Capital growth: Edinburgh and Lothian since devolution

‘Trams are coming to Leith.’ This promise would have fired the imagination when it was first made in 1999. 

Now, as the City of Edinburgh Council finally approves the line, 20 years of change to Scotland’s capital has meant the economic and demographic context has shifted.

The cost of the design and construction of the Scottish Parliament proved controversial, but that row was dwarfed by that which surrounded the trams in the following years.

The £350m trams project was proposed originally by the local authority in the same year the parliament was born, as a network of three routes spanning the city.

By the time it was completed in 2014, there was only one route – from the airport to the city centre – and it had cost £776m.

A route through the more deprived parts of north Edinburgh such as Pilton and Granton was abandoned.

For the residents of Edinburgh, it became emblematic of what many saw as the priorities of the city’s political leaders – to maximise the experience for Edinburgh’s visitors at the expense of its residents.

Leith Walk, which was to carry the tram service down to Newhaven, was dug up, filled in during the visitor seasons around the Festival and Hogmanay, and then dug up again. And then, in 2011, that part of the route too was scrapped, leaving a line taking visitors from the airport to the city centre only.

This month, City of Edinburgh councillors voted to resurrect the original ‘1a’ tram line to Newhaven, with work expected to be completed in 2023. How many of the residents and businesses so disrupted by the original works will still be there to enjoy its benefits, though?

After spiralling costs for the original project, the new extension will be “affordable and self-financing”, insisted the council.

Edinburgh has changed enormously in the 20 years of devolution, something acknowledged by the current councillors who approved the new line.

Councillor Lesley Macinnes, transport and environment convener, said: “Our city is growing faster than anywhere else in Scotland – a sign of our continued attractiveness as a place to work, live, visit and spend time – and boosting our public transport infrastructure in a sustainable way is fundamental to catering to our expanding population.”

As a medieval city which grew up around finance instead of industry, Edinburgh’s more deprived communities were less visible, largely tucked away from the town centre after slum clearances in the 19th century. 

This may have had an impact on the way the city views itself, with the geographical position of these communities contributing to any sense of exclusion that they may have felt.

The establishment of a new parliament meant Edinburgh began to feel like a European capital again. In turn, that brought growth with it, both economic and in population.

Census figures suggest the city’s population swelled by over six per cent in the first decade of the new parliament, to 459,630 in 2011.

The council estimates the population is now 530,741, and National Records of Scotland predicts the growth will continue for Edinburgh at 7.7 per cent, forecasting it will overtake Glasgow by 2032.

House prices skyrocketed, with annual price rises of over ten per cent. Even after the financial crash, it meant Edinburgh’s homes were increasing in value at sometimes four times faster than the UK average. 

With much of Edinburgh’s population growth coming from net migration from the rest of the UK and overseas, the city became more socially and culturally diverse, contributing to its status as a European city.

However, the growth was not backed with adequate sustainable housing solutions for a working population whose wages were not keeping up with the cost of living in such a place.

One in five households in Edinburgh lives below the poverty threshold, and house prices were outstripping inflation. 

by Liam Kirkaldy

How devolution changed Scotland

The attractiveness of a handful of state schools saw house prices in their catchment areas grow even faster, polarising the wealth between Edinburgh’s richest and poorest districts.

In 2005, council tenants exerted some control by rejecting the stock housing transfer, effectively bringing the period of Labour’s mass sale of council houses to largely not-for-profit landlords in Scotland to an end.

The same year, a city-wide poll rejected plans by the council to introduce a congestion charge by a margin of three to one.

If communities felt excluded before, now many found themselves looking for homes outside Edinburgh, making locations in Midlothian, East and West Lothian, Fife, even the Scottish Borders increasingly look like a commuter belt.

This was brought into sharp focus when the Forth Road Bridge closed in 2015 because of defects in the steelwork. The bridge was carrying far, far more traffic than it was built to withstand as more and more people travelled to work in Edinburgh from Fife. 

Of course, a whole new bridge was about to take its place in the form of the Queensferry Crossing, which opened in 2017, speeding up commutes considerably. 

And the city’s leaders are again looking at ways to restrict traffic in the city centre. The establishment of a 20mph speed limit on Edinburgh’s residential streets has grown in popularity since it was introduced a year ago.

Dr Ruth Jepson, reader in public health at Edinburgh University, told MSPs of the Rural Economy and Connectivity Committee: “One year after the full implementation of the 20mph across Edinburgh, results indicate a decrease in the average speed of 1.6mph, from 24.3mph to 22.7mph.”

A recent consultation suggested three-quarters of residents now support further traffic reduction measures, while just over half think these should be “radical”.

MacInnes said: “We must plan effectively and test radical options if we are to get the right balance in the future that will provide a high quality of life and access to opportunities for all residents, in particular those that experience inequality.” 

While population numbers and house prices have risen, perhaps the most dramatic rise in Edinburgh has been in its number of tourists, growing to a situation where the city houses eight visitors for every one resident.

It is perhaps no surprise, then, that the idea of taxing tourists per night has been overwhelmingly backed by residents.

Responding to a council consultation on whether the city should levy a tourist tax, or transient visitor levy, 91 per cent of residents supported the plans, which the council estimates could raise between £11.6m and £14.6m a year for the city.

The proposal is to charge a £2-per-night levy for the first week of a stay in the capital, applicable at all hotels, B&Bs, short-term lets and hostels.

Edinburgh would become the latest European city to introduce such a charge in the wake of ‘tourism fatigue’, which has seen Barcelona, Venice and Paris take similar steps.

Barcelona in particular has seen a backlash against tourists, who now outnumber the city’s population by 20 to one. The ‘Tourists go home, refugees welcome’ slogan is spray-painted across the Catalan city.

Edinburgh’s visitor levy can only happen via legislation by the Scottish Parliament, however. Ministers have been lukewarm on the idea, but pledged to consult on the principle as a concession to the Scottish Greens in this year’s budget.

The consultation revealed many in the tourism and hospitality industry remain opposed to the charge, especially at a time when Brexit threatens future growth and the cost of wages are rising.

Speaking to the Scottish Tourism Alliance conference in Glasgow in recent weeks, Culture, Tourism and External Affairs Secretary Fiona Hyslop said she was concerned the industry was “fragile”, suggesting Edinburgh would not be allowed to introduce the levy until 2021 at the earliest.

“I am deeply committed to supporting the Scottish tourism sector, and to enabling it to maximise its success – success that is both good for business and good for all of Scotland and its people,” she said.

“Sometimes that is challenging – not least when the Scottish Government had to agree to consult and legislate on a locally determined tourism tax. This was as a direct result of negotiations with the only party willing to seriously engage in the budget process, and was a necessary part of the agreement which enabled us to deliver a budget that provides certainty and stability to taxpayers and businesses at a time when we face significant challenges from the UK leaving the EU.”

But the tourism issue is not just about Edinburgh’s finances, it also relates to its housing crisis. A huge boom in short-term let websites has meant many residential properties are now used by visitors as self-catering holiday homes.

Research by Alasdair Rae of the University of Sheffield found that there had been an increase of 54 per cent in just over a year between 2016 and 2017. 

 In the report, Rae said: “The evidence suggests that much of the sector is unreported and, far from being a way to make a few extra pounds, many ‘gig economy’ hosts are running potentially lucrative lettings businesses.”

The Planning (Scotland) Bill was amended to change the regulations around short-terms lets, amongst other regulations, in an effort to give communities have a greater say in their areas.

This should include much tighter regulation, even giving councils final say over the conversion of properties into short-term let properties.

But if Edinburgh residents become frustrated over any sense the Scottish Government may put business interests over their own when it comes to tourism, it may be a familiar feeling. The City of Edinburgh Council has had similar accusations levelled against it over the last 20 years.

In a city where four major parties have had a share of power since 1995, the policy agenda has remained noticeably stable, leading to questions about whether it is the executive, rather than the politicians, that have steered Edinburgh for the last 20 years. And trust in the council wavered amid allegations of corruption.

A high-profile statutory repairs scandal in 2015 saw two former officials convicted for accepting bribes for awarding maintenance and repair contracts by the council.

Some residents of the city believed they had paid thousands of pounds for statutory repairs that may not have been needed. 

Reports at the time suggested this was “the tip of the iceberg” of goings on at the council.

Another whistle-blower, who alleged fraud at the council’s arm’s length company ELLP, was subjected to a decade-long campaign of harassment which included sending him pornographic images.  

Meanwhile, from transport management to the selling of public assets, the direction of travel in terms of policy has been fairly consistent throughout the devolution era.

Like most councils, Edinburgh has had to cope with significant reductions in its budgets, especially since the financial crash.

One councillor told Holyrood in 2016 he felt as though his job was to “manage a period of decline, which is not what I went into politics for”.

The council has been accused several times of cashing in on the city’s UNESCO world heritage status with development proposals so large in scale they threaten that status.

Several times projects have taken ‘common good’ assets historically gifted to the city into private ownership.

As part of the council’s ‘Strategy for Jobs 2012-17’, the council hired property agents to identify gap sites in the city centre which could be sold. In doing so, the council hung a ‘For Sale’ sign on the city’s historical centre.

A £65m commercial proposal for the historic old town, which included the A-listed India buildings in 2016 was dubbed “Edinburgh’s age of endarkenment” in the Guardian at the time.

The current redevelopment of Edinburgh’s St James Centre was approved in 2015 against the recommendation of the city’s own own planners.

Indeed, Mechtild Rössler, director of heritage at UNESCO, wrote to the UK Government  with “strong concerns” about Edinburgh’s planning system, citing the pace of development.

But last year a senior property consultant urged the council to lift a longstanding restriction on the height of new buildings designed to protect the city’s famous skyline.

Stewart Taylor, senior director at investment firm CBRE, said: “The City of Edinburgh Council must be innovative and prepared to challenge long standing conventions over things such as height and the protection of commercial space to safeguard the city’s economic potential.”

But a spokesperson for conservation group The Cockburn Association said: “Edinburgh’s biggest assets are its landscape, townscape and architecture, which blend with its history to give the city unique qualities. Unless we conserve these, Edinburgh will cease to be special.”

The Edinburgh and South East Scotland City Region Deal aims to spread the wealth beyond the city boundaries. 

Innovation through the city’s universities, digital economy and a boost to its tourism and culture sector will form part of the deal, it was announced, while the Scottish Government will spend £120m on road infrastructure as part of £600m investment from the UK and Scottish governments.

But Fife Council’s co-leader David Ross said he thought the deal was rushed through for political reasons and would see investment focused on the city of Edinburgh itself at the expense of the surrounding areas.

“My overall impression is that the deal is concentrated on Edinburgh City itself and runs contrary to the work we have been doing as a partnership over the past two years to ensure that this deal addressed the need for inclusive growth across the whole region and not just the city,” he told Holyrood last year.

Now that Edinburgh’s growth impacts the whole of the south east of Scotland, many will hope it is managed sustainably.