Could Dundee get a major economic boost from an investment zone?

Dundee has fast been transformed into Scotland’s central political power base since Broughty Ferry-based Humza Yousaf became first minister.

Now the city could be in the running to benefit from a special economic area, in the form of an investment zone.

But just what exactly are they, and how is Dundee likely to fare when the bidding process starts?

What are investment zones?

Similar to freeports, investment zones are special economic areas focused in a city or region which offer companies tax breaks in the hope of spurring on growth.

They were heavily promoted by Liz Truss during her brief tenure in power as a consolation prize for areas which failed to win a freeport.

In his Budget last month, Tory Chancellor Jeremy Hunt announced a scaled back version of the policy as he confirmed there will be 12 investment zones across the UK.

Chancellor Jeremy Hunt. Image: Shutterstock.

Scotland is guaranteed to get at least one of those, and may even benefit from a second if applicants can beat out competition from the other devolved nations.

Those in favour of investment zones claim they will help fuel job creation by encouraging more businesses to regions such as the north-east.

Firms operating in the special economic areas would be expected to work closely with local universities when it comes to research projects.

Each of the winning regions will be given £80 million to spend over a five-year period.

Is there interest in the north-east?

It’s been hinted Dundee could serve as a possible hub for one of the new investment zones set to be introduced.

Coldside SNP councillor Mark Flynn, who heads the city development committee, said his party would be “interested” if the proposals are viable.

Dundee SNP Councillor Mark Flynn. Image: James Simpson/DC Thomson.

He told us: “I think it’s something we would be interested in looking into, and seeing what the feasibility would be.

“I think it comes down to the details. It goes back to having a full understanding of what is being offered by the UK Government here, and seeing whether it fits in with our needs and criteria.”

When will investment zones be in place?

The UK Government is yet to set out a clear timescale for when any investment zones would start operating, meaning plenty of uncertainty remains.

The Scottish Government is keen to work with Downing Street on investment zones, but said “further detail” is needed.

Holyrood also wants assurances the special economic zones will not encroach on areas where policy is devolved to Scotland.

Will Dundee face competition?

Given there’s a chance only one Scottish bid may be successful, Dundee could face some stiff competition.

Glasgow and Aberdeen were both unsuccessful in their freeport applications in January, and both will regard investment zones as a good alternative.

Dundee-based North East MSP Maurice Golden, who also represents Aberdeen, reckons the Tayside city may be the better choice of the two.

Tory MSP Maurice Golden. Image: Richard Gardner.

He told The Courier: “There’s a case that as Dundee has missed out on oil and gas, which provided a lot of prosperity to Aberdeen, an investment zone would provide prosperity to Dundee.

“Aberdeen does have a strong case, but there’s also a lot of private finance available in Aberdeen.

“Do we invest in an area that might struggle to attract that sort of private finance? I think that’s where Dundee sits.

“Aberdeen could produce a strong bid, but I think Dundee perhaps needs the government investment zone. That intervention to a place like Dundee could be transformation to the city.”