RI Funding Cut: An Open Letter to John Swinney

Below is the full text of a letter sent today to John Swinney by myself, the MP and the two constituency MSPs:

70% Funding Cut for Urban Regeneration Company

We are writing to you as Cabinet Secretary responsible for Scottish Enterprise to express our deepest concern and shock at the extraordinary level of funding reduction for Inverclyde’s Urban Regeneration Company (URC), Riverside Inverclyde.

The company was jointly established in 2007 as a ten year initiative with funding being provided by the Scottish Government (£36 million), Scottish Enterprise (£33 million) and Inverclyde Council (£24 million) to transform Inverclyde’s waterfront area into a more attractive place for the private sector to invest and for jobs to be created in recognition of the significant levels of poverty, deprivation and associated unemployment in our area.

You will be aware that following the decline in major industries in the area, Inverclyde has seen the largest % decline in population of any Scottish Local Authority area in the period between 2001 – 2008. Over those 7 years, there was a 4% reduction in the population – compared with the Scottish population change over the same period, which has seen a 2.1% increase. With this significant population decline projected to continue, successful interventions via Riverside Inverclyde are a critical part of the solution.

Furthermore, 42% of the Inverclyde population live in areas which are defined as the most deprived 20% in Scotland with average earnings in Inverclyde 13% lower than the Scottish average, the fourth lowest in Scotland.

We fully appreciate the impact of the acute financial challenges facing Government and the entire public sector following the banking crisis and the subsequent downturn in global economic activity. However we cannot comprehend or begin to understand what equates to a significantly disproportionate cut in funding of nearly 70% for our Local Urban Regeneration Company in which the Scottish Government are a major shareholder.

This needs to be put in the context of the Scottish Government’s draft budget, where we believe the cut in Enterprise, Energy & Tourism provision is 5.9%. For your budget line Enterprise Policy & Delivery, which predominately covers the governments overall funding commitment to SE and HIE, we understand the reduction is only 2.8%.

Furthermore, on the basis of relative need in Scotland, you were party to a written agreement at a national level, for four Urban Regeneration Companies, Riverside Inverclyde, Irvine Bay, Clyde Gateway and Clyde Rebuilt to ring fence £12.5 million of specific funding for the current and next financial year. Agreed conditions were attached including the fact that the £12.5 million or any part of it could not be used in any other way by Scottish Enterprise to prop up budget reductions elsewhere. It would appear that this is precisely what has happened and we understand that SE has only allocated £6.8million to the four URCs which leaves a shortfall of £5.7million which is clearly a fundamental breach in the agreement.

Within a very tight budget Inverclyde Council’s Administration are totally committed to continuing funding Riverside Inverclyde in accordance with previous agreements and are proposing to allocate £2.1 million for the regeneration company next year. This has not been easy within a context of significant service reductions and job losses.

We would like an explanation of why Riverside Inverclyde has had an exceptionally harsh settlement and some sort of reassurance that both Scottish Enterprise and the Scottish Government will honour their principle allocation of £33 million and £36 million respectively as originally planned.

We are at the start of a long-term approach to the regeneration of Inverclyde and it must be maintained over the medium and longer term if we are going to turn the area’s economic fortunes around. So much has already been done that it would be devastating to our community to apply the financial brakes and lose the momentum that has been built up over recent years.


Yours sincerely

David Cairns MP, Duncan McNeill MSP, Trish Godman MSP, Councillor Stephen McCabe, Inverclyde Council Leader