This much-maligned city has done something right
But the city can draw on one outstanding resource. Faced with the threat posed to its prosperity by the near collapse of two leading banks headquartered in the capital, the council’s economic development department has provided a professional, well-researched and clearly presented regular economic bulletin, updated every month. It has tracked, among other trends, employment, unemployment and job vacancies, retail sales, house prices planning, inward investment, business formation, hotel occupancy and city centre footfall. This Economy Watch was driven by two concerns: first, a clear understanding of the importance of economic growth to the general prosperity of the city; and second, an equally clear concern that, for all the success of the city over the past 20 years, absolutely nothing could be taken for granted.
I was happy to recommend this excellent Economy Watch earlier this year to St Andrew’s House as a model of how the Scottish government could usefully improve its presentation of Scottish economic statistics. The council’s barometer quickly picked up on the “resilience factor” enjoyed by the city as we moved out of recession, with bank job losses cushioned by job creation elsewhere in the financial sector. But now these pointers are turning down. And that makes the publication of a pioneering five-year City Region Economic Review all the more commendable and compelling.
There are two immediate areas of high vulnerability: financial services, given the fresh concerns over banks, and the growing likelihood of a relapse into recession; and cutbacks in the public sector – 4,200 jobs forecast to go between now and 2014-15. We cannot count on a continuing “resilient Edinburgh” story because of this one fact alone: together, these two vulnerable sectors account for almost 60 per cent of all employment in the city.
Here are two other killer facts from this treasure trove: unemployment among state school leavers in the city is the highest in Scotland at 19 per cent (2008-9). And demand for jobs is projected to grow at three times supply.
That is the background to the council’s most eye-catching initiative: it plans, with partners such as Edinburgh Chamber of Commerce, to launch the “Edinburgh Guarantee” – a proposal to offer a job, training or further education to every child who leaves school in Edinburgh with no future career path. Almost 600 young people a year in Edinburgh fall into this category. Another proposal is improved access to equity and debt finance including leveraging matched funds from Europe to deliver Business Gateway services for growing businesses.
These are positive and constructive proposals. And I am confident this must-read report (available at www.edinburgh.gov.uk/economicreview2011) will draw many more during the public consultation period for the review, which runs until 16 September.
Improving employability skills should also not be seen as a responsibility outwith schools and dumped on other agencies. As employers will readily testify, we need a dramatic improvement in the content and quality of education as opposed to over-emphasis on grade passes. This will be imperative in the period ahead.
So, too, will the need to keep down the burden of business rates and, where possible, improving reliefs and exemptions to help drive up business formation and expansion. And an improvement is planning should also be looked for. It is a miracle in Edinburgh when one brick can be laid upon another without years of inquiries, consultations and appeals.
But above all, what will be needed is leadership. The cause of development and expansion needs to be led and championed from the top if Scotland’s capital is to match the intensifying competition on fronts ranging from arts festivals to inward investment and business expansion. Economy Watch has set the tone. Now it should be the centrepiece of action for the future of this great city.