Future Grangemouth Vision 2025: evaluation of economic effects

In February 2015, Scottish Enterprise, Falkirk Council, Chemical Sciences Scotland and Grangemouth’s key chemicals businesses adopted the 'Future Grangemouth Vision 2025’. The strategy aims to firmly position Grangemouth as Scotland’s main chemicals and advanced manufacturing centre. The strategy has four elements: industry and sector development to extend sustainable and innovative advanced manufacturing; developing sustainable infrastructure to enable growth and attract investment; people – developing the skills and capacity to support the Grangemouth investment zone; and partnership and positioning – establishing a structure to support the delivery of the vision. This evaluation aimed to develop more detail of the components and actions needed to deliver the Vision objectives within the context of the area’s performance, and examine the potential economic effects of the Vision’s implementation. It summarises the economic, policy and other baseline considerations, comments on key milestones to delivery, and examines the scale and nature of potential benefits.

The evaluation involved a comprehensive socio-economic and policy baseline review, consultations with key stakeholders (including INEOS, Calachem, BP, Syngenta, Forth Ports, Falkirk Council, Chemical Sciences Scotland, IBIOC, SE officers and others), and a stakeholder workshop, which presented the baseline, identified key issues and discussed potential actions, investments and initiatives which may represent delivery of the Vision. Follow up discussions to refine the workshop ideas were also held, and a draft concept was prepared. Finally, an economic assessment of the effects of delivering the Vision was conducted.

The baseline analysis reported that the chemical sciences sector is critical to Scotland’s economy, with Grangemouth being central to this sector. Chemical manufacturing and pharmaceutical Gross Value Added (GVA) was expected to reach £1.5 billion in 2016, though profit margins were challenging. In 2014, it was Scotland’s second most valuable export sector after food and drink. Grangemouth’s refinery & petrochemicals complex accounted for 34% of the chemicals sector GVA in Scotland in 2015. The evaluation also found that there was general support for the direction laid out in the Vision. While there was only limited detail of what it would involve or priorities from a business, infrastructure or skills development perspective, there was general consensus in the following areas: leadership – clarity and partnership in delivery, including to harness support from the business and wider community and exercise political influence; consolidation around the area’s strengths, including promoting the concentration, diversity and innovation of Grangemouth’s chemicals sector and its supporting skills infrastructure; and repositioning Grangemouth as a world-class centre for innovation in chemicals & related manufacturing and energy. The evaluation also found that implementation of the Grangemouth Future Vision would generate an estimated 3,591 additional jobs (FTEs) locally and over 3,350 across Scotland. These jobs were expected to be spread across the chemicals (1,977), industry (797), office (456) and distribution (128) sectors. The effects of investment in the Grangemouth chemical sciences cluster in growing the economy will be similarly significant - with an additional £206 million generated annually in the local area, and £182 million across Scotland.

The evaluation identified a number of key enabling actions needed to develop the Grangemouth Future Vision 2025 under each of the four elements: industry and sector development; infrastructure; people; and partnership and positioning. These include: the development of a delivery vehicle for Grangemouth; a review of assisted area status; delivering road improvements; constructing and opening a Forth Valley College campus; increasing the number of Modern Apprenticeships programmes; and establishing a dedicated partnership structure to deliver the Vision.