Our friends in the North

What has been the response of the construction sector to the imminent arrival of the new Scottish parliament? Is it something that the industry wants to become involved with? Yes, say Sir Fraser Morrison and the five other members of the Construction Sector Pathfinder Group that reported in March on the likely impact of the new parliament. The group called on Scotland’s new politicians to heighten the priority given to the construction industry and to recognise the sector as one of Scotland’s key industries.

This proactive response contrasts sharply with the general reaction of UK business. A survey of 500 UK companies carried out in December 1998 by Market Research UK found that 64% of the respondents were unaware of the responsibilities of the new parliament.

When asked which areas of responsibility might transfer to Edinburgh from Westminster, 36% said they did not know, and a further 12% said that nothing would transfer. This lack of knowledge is disturbing.

As well as enacting domestic legislation, the new Scottish administration will also have responsibility for implementing into Scots law European legislation that falls within the scheme of devolution. It is possible that such legislation will be introduced in a different form in Scotland than England. The process of “gold plating”, where extraneous regulations are added by domestic civil servants to otherwise innocuous Euro legislation, is well known; a similar form of “tartan plating” should be expected.

All this could have a significant impact on those doing business in Scotland. The UK government would like to ensure a “level playing field” for industry and for investment across the country, but the new devolved administrations may well try to make their part of the UK more attractive to business than others. The Pathfinder report found the idea of the new parliament using its powers to promote local business to be a positive one.

The report stresses the importance of the construction sector to Scotland’s economy; sustaining some 116 000 jobs across an industry worth £3.25bn. Viewing the parliament as an opportunity for the industry, the authors highlight four key themes that an incoming administration might take forward.

When asked which responsibilities might transfer to Edinburgh, 36% did not know, and a 12% said that nothing would. This lack of knowledge is disturbing

The report calls for a Scottish strategic plan to provide the parliament with a model for future residential, infrastructural and industrial development. Coupled with this strategic overview would be a comprehensive review of the planning system and building regulations. The authors refer to the 1998 McKinsey report on the British economy, which blamed planning controls for restraining development in the UK.

The development of under-used assets in the public sector is identified as a priority for the new parliament. The construction sector is seen as providing “innovative and commercially viable” redevelopment proposals for these assets, working with the new institutions in private-public partnerships.

The report’s authors take a radical approach to funding infrastructure development. They note that a Scottish administration would lack the ability to raise sufficient funds to upgrade Scotland’s infrastructure and call for the introduction of a “user pay” system, principally in relation to road use.

The fourth proposal is for the parliament to assist the transfer of local authority housing stock to the private and voluntary sectors. This idea is echoed in the manifestos of most of the parties contesting the Scottish parliament elections. Action to solve Scotland’s chronic housing debt should be forthcoming in the early years of the new parliament.