Revealed: Brexit fears of Scottish councils

With the deadline for EU withdrawal edging ever closer Scotland on Sunday has conducted a survey of Scotland's local authorities to find out what impact Brexit will have across the country.

By The Newsroom Sunday, 9th September 2018, 12:41 pm Updated Sunday, 9th September 2018, 1:15 pm

Official papers obtained by Scotland on Sunday revealed that with less than nine months from the March deadline for leaving the EU, a host of unresolved issues remain. Picture: John Devlin

Documents unearthed by Freedom of Information legislation revealed widespread concern over how EU funding will be replaced, Brexit’s impact on agriculture, energy industries, foreign investment, trade tourism, and the effect that it will have on Scotland’s foreign workforce.

Official papers obtained by Scotland on Sunday revealed that with less than nine months from the March deadline for leaving the EU a host of unresolved issues remain.

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While papers produced by some councils showed evidence of contingency planning, they raised more questions than answers. And some of the country’s councils, such as Stirling and West Dunbartonshire, were unable to produce any documents relating to Brexit preparations.

There are many questions surrounding farming and agriculture. Picture: Lisa Ferguson

European funding

• Most councils have real concern about the future of EU funding. A Dundee City Council paper published last month says the lack of a guarantee for interreg funding, which promotes co-operation across the EU, could effect the city’s expertise in creative technology, animation and virtual reality projects.

• In the Western Isles there is concern over lack of access to EU structural funds in whisky and food and drink industries.

• Highlands forestry sector is dependent on EU funding support notably for replanting trees. Across the Highlands and Islands EU cash has financed village halls, community buildings and sports and leisure facilities.

• Organisations dealing with the most vulnerable or the socially excluded have also benefited. “As such these groups are those most likely to be affected were support to be removed,” a paper produced by Highland Council said.

• A document produced by South Lanarkshire identifies £12.76 million of EU funding between 2016 and 2020 and warns that some will be at risk.

• North Ayrshire loss of funding could leave a “policy vacuum” that the UK government must fill to stop regions losing out and increase economic disparities between regions. A council paper warns: “For an already fragile economy like North Ayrshire this could signal a further economic downturn and increasing unemployment.”

• Aberdeenshire Council says European Structural Funds have benefited 13,687 individuals, and 654 businesses between 2007 and 2020. Projects requiring EU assistance include the plan to get 99 per cent coverage of 32kb broadband, and enlarging Fraserburgh harbour to accommodate larger vessels.

Workforce

• Argyll and Bute warns of reduced workforce in food processing and skilled jobs such as chefs.

• North Lanarkshire identifies workforce issues including uncertainty around EU nationals in the UK.

• North Ayrshire says reliance on foreign workers raises particular concerns on Arran where many work in hospitality.

• Highland is home to large numbers of migrant workers operating in aquaculture, fish processing, agriculture and hospitality. “In some areas the migrant workforce can be critical to sustaining population and sustaining local facilities or services.”

• Shetland says EU nationals play a key role in the local fish processing industry with local businesses warning they would struggle without them.

• Perth and Kinross said there were already recruitment difficulties in teaching, nursing and social care. The council pointed out that 64.8 per cent of new migrant workers to the area were Romanian (2,165 in 2014/16), Polish (1,623 in 2014/16) or Bulgarian (1,298 in 2014/16). Migration from EU countries declined by 12.7 per cent in the 12 months up to September 2017.

Research & Development

• Aberdeen City Council fears it will be “disproportionately impacted” because of its large share of scientific exports.

• Dundee has thousands of people employed at the University of Dundee and Wellcome Trust and says: “The loss of EU research funding provides a large threat to Scotland’s life sciences sector.

• Glasgow’s higher and further education sector attracts 6,400 EU national students and 1,230 staff. “Any diminution of Scotland’s engagement with key EU academic programmes will impact negatively on the HE sector and impact on forward investment programmes.

Energy

• Aberdeen employs 41,900 people in energy and “uncertainty of the full impact of Brexit may further discourage future in investment in the UK continental shelf.”

• Aberdeenshire Council says it should maximise the potential of hydrogen, energy from waste and other renewables to develop a demand for transferable skills from oil and gas sector.

Agriculture

• Perth and Kinross says farmers may need to change their business models. New trading partners may not have the same environment, animal protection and land-use constraints and this could result in them producing agricultural goods more cheaply.

• Any detriment to agriculture could have knock-on effect on retail and trade in Perth because less money will be circulating locally.

• Orkney says agricultural activities are highly vulnerable to price and support reductions.

Remoteness means there is limited scope for innovation and adjustment, leading to risk of depopulation.

• A study commissioned by the Highlands and Islands Agricultural Support Group warns that livestock grazing across the region is vulnerable to potential Brexit price reductions and income support.

• This will accelerate existing trends of declining agricultural activity, land abandonment and a shrinking agricultural workforce.

• Argyll and Bute was one of several councils to express concern about a lack of Common Agricultural Policy in an area where there are high costs to transport to markets.

Housing & construction

• North Ayrshire reported a post Brexit vote slump in private house building and is looking at mitigating this by exploring a more commercial approach to construction. Fife Council is undertaking an assessment of the impact of Brexit on housing, in particular the impact of inflation and interest rates.

• Perth and Kinross said construction was its fourth largest sector and would take a “potential hit” given that it employs many European Union nationals.

Employment in construction accounts for some 7.1 per cent of total employment in the area, which is above the national average of 5.5 per cent.

Trade & investment

• Aberdeen City Council says 19.6 per cent of Scottish wholesale, retail and trade international exports are attributed to the city and Aberdeenshire and “sector contraction” would have a higher proportional effect in the North East.

• Falkirk talks of a need to understand the likely impacts for local industries such as chemicals, food and drink. Grangemouth Port has significant reliance on shipping of goods to/from EU ports.

• Argyll and Bute is concerned by increased costs of imported raw materials due to a weaker pound. North Lanarkshire has flagged up potential supply chain disruption for council projects that rely on EU goods and services.

• North Ayrshire reports “anecdotal evidence” that potential investors are holding off decisions and foreign-owned companies’ investment plans for UK sites are being delayed.

• Highland Council says private investment lags behind when it comes to putting funds into the communications technology required in remote areas.

Tourism

• Highlands said there is concern that the perception of Brexit may have an impact on how welcoming Scotland is seen as being, although the weak pound may increase overseas visitors.