Fund which provides loans for regeneration projects is good value, says minister

A Scottish Government fund which provided commercial loans for infrastructure projects has provided “considerable value for money”, an evaluation has said.

The Scottish Partnership for Regeneration in Urban Centres (Spruce) fund was created in 2011 and has since supported 18 projects including remediation work of “large and strategically important sites at Haymarket and Edinburgh Park in Edinburgh”.

The fund also invested in a low carbon innovation centre at St Andrews University, which forms part of the institution’s green energy strategy and already saves more than 10,000 tonnes of carbon dioxide per year.

A final report commissioned by the Scottish Government and the European Investment Bank – and carried out by consultancy Indigo House – praised the fund.

The report, which assessed the impact of the fund up to November 2021, said: “On the basis of the evaluation completed, Spruce represents the most economically advantageous option for achieving a set of desired impacts.

“Spruce demonstrates considerable value for money to the public purse when compared against alternative pricing interventions including non-repayable grant and/or other structured financing.”

Despite an initial investment of £94 million from the Scottish Government when the fund was formed, a total of £135 million had been provided in loans as a result of repayments.

The fund, according to the report, had also created more than 5,000 jobs – however, this figure was arrived at by a calculation which suggested one job would be created for every 12 square feet of commercial space and is not as a result of a count of the number of people employed within the projects.

Planning minister Joe FitzPatrick welcomed the report during a visit to an office building in Edinburgh part-funded by the project, saying: “The Spruce fund has created thousands of jobs and the total project development costs of more than half a billion pounds has delivered new infrastructure, supported the economy and transformed our communities for the better.

“Despite operating during a very challenging period, which covered the recovery from the financial crisis, Britain’s departure from the EU and the Covid pandemic, it is clear that Spruce contributed significantly to Scotland’s economic strategy.

“The impact of some of the projects has enabled wider regeneration of areas which otherwise would not have happened in the absence of Spruce. The Guardbridge project in St Andrews is a good example of this.”