Press & Policy

The shape of local government may feel distant from the day-to-day pressures facing businesses. But the organisations responsible for transport, housing, skills and infrastructure can have a direct bearing on where firms invest, recruit and grow.

A recent debate in the Scottish Parliament has opened a wider discussion about whether those decisions should be made differently. The Scottish Government is considering a new model of local governance, with a smaller number of regional authorities responsible for strategic decisions and more community-level bodies taking decisions closer to local people.

Economic development, housing, transport and long-term planning are among the responsibilities that could be considered at regional level. The details, including the boundaries and powers of any new bodies, remain undecided.

The debate comes at a time when Scotland needs to improve how it turns economic priorities into delivery. Businesses experience the consequences when infrastructure projects take too long, transport services fail to meet local needs or skills provision does not keep pace with changes in the economy. Weak coordination between stakeholders involved can make those problems harder to resolve.

Stronger regional decision-making could help. Businesses recruit across council areas, while transport networks, housing markets and supply chains rarely follow administrative boundaries. Decisions made across a wider economic area could connect infrastructure investment more closely with workforce needs and future growth opportunities. Regional bodies may also be better placed to coordinate major projects that require several councils and public agencies to work together.

The structure alone will not secure those benefits. New authorities must have clear responsibilities, sufficient capacity and the ability to act. Businesses should be able to understand which organisation is responsible for a decision and how it will be held accountable. Reform that creates overlapping duties or additional approval processes would make investment more difficult and replace existing fragmentation with a different version of the same problem.

The design of the regions will also matter. Boundaries should account for travel-to-work areas, transport links, key industries and established trading relationships. Scotland’s cities, rural areas and islands have different economic circumstances, so a single approach may produce poor decisions. Ministers should begin by identifying the functions that are best handled regionally and the results that the new system is expected to achieve.

Business involvement must form part of that work. Scotland’s regions should have a stronger role in decisions on investment, infrastructure, skills and economic development, with businesses and the Chamber Network meaningfully involved in setting priorities. Chambers can provide evidence on barriers to investment, bring firms of different sizes into the discussion and test whether regional plans respond to commercial conditions.

Meaningful involvement requires engagement while the model is being designed. Asking businesses for views once boundaries and responsibilities have been settled would limit their influence over the decisions that matter most.

The current proposals remain an opening contribution to the debate. Ministers have started a period of engagement and have said that businesses will be among the groups involved. That process should establish how regional priorities will be agreed, what authority sits behind them and how progress will be measured.

Local government reform presents an opportunity to give Scotland’s regions a stronger economic voice. Its success should be judged by whether it produces clearer decisions, faster delivery and investment that responds to the needs of each regional economy.