Shared Services Proposal – Economic Development
North Ayrshire Council · 11 February 2026
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NORTH AYRSHIRE COUNCIL 11 February 2026 Council Title: Shared Services Proposal – Economic Development Purpose: To update Members on progress in relation to the development of regional collaborative working opportunities within Economic Development and to seek approval to progress with a shared Economic Development Service, in partnership with East Ayrshire Council. Recommendation: Council is asked to: (i) Note the strategic context for public service reform, including the national commitments to economic growth. (ii) Note the work that has been undertaken to develop the case for a shared Economic Development Service. (iii) Note that there is a strong alignment across the existing policies and strategies of both North and East Ayrshire Councils, with clear and robust links to national and regional outcomes for economic growth. (iv) Agree to progress with the development of a shared Economic Development Service, in partnership with East Ayrshire Council, with a single management team and with services located within each Council. (v) Note that an officer project board will be established to take forward the proposed development and implementation of the service, with representation from professional services including Human Resources, Legal and Finance. (vi) Agree that the shared service will be led by North Ayrshire Council, with effect from 1 June 2026 and that the Ayrshire Growth Deal’s PMO will be retained with East Ayrshire Council as lead accountable body for the Ayrshire Growth Deal (AGD). (vii) Agree the creation of the post of Regional Economic Director. (viii) Agree to amend the Scheme of Administration to delegate appropriate powers to the Ayrshire Economic Joint Committee for governance of the shared Economic Development Service with effect from its commencement date. (ix) Agree to the proposals for the composition of the Staffing and Recruitment Committee when considering recruitment
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of Chief Officers to the shared service as outlined at para 2.47 of this report and amend the Scheme of Administration accordingly. (x) Approve the progression of the recruitment process of a Regional Economic Director and maintaining one Head of Service, both of whom will then be involved in developing the overall structure of the Shared Services team. 1. Executive Summary 1.1 At its meeting of 17 September 2025, Council considered a paper on Collaborative Working Across Ayrshire, when it was agreed further development of potential regional collaborative working opportunities would progress. In recognising the existing regional collaboration already in place within Economic Development, it was agreed this was an area for immediate focus. 1.2 This report provides an update on the work that has been undertaken to develop the case for a shared Economic Development Service which will deliver and implement the Regional Economic Strategy Delivery Action Plan, Ayrshire Growth Deal and associated strategic objectives. 1.3 It is becoming increasingly clear that both UK and Scottish Governments consider Ayrshire as an Economic Development/Growth region particularly in terms of future funding streams including, but not limited to, the recently announced Local Growth Fund and the anticipated follow on to the Ayrshire Growth Deal that concludes in 2029/30. 1.4 The Regional Economic Strategy and our Community Wealth Building approach will be at the centre of the future economic plans for Ayrshire overseen by the Regional Economic Partnership and Regional Economic Joint Committee, ensuring a joined-up approach across all partners including national agencies, local organisations and the private sector. 1.5 The three Ayrshire Chief Executives previously agreed to commission a study to consider in more detail the creation of a single regional Economic Development Service for Ayrshire to support both delivery of the Regional Economic Strategy and wider Economic Growth within Ayrshire. This review scoped out current activity and resourcing and used data to make comparisons with other areas of similar size. This work has been developed further in the short-term and has identified opportunities to create a Shared Economic Development Service. 1.6 Whilst South Ayrshire Council’s Cabinet on 28 October 2025 agreed to the further development of collaborative opportunities across Ayrshire, including identification and assessment of joint working or shared service opportunities, South Ayrshire Council’s Chief Executive has confirmed that the Council is not in a position to commit to a shared Economic Development Service at this time 1.7 Work has therefore been progressed to consider the merits and opportunities of developing a collaborative arrangement for North and East Ayrshire Councils. This has
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identified the opportunity to create a shared Economic Development Service between North Ayrshire Council and East Ayrshire Council. 1.8 During its meeting on 29 January 2026, East Ayrshire Council agreed to progress with the development of a shared Economic Development Service, in partnership with North Ayrshire Council. 1.9 If approved by North Ayrshire Council, arrangements will commence to implement a Shared Economic Development Service between North Ayrshire Council and East Ayrshire Council, with the first stage being the recruitment of a Regional Economic Director. 2. Background 2.1 At its meeting of 17 September 2025, Council considered a paper on Collaborative Working Across Ayrshire, which outlined the Accounts Commission’s publication - ‘Transformation in Councils’, which highlighted the need for Councils to urgently transform how they deliver services as the financial and service demand challenges continue to deepen. Council agreed to the further development of potential regional collaborative working opportunities being progressed. 2.2 The Council has a long history of successfully working with a range of partner organisations, including national agencies, third sector, communities and other Councils to deliver efficiencies, innovation, effective services and joined up interventions. In recognising the existing regional collaboration already in place within Economic Development, it was agreed this was an area for immediate focus. National landscape 2.3 It is becoming increasingly clear that both UK and Scottish Governments consider Ayrshire as an Economic Development/Growth region particularly in terms of future funding streams including, but not limited to, the Local Growth Fund, which is the next iteration of the Shared Prosperity Fund and the anticipated follow on to the Ayrshire Growth Deal that concludes in 2029/30. The Regional Economic Strategy and our Community Wealth Building approach will be at the centre of the future economic plans for Ayrshire overseen by the Regional Economic Partnership ensuring a joined- up approach across all partners including national agencies, local organisations and the private sector. 2.4 Scotland’s National Strategy for Economic Transformation was published in 2022 and sets an intention to deliver economic growth that significantly outperforms the last decade, so that the Scottish economy is “more prosperous, more productive and more internationally competitive”. The UK Government has declared that economic growth is its number one mission, noting that this will fund public services, enable investment and most importantly, raise living standards for everyone. The 10-year Modern Industrial Strategy forms an integral part of this mission and will inform future investment. 2.5 The concept of shared services is not new. There are good examples across the public sector which demonstrate that shared services implemented effectively can deliver benefits in terms of efficiency, effectiveness and resilience. A recent Summary
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Report by the Improvement Service on Collaborative Working in Scottish Local Government highlighted a range of benefits from collaborative working, both financial and non-financial. These include: • Economies of scale and cost savings • Delivery of improved outcomes • Access to specialist skills and expertise • Enhanced capacity and efficiency • Improved service resilience • Simplification, standardisation and single points of contact • Innovation, upskilling and best practice sharing 2.6 In June 2025, the Scottish Government published its Public Service Reform Strategy, building on the Christie approach to Public Service Reform, to deliver a system that improves lives, reduces inequality and is fiscally sustainable. There is a focus on a system that will: • Be efficient and effective with the right-size delivery landscape. • Better join up services and focus on helping people. • Prioritise prevention. • Empower people and communities to shape the services that matter to them. • Be fiscally sustainable. 2.7 While the focus is largely on Scottish Government and Public Bodies, Local Government is recognised as an essential partner. The document also confirms that Scottish Government will work with local government and public bodies to conclude the Local Governance Review and will empower local government and health partners to strengthen and streamline local decision making. There is a dedicated workstream on shared services, emphasising the importance of this approach. 2.8 The Local Government Transformation Programme is developing proposals for future operating models for councils and options for future delivery of council services. The programme is led by SOLACE Scotland and supported by the Improvement Service and builds on a report published in October 2022, which proposes a new vision for Scottish Local Government. ‘Delivering a Future for Scottish Local Authorities’ outlines the context that local government is operating within, the challenges and opportunities it faces and how councils might transition to a model of service delivery that builds on current success. 2.9 More recently, the Accounts Commission reported on how councils are responding to current workforce challenges, highlighted that while many councils have initiatives in place to address challenges with recruitment and retaining staff, urgent progress is needed to have robust workforce plans in place at every Council. The report notes that this needs to: help financial sustainability; address wellbeing; link to future skill needs and drive many more shared services and roles across the public sector. 2.10 The overall outlook for the Ayrshire councils remains challenging. The anticipated gross funding gap of North Ayrshire Council (excluding any assumptions on increases to Council tax currently and excluding any planned use of reserves for 2026/27 and 2027/28) over the next three years is £11.0m in 2026/27, £14.1m in 27/28 and £12.9m in 28/29. In total this is an anticipated gross funding gap of £38.0m over the next 3 years. It is also important to note that this forecast position does not include any
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additional funding requirements to the Health and Social Care Partnership. For 2026/27 the Health and Social Care Partnership projects a potential funding deficit of between £8m to £21m. 2.11 East Ayrshire’s Budget Strategy was reported to their Council on 30 October 2025 and contained details of the indicative budget gap for 2026/27 (£5m) and 2027/28 (£6m), which is based on Council Tax being set at 8% for 2026/27 and with Scottish Government financial grant settlement being allocated with annual real term growth of circa 1.4%, based on the recently published Scottish Government Medium Term Financial Plan. Benefits of Shared Services 2.12 Whilst the creation of a Shared Economic Development service will not bring any initial financial savings it will lead to greatly enhanced outcomes through: enhanced strategic leadership, shared resources, enhanced collaborative arrangements, economies of scale, greater access to specialist skills and expertise, enhanced capacity, and strengthened service resilience, together with simplification, standardisation, upskilling and best practice sharing. The Ayrshire Region 2.13 Ayrshire covers an area of some 3,400 square km and serves a population of around 370,000 people. There are approximately 10,000 businesses, the vast majority of which are small and medium sized businesses, often family owned and rooted in the local economy. There are also a small number of internationally renowned major employers. 2.14 The region offers a wealth of opportunities, but to achieve the vision we have for the economy, there are key challenges that must be addressed. These are set out within the Ayrshire Regional Economic Strategy: • Delivering a wellbeing economy: addressing high incidences of deprivation and child poverty by connecting communities to opportunities, whilst achieving a just transition to net zero. • Enhancing economic activity and productivity: addressing low economic activity rates, high unemployment rates and skills mismatch/shortages to make the most of inward investment opportunities and facilitate greater international trade. • Improving physical infrastructure: addressing poor road linkages, reduced and unreliable public transport, high levels of vacant and derelict land and island and rural specific challenges, whilst capitalising on significant blue economy/marine environment opportunities. Ayrshire Regional Economic Strategy 2.15 The Ayrshire Regional Economic Strategy was published in 2023 and reflects a desire across Ayrshire to take a different approach to regional economic development. The Strategy sets out a bold 10-year vision for the Ayrshire economy and seeks to address some of the key challenges facing our region, including deprivation and child poverty, low economic activity, high unemployment and regional infrastructure and transport issues. Community wealth building is at the heart of the Strategy. It is widely accepted
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that North Ayrshire has played a significant lead role at the forefront of community wealth building in Scotland, challenging traditional models of economic development and recognising that the status quo isn’t working. 2.16 The UK and Scottish Governments have a desire to engage at regional levels on delivery of their key economic development policies. It is therefore necessary to strengthen the regional strategic proposition and for local authorities to work beyond their administrative boundaries and with partners across sectors. The Strategy goes on to note that this applies not only to public sector partners, but also takes account of the perspectives of businesses, communities and residents who do not necessarily relate to, or operate within such boundaries. 2.17 Our commitment to a regional approach already helped Ayrshire to secure the Ayrshire Growth Deal, a £251.5m deal brokered by the three local authorities in 2020, along with the UK and Scottish Governments. Work continues to progress a number of projects within the Ayrshire Growth Deal. The Fair Work priority theme has supported mainstreaming of community wealth building, which is further evidenced by the recent evaluation report on the successful Ayrshire Growth Deal Community Wealth Building Programme and the continued success of the Ayrshire Skills Investment Fund and Working for a Healthy Economy initiative. Other successes include progress on digital infrastructure and digital skills, 5GIR project, Digital Process Manufacturing Centre (DPMC) and Ayrshire Innovation Business Park projects and the upskilling of business advisors to deliver the changing business support role in areas such as Digital and the Net Zero Accelerator programme. The following key achievements serve as examples of progress: • £21m invested from Scottish and UK Governments • £28m of total commitment to additional investment projected. • 3,102 jobs supported. • 5,321 residents supported through Working for a Healthy Economy. • 1,152 organisations supported by Community Wealth Building. • 286 new enterprises supported. • 9.87ha of development space unlocked. • 8 Full Business Cases completed. • 10 Outline Business Cases completed. • 2 Projects completed. • Securing significant additional funding to support and enhance delivery through the Levelling Up Fund and 5G Innovation Regions (5GIR) Programme 2.18 An update on the Ayrshire Regional Economic Strategy was presented to the Ayrshire Economic Joint Committee on 30 September 2025. The Update report noted the appointment of a Regional Economy Lead to progress the development a new three- year delivery plan, following agreement from the Regional Strategy Delivery Group that a change in approach was required. The development process for the 2026-2029 Delivery Plan has involved extensive engagement to review existing delivery mechanisms and consider the most appropriate route forward. The report sets out the process for the development of the Delivery Plan and states that work has been undertaken internally within the three local authorities to develop a measurement framework and regional baseline for tracking achievements and impact. However, it was determined that capacity and expertise was not sufficient internally to achieve this and external expertise would be sought.
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Regional Strategy Review 2.19 In 2024, a review of the Regional Economic Strategy was commissioned from an external professional resource - SQW, who were tasked with undertaking a high-level review of the Ayrshire Regional Economic Strategy (Phase 1). In March 2025, SQW was then commissioned by the three local authority chief executives to consider in more detail the creation of a single regional Economic Development Service for Ayrshire (Phase 2). 2.20 The Phase 1 review of the Regional Economic Strategy examined the progress made in delivering the Strategy and the effectiveness of organisational structures, as well as setting out options and recommendations on how to improve the focus and efficiency of these structures. The review included semi-structured interviews with senior individuals from the public and private sectors involved in delivering the Regional Economic Strategy and the Ayrshire Growth Deal. 2.21 The consultation led to the identification of four main opportunities for improvement: • Sharpen up the vision and streamline priorities • Improve the governance structures to enable more robust ‘check and challenge’. • Improve strategic leadership, with a full-time dedicated Director of Regional Economic Growth. • Increase regional economic development capacity to deliver against the Regional Economic Strategy objectives 2.22 The Phase 2 review provides a more detailed consideration of the creation of a single regional Economic Development Service for Ayrshire. The report reviewed and analysed relevant background documents and available data and draws on wider stakeholder consultations carried out during the Phase 1 review. 2.23 The following benefits of having a new regional economic development team have been identified, based on the consultations undertaken. • It will ensure a more strategic and consistent approach to supporting business and communities across Ayrshire. • A new regional team would help to accelerate delivery of the Regional Economic Strategy and ensure greater buy-in. • It will help to improve strategic leadership and promote the needs and opportunities for the Ayrshire economy more effectively. • A regional team will help to simplify and strengthen partner relationships. • Improved regional working through increased capacity and pooling of resources • Generating greater value from the combined resources and ensuring a more joined up approach that will help better align resources and activities and make future opportunities more likely to be shared across Ayrshire. 2.24 Whilst South Ayrshire Council’s Cabinet agreed on 28 October 2025 to the further development of collaborative opportunities across Ayrshire, including identification and assessment of joint working or shared service opportunities, South Ayrshire Council’s Chief Executive has confirmed that the Council is not in a position to commit to a shared Economic Development Service at this time. However, this does not mean that
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it would not be considered in future. The following sections therefore look only at East and North Ayrshire Councils. 2.25 The review and proposals recommended in this Council paper focus on the Economic Policy, Business Support and Development, Tourism, Digital Renewal and Ayrshire Growth Deal delivery elements of each service. Local employability services, together with regeneration (excluding digital renewal) and active travel are not within the scope of the proposals. North Ayrshire Council 2.26 North Ayrshire Council’s Economic Development, Growth and Regeneration Service sits within the Place Directorate. The Service is comprised of six teams, delivering a broad range of economic development functions and programmes. Members will recall this service recently underwent a comprehensive service review which identified and secured the delivery of significant savings. The Service works with a wide range of partners and stakeholders to contribute to the delivery of a community wealth building approach to a wellbeing economy. • The Economic Policy Team currently leads the Regional Economic Strategy at a regional level alongside the Council’s Community Wealth Building strategy and associated regional activities such as the CWB Commission and participation in the Highlands and Islands Regional Economic Partnership. The Team delivers the North Ayrshire Islands Programme in partnership with Scottish Government and Highlands and Islands Enterprise. They also deliver the Council’s Economic policy advisory service including Quarterly Economic Briefings, Locality Profiles and contributing to business case development. • The Business Support and Development team provides a range of support, advice and financial help for businesses at every stage of their journey in North Ayrshire. The Team also has a dedicated Inward Investment function and provides support to the work streams within the Regional Economic Partnership. • The Regeneration Team develops and delivers the Regeneration Delivery Plan including enhancing the commercial estate and maximising land and assets, Place Based Investment Programme, Repurposing Property Grant Fund and the Shared Prosperity Fund including the overall Programme management and Communities & Place Fund. The Team leads on the delivery of the Vacant and Derelict Land Strategy and Local Transport and Active Travel Strategy. Furthermore, they lead on Digital Renewal including the Ayrshire 5G Innovation Regions Programme. • The Growth and Investment Team delivers the Council’s tourism activities and is responsible for the development and delivery of the Ayrshire Growth Deal capital programme projects including the Digital Processing and Manufacturing (DPMC) and Flexible Space, Marine Tourism and Great Harbour projects. • The Employability and Skills Team deliver the Council’s all age employment support under the Your Next Move, Working North Ayrshire Service. This includes the No One Left Behind (NOLB) Delivery Plan and chairing the Local Employability Partnership (LEP). The Team also leads on the Ayrshire Growth Deal revenue programme including the Ayrshire Skills Investment Fund (ASIF), Working for a Healthy Economy (WfHE) and Fair Work Ayrshire alongside the Shared Prosperity Fund People & Skills thematic priority.
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2.27 The following elements of the North Ayrshire Economic Development, Growth and Regeneration Service are within the scope of this review: Economic Policy, Business Support and Development, Digital Renewal and Growth and Investment. East Ayrshire Council 2.28 In East Ayrshire, Economic Growth is part of the Communities and Economy Directorate and works with a wide range of partners and stakeholders to drive economic prosperity through support for employment, skills, businesses and improvements to local communities. • The Economic Development Team provides a range of advice and financial help for businesses through Business Gateway at every stage of the SME journey in East Ayrshire, while aligning with Scottish Enterprise on joint initiatives for account managed businesses. The Team also hosts the Ingram Enterprise Business Centre, manages inward investment enquiries and leads with partners on economic investment bids on areas such as 5GIR and the Local Innovation Partnership Fund. At a regional level the Team provides support to the work streams within the Regional Economic Partnership comprising skills, digital, visitor economy, aerospace, clean growth, with the Service leading on food and drink workstream. • The Development Planning and Regeneration Team prepares the Local Development Plan, which guides the future use of land and the appearance of our communities. The Team is also responsible for the strategic management of East Ayrshire Woodlands and the delivery of regeneration, environmental and townscape improvement projects with all Scottish and UK Government regeneration funds such as Regeneration Capital Grant Fund, Place Based Investment Fund, Neighbourhood Board and Pride in Place Impact Funding managed through the team. The team are responsible for developing and implementing the Ayrshire Growth Deal’s four capital projects. • The Ayrshire Growth Deal Project Management Office (PMO) is responsible for the overall management of the Growth Deal across the region, which is essential to satisfy the requirements of the Scottish and UK Governments in terms of authorisation, audit and recovery of project costs. As part of its responsibility to monitor progress, the PMO also provides analysis and reporting of the impact of Ayrshire Growth Deal projects as set out in project business cases. 2.29 The following elements of the East Ayrshire Economic Growth Service are within the scope of this review: Economic Development Team and Ayrshire Growth Deal Capital Projects Delivery Team. The Ayrshire Growth Deal’s PMO will be retained with East Ayrshire Council as lead accountable body for Ayrshire Growth Deal, with management responsibility resting with their Director of Finance & Digital. Shared Resources Opportunities 2.30 A review of existing Economic Development Staff Structures within North and East Ayrshire Councils has been carried out and updated recently to reflect the current position for in scope posts as at February 2026 which is detailed in the table below:
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Table 1: Economic Development Employee Numbers Service Area North Ayrshire East Ayrshire FTE (per m) FTE (tem p) FTE (total ) FTE (perm ) FTE (tem p) FTE (total) Head Of Service 1 0 1 1 0 1 Senior/Strategic Managers 5 0 5 2 0 2 Growth and Investment, Ayrshire Growth Deal (AGD) Delivery and Tourism 3 1 4 2 2 4 Digital / Digital Renewal 1 0 1 0 1 1 Business Support and Development 7.6 1 8.6 10 4 14 Economic Policy 4 0 4 0 0 0 Admin 1.6 0 1.6 5 0 5 Total 23.2 2 25.2 20 7 27 2.31 The table below provides a summary of the estimated budgets for each service. It should be noted that these are the budget figures for 2025/26 and do not take account of any savings that each service requires to make to ensure a balanced budget in future years. The North Ayrshire figures in the table below have recently been updated in February 2026 to reflect current in scope costs. Further refinement to the in-scope budgets will be progressed and agreed between the Councils across staffing and attributable running costs. Table 2: Economic Development Budgets 2025/26 Description East Ayrshire North Ayrshire Employee Costs 1,063,510 1,417,297 Premises Costs 65,480 0 Transport Costs 4,060 3,930 Supplies and Services 520,310 18,826 Third Party Payments 43,180 280,625 Gross Expenditure 1,696,540 1,720,678 Income (88,320) (180,000) Net Expenditure 1,608,220 1,540,678
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2.32 Both North and East Ayrshire Councils are ambitious for their communities, seeking to improve the lives of the people they serve. From an assessment of both Councils’ strategic plans and policies it is clear that there is strong alignment across North Ayrshire and East Ayrshire Councils. Economic Development Services in both councils are meeting the corporate aims of their council, as well as regional and national policy priorities. 2.33 Economic Development services provide local authorities with vital intelligence about the local economy and connections to local businesses and employers. They enable councils to provide economic support quickly and accurately through direct and strategic relationships, networks and business databases. They also influence the availability of employment opportunities by attracting employers to the area, supporting inward investment and helping existing employers expand. 2.34 The Ayrshire Regional Economic Strategy includes support for enterprise as a key theme and highlights the need to create a region where ‘businesses can grow both domestically and globally and entrepreneurship and creativity can flourish’. It will do so by improving digital infrastructure, enhancing business support services, improving the quantity and quality of business space provision and improving support for the third sector to deliver community wealth. 2.35 The Business Support and Development Team in North Ayrshire supports start-ups, early-stage growth and volume businesses. The Team supports businesses in the private and third sectors to set up and to work through early-stage challenges, such as understanding their target market, digitising their business, funding and finance. Businesses at all stages can access specific support via workshops and 1-2-1 surgeries with an adviser alongside grant and other specialist support. 2.36 The Business Growth Team supports businesses with identified growth potential. They offer advice and support, and referral to wider partners. A named Business Growth Manager is the dedicated single point of contact for growth businesses. The team also supports new businesses coming into North Ayrshire, through dedicated Inward Investment support. Grant and specialist support is funded through the Council’s Business Recovery and Sustainability Fund and external sources. 2.37 Collectively, the Team stimulates business growth and resilience across North Ayrshire and supports businesses to embrace the Community Wealth Building (CWB) Pillars, as well as Green and Digital adaption. 2.38 Business support services in East Ayrshire similarly support new businesses to start up, indigenous business to grow and others to relocate in the area. A report to East Ayrshire Council’s Cabinet on 4 June 2025 provided the 2024/25 Business Support Report. Activities detailed included: • Supporting the development of 242 new businesses • 28 businesses awarded community wealth building grants for a variety of purposes related to fair work, procurement and climate change. • 129 businesses supported to review their practices in line with green/climate agenda.
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• Specialised advice and support, funded from the Shared Prosperity Fund, was used to complement existing business and advice, with 201 new jobs created and 503 enterprises supported • BeReady, with funding via the Shared Prosperity Fund, resulted in 139 enterprises receiving grants and 215 receiving financial support other than grants. • Community wealth building project provided grant funding for 54 enterprises and a further 244 received non-financial support. 2.39 The Local Government Association published a Guide on the role and future skills needs of economic development teams in July 2023. The guide highlights the vital, cross-cutting role of local government economic development teams in attracting investment and capitalising on opportunities created by green growth, automation and new global markets, as well as existing industries which can lead to high-quality jobs for our residents. The report also notes that with the right levers and approaches, councils can also address social, regional and economic inequalities within and between places. 2.40 The Guide recommends that councils explore how closer joint working with other councils could help meet the needs of the functional economic area, make the most of scarce resources, reduce duplication and maximise economies of scale where it makes sense to do so. There is particular reference in the Guide to the challenges of the replacement of EU Structural funding with a domestic funding regime and continued pressure on budgets, which it states both strengthen the case of inter- authority collaboration on economic development services, where appropriate and the need to innovate both operations and policy. North Ayrshire and East Ayrshire Council Shared Economic Development Service 2.41 It is clear from the information gathered and reviews carried out, that the creation of a Shared Economic Development service for North and East Ayrshire Council will assist in the enhanced delivery the Regional Economic Strategy. The proposed Shared Services model is a lead authority model, with the service hosted by one Council, which will then provide all the back-office functions. Consideration will require to be given to structure and location of the team, ensuring that a local business support and economic development presence remains in each area. The proposed model will see business support and development, economic policy including community wealth building, tourism, digital renewal and the delivery of the Ayrshire Growth Deal being delivered by a Shared Economic Development Service. 2.42 At its recent Council meeting on 29 January 2026, East Ayrshire Council considered and agreed to support the introduction of a Shared Economic Development Service and further agreed to North Ayrshire Council being the lead authority. 2.43 If agreed by North Ayrshire Council, it is intended that an officer Project Board is established with the aim of overseeing progress and the development and implementation of the shared service. This will include representation from professional services including human resources, legal and finance from both Councils. Consideration will also be given to including employee or trade union representation.
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2.44 The lead authority model will be underpinned by the following principles: • Local governance is being delivered through the Ayrshire Economic Joint Committee and the Ayrshire Economic Partnership Board and, subject to refining their Terms of Reference and Delegations to reflect the Shared Service, will be retained. Standing Orders will require to be amended including granting appropriate delegation of powers to the Joint Committee. • The councils will maximise the effectiveness and efficiency of services through closer joint working. • The lead authority will be responsible for support functions. • Relevant staff will be transferred to the lead authority under TUPE regulations. • Each council will meet the costs of services delivered in their area, with common costs apportioned based on a distribution model to be agreed before the commencement of the shared service. Regional Economic Director 2.45 Strategic Leadership is vital for the new team. A Regional Economic Director post is proposed to lead the service and lead on reporting to the Ayrshire Economic Partnership Board and Ayrshire Economic Joint Committee for both Councils. It is considered that this post would benefit from being a more senior post than the existing Heads of Economic Development, reflecting the increased level of challenge and areas to be covered. The main responsibilities would include: • Promoting the Regional Economic Strategy across public, private and third sector partners, to ensure stronger buy-in. • Ensuring the Regional Economic Strategy Delivery Plan is delivered, including Ayrshire Growth Deal and other delivery programmes, through effective performance management and stakeholder management. • Promoting the economic opportunities in Ayrshire to Scottish and UK Governments. • Coordinating inward investment activity. • Coordinate bids for external funding. 2.46 It is proposed the role will be recruited in line with North Ayrshire Council’s policies and procedures and would be placed within North Ayrshire Council’s leadership structure at an appropriate grade to be determined by the Chief Executive. If agreed, the post of Regional Economic Director will be ringfenced to the two existing Heads of Service, with the unsuccessful individual being matched to the Head of Service post within the Shared Economic Development Service. It is further proposed that the new Regional Economic Director, will then be involved, together with the Head of Service, in appointing the senior team and structure. This has the advantage of giving the new Director responsibility for shaping and recruiting the new team. The remaining services within the current Economic Development Growth and Regeneration Service will be subject to further redistribution within the Council’s Chief Officer structure after review by the Chief Executive. 2.47 Proposed arrangements for the recruitment and selection of the new Regional Economic Director will require the Council to agree to amend its Scheme of Administration to allow the establishment of a joint Staffing Recruitment Committee with representation from both North and East Ayrshire Councils. It is proposed the recruitment and selection of the new Regional Economic Director and in future any
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Chief Officer follows a similar format previously used for appointments to the HSCP. It is proposed the joint Staffing and Recruitment Committee be established on this occasion to recruit the Regional Economic Director to the Shared Service with the following representation: • NAC Leader • NAC Deputy Leader • NAC Leader of the Main Opposition • NAC Leader of the Second Opposition • NAC Cabinet Member holding the relevant service portfolio • EAC Leader • EAC Deputy Leader • EAC Member holding the relevant service portfolio This would be supported by attendance from – NAC Chief Executive, NAC Executive Director (Place) and NAC Head of People (as HR Support). Governance 2.48 Funding for the new Economic Development Service needs to be transparent and sustainable, with contributions based on the size of the Council, rather than simply splitting the budget. Detailed financial information will require to be prepared by the finance teams of each Council and a funding strategy agreed prior to the launch of the shared service and provide a fair and equitable approach to service delivery. 2.49 For both Councils, there will be a desire to retain a local presence and connections. As part of the implementation plan and engagement with teams, consideration will require to be given to accommodation needs. There are also a number of support areas that will need to be considered during the implementation phase, including the treatment of support costs, existing systems and digital requirements and procurement arrangements. In addition, information governance and data sharing matters will require consideration. 2.50 There are currently two bodies which oversee joint working in Ayrshire: • The Ayrshire Shared Services Joint Committee is a body that oversees shared services across the three Ayrshire Councils. It is responsible for approving service plans, coordinating performance and monitoring the delivery of these shared services. The committee includes four elected members from each council. At present the following services are delegated to the Joint Committee: Ayrshire Roads Alliance and Ayrshire Civil Contingencies. The constituent authorities can determine which specific services and functions are to be delegated to the Joint Committee. • The Ayrshire Economic Joint Committee was established in 2019 as the governance structure for overseeing the delivery of the Regional Economic Strategy and Ayrshire Growth Deal and to promote the main drivers for the Ayrshire Economy. The Committee includes representation from the three Ayrshire Councils (three elected members each), with representation also from partners and business. There is also an Ayrshire Economic Partnership Board which has membership from public, private and third sectors whose
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role is to scrutinise economic reports before determination by the Ayrshire Economic Joint Committee. 2.51 The Regional Economic Director will be accountable to the Ayrshire Economic Joint Committee and for day-to-day operational matters will report to the Executive Director (Place) of North Ayrshire Council as lead authority. A review of the Economic Joint Committee Terms of Reference and Delegations will be required to reflect the Shared Economic Development Service model. Standing Orders will require to be amended including granting appropriate delegation of powers to the Joint Committee with effect from the commencement of any shared service. 2.52 A full risk register will require to be developed as part of the implementation phase. The following risks and possible mitigations have been highlighted thus far and will be further developed by the proposed officer Project Board to be established to implement the Shared Service: • Whilst progress has been made in moving towards a regional economic mindset there will continue to be some sensitivities and concerns about less support for local communities. It will therefore be important to ensure effective communications between the regional team and all elected members in the councils, not only those sitting on the Economic Joint Committee. • There could be some challenges around creating a single working culture. The two existing economic development teams will have their own way of working and so the new team will need to integrate and secure buy-in to the new approach. The new team will need to be aware of sensitivities about each council area getting their ‘fair share’ – this will be addressed by promoting and explaining a regional approach to allocating and prioritising investment across Ayrshire as a whole. • There will also be legal and TUPE related issues for staff transferring to a new organisation, including differences in terms and conditions. In addition, fixed term contracts and fit to TUPE will need to be reviewed person by person. 2.53 As noted earlier in the report South Ayrshire Council has confirmed that it does not wish to be part of a Shared Economic Development Service at this time, however, it is possible that this position could change over time. Given the information and findings contained within this report, it is considered that there is merit in North and East Ayrshire Councils bringing together their economic development teams, under the remit of a single Regional Economic Director. 3. Proposals 3.1 It is proposed that Council: (xi) Notes the strategic context for public service reform, including the national commitments to economic growth. (xii) Notes the work that has been undertaken to develop the case for a shared Economic Development Service. (xiii) Notes that there is a strong alignment across the existing policies and strategies of both North and East Ayrshire Councils, with clear and robust links to national and regional outcomes for economic growth.
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(xiv) Agrees to progress with the development of a shared Economic Development Service, in partnership with East Ayrshire Council, with a single management team and with services located within each Council. (xv) Notes that an officer project board will be established to take forward the proposed development and implementation of the service, with representation from professional services including Human Resources, Legal and Finance. (xvi) Agrees that the shared service will be led by North Ayrshire Council, with effect from 1 June 2026 and that the Ayrshire Growth Deal’s PMO will be retained with East Ayrshire Council as lead accountable body for the Ayrshire Growth Deal (AGD). (xvii) Agrees the creation of the post of Regional Economic Director. (xviii) Agrees to amend the Scheme of Administration to delegate appropriate powers to the Ayrshire Economic Joint Committee for governance of the shared Economic Development Service with effect from its commencement date. (xix) Agrees to the proposals for the composition of the Staffing and Recruitment Committee when considering recruitment of Chief Officers to the shared service as outlined at para 2.47 of this report and amend the Scheme of Administration accordingly. (xx) Approves the progression of the recruitment process of a Regional Economic Director and maintaining one Head of Service, both of whom will then be involved in developing the overall structure of the Shared Services team. 4. Implications/Socio-economic Duty Financial 4.1 There will be no initial direct financial savings from the creation of a Shared Economic Development Service. Detailed financial information will require to be prepared by the finance teams of each Council and a funding strategy agreed prior to the launch of the shared service. Human Resources 4.2 If it is agreed that staff will transfer to the lead council, there will be TUPE related issues to consider. The Regional Economic Director will be appointed in the first instance and will be responsible for developing and taking forward the new service. Trade Union and affected employees have been briefed in advance of Council. Legal 4.3 The governance implications are set out within the report. The Regional Economic Director will assume overall responsibility for the shared service and will be accountable to the Ayrshire Economic Joint Committee and for day-to-day operational matters will report to North Ayrshire Council’s Executive Director (Place). Scrutiny in respect of the Ayrshire Economic Joint Committee will also require to be undertaken by each council in accordance with their own scrutiny processes. Equality/Socio-economic 4.4 A full ECRIA was undertaken for the recent review of the Economic Development, Growth and Regeneration Service. This established that the review would have a neutral impact across the protected characteristics and that the intended outcomes
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would not have a different impact on our island communities. East Ayrshire Council has also separately undertaken its own ECRIA assessment. A screening assessment has been undertaken for the current Shared Services Proposal. The need for further assessment will be kept under review by the officer Project Board as the full detail for the new Shared Service is developed through further screening and wider assessment where appropriate. Climate Change and Carbon 4.5 Economic growth in Ayrshire supports and is being supported by net-zero initiatives. This includes leveraging funding through the Ayrshire Growth Deal to drive investment in clean energy, sustainable infrastructure and green skills. Programmes such as the Net Zero Accelerator are helping local businesses to transition to a low-carbon economy and strategies like Community Wealth Building aim to ensure these benefits lead to inclusive growth and resilience for the region. Key Priorities 4.6 The Council Plan’s strategic priorities will be supported and enhanced by the new Shared Economic Development Service. Community Wealth Building 4.7 Community Wealth Building is a vital part of the Ayrshire Regional Economic Strategy and Ayrshire Growth Deal. Through supporting businesses and third sector organisations across a pan-Ayrshire approach to economic development, community wealth building aims to promote benefits in economic recovery, inclusivity, equality, tackling the climate crisis and taking on other issues that Ayrshire faces. The recommendations detailed within this report are designed to further strengthen this approach. Islands Communities Impact Assessment (ICIA) 4.8 A full ECRIA was undertaken for the recent review of the Economic Development, Growth and Regeneration Service. This established that the review would have a neutral impact across the protected characteristics and that the intended outcomes would not have a different impact on our island communities. United Nations Rights of the Child (UNCRC) 4.9 None. Consumer Duty 4.10 None.
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5. Consultation 5.1 Engagement with senior economic development officers and chief executives during the Phase 1 and Phase 2 reviews described earlier in the report has taken place. The feedback from Phase 1 was clear that there needs to be a more formalised approach to economic development across Ayrshire, in order to address the challenges and opportunities in the regional economy. The feedback also indicated that governance and strategic leadership needs strengthened. Initial engagement with employees and Joint Trade Unions has taken place There will be continuing engagement with employees and trade unions and wider engagement with those affected by the Service. RUSSELL McCUTCHEON Executive Director (Place) For further information please contact Russell McCutcheon, Executive Director (Place), on 01294 324312. Background Papers 0