Scots £23,000 worse off because of lagging income growth, report finds

Aberdeen is found to be worst performing of an town or city in the UK

People across Scotland could be more than £23,000 a year better off if income growth since 2010 had kept pace with previous trends, a report has found. Photo: Joe Giddens/PA Wire

People across Scotland could be more than £23,000 a year better off if income growth since 2010 had kept pace with previous trends, a report has found.

Research by the Centre for Cities think tank found across the UK as a whole, people are on average £10,200 worse off than they would otherwise have been if income growth had continued at the same rate as between 1998 and 2010.

It said the situation in Scotland is worse, with the average person north of the border having missed out on £23,370 in disposable income, when compared with predictions based on the 1998-2010 trends.

In Aberdeen, it said people could have been £45,240 a year better off - giving it the worst performance in this regard of any town or city in the UK.

In Scotland's largest city, Glasgow, the report said people could be £23,500 a year better off, while in Dundee and Edinburgh the figure was put at £17,730 and £16,030 respectively.

The Cities Outlook 2024 report found at the city level, just seven places - Aldershot, Bristol, Derby, Northampton, Slough, Telford and York - had cumulative disposable incomes that were higher than for the period 1998-2010.

It said: "In every other city, people were worse off than if incomes had grown at the rate they did in their area between 1998 and 2010.

"Aberdeen had the biggest shortfall - if incomes had grown at pre-2010 rates, the city's residents would have had an extra £45,000 in their pockets (equivalent to two extra years of disposable income)."

The research added that Aberdeen had been "one of the most prosperous cities in the UK in 2010", with residents having at the time the sixth highest disposable income in the UK.

The think tank said the city has had a "difficult period" since then, as the oil and gas sector "struggled in the 2010s", with an estimated 9,000 jobs lost in the industry.

This is "likely to have impacted the amount of money spent in the city", the report added, resulting in retail jobs falling by almost 30% compared to just 6% nationally.

With the report released ahead of this year's expected general election, Centre for Cities chief executive Andrew Carter called for "bold actions" from political leaders to support growth in cities.

Mr Carter said: "Both the two main political parties have pledged to grow the economy and the general election debate will have growth at its heart.

"The challenge for the next government is to go beyond the rhetoric and to do what's needed to make this rhetoric a reality."

He added that with the UK having suffered a "torrid time since the Great Recession", the next government will need to "act at a radically different pace and scale".

Mr Carter suggested: "The first step in a realistic approach to grow the economy is to recognise that the British economy is an urban economy. Cities account for 9% of the land and over 60% of the economy, as well as 72% of high-skilled jobs.

"Their slowdown is at the heart of why the national economy is struggling. There is no plausible way of achieving higher growth without increasing the innovation and dynamism of urban Britain.

"This means reforming the planning system to enable cities to grow, devolving more powers and financial freedoms to encourage our big cities to make decisions that support growth, and following the levelling up rhetoric with bold actions."