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APPENDIX 2: DUNDEE

Introduction

A2.1 This chapter sets out a review of the Cities Growth Fund process for Dundee. It covers the following key themes:-

• City vision;
• City Growth Fund projects;
• Fit between projects and the Vision;
• Progress with City Vision projects;
• Management of the CGF fund;
• Project management issues;
• Impacts; and
• Other benefits.

The City Vision

A2.2 The Dundee City Vision has 3 main objectives at its core. Through the vision Dundee aims to:-

• Be a vibrant and attractive city with an excellent quality of life where people choose to live, learn, work and visit;
• Offer real choice and opportunity in a city that has tackled the root causes of social and economic exclusion, creating a community which is healthy, safe, confident, educated and empowered; and
• Become a strong and sustainable city economy that will provide jobs for the people of Dundee and the city region, retain more of the universities' graduates and make the city a magnet for new talent.

A2.3 The Vision is set out around 7 explicit themes. These are:-

• An Enterprising City - An economy where prosperity, job opportunities and employability are developed across the city;
• A Learning City - An increase in learning opportunities related to life skills and employment;
• An Inclusive City - Full social and economic inclusion for all in the life of the city;
• A Sustainable City - Development which safeguards the future of the environment in the city;
• A Healthy and Caring City - Promotion of the wellbeing of communities and effective care for those who need it;
• A Safe City - Reduction of crime and services to ensure people feel safe and are safe; and
• A Regional Centre - Key role for Dundee in the balanced development of the city region.

A2.4 The development of the vision was seen as a relatively straightforward process by the partners in Dundee. It was based on a summary and amalgamation of the key policies and principles that had been developed prior to the CGF being launched, without inventing any new commitments. At the heart of the Vision is the development of Dundee as the hub of the city region. A key strength of the new approach taken in Dundee was said to be that it has stopped attempting to be a "mini-Glasgow" or "mini-Edinburgh". It has now focused on developing its own strengths and staking its place as forward thinking city in its own right.

A2.5 The process of developing the Vision started in May 2001 when the Dundee Partnership held a workshop which looked at the future of Dundee and discussed the issues facing the city. From this event, a new Vision for Dundee was endorsed and the broad direction and priorities of the new Community Plan for Dundee were determined. The workshop involved consultations with the public, private, voluntary and community sectors within the city.

A2.6 Public partnership working in Dundee is considered to be excellent by those consulted. This is partly due to a long standing commitment to partnership working in the city, with partnerships having been in place for the last 30 years and also due to the length of time some of the key stakeholders have been in post. For these reasons, the development of the vision within Dundee was seen a straightforward and streamlined process.

A2.7 Meetings were also held with representatives of the neighbouring Community Planning Partnerships in Angus, Perth and Kinross and Fife. There was less success in gaining initial endorsement from the neighbouring local authorities for 2 main reasons:-

• There was some concern that the vision did not reflect the city-region agenda as fully as the neighbours would have liked. The view was that it emphasised the "city" over the 'region'; and
• There was understandable hostility to the suggestion that the Dundee local authority boundary be reviewed.

A2.8 In order to obtain the support of their neighbours for the overall vision, Dundee Partnership addressed the boundary issue separately in an Appendix to the Vision. This was solely supported by the Partnership.

A2.9 These tensions have remained over the last 3 years and surfaced again at the time the 2006-08 Investment Plan was prepared. This has led to a revised City Vision which has been accepted by the neighbouring local authority partners. The main amendments are to strengthen the emphasis on the relationship between a strong regional centre, in Dundee, and the regional towns and villages. Secondly the reference to exploring boundary changes has been removed.

A2.10 There is now a "city-region" community planning body. This is not formalised in terms of the statutory function of Community Planning, rather it acts as a mechanism for discussing issues of joint interest and delivery.

City Growth Fund Projects

A2.11 Unlike the 5 other cities, which selected a 'basket' of projects to fit with their Vision, Dundee selected only one strategic project, the Central Waterfront ( CWF). This project will redevelop the central waterfront area of the city centre over a 12 year period, with scheduled completion in 2015. The decision to select the Central Waterfront as Dundee's sole strategic project was underpinned by a number of factors. These were:

• Developing the Central Waterfront was a concept that had been considered in Dundee since the mid-1990s. A series of consultancy reports had been commissioned in 1998 to look at the development potential of the waterfront area;
• The Cities Growth Fund represented a 'once-in-a lifetime' opportunity to kick-start the CWF project. The funding to start the project was not available from any other sources;
• Dundee wanted to be 'brave' with its CGF allocation. There was a desire to take on something that was long-term and ambitious;
• There were no other projects in Dundee considered to be as suitable for CGF funding as the Central Waterfront. The Dundee Partnership was unanimous in its support for the project;
• The project represented something of real scale and therefore had the potential to have a real impact on the city region. This was in contrast to an alternative approach which, in Dundee's view, would have dissipated the money on a range of smaller projects for which impact would be harder to measure; and
• Redeveloping the Central Waterfront was considered to have the potential to make an impact on the wider city-region. For example, the status of Dundee as the hub of the city region meant that in-commuters from the neighbouring local authorities would benefit from the project. The view was that employment and growth created in Dundee city centre benefits those outside the city boundary as much, if not more, than those living within the city.

A2.12 Given this, the selection of the Central Waterfront project was seen to represent the next stage in Dundee's development. Redevelopment of the city centre had already taken place and the tackling of the central waterfront was seen as the next logical step if Dundee was to cement its position as an up and coming city. The view was that if Dundee was to continue to attract new talent to work in the life sciences, medical and IT related industries, it needed to have the infrastructure in place to make it feel like a vibrant city.

A2.13 Table A2.1 gives a brief description of the project. It is split into 7 stages over a 12 year period. The 2003-06 Cities Growth fund allocation was used to fund the first stage which comprised 2 transport infrastructure elements. These were:-

Construction of the New Western Road Alignment; and
Strengthening of the Dock Street Rail Tunnel - Phase 1.

TABLE A2. 1 Dundee City Growth Fund Projects and Original Budget Allocation

A2.14 The allocation of CGF to specific themes along with the capital and revenue allocations is presented in Table A2.2. From this it can be seen that the initial work on the Central Waterfront project has been entirely allocated to improving Transport Infrastructure. More specifically:-

• 42% of the total CGF allocation was intended for spend on public transport infrastructure. This theme is made up of the £3.815m allocated to the strengthening of the Dock Street rail tunnel (phase 1) and half the overall feasibility scheme design cost (£75,000), which we have split across the 2 themes; and
• 58% on private transport infrastructure improvements. This comprises the Western Road re-alignment and associated utility diversions, as well as the £260,000 allocated to taking down the pedestrian footbridge.

A2.15 Dundee's funding was allocated entirely to capital projects. None of the original CGF allocation was intended for revenue support.

TABLE A2.2 Capital and Revenue Split of Dundee Projects

Leverage

A2.16 The estimated leverage figures for Dundee are presented in Table A2.3. From the table it can be seen that to date, Dundee has been unsuccessful in directly levering in any funds from the private sector.

TABLE A2.3 Public and Private Sector Leverage in Dundee

A2.17 The main explanation for this is the long-term nature of the Central Waterfront project. At this early stage, the work is entirely infrastructure based. The project board were realistic about their ability to lever in funds from the private sector in the project's early days. The view was that the private sector needs to see the basic infrastructure in place before they will invest. Therefore, private sector investment is forecast for the latter stages of the project when the private sector is expected to invest in the assets the earlier infrastructure work has created. The value of this future leverage is shown in Table 3.7 in the main report.

A2.18 Although not directly channelled into the project at the moment, the activity at the waterfront was said to have created a renewed interest in the periphery of the waterfront area. At this stage, investments in excess of £20 million have already been secured in the form of new commercial and hotel developments. The proposal is that the money from the land receipts on these and subsequent sales will fund the end stages of the project. The 2 offices built at the same time as the Western Road works, were partially enabled by the road works at the Greenmarket junction and the treatment to their north boundary. The proposed development at South Marketgait/Greenmarket (2 offices and a hotel) was enabled by the Western Road works that created the necessary extra space at Nethergate and at the Greenmarket junction. At Gellatly Street, where a hotel is proposed, waterfront plans enabled this by releasing land in council ownership to complement that in private ownership. Furthermore there are partial receipts for these 2 sites (relatively modest because there were only small pieces of land involved, less than £200,000) that will be used by the project in the near future.

A2.19 Land values in Dundee were also said to have increased as a result of the increased activity around the waterfront. Currently city centre land is on the market at around £1 million an acre. This was said to reflect a renewed investor confidence in the city.

A2.20 In terms of public sector leverage, the following sums have been secured:-

• Dundee secured £950,000 of ERDF money for the Western Road re-alignment. This amount has been paid to Dundee in full;
• A total of £490,000 was secured from Scottish Enterprise Tayside. £370,000 of this went towards improving the Greenmarket road junction for the new Seabraes Digital Media Park. This was undertaken as part of the Western Road re-alignment. The remainder contributed towards the feasibility scheme design and other research work; and
• The £30,000 secured in the public transport infrastructure theme represents half the £60,000 contributed by Scottish Enterprise towards the overall feasibility scheme design.

A2.21 Dundee City Council provided some information on anticipated leverage from the first round of CGF investment. A further £1 million is expected to be invested in support of the Dock Street Rail Tunnel and Tay Road Bridge Approach Ramps project in 2007-08. In addition the completion of the project is expected to lever in around £55 million of private sector investment in residential, commercial and retail property in and around the Waterfront area over the next 15-20 years.

A2.22 In summary, the Central Waterfront development in Dundee represents an attempt to undertake a far reaching project to deliver the City Vision. In time, the project will develop to fit the Vision and make an impact on associated themes such as inward investment, streetscape and domestic and business property.

A2.23 The view in Dundee is that the initial investment of the CGF allocation in infrastructure is necessary to secure the longer term improvements for the city region. By improving the arrival point in the city, the intention is that visitors' "first impressions" of Dundee will be positive and the perception of Dundee as a forward thinking and vibrant city will be enhanced.

A2.24 The issue for Dundee is that, unlike other cities, the early stages of the project are fairly standard infrastructure work which is largely unappealing to visitors and Dundee residents alike. Therefore, it will take several years before the Central Waterfront starts to take recognisable shape.

Fit Between Projects and the City Vision

A2.25 Using the thematic categorisation of projects, central waterfront project was assessed for "fit"' with the Dundee City Vision. As has been highlighted throughout this case study, the difficulty with assessing the Dundee project against its vision is the long-term nature of the central waterfront project. Table A2.4 shows that the Vision makes reference to a wide range of themes. However, the first stage of the Central Waterfront project does not appear to directly correlate to these.

A2.26 Looking forward over the term of the project one area of mismatch arises in the Community Participation theme. The Vision refers to Dundee as an "Inclusive City". However there are no projects which directly support this aim. Furthermore, this could also be argued in relation to the Training/Education theme. The evidence for how a large capital project such as the central waterfront will directly contribute to Dundee achieving its explicit theme of being a "Learning City" is also unclear. However the argument can be made that the project will indirectly contribute to Dundee's status as a 'Learning City' by attracting academics and researchers to work in the city's universities and research institutes. Improvements in infrastructure may lead to improvements in perceptions of the city as a place to live and work.

TABLE A2.4 Fit Between Projects and City Vision

Progress with City Vision Projects

A2.27 Table A2.5 presents the financial information related to project progress in Dundee. As can be seen there has been significant level of underspend, totalling £5.475 million.

A2.28 The underspend on the project can be explained through analysis of the 2 major infrastructure elements, the Western Road re-alignment and the Dock Street tunnel strengthening.

A2.29 The Western Road re-alignment was said to be more difficult than first anticipated. The utility diversions that had to be put in place were more extensive than the plans had originally indicated. In addition, when the road was in the process of construction in 2005 the agreement was that the work would cease in time for the Christmas shopping period, thereby having minimal impact on city centre retail trading.

TABLE A2.5 Project Spend and Underspend

A2.30 This element of the project is now complete, with the road opening in November 2005. The underspend can be explained by 2 main factors:-

• The difference between the current predicted total for Western Road which is now £3.6m, and the original CGF budget estimate of £4.6m is that the tender to deliver the work was cheaper than predicted. The budget figures were prepared on worst expectations. It is proposed the 2007-8 amount will be taken from the second round grant; and
• The ERDF contribution of £950,000 is taken off the Western Road project resulting in less being drawn from CGF for this element of the project.

A2.31 The taking down of the Union Street footbridge also showed as slippage on the 2003-06 report figures. However consultation with the project team in Dundee found that this element of the project is now almost complete. There is a small portion still to be removed which is awaiting clearance from Network Rail.

A2.32 With regards to the slippage on the public infrastructure project this is explained solely by the lack of progress on the Dock Street tunnel strengthening. Negotiations with Network Rail have proved lengthy and complicated. The main barrier has been the high costs associated with track closure and damage to the tunnel. Network Rail has been keen to ensure the correct safeguards and insurances are in place before they would agree to any work starting. A new approach has now been designed, whereby a reinforced concrete slab will be laid over the tunnel. This will result in minimal disruption to rail services. Network Rail and the CWP board are satisfied with this arrangement and work is expected to commence before December 2006. It is expected that spend on this project will catch up over the next 3 years.

Management of the CGF Fund

A2.33 The strategic management of the CGF fund is undertaken by the CGF project partnership board. The board comprises:-

• The Convenor of Economic Development (board chair);
• The Convenor of Planning and Transportation;
• Dundee City Council's Directors of:-
• • Planning and Transportation;
  • Economic Development;
  • Finance (non board member but attends board);
• Scottish Enterprise Tayside (an SET board member and a senior officer are both project board members); and
• The Central Waterfront Project Co-ordinator(non board member but attends board

The board meet quarterly to discuss:-

• Progress to date;
• Funding and financial monitoring;
• PR and marketing; and
• Associated studies.

A2.34 In addition to the project steering group, there is also a partnership steering group which meets 'as and when' required to discuss any issues which require urgent action. The implementation of the infrastructure works is undertaken by the City Engineer's team. There is daily contact between the Central Waterfront Co-ordinator and the City Engineer's team, as well as a formal meeting once a month.

Project Management Issues

A2.35 Project management was reported to have worked well from an internal perspective in Dundee. Any issues that had occurred were seen as being due to external factors outwith the control of the project management team, such as securing agreement from Network Rail on the Dock Street tunnel strengthening.

Scottish Executive

A2.36 Dundee's relationship with the Scottish Executive was described as a good working relationship with no difficulties. There was some concern in Dundee that the relationship would become more difficult when the responsibility for the Cities Growth Fund moved from Regeneration to Local Government Finance within the Executive. The view was that regeneration might not be as well understood within the new Executive department. However, to date, this has proved not to be the case.

A2.37 The flexibility over the detail of the fund and the ability to move funding between different elements of the project has been welcomed in Dundee. In addition, the facility to carry over funding which was not spent in the 2003-06 allocation was seen as crucial in the long-term delivery of an infrastructure project such as the Central Waterfront.

A2.38 One concern expressed was the frequent change of personnel in the Executive. This was said to have made it difficult in sustaining continuity in the relationship. This has not affected the relationship between the City Council and the Executive at an organisational level, but has been slightly confusing at a personal level.

Impacts

A2.39 The consensus in Dundee is that the Central Waterfront project will have a significant economic impact on the city over the next 30 years. This is supported by an ex-ante economic impact assessment carried out by external consultants ⁷. This forecasts employment and GVA based on 2 scenarios. These are:-

• Scenario One where 20% of the new commercial space created by the development is occupied by businesses new to Dundee. Under this 2,257 new permanent jobs are forecast to be created. When converted to GVA this represents £1,570 million; and
• Scenario Two where 40% of the new commercial space created is occupied by new businesses. This results in 3,531 new permanent jobs and £2,600 million GVA.

A2.40 Of course there are a number of assumptions made in calculating these figures, especially around commercial property rental rates. However, the view in Dundee is that the assessment is reasonable without being overly optimistic.

A2.41 There was also the belief that the Central Waterfront represented the archetypal city-region project. The new space and development will be accessible by everyone within the city-region for work and leisure. Reference was made to travel-to-work patterns in the region, with high levels of in-commute from Fife, Angus and Perth and Kinross to Dundee. This led to the conclusion that a job created in Dundee was good for the city region as a whole as there is a high probability that it will be taken by a resident in one of the 3 neighbouring local authorities.

A2.42 The consultations found the work undertaken to date (Western Rd and removal of footbridge) has been perceived to have had an impact with the community in Dundee. The project team have received comments from the public about how the streetscene has opened up at this location, how much better it is crossing to the station and how it feels more "city like" with the associated completion of the two office buildings.

A2.43 Those involved in the delivery in Dundee feel that no other project had the potential to generate the same benefits for the city. The scale, nature and location of the project were seen as essential to the long-term development of the city.

Additionality

A2.44 The additionality of the Cities Growth Fund allocation in enabling the Central Waterfront project to commence is considered to be high. There are a number of reasons for this:-

• The project had been discussed since the mid 1990s and Dundee City Council was not, at any point since that time, in a position to start it. The view was that the project would still be in the discussion stages if the Cities Growth Fund had not been offered by the Scottish Executive; and
• The CGF gave Dundee the confidence to start the waterfront project. Without the funding, the view was that it would have been difficult for Dundee to raise the capital needed to take the bold step of commencing the project. CGF has given Dundee the necessary catalyst.

The central message permeating through the consultations in Dundee was that without Cities Growth Fund, the Central Waterfront project would not have been started.

Other Benefits

A2.45 Improving the arrival point in Dundee through the Central Waterfront project was seen as having the potential to ignite the interest of potential investors travelling through the city. An example given was business people passing through Dundee on their way to play golf at nearby Carnoustie or St. Andrews. The premise was that if Dundee can make a better "first impression" on these individuals then it increases the probability that they will consider it as a place for potential investment.

The Future

A2.46 The phasing of the Central Waterfront project is considered to be reasonable for a project of its size. The next stage is felt to be critical in advancing the project. Up until now, nearly all of the work has been low profile infrastructure activity. This has meant that it has been relatively invisible to the residents of the Dundee city-region. Despite this, there has been a low level of complaints about the disruption caused by elements of the project such as the Western Road re-alignment. The reason given for this is said to be that local residents have bought into the vision for Dundee and are willing to tolerate minor disruptions in the short term for improvement to their city region in the longer term.

A2.47 The immediate challenges for the project in future are:-

• Completion of the Dock Street tunnel strengthening given the slippage to date; and
• Reconfiguration of the Tay Road Bridge ramps. Progress on this aspect of the project is closely bound to a decision on whether to abolish the tolls on the bridge. This will inform whether a new bridge toll plaza will be constructed.

A2.48 In order to complete these stages, retaining the flexibility of CGF was seen as critical. The uncertainty that has surrounded the Dock Street tunnel has shown that flexibility has been very important. The potential issues surrounding the Tay Road Bridge ramps mean that continuing this flexibility will allow the CGF board to react to external and unforeseen circumstances.

A2.49 The key challenges going forward are seen by the project team as:

• How to deliver development opportunities
• How to improve the speed of delivery of development
• How to ensure the quality of development.

Good Practice

A2.50 Although it cannot be considered as an area of good practice, due to the fact it cannot be replicated easily elsewhere, the well developed partnership working in Dundee has been a key factor in the success of developing the Vision and subsequent project selection. Following on from this, the size of Dundee as a city was seen as beneficial in gaining agreement on the vision and the Central Waterfront project.

A2.51 In addition, the Central Waterfront Co-ordinator and the City Engineer's office both sit under the Director of Planning and Transportation at the Council. This was said to have benefits both in communication and coordination of the project.

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