Michael Gove: The UK Government is not an economic XL Bully

Levelling-up secretary Michael Gove has said the UK Government does not “career around like some kind of economic XL Bully dog” when making decisions on where to allocate funding in Scotland.

Appearing in front of Holyrood’s Finance and Public Administration Committee on Thursday morning, the minister was challenged by Labour MSP Michael Marra over the process for awarding investment zone status to regional economic partnerships in Glasgow and the north east.

Investment zones, which were created by then chancellor Kwasi Kwarteng in 2022, seek to drive economic growth by providing funding to regions that have existing strengths in areas including green industries, life sciences and tech.

When it was announced in June last year that Glasgow and the north east had been selected as the locations for Scotland’s investment zones the UK Government said each would “benefit from an overall funding envelope of £80m over a five-year period”. However, it did not publish information on how they had been selected until August.

Marra said it was “not even sub-optimal” but “unacceptable” that the selection criteria was published retrospectively and that that was “in stark contrast to what happened in the English process”.

Gove said the Westminster administration had worked alongside officials in Holyrood on deciding where the money should go, noting that the priority had been to ensure funding was allocated “relatively speedily”.

“The process from my point of view is to seek partnership with the Scottish Government wherever possible and accommodate ourselves to the Scottish Government’s priorities as well,” he said.

“Theoretically the UK Government could say we’re going to impose, well not impose, we’re going to create and direct investment zones in this area or that area […] but the Scottish Government has made its own decisions […] so we work with that.

“To editorialise slightly, the argument is sometimes made that the UK Government careers around like some kind of economic XL Bully dog, deciding what it will do in Scotland willy-nilly.

“In fact, the reality is partnership with the Scottish Government.”

As well as investment zones, under its levelling-up agenda the UK Government has created a number of different funding pots to replace development money that was previously available from the EU. Among these are the Levelling Up fund and the UK Shared Prosperity Fund.

In late 2022 then finance secretary John Swinney told a session of the House of Commons Levelling Up, Housing and Communities Committee that the Scottish Government was not fully engaged in discussions about the UK Government's levelling-up agenda because it felt it was more bureaucratic and less lucrative than previous arrangements put in place by the EU.

Specifically, Swinney had said that because the Levelling Up Fund is administered on a UK-wide basis there were concerns the UK Government was making decisions on "wholly devolved functions", which “raised questions” about whether money was being allocated in a way that was "consistent and aligned with policy-making in Scotland".

Responding to a question from Scottish Conservative MSP Liz Smith, Gove said that in the last two years the relationship between the Scottish and UK governments had improved.

“I believe so and I believe that’s been influenced by the work of the committee and also our engagement with Cosla at a corporate level and individual leaders at local government level,” he said.

Gove said the UK Government had worked particularly constructively with SNP-led Dundee City Council, which missed out on receiving investment zone and green free port funding but was successful in accessing cash from the Levelling Up Fund.

“Dundee initially was disappointed not to receive an investment zone or a green free port but the objective metrics that we use meant that we could enter into a levelling-up partnership with Dundee,” he said.

“I have to say that the leader of Dundee council, obviously an SNP leader, John Alexander, while initially was disappointed, has been very constructive in making the case for investment in Dundee.”

John Mason of the SNP asked Gove how he “squared” making funds available to areas such as Aberdeenshire, which are wealthier than cities such as Glasgow, when the term levelling up “seems to have a real emphasis on need”.

Mason said the funding that has been made available for Glasgow, which includes £13m for the upgrade of a block of stables in Pollok Country Park – “a wealthy part of the city” – will “only scratch the surface” of that need.

Gove said the Pollok Park investment had been put forward by Glasgow City Council and was backed by its leader, Susan Aitken of the SNP, adding that while the area around the park is prosperous it is adjacent to areas of significant deprivation and that the investment would “make the ecosystem around the Burrell Collection even more attractive for tourism and education”.