Peter Jones: Aberdeen paying the price for success

IS ABERDEEN becoming to Scotland what London is to the rest of Britain – an economic capital of wealth creation and high incomes, but putting up formidable barriers to those who want to move in because of high house prices and costs of living?

Ships dock in Aberdeen harbour. Picture: Getty

NHS Grampian believes that living there is unaffordable to some already in the city. The health board is having such difficulty recruiting and retaining staff that it is considering paying an Aberdeen weighting allowance.

That speaks of the city and surrounding shire having the same two-speed economy as London. In Aberdeen’s case, it is an oil industry-driven economy living in the fast lane which risks driving a slow-lane low-paid economy off the road.

Indeed, the fast lane looks to be accelerating. A report from Lloyds Bank reckons that the UK oil and gas industry will create 39,000 jobs in the next two years, the lion’s share of which will be in and around Aberdeen.

But if this is a problem, it is a good one, the kind of problem that other cities would love to have. And the extent to which it is troubling can be over-stated.

House prices are certainly an issue. According to Registers of Scotland, in the ten years to 2012-13, Aberdeen prices rose the fastest in Scotland with average prices more than doubling to £187,300.

But that is still some way behind Edinburgh, where average prices rose by 45 per cent over the same period and were still much higher at £217,300.

The city’s geography – having only two significant road/rail corridors connecting it to the rest of Scotland – does not help either. Cheaper housing, in Angus to the south, means higher commuting costs in both time and money.

The only answer appears to be to build more houses in and around the city, lots of them. Builders have to cope with high land prices so new houses can’t be provided cheaply. This, however, is the price of success.