Investors urged to support City Deal
Glasgow seeks private sector leverage as plans for £4bn project accelerate
THE head of Glasgow’s City Deal programme has urged private firms to commit the investment required to help the council deliver on “the opportunity of a lifetime”.
Carol Connolly said the highprofile City Deal funding, which has seen both the Scottish and UK governments each commit £500 million, will be a catalyst for investment in the city, leading to the creation of tens of thousands of jobs.
Glasgow is one of eight local authorities participating in the Glasgow City Region City Deal, which will see £1.13 billion of infrastructure spending between now and 2035, with an aim of leveraging £3bn in private investment.
The economic goal of the programme is to permanently add £2.2bn to the region’s annual economic output. This is hinged around four key infrastructure zones and two main innovation projects.
“We know that Glasgow is still very busy with development at the moment, and what we’ve got to do is be really competitive and get out there,” said Ms Connolly. “We want growth. The Glasgow economic strategy shows we are the fastest growing city in the UK; we have got to capitalise on that now.”
Since the funding was awarded in 2014, Ms Connolly and her team have been engaging with businesses to illustrate the potential of investing in Glasgow.
That is now being ramped up and Ms Connolly said this year will also see the start of procurement.
“Procurement will be massive this year. We’re going to see something like £40m in construction contracts this financial year and probably around £6m in design.”
One early success has been The Tontine Centre in Trongate, which opened in May 2016 after receiving £1.67m from the City Deals pot. The five-year project to attract creative and fast-growth companies is already at 50 per cent capacity.
“There are a whole range of opportunities for businesses within the programme itself,” said Mr Connolly. “Our economic growth is about home-grown businesses and supporting them to be a success.”
Another huge project already under way is the regeneration of Sighthill in the north of the city, with City Deal funding new traffic and pedestrian bridges over the M8 motorway.
“We are learning a lot from Sighthill, that’s the starter, we’re seeing how businesses respond,” said Ms Connolly. “The housing isn’t City Deal but it is the first area to show if this idea of big investments makes a difference to investors and developers.”
As part of its engagement programme, the City Deal team has held a series of eight events to highlight the opportunities to small and medium-sized enterprises (SME), which could win work from main contractors.
“What we’re trying to do is get as much out into that marketplace as possible so that it doesn’t just disappear into a sub-contracting route in a big company,” said Ms Connolly.
Tier 1 companies, she said, have welcomed the move, while developers are “getting excited” as the actual interventions begin.
“We have spent six months pushing procurement forward and now need to go back to engagement across the space from small businesses to big investors,” she said. “We’re keen to talk about what it means for changing the city. It has been welcomed by businesses and now we’re talking about the actual designs, the actual interventions.”
And while Glasgow’s commercial property space has been limited by a lack of speculative building in the post-Brexit vote climate, Ms Connolly said that was changing. “People are interested in doing speculative development [in the Clyde Waterfront and West End Innovation Quarter] so we have to look at how we get that right. We’ve got a lot to do in still talking to investors about the sites that are going to be coming forward, what the City Deal investment will be and what we will wrap around any investment.”
The nature of the funding means City Deal will cover the cost of aspects such as remediation or drainage works, which could deter private investors. Much of this is based on a model used in Manchester, which was among the first of the UK’s City Deal projects.
Ms Connolly said there is no extra pressure on being the first Scottish region to progress with City Deal funding, which has now been extended to every city in Scotland. “We’re really exciting. It’s hard not
to be,” she said. “People talk about how the Commonwealth Games investment was once in a generation, but this is once in a lifetime.”
Among another investments are a £30m tax incremental finance scheme to support an innovation quarter in the city and European Structural funds, which are being used to install 3,000 smart street lights in areas marked for improvement, such as Sauchiehall St – which is among 16 avenues earmarked for upgrades.
“City Deal is a facilitator, a catalyst in the market,” she said. “There are so many other great things happening in Glasgow that we have to work alongside. We need to stitch it all together to get the best deal for the city. We’ve got a lot more to do as the sites come forward but the early engagement has been good.”
The biggest challenge, according to Ms Connolly is in making the deal work for the labour market. In the construction phase, it is hoped 15,000 jobs will be created, with 28,000 permanent posts as a result of the investments.
“The whole idea of people in the region accessing better paid work, or getting back into work, improving their health, if we can achieve that, to see the benefits not to the city but to Glaswegians, that’s the biggest plan,” she said.
Looking ahead to where Glasgow will be at the end of the project, Ms Connolly said: “There will be new fantastic pieces of infrastructure; there will be new bridges to step on, a link from Central station to Glasgow Airport; Sighthill as a new area to live in. It’s about the vision that sits in the business case at an early stage. How these communities work and how the component parts actually support that and make it a successful area.”
Councillor Frank McAveety, council leader and chair of the Glasgow City Region City Deal cabinet, said: “This City Deal offers tremendous opportunities both now and in the years to come for both businesses and individuals. This is a unique time in Glasgow’s history in terms of how business can contribute to and benefit from the fantastic infrastructure projects that the City Deal will deliver in the city.”