IT WAS the great North Sea giveaway yesterday. But no sooner had the ink dried on a joint Scottish/UK Government £250 million city deal for oil capital Aberdeen – including an extra £20m to help cope with the oil crisis – than experts said it was not enough to save the industry.
First Minister Nicola Sturgeon pledged an additional £254m from future budgets over five to 10 years to improve the north-east’s infrastructure and called on Prime Minister David Cameron to match the funding.
She told MSPs: “I welcome the city deal agreement which is seeing the Scottish and UK Government both commit £125m to support infrastructure and innovation in the north-east. However, I do know the investment Aberdeen and Aberdeenshire asked for was more significant than that.
“That is why we have taken the decision as the Scottish Government to today confirm £254m of additional support for key infrastructure in the north-east. The Cabinet Secretary for Infrastructure did invite the UK Government to match that additional commitment, and we will continue to discuss with them increasing their contribution.”
Professors Alex Russell and Peter Strachan, from Robert Gordon University, writing for The National, said the cash injection was a short-term move and not enough to save the industry. “Given that the Chancellor of the Exchequer has collected over £300 billion in direct taxation from the North Sea industry, is a reinvestment of £125m from Osborne that noteworthy? It will not save the industry. And it will not maximise economic recovery,” they wrote.
At First Minister’s Questions, Sturgeon was asked by SNP backbencher Kevin Stewart if she “shared his view that Aberdeen deserved more than £125m from the UK Government”, given the tax revenues that had gone to the Treasury from the oil and gas sector.
She replied: “I think Kevin Stewart makes a very, very good point indeed, but nevertheless today I think is a good day for the north-east of Scotland.”
The announcement of an additional £20m came as Cameron visited Aberdeen and met with oil industry
leaders. It will be used for seismic surveys to be carried out to try to boost exploration and uncover new oil fields.
But the RMT union, which represents offshore workers, said it could be too little, too late.
Regional organiser Jake Molloy said: “The offshore sector has been losing vital skills and experience at a rate equivalent to the closure of a steel plant every week for the last year. It has taken the loss of a staggering 65,000-plus jobs to finally see Mr Cameron and his Government think about intervening.
“That intervention may already be too late, and without some innovative proposals to protect and sustain employment and ensure the infrastructure is fit for purpose, the Government objective of ‘maximising economic recovery’ from the UK Continental Shelf is at serious risk.”
The city deal agreement was formally signed in Aberdeen by the Scottish Government’s Infrastructure Secretary Keith Brown and Scottish Secretary David Mundell. Brown said: “While I support the city deal agreement, the Scottish Government recognises there is more support that can be made available to the region and that will deliver real economic benefits.
“That is why we have decided to invest £254m of additional Scottish Government support in key infrastructure in the north-east to cement Aberdeen as one of the world’s leading cities for business and industry.
"It is clear that the appetite of the councils and the needs of the area require more.”
The Oil and Gas Authority (OGA) has previously estimated the sector has lost 65,000 jobs – 15 per cent of its workforce – since the start of 2014.
Jenny Laing, leader of Aberdeen City Council, welcomed the moves, but added: “The package announced today is only the first stage in transforming the north-east of Scotland and I look forward to continuing our discussions with all layers of government.”
Other measures will see an oil and gas ambassador appointed to promote the North Sea around the world and boost inward investment.
Meanwhile the OGA will produce a decommissioning plan by early summer, which ministers hope will help Aberdeen become a centre of expertise and ensure UK firms can capitalise on this future source of income.
NICOLA Sturgeon was challenged to confirm the funding going to Aberdeen as part of the city deal was “new” money.
Scottish Tory leader Ruth Davidson said the £200 million to increase capacity on key rail links between Aberdeen and the central belt “has been on the books since 2007 – the entire lifetime of the current Scottish Government.” She asked Sturgeon “to confirm that the money is new, when it is being released and when the work will be carried out”. The First Minister said she would visit Aberdeen on Monday and make further announcements, but the money “will be available to Aberdeen and Aberdeenshire, to benefit those areas, over the same timescale as the city deal". “To recap, a funding package of £504m has been provided for Aberdeen and Aberdeenshire today, £125m of which is coming from the UK Government – we are very grateful for that – and £379m of which is coming from the Scottish Government,” she said.
The National View: Aberdeen needs proper help to ensure oil and gas industry has a tomorrow
Professors Alex Russell and Peter Strachan: Joint venture is now needed with much more investment
Gordon MacIntyre-Kemp: The oil sums don’t add up in Cameron's measly rescue package
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