Sturgeon announces £100m post-Brexit capital spending stimulus 

Scotland’s First Minister Nicola Sturgeon has today outlined details of the financial measures the Scottish Government is to take in order to support and stimulate the nation’s economy in the wake of Britain’s vote to leave the EU.

The package will see capital spending on projects to support and create employment accelerated, starting with an additional £100 million of funding in this financial year.

A statement said that the capital funding will be used to speed up delivery of health and other infrastructure projects and “projects will be assessed for accelerated funding against a range of criteria including how quickly work can start, the number of jobs that will be supported or created, the likely impact on the supply chain and geographic spread”.

The Scottish Government said it will also set up a new dedicated service to provide information and support to businesses affected by the EU referendum, while a new Post-Referendum Business Network will work closely with the main business bodies, the STUC and the Scotland Office.

The plans were announced at the Golden Jubilee which will receive an extra £5 million to bring expansion of its elective centre forward from 2018-19 to this year.

Officials said that further details of the Capital Acceleration Programme, including the projects to be supported by the initial £100 million of additional funding and details of funding for future years, will be announced in due course.

The Scottish Chambers of Commerce welcomed the announcement but warned that it must be backed up by action to tackle businesses’ cost base.

Liz Cameron, chief executive of Scottish Chambers of Commerce, said: “This is a great example of the Scottish Government using devolved powers it has at its disposal to deliver a timely boost to the Scottish economy. However, it must be clearly targeted to provide a shot in the arm to Scotland’s businesses and to support jobs in the short, medium and long term.

“This is a very welcome first step in the process of supporting businesses. Businesses are looking for our Governments in Edinburgh and London to invest in infrastructure and skills in order to support business at this crucial time. We would also ask that the Scottish Government follows this up with action to reduce the cost base of businesses, including a reduction in the burden of business rates and an acceleration of the planned reduction in Air Passenger Duty.”

David Watt, Executive Director of the Institute of Directors in Scotland, said: “If there’s one thing businesses don’t like, it’s uncertainty, and following the Brexit vote that is something we have in abundance. Although we have still to see the detail of the stimulus package announced today, the First Minister’s assertive move to inject tangible economic action into the current business climate, and offer greater advice and support to Scottish companies, is to be welcomed. We hope that it will soon translate into real opportunities for both individuals and businesses in Scotland.”

The First Minister also called on the UK Government to give early certainty about EU Structural Funds and to urgently announce its own economic stimulus package, which would enable the Scottish Government to do even more to accelerate capital spending.

Ms Sturgeon said: “As I have made clear since the EU referendum, the Scottish Government will pursue all possible options to protect Scotland’s relationship with the EU and ensure that our voice is heard.

“However, it is also important to act now to support and stimulate the economy.

“Scotland is and remains an attractive and stable place to do business - however, there is no doubt that the referendum outcome has created deep and widespread uncertainty, with the impact on jobs and investment already being felt.

“The UK Government has not yet taken any meaningful action to alleviate uncertainty or to boost confidence, and there are very real concerns that the damage to the economy and to jobs will be severe and long lasting.

“It is against this background that the Scottish Government is announcing early action to boost confidence, stimulate economic activity and support business.

“Our Infrastructure Investment Plan is already delivering major infrastructure improvements, with projects worth almost £6 billion currently under construction - we will now inject a further £100 million of spending this year to accelerate planned projects.

“We will also provide business with wider support to help them navigate the uncertainty caused by the referendum result. Business organisations have asked for a single point of contact and we will shortly launch a new Business Information Service that will provide up-to-date information and advice, and answer questions from individual businesses, going some way to alleviate business concerns about the future.

“We will also establish a new Post-Referendum Business Network, to work more closely and collaboratively with the main business bodies, the STUC and the Scotland Office to help shape future policy and support for business.

“These three initial measures will help support new and existing jobs and alleviate business concerns at this difficult time.

“However, it is important that the UK government also acts and I am calling today for urgent action on two fronts - firstly, early assurance about EU Structural Funds and, second, a UK wide stimulus package which, through consequential funding, would enable the Scottish Government to do more to accelerate capital spending.”