Investment in local infrastructure projects vital, says Committee


Local Authorities must maximise the opportunities presented by City Deals to improve local infrastructure. This is just one conclusion of a report issued today (30 November) by the Scottish Parliament’s Local Government and Regeneration Committee.

The use of local authority pension funds and public policy initiatives such as City Deals were the focus for the Committee as it examined local government funding of capital infrastructure projects. The Committee’s report found that Local Government Pension Funds should invest more capital in local projects such as affordable housing.

The Committee found there is untapped potential for Pension Funds to support communities and generate income. A lack of expertise in infrastructure investment means too few Pension Funds are grasping the opportunity to invest to achieve local social or economic impact. 

Committee Convener, Kevin Stewart MSP said: 

“It has been proven time and again that investment in infrastructure is needed to grow a successful economy. All communities across Scotland must have the chance to benefit from this success and the opportunity to grow.  

“Whilst there are some risks associated with investing in infrastructure, these can be reconciled given the long-term nature of these investments together with their positive social and economic impact. By working collaboratively Pension Funds could maximise their returns, share expertise and reduce investment costs.  The returns should also be measured in terms of growth to communities.”   

The Committee also looked at how City Deals can support growth. These deals, which help local authorities with long term strategic development, also see significant government funding in local infrastructure.

The Convener continued:

“On our visit to Manchester the drive, vision and enthusiasm that is vital for City Deals to succeed was apparent.  City Deals offer unique opportunities to invest in strategic infrastructure projects and we look forward to seeing measurable benefits emerge for communities and the wider surrounding areas. However there needs to be careful governance to ensure plans flourish and other areas benefit from good practice.” 


The Committee mainstreams its budget scrutiny, throughout its work programme. This allows the Committee to continually focus more on whether spending by the Scottish Government and public bodies is generating the outcomes and efficiencies expected. 

The Committee took evidence from key stakeholders including the Scottish Public Pensions Agency, Strathclyde Pension Fund, Greater Manchester Pension Fund, and Aberdeen City Council in relation to the North East Scotland Pension Fund focussing on how Pension Funds are investing in capital infrastructure.  

In 2011 the Scottish Government launched its city strategy as set out in the Agenda for Cities, “Scotland’s Cities: Delivering for Scotland”. This strategy also saw the establishment of the Scottish Cities Alliance (the Cities Alliance), a partnership of Scotland's 7 cities (Aberdeen, Dundee, Edinburgh, Glasgow, Inverness, Perth and Stirling). The Cities Alliance aims to attract external investment, stimulate economic activity and, create new jobs and business opportunities.

City or region deals are a UK policy initiative to encourage local authorities to operate strategically at the regional level and support a long‑term and wider focus on their priorities. Each deal is bespoke to the particular city region and is expected to include a package of measures designed to reflect regional circumstances. The Glasgow and Clyde Valley City Deal became the first City Deal in Scotland in August 2014. 

As part of the UK Budget on 18 March 2015, the UK Government decided there was merit in extending the City Deal model further. In Scotland Aberdeen, Edinburgh, Inverness and Highland city regions, have recently submitted proposals for City Deals.

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