Council debt: 'The approach is undeniably a big gamble'

THE prospect of Edinburgh falling £1 billion into debt by the end of this year will generate understandable concern.

It is a massive figure for a single city, even if it does pale in comparison with the near 850bn total public sector debt in the UK. The important question for both the council and the government is whether or not their borrowings are reckless.

At a time when most of the global economy is in trouble, it would be easy to make the case for hunkering down and avoiding risks. The council, after all, already faces spending cuts of more than 90 million. It cannot borrow to reduce this deficit as debt can only be for investment in capital projects, not to subsidise or bolster services.

This, in part, explains the plan to use its borrowing powers to develop the Waterfront and back companies like EDI, even at a time when the economy has been stagnating.

But the signs are that we are beginning to come out of recession and the city must place itself in a position where it can take advantage of the opportunities that will come when things take a turn for the better.

Only by ensuring that the correct infrastructure is in place in areas like the Waterfront will investors be encouraged to locate there.

By continuing to borrow against future revenues – mainly business rates – to develop potentially fertile territories, Edinburgh is seeking to gain an advantage over other parts of the country.

Like the Westminster government's plans to delay the spending cuts that must one day come to pay off the national debt, the city's approach is undeniably a gamble. A degree of caution and absolute scrutiny will be necessary as the policy unfolds.

But it is a gamble which could pay handsome dividends for the Capital in the long run – and, in the meantime, there will be new jobs and other benefits from construction, just when the city needs them most.

Prosperity in store

ON THE surface it is just another forlorn row of shops surrounding a long-abandoned pub.

But a closer inspection shows that behind the fading facades of part of Niddrie Mains Road lie some art deco gems. They are relics of an age which was not only more glamorous but in which areas like Niddrie had their own eye-catching architecture at the centre of a thriving local community.

Restoring this stretch of shops won't bring that back to life, but it will remind us all of how any street or community can prosper if nurtured.