There is much to welcome in the deal being offered to Aberdeen by the Scottish and UK governments. Any investment right now can only, even if momentarily, help.
The problem is that the sum being presented by the Treasury is not even close to what Aberdeen deserves.
There is no doubt much more is needed. This is a city battered by the fall in the oil price. It is a city where the headlines about the 65,000 job losses in the oil and gas industry hide the fact that the impact will be felt by everyone who works in the construction and service industries. In fact, it is hard to think who in the city and the surrounding areas won’t be affected by the fall in oil price.
It is a city that has perhaps lost its lustre. The state of Union Street, the mile that runs through the heart of the city, has become dirtier and filthier over the years. Every city in the country, if not the world, has been affected by the economic downturn. Yet Union Street seems to have more empty shops and boarded-up windows than most.
The winner of the dreaded Carbuncle award last year for poor planning decisions of generations of councillors, Aberdeen’s reputation has taken a battering of late too.
The oil price has fallen before – but it has always come back. The situation now is much more challenging.
For decades, there have been warnings in the city about what will happen when the oil industry stops. Fortunately, it is not yet near stopping. Indeed, the report from Pinsent Masons released this week indicating that 96 per cent of 200 senior executives across the oilfields services industry predict the UK Continental Shelf will recover to "peak" levels of profitability gives reasons for optimism.
Aberdeen must think carefully about the future. It must prepare better for it than it has up until now.
The money announced by the governments will go some way to doing just that.
But given how much money has gone from Aberdeen to the Treasury’s coffers – the figure of £300 billion was being bandied about yesterday – the sum being offered is really rather pathetic.
An initial bid by Aberdeen City Council and Aberdeenshire Council for £2.9bn became £504 million, just £125m of which came from Westminster. An extra £20m announced later on in the day purely for the industry will make little difference. In 2014, the oil industry spent £14.8bn in the North Sea. That £145m is not going to go very far at all.
You can see why many people in Aberdeen were not best pleased.
As industry experts Professor Peter Strachan and Professor Alex Russell say in today’s National, this will not save the industry:
“A long-term approach is required. Governments and the industry must act as a joint venture with carrots and sticks cementing the relationship for at least 20 years.
"Much more investment is required from all parties but a joint venture agreement needs to be drawn from scratch. The national interest is paramount.”
David Cameron told us that North Sea oil was better off with the “broad shoulders” of the UK. His government needs to prove that.
Experts warning £270m fund for Aberdeen will not save the oil sector
Gordon MacIntyre-Kemp: The oil sums don’t add up in Cameron's measly rescue package
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