We are the city of growth and opportunity - the future is bright

The Herald Scotland

03-06-2025

According to the individuals responsible for ensuring this growth is carefully managed and inclusive, Edinburgh's future is 'bright' as long as those most in need aren't left behind. Edinburgh, they say, must 'move forward in a way that's going to enhance our success rather than cause further problems'.
It is no small task, and one which many rapidly-expanding cities around the world have struggled to overcome.
In the first of an exclusive two-part interview for The Herald's series looking at the Future of Edinburgh, City of Edinburgh Council's leader Jane Meagher and chief executive Paul Lawrence discussed the challenges facing the city and the solutions being explored.
'We've got a growing city, we've got a successful city and we've also got a city that faces a huge number of challenges,' said Meagher, who stepped up from her previous role as the authority's housing convener just five months ago after former council leader Cammy Day resigned over allegations of inappropriate behaviour. 'If we are going to continue to grow as a city, for obvious reasons we need to make sure that we can provide enough places for people to live. It's as simple as that.'
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When it comes to the capital's continued economic success compared to most UK cities, the figures speak for themselves. A new and as yet unpublished Scottish Cities Outlook report by the Fraser of Allander Institute (FAI) shows Edinburgh accounts for around 18% of Scotland's economic activity, more than any other city, and recorded strong average GVA growth of 5% between 2017 and 2022 - significantly outperforming the Scottish average of 3.7%. It also shows workers in Edinburgh produce more value per hour than anywhere else in Scotland — £49 an hour, compared to the national average of £38.50.
Furthermore 82.2% of Edinburgh's working-age population is economically active, above London (78.6%) and Glasgow (73.6%). The capital's 2.6% unemployment rate is the UK's lowest and its median hourly pay of £17.70 is the highest outside London.
Highlighting huge innovation growth in artificial intelligence and life sciences, Lawrence likened Edinburgh to the Oxford-Cambridge corridor which, while attracting major investment, has resulted in pressure on infrastructure, particularly transport and housing.
'The challenge is to ensure that growth is inclusive not exclusive,' he said.
'If you look at innovation cities around the world, particularly in western economies, often the most innovation strong also have significant amounts of poverty and inequality as well. We need to ensure that innovation-driven growth, which all the stats show is unarguable, is accompanied by an inclusive approach to employment.'
Edinburgh's BioQuarter health innovation hub, he said, has the 'largest concentration of stem cell scientists in the UK with growing companies in life sciences, a world-leading cluster of healthcare and life sciences academics'. But he noted it sits between some of the city's most deprived neighbourhoods.
Edinburgh's population is growing three times faster than any other Scottish city (Image: Colin Mearns) 'The challenge for us is to make sure those jobs of the future at the BioQuarter provide meaningful routes to high-quality jobs for the people of Niddrie, Craigmillar and Moredun, as much as postdocs from San Francisco or Singapore,' he added.
The Forth Green Freeport is another key driver of the city's growth. Meagher said the council is making it clear to any potential investors that 'local people should not be left behind'.
She said: 'What we're doing is drawing together not only investors and potential employers, but also the colleges and universities so they can make sure things like training are happening which equip young people that, for example, will be needed at the Forth Green Freeport so investors go ahead with the development that their planning.
'Then we need to start thinking now about things like apprenticeships, about what kind of college courses are going to be put on so that, in the interests of the company, they've got on their doorstep the right kind of people to make their business a success.'
Meanwhile, one of the largest urban extensions in the UK is planned in West Edinburgh, where planning permission was granted for 11,000 new homes in the last three months of last year. 'Here, you have two huge motors of economic development,' Lawrence said, 'one being the airport and the other being Heriot-Watt University, and you have areas of significant deprivation on the other side of the bypass.
'Edinburgh airport is the fastest growing airport in Scotland, Heriot Watt has amazing plans, a big part of the City Region Deal with the National Robotarium. So what does that mean if you live in Wester Hailes? And is there a meaningful route to a meaningful career, not just at entry level but right through the employment spectrum?
'So that allying of Edinburgh's growth with the people who historically have been excluded from it, whether it's in Leith, West Edinburgh; that's the challenge. And to make sure the city, while all that growth is happening, and obviously we see the public saying this, the city doesn't come to a standstill through the growth in car use and public transport not keeping up.
'Transport is a huge part of that. Employment and wider infrastructure to mean that growth is for the city's good, rather than things that for the city's continued division, polarisation if you can call it that, and that the infrastructure needed doesn't keep up. We see examples all around the country where there's been a lot of housing growth and members of the public saying to their elected representatives 'but what about the public services that are needed to support this?'
'It's the challenges of growth that Edinburgh has historically faced into, historically we've actually done pretty well, but those are big challenges for us to address.'
But in a climate of increasingly underfunded local government and gaping holes in budgets for housing, transport and education, is the city really up the challenge? The short answer, Meagher said, is yes, 'but only in partnership'.
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She said: 'If we're going to take forward these big issues we can only do it with the right people on board. I think there are lots of strands that need to be drawn together and some of them lie in the hands of the Scottish Government, and it's important to keep them in the equation because that's the only way we can make sure that not only do we need enough homes for people to live in, we also need the right types and tenures of homes.
'We need social rented homes and the way the figures stack up at the moment, one of the ways we can achieve that is through grant funding from the Scottish Government. There are other ways we can work out what kinds of financial mechanisms that we can use in order to attract increasing investment and not to rely entirely on government funding.
'We're not saying we need to go to the Scottish Government with a begging bowl, but we are saying we're looking at all different kinds of financial mechanisms.'
Lawrence said there is 'no question' significant public funding is required for the housing and transport infrastructure needed to support Edinburgh's projected growth. Some of the figures on this, he added, are 'pretty stark'. The council's plan to deliver 11,000 new affordable homes in the next five years faces a gap of £665 million, while it's estimated a north-south tram extension from Granton to the Royal Infirmary will cost £2 billion.
'A new tram line will need direct investment from the government, there is no question about that. You will not be able to build that at scale otherwise,' he added.
'There are parts of the UK where they've used something called land value uplift where you can say 'this land is currently worth X because it's not being used', transport infrastructure goes in, as a result the value of the land increases and you can capture some of that. That's more difficult to do in a dense, already urban built city like Edinburgh. So while there are mechanisms we can look at, there is no question that for us to take the tram forward will need some very tough decisions from the Scottish Government to prioritise mobility in a major city like Edinburgh.
'What's happened over the past 10 to 15 years with large scale house building outside the city is a lot of people are living outside the city, because frankly house prices are cheaper, but are coming into the city for employment. So we have to plan that together and something like public transport expansion, whether that's tram or bus - and bus is extremely important to that - that we do that as a region.
'We are the fastest-growing region in Scotland and that means that infrastructure investment in public transport needs to keep pace.'
He said the Growth Accelerator Model (GAM) used to deliver the St James Quarter 'has got a lot more potential' in Edinburgh. 'This was effectively a way of recycling tax uplift which wouldn't have happened if the development hadn't happened, and then partially reinvested it into the development to support viability and the quality of the public realm.
'That was a partnership between the council, Scottish Government and the private sector investor. It took us a long time to design and deliver that but it was done very successfully, we see the public enjoying Edinburgh St James. We think there's more like that can be done where it's not just us with a hand out, it's also creating mechanisms that we think will work.'
Jane Meagher has been City of Edinburgh Council's leader since December 2024 (Image: Gordon Terris) Meagher added: 'If you think about the benefits to the Scottish economy as a whole, it's an undeniable fact that the central belt is what, at least in part, drives the whole of the Scottish economy.
'If we're bringing in all these jobs then clearly that's going to increase revenue in terms of taxation, etcetera. We think this is not just for Edinburgh's benefit but for the benefit of the whole country.
'The future is bright provided we don't leave behind the people and parts of the city who suffer most from things like poverty.
'We've got major challenges to address in order to move forward in a way that's going to enhance our success rather than cause further problems.'