Aberdeen’s council leader will today call for the UK and Scottish governments to “seize the moment” and back plans for a £2billion investment in the north-east.
Jenny Laing will use a North Sea oil summit to argue for a radical transformation of the area through spending on transport, housing and skills development to help secure the long-term future of the industry.
The city council administration believes the level of attention currently focused on the energy sector, due to the dramatic fall in the price of Brent Crude, provides a “historic opportunity” for the region.
Labour councillor Mrs Laing will make her case to First Minister Nicola Sturgeon and Scottish Secretary Alistair Carmichael, who will attend the event at the Aberdeen Exhibition and Conference Centre (AECC) along with senior industry and trade union representatives.
Deputy Prime Minister Nick Clegg told the Press and Journal last week that he wanted to sign off on a “City Deal” for Aberdeen before the general election in May.
The package has been described as a “game changer” by local authority leaders in the north-east, who have complained for years about low funding levels.
Mrs Laing said: “I think (the summit) does give us an opportunity to showcase the bid, and also to highlight the importance of our economy to Scotland and the UK.
“Sometimes it is taken for granted that the oil and gas sector will generate revenue for the UK.
“The spotlight is very much on the oil industry just now, but it is about much more than that.
“We need a short-term fiscal response but we also need a long-term approach to this.
“I see that being support for improvements to infrastructure in the north-east around the improvements to the skills base and the innovations in technology that we have developed over the years – we need support for all of that going forward if we are really serious about sustaining this industry in the long-term.”
Under-investment in infrastructure is considered to be one of the main causes of cost pressures faced by the industry operating in the North Sea, and globally, from Aberdeen.
Mrs Laing said the city and shire councils combined already had capital spending plans of £1.4billion, and that she envisaged the City Deal being spread over a 20-year period to deliver about £100million annually.
When asked about specific projects, she pointed to plans for the expansion of Aberdeen harbour into Nigg Bay, which she said would require significant upgrades to road and rail infrastructure.
The rapid expansion of business parks around Aberdeen Airport has also presented challenges in terms of local road network capacity.
A total of 26 City Deals have been confirmed across Britain, but Glasgow is the only area of Scotland to secure one so far.
Each agreement is different depending on the needs of the local area, but all aim to provide extra levers to boost growth, including direct funding, greater borrowing powers, the ability to “earn back” tax from the Treasury, control of transport budgets and the ability to develop specialised skills programmes.
The Glasgow and Clyde Valley package, awarded last year, involved £1.2billion in UK and Scottish government funding, as well as new borrowing powers.
In a speech at the oil summit today, Mrs Laing is expected to say: “Never has there been a greater need for this city to work with and receive support from both levels of government.
“We have a historic opportunity to establish a City Deal for this region which will benefit local people, the industry and indeed the UK as a whole. Let us seize that moment for the mutual benefit of all.”
Last night, Mr Carmichael said: “I am delighted to be at the summit in Aberdeen and hope the sector will see first-hand how determined we are to work with them, Aberdeen City Council and the Scottish Government to bring practical support to the industry.”