Regional economic policy review: paper 2 – the regional perspective

4. Funding

4.1.1 The Scottish Government does not currently fund REPs on a year-on-year basis. However in 2020-21 the Scottish Government launched a Regional Recovery Fund (RRF), and in 2021-22 the Regional Economic Partnership Fund (REP Fund) both issued via the REPs. The funding was able to flow to REPs via the associated Accountable Body within the relevant Deal, supporting projects and activity that had been agreed at a regional level, even if led on by a single Local Authority.

Regional Recovery Fund (RRF) – fy 2020-21

4.1.2 This was a £2 million fund that offered targeted financial support for regions to help them in maximising local job creation, as well as accelerating delivery of City Region and Growth Deal investment and developing regional recovery plans.

South of Scotland

4.1.3 The South of Scotland (SoS) received around £76,500 and focussed this on regional recovery planning. The region which had established the South of Scotland Regional Economic Partnership in 2018 and had created the new South of Scotland Enterprise (SOSE) in April 2020, identified a need for better data to allow for targeted support.

4.1.4 SoS used the Fund to support an extended programme of engagement which enhanced engagement with businesses, organisations, and communities across the region. This helped build a richer understanding of the region's opportunities and supported a sense of wider ownership for future interventions.

4.1.5 The Fund was also used to support the development of a deeper understanding of existing data sources available, gaps in these, alongside the development of options to bring data together into a single, region-wide and more easily accessible repository.

4.1.6 They mapped existing work within the context of an enhanced focus on expanded measures which will better reflect inclusive growth, environmental ambitions and ultimately what the region considers important for its future.

4.1.7 Prioritising intelligence gathering has afforded the region a more developed and deeper understanding of the needs and opportunities facing it both presently and in the future. It also led to recommendations for the region to improve data retention and access. This shows strategic, long-term planning and the capability to take the region forward implementing strategically important projects to allow for inclusive growth within the South of Scotland.

Forth Valley

4.1.8 Forth Valley received almost £115,000 from the Fund and prioritised acceleration of the delivery of the growth Deal projects; Community Wealth Building; and regional recovery planning.

4.1.9 The region recognised the need to support the town and city centres in the aftermath of lockdown and used this fund to incentivise footfall, and support the SME base which they saw as the lifeblood of the regional economy. To do this the region delivered on the following projects:

Alloa First

4.1.10 Leaflet design and printing by local firm and postage costs, delivered to all Clackmannanshire residents and multi-page adverts in Scotland Loves Local Magazine and town centre banners all promoting Alloa Town Centre's 'reopening' post Covid restrictions.

Falkirk BID

4.1.11 To support the recovery of Falkirk Town Centre, the installation of 4 digital footfall sensors in the town centre to understand pedestrian traffic at key routes into the retail hub. This data-led intervention can be used across private, public and social sectors, to improve and revive town centre health and the resilience of local businesses.

Go Forth Stirling

4.1.12 In order to support recovery, investment in the geographical extension of city centre wi-fi network (at Port Street) to make the city centre better connected for businesses and to allow free wi-fi for all users of the centre including shoppers and tourists.

4.1.13 Recognising the strengths of a regional approach to recovery and to longer-term regional economic development, Forth Valley used a portion of the funding to support development of an updated economic strategy. They held fortnightly updates with the economic development leads in the region and collaborated together with partners on projects including "My Carbon Zero" and the "FV River Parc".

4.1.14 Much like SoS, Forth Valley recognised the immediate needs of the region and assisted its economic recovery from the pandemic with the funds available. Again, this highlights that local authorities coming together to deliver economic benefits is a strategic move for the region especially when it comes to economic shocks such as the pandemic.

Regional Economic Partnership Fund 2021-22

4.1.15 This fund supported work to develop or strengthen regional partnerships; develop/refresh regional economic strategies; intelligence gathering; and/or strengthen internationalisation plans. The fund itself was £995,000 and each of the eight REPs applied and received a share of the fund.

Ayrshire

4.1.16 Ayrshire received £96,000 and focussed the funding on the development of their RES and on internationalisation plans to maximise investment in the region.

4.1.17 To develop the RES for the region, Ayrshire used part of this funding to commission economic development consultants to research and produce an Ayrshire Regional Economic Strategy and two-year Action Plan. They were also tasked with embedding the principles of Community Wealth Building (CWB) throughout the Strategy.

4.1.18 Work is still underway on the development of the strategy but they have developed an economic baseline report and created a regional expert panel which is able to advise on embedding CWB principles into the strategy.

4.1.19 Ayrshire also reached out to the Inclusive Growth Network to ensure that thorough and meaningful engagement was part of the development process.

Tay Cities

4.1.20 Tay Cities Region received £117,000 and prioritised the development of regional collaboration.

4.1.21 Noting the importance that tourism plays on the regional economy, Tay Cities supported the development of a Regional Tourism Strategy. The purpose of the strategy was to deliver elements of the regional economic strategy through key actions to diversify and grow the visitor offer. By expanding the regional offer to tourists they hoped to increase the time that tourists would stay in the area.

4.1.22 As an extension of this work, the region also developed an expression of interest for the City of Culture 2025 bid. The region views this as an opportunity to showcase culture in the region and gain national and international awareness and new visitors.

4.1.23 Similar to Ayrshire, Tay Cities also recognised the importance of focussing on CWB and an action plan was developed using this Fund to support a CWB action plan for Dundee. Wishing to utilise knowledge available within other regions, Tay Cities engaged with Ayrshire on the development of the action plan. Work on this project is still under way.

Funding Conclusions

4.1.24 The past two financial years have seen comparatively small sums of revenue funding go to the eight REPs. Evaluation exercises for both funds have shown that despite the small sums of funding, positive outcomes have been achieved.

4.1.25 The readiness and ability of the regions to utilise these opportunities to develop their economic resilience; develop and support strong recovery projects; identify and address inequalities; further internationalisation to bring investment into the region and the country, showcases their capabilities.

4.1.26 Despite only receiving minimal finding, REPs have played a vital role in Scotland's economic recovery from Covid-19. Over recent years regions have prioritised intelligence whether that be in the development of an Intelligence Hub in Glasgow or the procurement of consultants to collect and analyse data. The willingness and readiness to focus funding on these types of activity show that REPs have the long-term resilience and growth of the regional economy at their heart. This is further evidenced by the high-quality of the Regional Economic Strategies, Frameworks and Action Plans that have been published.

4.1.27 The successes of REPs have not gone unnoticed, hence the enhanced emphasis placed upon them in NSET, flagging them as a key partner in ensuring economic transformation, improved productivity, encouraging further inward investment all with a view to reducing inequality within and between regions.

4.1.28 REPs have also been recognised by the UK Government in their plans for the delivery of the Shared Prosperity Fund (SPF), with REPS theoretically able to apply for and deliver funding at a regional level, ^[11] though it should be noted there was insufficient time available to agree regional Investment Plans via regional structures (which requires local approval before regional agreement), especially for regions with less mature REPs.

4.1.29 Given past precedence of Scottish Government single-year funding, REPs are able to receive investment via the Accountable Body associated with the relevant Deal. That funding can be used to deliver projects and priority policy identified in Regional Economic Strategies, linking to national priorities. Thus, the successful implementation of projects such as those identified by the REPs are what will lead to the successful delivery of NSET.

4.1.30 To date the funding that has been issued to REPs has come toward the end of the financial year with little notice given prior to the application process opening. If REPs were to receive year-on-year guaranteed funding this would provide confidence to both them and private sector partners in terms of planning and delivery. In turn, this would improve the impact of government spending.

4.1.31 REPAG recognises the context within which REPs have evolved has been one without any secure multi-year funding, which has impacted on the pace at which they have developed, and what is within their capacity to achieve. As noted in Paper One, we believe it would be useful for the Scottish Government to explore options regarding how to support REPs, and share an assessment of the implications for REP outcomes given those options.

4.1.32 Relatedly, as Paper One discusses, it is REPAG's view that the Scottish Government can mirror the kind of policy alignment we see coalesced around regions, developing a placed based, regional, strategic conversation across relevant policy areas – making more joined up funding decisions, using existing streams to support shared outcomes.