Developers are being invited to build now, pay
later as part of a range of initiatives being outlined today to
kick-start the economy in Scotland’s largest city.
In a pledge to relax red tape and reinvigorate business, authorities
in Glasgow are offering land for free, with developers only paying once
there has been an upturn in the economy.
Upfront compensation payments for developments on green space, known
as RES3 contributions, will be deferred while the local authority will
be more prescriptive in how its annual social housing grant is
This year’s allocation of £83m will be spent in part on taking over
unfinished units from the private sector, buying land while prices are
low to aid development, and snapping up finished units that developers
The measures, being unveiled by city council leader Steven Purcell
at the annual State of the City Economy conference in Glasgow, comes as
the credit crunch claims another two victims.
Duncarse Development, the firm behind a £40m luxury housing scheme
in Dundee, has gone into administration, and popular Largs restaurant
Nardini’s at Regattas has also gone bust.
Citigroup Bank yesterday announced 50,000 jobs were being shed worldwide, including 12,000 in London.
They also come on the back of Prime Minister Gordon Brown’s comments
yesterday on the urgent need for “temporary and affordable” fiscal
stimulus and the “emerging consensus” around the world on the need for
rapid and co-ordinated action through budgetary measures.
He said the G20 nations had backed his plans at the weekend for tax
cuts to aid recovery and again suggested that reforms aimed at low
earners and pensioners on winter fuel allowances will be unveiled
during Monday’s pre-Budget report.
Last week it was revealed that the slowdown is having a major
detrimental impact on Glasgow council’s finances, with the public purse
down £1m a month due to a lack of planning applications and the £144m
in saved capital receipts being spent with little or no sign of future
developments to replenish the fund.
The move is seen as the biggest public-sector intervention at a
Scottish regional level to prop up the economy by savings jobs and
providing an incentive for development.
Glasgow generates one-sixth of Scotland’s GDP and in the past 10 years has been home to 50,000 new jobs.
Speaking ahead of today’s conference, Mr Purcell said it was “no
time for unnecessary rules and processes” and the first thing public
bodies must do in the current climate is “examine where we can help
business by being more flexible and willing to do things differently”.
“Today I can announce three areas where we will relax rules and show
more flexibility in order to promote development, safeguard businesses
and protect jobs,” he said.
“As of today, we are willing to be much more flexible in the way we
dispose of land if it means projects get off the ground. We are willing
to look at deferred payment arrangements, profit sharing, joint
ventures and greater risk-taking on the part of the council.
“We will no longer ask developers for the payment they have to make
to develop a site at the planning stage. This is a significant upfront
cost and a barrier to development in the current climate.
“We have £83m to spend on social housing in the city and
will use it to buy land, while prices are low, to aid development, buy
finished units that developers can’t sell and also to finish units
where work has stopped. We then let them in the social rented sector.”
Mr Purcell added that the measures could be “the difference between
a development going ahead or not” and “the difference between someone
keeping their job or losing it”.
He also invited the business community to suggest changes to local rules and processes to stimulate the city economy.
First Minister Alex Salmond, who will also be speaking at today’s
conference, said that Glasgow was not immune to the credit crunch and
he believed schemes like the 2014 Commonwealth Games meant the city
still had “vast economic potential”.
He added that the Scottish Government was working closely with
Glasgow City Council, businesses, social enterprises and unions, to
reflate the economy.
Jim Sneddon, of Glasgow Housing Association, the country’s biggest
social landlord, welcomed the housing intervention, adding: “While the
current economic climate can be difficult, there are also real
opportunities to be entrepreneurial.”