Success of City-Region Deal - £315millon of Investment

22nd March 2016

​The vision behind the Inverness City-Region Deal to position Inverness and the Highlands as a region of digital opportunity, is set to become a reality as the deal is signed between the UK and Scottish Government's and The Highland Council in Inverness.

The City-Region deal contains a number of proposals under three broad headings; a growing economy, a skilled economy and an enabled economy.

UK and Scottish Government funding of over £188 million together with £127 million of further investment by the Council and public partners will deliver a step change in digital connectivity, digital healthcare, skills, business development and infrastructure.

UK and Scottish Government and Highland investment will over the lifetime of the deal will lever in around £1billion of investment.

The Highland Council has worked closely with Highlands and Islands Enterprise and the University of the Highlands and Islands to develop these proposals and with the Inverness Chamber of Commerce and the Scottish Council for Development and Industry.

Leader of The Highland Council, Councillor Margaret Davidson warmly welcomed the announcement which seals the deal after two years of background work and negotiations. She said: "The city of Inverness and the wider Highlands offers a unique and wonderful environment to live, work, study and visit and is a globally recognised location. This Deal will make a significant contribution to the long term productivity and economic growth of our area by promoting it as the best digitally connected rural region in Europe. Effective broadband and mobile coverage is essential so that businesses can fully exploit commercial opportunities and international markets.

"The majority of the businesses in the Highlands are small and medium businesses and this deal will enable them to expand and develop, as well as attracting new high skill, high value businesses to the area. The Deal also focuses on the attraction and retention of young people in a region which has tended to see out-migration to other areas and countries. The development and infrastructure which will result from the Deal will provide hundreds of job opportunities and greatly improve the supporting infrastructure to grow business.

“This Deal will provide a step change in terms of providing the opportunity to enhance and accelerate the delivery of the long term aspirations for Inverness and the wider region. I am grateful to everyone who has worked so hard to achieve this very positive outcome for the people of the Highlands."

Highlands and Islands Enterprise (HIE) Chief Executive Alex Paterson said: “The City-Region deal is very welcome news, and we'll be working with our partners to ensure that the benefits which will arise from this investment reach the whole of the Highlands.

“As the region’s development agency, we’re committed to making the Highlands a highly successful and competitive place where more and more people want to live, work study and invest.

“We’re already engaged in many successful projects to achieve that goal, whether that’s making superfast broadband accessible in all parts of the region, investing in new infrastructure, or supporting the growth of businesses, communities and key economic sectors on the mainland and the islands.

“This important deal will help HIE and our partners accelerate many of our most ambitious plans to build a stronger future."

Professor Clive Mulholland, principal and vice-chancellor of the University of the Highlands and Islands welcomed the partnership opportunities the city deal will bring:

"We were created to have a transformative impact on the Highlands and Islands and we have big plans for the future. We want to use this investment to help transform health, social care and wellbeing in the Highlands and Islands.

“We already teach a variety of related subjects and carry out world leading health research in Inverness. We want to develop and align our curriculum and research at all levels to meet the needs of the health and social care sectors across our region, but also including other areas of life science and health service leadership, management and administration.

“New possibilities include discussions with the University of Stirling to transfer their current Highland adult and mental health nursing programmes to the University of the Highlands and Islands; a memorandum of understanding with NHS Highland; a £4 million research investment from Highlands and Islands Enterprise to increase our health research capacity; and scoping a Scottish graduate medical school model in collaboration with existing medical education providers.”

Stewart Nicol, Chief Executive of Inverness Chamber of Commerce, commented; “This is a momentous announcement for the city of Inverness and the wider Highland region. The considerable funding that will come from the City-Region Deal has the potential to significantly transform the city and region and improve the business environment and local economy for many years to come. The leverage of additional revenues over coming years will help secure jobs throughout the region across many sectors. The scale and scope of funding, combined with an impressive array of potential projects. Inverness has a growing and increasingly diverse economy. In the Inverness business community we have achieved significant progress over recent years. The City-Region Deal will, I believe, provide an excellent opportunity for both the public and private sectors to achieve so much more for this city and region in which some many of us have chosen to live and work and grow our successful businesses.”

The City-Region deal contains a number of proposals that seeks to deliver this vision under three broad headings.

A Growing Economy
• Support the commercialisation of new medical products and technologies at the University of the Highlands and Islands new multi-disciplinary centre for clinical research and teaching on the Campus;
• Deliver an innovative approach to assisted living with applicability across the UK;
• Establish a North Innovation Hub to support the development and internationalisation of business; and
• Capitalise on the Highlands as a globally recognised location, by developing Inverness Castle as a key tourist destination and the international marketing of the area as a region for adventure tourism.

Enabling the Economy
• Establishing a Joint Digital Highland Action Plan to accelerate provision of effective broadband and mobile coverage;
• Improving the connectivity of the City and region through construction of critical roads which open up land for housing and commercial development;
• Provide 6,000 new homes of which 1,800 will be affordable;
• Ensure key regional air links to a global hub are developed and maintained to complement digital connectivity.

A Skilled Economy
• Deliver the Science Skills Academy to promote STEM/D, subjects through an innovative approach to learning;
• Pilot a joint Highland Employability Programme to bring about transformational change to employability services.

Impact of the City-Region Deal
The impact of this deal on Inverness and the wider Highland region would be significant in securing the long term productivity and economic growth of the region and position it as a region of digital opportunity.

City-Region Deal funding of £315m would realise £1billion of investment by the private sector.

Specifically the Deal:
• Creates 1,125 direct jobs as a result of City-Region Deal projects with a further 2,200 additional jobs in the construction sector;
• Helps up-skill the labour market and contribute to moving towards a high skilled high wage economy.
• Establishes a centre of excellence in rural and digital healthcare with sufficient mass to attract research and investment and fully exploits the commercial opportunities;
• Enables business growth through effective digital connectivity and promotion of innovation;
• Improves productivity and real wages, which are estimated to increase by almost 1.3 per cent and bring £100m per annum to the regional economy;
• Helps rebalance the population with the aim of retaining and/or attracting 1,500 young people in the 18-29 age group over the initial 10 year deal period;
• Creates 6,000 new houses over 20 years of which 1,800 will be affordable homes; and
• Delivers private sector leverage from housing building and, through opening up land for commercial development, would see a return over a 20 year period of around £800 million being invested in the economy of the city and region.

The key challenges facing the region are:
• population drift, ageing demographics, and outmigration of young people in pursuit of Further and Higher Education and more diverse employment opportunities elsewhere;
• talent drain to cities, the central belt of Scotland and beyond;
• insufficient investment in transport infrastructure constraining employment and population growth;
• insufficient research and development spend by businesses and institutions, and the concentration of public research spend in the larger universities elsewhere in Scotland;
• insecure connections to hub airports;
• over reliance on a small number of major employers; and
• The need to grow higher value private sector jobs as public sector posts reduce.