ACCORDING to the Work Foundation, Edinburgh and London are the only two UK cities worthy of the title "Ideopolis". The knowledge economy, which is the basis of future economic success, grows fastest in creative and cultural cities, and they play a
crucial role in generating jobs and wealth for their regional and national economies.
This is particularly true of Edinburgh and Scotland. Edinburgh, with nine per cent of Scotland's population, generates 15 per cent of the country's wealth. Designated an EU region of excellence for innovation, 50 per cent of new jobs in Scotland over the next decade will be based in Edinburgh and its city region, with advantages for the whole country.
Although Edinburgh has enjoyed strong economic growth compared with other UK cities, the city region has failed to grow as quickly as key competitors, and needs to close a 20 per cent productivity gap if it is to match the wealth of Europe's top-performing city regions. Other European capitals are outstripping our attractions by investing heavily in rapid-transit systems; varied housing opportunities; educational excellence at all levels and cultural and sporting infrastructure, with theatres, galleries and stadiums of an international standard.
Scotland's Capital has identified a shortfall – a minimum of £400 million and up to £1 billion – in investment required for strategic infrastructure projects, such as extending tram and rail networks, improving the city centre and upgrading cultural buildings and public spaces. These cannot be funded by the public sector alone.
Key infrastructure, including improved transport for workers in the city region and to Glasgow, is vital to unlock potential and for sustainable economic growth for the region and nation. As the tourist gateway and shop window for Scotland, we must be confident our Capital can compare with top-performing cities such as Oslo, Dublin and Stockholm, with the infrastructure that investors and tourists expect to find in a European capital.
Major firms choosing to locate in Edinburgh constantly review whether they could get a better deal elsewhere, so it is important Edinburgh continues to offer those companies reasons to stay – not least because the critical mass of big business in the city attracts others.
Leading collaboration with Dundee, Strathclyde and Aberdeen, and forecast to bring £350 million a year to Scotland's economy, it unquestionably deserves major national investment.
However, the rapid transport links from the city centre and affordable housing required for the 6500 skilled scientists and medical experts expected to arrive here from all over the world must not be relegated to the status of "local development". These workers will be exactly the sort of educated and entrepreneurial fresh talent Scotland is seeking to attract, with the potential to lead not just a Scottish but a global life-sciences industry. However, the whole enterprise may suffer because local funding cannot provide the necessary infrastructure.
Edinburgh's status as a World Heritage Capital with national responsibilities makes the case for significant and long-term investment. If Scotland seeks a place on the world stage, it cannot afford a shabby Capital. While the Scottish Government's new capital city supplement is undoubtedly welcome, it is unclear whether this will make a significant dent in Edinburgh's needs or offer the opportunity for long-term planning.
FRESH thinking on these issues is vitally important. The Edinburgh Business Assembly is encouraging this debate in the knowledge that any scheme must be attractive to all partners, delivering best value and a sound return.
We in the business community strongly support the economic ambitions of the Scottish Government, which has a crucial role to play in creating a fiscal environment appealing to private investors, and we want to work with politicians and the public sector to identify appropriate investment methods. Innovative funding mechanisms, such as the Scottish Futures Trust (SFT) are worthy of consideration but are, as yet, untried and untested. It may not be clear for some time whether the SFT will be sufficiently attractive to private investors to meet the city's needs, and Edinburgh cannot afford to wait.
Alternative models also hold appeal. A proven scheme such as the tax increment finance scheme, operating in the USA and being considered elsewhere in the UK, could lever long-term private sector investment: for example, levering in £650m from around £56m additional income, with the city council taking the risk rather than the Scottish Government.
The EBA supports the prioritisation of infrastructure investment based on sound analysis of need and value added. Where evidenced, this may indicate that infrastructure of national importance justifies national funding.
Aside from transport links, other examples include the development of national sporting facilities and vital upgrades to cultural buildings, such as the King's Theatre and Museum of Edinburgh, to help Scotland retain its international reputation for year-round festivals and events, with all the benefits that brings for tourism and national profile.
The ability to retain a greater share of its business rates would also assist the council make strategic reinvestment in the city's infrastructure.
Currently, 40 per cent of Edinburgh's business rates subsidises other Scottish local authorities, putting £1bn in Holyrood's coffers in the past decade alone. While sharing success through taxation is appropriate, a penalty on wealth creation in Edinburgh damages Scotland.
All Scots should take pride in the nation's Capital. Business and politicians must work in partnership to ensure that our city receives not subsidy but the ability to attract sound investment for infrastructure developments that will deliver an excellent return for Scotland. By investing in Edinburgh, the beating heart of the nation, Scotland will prosper.
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Brendan Dick is national manager of BT Scotland and chairman of the Edinburgh Business AssemblyThe full article contains 963 words and appears in Edinburgh Evening News newspaper.
