Scotland's economic performance - economic development zones: survey analysis

Executive Summary

The Scottish Government is committed to sustainable, inclusive economic growth as part of our ambition for Scotland to flourish through a just transition towards a net zero, wellbeing economy. This report details the results of a survey designed to engage a broad range of stakeholders. It focuses on the contribution that placed-based economic development initiatives can make to building a green, jobs-focussed recovery. We were also interested in views on whether the UK Government's freeport proposals, for bespoke economic development zones around ports (maritime, air and/or rail terminals), might enhance that activity, and if it could better reflect Scotland's needs and priorities.

The UK Government (UKG) has cited the creation of freeports as something made possible by the UK's exit from the European Union. However, freeports have operated in the UK in the past while it was in the EU, and many still exist across the EU.

There were 39 responses to the survey overall. 35 were submitted through the Consult portal and 4 were sent directly. There were 13 responses from business. Harbour authorities are included in this category. Local authorities submitted 11 responses (the 3 Ayrshire councils submitted together and Dundee submitted on behalf of the Tay Cities Region). There were 15 responses from others including business organisations and other interested groups.

The survey provided a range of evidence and views on the importance of place based economic development historically and how lessons can be learned for future interventions. There was reflection on the need for similar initiatives to the UK Government freeport model in Scotland.

Reflecting on place-based economic development interventions to date, non-domestic rates (NDR) relief was noted as the most beneficial of the historical interventions, with enhanced capital allowances and a streamlined planning processes close behind.

Whilst there were concerns over potential displacement of economic growth and interactions with the timing of UKG development of freeports, respondents were supportive of a Scottish freeport approach tied to Scottish Government policies on inclusive growth, fair work and the just transition.

It was acknowledged that there was an opportunity within Scotland to shape the nature of this intervention. Some of these comments related to natural advantages in Scotland around renewable energy and net zero transition, but also touched more widely on the importance of high-value jobs rather than a 'race to the bottom' in terms of relaxing planning constraints.

The view that Scottish progress should be aligned to the UKG timetable as much as possible whilst allowing for variation to reflect devolved policy was mentioned by a number of respondents.

A key point from many submissions was the importance of flexibility to meet local needs rather than a one-size-fits-all approach, and that a range of approaches would be preferable. There was a general view that the key potential benefit of a freeport model was to bring together a range of place based initiatives in a single package rather than a focus on any single aspect of support.

There was also some concern around the nature of the UKG bidding process potentially distorting competition and a suggestion that all ports should be able to achieve the same status rather than "picking winners". A view was expressed that these concerns could be exacerbated in Scotland if one rural area gained through designation at the expense of another.

Some respondents also reflected on the impact of Covid 19, both in terms of the impact on current activity and timescales but also on the importance of new interventions to help with economic recovery.