Business chiefs have been warned Dundee faces the biggest challenge of any city in Scotland when it comes to recovering the economy after coronavirus.
The Centre for Cities’ annual study, called ‘Cities Outlook 2021’ says the Covid-19 outbreak is making improving Scotland’s economy almost four times harder than before, and says Dundee faces more challenges than any other Scottish city.
It also adds Dundee was in need of levelling-up its economy before the pandemic began, and its export base has only further been damaged by coronavirus.
Chamber of Commerce CEO “surprised” but says Dundee faces a “significant challenge”
Alison Henderson, CEO of Dundee and Angus Chamber of Commerce, said she was surprised to hear Dundee would struggle more to recover its economy than other Scottish cities such as Edinburgh, Glasgow and Aberdeen.
She said: “I am surprised at the report, partly because Dundee is not as dependent on some of the bigger sectors that have been hard hit by coronavirus.
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“Aberdeen for example is seeing some really dramatic difficulties with oil and energy, Edinburgh with tourism and hospitality on its knees, and Glasgow has a very large office-based city centre.
“So I would have hoped Dundee would be isolated from some of those key sectors but it is still facing challenges.
“Our city centre has been badly hit.
“Dundee has got a decent retail sector and cultural attractions but a lack of visitors coming in is certainly impacting on Dundee and we are seeing that with businesses that are struggling to get support.
“Dundee also has a lot of very small and micro businesses that are finding this pandemic incredibly difficult.”
Unemployment must shrink by 4.1% if Dundee economy is to recover
The Centre for Cities has also said the unemployment rate in the city needs to shrink by at least 4.1% if Dundee is to successfully rebuild its economy.
Ms Henderson said there are a number of exciting projects happening in Dundee over the next few years, but added business chiefs need to be realistic about what can be achieved in the short-term.
She said: “Reducing unemployment is incredibly difficult to do.
“The city is already doing an enormous amount in employability to create jobs and investment in the city and it is clear in 2020 a lot of investment and other things just didn’t happen.
“Not only do we have Covid-19 but we also have Brexit and we know this has caused businesses to pause their investments for the last two years because of that uncertainty.
“But we do now have the Tay Cities Deal and the great thing about that is we are now seeing projects getting approval and that will create a lot of jobs.
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“The CyberQuarter at Abertay University will create a lot of jobs but the construction of that space is still a bit away.
“At the Invest in Dundee conference we were told the new esports arena and Eden Project will not be open until about 2024.
“These are very exciting things but we have to be realistic about what is achievable in 2021.
“One very positive thing is the Kick Start programme, which is one of the UK Government’s responses to Covid-19.
“The government will pay for up to six months of a young person’s wages on a work placement for up to 25 hours a week.
“We already have nearly 150 jobs from local employers through this scheme and more employers are keen to support these young people.”
Call for UK and Scottish government to do more to support the unemployed and consider extending furlough scheme
Both Ms Henderson and the Centre for Cities are now calling on the UK and Scottish governments to do more to help support the unemployed in Dundee.
Ms Henderson said: “In the short term we are calling for the UK Government to extend the furlough scheme and consider how the scheme works, because employers still have to find the cash to pay their workforce before claiming the furlough money back.
“This means cash flow can be very difficult for some employers and we don’t want to leave these businesses exposed.
“The Scottish Government budget is next week and we want the government to be clear about the roadmap to recovery because businesses need to be able to plan for the rest of the year.”
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Meanwhile the Centre for Cities say the UK Government should consider making the temporary £20 rise in Universal Credit payments permanent, do more to support those who are unemployed, and consider renewing the Eat Out to Help Out scheme for hospitality and non-online retailers once it is safe to do so.
It is also urging the Scottish Government to spend more money on further measures to prevent the economy being damaged further, such as training those who are unemployed for jobs in emerging industries, making city centres better places for high-skilled businesses to locate to, and improving transport.
Andrew Carter, chief executive at the Centre for Cities, said: “Covid-19 has made the task of improving Scotland’s economy and spreading prosperity around its cities and towns much harder.
“Rebuilding and strengthening the economy of Scotland and its cities will not be cheap and will require more than short-term handouts.
“Government support and investment for new businesses in emerging industries will be essential, as will spending on further education to train people to do the good-quality jobs created.”
Kate Forbes MSP, finance secretary, said: “We have allocated over £3 billion to help businesses since the start of this pandemic.
“[We paid] out 383,000 awards for businesses between March and October and a further £55 million between October and December.
“We also have significant top-up payments that will be made this month.
“The recent tightening of restrictions means that more businesses will be eligible for the strategic framework business fund from January onwards and many will also benefit from top-up payments or sectoral grants.
“The December payments from this fund was made over a week early and local authorities are on track to make the January payment, despite a large increase in the number of new applications this month.
“We are acutely aware that this support can never compensate for the full impact on business, but we will continue to work within the resources that are available to us to protect businesses and build a stronger recovery for Scotland.”
And a spokesman for HM Treasury added: “We’ve invested more than £280 billion throughout the pandemic to protect millions of jobs and businesses – and extend our furlough scheme through to April which has protect 779,500 jobs in Scotland.
“At the upcoming budget the government will set out how we’ll ensure public services continue to receive the investment they need.
“We’ll also outline the next stages of our ‘plan for jobs’ to support businesses and families across the UK.
“That has been our priority throughout the past year and it will be the priority for the year to come.”
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