Blog: Deal or no deal - procuring a successful city deal

James Forbes
James Forbes

James Forbes is a Partner at Scottish law firm Burness Paul

Successful cities are those cities with a feel about them - a ‘buzz in the air’. A city which embraces creativity, industry and innovation will be a successful city: capable of attracting the best businesses, the best people and competing on a European scale.

Modern infrastructure is the key to make this all happen. The Glasgow and Clyde Valley City Deal is one of the biggest in the UK at £1.3bn and aims to provide the much needed stimulus to achieve this goal for Glasgow and the greater Clyde Valley. It consists of a number of high value projects such as the Clyde Waterfront & Renfrew Riverside at £78m and the Glasgow Airport Link at £144m.

The City Deal will draw on £1bn of grant funding from the combined resources of the UK and Scottish Governments together with a further £300m from the eight participating local authorities consisting of: Glasgow City Council, East Dunbartonshire Council, East Renfrewshire Council, Inverclyde Council, North Lanarkshire Council, Renfrewshire Council, South Lanarkshire Council and West Dunbartonshire Council, secured through prudential borrowing.

The local authorities have agreed to collaborate through an Assurance Framework, sharing efficiencies, knowledge and drawing on each of the authorities’ own individual experiences of major capital and infrastructure procurement to form a cohesive and co-ordinated delivery vehicle.

One of the stated aims of the City Deal, and one which we would argue is a prerequisite for success, is the need to properly engage with the private sector. An additional £3.3bn of private sector investment will be sought over the 20 year term of the City Deal to complement the public sector contribution.

This ‘partnership with business’ as Glasgow City Council recently described it, could well be served by utilising the new forms of EU procurement set out in Directive 2014/24/EU. Whilst not the most catchy title, the Directive when implemented in Scotland towards the tail end of 2015, could significantly improve the way that initiatives such as the City Deal engage with the private sector.

‘Innovation Partnership’ will be one of the new procurement methods available to the Assurance Framework. Innovation Partnership is in effect a method of procuring a long term strategic private sector development partner – the Directive describes it as: ‘the Innovative partnership will aim at the development of an innovative product, service or works and the subsequent purchase of the resulting product, service or works’.

So now a private sector partner appointed through Innovation Partnership can fully engage and evolve an innovative infrastructure plan with a local authority, safe in the knowledge that the actual delivery of its innovative proposals will not be subject to a second EU procurement with the inevitable risk that all that effort to shape the project will be lost if not re-appointed.

Growing on the success of the 2014 Commonwealth Games, Glasgow in particular has shown it can deliver transitional projects. There is a lot to play for in this City Deal for both the public and private sector side. We are confident that when faced with the question ‘Deal or No Deal’ the construction sector will deliver the former.

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