Argyll and Bute Council’s ambitious plans for the Lorn Arc took a huge step forward today as the Scottish Government approved the £18.9M TIF proposal
The Scottish Government has announced that the Lorn Arc project has been approved under the Tax Incremental Finance (TIF) scheme.
TIF scheme expected to attract £125M of private investment
The news was warmly welcomed by Council Leader, Councillor Dick Walsh, who said: ‘’This is fantastic news, both for the people of Oban and the surrounding area, as well as the people of Argyll and Bute as a whole.
‘’Our Single Outcome Agreement states that the key to the future of Argyll and Bute is to encourage and enable sustainable economic growth by seeking investment from government and private sector sources, and that’s exactly what we’ve done here
‘’We were confident in the strength of our initial bid, however, we were up against some strong opposition. This approval by the Scottish Government is indication of the robustness of our plans and the professionalism and expertise of our staff who developed the business case for the Lorn Arc project.
‘’I would also like to thank our partners in both the public and private sectors, particularly those at Scottish Futures Trust, who threw their support behind the TIF bid. They see, as we do, that the key to sustainable economic growth is investment in vital infrastructure
‘’The project has the potential to create over 1,000 jobs and bring huge private sector investment to the Oban area in the years to come. The area has significant economic growth potential and we would hope that, with this investment, and the private sector investment we will be able to lever in, we can unlock this potential and grow the Oban’s reputation on the world stage as a place to live, work and visit.
‘’I am excited to see this project develop and am eagerly looking forward to the first spade going in the ground this autumn. This investment is going to have a hugely positive impact on the lives of the people of Oban and the surrounding area.’’
Depute First Minister, Nicola Sturgeon MSP, said: “The Argyll and Bute TIF will allow major construction developments across the area over the next five years, which will unlock significant economic development and regeneration.
“It will allow Argyll and Bute to maintain and grow a number of industries and sectors that are important nationally such as renewable energy, aquaculture and marine tourism.’’
Tony Rose, infrastructure director at the Scottish Futures Trust, said: “SFT continues to lead the way with the development of TIF across Scotland as an innovative way to unlock future economic growth, as every £1 invested by the public sector has the potential to attract a further £6 from the private sector.
“We have worked closely with Argyll and Bute Council on finalising this agreement since recommending approval of its TIF Business Case and very much look forward to the positive impact that the investment will make to this region and adjacent areas.”
The Lorn Arc project looks to develop sustainable growth in the marine science, marine tourism, aquaculture and renewable energy sectors, as well as stimulating the wider economy
The Lorn Arc covers the areas of Oban, Dunstaffnage, Dunbeg, North Connel and Barcaldine.
The council will implement a programme of strategic infrastructure investment over the next 6 years, starting with a £2.75M project to improve the Lorn Road/Kirk Road area, with work set to begin in Autumn 2014. Each project will be subject to the standard business case and approval process.
Beyond that the council aims to invest the remainder of the £18.9M in the Dunbeg Gateway, the Halfwayhouse roundabout/ Dunbeg development road, the south Oban development zone, the North Pier, the Barcaldine business space and access improvements and the creation of a new business park around Oban Airport.
This investment in vital infrastructure will attract new businesses to the area and, as a result, create jobs for the people of Argyll and Bute.
Oban has been an important economic and social centre for the Highlands and Islands for many years. With the town recently celebrating is bicentennial, the Lorn Arc project will develop Oban, and the surrounding area, as an important economic growth area for the west coast of Scotland in the coming decades.
This is part of Argyll and Bute Council’s wider vision for regeneration and follows on from the £30M of council investment in the CHORD project, which has already delivered a number of successes such as the regeneration of Campbeltown, with major work on the town centre, the harbour and the Kinloch Road area; the Helensburgh project, with work already completed on the esplanade and further work currently underway in the town’s Colquhoun Square; the work in Rothesay, where a number of historic buildings have been restored to their former glory and in Dunoon and Oban, where work is progressing towards the enhancement of their waterfronts.
The Scottish Government’s TIF scheme is a way of funding local council’s investment in vital infrastructure which will lead to the economic regeneration of an area.
This loan will be repaid over the next 25 years through the extra tax income (non-domestic rates) gained from attracting new businesses to the Lorn Arc area.
For example, when a new road is built this increases the value of the land which can lead to new property and business investment. As a result the increased site value and business investment generates increased tax revenue.
In the first round of TIF funding, the Scottish Government approved funding for the Edinburgh Waterfront project, the regeneration of Ravenscraig in North Lanarkshire and the development of the Buchanan Quarter in Glasgow
In the second round of TIF, Argyll and Bute Council was one of 15 local authorities to submit bids and was one of the three successful bids to be taken forward, along with projects in Fife and Falkirk/Grangemouth.
Argyll and Bute Council will be appointing a special project team to oversee the implementation of the Lorn Arc project.