A briefing by the SANE Collective on Glasgow’s Covid Economic Recovery Strategy, August 2021
WHAT’S THIS ALL ABOUT?
Stand anywhere with a view in Glasgow and you will see an edifice which has been financed, at least in part, by the public purse. Despite this, it’s more than likely that the school, hospital, care home, house, office block or bridge that you see is either owned privately or the private sector has made a big profit in its construction. And we are not talking about small and medium sized enterprises (SMEs) here: the big profits go to big business.
The public financing of private developments cuts across all areas of the public sector in Glasgow, and reach into industry sectors which clearly are not in need of public financial support, such as banking.
In this briefing sheet, we will examine how this neoliberal model of regional development is being applied to Glasgow in the post-pandemic context, and what the alternative is.
(Note: While the focus of this briefing will be on the Glasgow City Council area, it will also include analysis of regional development in the broader Glasgow region, which includes GCC and seven other local authorities, specifically via the 2014 Glasgow Region City Deal.)
- Glasgow’s Covid economic recovery strategy is business-as-usual: seeking to attract capital to re-locate to Glasgow through marketing campaigns and investment & tax incentives, and public-private partnerships to develop infrastructure which is focused on enhancing business opportunities for corporations. This has been the standard neoliberal regional development model in Scotland and the UK for decades.
- Glasgow City Council has spent significant public money on Invest Glasgow and IFSD Glasgow, which both seek to attract inward investment to the city through offering free services, financial support and tax incentives, a package of public support which is not available to businesses indigenous to Glasgow. This puts Glasgow in a regional development race-to-the-bottom, with no guarantees that high-quality jobs which are sustainable and resilient to crisis will be generated.
- Businesses re-locating from outside Scotland to Glasgow have also been able to benefit from the Scottish Government quango Scottish Enterprise’s Regional Selective Assistance (RSA) fund. An FoI request has revealed RSA has paid out over £80 million to attract companies to re-locate to the Glasgow City Council area since 2001, with an average grant of £826,000. In aggregate, this report (which is by no means comprehensive) has identified £662 million in public money which has gone towards business subsidies or investments in infrastructure which directly benefit corporations. This is very clear income redistribution from the Scottish public to multi-national corporations.
- ‘Clyde Mission’ is the latest cross-government scheme seeking to attract foreign capital, with the promise of public spending to support a wide array of private business developments.
- The proposal for ‘Green ports’ is a Scottish Government twist on a Tory Brexiteer idea which has been rightly described as “neoliberalism on steroids”. Glasgow’s green port would likely be located around Glasgow Airport, given the work that has already gone into making this area a business development hub, but the contradictions of a ‘green port’ based around an airport are obvious for all to see. Additionally, the idea requires UK Government approval, so will most likely never see the light of day.
- Glasgow’s eight ‘Transformational Regeneration Areas’ are gentrification schemes, ploughing significant public money into housing developments where just a small fraction of the homes built will be social or council housing. The Sighthill development specifically, the largest in the UK outside of London at a cost of £250 million, will see just 15% of the homes built being social housing, with development evaluators accepting that it will lead to “some displacement” of the community, but arguing that this is “positive”.
- An alternative regional development strategy would seek to replace this big business-led, extractive model with a public-sector led investment plan, aimed at maintaining the wealth generated through development by anchoring it in the community. Policies to deliver this would include transforming procurement by supporting local business and co-operatives (‘The Preston Model’); lowering the cost of land for public-sector investment through a land/property tax and a Public Land Value Capture policy; and developing ‘public-public partnerships’ so that public money is mobilised for public-sector built infrastructure which is run for the public good. Finally, a democratisation of regional development is vital to end the tokenism of public consultation and have real citizen-led development.