LEVELLING UP Beyond Holyrood

What has and has not worked with current investment vehicles?

• Growth Deals have succeeded in breaking myopic funding tendencies that straddle normal political cycles. And deals that span more than one local authority have highlighted the willingness of authorities to cooperate and deliver collective benefits.
• The competitive bidding process for the Levelling Up Fund has seen local authorities spend large sums on unsuccessful applications. There needs to be greater clarity on future investment opportunities to ensure that the time and resources spent putting these bids together does not go to waste.
• Local authorities have had to march on with reduced autonomy and piecemeal funding from central government. This has hampered their ability to strategically coordinate several fragmented funding streams in a manner that prioritises securing and optimising long-term investment.
• Recent inflationary pressures have posed serious challenges for the delivery of many growth projects, and there exists a real lack of mechanisms to account for this within existing funding streams.

Recommendations for Growth Deals 2.0

1. A simpler and bigger Growth Deal Fund. Combining multiple funding sources under the levelling up banner could provide a greater ‘bang for buck.’ Limiting central government to setting the strategic objectives and devolving execution and responsibility to the second wave of growth deals would create a more whole system approach to economic growth in Scotland.
2. Unlock and augment existing private sector investment. Assistance with R&D, skills, and physical infrastructure would incentivise greater individual investments; and pension and insurance market reforms would unlock greater institutional private investment.
3. Provide longer and more adjustable investment timelines. Allowing deals to flex year-to-year spending levels within the overall duration could help smaller institutions that struggle with borrowing and forming partnerships.
4. Permit greater flexibility. Instead of being solely geographically-led, greater project-oriented coordination efforts could raise collective rewards. And regulatory flexibility to design bespoke local polices could ensure that local needs are being met effectively.
5. Enhance capacity and capabilities. Having central government sector representatives advise local government could help transfer expertise and foster better cooperation.
6. Deliver good governance. Directly elected provosts, similar to England’s metro mayors, could assume greater responsibility and accountability for deploying these funds.