Socio-Economic Rescue Plan launched for city

30 June 2020

A Socio-Economic Rescue Plan for 2020-21, responding to the impact of Covid-19 and taking forward the delivery of an Aberdeen City Council Business Charter, has been unanimously approved by the Council’s Urgent Business Committee today (Tuesday 30 June). 

The Covid-19 pandemic and the consequent public health crisis, allied with an unprecedented fall in oil prices, has fundamentally changed how the economy will respond as Aberdeen adapts to new operating models as lockdown is phased out. 

Gross Domestic Product (GDP) forecasts at UK and Scottish levels suggest that Scottish GDP will contract by around 7%-14% in 2020. Covid-19 and the subsequent collapse in global oil demand have placed the North East in one of the most vulnerable positions of any region in Europe. 

The Plan has been produced within the frameworks of the Regional Economic Strategy priorities, the Local Outcome Improvement Plan (LOIP) and the recently approved Net Zero Vision for the city and the Strategic Infrastructure Plan – Energy Transition. 

The Committee also agreed that a short life Socio-Economic Rescue Plan – Implementation Group should be created to sit within the existing Community Planning Aberdeen framework. 

The Council’s Chief Officer City Growth will invite key organisations to participate in the Group and will report back to the Community Planning Aberdeen Board to update on the progress of the Socio-Economic Rescue Plan. 

The precise implications of Covid-19 and oil price fluctuations on the city’s economy are yet to be fully understood but it is clear that Aberdeen faces an even more significant economic shock than previous downturns. It is anticipated that the impact on businesses, individuals, young people and vulnerable groups in the city will be considerable. 

Using a mix of immediately available management information from within the Council, more timely available economic data and Government forecasts have shaped the Plan’s response. 

As of May 2020, approximately 7.5m jobs were furloughed in the UK, around a quarter of the workforce. In Aberdeen, this would equate to around 45,000 workers. The average net costs incurred by of hibernating businesses are significant, even with financial support. When furlough ends, the debts incurred by business during lockdown could see job losses. 

The overall programme will need to be phased depending on the Scottish Government’s guidance on movement from one phase to the next. Early engagement with Scottish Government, SDS, SE and the Business Gateway will be critical to developing any new approach to deliver priority actions. 

An immediate response to Covid-19 impacts, the Plan aligns to the LOIP strategies for Economy, People, Place. While it focuses on immediate actions, there is an opportunity for it to inform the scheduled refresh of the LOIP in 2021. It is proposed that scrutiny and oversight of the implementation of the Plan is ultimately done through the Community Planning Aberdeen Board (CPA). 

Aberdeen City Council Co-Leader Councillor Jenny Laing said: “We are living in unprecedented times and the Socio-Economic Rescue Plan provides Aberdeen City Council with an opportunity to lead a coordinated city-wide response. 

“The purpose of the Rescue Plan is to minimise the harm and impacts of the current crisis where possible. At the same time, it provides an opportunity to anchor existing inclusive economic growth and Local Outcome Improvement Plan priorities by focusing on the needs of local business and communities. By working together, we can get through this.” 

CPA Outcome Improvement Groups provide an established structure to drive delivery and will take a lead. Delivery will, however, need input from wider stakeholders not currently represented within these groups. 

A ‘short life’ working group is proposed from within organisations already on Aberdeen Prospers, augmented by representatives from the Business Resilience Group. 

The remit of the Group will be to provide a coordinated and collaborative approach to implementing the Plan within the CPA Outcome Improvement Groups, the Council and with external stakeholders and partners. 

As the Plan progresses some actions may be reflected and ‘mainstreamed’ in the refreshed LOIP, the Regional Economic Strategy and the associated governance where appropriate. 

Included in the Plan is a proposal for an Aberdeen City Council Business Charter which aims to continue to make Aberdeen an attractive place to do business and sets ‘standards’ for responsible business and developing people and skills. 

To take forward the Council’s priorities, the Charter sets out how the Council will support businesses through delivery of its ‘business facing’ activities and also reflects the urgency with which services need to respond to businesses. The Charter was informed by feedback from a sample of businesses and representative groups. 

The committee also approved a Financial Resilience Recovery Plan. Agenda reports can be found here.