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Yes vote 'would jeopardise' £7.8bn of Scottish schemes


More than £7.8 billion of proposed schemes could be canned if Scotland votes to leave the United Kingdom later this week (18 September)

According to industry analyst Barbour ABI, schemes backed by companies outside Scotland make up nearly a fifth of the £38 billion of construction contracts in the pipeline. In its report Scottish Construction: A Bright Future? the intelligence specialist suggested the future of these schemes would ‘hang in the balance’ if there was a yes vote.

The body suggests projects linked to the renewable energy sector, which benefits from a UK-wide subsidy, would be ‘particularly at risk’.

The Barbour ABI claims comes just days after construction project tracker Glenigan revealed that business uncertainty ahead of the Scottish independence referendum had led to a major downturn in privately funded work in Scotland, with shopping-led schemes alone dropping 59 per cent (see AJ 11.09.14).

Michael Dall, a lead economist at Barbour ABI, said: ‘If Scotland does choose independence, it’s likely that negotiations between UK and Scottish Governments will be prolonged and complex, posing a potential risk to both public and private sector contracts and with the lion’s share of planned works being funded by non-Scottish businesses, the currency question will also have a direct impact.

He added: ‘[The] result will certainly lead the construction industry into unchartered territory with potential implications for firms and employees in Scotland and the rest of the UK.’

However a number of Scottish architects have slammed the Barbour ABI findings, saying they amounted to ‘scaremongering’.

Helen Lucas, of Helen Lucas Architects said: ‘The No campaign has consistently used threats of hell and high water to try to suppress the fantastic creative energy that is coming out of all the fresh debate/ideas political movements surrounding independence. 

‘There is strong evidence to the contrary that the refocus of energies on Scotland, the creation of a renewed country and new banking system etc enables Scotland to unleash the grip of big business and grow a less risky economy based on smaller, sustainable business models which are less prone to universal collapse.’

Dalkeith-based architect Douglas Strachan agreed: ‘In short, this is scaremongering. Companies with registered head offices outside Scotland, still pay tax on their economic activity within Scotland. If a project represents a sound investment now, there is no reason why it would not just because more political decision making power is transferred to Holyrood, which after all is all independence really is.

‘The relocation of decision-making power closer to those the decisions effect would eventually lead to some changes. But there is no reason to think this would impact on investment in the short or medium term.’

A poll by the AJ revealed that a hefty 59 per cent of the nearly 160 architects who voted said they were in favour of the country cutting its ties with the UK.

Other comments:

Gordon McGregor, senior architects at Groves Raines Architects

‘The nature of these threats bombarding the Scottish people at the moment is that they are vague and doom laden. We don’t know how the question was put to these unnamed investors and that can of course have a huge impact on what answer is returned.

‘So is it likely that all of the projects funded from beyond Scotland would be cancelled irrespective of where they are in the construction process?

‘Scotland is well placed to provide renewable energy and big money is to be made from that investment. If planning permission has been gained do they think that these investors will throw that away? 

‘I have no doubt that if an initial panic, does occur things will settle down quickly enough and a pragmatic approach will be found because it will be in the interests of both Scotland and the UK to work together.’

Jeremy Blackburn, head of UK policy at RICS

‘Inevitably, the referendum on Scottish independence will have an impact on the industry regardless of whether it’s a ‘yes’ or a ‘no’ next week. At the moment, it’s the extent of the potential changes to the construction and built environment industry in the country which are causing anxiety. Potential political changes on this scale always bring an element of risk and uncertainty for investors.’




Readers' comments (4)

  • Gordon MacGregor might not be aware that there's already action by the renewable energy industry to put projects on hold pending clarification of government policy after this week's vote.
    Near where I live in Argyll a fairly large, but uncontroversial, wind farm project was about to start on site but has now been frozen - and the same company has frozen their other project in Scotland. Nothing 'vague' about it.
    As for Helen Lucas's comments about 'fantastic creative energy', it seems to me that there's plenty of that in Scotland anyway, and there does seem to be a notion fostered by the 'Yes' campaigners that Scotland is a poor, decrepit, hollowed out shell of a country. Really?
    This is not to say that there isn't the urgent need for radical reform of the governance of Britain - anyone living outside the London area (and not just in Scotland) must be aware of the extraordinarily unhealthy coincidence of concentrated wealth and political power in just one patch of the country.
    Without reform, there really is a risk of enormously damaging fault lines opening up within England, let alone between England and Scotland.

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  • ..."schemes backed by companies outside Scotland make up nearly a fifth of the £38 billion of construction contracts in the pipeline."

    "...the lion’s share of planned works being funded by non-Scottish businesses..."

    Which is it - "nearly a fifth" or "the lion's share" - it can't be both!

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  • That then would be a Yes to remaining sane, rather than up to one's ears in debt and deaf, instead of burying London in over stressed High Rise knitted piling at ludicrous rental costs on subsiding clay Chunneling and bad sand technology of the terrace slips and polluted groundwater. One thing Scotland Somerset Wales and some other parts the beer soaked longer ago than advertising need to do is leave the ancient themes of London behind for safety and health, lowered inflation, better education and University, Planning, Schools good landscapes and clean water. It was not even the capital that is a recent myth generated by foreign castle builders. MD Stagg Senior Lecturer 1978 GCADesign Cheltenham

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  • dominic cox

    Ian Bell (The Herald) calls the British state "hideous". What an opportunity for Scotland to do what the spineless British state has resisted, and follow French legislation to make the appointment of an Architect compulsory for all projects over 70 msq. What is the value of that, bean-counters ? What a haven for Architects would result !

    The sight of the 'bigot' Gordon Brown mouthing empty promises to support the Union is laughable. Doesn't he realise no one believes him ? The Scots had quite enough of his tory New Labour government. Scots don't agree with £9000 pa tuition fees, doh ! Scots still have values, a culture,a common language (their second tongue isn't Polish) and won't sell out to the UK's right wing economy that profits by churning out bullets, mines, and tanks for the the numerous conflicts around the world.

    Westminster must be terrified what will happen to Faslane, and the House of Hanover's asset at Balmoral.

    COME ON SCOTLAND - cut the chord !

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