As the Herald has covered in recent months, there is a renewed interest in regional economic development emerging in Scotland. After a quarter-century in which political authority became increasingly concentrated at Holyrood, policymakers are again turning their attention to the economic potential of Scotland’s cities and regions.
In recent weeks both the First Minister – in his State of the City Economy address in Glasgow last month – and Scottish Labour, through a report from Professor Anton Muscatelli, have called for a new approach to regional growth.
Professor Muscatelli’s report highlights weaknesses in Scotland’s economic development system – including fragmented institutions and weak regional capacity – warning that Scottish cities might fall behind their better-resourced English counterparts. The First Minister, for his part, stressed the need to empower local leaders and strengthen partnerships across sectors.
A debate that dwells on structures, governance and process may feel frustrating. Many readers will argue we have had too much preoccupation with politics and not enough delivery.
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But getting the institutional foundations right matters. The past decade has seen an ever-growing list of “bitty” initiatives: City Region and Growth Deals, Innovation Accelerators, Shared Prosperity Funding, Investment Zones and Freeports, to name just a few.
Around these sit national strategies – from the UK’s Industrial Strategy to Scotland’s National Strategy for Economic Transformation. And all of this occurs within a crowded institutional landscape with a plethora of agencies covering enterprise, transport, skills, innovation and planning.
Collectively, this has produced a cluttered system; fragmented, reactive, and lacking a clear sense of what regional policy is trying to achieve.
Last week, along with colleagues at Glasgow and Strathclyde, we published new research examining what city-region partnerships in Aberdeen, Dundee, Edinburgh and Glasgow believe has worked well – and what should come next. Several themes emerged from this research.
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First, there is agreement that the recent emergence of greater City Region working has been valuable.
"City Region Deals" required partners to develop a regional vision and strengthen collaboration. In several areas, deal structures helped overcome long-standing political or administrative boundaries and supported a more functional and effective approach to economic planning.
Second, however, there was frustration at the highly dispersed and competitive funding landscape. Short-term bidding rounds, disconnected from local priorities, were seen as inefficient and counterproductive. This has made it harder for regions to stick to strategic plans and to invest for the long-term.
Third, participants consistently highlighted the need for greater regional variation in policy decision-making.
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Across the four city-regions there was a strong desire for more influence over national policies that shape local economic outcomes: skills, planning and elements of enterprise, innovation and transport investment. Alongside this sits a call for more revenue funding, not just capital grants, to support regional development.
What can we conclude from this?
There is an opportunity to develop a more coherent framework for regional policy – one that builds on the progress of City Deals but moves beyond ad-hocism.
Central to this could be the creation of a tiered model of regional development, like England. This would allow city-regions with stronger capacity and clearer plans to take on greater autonomy over time, while others could proceed more gradually. Importantly, this need not depend on introducing elected mayors.
Indeed, views on the possibility of City Mayors remain mixed: in our work we found that some stakeholders would welcome stronger regional leadership, whilst others cautioned against adding a new tier into an already crowded political system.
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More important is establishing the principle of partnership across Scotland’s tripartite system – with the Scottish Government, the UK Government, and local authorities working within a clearer, more predictable framework. That means better coordination of funding streams, longer-term settlements, and a shift from transactional oversight to co-production and shared accountability.
It also means enhancing regional capacity so that local partners can shape economic policy, not simply respond to it. As our findings show, the most powerful legacy of deals so far has not been individual projects, but the relationships and practical know-how that have grown across the regions.
The upcoming election provides an opportunity to debate and build a more coherent, long-term approach to regional development.
Scotland’s city-regions – including Glasgow and Edinburgh – can be powerful drivers of national prosperity. But they require the structures, autonomy and collaborative culture to make it happen.
Graeme Roy is professor of economics at the University of Glasgow’s Adam Smith Business School.
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