SPECIAL FEATURE by OUR LOCAL GOVERNMENT EDITOR
A £29 million flagship infrastructure project designed to transform the Scottish Borders economy has become totally becalmed after civil servants demanded revised business cases to justify further financial investment.
The Borders Innovation Park [BIP], close to the Tweedbank rail terminus, is already well behind schedule. It was originally intended as a vehicle to provide quality office space for incoming businesses.
But the Covid pandemic in 2019 crushed demand for new offices in the Borders and elsewhere, and the park's promoters Scottish Borders Council decided to revise the make-up of the buildings to deliver a higher proportion of top end industrial units.
The park is being partly funded by a £15 million grant from the Edinburgh & South-east Scotland City Region Deal which is investing £600 million in a bid to bring additional prosperity to the region.
The original business case for BIP claimed the Tweedbank facility "represents very high value for money". Programme implementation was given as: phase one completion by September 2020; phase two by March 2022, and phase three by March 2024.
Only the first phase has been completed with most of the space occupied by the council's Inspire Academy and by CGI, the authority's IT provider.
A meeting of the city deal joint committee was told by Andy Nichol, head of the deal's project management office that BIP was due for reconsideration by committee members in December but it was likely that date would need to be rescheduled.
Said Mr Nichol: "We had hoped to progress changes to the the phase two approach and these were largely in terms of revisions to the proportions of traditional office space and altering that to higher end industrial units on the back of changed behaviours that have arisen following the COVID pandemic. We had hoped to to make those revisions via a change control process, but the government signalled that we're going to have to provide a revised business case instead."
Earlier this year South of Scotland Enterprise confirmed it was providing £3 million in funding to help facilitate phase two of BIP.
At the time Councillor Scott Hamilton, Executive Member for Community & Economic Development at SBC commented: “The announced funding from our partner SOSE is extremely welcome news and helps fund a critical next step in the development of the Borders Innovation Park at Tweedbank.
"The site has incredible potential and will help to transform our area’s economy by tapping in to nearby transport links like the Borders Railway and attracting new workers, homeowners, businesses and visitors to the region. All of this together will help stimulate new rural economic growth whilst delivering lasting benefits to the wider region.”
The strong feeling of frustration at Scottish Borders Council in the wake of the latest setback was expressed by council leader Euan Jardine when he addressed the city deal committee.
Councillor Jardine told the meeting: "it was disappointing to receive the feedback from the Scottish Government civil servants last week that phase two of the Borders Innovation Park needs an updated full business case to cover the extension of the existing site.
"Civil servants have also advised they need a separate new full business case for the next [third] phase, which would significantly delay project delivery. This is particularly frustrating as we had requested a simple change control process."
This would have allowed a different business use mix between office and flexible hybrid industrial space to reflect changes in the economy since the pandemic.
"The experience in both Scottish Borders and in Fife is evidence of demand for business space. It's complex to demonstrate this significant market demand, but that initial phases of development in both Borders and Fife have been successfully let shows the need for public sector intervention to support business growth."
And the Borders council leader added: "Scottish ministers said at the Convention of the South of Scotland in September 2023, that they would explore a more pragmatic and responsive approach to business development in the south to support the development at Tweedbank and other key assets and sites. However, its clear civil servants are struggling to give us that flexibility."
There was support for that view from Midlothian councillor Russell Imrie who commented: "Things are not the same as they were in 2019. Civil servants are going to have to be more nimble on their feet. This may be the first example of its kind, and to hold back on this project is not acceptable".
Officials told Borders councillors in a March 2023 report there would be external funding for BIP of £4.972 million in 2023/24 and £6.183 million in 2024/25.
However, papers for the city deal committee meeting showed a sum of only £1 million for the innovation park in 2024/25. Just £0.1 million had been drawn down in the first quarter of the financial year. In fact total investment from city deal funds is £2.9 million, 20% of the £15 million allocated.
There is said to be considerable concern in local government circles that delays in project delivery like that now emerging in the case of Tweedbank's BIP may soon be commonplace.
We were told: "There is - all of a sudden - a need to “relook” at some projects which everyone thought were progressing OK; more/revised business cases needed. The Borders BIP seems to be falling foul of a climate of civil servant anxiety about spending commitments in light of budget and monetary worries."
City deal committee members decided the organisation should write to appropriate Scottish ministers expressing their concerns and pressing the case for work on the BIP to restart without any further significant delays.
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