Concerns regarding Brexit’s effect on Fife’s economy and job market have risen to the forefront of local issues. EU funding, employment prospects, and environmental regulations are of particular note.
So –– what effect will Brexit have locally?
Scotland’s structural funds
Scotland currently receives an allocation of around £674 million in EU structural funds. These funds are distributed across the UK, with Wales receiving £1.7 billion and England £5.3 billion between 2014 and 2020.
These funds have been used to create jobs, assist start-ups, and contribute to a variety of essential projects across the UK, including building skills for the unemployed, increasing female participation in science and engineering, and developing new healthcare technologies.
Continuing this level of spending would incur a large cost for national governments, doubling domestically-sourced funding in some countries.
If the UK had voted to remain in the EU until 2020, it could have also claimed a large portion of the EU Cohesion Policy budget.
This money is provided to improve the wellbeing of regions in the EU and avoid regional disparities (consider the relatively poor economic performance of some UK regions in comparison to other EU regions in recent years).
Whilst the UK government has guaranteed funding for any structural funds projects that take place prior to Brexit, it has not made any commitments thereafter.
Due to this lack of funding transparency, local governments have been forced to create their own plans.
The UK government’s “Plan for Growth” has been threatened in the wake of Brexit and certainly needs to be re-evaluated.
Written alongside the 2011 budget, the plan’s goal is to make the UK the best place in Europe to start and finance a business.
The government also hopes to have the most flexible workforce in Europe and most competitive tax system in the G20. This is certainly an admirable goal, but some reappraisal is necessary.
At a more local level, councils across Scotland have had to begin preparing strategies to face the maze of Brexit.
Fife: what’s in store?
The Fife Brexit Business Advisory Group was created in the wake of questions about regional funding. within Scotland. The group’s intention is to make Fife the best place to practice business in Scotland over the course of Brexit and beyond.
Council leader and group chair David Ross said, “In pulling this Advisory Group together, Fife Council wanted to ensure that we were in a position to articulate and contribute a strong voice to this ongoing debate.”
What does this vague statement mean for businesses, residents, and students in Fife?
The group has emphasised the newly-created Fife Economic Strategy 2017 to 2027. Whilst not written in response to Brexit specifically, the programme outlines a strategy for Fife to confront emerging economic trends, such as the predicted technological advances in robotics that threaten jobs worldwide, and the impact of the decision to leave the EU.
Written by Fife Council, the paper outlines ongoing socio-economic issues that restrict economic growth. These include above-average rates of youth unemployment, earnings and productivity below national averages, and persistent areas of deprivation in some parts of Fife.
The paper states that it hopes to tackle these issues “against a background of continued reductions in public spending, low oil and gas prices, constitutional uncertainty, and the implications to businesses arising from the outcome of the 2016 EU referendum.”
So, what measures is it planning to put in place? The strategy is comprised of four key goals, written with the intention of making Fife the best place for business in Scotland. In summary, these are inclusive growth, increased infrastructure, internationalisation, and innovation.
The council is hoping to achieve fairer, more inclusive growth with a focus on measures to reduce youth unemployment, improve the mobility of the workforce, and increase “upskilling” and support for start-ups.
Measures such as the Opportunity Fife Partnership’s Employability Pathway have already been created to help young people facing barriers to employment in the most deprived areas.
The council has also been working with NHS Fife and other medical bodies to assist those claiming benefits due to mental health issues. Over 40 per cent of the individuals claiming working age benefits in Fife do so on the basis of such issues.
The second goal of increased infrastructure investment will surely be welcomed by many hoping for improved transport connectivity. Submissions regarding funding for new transport projects, including those that improve workforce mobility and commit to delivering the Levenmouth Rail Link (Levenmouth is currently the largest urban area in Scotland unserviced by any direct rail link), are being prepared for the Scottish and UK governments.
The council also hopes to make use of vacant and derelict land, facilitate joint infrastructure planning between national and regional agencies, and increase private and public sector investment in key industries.
Brexit was certainly in mind during the writing of the paper’s third goal: internationalisation and improved sales and exports. Fife is currently focusing on building its competitive advantage in energy and renewables to encourage further international investment and innovation.
The strategy names St Andrews as a key centre for growth and hopes to develop social and business facilities to retain graduates within Fife.
The council has highlighted the St Andrews Biomass District Heating Scheme, one of the most exciting sustainable energy projects in the UK. The £25 million project will transform the disused Guardbridge Paper Mill into an energy centre that will pump hot water from Guardbridge to North Haugh. The aim of this initiative is lowering carbon emissions, creating jobs in the local area, and, its planners hope, creating the UK’s first carbon neutral university.
Finally, the goal of fostering a culture of innovation and enterprise may be slow to take off, but it is certainly not starting from nothing.
Fife is actually a key centre for innovation in carbon reduction. Many companies are developing cutting-edge products in energy engineering and advanced manufacturing. The Levenmouth area, for example, has the largest open-access wind turbine in the world.
What does this mean for businesses, residents, and students in Fife?
This business plan is less about economic ties and relations with the EU and more about improving Fife’s position economically within Scotland and Europe. By preparing Fife for a rapidly changing economic world, the council hopes that it will put its residents and students in better stead for the future.
Paul Vaughan, head of community provision, has said that both the council and community planning partners have a range of roles to undertake as the Brexit process begins.
“The pace of this activity is likely to increase as negotiations begin and as further legislation is proposed,” he explained. “The breadth of activity is wide, although much will naturally focus on trade and competitiveness.”
Whilst these are all certainly constructive measures for Fife economically, they seem to lack an emphasis on the social repercussions of Brexit for Fife and Scotland. However, Mr Vaughan has noted that the council will play an active role in mitigating the inevitable wider societal impacts of Brexit.
He has suggested that these could include ongoing promotion of rights, European cultural activities, education, and utilising strong relations with European partners.
On a larger scale, an important issue is the lack of an institutionalised framework for the UK as a whole.
Beyond the current EU structural funds, there is a distinct lack of coordination regarding policy objectives and instruments across regions of the UK. Shared information and policy experiences are also weak points in local government relations.
This is in direct contrast to other European countries, which tend to have formal or informal coordination systems across levels of government.
Overall, the Economic Strategy presents many viable and well-thought out measures that tackle a range of challenges Fife will face in the coming years. Small-scale programs and initiatives may well be the best way forward for a geographically isolated area with growing business potential.