Capital investment and infrastructure funding for Scotland comes from multiple sources. For anyone involved in developing and implementing infrastructure proposals, it is worth knowing the priorities of the current or recent overarching funding streams and strategies. Understanding the vision behind these economic policies and investments will lead to stronger business cases that are closely aligned with current economic and non-economic goals.
This section outlines the current national and regional strategic context relevant to capital investment projects and identifies where they have a focus beyond economic growth on wider equalities and health impacts.
The Levelling Up Fund
The Levelling Up strategy was introduced in 2020 with the aim of driving economic growth and improving social outcomes, including personal wellbeing. The strategy defined six types of capital - physical, intangible, human, financial, social and institutional - as driving economic and social outcomes, acknowledging that they were not evenly distributed across the UK. The first two funding rounds focused on three investment themes:
1. transport projects
2. town centre and high street regeneration
3. cultural investment.
The Fund focused on the determinants of health, prioritising projects that evidenced the need for development in order to improve the health and wellbeing of communities, or had a clear outcome aligned with health and wellbeing. These included bids to upgrade or develop local transport networks or regenerate town centres. Such developments have the potential to impact the wider (social, economic and environmental) determinants of health in multiple ways, for example:
- Creating jobs directly through the development process, as well as increasing access to employment through improved transport connectivity.
- Connectivity to education, health services, social opportunities - many of the building blocks of health.
- Reduced reliance on motor vehicles which reduce levels of physical activity and harmful climate impacts.
- Attracting further investment e.g. housing developments as a result of increased economic prosperity and connectivity of a region.
National Strategy for Economic Transformation (NSET) in Scotland
The NSET strategy is a 10 year strategy published in 2022, aiming to deliver a wellbeing economy for Scotland through a community wealth building approach. Key elements laid out in the NSET strategy relevant to capital infrastructure projects include (but are not limited to) the following:
1. Creating a country where economic power and opportunity are distributed fairly across our regions, cities and towns, rural and island communities.
2. Making Scotland a great place to live and work with high living standards, and a vibrant, diverse culture in which all sectors of the economy work to eliminate the scourge of poverty.
3. Developing the circular economy, where resources are kept in high-value use, creating new market, innovation and job opportunities that will be key to achieving our targets for net zero and nature.
4. Targeting more skills investment and support to working aged people in poverty or at risk of moving into poverty.
5. Creating a society that is thriving across economic, social and environmental dimensions, and that delivers prosperity for all Scotland's people and places. A fair and equal society and a wealthier, greener economy are mutually reinforcing.
6. Ensuring everyone in Scotland earns at least the real Living Wage as a minimum. Business models that rely on low pay are not sustainable and are incompatible with our vision and strategic direction.
Scotland's National Strategy for Economic Transformation is strongly aligned with consideration of the wider (non-economic) impacts of capital infrastructure projects, including a focus on health and equity, and the strategy is centred around the concept of a wellbeing economy (as defined in item 5 above). Therefore, capital projects which seek to deliver wider social impacts are aligned with the broad vision of Scotland's national economic strategy.
Scotland's National Planning Framework 4 (NPF4)
National Planning Framework 4 (NPF4) is the national strategy for how places, (and our access to them), will change and grow in Scotland. It sets out six spatial principles (just transition, conserving and recycling assets, local living, compact urban growth, rebalanced development, and rural revitalisation) to inform planning decisions. It also identifies regional priorities for the five regions of Scotland, and eighteen national developments that support the Framework. NPF4 replaces NPF3 and the Scottish Planning Policy.
The NPF4 guides development and investment decisions, so that investment is targeted for developments that improve the sustainability, quality and liveability of places, and deliver on climate objectives including the transition to net zero. The NP4 uses an 'infrastructure first' approach in which placemaking decisions are centred around the existing and future infrastructure of an area. Capital investment proposals will therefore need to align with the 'infrastructure first' policy principles outlined below.
Many principles of the NPF4 are aligned with inclusive growth and community wealth building approaches that act on the wider determinants of health such as:
- Promoting community health and wellbeing through accessible services and amenities.
- Consideration of development locations and design that work to address health inequalities and support a just transition to climate resilient spaces.
- Prioritises action to combat the climate emergency and halt biodiversity loss.
- Development of policies and strategies to reduce discrimination and persistent structural inequalities.
- National developments to promote liveable neighbourhoods that benefit communities.
- A more connected approach to planning public transport that is sustainable, affordable, and reduces the need to travel by car.
Fair Work First
Fair Work First is a Scottish Government policy aimed at promoting high quality work and eradicating inadequate pay which is aligned to both inclusive economy and community wealth building principles.
The policy applies to organisations seeking and awarding public sector grants, contracts and other funding, and includes the criteria outlined in the table below. All organisations with a workforce must be able to demonstrate how they ensure, or are taking meaningful action to ensure, that their organisation meets the following criteria before accessing public grants, including capital investment funds.
Fair Work First Criteria | ||
Criteria | Potential benefits to health and equity | Benefits to employer |
Payment of at least the Real Living Wage
| Can help to address pay inequalities related to ethnicity, disability and gender. | Attract and retain diverse talent, access to public sector funding, organisational reputation. |
Provide appropriate channels for effective workers' voice, such as trade union recognition | Improve workplace culture, employee voice and rights, and lead to collective favourable terms of employment. | Attract and retain diverse talent, greater employee safety and protection from bullying and harassment, organisational reputation. |
Investment in workforce development | Skills development leading to greater choice in employment, greater employee wellbeing and fulfilment, reduction of pay gaps. | Attract and retain diverse talent, skilled, innovative and engaged workforce, organisational reputation. |
No inappropriate use of zero hours contracts
| Can increase job and income security and consistency, reduce risk of in-work poverty, improve mental wellbeing as a result of increased certainty, reduce inequalities related to e.g. age, ethnicity and gender. | Benefits employee recruitment and retention, better employee wellbeing and organisational reputation. |
Action to tackle the gender pay gap and create a more diverse and inclusive workplace | Reduces labour market inequalities related to pay and progression, potential to reduce intersectional economic inequalities based on gender/ethnicity/disability through inclusive practices. | Greater diversity across all levels of the organisation leading to balanced decision making and an understanding of a diverse customer base; improved organisational reputation. |
Offer flexible and family friendly working practices for all workers from day one of employment | Reduces income inequalities driven by maternity/care responsibilities, enables better wellbeing through work-life balance, allows those with disabilities/illness to continue working and avoid the economic cost of ill health | Attract and retain diverse talent, better productivity, reduced sickness and absenteeism, increased employee satisfaction and organisational reputation. |
Oppose the use of fire and rehire practices | Improved job security, working conditions and pay (where rehiring linked to unfavourable contract changes), and peace of mind/wellbeing. | Retention of skilled staff, reduced risk of litigation and costs of hiring new employees, organisational reputation. |
Glasgow City Region City Deal
The Glasgow City Region City Deal partnership, established in 2014, received funding from both the UK and Scottish Governments, with £500 million provided from each for infrastructure investment. The eight member local authorities of the Region contributed a further combined £130 million, creating a total funding pot of £1.13 billion. The aim of the Deal was to fund major infrastructure projects, creating jobs and reducing unemployment, as well as improving transport and connectivity within the Glasgow City Region. Since 2014 a programme of infrastructure transformation has been underway across the City Region, bringing with it a huge opportunity to improve lives of those living in the Glasgow City Region - to reduce health inequalities, and wider social and economic inequalities, through development of infrastructure in a way that aligns with inclusive growth and community wealth building practices. The Supplier's Guidance for City Deal projects sets out the expectations of tenderers for all City Deal projects so that the implementation of projects works to benefit the health and wellbeing of people and communities.
These fall under two main categories:
- Sustainable procurement
The City Deal procurement strategy ensures that those awarded contracts for City Deal projects have processes in place to ensure fair working practices, in line with Fair Work First guidance and use fairly traded products and materials. Contractual clauses are included where relevant to ensure fairly traded products are used throughout the supply chain, and organisations that adhere to ethical treatment of employees are engaged at each stage of the supply chain.
- Community benefits
One component of the way in which tender bids are assessed includes their commitment to delivering community benefits. Community benefits can include activities such as:
- Recruitment and Employment
Proposals are judged on criteria such as fair working practices and employment of individuals from priority groups, including those who may face barriers to employment as a result of discrimination due to their circumstances (e.g. health, caring responsibilities, involvement in the criminal justice system).
- Skills and Training
This includes employers' commitment to developing their workforce, providing mentoring and opportunities for other local businesses, social enterprises and third sector organisations, as well as engagement with schools and other education providers to deliver career events, workshops or other opportunities.
- Supply Chain Development
In addition to use of fair and ethical products and services, proposals should outline how they plan to support community wealth building activities with local small-medium enterprises (SME), social enterprises, third sector organisations and supported businesses. This can include employment opportunities through supply of goods and services, and non-financial contributions such as mentoring.
- Community Engagement
Community engagement should be undertaken throughout the process, and details of how and when suppliers plan to do this need to be outlined in the business case. However, suppliers should also consider how they can support the wider community such as financial and non-financial support to community organisations, education providers, and local charities.
Capital investment projects have huge potential to contribute to better health outcomes and reduction of wider economic and social inequalities. The funds and strategies outlined above show that action to improve health and equity across Scotland is becoming embedded in national and regional policy. Therefore, all proposals for infrastructure developments should highlight how they can benefit the local areas beyond economic growth.
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