Finance Network Steering Group

Finance Network Steering Group Notes of Meeting Tuesday 27th June 2017

Welcome George Thom, Chair of the Finance Network, welcomed all in attendance and gave introductions to the speakers. For those new to the group, George gave a brief outline on the group’s purpose which is to provide knowledge transfer, peer to peer support and networking. The Chamber offers a voice on behalf of the network groups to ensure that issues are raised and information is fed back.

The meeting was kindly hosted by Anderson Anderson & Brown LLP. Graeme Ross of AAB welcomed all in attendance to their offices and gave a brief H&S note.

Notes of Last Meeting None.

City Centre Masterplan Update Marc Cole, City Centre Director of Aberdeen City Council joined the group to give an update on the City Centre Masterplan and its progress. Marc started his presentation by giving a bit of background on the project. - Masterplan unanimously approved by the Council in June 2015. - Aims to build on the city’s reputation as global business and leisure destination. - Sets out 8 key objectives including: o Changing perceptions of the city centre o Growing the city centre employment base o Increasing the number of people living in the city centre o Exploiting its waterfront location o Capitalising on Aberdeen’s distinct local culture - Now has 50 catalytic economic, infrastructure, environmental and community projects aiming to kick start a 25 year regeneration programme.

Marc gave details of the Masterplans current position and the works that are already underway including - - Masterplan team established.

- Governance and delivery arrangements in place.

- Initial communications and engagement exercises completed

- Catalytic projects work programme assembled.

- City Centre thematic groups established.

- Operation Union Street Rejuvenation underway - Union Terrace Gardens – scheme approved

- Schoolhill/Golden Square – detailed design work underway

- Operation Union Street Rejuvenation underway

- Union Terrace Gardens – scheme approved

- Operation Union Street Rejuvenation underway

- Union Terrace Gardens – scheme approved

Marc then noted the planned next steps for the project – • Progress work on high profile projects o Queen’s Square – development framework nearing completion o Independent Aberdeen – work underway o North Dee Business Quarter – mixed use masterplan commissioned o St Nicholas/Bon Accord Shopping Centre – planning application submitted o Station Gateway – detailed design works being developed o City Centre Living report – nearing completion o City Parking Study – underway

In parallel with this work is ongoing to:- • Secure greater public support and 'buy in' for the Masterplan o engagement and communications plan o working with local schools o develop a city narrative with Chamber of Commerce o galvanise public and business support for key masterplan projects

• Secure additional public and private sector masterplan funding o investment/marketing plan o identify funding sources e.g. Sustrans, Scottish Heritage, the market etc. o transform city into a 'business friendly' location

Marc concluded his presentation by noting – - Real progress being made on catalytic masterplan projects

- Clear private sector interest in the city centre

- Key stakeholders actively engaged with masterplan implementation process

- Implementation process gaining momentum and traction

- Translating interest into delivering masterplan objectives

- Delivering a pipeline of early wins

- Sustaining progress on catalytic high profile projects - Broadening and deepening public and business support for transformation process

- Securing additional resources necessary to sustain the delivery process

Marc’s full presentation can be found here.

George thanked Marc for his update and facilitated a Q&A session.

North East Economic Update Tony Mackay, Economist of Mackay Consultants returned to the group to give an update on the current North East economic condition. Tony has been producing this report for around 20 years, the report is made available to Chamber members online monthly and can be found here.

Tony covered the key points from his latest reports including – • North East most prosperous part of Scottish economy in decade up to 2015 • Earnings the highest in the country and unemployment the lowest • Oil price collapse has had serious negative impact • At least 20,000 job losses • Short term prospects still heavily influenced by world oil price • Economic diversification very important • 70% of economic output and employment is in service sector • Most service industries dependent on fortunes of oil and gas industry to varying extents • Major employers include the two councils and NHS, so public sector is still very important • Brexit vote creates uncertainty • IndyRef2 creates more uncertainty

Tony went over recent economic performance showing – • NE economic growth (GDP) fell from +3.5% in 2014 to just +0.7% in 2016 • Unemployment has risen by +40% to 6,305 • At least 20,000 job losses in oil industry • House prices in Aberdeen have fallen by -4.3% over last year, compared with +6.8% in Scotland as a whole • Most other economic indicators give similar picture • Slowdown in UK economic growth

Tony shared his thoughts on the current oil industry state – • Brent price fell from peak of $125 a barrel in 2014 to about $45 today • Main reason has been increases in supply from shale oil in the USA, and also Libya and Iraq • OPEC-Russian agreements to cut production have had little impact on supply/demand balance and world oil prices • Some progress in reducing costs in North Sea but much more difficult than elsewhere • In any case most future projections for North Sea production and expenditure show further declines • Differing opinions on future oil prices but I remain pessimistic

Tony went over the UK and Scottish economic forecasts - General consensus is slowdown in UK economy

- Impact of Brexit vote - Significant fall in value of sterling since Brexit vote

- Boost to exports but imports now more expensive

- Inflation now above rise in average earnings

- Fall in consumer confidence and spending

- Conservative Government’s commitment to reducing annual public sector deficit

- Scottish GDP increased by just +0.4% in 2016, compared with +1.8% in UK as a whole

- Official statistics show Scottish GDP falling by -0.2% in Q4 of 2016

- Main reason has undoubtedly been the recession in the North Sea oil and gas industry

- Brexit impact has not helped but has been less worse than some predicted

- Added uncertainty of proposed Indyref2

- No reason to expect Scottish economy to do better than UK in the next few years

North East economic forecasts included – - We forecast that Aberdeen City GDP will increase by annual average of +1.03% during three years 2017-19. The city ranks 32nd of the 32 local areas - We forecast that Aberdeenshire GDP will increase by annual average of +1.24% during three years 2017-19. The city ranks 31st of the 32 local areas - Scottish economy is forecast to grow by annual average of +1.49%, rising from +1.2% in 2017 to +1.7% in 2019 - Long term average for all areas has been about +2%

Tony finished his presentation by showing some visual forecasts for Aberdeen and Aberdeenshire. The full presentation can be viewed here.

George thanked Tony for providing an update to the group and facilitated a Q&A session. George also encouraged attendees to view the report on the Chamber website and pass onto colleagues and clients.

Policy Update Rebecca Campbell, Policy Executive at the Chamber joined the group to give an update on the Chambers latest policy activities. - The Chamber AGM took place on the 20th June where John Brebner, former vice president, replaced Edel Harris who has served as president since June 2015. She remains on the board for a further two years. Two new faces were also elected to the board, Deborah O’Neil of Novabiotics and Derren McRae of CBRE. The policy council attracted incredible levels of interest and engagement with 26 candidates stepping forward for the nine available places. Full details can be found here. - The Chamber have been doing a lot of work surrounding the general election raising issues such as Brexit and the Industrial Strategy. - The Chamber welcomed The Secretary of State for Scotland, David Mundell MP to their offices on June 16th and members were invited to attend the exclusive roundtable session. - It was noted that the Chamber have been doing some significant work on a business rates campaign and are waiting on the recommendations from the Barlcay review which will be available in July. - The 26th Oil & Gas survey became available during a web launch and can be viewed here. - An updated version of the infrastructure tracker is in progress and will be available soon.

If you have any questions on the above noted or would like to raise any policy matters with the Chamber please contact [email protected]

Update from the Chamber Teresa Bremner, Membership Network Manager at the Chamber gave an update to attendees - Northern Star Business Awards will take place on the 5th October at the AECC, table bookings are now open. There are three sponsorship opportunities still available – contact [email protected] for more information. - The Research team at the Chamber are offering members a special offer on their staff engagement survey service, more details can be found here.

AOB Susan Lawrie, Programme Lead at Aberdeen Business School, introduced the group to the latest initiative in education – Graduate Level Apprenticeships (GLA) that have been launched in Scotland.

Graduate Level Apprenticeships have been developed by SDS in partnership with employers, universities and colleges and professional bodies to create stronger links between industry and education and increase graduate employability skills. The content of the courses will be developed in conjunction with employers to ensure that the degrees undertaken by their staff contain the required work based learning along with the theoretical underpinning. Graduate Apprentices will be employed during their studies and because much of the learning takes place in the workplace they will have the opportunity to immediately apply what they learn at university in their jobs – and vice versa, therefore providing opportunities for employers to help shape the skills of their employees and to address the skills shortages affecting their industry and the local economy.

Anyone interested in finding out more about GLAs should contact Susan on [email protected]

Date of Next Meetings 20th September 2017 29th November 2017

George closed the meeting by thanking attendees & speakers. George encouraged the group to provide suggestions for future topics and speakers – volunteers to host future meetings also welcomed.

Please contact Lee-Ann Stewart if you would like to host – [email protected]