Shaping Aberdeen – Oil and Gas Summit

The week begins for me at AECC for the Oil and Gas Summit. Below for your interest is the opening speech delivered by the Council Leader, Councillor Jenny Laing.

“The city council has taken the bold initiative of bringing together three tiers of government to the summit to look strategically at the challenges the oil industry faces in a climate of falling prices.

Today is an opportunity for policy and decision-makers in all layers of government to join with senior industry representatives, trades unions and academic experts to develop meaningful and sustainable solutions. Certainly I cannot remember a gathering of so many senior representatives from interested parties in one location at such a critical, and indeed, opportune juncture in the history of the industry and our region.

The reasons for the recent oil price reductions are well documented:
– a reduction in demand from key markets such as China;
– increases in production from the US shale industry; and
– of course OPEC’s decision to maintain production levels even as the price decreased.

But let’s put this in some local historical context. It is almost 50 years since the first Oil and Gas company located to this City. Almost immediately we started to experience the cyclical nature of the oil and gas industry with its health tied to the price of Brent Crude.

Our city and region has been affected by major swings and low points throughout the decades. Most notably when the price dropped to under $10 a barrel in July 1986 from just under $30 in the previous year. And of course there were significant price fluctuations in 1991,1998 and again in 2008.

Each time there is a decline in oil price there is a rallying round of industry, government and the broader oil and gas community to deal with the crisis. Cost reduction, fiscal review and diversification are debated and discussed. Promises are made and some effective short term solutions are put in place. But the price invariably recovers and the momentum to deliver on longer term infrastructure investment falls by the wayside. This means greater reliance on a single industry for Aberdeen and the North East which is of course a risk for all involved.

The story of the Oil and Gas industry is not just about its impact on the city of Aberdeen and the North East but its impact across the whole of Scotland and the UK – through nationwide supply chains and substantial exchequer contributions.

Estimates suggest that this extended Oil and Gas industry employs 450,000 people throughout the UK. So I stand here as a City Council Leader fully aware that there is a complex and interdependent UK wide relationship resting on an industry that radiates outwards from Aberdeen.

Aberdeen competes globally for the investment, skills and resources that sustains the oil and gas industry. We are seen as the only UK based Energy Capital and it is often the case that investment lost to Aberdeen is investment lost to the UK.

But of course the UK is a relatively small player in the World’s oil and gas community. What happens across the rest of the global oilfields has a big impact on our economy.

Aberdeen is a founder member of the World Energy Cities Partnership which is 20 years old this year and now has 21 members including most of the cities that you would expect to be in such an organisation.

We work very closely together and so we have carried out a brief survey on the impact of the downturn across our partner cities and some of the results of this survey will be discussed in the economic impact workshop.

Efforts to anchor the industry and the supply chains locally have been in train since before the oil price fall. Industry and local government have long been concerned with investing in the skills base and infrastructure to keep costs down. Our concerns must be more than about fiscal measures – which are of course vitally important – but we need to ensure the long term sustainability of the industry. We, as a council, need to think about the potential impact locally of a loss to accommodation providers, cancellation of investment in property, loss of business rates from empty offices and any job losses as a result of an extended period of low oil prices.

Council leaders and officers in Aberdeen City and Shire have been thinking strategically about a package of locally led growth proposals that will also begin to address some of the challenges set out in the Wood Review. We know that Aberdeen’s competitors in the oil and gas industry from Houston to Dubai and from Perth to Stavanger have made significant investment in infrastructure. It is important that Aberdeen and Aberdeenshire consolidates and expands its capacity to ensure new and old industries can thrive in the North East of Scotland. Aberdeen based innovators placed 4th in the UK in terms of patents registered per 100,000 of population – but even high performers need support!

However owing to Aberdeen City’s relative prosperity we receive the lowest share of funding of any Scottish local authority.

Despite this we have demonstrated our commitment to growth and infrastructure. And together the two councils have used all available capacity through our ten year capital plans to invest over £1.4bn including a £150m contribution to the Aberdeen Bypass and the City Council’s award winning Strategic Infrastructure Plan.

But pressures to deliver on wider statutory duties and continuing austerity measures mean that we are severely constrained in our ability to help address the urgent concerns of industry. There is evidence that – despite Aberdeen’s booming economy over the last ten years – the lack of enabling public sector investment is holding back investment from the private sector.

In particular a lack of transport capacity is constraining housing and employment. Development of the airport is limited by congested roads and a much needed £400m expansion of the harbour is seeking a public contribution for roads.

That is why in November 2014 we submitted strategic briefing documents to the Scottish and UK governments to kick start discussions for an Aberdeen City Regional Deal to catalyse growth and diversification for existing and new industries. Similar deals have been put in place for City Regions in England and for Glasgow.

These City deals give regions more powers to stimulate growth whilst increasing returns from sources such as tax to central governments or reducing costs associated with developing employment opportunities and skills enhancement. At the core though lies an investment fund to develop infrastructure together with initiatives to stimulate the regional economy in terms of innovation, diversification and internationalisation.

We thank the Secretary of State for Scotland for his leadership in taking this forward with the UK government and thank the First Minister for allowing us to engage with officers of the Scottish Government to develop these proposals. I have also been encouraged by the public support for a City Regional Deal from Scottish Labour leader Jim Murphy, Scottish Conservative leader Ruth Davidson and UK Deputy Prime Minister Nick Clegg.

Never has there been a greater need for this City to work with and receive support from both levels of government. We have an historic opportunity to establish a City Deal for this region which will benefit local people, the industry and indeed the UK as a whole. Let us seize that moment for the mutual benefit of all.”

Shaping Aberdeen, budget 2015/2016

The papers for the Council Budget Meeting on 5th February have now been finalised and circulated to the elected members. 

The Council will be considering reports relating to the General Fund Revenue 2015/2016 and indicative 5 year budgets, the Non Housing Capital Programme 2015/2016 and indicative 5 year budgets and the Common Good budget 2015/2016 and indicative 2016/2017 to 2019/2020 budget.  The Council approved the Housing Revenue Account and Housing Capital budgets 2015/2016 to 2019/2020 at its meeting on 17th December 2014. 

At the time of writing the organisational review of the Council’s management structure approved at the meetings of 14th May 2014 and 20th August 2014 is moving towards its conclusion and in addition, recruitment and selection will soon be underway to the posts of Director of Corporate Governance, Head of Legal and Democratic Services and Head of IT and Transformation. In order to ensure continued effective financial stewardship the Council’s budget was not realigned to the revised management structure of the Council during 2014/2015.  The realignment will be completed for 2015/2016. 

My report to the Budget Meeting includes the latest workforce planning document for the Council – Shaping Our Future Workforce 2015 – 2020.  This document will underpin the work of each Directorate in relation to the development of the Council’s staff team over the coming years. 

Work will begin before the end of the current financial year on the development with staff across the Council of a re-focused culture within the organisation which will see consideration given to each of customer experience, staff experience and use of resources in everything we do.  Decision-making within the Council will include an assessment of how the proposal being considered addresses the balance between these three factors.  This will be of central importance to the transformational work to be led by the new post of Head of IT and Transformation. 

Extensive work has been undertaken on developing the programmes to underpin the customer experience and staff experience aspects of this refocused culture. The early part of the new financial year will see initial piloting of an approach to outcome planning and budgeting which will be the subject of a report back to Committee. 

While the structure and culture of the Council are being refreshed, work is also underway with colleagues from public sector partners to refresh and refocus the City’s Single Outcome Agreement.  At the same time, given the changes underway within the Council, the Council’s own 5-year Business Plan 2012/2013 – 2017/2018 will also be updated in the coming weeks to reflect the changed working environment within the organisation. 

It’s useful to reflect that the Council’s current suite of corporate planning documents makes no mention of the impact of a City Deal or the delivery of the City Centre Masterplan.  Both will need to be included within the revised documents and both will require to be underpinned by a long-term financial strategy for the Council.  Officers are currently preparing such a strategy which will provide the Council with a clear understanding of its long-term financial opportunities and challenges within the context of the medium term financial stability that it has achieved in recent years. 

The budget reports considered by members next week set out how work continues in delivering against the Council’s Smarter Aberdeen policy statement and the Strategic Infrastructure Plan.  The reports also make clear that the financial situation to be faced by the Council, along with every other public sector body, over the coming five years is bound to be challenging. 

The Corporate Management Team is keenly aware of this challenge and work is underway both in terms of making the very best case to both the UK and Scottish Governments to explore with the Council mechanisms by which Aberdeen and the wider North East can be supported and in working with public sector partners locally to examine options through which further services might be shared. 

Such efforts with local, Scottish and UK partners will be built upon efforts within the Council to work with staff and their Trades Union representatives to seek and deliver service improvement and/or transformation. 

Reports will be brought to Committee as required.

Shaping Aberdeen, shaping the team

The week just coming to an end saw another milestone passed in the restructuring of the senior management of the Council with the announcement that Bernadette Oxley is the preferred candidate for the post of Head of Children’s Social Work/Chief Social Work Officer.

With Euan Couperwhite having taken up post just before Christmas as Head of Policy, Performance and Resources and with Helen Shanks having started work with us at the beginning of the year as Head of Inclusion, the senior team in the Education and Children’s Services Directorate is now complete.

Next week, Takki Sulaiman begins work with the Council as Head of Communication and Promotion and next month Richard Sweetnam joins us as Head of Economic Development.

We will soon begin the recruitment and selection process for the posts of Director of Corporate Governance and Head of IT and Transformation, so it is hoped that we will have a full Extended Corporate Management Team complement by the Spring. 

It’s exciting to be progressing in this way, but as I’ve said many times before while the structure is important it isn’t the be all an end all.  The key for the Council moving forward will be the culture we develop within the organisation and the focus we have on balancing improving customer experience, improving staff experience and improving our use of resources.

 

New Year, New You?

As we come to the end of the second full working week of 2015, it seems like a good time to see how we’re all doing with our New Year Resolutions…

If its fitness that you’re after you’ll find a recent reminder on the Zone that there’s a 25% discount for City Council staff at Aberdeen Sports Village, just show your ID badge. 

If the wellbeing you seek is slightly less frenetic you’ll also find on the Zone that discounted alternative therapy sessions are also being arranged for staff.  The first two sessions are already fully booked but more are promised for the future.

Finally, if a reduction in alcohol intake was the resolution for you for January you might be interested in giving the quiz a go at

http://www.alcoholaberdeen.org.uk/#alcohol 

Whatever the New Year goals you set yourself, keep up the good work!

 

Paris attack

The impact of the awful events in Paris on Wednesday this week has been thrown into even sharper relief for a number of colleagues here as it has emerged that one of the victims of the shooting was visiting the offices of Charlie Hebdo from Clermont-Ferrand, Aberdeen’s French twin city.

Michel Renaud had worked for several years in the Mayor’s office in Clermont-Ferrand and organised the biennial Carnet de Voyage festival there.  He is survived by a daughter and wife, Gala Renaud.  Gala works at the Mission des Relations Internationales in Clermont-Ferrand and will be known to many in Aberdeen who have participated in exchange projects with our twin city.

A march is taking place in Clermont-Ferrand on Sunday to pay tribute to the victims of the attack and to demonstrate the importance of freedom of expression. 

A statement on the Ville de Clermont-Ferrand website reads: ‘The city of Clermont-Ferrand is injured for two reasons: first, because in this country of human rights, this cowardly attack has infringed the freedom of the press, the freedom to speak freely; but also by the loss of a good man, Michel Renaud, an active Clermont citizen, always committed to the defence of human values.  His death affects us all deeply.’

The Lord Provost is writing to our friends and colleagues in Clermont to express our condolences and to reaffirm our support at such a difficult time.

 

Into 2015

With Twelfth Night now having been and gone I think we can say that the festive holiday period is now behind us and a new year has now begun.

Like the vast majority of Council colleagues I returned to work yesterday and I wanted to take the opportunity in this first short message of the new year to welcome everyone back, to once again thank those team members who continued to provide Council services when others were on holiday and to say how much I’m looking forward to working with you on what is bound to be another packed year of service development and delivery for the people of Aberdeen.

As I mentioned before Christmas I am committing time in the diary to getting out and about throughout the year to visit teams to find out from them about the services we provide to individuals, families and communities across the different parts of the City.  Hopefully I will have the opportunity to meet you and your colleagues on one of these visits, but in the meantime I wish you a happy and successful 2015.

Tragic events in Glasgow

Surely none of us can be left unmoved by the truly heartbreaking events on Queen Street, Glasgow yesterday.  I’ve no doubt that our thoughts are with the families and friends of those killed or injured and I’m sure we are all once again full of admiration for the professionalism of the emergency services in such difficult circumstances.  I think we probably also all recognise the impact this tragedy will have on our colleagues at Glasgow City Council.

Coming as it does so close to Christmas, the shock of the event resonates even more strongly and powerfully reminds us of the fragility of life and the preciousness of family.  It also brings to mind the importance of the work we and our partners undertake at this time of year with those struggling with loss or in some other way vulnerable and in need of our support.

Out and about

As we move towards the New Year, thoughts are beginning to turn to the diary for 2015. One of the commitments I’ve asked my office to make for me is to ensure that I have time each month to make visits to colleagues at their places of work across the City as well as around Marischal College and the Town House.

Most recently I have followed up a visit I made to the staff at Duthie Park with one to colleagues working at Hazlehead Park.  I really enjoyed the opportunity to meet the teams working on planting schemes at the park and those undertaking tree works there.  It was encouraging to hear of the plans there are for the park, the tremendous partnership working underway with the Friends of Hazlehead Park group and the exciting links being made with the local schools and others.  I’m looking forward to visiting again to hear about progress, although I might try for a summer’s day rather than one in deepest December.

In the meantime I’ve accepted an invitation from Steven Shaw to visit Seaton Park early in the New Year to find out more about what he and his teams are doing there.

If you and your colleagues would like to invite me to visit you where you work, have a word with your manager and drop my office a line at chiefexecutive@aberdeencity.gov.uk

 

Oh yes it is…!

Notwithstanding the small matter of today’s Council meeting, there’s now a real feel of Christmas around.

Yesterday evening I was delighted to attend the Danestone Primary School pantomime.  The cuddly goose’s adventures are sure to live long in the memory – you had to be there!  The production was clearly a huge effort by all the pupils and staff involved and it was great to join an audience full of proud parents and family.  Many congratulations to George Roberts and his team at Danestone.

There’ll be similar Christmas events going on in our schools across the City as we move towards the end of term on Friday, well done to all those on stage and a big thank you to everyone involved in making sure the show goes on.

Merry Christmas