Will Edinburgh as we know it survive another decade of extraordinary growth like the last one, asks Cliff Hague, warning the city’s infrastructure has not kept pace, the World Heritage Site is suffering and many people are being left behind by an economic boom.
The decade now ending has seen a significant shift: Edinburgh has become Scotland’s economic leader. Aberdeen was badly impacted by the drop in the oil price midway through the decade, and is still recovering and seeking to diversify its base. Glasgow remains a larger city, and still economically significant, but Scotland’s big story of the last ten years lies in the Edinburgh city region. Not only has Edinburgh become the fastest growing city in Scotland, it is now outstripping London.
Back in 2009 Edinburgh had a population of 463,230; the figure is now around 520,000 and rising. Until 2010, changes in the city’s population broadly reflected those in Scotland as a whole. Since then it has been a very different picture. Between 1998 and 2008, Scotland’s population grew by 2.5 per cent, that of Edinburgh by 2.8 per cent. The figures by 2018 were a seven per cent increase for Scotland since 1998, but a leap of 16.2 per cent in the capital.
Net immigration to Edinburgh runs at around 5,000 a year, with 25,000 leaving and 30,000 coming to live in the city. Age is a factor: the proportion of Edinburgh’s population in the 16-44 age range is notably above the Scottish average.
Bill Clinton famously said “It’s the economy, stupid”, and there can be no doubt that the strength of Edinburgh’s economy is drawing people to this part of Scotland. Since 2010, the number of people employed in Edinburgh has increased by 23 per cent, compared to growth of six per cent across Scotland as a whole. Yet it could easily have been a different story in the aftermath of the financial crisis in which the Royal Bank of Scotland and HBOS were such prominent actors. Helped by the government’s bail out of the errant banks, the city has been able to continue to prosper. Average annual employment growth has been above the Scottish average also in Midlothian, East Lothian and West Lothian. In 2010, employment in Edinburgh and the Lothians accounted for 16 per cent of the Scottish total; it now makes up 18 per cent.
The number of registered enterprises in Edinburgh increased by 18.2 per cent from 2012 to 2017. This is higher than the Scotland average of 10.5 per cent over the same period.
Tourists and students
Amongst the highlights behind these figures are the growth of “fintech” enterprises in the city, along with the boom in student numbers and in tourism. The University of Edinburgh had just under 27,000 students on its city campuses in 2008, but by 2018 the figure had increased dramatically to more than 34,500. The three other universities also grew, and now have about 28,000 students in Edinburgh between them.
The tourist industry attracted 3.27 million visitors in 2012. Since then it has boomed, adding more than another million. Edinburgh is the tourist gateway to Scotland as a whole. Events have been nurtured successfully to attract tourists: the economic impact of Edinburgh’s Hogmanay, for example, grew by more than 40 per cent between 2010 and 2017/18.
Not surprisingly, Edinburgh and the Lothians have become the single major focus of the housebuilding industry. In 2010-11, only 14 per cent of Scotland’s new housing supply was in this region, but in 2017-18 approaching a quarter of all new houses in Scotland were built in Edinburgh and the Lothians. Even so, increases in house prices and rents have outstripped inflation and the Scottish averages. In 2018/19, Edinburgh accounted for over 65 per cent of Scotland’s volume of residential properties that were sold for over £1 million. The furore over new homes in the former Boroughmuir school being advertised in Hong Kong highlights the extent to which international investment is now a significant force in Edinburgh’s property scene. The billion-pound St James development is another example.
Poverty alongside wealth
Many other cities, not just in Scotland but elsewhere in the UK and across Europe, would look with envy at this growth record. We even have the trams operating, and the route being extended, something that looked a distant prospect ten years ago. For the Scottish Government contemplating indyref2, where the economic case for independence will be contested, the success of the Edinburgh region is of incalculable importance.
However, an estimated 80,000 people in Edinburgh live in relative poverty: in several wards more than one household in four is in poverty. A decade of strong economic growth has not reached all parts of the city. Also much of the growth has impacted negatively on quite a small part of the city, particularly the World Heritage Site in the centre. The boom in student housing has been concentrated around the Old Town, the South Side and Fountainbridge, all areas where rents were traditionally lower. The hotel growth has been mainly in the city centre, where short-term holiday lets now take up one residential property in six: a decade ago nobody had heard of Airbnb. India Buildings was disposed of to become a Virgin hotel, in the face of strong local opposition. The fate of the old Royal High School, such a critical component of the World Heritage Site, rests with the Minister, Kevin Stewart MSP. East Princes Street Gardens have been essentially handed over to the London-based Underbelly for ten weeks to do with as they wish, without the inconvenience of having to get planning permission beforehand. West Princes Street Gardens is screened off in August for the Summer Sessions concerts. Unbelievably ugly security barriers have been erected on the Royal Mile. The relentless efforts to grow tourist numbers have resulted in periods of extreme congestion in some streets in the Old Town. Traffic slows and slows.
Infrastructure has not kept pace with Edinburgh’s growth. As the professional lobbyists for growth and more growth have recognised, there is an increasing measure of opposition to “business as usual 2010-2019”. Can the city we know survive another decade like the last one?
Professor Cliff Hague is chair of the Cockburn Association