New report shows importance of UK to Scottish economy – John McLellan

The Fraser of Allander report on weak economic growth made recommendations which apply to Edinburgh
The Fraser of Allander report on weak economic growth made recommendations which apply to Edinburgh
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After last week’s encouraging employment figures, a report highlighting weak Scottish economic growth from Strathclyde University’s Fraser of Allander economic think-tank was more sober reading,

Commissioned by Edinburgh-headquartered law firm Shepherd & Wedderburn, the report made several recommendations, many of which chime here; infrastructure investment, helping small businesses scale up, attracting and retaining talent from abroad, industry-university collaboration, and concentrating investment on sectors with the highest growth potential.

The city council is certainly placing great store on three miles of tram track as evidence of its commitment to infrastructure investment, but the issue now will be how the many development challenges in other parts of the city are affected by the decision.

In particular, the issue of school building in West Edinburgh and the vast Granton site is unresolved because of ongoing confusion about developers’ contributions to the cost. Even if the target of building 20,000 affordable homes in ten years is met, the question of where the children are educated is as yet unresolved.

The report also re-emphasisied the importance of the rest of the UK to Scottish economy, with £49bn worth of exports compared to £14.8bn to the EU and £17.5bn to the rest of the world.

Intriguingly, the figures showed the latter growing by 95 per cent compared to a 29 per cent rise in EU exports, but then claimed Scotland’s internationalisation will be made more difficult by Brexit. The figures suggest that’s only true if the EU is the limit of that international horizon and it’s not a view shared by the whisky industry.

Ministers need schooled on consequences

New figures from the Scottish Parliament Information Service confirm that Edinburgh will receive the lowest settlement from the Scottish Government than any local authority for 2019-20, at £1422.40 per head against an average of £1812.90. Both Glasgow and Dundee will get just over £2000 per person.

With the council still facing £39m of cuts, the Scottish Government argues everything is fairly calculated according to its complex distribution formulae, and the paltry grant is usually justified by the 24 per cent of school age children in the private sector the council does not have to educate.

With about 1700 Edinburgh private school children predicted to withdraw, partly because of the impact of the end of charitable tax relief, the Scottish Government will need to meet the cost of their state education, illustrating once again that tax rises do not always produce more money for the Government to spend.

Peffermill is a game-changer

Edinburgh University’s plan to transform its Peffermill sports centre into a sports village has been in the making for some time now and if it goes ahead will put it well ahead of its rivals, with the possible exception of Heriot-Watt’s impressive Oriam complex.

The plans include student accommodation and while there is no guarantee the eventual plans will be acceptable, at least the university is recognising that the expansion of its facilities and appeal to potential international students comes with a responsibility to tackle the strains a growing student population can create.

Double trouble

Perhaps boosted by the absence of live action for Hearts and Hibs fans, the 1057 people who watched Edinburgh City draw 0-0 with Peterhead at Ainslie Park will give Edinburgh Leisure something to think about given the capacity at City’s revamped ancestral Meadowbank home will be 500. In case anyone’s forgotten, Condition 12 of the planning permission said: “The applicant should work with Edinburgh City Football Club to explore the potential to increase spectator capacity.” By increase did they mean double?