Bruce Lindsay: Government must lead the recovery in Scotland

BEFORE the downturn, Glasgow and Edinburgh, Scotland's two main engines of economic wealth, each profited from their own character and culture, which encouraged investors.

House prices were booming, confidence was high, trading conditions were strong and interest rates and inflation were low.

Edinburgh, the traditional financial centre, had issues of where to expand to during the peak. Whilst success followed success, the daily challenges of just getting across the city existed for all. Now, however, Edinburgh will get its tram system, which although residents and workers currently find it hard to see the end justifying the means, will deliver a viable, value for money alternative that will allow easier travel across the city.

So is Edinburgh physically ready for its recovery? The new Forth road bridge and the Waverley line seem uncertain and are already victims of delay.

The west seems to be in a stronger position to take advantage of three big opportunities: in situ communications – road, rail and underground – as well as the new road projects – the M80 and the M74.

Glasgow's successful bid to host the 2014 Commonwealth Games will also play a key role in speeding up the economic recovery in the west.

So how can we best encourage renewed interest in the stalled developments which require major infrastructure now to encourage the private sector to join in? The answer must be government-led, which could be best delivered in three main ways.

Top-down infrastructure provision with payback from the private sector over time. This could be provided by a mechanism such as Tax Increment Finance which would bring about a significant step forward.

In addition, the Scottish Futures Trust is now putting packages of work out to the private sector. Where these services are, so recovery will follow and it will be those with their eye on taking advantage of these packages that will reap the rewards. Seeing developments begin to rise out of the ground once more provides momentum and will create its own snowball effect in confidence.

Finally, we should be looking at a return to financial incentives – perhaps in the shape of new Enterprise Zones, which have attracted significant interest in the past. Investment will increase if a competitive advantage can be established in the cost profile of developers and investors.

It may still be some time before the rapids calm but with the right equipment, progress through the choppy waters can be made.

• Bruce Lindsay is senior development surveyor, Muse Developments