There is a growing backlash from Venice to Vancouver, from Barcelona to Brisbane against cities being handed over to developers and the tourism industry. Edinburgh now finds itself at the maelstrom of these pressures. This week we reach a tipping point: will the planning committee be seduced by predictions that a “luxury hotel” spreading around the listed Royal High School Building on Calton Hill would put an average of £25.2 million a year and 630 jobs into Edinburgh’s economy over an eight-year period?
If dollar signs dazzle them into granting permission, then the alternative, widely welcomed plan for a National Music School in the elegant former school building is doomed.
It is crucial that planning committee members understand that there are flaws in the economic case presented to them. Scottish Planning Policy says that the “net economic benefit of proposed development “should be considered. But that is not what the applicants have calculated. Their economic consultants’ report states: “We have chosen not to present results on a net basis.”
HM Treasury’s Green Book recommends that any impact calculation be net, which it explains is the impact “after making allowances for what would have happened in the absence of the intervention”.
In the case of the proposed Calton Hill hotel, for example, it is impossible to believe that not one single guest would have been coming to Edinburgh anyway and content to stay in one of our other luxury hotels.
So it is not their total spend that should be added to Edinburgh’s and Scotland’s economies, but only the difference from what they would have spent anyway, had they been staying in an existing hotel. As the Treasury dryly observes: “The effect on net employment and net output is likely to be much smaller than the direct employment and output effects.”
The £25.2m a year and 630 jobs are predictions of direct effects. By following conventional impact methods in a more robust and transparent manner, and running their model on optimistic and pessimistic assumptions (something that the developers did not do), London Economics calculated that the boost to GDP in the city would be between £9.6m and £11.2m – at best less than half the developers’ figure. In an economy the scale of Edinburgh’s, and with low levels of unemployment, even the developers’ figures are not game changers.
What would be a game changer is the visual impact of the hotel. What would be a game changer would be for the council to ignore the massive number of objections lodged in opposition to the planning application.
Similarly, with research by MORI finding that 90 per cent of citizens are favourable towards the music school proposal, and 54 per cent unfavourable to the hotel, confidence in the democratic process will be further damaged if the hotel is nodded through.
The worst game changer would be permission for a luxury hotel that then has to be amended (more rooms, more storeys) to make it viable in “unanticipated market conditions”. As we know, “stuff happens”.
Cliff Hague is chair of heritage watchdog the Cockburn Association