SNP government shouldn't be subsidising foreign rivals while letting our own industry die

The bus and coach manufacturer, Alexander Dennis (ADL), is a jewel in the crown of Scottish industry, with a history dating back to 1902, when Walter Alexander opened a bicycle shop in Camelon. They expanded into bus services and coachbuilding a century ago, in 1924, and grew to be one of the country’s leading coachbuilders.

Today, Alexander Dennis is a major player in the global bus industry, providing good, high-skilled manufacturing jobs across the country and exporting Scottish-built buses as far afield as Hong Kong, Malaysia, New Zealand and the United States, with 31,000 ADL buses in service around the world, carrying 25,000 passengers every minute of each day.

But this Scottish industrial success story is under threat as the ADL board now propose closing its Scottish manufacturing base and moving all production to Scarborough, citing a lack of demand from Scottish bus operators for their new electric buses.

The closure of the Falkirk and Larbert factories would be a devastating blow for our country with 400 job losses and another key Scottish industry gone. But this hasn’t happened overnight – it is a direct result of the SNP government’s self-defeating procurement policy that has failed to support this Scottish industry.

Most of the new electric buses being bought by the likes of First Glasgow and McGill’s are partially funded by Scottish Government subsidies. I recently asked the Scottish Government how many of these buses funded by the Scottish Zero Emission Bus Challenge Fund were made here in Scotland. While I knew that too often the government’s procurement policy failed to bolster domestic industry, I was shocked that less than a third of these buses were made in Scotland.

Of the 523 electric buses funded through the Scottish Government subsidy scheme, more than two-thirds, 340 buses, have been manufactured overseas, with 287 buses – over half - made in China by Yutong.

The reality is that while the Scottish Government has failed to support Alexander Dennis, the Mayor of Greater Manchester, Andy Burnham, has bought over 160 Alexander Dennis electric buses to operate on the new publicly controlled Bee Network bus franchise.

If the Mayor of Greater Manchester can buy Scottish buses, why can’t the First Minister?

The Scottish Government’s public procurement policy is not fit for purpose as, unlike in every other part of the UK, it completely disregards the ‘social value’ that is created in the local area. They are asleep at the wheel while other countries take increasingly assertive measures to develop their industrial champions.

The Scottish electric bus scheme is weighted primarily towards financial cost (40%) with ‘wider community and decarbonisation benefit’ - including job creation - receiving only a 10% weighting.

Chinese firms like Yutong exploit lower labour costs and weaker employment rights, allowing them to substantially undercut Alexander Dennis on price. While the process did include criteria for job creation and wider community benefits, the weighting of just 10% was far too low to counterbalance the cost advantages of overseas suppliers.

As a result, the Scottish Government effectively prioritised the cheapest bids, regardless of where the resulting buses were made or the domestic economic benefits they could generate. It’s amazing that Alexander Dennis won any contracts at all, given how the government’s scheme was so unfairly rigged against its own industrial base.

This senseless and damaging procurement policy must urgently be reformed to unashamedly support critical manufacturers in Scotland by prioritising wider social value considerations over financial cost, which domestic firms would be better placed to meet, rather than the perverse situation where Scottish taxpayers are subsidising foreign competitors putting hundreds of our own workers out of a job.

When the government buys a bus from Alexander Dennis, it doesn’t just support that business. For every job in bus manufacturing, it is estimated that there is a multiplier effect of three to four jobs in the wider supply chain. The negative impact is already being seen. A major supplier to Alexander Dennis, Greenfold Systems in Dunfermline, has made 80 workers redundant after a key contract between the two firms was withdrawn.

The lack of social value weighting and understanding of the multiplier effect goes beyond procuring new buses.

Earlier this year, the Scottish Government announced that the new fleet of Loch-class electric ferries for Caledonian MacBrayne would be built by Remontowa in Gdańsk, Poland.

The Scottish Government-owned Ferguson Marine in Port Glasgow lost out on the contract, meaning the only thing keeping the lights on at that site is subcontract work for Type 26 Frigates from BAE Systems.

The decision to award Remontowa the contract was based upon a weighting of 65% technical and 35% financial. At no stage was social value considered – the jobs that would have come from the contract or the positive economic boost to the west of Scotland.

If Scotland is to reindustrialise, the Scottish Government must urgently embrace a more assertive, ambitious and coordinated approach to industrial policy that is geared towards supporting Scotland’s industrial champions, not foreign competitors.

With Alexander Dennis recently extending the consultation on closure, it’s still not too late; every avenue should be exhausted to safeguard jobs and save this crown jewel of Scottish industry.

You can read my column in the Glasgow Times here: https://www.glasgowtimes.co.uk/news/25318945.snp-government-shouldnt-letting-industry-die/