House of Commons - Scottish Affairs

Select Committee on Scottish Affairs Second Report

SECOND REPORT

The Scottish Affairs Committee has agreed to the following Report:—

JOB CREATION POTENTIAL OF THE MODERNISED
FORTH, CLYDE AND UNION CANAL

1. When we came to consider topics for inquiry in the new Parliament, the ambitious joining of, and regeneration and development along, the Forth, Clyde and Union Canal attracted our attention. The Forth and Clyde Canal stretches from West Dunbarton to Grangemouth; the Union Canal runs from Edinburgh to Falkirk, where the two are now linked. A map showing the route of the Forth, Clyde and Union Canal is reproduced in the Annex to the Report. Job creation in Scotland is a matter of considerable interest to us. We therefore decided to devote one evidence session to an investigation of the job creation potential of the modernised Forth, Clyde and Union Canal. This meeting formed part of a visit we undertook along the whole length of the Canal.

2. On 3 December 2001 we took oral evidence at the headquarters of East Dunbartonshire Council in Kirkintilloch, from: British Waterways Scotland; West Dunbartonshire Council, Glasgow City Council, East Dunbartonshire Council, North Lanarkshire Council, Falkirk Council, West Lothian Council, Edinburgh City Council; Scottish Enterprise Network, Millennium Commission, Strathclyde European Partnership, and East of Scotland European Partnership. Full details of the participants and the associated written evidence can be found between pages iv-vi of this Report. Mr Michael Connarty MP also provided a memorandum.[4] Although the points he raised fall to a large extent outside of our remit, they did nevertheless indicate that there was some dissatisfaction about a project which was praised by most of those we met. Our final meeting of the inquiry was an informal session with the Wester Hailes Representative Council and Canal Group, who subsequently submitted written evidence.[5]

2. Background and current position

3. During the 1960s, the Forth and Clyde Canal (completed in 1790) and the Union Canal (completed in 1822) were closed, leaving behind "a corridor of dereliction".[6] There has been a persistent and long-term campaign by canal-side communities to get the waterways reopened. Mr Connarty MP complained to us that, following a change in the original plans, Grangemouth had been hard done by in terms of development along the Forth and Clyde Canal, even though local groups had long campaigned for its reopening.[7] Today, the route of the canals, navigable for the first time in 40 years, encompasses areas with some of the highest unemployment rates in Scotland. The Canal route includes the most heavily populated areas of Scotland stretching between Glasgow and Edinburgh. It passes through a number of Social Inclusion Partnership areas[8] and fragile rural communities.[9]

4. In the mid-1990s British Waterways Scotland and a subsequent collection of partners proposed the restoration of coast to coast navigation by reopening the 110 km length of the Forth, Clyde and Union Canal. The aim was to develop, through regeneration, dynamic waterside areas, which would create opportunities in terms of jobs, enterprise, tourism and access. The project amounted to the largest ever canal restoration exercise. It involved the first new canal tunnel in Britain in nearly 200 years, as well as unique feats of engineering, including the Falkirk Wheel and a drop lock which enabled the canal to pass under a road bridge. A number of co-ordinated initiatives in the areas of housing, transport and the environment were called for. Both Railtrack and Scottish Power offered significant co-operation.

5. Reviving the Millennium Link, as it became known, required the removal of obstacles, including filled-in sections and low headroom bridges, redeveloping disused and contaminated land, refurbishing locks and building a sophisticated transfer mechanism at Falkirk (the Falkirk Wheel) for the passage of boats. Additional lengths of canal have been dug at Falkirk and Wester Hailes in Edinburgh. British Waterways Scotland said that the venture had required innovative, high risk civil engineering works. They were nevertheless reaching completion to time and cost.[10]

6. The Falkirk Wheel, which is due to open in Spring 2002, links the Forth and Clyde and the Union canals. In addition to its functional role as the first rotating lift, the Wheel was described appropriately by its architect as a piece of sculpture. It is envisaged as a new tourist destination in the centre belt of Scotland, and a focal point for the whole project. A visitor centre has been built at a cost of £4million, which will employ 30 full-time equivalent staff.[11]

7. The environmental benefits achieved by the project are impressive. Land at Falkirk severely polluted by mercury contamination has been reclaimed. In one stretch near Netherton, 26 Minis were removed from the Forth and Clyde Canal. A 'green corridor' has been created which is an important place for wildlife and birds. Unique plant life, Bennett's Pond Weed for example, has been identified along the Canal. Environmental groups have made funding available for hedgerow maintenance.

8. The project received financial support from seven local authorities, five local enterprise companies, the European Commission, the private and voluntary sectors and the Millennium Commission. Extensive consultation and co-operation was required. Under the Chairmanship of British Waterways Scotland, the Lowlands Canals Steering Committee and Advisory Group, composed of all the partners, was established to "facilitate the delivery of the wider economic, environmental and community benefits associated with the Millennium Link and its corridor".[12]

9. The total project cost was £78,814,457.

The Millennium Commission provided a grant of £32,214,310.[13]

Scottish Enterprise Network gave £18.70 million.

British Waterways Scotland contributed £9.30 million.

European Regional Development Fund grant assistance amounted to £8.59 million towards the capital costs. European funding was secured from the two 1997-99 Objective 2 European Structural Funds programmes covering eastern (£3.84 million) and western (£4.75 million) Scotland.[14]

The rationale for European assistance was the identified catalyst effect in terms of regeneration and job creation, which the Millennium Link was expected to have.[15] East of Scotland European Partnership pointed out that one of the conditions for European money was the need for British Waterways to commit itself to meeting the maintenance costs of the canal for at least 25 years from the completion of the project.[16] Private and voluntary sector money amounted to £2.40 million. The balance was provided by the local authorities involved, with Glasgow City Council making the highest contribution (£2.35 million). Evidence suggested that Millennium Commission funding acted "as a significant lever for attracting funding from other partners."[17]

10. An economic impact study carried out by DTZ Pieta[18] for Scottish Enterprise indicated that the Millennium Link could result in 4,541 new jobs being created over a period of 10 to 15 years.[19] The Millennium Commission when considering the application for funds, noted that it was expected that the creation of over 4,000 jobs along the canal corridor might take four to five years.[20] DTZ Pieta split the potential developments along the Canal into a series of 'corridors of opportunity' and developed targets for each corridor. Scottish Enterprise said that it was important to distinguish between the types of benefit. Direct benefits arose from reconstruction and operation of the canal. Indirect benefits came through the exploitation of the development opportunities generated by the project.[21] Strathclyde European Partnership explained that "It has been generally accepted that the majority of the job creation opportunities will come after completion of the works and over a longer time scale."[22]

11. The assessment of the impact of the Millennium Commission's various programmes said, in reference to the Millennium Link, "For British Waterways (and the Millennium Commission) the overarching aim of the project is to reopen the entire canal network of lowland Scotland, a civil engineering project."[23] The memorandum from the relevant local authorities described the Millennium Link as "an innovative and difficult project to deliver."[24] Although the Millennium Commission-related document warned that in general "Many of the projects will face a stern test of their sustainability in subsequent years when significant reinvestment is called for,"[25] it also believed that there was potential to generate significant follow on investment[26]. The point was also made that linking several discrete development sites had been made possible, which, if they had been considered separately, would have been unlikely to have attracted the same level of interest.[27] British Waterways have developed an evaluation strategy to monitor activity occurring 1km on either side of the canal corridor.[28] We were pleased to hear that all jobs on the Canal were subject to an environmental assessment.[29]

12. During oral evidence British Waterways Scotland reminded us that from the start the project was designed to be a stimulant for other activities.[30] The long-term sustainability of the venture was a matter which preoccupied us. British Waterways Scotland described sustainability as "being the combination of three elements, of economic activity, built natural environment and social equity."[31] It seemed to us that some of the specific jobs projections contained in the written evidence suggested a degree of precision almost impossible to achieve. There is every reason in the world to talk up the Millennium Link project, but optimism should be coupled with a realistic approach to the provision and analysis of figures. Distinction should also be made between jobs which have been created by the Canal project and those that are located close-by and would have materialised anyway. We felt too that some of the tourism figures associated with the canal could perhaps be anchored in clearer water. It might be opportune before too long for Visit Scotland to become fully engaged in highlighting the attractions on offer.

Local authorities

13. The preamble to the memorandum from the local authorities spoke of the long standing commitment to the Canal by the councils. It said that local authorities were keen to exploit the opportunities provided by the development.[32] West Lothian Council noted that its investment in the Millennium Link was not reliant on job creation. The consequent regeneration was viewed with regard to added-value over the longer term, with immediate benefits for West Lothian communities in relation to access and amenity.[33] West Dunbartonshire Council made the same point.[34] West Dunbartonshire also explained that its contribution to the overall local authority funding was made in the form of land transfer and that "Negotiations are continuing on this transfer."[35] In oral evidence, we did not quite get to the bottom of the reasons for the delay here, which are apparently connected to the valuation of the watermark Chip Boat at Clydebank, but we hope that West Dunbartonshire Council and British Waterways Scotland can reach agreement soon.[36] City of Edinburgh Council said that the project had been endorsed by the Wester Hailes community as an opportunity to transform a derelict liability into a vehicle for environmental and economic regeneration.[37] The Council recognised the project as an imaginative investment in the future, bringing a range of concrete benefits for Edinburgh.[38] It is important that local authorities should develop strategies to maximise the opportunities provided by the Canal. We are not yet convinced that this is being done by all the authorities concerned.

14. Glasgow City Council admitted that in its area there should be a higher level of community involvement in projects associated with the Canal. We believe this may also be an issue for other local authorities involved with the Canal, indeed to some extent it is related to the point raised by Mr Connarty referred to in paragraph 3. It is important that all communities along the Canal should feel they have some positive connection with what has been a multi-million pounds investment. Glasgow City Council referred to its draft Canal Strategy. This must provide the opportunity to involve local residents not already engaged. The other local authorities should make similar provision. More attention should be given to areas adjacent to the Canal, such as Wester Hailes, which suffer from known deprivation, to ensure that appropriate economic development takes place.

Provision of canal-side facilities

15. The Wester Hailes Representative Council and Canal Group, whilst acknowledging the improvements that had been brought about, were concerned that appropriate canal-side facilities had yet to materialise. British Waterways Scotland told us informally that the necessary money was not currently available. We believe this is an example of where the lead organisation cannot or should not remain responsible for every detail of the project. Attracting boat users by the provision of mooring and facilities is vital if canal activity is to increase. Indeed increased use is essential to prevent the canal from becoming silted. Advice, guidance and encouragement must come from British Waterways Scotland, but not every penny that appropriate provision would cost. Local authorities should continually be alive to the advantages growing from a popular water facility. They should seek wherever possible to provide appropriate resources to enable basic amenities to be introduced.

Training and Employment

16. Strathclyde European Partnership said that a condition attached to the provision of European money was that British Waterways should work with development companies to maximise the training and employment opportunities for residents of SIP areas adjacent to the canal.[39] However, Scottish Enterprise noted that the original forecast for trainee places was unlikely to be achieved because of the skilled nature of the work and limited opportunity to engage trainees."[40] Given the scale, importance and profile of the project, this was a disappointment. But again emphasising the post-construction expectations Strathclyde European Partnership told us:

17. Appendix 2 of the memorandum from Scottish Enterprise stated that "Following the success of a pilot intermediate labour project in Glasgow North last year, a £300,000 'Canal Training and Employment Project' is now under way...and aims to provide employment and training for at least 16 local unemployed people over a period of two years."[42] We welcome this and hope that other local authorities will follow suit. At Kirkintilloch we were shown the site of a new Learning Centre, a training facility, which would have been situated elsewhere if the Canal had not opened up.[43] The Wester Hailes Representative Council claimed that, in its area, construction jobs had not matched expectations.[44] In general though, as the memorandum from Scottish Enterprise said, direct construction jobs exceeded expectations, reaching over 700 at their peak in late 2000.[45]

Conclusion

18. We were impressed by what we saw and heard during our brief overview of the job creation potential for the Canal. We commend the inspiration, initiative and energy which in a short time has brought the Canal to its current improved state. There is cause to expect that with proper direction and effort the job creation potential will be high. But much work is still required in order to attract and sustain investment. The economic impact assessment carried out for the Millennium Commission reminded us that displacement remains an issue for projects which rely on visitors and users, but acknowledged that the degree to which this happened was uncertain. It recommended that, for Millennium Commission projects overall, further research should be undertaken concerning displacement.[46] We must also sound a cautionary note about displacement. The last thing that should happen now is for existing jobs to be moved, rather than new jobs created. We questioned witnesses about this possibility. During a briefing meeting British Waterways Scotland told us that whilst they treated the matter seriously, assessments indicated that an increase in opportunity was likely, a view which both West Dunbartonshire Council and East Dunbartonshire Council endorsed.[47] The Strathclyde European Partnership and Scottish Enterprise indicated that their projections for job creation resulting from the Canal had taken account of displacement.[48]

3. What next?

19. All those concerned in the redevelopment of the Forth, Clyde and Union Canal should be congratulated for the visionary and imaginative project, the construction side of which has taken only an almost unbelievable two years or so to complete. British Waterways Scotland deserves particular praise for its steadfast leadership. Jim Stirling, Director of British Waterways Scotland has provided a rare display of driven, creative zeal which we applaud. We were reminded on several occasions that Phase One of the project, that is the building and engineering part, was nearing completion. Phase Two, ensuring sustainability and appropriate economic development is now a priority. As we were told, "The biggest challenge... is what happens next".[49] There was general acceptance that most benefits would be long term.

20. The partners involved in the project appeared, by and large, to have retained their enthusiasm. Whilst there was no doubt an element of risk involved, it has been a calculated one. Vibrant, regenerated waterside areas are not unique. British Waterways Scotland said:

21. The study for the Millennium Commission referred to the different examples of regeneration, in the form of new waterside ventures, including pubs, restaurants, business parks and housing developments, which would not have happened without the Millennium Link.[51] Appendix 2 of the memorandum from Scottish Enterprise indicates progress towards economic targets in a variety of the Canal areas.[52]

22. We saw an example of a successful housing development at Havana Lock on the Forth and Clyde Canal which had come about directly as a result of the work on the Canal. We were told also of important mixed housing developments attributed to the Millennium Link, indicating confidence from the private sector.[53] Scottish Enterprise reported positive signs that the necessary economic development along the Canal was beginning to take shape.[54] Once again it was stated that impetus was expected to build after the completion of the Canal.

Commercial use of the Canal

23. The prospects for developing commercial traffic along the canal are limited. But they do exist. British Waterways Scotland explained that the UK canal network was, in places, used to transport waste to landfill sites. Some inquiries had also been made about the possibility of moving coal along the Union Canal. Essentially, commercial traffic would involve what British Waterways Scotland described as "material that is not in a hurry."[55] We would urge all those concerned to explore likely areas of commercial use to the fullest extent. The transportation of waste or refuse through the Canal might be something the associated local authorities would want to pursue as a priority.

Co-ordination

24. The memorandum from British Waterways Scotland said "British Waterways Scotland can only guarantee the future of the canals if other partners play their full part to realise the benefits of regeneration."[56] This seemed to us an important point to make. A dynamic partnership approach is now crucial in order to maintain impetus. Scottish Enterprise in particular should pursue its role with vigour.

25. In oral evidence East Dunbartonshire Council told us that there was a need to build a platform which could attract private investment.[57] We saw only limited evidence of such private involvement. We believe this must therefore be a priority. The possibility exists that any platform not bolstered with the solid foundation of robust development could undermine the excellent work done so far by British Waterways Scotland. To date, British Waterways Scotland has led from the front. It might now be time for a change in order to allow the relevant type of expertise to take centre stage in co-ordinating potential investment and development along the Canal. The tourist destinations envisaged for areas of the Canal should be developed, promoted and co-ordinated more fully. A central information point for the Canal would be a significant step forward. We feel that the Lowlands Canals Steering Committee and Advisory Group currently chaired by British Waterways Scotland, might be superceded by a similar over-arching partnership charged specifically with attracting and developing economic development and able to deliver positive results. The terms of reference could remain as outlined in paragraph 7.

26. The ideal body to direct such operations under the auspices of a single, senior co-ordinating officer within its organisation is Scottish Enterprise, which currently has five local enterprise companies focussed on the project. There is a need to inculcate a sense of "ownership" of the Canal by developing community involvement.[58] Such a body would enable additional co-ordination between councils to take place before developments occur. Allowances will need to be made for the fact that different areas of the Canal will require individual attention. But this should be encompassed within a central Scotland-wide approach. Falkirk Council indicated that work had been:

To encourage development, the co-ordinating group might try to ensure, so far as possible, that a flexible and uniform planning regime exists across the various local authority boundaries along the Canal, consistent of course with wider local interests. Scottish Enterprise told us, "I think we will also see some specific cross-cutting initiatives on the consistency of business support, on a common approach to marketing...coming forward."[60]

Security

27. The Canal by its nature is very accessible. That of course is part of its attraction. Some concerns were raised with us about the implications for safety of this condition, particularly for children. We understand this reservation, which is exacerbated in quiet spots or areas where vulnerable individuals might confront a large boisterous group. It would though be unfortunate if the amenities offered by the canal in terms of water-based or waterside activity were to be diminished by negative, anti-social reasons. Often in these cases a small visible step can lead to giant strides in confidence. Strategically placed and properly advertised helplines would be advantageous. British Waterways Scotland supplies the bicycles for about six mounted patrols undertaken by Strathclyde Police in the Glasgow area.[61] We hope that ultimately a team of Canal Rangers might be employed to patrol the whole length of the towpath, a move that would reassure users, deter vandalism and allow early identification of problems or the need for repair. It would also contribute to job creation. Adequate safety provision for cyclists should be provided where the towpath leads across a main road. Discrete lighting is also required on certain stretches of the Canal.

Summary

28. The cost of the Millennium Link and associated development and reconstruction was £78.8 million. The Millennium Commission grant was £32.2 million. Joining the Forth, Clyde and Union canals was an innovative and difficult engineering project, which was completed on time and to cost. It was widely recognised that there would be a catalyst affect causing most of the benefits deriving from the Millennium Link to be long-term. There is reason to expect that job creation potential could be high. But the danger exists that the wholesale potential might not be fully exploited. Proper care was needed in the provision and analysis of jobs projection figures. Displacement of jobs along with the creation of jobs needs to be monitored. Likely tourist numbers required more clarity. Visit Scotland should become fully engaged in the promotion of Millennium Link features. Commercial use of the Canal should be encouraged where possible. After its exceptional role in bringing the engineering side of the project to fruition, it might now be time for British Waterways Scotland to relinquish its leadership to Scottish Enterprise for the start of Phase 2 concerned with ensuring sustainability and appropriate economic development. The employment of Canal Rangers would improve Canal and towpath security and usage. We commend those associated with the project, especially British Waterways Scotland for the inspiration innovation and energy displayed in the planning and construction phase.

4 Appendix 1, p.55. Back

5 Appendix 2, p.56. Back

6 The Link-Unlocking Scotland's Potential, brochure available from British Waterways Scotland. Back

7 Appendix 1, p.55, para 4. Back

8 Ev. p.47, para 2.2. Back

9 Ev. p.1, para 4. Back

10 Ibid, para 7. Back

11 Ev. p.2, para 10. Back