Good morning and welcome to this meeting of the Scottish Affairs Committee. We will be looking at industrial transition in Scotland and in particular at former industrial towns. I very much welcome our first panel and ask each of you to introduce yourself briefly, please.

Councillor Altany Craik, Fife Council, and Scottish chair of the Industrial Communities Alliance.

Pauline Grandison, head of operations with the Coalfields Regeneration Trust.

Good morning, everyone. Councillor Debbi McCall, Midlothian Council and a member of the Industrial Communities Alliance.

Before we start the questions, I have a declaration of interest to take from Elaine Stewart.

Yes, just to refer to my entry in the register of interests: for the avoidance of doubt, I am a former employee of CRT.

And a transparency statement from Kirsteen Sullivan.

For the purposes of transparency, I was a signatory to the Edinburgh and South East Scotland city region deal in my former capacity as depute leader, West Lothian Council.

The first question I have is to ask you—and briefly, please, which I realise that is a big ask—to describe the problems that former industrial communities face in creating more local employment.

The problems have been well rehearsed over lots and lots of occurrences, but I will touch on the main ones: poorer health and poorer health outcomes and life expectancy, worklessness in the working-age population, poorer skills and generally a need for them to move from the communities to cities for jobs elsewhere rather than where they live. I think those are the main ones. You said briefly, so I will stick with those being the main ones.

That is helpful, thank you.

From the coalfields perspective, it is the rural situation of the towns and villages, the transport links and the high cost of public transport for people getting from their rural villages to the towns where the main jobs are. As Altany said, there is health. We are working with people who are on disability benefits and things, and it is difficult for them to be able to get into the job market

I absolutely agree with what my colleagues have said. There is also a lack of opportunities within the coalfield areas. If you look at the number of privately run businesses, they lag way behind and there are many reasons for that. They feel that the skills are not there for the people they want to employ. Connectivity has already been mentioned. There are all those interconnecting issues that have that impact.

This question is for Pauline. Given that coalfields are still suffering from deindustrialisation, what part can communities play in creating local jobs?

The communities themselves have to play a very important part because larger industries are not going to come back to these rural areas. We have to ensure that we can work and support these communities, especially in the areas of East Ayrshire with the transport links to get to major towns, as I said. We need to support social enterprise for organisations like they have in East Ayrshire like The Zone and Yipworld that are creating training, developing young people, creating job opportunities in these organisations. We need to look at how they can diversify and go into tourism and those types of areas as well. Young people coming through education need to be skilled and have time spent to encourage them to move into jobs but to be creating the jobs in their own towns and villages.

To add to that, what could be done to ensure that the new jobs are high-quality jobs?

I think it comes down to the skills development of the young people and what we can bring in. One of the things that CRT is looking at—and we have a very established model in England—is creating small to medium industrial units. That is bringing them into areas where normal developers would not want to build because it would not be worth their while. We can invest in those and bring in jobs that need higher skills, with smaller engineering companies using the space. As I say, because they are in areas that would not be touched, they are creating work for the people who are building them, using the model of community wealth building, where the money is staying in the areas where they are created. We feel this is a very important step for us as an organisation to be moving into and to get the support to be able to do that.

It would be interesting to hear from the other two witnesses if they have anything to add to that point about high-quality jobs.

I think you have hit the nail on the head. We don’t just want any old jobs. We want good, high-paying, quality jobs, and to get those we need the skills out there as well. Pauline really hit the nail on the head when she said what is available. Where would we put these jobs? Where will they be? In Midlothian, for example, a lot of people move to well-paying jobs in Edinburgh. We know that and that is probably the same for your surrounding areas as well. I am from Penicuik. We have some good-quality, well-paying jobs in Penicuik and that is great but for people in Gorebridge, which is one of the poorer parts of our county, if you don’t have transport, you can’t get a bus from Gorebridge to Penicuik. You have to go into Edinburgh, up to Dalkeith and back out again, so it is a nonsense. It is making sure that the jobs are in the particular areas rather than, “This is quite a good place to go, it has good transport links to Edinburgh, we will go here.” They need to be situated where the higher levels of deprivation are, and we know where they are. That is well evidenced.

The key to this is skills, but it is not just training people for the sake of it. It is about making sure that the skills are relevant to the workplace that they are going into when they have finished training. Unfortunately, for a lot of our pipeline of skills, people are leaving school with the wrong skills or the wrong desire—they want to be YouTubers or whatever—and the world of work does not seem attractive to them. From our point of view, it is with communities, place-based investment. I have a number of ICA things today: more jobs, better jobs, closer to home, kind of hits it on the head. You don’t have to travel very far if we get this right and we get jobs nearer where people live and make them communities again rather than dormitories. That makes the connection between the skill, the job and the economy locally that supports the whole community. Deindustrialisation has meant that the big industries have gone, absolutely, and they are not coming back in that form. Whether it is green retrofit or working in solar arrays or wind turbines, all of these will need skills and to be accessible. The approach the CRT takes with small industrial units, the same one that was taken in the city region deal across Fife and the Lothians, is to make units that are available for businesses as they are now—good-quality, high-quality units that a business can start from and grow from. There is a bit of joining up there, but skills are at the very heart of it. If I take a bit of Fife, when we had a couple of major employers close, we did the Mid-Fife Economic Action Plan and we found that Cowdenbeath, right in the heart of the Fife coalfield, had a massive skills deficit, a huge gap. They were so far behind that it was quite difficult to understand why that was the case, and it was about access to proper education, making sure that they got something at school and got the right qualifications. Skills are at the heart of it. Education is about getting people ready for work.

I think this has been touched on, but what do you see as the barriers that are holding back private enterprises from moving into former industrial areas? That is to all of you.

We have looked over the last number of years at things like subsidy control and how we have dealt with regional investment—state aid, as it was called in the olden days. We did not make best use of that as a country, and we need to have patient capital to help us unlock brownfield sites that are just sitting there. The commercial sector will not be able to make anything from them. We need to make use of the Scottish Futures Trust, investment in the Scottish National Investment Bank and others to invest over the long term, so that we are not under financial pressure first off, so we can get the right thing in the right place. It probably comes back to where I started: place-based investment. We should be making places, rather than wanting people to amalgamate to go to work. We should be thinking of it as an integrated part of it.

Does anyone have anything to add to that?

I don’t think so. I think I said that the stats are quite glaring that there is a reluctance to invest. I say “reluctance”, it appears that private enterprises are not investing in these areas, so what can we do to encourage them. I think Altany has summed it up for me.

Is it something to do with engagement with private businesses at a very local level, where people know the area best, the skills best and the local resources best?

I think that you are right that local knowledge will certainly help make sure we are not trying to put a white elephant in the wrong place. We have had that in the past with Hyundai and various others, and I am just of thinking of Fife. The other thing to think about is that we used to use an assisted area map in regional development. We had areas that we knew needed investment and specific help with new enterprise and support. We seem to have moved very much away from that. The local dimension, the community dimension could be helped with an updated and better dataset used for assisted areas. Now that we are out of the EU it is slightly different, but we can still use some of the same thinking about how we direct rather than allow the market to choose where it wants to invest. We need to support it to the right places.

I suppose that has to be two levels. If you are looking for the Government, local government or the Scottish Government to do something, there has to be movement from the business community and how it engages. Do you have any thoughts on how we get movement on that side to get them to recognise that a particular area that is in need of better jobs and industry is the right place, and that it is to their benefit that they locate there and invest in local communities?

I think there was an attempt to understand that sort of enterprise with the green freeport idea. I don’t want to be critical of that, and I should state that I am on the board of Fife’s Forth Green freeport. The idea is to incentivise work, to give tax breaks, to give opportunities and patient capital, give them time to do these things. We used to have that anyway. I don’t think we needed a freeport to do that. We could have done it if we had made better use of the assisted area map and used incentivisation tax breaks. Particularly employment tax breaks are always good, but to use brownfield sites, for example, requires a little bit of cleverness or fleetness of foot in the planning system to make sure that is quick and easy. Businesses want certainty, and they want to know that it is not going to change, particularly if they are going somewhere they have been not before. They want a long-term period where they can do what they do. It is a partnership. You are right, we need to have all the bits moving in the right direction.

What do you think the main challenges are to building a more diverse economy? Pauline, did you mention a diversified economy?

Yes, looking at communities working and establishing services themselves, and looking at social enterprise. In Scotland we have quite a number of social enterprises, but in the deprived areas that we work in, the organisations are delivering the services but they don’t recognise that that is what they are. They are getting on with the work, and they are doing it. I think there needs to be a bit more support for the organisations that are creating local jobs in their own communities and are helping young people with their skills development. It is tackling the furthest from the job market. We can talk about the higher-skilled jobs and the young people who want to go into these jobs do well at school and go to university, but in our areas they don’t have that aspiration because they are not supported to have that. That is why we need smaller organisations like Yipworld in Cumnock and The Zone in Dalmellington to give these young people the aspiration for getting better jobs and well-paid jobs, and giving them the confidence to go out into the big wide world rather than being insular within their own community. Talking about how we get businesses to come into our communities, in Fife we have Amazon. It is one of the biggest Amazon depots in Britain, and we have Sky as well, which is a big employer and has been for years. They are paying off 300 people in the area of Dunfermline, so that will have an effect, and they are moving their work to South Africa. We are talking about how we can encourage businesses to come in when the businesses that are already here are paying off. We have an industrial site that has the major banks, and they are all paying off people, not just the high street ones but the big call centres and things. It is very difficult.

It is an opportunity for more home-grown businesses that could bring more stability to the local economy.

Yes, and that is why we want to use this property model. Altany spoke about Cowdenbeath. That is one of the areas where we will be building small to medium industrial units. It is bringing the skill base into an area that badly needs it, so that is how we have to prioritise those types of projects.

Yes, absolutely. The problem we have is that we are up against AI. We don’t really know what impact that will have. I don’t want to pick on Amazon, but will the jobs that it has at the moment be around in two years? We don’t know if we will have AI pickers and so on. While we might think this will be great, we will open a big warehouse with 1,500 jobs; are they good jobs, will they be there in a year’s time or two years’ time? We just don’t know. For me, it is more on a micro base. We have had a little bit of success in Penicuik. The problem we have in the high street is that our shops are all really big and, therefore, no one will come in and take over a massive shopfront. Private business has gone in and divided it into little micro shops. I think there are 10 micro businesses in there instead of one, and that has been really successful. They have then moved into a slightly bigger shop in the high street and there is a little bit of growth, but that is 10 individual micro businesses that were not there four years ago. We all know the struggles in the high street. It is a hard job, a hard sell to get people.

Yes, that is part of that. Going back to something Pauline said, which I think is really important, it is about partnership working. There is the business improvement district, the community council, the community development trust. So many small organisations within that have fed in and used that encouragement. The BID has now branched out. It has now finished, and one of the shop owners is now forging ahead with “Penicuik means business.” I would like to throw out a wee cheeky invite to you. You are all very welcome to come and see me in Penicuik. I will buy you a coffee and a bit of cake in the local store. It is really nice.

Absolutely not, and what I have been talking about is older people who have been doing this. I speak for myself, but I feel that the older people have a bit more—I don’t want to say “drive,” but there may be a recognition of “I can do this,” whereas our younger people need to find more encouragement. You will be sick of hearing it, but I don’t think we can overplay the impact that covid had on our young people. I hear from employers that school leavers don’t know how to behave in a workplace. You have heard all this as well. No, I am absolutely not writing off older people. Certainly I feel—and Pauline can speak for herself—when we speak about young people it is because we feel that they need a bit more encouragement, support, direction and so on.

Can I touch on the point about skills, CPD and lifelong learning? That is very much at the heart of what we need to be doing. Our workforce demographic, particularly across the former coalfields but across Scotland in general—talking about Scotland’s city region deals—is that we need thousands of workers for the houses we are going to build, the green retrofit, the green freeport, wind turbines and solar arrays. We need thousands of workers for those. We not only need thousands of workers but we need to run the economy at the same time as we provide thousands of workers, so we can’t possibly fill that from the young cohort. It needs to be about retraining, reallocating and reorganising the workforce that we have. Some of that will be part-time, because people who are on out-of-work benefits because of illness, infirmity or mental ill-health may not be able to work full-time, so we need to be cleverer about the human resource that is available to deliver the economy. When we start looking at the higher-skill jobs, who will run the rest of the economy? Who will run tourism, hospitality businesses and shops? If the wages don’t keep up, we will have gaps. As a local authority, finding planners and public health people—they are just not there. We are all chasing after the same diminishing group of people to fill these jobs, and we need to be clever about how we do it and people need to retrain. As an adult returner a number of times to universities and colleges—when I grow up, I will decide what I want to be. I think that is what will happen, but people need to retrain. Education is a lifelong thing.

I think I am hearing that the place-based method is a successful model for regeneration. Do you agree that is the case?

Partly. I think it makes better places, absolutely, but because of the nature of the way funding comes to place-based—and I say this often, I refuse nothing but blows when it comes to money for Fife as the finance spokesperson. However, it often comes with strictures, short timescales, so you have to have things ready to deliver, and most of the time local authorities are not in a position to do that. We get an allocation of £3 million or whatever, it needs to be spent by March and you get it in September. Capital does not work like that, and the Government need to take a hard look at itself and say, “We need to get a bit cleverer.” It is one-off money by all means but you need to let us do it. That is a local government plug, not an ICA one. Apologies. Too many hats.

Good morning, all. We spoke about skills, skills gaps and how different generations can get in, but I am looking now at locations. With rural communities, we know for example if you are in Midlothian you are close to Edinburgh and you have that advantage. I noted, Councillor McCall, what you said about buses and transport. In more rural areas you are similarly left behind, similarly impacted by deindustrialisation. What can be done to ensure they can benefit from moving in new economies, growing economies as well? I take this very seriously, given I represent Gordon and Buchan, which is a north-east constituency, very rural, and it will be impacted by the decline of the oil and gas sector. It is what we are dealing with now, and I am interested in your take on what can be done to make sure that areas like mine will be able to grow different economies, particularly the more rural ones.

I think we have to learn from the mistakes of the past, and we can all see the evidence is still there 40 years after the coalfields closed. We can see the devastation and the impact that had. We cannot have that for the workers in the oilfields. We can’t go through that again. We know we have to reskill people, we know that. Therefore, it has to be place-based and the community has to buy into it. Particularly in your constituency, transport and connectivity links are problematic and that needs to be invested in. Forgive me, because I don’t know your area particularly well, but do you have a city deal? Is there an Aberdeenshire city deal?

Yes, but more generally across the country, if we look at the rural Highland areas, there are some areas where regardless of which their big city is, the connectivity between the two is effectively non-existent—even just commuting into town is not possible. It is more of a general question: how do we make sure that regardless of where people live, regardless of where the communities are, they are able to move into new economies, new industries, new opportunities, despite what has happened in the past with industrial decline?

Yes, absolutely. City region deals have a part to play in that. Altany and I can talk about Edinburgh, the Lothians, Fife and the Scottish Borders, which is a significant chunk of the country. It is 25%, 26% of Scotland. It is a significant and very diverse area from the Scottish Borders, which are very rural, up through the more prosperous Lothians, with caveats there obviously, and over into Fife, and we know the areas that are problematic. For me, if the investment is done—I will go back to partnership working. When you have a city deal and you have the people who know their area best and know where needs the help and where we will put these various different things, it is a planned package. Our city deal has five strands that we are looking into and where everything is going. For me, a city deal is the way forward, in my opinion, with buy-in from the local community for people to come in there.

Thanks, Debbi, you have covered a number of the main points. The next one is to accept that the world of work has changed. We all quite like the idea of hybrid working, and I think you have Stephen McCabe on hybrid later. The notion of going to work has been a little bit decoupled from some of the skilled jobs and some of the modern digital technology jobs that exist. You don’t need to go to a place necessarily to do it. In supporting the rurality of Banff and Buchan, Fife has all of these things because we are effectively Scotland in miniature, but essentially if Project Gigabit or R100 is reaching where it is meant to reach and giving people access to the whole digital infrastructure that is supposed to support the economy, that will enable people to make different life and work choices, maybe not having to go into Aberdeen every day. Driving around Anderson Drive may not be very much fun, I imagine Essentially it is about what the new jobs look like. High-skilled engineering-type jobs are not all about going and putting pieces of metal together any more. A lot of it is done on computers, so digital mobility will work if we get the digital infrastructure in place. We have spent a lot of money on Project Gigabit and digital superfast broadband for Scotland. All of these are the right things to do, but I am not sure what the penetration is into Banff and Buchan to support that kind of work.

It is the same as anywhere. The first 80% is the easiest, isn’t it? You still always have the same 20%, or whatever it is, being the ones who are left behind. Understandably, because it is the most difficult, but it is not understandable for the people living on the ground. Your point about internet and broadband working together across the board, all these things coming together; it is not one industry or one sector that will be able to sort this.

The other thing I will add is that, while city region deals are in vogue, they are effectively regional economic partnerships. They are not a new thing, as we have done these for years. The key thing to understand is that towns are not necessarily feeders for cities; they have their own ecosystem, they have their own requirement for a place and a community and jobs locally. It is about making sure it fits the right thing, and thinking of different towns in different places. In the coalfields particularly, we do not want them all picking up in the morning, getting on the bus, getting in the car, getting on the train, going somewhere else, working and coming back. That is not making a place. The APPG for coalfields did a number of publications touching on that very thing. We are not talking about being dormitories to feed jobs; that is not what quality of life is about, that is not work-life balance, that is not the kind of jobs of the future that we would like.

That is why CRT wants to be working with partners but also get investment. We have an ask into MHCLG at the moment, working with Minister Alex Norris to get a large investment of £50 million over the next five years to build these small to medium industrial units. That will be in the heart of these communities, making sure that the jobs are there, making sure that we can upskill people and have local jobs for local people. An investment into these communities is crucial. Touching on what Debbi was saying, the coalfields were 40 years ago; I work at the coalface, I am out there every day with these communities and the thing they say is that they feel they are forgotten communities. We don’t want any other communities to feel like that again. We have to make sure that does not happen.

I will pick up on a couple of points you made, Altany. Do you view the rollout of digital connectivity as a potential key enabler and facilitator to attract more businesses into rural areas? As you say, we do not want our rural area to become a commuter area, purely taking people out of the area into cities where they will spend money and maybe return home to villages that may not have the amenities.

Yes, is the short answer. Digital infrastructure and making sure that every community is connected properly, whether to access Government services online or the likes of Netflix and other things that people want. If you cannot get a decent connection, you are not getting it. I have a slight wry smile about this because I remember when superfast broadband came out and they were talking about 24 megabits per second and I am thinking, “I am never going anywhere near that.” Then I had cable and it was 500 megabits per second, and I thought, “That will be rubbish,” but that was a step forward, and then R100 came along to try to pick up the rest and then of course Project Gigabit. But the private sector is running ahead with the fibre to the premises, because they know there is money to be had in that and it is working. It still comes back to how we get to the hard-to-reach parts that are not commercially great, and that is about how we do regional procurement. We have to say to these firms, “Absolutely, you can come and do towns like Glenrothes, Livingston or the ones that are easy to do, but we also need you to do some of the stuff that is a bit harder to connect.” We need to get the pricing right, and we have to accept that it must have been like the telephone rollout in the first place, when we had party lines and you could not get a phone number and you could not get it installed. We have to get the digital infrastructure in place so that people can access all the services, jobs and opportunities for learning that may come from that. The Open University makes huge use of online.

Following from that, to have the digital infrastructure you also have to make sure that people have the resources to be able to access it. We are working with an organisation, Digital Poverty Alliance, within East Ayrshire to help families access laptops because all they have now are their phones. How can you do Open University on a phone? How can you do any type of training that could be done on a laptop without a laptop? You need the resources. It is all good and well with that but the resources have to be put in place as well.

In former mining communities in Yorkshire, I understand there has been quite a significant increase in warehousing jobs that are close to matching local employment levels before the miners’ strike. I understand the growth in Scotland has been more modest; obviously Yorkshire is a more central location and benefits from proximity to transport infrastructure that is particularly difficult to match perhaps. In the first instance I will direct this question to Ms Grandison. What advantages do you think that the Scottish coalfields might particularly have that they can capitalise on?

With the warehousing sector, it is better to have jobs than not to have jobs, so it is like build big and you will fill it with all these employees. What is more of a concern is whether Scotland wants all these warehouses. Obviously, the transport links are not there to capitalise on, but also these jobs are low-skill, low-wage. I think we want to aspire to something better. As we touched on earlier, we have Amazon just off a main motorway connection to north, south, east and west, being situated in Fife. But where are those other areas that we could build these big warehouses? Green energy is playing a very important part. Scotland has very large wind farms, but the people working on those are university graduates who come in and do a lot of that type of work, but they are jobs that are there and then they are gone. Once the facilities are built, they only require maintenance. We managed to get a job with the wind farm company for a young chap in East Ayrshire, but once it is built, it is built, and the jobs are no longer there. It creates money for the economy while they are there for a few years, but once they are gone, they are gone. We need to ensure our communities have the capacity to capture the community benefits that come from the industries coming in with the greener energy, looking at the skills for green energy jobs but also looking at how our communities can ensure that they are getting that community benefit and then look at being able to set up social enterprises to deliver services within their own communities.

The growth of the warehousing jobs in Yorkshire has been a benefit—there are a lot of jobs in that—but I would caveat that by saying that a monoculture is not a good thing for jobs. Why are we talking about deindustrialisation? Because an industry went. Coal went, steel has gone. If you focus too closely on one thing, you will pay at some point later when it changes. We need to learn from that and create a more joined-up, multifaceted part of what the world of work looks like, what jobs we need to support and how we do it. We touched on AI earlier—I am checking back on my scribblings—and AI comes with a set of challenges and a set of opportunities perhaps, but when they make AI footprints there are not a lot of jobs in it. There are lots of football pitches covered in computers and warehouses, but there are not a lot of jobs in that. Is that the height of our aspiration, a low-paid, low-skilled job? I do not think it should be, although part of the recovery is to have any job first, and we can move on from that. The warehousing boom in Yorkshire is locational—it has a big market to serve and I can understand why it has happened, but I do not think you would want to be too reliant on one thing. Scotland’s geography means that most of us live in the middle bit, and we will need to have more options that are more skills based and more diverse, I would hope.

I would be interested to see how many of these jobs are still around in five years’ time.

Yes, you made that point about AI. Forgive my ignorance, but how do the pay and conditions of the warehousing jobs compare with the old coalmining?

That is an interesting question. I am trying to see what document it was in. I think “Levelling Up the Former Coalfields” has something interesting about that, as do as a couple of other pieces that were done by Sheffield Hallam about whose recovery and where the growth has gone, that kind of thing. The point is that warehousing jobs is that at least they are clean, they are generally warm, they are not the same as going down a hole in the ground and manually hacking out coal from the coal seam. They are very different animals, and that is not what we are looking for. What we are asking is what do we want our communities to be like? Are these jobs unionised? Probably not. Have they got good terms and conditions? Certainly better than some, but they are not an equal comparator. You would find that warehousing jobs are not attractive if people could choose engineering jobs and had the skills to deliver them. It is a fair point. They are different, but I think that is not the height of our aspirations for our communities. To do that, people and communities have to help themselves, and they have to get the skills to meet the job market that exists.

I have a statistic. The wages in the coalfield communities are 6% to 7% lower than the GB average.

There are a number of statistics here, but I could not find them so, thanks, Pauline.

We spoke about health statistics earlier. What would you say are the underlying causes of the jump in incapacity benefit claims within our coalfield areas? How can we address that?

I am not sure you can say it is just a jump in out-of-work benefits and health-related benefits in the coalfield areas; it has happened across the country. The number was below 2 million most of the time, and it is now nearer 2.8 million. Covid has had a huge impact on that, and people have become less able to work. They have been debilitated on a number of fronts, sometimes because they cannot go back to the job that they were in, so there is a bit of that. I do not want to be glib, and this is not an attempt to be so, but poverty tells you everything you need to know. People have poorer health outcomes, they have poorer outcomes at the end, their life expectancy is lower, but their good health expectancy is much lower. Diet is poorer, the impact of eating ultra-processed food and all sorts of things. These things are symptomatic of not having jobs and having communities that are left behind. Essentially if you do not have opportunity and you do not have people in better jobs, they will have poorer outcomes and you will have more people unable to work, whether because of their mental health, covid or long-term vascular or respiratory issues. It was even harder before, obviously, when they were going down the mine, which had a huge impact on people’s health and they gave up a lot to provide that industry.

How do you foresee the Government’s welfare reforms impacting on employment in the industrial communities?

We have been here before. I think we are all old enough to remember all the different incarnations of incapacity benefit over the years. We know what does not work, we know that the stick does not work, we need to have some carrot to go along with it. Changing the questions or the levels of attainment on a PIP application form will not change someone’s ability to work in a full-time job when they are not able, although they might be able to work part time. We need to be looking at what we can do to help people back into work. I used to work in welfare rights, and I have seen it when people got zero points after being on incapacity for 15 years, you have to be at the jobcentre for an interview on Monday morning. How will that work? You cannot expect someone to take that leap from having been on incapacity for decades to then starting work on Monday morning—it will not happen. Employers will not want to take on someone like that. Looking at what has happened in the past, there needs to be some recognition of that.

Do you think that the UK Government’s announcement on the right to try is a welcome initiative?

Yes. It is not new. I remember it from previous incarnations, so I think it is to be welcomed.

Obviously we are here as the ICA, and we have different hats being in local government, as a local government organisation. Many of the changes to PIP and welfare reform will apply to England and Wales because welfare is devolved to Scotland. When it is implemented, most of the people in Scotland who would have been on PIP will be on the Scottish disability payment. If I could helpfully say that we all like the idea of welfare reform, and we say, “Yes, you should reform welfare and get it right so it supports the right people,” but when it comes to the detail it is often a different animal. It depends what you are trying to do. But I do not think that is the point for our communities. The point is that we need to change our position to get ready for the future and support our people to be ready for the future. What does work look like? If they cannot do a full-time job, or if that is not the kind of jobs that will be available, how do we get our workforce to replace them. PIP by its nature—it is a personal independence payment—is to help people go back to work. I am always twitchy about tinkering with these things, but luckily it is not in our gift. From an ICA point of view, these things help our people get back to work, and I think that is where we would like to see it best placed. As a Labour councillor, I have a different answer.

Hugely, is the short answer. Previously we had a seven-year programme with the potential to extend beyond that and were able to do some substantial planning. I cannot remember if it was Altany or Pauline who mentioned the never-ending cycle for local authorities of applying. It seems to be that as soon as you have put in an application for one thing, you are on to the next. It is not helpful. We feel that a longer-term strategic programme, at least matching the previous seven years, would be far more helpful and allow us to make significant impacts for future planning.

The Shared Prosperity Fund, the European funding replacement as it was touted, certainly did not replace the seven-year multiannual financial fiscal framework that we were used to, which was rather unhelpful. When we did get the profile of the Shared Prosperity Fund money, it started off lowish, got a bit bigger and then got quite a lot larger, and then fell off the end of the world. The grand old Duke of York marched us up to the top of the hill, we had a whole load of people qualifying to deliver employability, supporting people, and then the money was going to fall off. The Government came along and, in the last Budget, supported about 40% to keep it going, but we need a plan rather than sticking plasters to stop it all falling over. I do not think that is acceptable. As an alliance, we have worked very closely with Treasury to deliver a non-competitive allocation, and that is what we have said; put the money directly where we need it to go, rather than making us do a beauty contest for different projects and beg for funding. Do not do that. Make it allocative, regional or direct to the local authorities, cut out the need for it to go through yet another set of hands. With the European funding, the Scottish Government was another level of bureaucracy that they had to manage and nobody gained from it. If we can go directly to local authorities that gives us an opportunity to push directly into our communities to get it right. But the Shared Prosperity Fund, thank you very much for the money—it was all very welcome. First, it was not enough; secondly, it was not long enough; and thirdly, it fell off a cliff edge. We need to make sure we have a plan for that, and hopefully the post-European funding review in the CSR gives us an opportunity to get that right and get it on a long-term footing rather than this hand-to-mouth because we cannot keep doing that.

As a third-sector organisation we find it very difficult because of the problems that the local authorities face with their timescales, to even get in the door and say, “Can we work on a project for that funding?” It is, “sorry.” We have our stumbling blocks with that, as a third-sector organisation.

I would imagine so. Given that the coalfields do not fit into local authority boundaries, they cut across the middle and some of them will be in different regional economic partnerships whether we want to call them city region deals, growth deals or whatever. Yes, there is a bit of that marginality. When you are between two things, how do you get the right thing? That is why I think it is important that we do not try to put it through too many hands and we try to get it as close to the people who need it as quickly as possible. Local authorities are usually best placed to deliver that, but then to have forward sight of what is coming so we can plan better. The UK Shared Prosperity Fund was one of many. I had some of them written down: the Levelling Up Fund, the Towns Fund, the Town Centre Fund, all this sort of stuff. It was very cluttered, and it needs to be tidied up and consolidated. That is being old and wise after the event, but as long as it does not mean there is a cut once we put it all together—we do not want a haircut, we want the same amount of money—but we want it in the right places for us to invest in our communities.

We will now turn to city and regional growth deals. I will ask all of you how effective you think these are in delivering benefits to the areas that are most in need?

I am conscious of my propensity to go for it, and you will get the lot, so stop me whenever you are ready. Do they work? Yes. Do they work perfectly? No. Are we on to the second and third generations of them? Of course we are. Obviously, we are coming from an industrial communities vent, whereas Fife sits at the nexus of two city region deals: we are part of the Tay Cities one and we are part of the Edinburgh, Lothians, Borders and Fife one. They are complementary, they do different geographies, but essentially they are different and that is the learning curve we have been on as local authorities. I suppose, Kirsteen, having been on the same city region as I have, you will know this. It is about how to make sure that the skills agenda—for example IRES—goes right across the region so that way it will pick up our former coalfield communities in the same way. But I think it is an imperfect tool for that because it is trying to do much more than we are talking about as industrial communities. We are certainly focused on places like the Fife coalfields or Lanarkshire or Ayrshire and Midlothian—the coalfields element of those communities—but it is wider than that. Many of our communities are feeling the same things without the same historical background. City region deals, yes, they are good, they work, they bring in extra investment and they have been seen to be quite good at delivering some things. I think we need to be careful they are not the only tool that we have for doing this, because obviously, the Shared Prosperity Fund, No One Left Behind, and delivering skills to those furthest from the labour market is important.

Picking up on the point you made about ensuring that the skills agenda is across the region, do you think there is a danger perhaps with the city deals that a lot of the money can be swallowed up by the large cities rather than spread across the geographical area?

As someone who signed it as well—and I looked like I was eating the back of the First Minister’s head while doing so—I think we were concerned about that because Edinburgh is a big magnet for the economy in our region. However, that has not turned out to be the case because we have worked very well collaboratively with the local authorities involved. With that in mind, knowing that this could have unintended consequences for us, we have worked with a number of universities—Edinburgh, Heriot-Watt, St Andrews, Napier and the colleges around those—to make sure that the skills were being pushed out and spread to give an opportunity to bring the bodies in to deliver the work that is needed. We were cognisant of that at the start, and I think we have all worked very closely to make sure it does not happen. I know Norman Hampshire was outside earlier. He will be talking about infrastructure first, but it is very much about making sure that each of our local authorities feels connected and gets a share of this—the right share at the right place, based on need.

For our city region deal, there are six local authorities and it is very much the case that the chair is shared and each local authority takes a turn. Wee Midlothian is the smallest local authority of the six local authorities, but we have as much of a voice as Edinburgh or Fife for that matter, which is a huge local authority. I could understand other areas looking at that and thinking, “I do not know if that is for us” but for me, as a Midlothian councillor, I do not feel that has been the case. The benefits it has brought—the science zone, and so on—have been very beneficial for Midlothian.

What are the potential benefits and drawbacks of the Scottish Government playing a greater role in delivering local growth funding? You have touched on the red tape, but could you elaborate.

It is an extra layer, and that is always the worry. You are then talking about timescales and how they will impact. I mentioned previously the issues with local authority staff being under pressure and this constant battle of making applications. I am sure Pauline can go into more detail about her life basically, which is going from one funding paper to another. Another layer of bureaucracy and time would not be helpful.

Do you think there should be more direct funding from the UK Government, if it is UK Government funding, to local authority areas?

Yes.

I think we are agreed on that specifically, but we need to be careful as well, because when we were talking about European funding, it was the bureaucracy element of it going through the Government before it came to us that was the problem. City region deals are tripartite agreements between the Scottish Government, the UK Government and the local authorities. We are all partners in this to make the city regions work. I do not want anybody to think that is not an effective or functional arrangement. Sorry, it is a different hat I now have on, I have realised that was a city region hat I had on. If we are getting direct funding, absolutely—the closer it gets to us without going through a number of hands, the better. That is more effective, but it comes with a responsibility to make sure we are accountable for it and it is used for the things that we are supposed to use it for. I suppose I could touch on one final thing that goes with that, which is the general power of competence that is being consulted on at the moment. If local authorities had that in Scotland, we could do a lot more. There you are; that is a different hat.

As the Coalfields Regeneration Trust we are funded by the Scottish Government through the Regeneration Fund budget, and it is very difficult because we are year-on-year. Come August, we have to start writing a proposal for the next financial year. We need to look at how we can ensure that third-sector organisations like ours have longer-term funding. We are a regeneration organisation. The work that we do to support our communities right across Scotland, England and Wales is unique. We need to be embedded as that regeneration organisation because we work directly with the communities, and we speak to the communities. We see what their priorities are. That is when we start working with our partners within our local authorities to say, “This has been identified. Where can you support it? Where can we get the funding to be able to deliver projects together and work together?” Of course, every penny counts. We want £1 to turn into £10. We want £1,000 to turn into £100,000. For us, it is, longer term, getting embedded into the Scottish Government as well as the UK Government.

I wondered whether or how the industrial strategy could be best used to address the needs of local industrial communities and to help foster more resilient and sustainable growth.

I suppose the focus of the industrial strategy has to be away from trying to pick winners, trying to predict the future and trying to be too prescriptive about where you think growth will come from. The industrial strategy needs to focus more on our towns and industrial communities, which have a lot of manufacturing in them, more than the national average. We should focus on our manufacturing. We should create the skills to support that. I have a number of notes for that very thought. I must have been prescient for a minute. We need to use state aid or subsidy control to support investment into the right places, which I touched on earlier. Support research and development with incentivisation, such as through tax levers for companies to invest in research and development. If we have the right places with the right industrial premises for businesses to move into, we should be able to support them with other options. There are new sectors that did not exist before. Renewable energy is now de rigueur, but we have the green retrofit to consider. How do we make our homes warm and insulated properly? A lot of work will come with that. The industrial strategy has a lot of heavy lifting to do for the whole country but, from our point of view, back to my assisted area map, if we use different data, we will get different areas that need assistance. If we know where they are, we can start to direct the work into that. We cannot have a hands-off, light-touch, laissez-faire approach to the economy or we will get an overheated economy and the communities that are furthest from being prosperous will get even further away from that. Investment into towns and our communities is the right thing to do to rebalance the economy, but it also needs to be the right kind of jobs.

You have partly answered my follow-up to that question, but maybe we could just dig into it a little more. What would the industrial strategy need to contain to ensure that communities that either are not close to big cities or do not have good connectivity with big cities do not find themselves in the same position all over again?

In the footprints of our towns and communities, a lot of deindustrialised land is around about, and a lot of brownfield sites are around about. These need to be worked on. Gap funding is a big part of how we take the market failure that will not invest in them and fund it through the public purse, because the benefit is to our communities and to ourselves. It is a virtuous circle. If we invest and make these sites available and remediated, perhaps, or if we use the vacant and derelict land fund to do this kind of stuff. We have lots of pockets that would be economically unviable without some support, but the benefit to our communities would be huge if these were brought back into productive use. I suppose gap funding is part of that. We talk about patient capital all the time, but without this need for it to turn over quickly. We need to measure differently if we want to get the benefits, and we need to think wider as a Government and as local authorities. Is the Treasury Green Book the right tool for some of these measurements? The answer is probably no. It needs to look at the wider societal benefits, or it needs to quantify them better, so that it allows the Government, through industrial policy, to say, “We can help you better in these places.”

Community wealth building. The microbusinesses that I spoke about before. As I said, nice as it would be to think that someone will open a factory tomorrow and provide 2,000 jobs, that will not happen in our areas. Will those jobs be available? It is about futureproofing. I know that jobs will exist in 10 years’ time that we do not even know about today. That is difficult. Futureproof these future jobs as best as possible.

By talking. Again, I keep banging on about partnership working. It is so important to get the local knowledge from people who know their communities best.

The Industrial Strategy Advisory Council is good. It is an opportunity to harness people’s thinking from lots of different places. The chair is formerly Microsoft—or maybe even still is Microsoft—which is fine, but that is very big. If you are trying to find the best leader, they will have one view of the world. They will need to be able to harness people like the Federation of Small Businesses, the CRT, local authorities and everyone with their feet on the ground to find out what will fit best. On the chances of great big factories or great big industries coming, there will be some big wins and it will be lauded, but who gets the growth from that? We need to be able to make sure that our communities have more jobs and better jobs closer to home. I say that thousands of times a day, but we need to make sure that is there. They need a wider stakeholder group to listen to, and it needs to feed in. It is easy to say you are listening, but it is difficult to distil what you hear so that everyone still feels included. It is useful to have, and it will be important to get the industrial strategy right, but they need to hear all the voices.

The biggest part of the work we do in our communities is helping communities to create local place plans and local action plans. From that, we can identify that the majority does come down to the low skills. It comes down to their employability, employment, their green spaces, their health and wellbeing and everything. We have so many good community activists within the areas that we work in, and they feel that sometimes they are overlooked. It becomes an expectation that they are delivering those services, because unfortunately the councils are not able to deliver them with their restricted funding and everything. It has to come from the communities. They have to have an involvement to see that they are being fully recognised. They have a lot to say, and they need to be able to say it.

I suppose if consultation was easy, we would not struggle with it quite so much. As a local authority, we do. The care sector is a big part. We have an older population. That will be a big part of jobs. How do we make those attractive to the right people who want to work in care? It is better that people want to work in it and have that attitude to that kind of work. It does not suit everyone. In terms of feeding in through SMEs and microbusinesses, most of the Fife economy—if I can be parochial—is small and medium-sized enterprises or microbusinesses, with one or two great big players. You have great big ballast, and then it is all small. You have to hear the right voices in terms of how we feed into the industrial strategy, which is where we started, but you also have to be able to make your communities work. If care is not funded properly or is not managed properly or does not work properly, the detriment to all our communities is the same. We cannot get care when we are all getting older and we will need it. Now that my hair is grey, I am probably more concerned about that. You mentioned the cost of employment. We were talking about employer’s national insurance. I feel a bit two-faced here, so I will declare that now. As a local authority, we were thankful that the money was raised so that we have it. On the other side, it was a big burden for us to deal with. I will note that the ICA does not have a view on this, as far as I am aware, so I will speak personally. If you are going to tax, you need to spend that money properly. We know about tax and spend, and tax and invest. If it is investing in our communities to make them better for the jobs that we want them to have, we will live with that for now, but it is very difficult to raise money. It has to come from somewhere, and you have to make the best of it when you get it. The devolved Assemblies both moaned on one hand and also said, “Thank you very much for the money.” We got some, too.

This is a quick one about the Industrial Strategy Advisory Council. I do not know whether the third sector sits on that. If it does not, it normally has the voices of the local communities. Should that happen?

That has two levels. Local authorities, whether it is COSLA or whether it is local authorities individually, should have an input to the Industrial Strategy Advisory Council, but also the third sector has a very loud voice in how we do the things that matter in our communities. Yes, it needs to have a voice in it, but there are many steps in between to make sure we are gathering it. The problem with all of us is that we get quite parochial when we get into this, which is not helpful when we are trying to get a strategy for the whole country but, yes, the third sector is huge in terms of delivery. Sorry, Pauline. I answered your question there, probably.

In such a small local authority as Midlothian, it is perhaps a bit easier. I have regular meetings with the third sector. In fact, I nipped in on my way past yesterday. I was going past the office and so I went in and had a wee chat. I had a meeting with the chief executive of the chamber of commerce yesterday as well. Again, because we are so small, those personal relationships are well built up. In larger areas, that may be a bit more difficult to do. I am not suggesting that we look at local authority reorganisation or anything like that, but I do feel that being small but mighty is an advantage.

That concludes our questions to this panel. I would like to end by thanking you all for coming along today and for giving us all your thoughts and ideas. It has been extremely helpful. This is the first session in this particular inquiry, so it has been a good way to set the scene for what will come afterwards. Thank you very much again.   Witnesses: Councillor Norman Hampshire, Councillor Stephen McCabe and Corey Beaton. [This evidence was taken by video conference]

We will resume with our second panel, looking at our industrial strategy. I welcome all three witnesses to the session. If I could just ask you to introduce yourselves, perhaps starting with the people who are in the room. Mr Beaton, would you like to start?

Good morning, everyone. My name is Corey Beaton, and I am from Inverclyde Chamber of Commerce. We represent members of the business community in Inverclyde of varying shapes and sizes, from start-ups and SMEs all the way through to larger employers and the third sector as well. I am grateful for the opportunity to be here today to share their input.

Good morning. I am Councillor Norman Hampshire. I am the current council leader in East Lothian. I am also vice chair of the Edinburgh City Deal and will move into the chair next year. I have been on the council for a long number of years as planning convener and now as the council leader.

Good morning, everyone. I am Councillor Stephen McCabe. I am the Leader of Inverclyde Council. I have held that post for most of the last 18 years, and I have the scars to show for it.

I am sure. Thank you all very much. I will kick off the questions this morning by asking you each to describe the challenges facing your communities as former industrial regions.

Our challenge in East Lothian is that we are on the edge of Edinburgh and, because Edinburgh is the driving force of the Scottish economy, it causes growth within East Lothian. We have had to accommodate a lot of new homes across East Lothian. Every community is taking a significant number of new houses, which has meant that the infrastructure within these communities has had to be expanded. We have five new primary schools and a new secondary school, and all of them are at capacity. We are now under real pressure because there is still more demand for more houses, and the infrastructure cannot cope. With the funds that we have available, we cannot afford to take development further. On the economic side, a huge expansion of renewable energy is taking place within East Lothian, with 2004 seeing the first onshore wind farm at Crystal Rig, which is the Fred Olsen group, but we have had a number of wind farms developed since then. Now we have the offshore coming. Berwick Bank will be the biggest wind farm in the world, but all the infrastructure for that needs to come onshore within East Lothian. That takes up land within our countryside. There is real pressure from the community about the process you have to go through to allow development to take place for this renewable technology. It is different from the planning for housing, whereas the community feels it has been imposed on them rather than through a planning process. These are the areas. Infrastructure is probably our biggest challenge as a council. All the national infrastructure, whether it be the A1 trunk road that runs right through East Lothian or the east coast main line, is under real pressure. Investment is required to bring them up to meet with the growing demand. Also, services like health have not been increased to meet the demand of new people moving into the area, so people who have lived there for a long time are now feeling they are having to take cuts in their services because new people are moving in.

I suppose there is a contrast between Norman’s council area and my own. It is not just a matter of being on different sides of the country but there is probably a stark contrast. East Lothian is a growing area. Inverclyde is the mainland authority in Scotland with the highest rate of population decline. We have had population decline for many decades. Part of that was net outward migration linked very much to deindustrialisation. More recently, it is a continuing natural decline in our population. Our net migration position is broadly stable. We have an ageing population, again, above the national average, which means we have fewer younger people as well. We have high levels of economic inactivity. Around 31% of our population is economically inactive. Much of that is to do with the health challenges we were discussing earlier. We have high levels of poverty and deprivation. In reality, to address those challenges, we need jobs. We need new, good-quality jobs. We have faced decades of industrial transition, which the chamber of commerce certainly highlighted in its submission, where we faced the decline of our shipbuilding and heavy engineering base. We used to have tens of thousands employed in shipbuilding and heavy engineering. Our strong manufacturing base in the 1970s and 1980s went through a period of decline. The growth in electronics to a certain extent offset the decline in manufacturing, engineering and shipbuilding jobs. Then we had the decline of the electronics sector with jobs going to the far east and eastern Europe. To mitigate that, in the late 1980s and into the ‘90s, the then UK Government awarded us enterprise zone status. Through the incentives that came from that, we were able—with the support of the Government, I have to say, and its agencies—to attract quite a number of new employers into the area. The Royal Bank of Scotland opened a mortgage centre. Amazon, which was mentioned in the earlier panel, opened a fulfilment centre. Various call centres were established in the mobile phone industry and health as well. Unfortunately, in recent years we have seen those service jobs start to leave the area. In fact, over the last two to three years, we have faced the loss of around 1,200 jobs. We saw the EE BT call centre in Greenock relocate to Glasgow to fill up empty office spaces as a result of covid. We have seen Amazon move its fulfilment centre out of Gourock and, in fact, the business moved to Fife. We heard earlier about the challenges around Amazon in Fife as well. IBM’s final presence in Inverclyde has moved, again to empty office space in Glasgow. We have seen a haemorrhaging of jobs over the last two to three years. Unfortunately, we have not had any direct support from either Government to address those issues. We look with envy, I have to say, at the response there has been to the loss of jobs at Grangemouth, where significant investment offered by both Governments is trying to help the situation. A lot of positive things are still happening in Inverclyde. We have two or three city deal projects, which will certainly be beneficial to the local community. We are working in partnership with the Glasgow city region and has recently recognised Inverclyde as a priority within the city region. We are not benefiting to the same extent from some of the regional activities as we should have, so it has recognised us as a priority. Recently we were awarded around £11 million in funding to create new industrial and commercial space in the area. Inverclyde is certainly an area that needs the support of the Government. It needs the support of the UK Government and the Scottish Government. The market is reluctant to invest in Inverclyde, we find. None of our city deal projects would have got off the ground without public investment. We are very much an area that needs the support of the Government to address the issues that we have and to exploit the opportunities we have. We have excellent opportunities. We are on the River Clyde. We have good port facilities and good marine facilities. We have opportunities in green technologies that could potentially be developed, but we very much need the support of the Government to help us address those challenges and exploit those opportunities.

We will no doubt come to some of those issues as we continue with our questioning. Mr Beaton, would you want to add anything?

I very much agree with Stephen’s analysis of the situation, particularly over the past 40 years, and the transitions that we have experienced as a community. It is fair to say that although we will touch on the opportunities, the infrastructure that now remains in Inverclyde presents a significant opportunity for investment to align it more closely with the wider UK Government economic strategy, and equally so with the Scottish Government. Scotland, with the focus on clean energy, has opportunities to provide either manufacturing facilities or storage facilities—there have been plans for that already in Inverclyde—and, equally, looking more widely at defence. Ferguson, a local shipbuilder, is doing some work for BAE and so already has a stake in that ongoing work with its yards in Govan. Opportunities to expand the Inchgreen facility, and equally other areas of land within Inverclyde, could provide vital manufacturing opportunities that ought to be considered, not least because it would counter the effect of depopulation and divestment in Inverclyde that has followed not only these significant economic milestones but also the pandemic, the cost of living crisis and particularly Brexit. Many of our members are still struggling with the effects of Brexit in the nine years since the referendum, and time will tell what this new deal with the EU will bring for them. Equally, the biggest factor that we have to consider is the time it has taken since those industries left Inverclyde for the Government to begin to step up through the Shared Prosperity Fund and the Levelling Up Fund to invest in Inverclyde and to promote it as a great place to live and work. I continue to do both. Yes, there are many opportunities ahead that we will come on to, as you said, Chair, but it is balancing them with the work needed to undo the damage that has been done over the past 40 years in particular.

My question is to both Councillor McCabe and Mr Beaton. Councillor McCabe, you mentioned in your first answer that one of the greatest challenges is economic inactivity. The obvious challenge is employment, with low employment rates and high unemployment figures. Both are above the national average in Inverclyde, as I understand it. What initiatives in Inverclyde are tackling high unemployment and economic inactivity, and what are your priorities over the next five years to improve employment rates?

We have a range of programmes in Inverclyde to try to address that. We have a well-educated population in Inverclyde. Our schools very much punch above their weight compared with other areas. A lot of young people come out of our schools well educated. A high proportion of our young people go to college and university. However, a significant proportion of the population are what we call furthest from the labour market. It is about trying to support those people—young people and older people, as was discussed in the earlier panel—into employment, and to get them the skills they need. We have a range of programmes, modern apprenticeship programmes and wage subsidy programmes for employers. We work closely with the third and voluntary sectors, which provides a range of opportunities for people who are furthest from the labour market. We seek to address issues around mental health and addiction as well. We have a lot of young people with additional support needs, and we need to work intensively with them to try to give them the skills they need. We work hard at it, but no doubt we need to continue to address the ongoing challenge. I suppose the more support we can get from the Governments and agencies, and certainly the more funding we can get, would assist us in trying to address those issues. We have specific issues around new Scots coming into our community, and a lot of support goes into helping them with language skills as well. The Shared Prosperity Fund was mentioned earlier, and the Multiply programme has been used to help people improve their maths skills. We are doing a range of work to try to support people who are furthest from the labour market. You were discussing the issue of welfare reform and the focus on people with disabilities. It is critical that we support people with disabilities to maximise their opportunities. That support has to be intense in a lot of cases, and it will be costly as well if we are to genuinely give them the opportunity to fulfil their potential. I am under no illusion about that, but a lot of good work is happening in Inverclyde across the agencies and it certainly will continue to be a big focus for us in the years ahead.

In relation to what Stephen said about the work that the public sector is doing, it certainly is making an impact. The levels of deprivation and social inequality within Inverclyde impact on local individuals’ ability to engage in education. Council services have been able to support adult learners to improve their literacy skills. Equally, adult learners have then gone on to gain a minimum of an SCQF qualification, particularly through our partner and member of the chamber of commerce, West College Scotland in Greenock. They are under pressure, just as the further education and higher education sectors are anyway, in the drawback of funding that has been available to them. There have been times where the future of the college’s presence in Inverclyde has been put into question. We are equally keen to support as many adult learners into further education and, ideally, higher education to benefit from the skills and the development that they gain from that. To touch on the work that the third sector is doing, our third sector interface, CVS Inverclyde, promotes opportunities for volunteering, not only among local volunteers but also local organisations that would benefit from having volunteers brought in. When you look at the situation for a charity with the intermittent funding cycles and the constant struggle to secure them, it is difficult enough for them to look at recruiting staff beyond perhaps a one, two or three-year period. Bringing in volunteers can not only support their clients and deliver their work, bringing their inherent skills and lived experiences, but equally for those who have very little of either, it gives them the opportunity to improve their employability and their attractiveness to employers, at least on paper and in what they bring to an interview and into a job. We as a chamber are very keen to support any opportunity that delivers on that, particularly through CVS and the Community Development Trust and the impact it has on the community. To sum up, I think there is a very good blend in the impact that the public sector and the third sector have. Equally, with the private sector I think that a lot of those initiatives go unsung and unrecognised in offering work experience to those who are already in school, to school leavers, to those on placement in college and university, for them then to develop those skills and take them into employment. There is very much a good deal of partnership working in Inverclyde at least to try to address those challenges, but we are a long way away from overcoming them. Not to labour the welfare reform point, if there are opportunities coming forward for employability services run by the DWP to be better funded, or at least funded to a greater degree, to pilot more innovative and unique initiatives in areas like Inverclyde, where there is a high need for it—or at least a test case as a viability study to discover the impact and what results are yielded—I think that is something that ought to be encouraged.

I think that you mentioned previously on behalf of Inverclyde Chamber of Commerce that you felt you were getting limited support in Inverclyde from Government. I presume you meant both UK and Scottish Governments. What should both Governments be doing differently to better support the community of Inverclyde? I will throw it back at you. Can I ask you both what you are doing to capitalise, for instance, on the growth sectors and announcements coming from the UK Government in initiatives such as defence and clean energy? These are employment opportunities.

To your point on what support we feel could be better developed by the Scottish Government and the UK Government, recognition first of all of the fact that there is an inherently unique situation in Inverclyde in relation to the levels of deprivation, unemployment and depopulation that we have. We are the most deprived area in Scotland, according to a study done in 2020. If you factor in the pandemic and the cost of living crisis that followed, I think you would see either that rate of deprivation increase or we would none the less stay in that position. Recognition of that, first of all, from the Scottish Government in seeking to address those matters directly with greater involvement in not only the public sector in relation to publicly funded initiatives and the third sector as well in the availability of funding, but equally within the private sector to encourage growth and to encourage not only the creation of businesses but the creation of jobs that then follow and the support that ought to be given to bring those who are either unemployed or jobseekers for the first time into employment. The funding that has been brought from the UK Government previously from the Shared Prosperity Fund and the Levelling Up Fund has delivered quite remarkable levels of change and projected change in Inverclyde in terms of the regeneration of the area and what that then means for those within the supply chain locally and, indeed, regionally to count on the regional support that we have had through the city region deal. These are all great opportunities that have been lined up, but we are still yet to feel the benefit of it. With the benefit of time, we will know the impact that will have on our local community and those who are seeking employment, and whether that counteracts the issues we have with socioeconomic deprivation and whether that encourages not only those who want to work and live in Inverclyde to remain in Inverclyde and, if their job then has to move elsewhere in time—we cannot predict—they want to still live in Inverclyde. Equally, if we flip it on its head, there is a unique selling point in Inverclyde for homeowners and first-time buyers. There is also one for businesses. That is the fact that we have our burgeoning infrastructure, a workforce that is ready to work and get back into work, and the prime location we offer for transport links and our infrastructure. As much as Stephen and I will know that many of our constituents talk about the issues with ongoing roadworks, that is a long-term investment that will yield results and improve access to other opportunities as much as it will for people coming into the community.

We are very much knocking on the door of Government to try to make the case for investment in Inverclyde, ably supported, I have to say, by our new MP, Martin McCluskey, who has been a great champion for the area since his election. We have had engagement with both the Scottish and UK Governments. We have had Ministers visiting us. We established a taskforce that has ministerial representation on it as well. We believe we have a lot to offer in Inverclyde in green energy and green technologies. We are an excellent location on the west coast. We have excellent port facilities. We have excellent transport links as well. We have close proximity to Glasgow airport. In terms of defence jobs, we are 20 miles down the road from the biggest warship facilities in the UK. We have our own small shipyard that could play a part in that. We have a massive dry dock in Greenock that could play a part in that as well. We are very much open for business and having engagement, but the reality, as I have said previously, is that we need the support of Government. In terms of our city deal projects, we required that investment to bring those projects to fruition. We have seen the success, for example, of our cruise terminal, a £20 million investment, half of it coming from the public sector, which over the next decade is hopefully going to lead to a dramatic increase in passengers coming through the port of Greenock, with real economic benefits coming to both the local community and the wider region. We are very ambitious for Inverclyde. We see that there are opportunities here, but it is undoubtedly the case—and that is why, I suppose, we are discussing the coalfield areas and Inverclyde as areas that need the support of Government. Government intervention is required. Even in the context of the Glasgow city region, we have probably not secured as many benefits and initiatives from it because, for example, we do not have a university in Inverclyde, and much of the investment is going through universities. We very much need the support. We have demonstrated that we can deliver, both as a local authority and as part of the Glasgow city region. All we are asking is for Government to recognise that and to work with us. As part of the wider city region, we are very much speaking to Government about a potential devolution deal. We believe that through the city region and various other initiatives we have demonstrated as a city region partnership that we can deliver. Through a devolution deal that gives us more autonomy in decision making over how we invest money for our own regional and local priorities we can deliver even more.

Before I move on, we have quite a lot still to get through and we are fast running out of time, so I ask that questions and answers be as succinct and focused as possible.

This is a question for Norman Hampshire. You have already touched on population growth in Edinburgh overspilling into the East Lothian area. You mentioned how a lot of local residents feel somewhat disadvantaged from that due to the increasing pressure on services. How are you supporting disadvantaged residents to ensure that everyone can benefit from the region’s economic success?

I mentioned that there is pressure on certain services, but every community has benefited from growth. Growth is a positive thing. It has brought additional investment into each of the communities. Wallyford was probably the most deprived area within East Lothian. That community has now doubled in size with the housing we are delivering there. It has a brand-new primary school and a brand-new secondary school. The secondary school that has been built in Wallyford is a secondary campus that has a training facility attached to it. Young people who are not doing well academically have an opportunity within that school to learn trades of joinery, bricklaying and electrical. Children from other areas within East Lothian go to this facility as well. Growth has allowed us to deliver these things. Without that growth, it would never have happened. Wallyford’s old primary school was really poor. This secondary school is state of the art. What was a very deprived area is now completely changed. We have done that in every community. I know the Chair said to be quick, but for people who are struggling, the Ridge project in my own community takes on young people who are struggling within education from across the area to learn traditional skills. They are doing restoration of buildings. It is a proper training programme. The best youngsters go on to apprenticeships, and there are lots of companies interested in working with them to try to get the best people to come into their business and move forward.

Can I also ask how significant East Lothian’s proximity to Edinburgh has been in driving its economic success, compared with other measures that might have been introduced by the council?

In the city deal, which I know you are aware of, I know there was a lot of concern at the start. Everybody felt, “Here is Edinburgh”. We had the Lothian region days where there was dominance from the city. However, the city region is a different model and it has allowed every authority to have its major input into the deal. The partnership that has developed and the relationships between officers from the different authorities, the universities and the businesspeople has been greatly improved. That is what has driven the city deal forward. It was £600 million of UK and Scottish Government investment. It has generated £1.5 billion of investment into our region. A lot more is going to come from it through the facilities that have been built, a lot of innovation facilities that will drive business forward. Another area is the Queen Margaret University food and innovation hub, which is about driving food and drink products in a healthier forum. Hopefully, from the innovation hub the business park that is available around it will become facilities where products will be developed and go into the marketplace. That venture is a partnership between East Lothian Council and Queen Margaret University. It opened at the end of the summer, and it will be, I think, a driver for a lot of new employment opportunities for the area.

To clarify, has that project come from the city region deal?

It was city region deal funded, yes.

Can I ask for detail on what other measures the council has taken and how they compare with some of the work coming out of the city region deal?

We had a coal-fired power station in East Lothian, and obviously that had to close. East Lothian, as a small council, took the decision to purchase that site from Scottish Power. It was a big gamble for a small local authority to take on something as complex as an old coal-fired power station, but again we were lucky to get some levelling-up funding. We have restored most of the site. There is still work to be done, but we will have the site restored. We have been able to sell off some of the land to offshore wind farms, which are putting in infrastructure to connect to the grid. There is still a lot of land available there. We have companies that are looking to use some of the power that will come from the wind farms for data centres. We also have a facility on site that is a large battery store. Through that area, we believe we will be able to deliver much more growth within East Lothian. Data, according to Peter Mathieson from Edinburgh University, will be the big growth factor going forward. The more facilities you can have to support data, the more you will grow your economy. We are in a good place. We have Torness nuclear power station at the other end. It has a licence until 2030. We are hoping to see that extended a bit, but we would also like to see modular reactors located on that site. There is a lot of power coming in at that location because of the eastern green link, and we think there is potential for hydrogen production and other manufacturing in that area.

There are a number of initiatives going on within the council as well as those.

Yes, as well as the city deal.

The Clune Park area has been a long saga. I could probably take up the next hour giving you the history of Clune Park. The reality is that I was the councillor for Clune Park from 1992 to 1996, and in that time the area was showing signs of decline. It was an entirely privately owned estate, originally built for shipyard workers. It was managed by a couple of factors. We had started to see private landlords buying into the area as well. At that time there was a plan to create a housing action area for improvement that would have seen the properties refurbished, pitched roofs put on them as well, but unfortunately the amount of funding for private housing was cut dramatically in the mid-1990s by the then Conservative Government and that plan never got off the ground. Into the 2000s we had dialogue with the Scottish Government about potential funding for a housing action area, and they were not prepared to put the funding in. Their view was that the area should be demolished and new housing built in its place. Over a period of time, we then had to seek to acquire the properties, and unfortunately our powers are very limited. We were not able to take effective action until the properties had deteriorated to the point where they were considered to be unsafe. Through a process of voluntary sale and engagement, we have now acquired probably around 80% of the estate and commenced the demolition. It really has been a war of attrition, particularly with the private landlords, who were unwilling to sell the properties to us voluntarily at a price we could afford. As a relatively small authority, there was not huge amounts of money available to us, and we are constrained by the public purse in terms of what we can pay for properties. We had engaged with the Scottish Government during the 2000s to try to get new legislation to give us more powers, but unfortunately the Government chose not to go down that route. Compulsory purchase is obviously a power available to us. That is very much a last resort. We got to a stage where the estate was in such bad condition it had that reputation, and we have seen the videos of it as well. I think there are lessons to be learned for the Scottish Government in terms of powers that should be available to local authorities to deal with situations like this, which could have meant that the demolition and renewal of this estate could have started many years ago, rather than taking around 20 years to get to the point we are at now.

No, there are extra costs. It is not just to the council; there are extra costs to the public purse in terms of the police and the fire service having to attend on occasion. There are costs to the council as we have acquired the properties in having to secure the properties and protect them from vandalism, fire-raising and so on. Yes, there are significant costs. There are legal costs to the council for fighting legal challenges, taking action against owners who are not paying their council tax, and so on. There have been lots of costs. We as a council have probably incurred somewhere in the region of £3 million-worth of costs to date in that process. In terms of what we can pay for the properties, we are constrained by value for money. We have to engage with a district valuer to put an appropriate valuation. There is some flexibility around that where we are maybe seeking to acquire large numbers of properties and there is a benefit in acquiring a large number of properties rather than individual properties. There are lots of issues around ownership, people disappearing, not knowing who they are, properties falling to the Crown as well. It has been a long process. It has taken too long, and that is because the powers available to us have been inadequate.

We recently commenced the demolition of those properties where we have demolition orders. We are hoping to acquire the remaining properties within the next 12 months or so, and hopefully demolish the estate within that period. We then have to secure funding from the Scottish Government to build replacement houses. We are engaging with housing associations and the Scottish Government to look for funding to build probably around 150 replacement new-build properties for affordable homes. If we can secure that funding, it will probably take five years or so to build the new properties. We believe it would be an excellent estate for Port Glasgow and Inverclyde more generally. It is in a good location. It is very close to the town centre and to transport links. There is very much a need for good-quality, affordable homes in the area.

I will pass to Elaine Stewart. Could I ask Councillor McCabe to adjust his volume a little? Believe it or not, Councillor McCabe, you are very quiet today. If you could either speak up a wee bit or adjust the volume, that would be very helpful.

How do you measure the success and the impact of the regeneration projects in addressing the socioeconomic challenges in your communities?

It is difficult to know from each area within East Lothian, but our employment level is now really low within East Lothian. It is not just for young people. For people who are inactive in employment, it is difficult to say to them, “You need to go into a job.” They need a lot of work to get them ready for employment, and that is an area that we have moved much more into. Employers will tell us that we can send somebody along to them but if they are not ready to go into that workplace—they need confidence as well. Once they have been out of work for some time, their confidence has gone. You need to build up that confidence and then work with them to get them back in. It is basic things they need to give them that confidence. The project I mentioned, the Ridge, does a lot of work with people. Some people have been through alcohol or drug problems, and it works with them to try to get them to a place where they can hold down employment. We need to keep doing more of that. We are trying to see that across the area, but it will be a challenge because of the changes to the welfare system. More and more of these people will need to go back into the workplace, and we will need to give them as much support as we possibly can so that employers will take them on. We will try to monitor that to make sure we are doing everything we can to accommodate them.

As Norman touched on, you have the usual metrics in terms of how high or low your unemployment rate goes over a period of time and the overall value of the investment going into a community. From a business community perspective, it is, as Norman said, about the confidence of those leaving school to go into the market. It is the confidence of businesses going forward into the next—I would not even say a year, the next quarter or so. The Scottish Chambers of Commerce’s quarterly economic indicator gives a good indication of that. It has remained fairly stable, if not dipped over the past five months, I think, since the start of the year. There are various factors involved in that. The risk of tariffs imposed by the United States has impacted on businesses and their supply chains. The increased cost of doing business is associated with inflation, interest rates and increased national insurance costs. That is a broad general picture of what the Scottish economy at large looks like. We have had a new port operator, Global Ports Holding, move into Inverclyde and secure a 50-year lease. That is a great sign of confidence in the area, and in such a growth area as tourism in Inverclyde. It is planning to provide further opportunities, not just to local jobseekers and those seeking opportunities following school or university, but equally for the business community to access such a vital and profitable market with the tourists who come off the ships. It is the same with Peel Ports as well, the owners of the port, providing those opportunities. At the moment, according to Business Gateway, 10 businesses start in Inverclyde each week. Their viability and survival rate we don’t know, but if we can access and support them, and if we are then able to direct the necessary logistical and financial support from the council or elsewhere into those businesses to help them to grow and employ staff, through that investment and with the benefit of time we will see that. At the moment, the picture for the business community is, I think it is fair to say, a bit of a mixed bag. There are mixed opinions. Time is the biggest test.

It is a range of measures, as Norman mentioned earlier. It is about getting people skills and so on. For us, it is about jobs. It is about getting people into the labour market and it is about reducing unemployment. We have made some progress in reducing the number of economically inactive people in the area through very intensive programmes, working with them. It is about family support as well, providing people with appropriate childcare that assists them to get into the labour market. Unfortunately, our unemployment levels have remained pretty stubborn and stable over the last number of years. Part of that is because we are running hard to stand still, and it is very much linked to the point I made earlier about the fact we have lost around 1,200 jobs over the last two to three years from these different companies moving out of the area. While we are working hard to attract new jobs into the area, to bring new jobs—for example, as part of our cruise terminal we created a new high-end restaurant, which has created 70 jobs—at the same time we are having a haemorrhage of jobs out of the area.

Can I ask both Norman and Stephen how the reduction in the UK Shared Prosperity Fund for 2025-26 will impact on the projects and initiatives you currently have planned?

It is like any Government funding that is short term. We have put programmes in place to provide training, and we cannot give people any guarantee of what is coming down the road. These are programmes that are essential. If we are going to get the maximum number of people into employment opportunities, we need that funding. Without that funding, these programmes will stop and these people have absolutely no chance of getting back into the workplace. When I meet Scottish Government Ministers, I say, “We get funding packages—a package for this, a package for that. Just give the council its pot of money and allow it to deliver the services our community needs.” We always look at everybody doing the same. What happens in Glasgow or Inverclyde is completely different from what happens in East Lothian. Just give the money to the local authority, whatever its share of the pot is, and let us deliver. Give us some things that we should be targeting, but don’t put it into small pots of money. Just give it to us and we can manage our budget much better than we do at the moment.

In the interests of time, I agree with everything Norman has just said.

That being the case, I will move on to my next question. What do you see as being the limitations of local and regional funding initiatives, and how do you think they could be improved? You have mentioned multi-year funding because one-year funding does not allow you to plan ahead and does not allow you to perhaps take a more strategic view. What other measures do you think would be helpful?

We need more funding. If you are looking for us to deliver growth, growth does not get recognised in the settlement figures that come through the process. We are now in a position in East Lothian where we have an open-cast coalfield that has been redeveloped, something like 1,600 houses, but to expand that to a much bigger community, something like 11,000 homes, something like a £300 million capital investment is required for infrastructure. There is no way a small council can do that via section 75. We will get money from developers, but there needs to be much more strategic thinking. That is where the city deal process comes in. If funding is coming through a city deal model and each area is getting its share of that pot, we can deliver things much better. I said at the beginning that I do not think the Lothian region works as well from our area, but I do believe in regional working because you can plan things better. Edinburgh trying to improve transport within Edinburgh needs to work with its outlying authorities, so there needs to be regional funding for regional infrastructure. Edinburgh is a huge driving force in the Scottish economy. There is so much going on within that, but Edinburgh knows that it cannot get much better unless its region grows. That is where the city deal has shown everybody that that is the way to grow it. If we could link the north-east of England to the south-east of Scotland—the A1 is a terrible trunk road. If that was dualled, that would be a driving force for growth within the north-east and Scotland.

It is very much about trusting local authorities with the funding rather than having a lot of different pots of money and a lot of bureaucracy that surrounds them. Trust that we know our communities best. We know the priorities for our communities. Give us that devolution. We see devolution to the Scottish Government and the Scottish Parliament. Let’s have some devolution to local authorities within Scotland. Give us the flexibility that we need to deliver for our communities. It is important. As Norman alluded to, our regions are mostly quite big—Glasgow city region is about 40% of Scotland’s population—but there are different challenges within the regions. That is why we are pleased that the city region has recently recognised that Inverclyde is a particular priority within the city region strategy. Hopefully that will bear fruit in our share of investment from the city region and from the Government. The Government strategy around growth is very much to be welcomed, and I support the ethos behind it, but pretty small letters within that is the term “inclusive growth.” That is the reality. We need inclusive growth. We should not be investing in areas that are already booming. We should be investing in those areas that need the investment, that need the help, that need a hand up. The whole country needs to benefit from growth. We often talk about trickle-down economics. Well, I’m sorry, we do not need trickle-down growth. We need an investment strategy and a growth strategy that is targeted at those areas of the country that need the greatest investment to address the underlying challenges of poor health, depopulation and worklessness. That is where the Government need to prioritise in their growth strategy.

We know that there will be a White Paper specifically aimed at post-industrial areas coming along soon. This is a two-part question in a sense. What would your priorities be for that White Paper? Do our local authorities have the capacity to deliver the local aspects of that strategy effectively?

Local authorities are best placed to deliver growth. If local authorities are given the resource, we can make growth happen. We know our areas. We can work with the businesses that want to locate within our areas. We have the planning system. The planning system needs to be improved. We need more powers with that. If land is allocated through the planning system, the landowner can sit on that piece of land and not allow anybody to develop on it. If you allocate that land for economic development, we should have the power to acquire that land. We have businesses desperate to build and expand and they cannot get access to this land. That needs to change. If you are going to get growth taking place, you need to give local authorities the powers and we will make growth happen, I can guarantee you that. That is the best way of delivering growth across the nation.

I think the Government’s priorities are very much the right priorities, but I think they need to target investment at those areas that are in greatest need. They are not looking at places like Inverclyde and saying, “What are Inverclyde’s strengths? How can Inverclyde contribute to the national growth strategy, and how do we support that?” In terms of capacity, it certainly is the case that my authority is a relatively small authority. Unfortunately, over the years we have had to cut back our economic regeneration staff just to protect other services. However, a big benefit from the Glasgow city region has been the ability to work in partnership. As Norman said, probably some of us went into the city region and the city deals with a bit of trepidation, but I think the partnership working has turned out to be excellent. It has very much allowed us to work together as a team. Certainly, our region is not dominated by Glasgow, but we very much get the benefit of working with Glasgow and bigger authorities as well, and they get benefits from working with us. The city region and the eight authorities within it have certainly demonstrated our ability to deliver. The Glasgow city region deal is somewhere in the region of a £1 billion programme, and we have demonstrated that we can deliver that level of investment and generate private investment. We have demonstrated the other funding streams that we can deliver as well. I think there is the capacity, and that needs to be recognised by both the UK Government and the Scottish Government. We should be encouraging local authorities to play a greater role in economic regeneration and growth.

You have certainly got that on the record this morning, so thank you for that. That concludes our questions to you this morning. Thank you all very much for giving us evidence. As always with these sessions, it is very useful to hear what you have to say and we look forward to being able to share our report with you eventually, once we have concluded our inquiry. Thank you very much.