high speed rail - wider economic benefits study glasgow edinburgh

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Glasgow : Edinburgh Collaboration Initiative

High Speed Rail

Wider Economic Benefits StudyFinal Report 16 October 2009



Glasgow : Edinburgh

Collaboration Initiative

High Speed Rail –

Wider Economic Benefits Study

Final Report

16 October 2009

Halcrow Group LimitedSustaining and improving the quality of peoples lives



Contents

1 Executive Summary 1

1.1 Background 1

1.2 Introduction 1

1.3 Wider Economic Benefits and Complementary Actions 2

1.4 Agglomeration Benefits 2

1.5 Glasgow : Edinburgh City Region Economic Context 2

1.6 Productivity 3

1.7 Integrated Policy and Intervention 3

1.8 Comprehensive and High Class Transport Infrastructure 4

1.9 City Centre Stations 5

1.10 Land Use Requirements 6

1.11 UK Connectivity 6

1.12 Political Support and Governance 6

1.13 Conclusions 7

2 Introduction 8

2.1 Background 8

2.2 Consultation 8

2.3 Context 9

2.4 Network Rail Business Case 9

2.5 Maximising the Benefits 10

3 Impacts and Benefits 11

3.1 Wider Economic Benefits and Complementary Actions 11

3.2 Potential Benefits for Scotland 12

3.3 Agglomeration Benefits 13

4 Lessons from International HSR 16



5.3 Productivity 23

6 Policy Context 25

6.1 Strategic Framework 25

6.2 Scottish Government 25 6.3 City and City Region Policy and Strategy 25

7 Transport Network 27

7.1 Connectivity Context 27

7.2 International Accessibility 27

7.3 Comprehensive and High Class Transport Infrastructure 27

8 Policy and Intervention 30

8.1 Integrated Policy and Intervention 30

8.2 The National Planning Framework 30

8.3 Planning System Reform and Strategic Development Plans 31

8.4 Enabling the Flow of Benefits 32

9 City Centres 34 9.1 City Centre Stations 34

9.2 Central Station, Glasgow 34

9.3 Waverley Station, Edinburgh 35

9.4 Haymarket Station, Edinburgh 36

9.5 Integration and Secondary Hubs 37

10 Lessons from UK Station Developments 38 10.1 UK Case Studies 38

10.2 Kings Cross and St Pancras International 39

10.3 Birmingham New Street 40

10.4 Manchester Victoria 41



12 Governance and Leadership 49

12.1 Political Support and Governance 49

13 Conclusions 51

13.1 Key actions 51

Appendix 1 – Bibliography 55

Appendix 2 – Socio-Economic Baseline 57

Introduction 57

Demographics 57

Qualities of the Labour Supply 59 Employment Base 64

Sectoral Strengths 65

Business Base 67

Appendix 3 – Analysis of HSR Terminal Locations 71



1 Executive Summary

1.1 Background

Halcrow has been commissioned by the Glasgow : Edinburgh Collaboration Initiative(GECI) to undertake a study to identify the measures required to ensure that theregional economic benefits to Scotland from High Speed Rail (HSR) can be realisedand maximised.

This study will also feed into Transport Scotland’s work on a business case for HighSpeed Rail Line 2 to Glasgow and Edinburgh. The Transport Scotland business casework is being submitted to the HS 2 Group (national body charged by UKGovernment to take forward HSR2).

This study is based upon extensive consultation with key business representatives,and agencies involved with economic development. It is further informed by a reviewof the experience of the impact of high speed networks in Europe and studies in the

UK. The focus of the study is upon identifying the characteristics of those businesssectors which most benefit from HSR and understanding the other requirements ofsuch businesses if they are to capture the potential that HSR opens up for the benefitof Scotland.

1.2 Introduction

There is clear evidence that HSR can create and facilitate significant economicimpacts and wider benefits. It is over greater distances that decreased journey times,and consequent economic impacts and environmental benefits from modal shift canbe best secured and maximised.

However, maximum benefit will only be achieved where positive action is taken torealise the full potential.

Experience shows that HSR will influence socio-economic trends rather than initiatenew ones. Trends in the economy and labour market will be influenced by much

more powerful forces. Taken in isolation, the economic impacts and immediate widerbenefits of HSR in Scotland will not transform the Scottish economy into a worldclass performer. However, the foundation that world class transport infrastructurewould provide if linked to an aspirational economic development strategy andimplementation plan could facilitate a step change in economic performance. Thecurrent potential for economic development within Glasgow and Edinburgh city



1.3 Wider Economic Benefits and Complementary Actions

Evidence shows that the assessment of wider economic benefits adds between 12%and 25% to economic impacts. However, Greengauge21 has recently estimated thiscan be as high as 50%. Including these wider economic benefits will significantlyimprove the understanding of the impact of transport projects and see astrengthening in the justification of the business case for HSR to Scotland.

Wider economic benefits will only accrue over the longer term. Direct benefits declineover time, indirect benefits will reach a plateau. However the structural changes

which can occur in parallel with HSR will provide continued benefits over manygenerations, derived from wider economic benefits and from complementary actions.These can be maximised through supporting policy and intervention.

1.4 Agglomeration Benefits

Agglomeration is the biggest source of wider economic benefits. This is simply ageographical concentration or cluster of businesses and employees. The benefits

derive from close interaction between businesses, and from an enlarged pool ofspecialist skills, talents and shared support industries within a rapid access area.Generally it is understood that the larger the agglomeration economy, the greater theagglomeration benefits. The clear implication of this is that if the scale of a city andcity region is increased, the agglomeration economies available are increased and asa consequence economic performance is enhanced. However, it is should berecognised that effective density is a more important influence than absolute size – indeed large sprawling areas of low density development fail to show the benefits ofagglomeration. Increasing effective density means increasing the number of peopleand businesses who can access the city effectively and efficiently though high classconnectivity. For example, collaboration and effective connectivity of Glasgow andEdinburgh will increase effective density and size (critical mass) and as aconsequence increase agglomeration benefits. It should be noted that city regionswith high productivity levels will benefit more from agglomeration benefits.

1.5 Glasgow : Edinburgh City Region Economic Context

Glasgow and Edinburgh are key drivers and form the backbone of the Scottisheconomy. Scotland’s two largest cities already make a disproportionate contributionto national wealth creation and are of such significance that their step change inperformance is fundamental to the future prospect of achieving sustainable economicgrowth and building a world class economy in Scotland.



There are undoubtedly European regions which share a similar dual city pattern, but

Glasgow and Edinburgh's proximity and their complementary structures make thepotential of their collaborative impact extremely significant. Economists who havetried to measure this suggest that doubling city and city region size could result in upto 8% productivity increases (Rosenthal and Strange, 2004; Venables, 2006).Understanding the geography of economic development and key industries inScotland will be critical to exploiting the opportunities that will be presented by HSR.A single integrated economic area for Glasgow and Edinburgh will provide theenvironment to maximise the benefits for Scotland.

1.6 Productivity

Glasgow and Edinburgh cities and city regions currently have a production gap withthe top international performers. The primary reason for this gap is their relatively lowproductivity rates. Increasing productivity must be the major focus of any economicdevelopment policy. In the long term, it is productivity which determines the economicsuccess and higher wages and living standards of any highly developed economy. Aworld class transport system is recognised as one of the key enablers for enhancingproductivity and sustainable economic growth, through closer interaction betweencomplementary businesses, and improved use of scarce skills.

High speed rail can facilitate a one-off effect on the level of productivity (along withfocused economic development interventions) by enabling an increase in highervalue businesses that could result in a significant increase in productivity growthrates. If sustained over a 20 year period of development this increased rate of growthcould enable the cities to close the production gap with the top international

performers. World class transport would support a sustained impact on productivitylevel. Transport can support impacts on the growth rate of productivity by stimulatinginnovation through its impact on agglomeration economies, inward investment andinternational trade.

At a time of economic uncertainty an integrated transport network is more importantthan ever to link businesses with markets and people with jobs. Greater integrationand investment is critical to economic resilience and providing the foundation for

accelerating economic growth, productivity and prosperity. Currently, Glasgow andEdinburgh fall behind their international comparators and competitors whosetransport systems and productivity rates are significantly superior. There is a need tounderstand and exploit economic and market trends and opportunities andundertaking focused interventions that exploit their full potential. This could result in apositive economic flow from London and other parts of the UK to Scotland. There is

i l h d i d id b i f i i l



At a city region level, transport, economic and spatial strategies across the UK havenot been as well integrated as in other countries, where concepts of smart growth

and transit oriented development are more deeply embedded. Innovative approachesshould be considered including more streamlined planning regimes and use ofspecial development zones. Nevertheless, there is reason to believe that legislativechanges to the planning system in Scotland will provide an improved policy contextand a more streamlined system. The Planning (etc) Scotland Act 2006 includesprovision for a National Planning Framework for Scotland, larger city region strategicdevelopment plans and a hierarchy of development including strategic development.The current NPF includes high speed rail to the south. The strategic development

plans will include the Glasgow and the Clyde Valley Strategic Development Plan, andthe South East Scotland Strategic Development Plan. This means that two strategiclevel plans will be covering the central belt of Scotland, allowing for greater inter-regional collaboration. Moreover, the establishment of Regional Transport Strategiesand associated partnerships increases the scope for policy integration at the regionallevel, between strategic development planning and strategic transport planning.However, there may be a need to focus on delivery at the national government level,to ensure that strategic transport priorities continue to be aligned with NationalPlanning Framework priorities.

There is evidence that strategic priority areas in both Glasgow and Edinburgh arealigned with accessibility opportunities which will facilitate the flow of benefits fromthe centres across the city regions. Further, the West Edinburgh Planning Frameworkis an example (the only example in Scotland to date) of how planning, transport andeconomic development can be integrated in the spatial context to deliver a strategicdevelopment corridor. These recent strategic developments provide a model for amore joined-up approach in the future.

1.8 Comprehensive and High Class Transport Infrastructure

HSR cannot be viewed in isolation, but part of a comprehensive transport strategy.In this context, there are already enabling infrastructure initiatives which will offerscope for integration and the flow of wider benefits, in particular the Edinburgh TramProject and strategic rail network improvements and linkages in central Scotland.Integration with the wider transport infrastructure ensuring high levels of access from

other modes will maximise distributional benefits. Full integration with the existingand upgraded Scottish transport network particularly in the Glasgow and Edinburghcity regions is fundamental to assuring the benefits of improved connectivity, and thedistribution of economic benefits throughout Scotland. City centre hub and spokemodels will provide for high levels of integration with local and city-region networks.Critical to this will be a fast, efficient point to point link between Glasgow andEdi b h l h h HSR i i d i f b fi ld b



from Scotland’s airports to the European continent, is an essential element ofimproving international positioning and competitiveness. Domestic air travel will be

significantly reduced by HSR. Consequently, airports can develop direct internationalbusiness routes from the freed capacity. However close linkages with Heathrow as amajor transport hub is also important.

1.9 City Centre Stations

Edinburgh and Glasgow city centres are established as major agglomerations ofbusinesses in key growth sectors, and attractive and dynamic city centres will remain

fundamental for supporting sustainable economic growth. It is the cities that act as agateway and magnet for business key sectors and other commercial activities. Welldesigned and strategically focused transport infrastructure, bringing together at onelocation the hubs of local, national and international transport networks, can enhancecity and national accessibility and facilitate major land-use developments. They canimprove the attractiveness of a location for inward investors, facilitate productivitygains as key sectors and higher value activities cluster around major hubs, increaselocal and tourist spending and have a positive impact on the economic outputs andthe wider benefits of the city regions and nations they serve.

Bringing HSR into Scotland’s big cities is therefore critical to maximise economicimpacts and wider benefits and could have a major impact on their identity, imageand behaviour, since their location characteristics (fast high quality access to thecentre of London, other UK cities and the European continent) and developmentvalues would be transformed. Clustering higher value activities of the knowledgeeconomy around city centre hubs, such as financial and business services andcreative industries, would provide further momentum to success achieved over the

last decade. Furthermore, improved connectivity and accessibility would provide amajor boost to city and Scottish business and leisure tourism as well as a significantif short to medium term boost to the construction industry.

Central Station has been identified by Glasgow City Council and its partners as theoption for Glasgow’s station and terminus. Its location is in the heart of the citycentre, close proximity to the International Financial Services District and the bestretail offer outside of London and with easy access to the HE quarter and the Clyde

Waterfront. Furthermore, Central Station provides a unique development opportunityto create a Glaswegian St Pancras. It also sits at the heart of a corridor ofdevelopment opportunities, stretching south-east and north-west of the city, alldirectly served by rail.

In Edinburgh, Waverley and Haymarket have been identified as possible stations forEdi b h W l S i i h f d i i f i l i i h i



A further enhancement of the city centres and their core uses would accelerate

economic development and regeneration opportunities across Scotland.Furthermore, this would integrate and strengthen the Glasgow and Edinburgh role asa fully functional economic region and Scottish economic driver and support globalambitions by improving connectivity and increasing its investment attractiveness.However, it is worth noting that HSR interchanges would need to be connected andintegrated with the existing network and other key gateways through very efficient,attractive and sustainable links to maximise the benefits for the surrounding regionsand Scotland. Strategically located secondary hubs that focus on key developmentsites and areas will play a major role in spatial distribution and the development ofsecondary clusters.

1.10 Land Use Requirements

Assuming the successful implementation of HSR in Scotland and focusedcomplementary measures, the demand for business land uses in Glasgow andEdinburgh is likely to increase significantly over the next 20 years. Distribution landuses are also likely to increase over the same period. In comparison, the demand forindustrial land will continue to decline, although the position is relatively static in theEdinburgh city region. Hence, estates in the West of Scotland in particular withpredominantly industrial land use should be carefully assessed to test theirappropriateness for meeting future demand requirements. Furthermore, anyemployment land identified to be unsuitable to meet the future requirements andunsuitable and unviable for redevelopment should be considered for release. Thedevelopment of mid-urban business parks utilising industrial land closely linked withthe expanding city centres (economically and geographically) within the hub and

spoke model should be considered as a priority. The planning system can affect thisdistribution by managing the redevelopment or change of use of existing land orbuildings, or by guiding the location and form of new development. In both Edinburghand Glasgow this strategic direction to land-use allocation, driven by considerationsof connectivity, can be seen to be a continuation of recent practices.

1.11 UK Connectivity

There is a need to consider the nature and potential of the relationship with London.For key sectors particularly financial services, faster, more regular city centre to citycentre access to London will further boost Scotland’s cost competitive advantages,as much of the growth sector has been in relocations out of high cost London-basedlocations. Other sectors identified the linking with other centres or clusters of activityto be of potential business benefit such as life sciences in Cambridge, digital media



It is clear that changes in governance are needed to support more joined-up actionwithin both national and local government and between national decisions on HSR

routing and local/regional action on complementary measures. Unresolved this couldprove to be the biggest barrier to reaping the full rewards of HSR.

Transport Scotland is not currently a member of the Government’s Strategic Forum,the body charged with driving alignment across Government and its nationalagencies. Current Forum members include Scottish Government, Highlands andIslands Enterprise, Scottish Enterprise, Scottish Funding Council and SkillsDevelopment Scotland. Closer partnership working with Transport Scotland will beessential to maximise benefits during HSR development and implementation.Business will provide a critical role in the development of this relationship.

To be effective governance arrangements need to ensure that stakeholders andpartners have the instruments and powers to achieve change both in securingopportunities and in managing conflicts. They must also ensure that the incentivesand resources to deliver the desired outcomes have legitimacy in the eyes ofstakeholders and the public. The following principles of strong and effectivegovernance must be applied:

• Clear aspirational vision• Clear strategy and objectives• Comprehensive and integrated implementation plan• Clear leadership and communication• Business and technical excellence• Appropriate resourcing for long term management

1.13 Conclusions

It is clear that HSR provides Scotland with a major opportunity for significanteconomic growth and world-class business development. Edinburgh and Glasgowcity centres are at the heart of these businesses, and will drive the Scottish economyforward.

There is evidence however that HSR alone will not deliver these benefits, but

requires the positive support of government, local government and business if theopportunities are to be fully realised.

With many of the tools already developed, and some of the key policies andprogrammes already in place, it is less a question of what, but how these can beimplemented effectively. Twenty-four actions are identified which need to be



2 Introduction

2.1 Background

The Glasgow : Edinburgh Collaboration Initiative through its partners Glasgow CityCouncil, the City of Edinburgh Council and Scottish Enterprise are committed tosecuring HSR service between Scotland, the south, London and Europe.Collaboration Initiative partners are pursuing a joint approach that will result in a stepchange in transport connectivity, whilst maximising the wider economic benefits for

the two cities, and Scotland as a whole. A long term view and position statement onHSR has been established that will help to shape policy and intervention across thetwo cities.

Halcrow has been commissioned by the Glasgow : Edinburgh Collaboration Initiative(GECI) to undertake a study to identify the measures required to ensure that theregional economic benefits to Scotland from High Speed Rail (HSR) can be realisedand maximised.

This study will also feed into Transport Scotland’s work on a business case for HighSpeed Rail Line 2 to Glasgow and Edinburgh. The Transport Scotland business casework is being submitted to the HS 2 Group (national body charged by UKGovernment to take forward HSR2) in October 2009.

The focus of the research is upon identifying the characteristics of the businesssectors that most benefit from HSR and understanding the other requirements ofsuch businesses if they are to capture the potential that HSR opens up for Scotland.

2.2 Consultation

This study is based upon extensive consultation with key business representatives,and transport and economic development agencies. The quality of input and the timededicated by consultees to supporting this study is very gratefully acknowledged byHalcrow and the Glasgow : Edinburgh Collaboration Initiative. This study has beeninfluenced significantly by the views and evidence provided by consultees.

The stakeholder consultation process was designed to identify and explore keyissues, opportunities and constraints faced in delivering and maximising theeconomic benefits of HSR. A series of one-to-one consultation meetings, telephoneinterviews and group discussions with:



There was clearly a consensus amongst consultees. This is best reflected in a

visionary statement:

Scotland needs a modern world class, efficient, comprehensive and integrated transport system to meet the economic challenge of the next 30 years and beyond. HSR is symbolic of a modern, dynamic and accessible state, and combined with good air and supportive local and regional transport links, will help Scotland address its productivity constraints and compete in the European and Global marketplace.

The study was further informed by a review of the experience of the impact of highspeed networks in Europe and studies in the UK.

2.3 Context

Large infrastructure projects are at the heart of economic development locally,regionally and nationally. The evidence through Halcrow’s professional experienceon projects such as the Great Western Main Line (Economic Impact Assessment) inthe UK demonstrates that high quality rail infrastructure facilitates economicdevelopment. Such infrastructure if designed and managed effectively can makesignificant tangible contributions, not least to economic output. Through facilitatingthe efficient movement of goods, services and people, rail infrastructure can alsodeliver considerable intangible benefits, such as productivity improvements,increased inward investments and wider sustainability impacts such as low per capitacarbon emissions.

Learning lessons from new rail infrastructure projects internationally and in the UK isvital. Experience demonstrates that new railway stations can bring significanteconomic additionality at a local level, not least by developing a hub of neweconomic activity, creating demand for workforce and other resources, includingland. This can further result in a positive impact on the value of the resources.

2.4 Network Rail Business Case

Network Rail has unveiled the business case for a new high speed route from thecentre of London to Scotland. The route would link the centres of London,Birmingham, Manchester, Liverpool, Glasgow and Edinburgh. Travel times betweenLondon and Scotland would be reduced to a little over two hours.

Network Rail’s analysis uses the latest government guidelines and modelling for



experience, including research by Greengauge21 and Network Rail. It is over greaterdistances that decreased journey times, economic impacts, environmental benefits

from modal shift can be best secured and maximised. Scotland’s aspirations aredriven by a different balance of priorities from other parts of the UK, due to thepotentially significantly higher benefits.

2.5 Maximising the Benefits

HSR can facilitate greater interactions between key businesses in different markets.This could result in a positive economic flow outward from London, creating powerful

regional partners within the UK economy. Consequently, Scotland’s immediateinvolvement in phase 1 of HSR is of fundamental importance.

Glasgow : Edinburgh Collaboration Initiative and its partners recognise that thebenefits are greater when journey time reductions are maximised, and therefore lookfor a frequent service from both cities, offering journey times around two and a halfhours or less to London, with comparable reductions in journey times to other cities inEngland.

However, this study is not about identifying or quantifying the economic impacts ofHSR, but how to both realise and maximise them. This involves considering thelocational and land-use requirements of businesses best able to take advantage ofHSR, and how stakeholders and partners can act decisively to maximise widerbenefits.

Experience shows that HSR will influence socio-economic trends rather than initiatenew ones. Trends in the economy and labour market are determined by much more

powerful forces. The wider benefits of HSR in Scotland, whilst significant, will nottransform the Scottish economy into a world class performer. However, thefoundation provided by world class transport infrastructure, if linked to an aspirationaleconomic development strategy and implementation plan, could facilitate a stepchange in performance. The current economic development potential in Glasgow andEdinburgh city regions in particular should be a focus for Scotland. The movementtowards a single economic area and integrated labour market for Scotland’s twolargest cities, linked to world class transport infrastructure, can provide the basis for

transforming Scotland economically. HSR can facilitate major new opportunities witheconomic and spatial distribution benefits locally and nationally.

However, maximum benefit will only be achieved where positive action is taken torealise the full potential, by providing the locations, land, and connectivity that keysector businesses need in order to thrive.



3 Impacts and Benefits

3.1 Wider Economic Benefits and Complementary Actions

The traditional view has been that additional benefits are not expected to be veryimportant in the case of HSR investment1

because freight transport does not benefitfrom HSR, and because service industry economic activity may concentrate in coreurban areas. However, this has been challenged by the OECD Joint TransportResearch Centre, which cites more recent research2

as an indication that wider

benefits, such as agglomeration, may be greater for sectors such as financialservices, and that it is erroneous to conclude that scale economies, agglomerationeconomies and productivity impacts are limited to manufacturing and freighttransport.

Reduction in regional inequalities is invoked in support of HSR investment, butpotential difficulties in the spatial distribution of benefits have been highlighted.However, reducing trade or transport costs is seen as a decisive factor in the spatiallocation of economic activities, by affecting the balance between dispersion andagglomeration. Also, European regional policies have the explicit aim of reducingregional inequalities by improving transport infrastructure. Nevertheless, it is notclear that this always facilitates convergence, and HSR invariably favours ‘mainnodes’ rather than ‘minor nodes’ or locations between nodes.

Large infrastructure projects are fundamental to economic development at the local,regional and national level, particularly through the prioritisation of larger transportprojects. Traditionally, transport investment was based on assumptions and analysis

that clearly underestimated economic impact and wider benefits. However, a newmethodology has been developed that enables a measure of the value of widereconomic benefits. Research by the Centre for Cities suggests that focused transportinfrastructure projects could make a significantly higher contribution to the economy,particularly when there is a focus on clusters of key sectors and high value activities.

Evidence shows that the assessment of wider economic benefits adds between 12%and 25% to economic impacts. However, Greengauge21 has recently estimated3 this

can be as high as 50%. Including these wider economic benefits will significantlyimprove the understanding of the impact of transport projects and see astrengthening in the justification of the business case for HSR to Scotland.



Wider economic benefits will only accrue over the longer term. Direct benefits decline

over time, indirect benefits will reach a plateau. However the structural changeswhich can occur in parallel with HSR will provide continued benefits over manygenerations, derived from wider economic benefits and from complementary actions.These can be maximised through supporting policy and intervention.

The influential Eddington report concluded that transport investment should focus onsupporting economically vital locations such as congested urban areas, inter-urbancorridors, ports and airports. The consideration of previously hidden wider economicbenefits including agglomeration effects and land values reinforces SACTRA andEddington’s focus on cities, city regions and important inter-urban corridors which willenhance the case for HSR. Furthermore, particular high value sectors are moreresponsive to transport improvements. This will include some of Scotland’s keysectors such as financial and business services and creative industries.

3.2 Potential Benefits for Scotland

Wider economic benefits that support the case for HSR to Scotland include:

Efficiency gains and improved distribution

HSR improvements that will deliver time, cost, frequency, quality and reliabilitysavings can significantly contribute to business improvement and economic impact.Gains include both efficiency improvements with the supply and distribution of lowercost goods and services and effectiveness improvements.

Business and economy

HSR can facilitate significant impact on business efficiency and the economy throughproductivity improvement, agglomeration benefits and the narrowing of theinternational production gap. The impact of productivity growth rates will assist thepursuit of sustainable economic growth and an increase of living standards. In termsof wider economic benefit, it is estimated that 10 new direct rail jobs will support 14additional induced and indirect jobs, and that the rail industry will invest £1.30 forevery £1 of public investment4.

Labour mobility

Increased workplace accessibility and expanded labour market catchment areas. Aslabour supply and skills availability are two of the most important factors in businesslocation, HSR and improved transport can increase and improve labour supply.

Land development and investment



important criteria identified by Invest UK. As attractiveness increases there would beopportunities to encourage larger numbers to live and work in Scotland.

Regeneration and social inclusion

The links between transport, planning, economic development, regeneration andsocial inclusion are essential to maximise distributional benefits. Improvements topublic transport services can help promote access to employment and services tovulnerable groups, particularly those without private transport. The introduction ofhigh speed rail could have a profound effect on the opportunities for achievinggreater participation levels, but only if the developments are integrated to ensure that

need and opportunity are firmly linked. Clear opportunities to reduce poverty anddeprivation would be presented.

Environmental

HSR can deliver these economic benefits with limited environmental impact. Itscarbon footprint is better than either road or air travel, particularly if electricity isgenerated from low carbon sources. Electric traction is potentially independent of oilsupplies, which road transport is currently not, and air transport is unlikely to be in the

foreseeable future. An ability to transport a significant proportion of freight andpassengers by electric traction will therefore make the UK economy less vulnerableto disruption from changes in the price/supply of oil. Capacity released onconventional lines will reduce overcrowding, improve reliability and enable moreservices to operate from local stations, and more freight services. It will also enableconventional lines to take passenger and freight traffic from the road network.

3.3 Agglomeration Benefits

Agglomeration is the biggest source of wider economic benefits. This is simply ageographical concentration or cluster of businesses and employees. The benefitsderive from close interaction between businesses, and from an enlarged pool ofspecialist skills, talents and shared support industries within a rapid access area.

Generally it is understood that the larger the agglomeration economy, the greater theagglomeration benefits. So if the scale of a city and city region is increased, theagglomeration economies available are increased and consequently economic

performance is enhanced. However, it is should be recognised that effective densityis a more important influence than absolute size – indeed large sprawling areas oflow density development fail to show the benefits of agglomeration.

Increasing effective density means increasing the number of people and businesseswho can access the city effectively and efficiently though high class connectivity For



However, the main effects of HSR on regional economic distribution are viewed asmixed. There is a perceived tension, between the benefits of the agglomeration

advantages arising from lowered costs and greater competition, with the widerlocational choices offered to businesses which may offer more dispersed patterns ofactivity and the consequential ‘two way road’ that is opened up, which allows astronger region to penetrate a weaker region, increasing regional inequalities.Furthermore, ‘localisation’ effects of transport (i.e. economic benefits derived fromincreasing the proximity of businesses to each other) fall off quite rapidly withdistance, with little or no effect beyond 50 km, and the most significant effects muchcloser than this.

In terms of inter-regional connectivity and business/spatial relationships, two viewsare cited. Firstly that the ‘status quo’ of London economic dominance should berecognised, and that centres originally grew because of the quality of existing links tolarger centres. Secondly, that HSR provides an opportunity for a ‘new economicgeography’ rather than just replacing radials to London. Research5

indicates theimportance of cities in regional growth, but their productivity relative to national andregional hinterlands tends to be lower than European collaborators; partly due to lackof connectivity at sub-regional levels. This is used to support the model

6of

‘functional spatial clustering’. This considers the scope for ‘super clusters’ createdfrom existing ‘sub clusters’ centred on locations including London and the Midlands(potentially leading to ‘urban England’ agglomeration following the Tokyo-Osakamodel) and of course the central belt of Scotland.



growth, even though direct benefits are highly centralised and focussed on keylocations and sectors.

1Puga (2002), Duranton and Puga (2001), Vickerman (1995, 2006), Vives (2001) as cited in

De Rus, OECD Joint Transport Research Centre discussion paper 2008-16, revised October2008.2

Graham (2007) cited by De Rus, ibid (2008).3

Complementary Measures to Facilitate Regional Benefits from High Speed Rail, Urban &Regional Policy, June 2009.4

UK Rail, A Case for Investment, Inversys, February 2009.5

Parkinson, cited in reference 3.5Wong (2006), cited in reference 3.

7Department for Transport (2006) cited in reference 3.



4 Lessons from International HSR

4.1 International Experience

HSR is now widespread with major networks developed in France, Netherlands,Germany, Italy, Spain, Japan and Taiwan with further development planned in theUS, China and Brazil and elsewhere.

Evidence has shown that HSR can generate extensive revenue and result in major

reductions in domestic road and air travel. For example, the Madrid to Seville routehas secured 90% of the air market between these two cities, although the passengernumbers have led to some to conclude that the route is not viable, with some 5mtrips per annum as opposed to the widely-held assumption that 9m-15m passengertrips per annum are required8. It is now estimated that the TGV South-East holds91% of the air/rail market.

The distance of the service offered also provides a different business context. Forexample, the medium-distance service offered in Spain by Renfe (96 miles on

average with government-set fares, including Madrid-Toledo, 30 minutes for 44miles, 22 trains per day) requires government subsidy, whereas the long-distanceroute (345 miles on average with market fares) is in fact profitable9. In Taiwan theGovernment is currently considering taking HSR back into public ownership as aresult of significant operating losses accumulated by the current operator.

High speed rail has acted as a catalyst for economic development and regeneration.As a result of AVE, Llieda in Spain has seen a 15% increase in tourism and as a

result has secured €150 million of investment. When the TGV in France waslaunched, office space in Part-Dieu (station location) increased by 43%. InMaastricht, office rental values are now the highest in the region particularly aroundthe Thalys HSR station. The European Commission has estimated that HSR as awhole would add 0.25% to GDP and increase employment by 0.11%

Evidence is emerging from international experience that HSR can lead to major non-transport benefits, provided there is a commitment to secure them, and is supported

by policy and intervention at a national, regional and local level. In terms of widereconomic benefits, research indicates that benefits would not be expected to exceed10%-20% of assessed impact, or influence GDP by more than 2%. However, otherstudies point to greater wider benefits (including 40% in the Netherlands), and theoverall conclusion is that the benefits (economic, environmental and wider) that canbe anticipated are variable and dependent upon regional factors10. It is widely



4.2 France, Paris to Lyon – South-East TGV

Development of the TGV network has led to the evolution of Lyon into a city whichsupports a Euro regionlinking Paris with SouthFrance, Switzerland, andsoon, Turin. TGV hashad a significant impacton tourism in theBurgundy region. TheEuropean Commissionestimated that the HighSpeed Rail as a wholewould add 0.25% to EUGDP and 0.11% toemployment over 25years.

Lyon has prospered with

the arrival of TGV. Therouteing of TGV services to a newly built station at Part-Dieu has acted as thecatalyst to redevelopment of the area as a commercial centre. Part-Dieu is nowconsidered to be a second city centre for Lyon. Commercial developments includemajor shopping malls and office developments. Between the opening of TGV in 1982and 1990, office space in Part-Dieu increased by 43% (equivalent to 250000 sq m).However, it should be noted that the majority of firms that have relocated to Part-Dieuwere already based in

Lyon. Therefore, theimpact of TGV hasprimarily led to an intra-urban distribution ofeconomic activity,rather than inter-regional. Around one-third of firms which

relocated stated thatTGV was the mainfactor in locationalchoice. TGV hasallowed Lyon-basedfirms access to Paris



4.3 Netherlands, Thalys Corridor

The Thalys high speed rail route hasconnected cities in The Netherlands toBelgium, France, Germany and Great Britainsince 1996. By 2020, the network is expectedto lead to GDP uplift of 0.10%. This couldrelate to the boost the tourism industry hasbenefited from since the advent of Thalys, asmany journeys on the network are associatedwith holiday and leisure trips.

Thalys has had a positive impact oneconomic activity on the towns in which HSRstations are located. In general there hasbeen an increase in property values, rents and real estate prices, the number of jobsavailable and the presence of businesses in the vicinity of Thalys stations. InMaastricht, office rental prices have increased faster than in other similar cities,making them the most expensive in the region. This is attributed to the nearby Thalys

station. Similarly, the area around the Thalys station in The Hague has gained from anumber of major developments, which have been sparked by the attractiveness ofaccessibility to the Thalys network. Around 80,000 sq m of office development,15,000 sq m of retail space, 565 apartments and 1300 car parking spaces have beendeveloped. Interviews conducted with office managers around stations in The Hagueindicate that proximity to Thalys was a key factor in choice of location.

It is important to note however,

that as with the impact of TGV inother countries, most newdevelopments represent intra-urban rather than inter-regionalredistribution of economicactivities.

The modal shift impacts of

Thalys link to The Netherlandsshould not be underestimated.The number of passengerstravelling between France andThe Netherlands via Thalys isestimated at 700,000. This



4.4 Spain, High Speed Rail Network – AVE

The introduction of the country’s high speed rail network (AVE) in 1992 revolutionisedrail travel in the country stitching together the regions of Spain with €100 billion ofhigh speed rail infrastructure.

The growth of the AVE is a havinga significant impact on life inSpain. Tourism has risendramatically in towns and cities

located close to an AVE route, forexample the town of Llieda in thenorth-east of Spain has seen a15% increase in tourism, and asresult has received over €150million of investment in itsinfrastructure and local economysince 2006.

Historically Spain has been acountry where many nationals choose to live and work within their local region, thearrival of the AVE has seen a significant increase in commuter travel (over 150km)since 2001, suggesting that improvements in accessibility allow people to travelfurther for work, thus increasing the size of labour markets and improving overallprosperity.

The economic benefits associated

with the AVE have not been limitedto Spain’s major cities. Thedevelopment of the AVE meansthat the town of Ciudad Real isnow only 50 minutes away fromMadrid and easily commutable. Asa result the population hasincreased by 12% since 2002, with

property prices increasing atalmost twice that of the nationalaverage.

AVE has lead to a massive modalshift from plane and car to rail. Passenger numbers on domestic flights fell 20% in



4.5 Taiwan, High Speed Rail Network

The Taiwanese Government hasbuilt a 345 km high speed rail linkconnecting the northern andsouthern regions of the country.

The HSR track crosses 14 counties,68 townships, 32 urban planningdistricts and has a land area of over2,000 acres. After beginning publicoperation in January 2007, the HSRhas laid a solid foundation forTaiwan's continued development inthe 21st century. In particular, theHSR is viewed as a symbol ofeconomic and technological exchange in the private sector between Japan andTaiwan.

The development of the HSR in Taiwan has revolutionised the way people live andwork in the country. It connects seven metropolitan areas in Taiwan, meaning that itis possible to travel from Tainan to Kaohsiung, Chiayi and Taichung in less than onehour, exponentially increasing the population’s spatial range for economic (activity)commuting.

The regional indirect economic benefits in terms of inward investment, job creationand rise in property prices of the HSR on various regions have been inconsistent.

The economic structure of the Northern and Central regions of Taiwan, which boastsof centres scientific research and for the production of other knowledge services, hasmaximised the indirect impacts of this vital infrastructure. However, the southerneconomy, which lacks a knowledge intensive economic structure, has shown nosigns of the spontaneous innovative processes that would facilitate the economictransformation. This said, the government is of the view that bringing economicallyprosperous areas closer to struggling economic regions will result in long term

economic gain for the Taiwan.

HSR has had a significant impacton the economic growth of towns / cities located close to HSRstations. Stations were deliberatelylocated in town centres in order to



8Russ and Nash 2007, cited in High Speed Rail Investment, Overview of Literature, Network

Rail9Capturing the Value of High Speed Rail, presentation by Renfe to High Speed Rail Summit,

9/9/09.10

SACTRA (1999), Oosterhaven and Elhorst (2003), Brocker (2004) cited in High Speed RailInvestment, Overview of Literature, Network Rail.11

Greengauge (2006) – European Regeneration Experience;Lawyer (2002) – Fuel Efficiency of Travel in the Twentieth Century;European Commission (1997) - The Likely Macro-economic Benefits and EmploymentImpacts of Investments in Trans-European Transport Network;Kamel et al (2008) – The Non-Transport Impacts of High Speed Trains on Regional EconomicDevelopment;Mannone V (1997) - Gares TGV et nouvelles dynamiques urbaines en centre ville: Le cas desvilles desservies par le TGV Sud-Est;12

Steer Davies Gleave (2004) - High Speed Rail: International Comparisons;Ettema et al (2006) - Monitoring the Effect of the Thalys High Speed Train;Greengauge 21 (2006) – High Speed Trains and the Development and Regeneration ofCities;Willigers (2006) – Impact of High Speed Railway Accessibility on the Locational Choices of

Office Establishments;South East England Development Agency (2008) – HST Impact Study.13

The Economic Effects of High Speed Rail Investment October 2008- Ginés DE RUSUniversity of Las Palmas SpainHigh Speed Trains and the Development and Regeneration of Cities, June 2006-Greengauge 21Spain's high-speed train the envy of Obama, April 2009- Valencia Life (quoting the WallStreet Journal



5 Economic Context

5.1 Economic Trends and Drivers

Global competition is strong and cities and city regions are increasingly competing toattract residents, tourists, businesses and investors in an international market place.The most successful destinations and locations tend to have certain commonqualities. They have a distinct identity, are vibrant, accessible and easy to movearound. They offer a real quality of life, experience and opportunity. Furthermore, toachieve longer term success they need to adapt to changing circumstances.

Attractive and dynamic city centres are fundamental for supporting sustainableeconomic growth. High quality connectivity and accessibility through world classtransport infrastructure can enhance economic prosperity by acting as a gateway andmagnet for business, key sectors and other commercial activities. The city centre is,almost by definition, at the heart of the local, regional and national transportnetworks, both because historically the networks have been built to serve the city, butalso conversely because the existence of transport hubs has created the conditions

for business growth. Attractive, well designed and strategically focused transportinfrastructure can enhance city and national accessibility and act as a facilitator formajor land-use developments. They can improve the attractiveness of a location forinward investors, facilitate productivity gains as key sectors and higher valueactivities cluster around major hubs, increase local and tourist spending and have apositive impact on the economic outputs and the wider benefits of the city regionsand nations they serve.

It is important to understand the role and contribution of the Glasgow and Edinburgheconomies and their transport hubs towards achieving wealth creation anddistribution. It is also important to consider the potential of HSR for facilitating widereconomic benefits to city centres, city regions and the Scottish economy.

5.2 Glasgow : Edinburgh City Region Economic Context

Glasgow and Edinburgh are key drivers and form the backbone of the Scottish

economy. Scotland’s two largest cities already make a disproportionate contributionto national wealth creation and are of such significance that a step change in theirperformance is fundamental to the future prospect of achieving sustainable economicgrowth and building a world class economy in Scotland.

Combined, the Glasgow and Edinburgh city regions account for 63% of Scotland’s



city. Glasgow city centre is now home to almost a quarter of a million employees.GVA per capita grew at a rate double the rest of Scotland’s and 50% above the UKaverage. Furthermore, the growth rates of Edinburgh city during this period wereamongst the best in Europe. Glasgow and Edinburgh has become the focus forScotland’s higher value knowledge economy and creative industries jobs.Interestingly, the political sector, i.e. the public sector and activities strongly shapedby state intervention, plays a more prominent role in Glasgow than in Edinburgh.However, labour productivity rates remain relatively low in international terms andtackling this issue remains a priority.

Glasgow and Edinburgh do not yet form a fully integrated economic area. In

particular, the two city region labour markets are still relatively distinct. Only about3% of the respective workforces commute from the Glasgow city region to Edinburghor vice versa. A larger and more integrated labour market could offer more productiveand more specialised jobs. Having reached what could be described as a criticalmass, the two economies would be more balanced, less prone to business andeconomic cycles and better protected from external shocks. In short, a moreintegrated labour market and economy would provide greater economic resilienceand increase potential opportunities. Furthermore, Scotland’s economic potential

would increase. In order to achieve this, both Glasgow and Edinburgh city regionswill need to place greater emphasis on integration by coordinating economicdevelopment and fundamentally by improving connectivity, accessibility and transportinfrastructure quality.

There are undoubtedly European regions which share a similar dual city pattern, butGlasgow and Edinburgh's proximity and their complementary structures make thepotential of their collaborative impact extremely significant. Economists who have

tried to measure this suggest that doubling city and city region size could result in upto 8% productivity increases (Rosenthal and Strange, 2004; Venables, 2006).Understanding the geography of economic development and key industries will becritical to exploiting the opportunities that will be presented.

Understanding the geography of economic development and key industries inScotland will be critical to exploiting the opportunities that will be presented by HSR.A single integrated economic area for Glasgow and Edinburgh will provide theenvironment to maximise the benefits for Scotland.

5.3 Productivity

Glasgow and Edinburgh cities and city regions currently have a production gap withthe top international performers. The primary reason for this gap is their relatively low

d i i I i hi b h j f f i



level. Transport can support impacts on the growth rate of productivity by stimulatinginnovation through its impact on agglomeration economies, inward investment andinternational trade.

At a time of economic uncertainty an integrated transport network is more importantthan ever to link businesses with markets and people with jobs. Greater integrationand investment is critical to economic resilience and providing the foundation foraccelerating economic growth, productivity and prosperity. Currently, Glasgow andEdinburgh fall behind their international comparators and competitors whosetransport systems and productivity rates are significantly superior. There is a need tounderstand and exploit economic and market trends and opportunities and

undertaking focused interventions that exploit their full potential. This could result in apositive economic flow from London and other parts of the UK to Scotland. There isan opportunity to close the production gap and provide a basis for internationalcompetitiveness and first mover advantages.



6 Policy Context

6.1 Strategic Framework

A full strategic and economic context for the development of High Speed Rail inScotland is essential to fully understanding Glasgow and Edinburgh city regions’economic and regeneration role in Scotland and the potential contribution of HSRhubs towards delivering a step change in economic performance.

6.2 Scottish Government

The Government Economic Strategy recognises that the drivers of sustainableeconomic prosperity in Scotland are businesses, key sectors and the knowledgeeconomy. A world class transport system is recognised as one of the key enablersfor enhancing productivity and sustainable economic growth. It also recognised thatgreater collaboration between Glasgow and Edinburgh city regions is required todevelop a metropolitan region with the critical mass and quality of assets that cancompete effectively in a global market.

The Scottish Government is supportive of HSR and it is included as an aspiration inthe new National Planning Framework. This appears to have cross party support inScotland. The Scottish Parliament’s Transport Infrastructure and Climate ChangeCommittee concluded that ‘probably the single most important message’ of its recentreport is that it is ‘imperative that the development of high speed rail services in theUK must include Scotland as a component of any plans from the outset.’…’theScottish Government should, as a priority, enter dialogue with the UK Government to

consider how the idea of a high speed rail line to Scotland might be taken forward’

Investment should focus on making connections significantly more integrated,effective, efficient, faster, reliable, safe and affordable whilst maximising theopportunities and benefits for employment, business and the economy. Improvedconnectivity is viewed as an opportunity to increase economic participation levels,increased social inclusion and sustainable economic growth for Scotland. It is alsoseen as a real opportunity to have an impact on the climate change agendas by

reducing emissions to tackle the issues of air quality and health improvement.

Scottish Enterprise (SE) and Highlands and Islands Enterprise (HIE) continue to workclosely with Scottish Government particularly in relation to the long term transportinfrastructure investment plan to ensure that the future needs and opportunities ofbusiness influence developments. SE and HIE prioritise projects to increase the



the most important areas of common interest, such as key sectors, connectivity andinternational profile.

A well designed, accessible, vibrant city is essential for the attraction and retention ofa skilled workforce and business investment. A well developed transportinfrastructure, including intra-regional transportation and links to key businesslocations are crucial to the development of the cities and the wider city regions.Modern cities require competitive physical and electronic connectivity if they are tocompete effectively. For Glasgow and Edinburgh to improve their relative positionand compete at a world class level, it has to ensure that its connectivity for businessis world class, enabling fast, efficient and cost competitive in relation to the

movement of people, information and goods.



7 Transport Network

7.1 Connectivity Context

Glasgow and Edinburgh’s recent attractiveness for inward investment has increasedin recent years, not least by strengthening of its economic assets, including its majortransport interchanges and infrastructure, which bring people to the cities and openup markets for the city region and Scottish economy. There is scope to furtherimprove the strengths and economic value of these interchanges. Being at the heartof Scotland’s transport network, the enhancement of supporting facilities and a step

change improvement of its major transport interchanges are essential to achieve thegoal of establishing a world class identity and image of Glasgow and Edinburgh asthe gateways to Scotland and economic prosperity.

7.2 International Accessibility

In a globalised economy, accessibility is a key factor in the pursuit of competitiveadvantage and sustainable economic prosperity. Without good and efficient

accessibility, a city region cannot secure economic development benefits aseffectively and is less attractive as a destination and location.

Renowned international economists, BAK Basel Economics have identified twodifferent indicators of accessibility: global accessibility and continental accessibility.They believe the accessibility of a region is driven by two factors: geography andinfrastructure. With Glasgow and Edinburgh in a position at the periphery of WesternEurope that is a relative disadvantage, improving accessibility and connectivity must

be a key policy aim.

For a region’s global accessibility, geographical location is viewed as less importantthan its connections to one of the large world airports. The global accessibility of theGlasgow city region is assessed of average quality. It is less developed compared toEurope’s major metropolitan regions, but assessed as better than that of severalmedium-sized city regions, including Edinburgh. It is not surprising that city regionswith large international hubs such as London, Frankfurt, Amsterdam and Paris rank

highest. Taking geographical location into account, Glasgow’s position is a significantachievement. However, its relative position has declined compared to its competitorsand Edinburgh. For Edinburgh to improve its global accessibility, it would need toimprove its connections to global airports, especially Heathrow.

BAK Basel Economics view the accessibility of Glasgow and Edinburgh to the



modes will maximise distributional benefits. Full integration with the existing andupgraded Scottish transport network, particularly in the Glasgow and Edinburgh cityregions is fundamental to assuring the benefits of improved connectivity, and the

distribution of economic benefits throughout Scotland. City centre hub and spokemodels will provide for high levels of integration with local and city-region networks.Critical to this will be a fast, efficient point to point link between Glasgow andEdinburgh; although HSR is not a requirement, as few benefits would be accruedfrom high speed operation over such a short distance.

A coherent approach and integration of policy and intervention is essential. It willprovide a wide range of opportunities for extending links across the whole of

Scotland including Dundee, Aberdeen and Inverness. Feeder services can beenhanced as required, linking other parts of Scotland and its international airportswith the HSR network. This regional network needs to deliver improved speeds,increased frequency and capacity and an improved working environment tocomplement the HSR network itself and spread the benefits across Scotland.

Dispersing HSR passengers is a significant challenge. Network Rail notes current(2007) rail demand to London as Glasgow 0.6 million and Edinburgh 1.1 million

passenger journeys pa. By 2030, with a new HSR line, this could rise to Glasgow 4.2million and Edinburgh 6.5 million. As Glasgow Central currently handles around 21million passengers a year, accommodating an additional 3.6 million represents 17%more passengers which is a challenge. At Waverley the proportional increase isgreater; accommodating 5.4 million extra passengers in a station which currentlyhandles 16 million, an increase of 33%. At Haymarket, currently handling 1.6 mpassengers a year, the contrast is starkest of all.

Data from Greengauge21 suggests that around 55 to 60% of the HSR passengers atEdinburgh would be from a wider area of Scotland. Edinburgh would be the principalinterchange for onward travel to much of Scotland, although Glasgow will be theinterchange for west and south-west. This suggests that the rail network centred onEdinburgh could have to accommodate in the order of 2.5 million extra passengersper year making connections with HSR services. The Strategic Transport ProjectsReview has already approved a range of enhancements to rail services centred onEdinburgh and Glasgow through the Edinburgh-Glasgow Improvement Plan. Thisincludes increase capacity between Edinburgh and Glasgow, and also from

Edinburgh to the north over the Forth including Aberdeen, Dundee and Inverness. Inaddition the project to reopen the link between Airdrie and Bathgate provides furthercapacity across the central belt. Part of the strategy will deliver two fast serviceseach hour between Edinburgh and Glasgow city centres. It is beyond the scope ofthis study to quantify the specific increase in travel that HSR will generate withinScotland However it is noted that the enhancements approved in the STPR are



of global connections, particularly new business routes from Scotland’s airports to theEuropean continent, is an essential element of improving international positioningand competitiveness. As a result of the transfer of domestic air travel from plane to

train, domestic air travel will be significantly reduced to those regions (and principallyLondon) served by HSR, although it is to be expected that domestic services fromInverness and Aberdeen will be less affected due to the greater distances involved.Edinburgh, Glasgow and Prestwick Airports will in any case be better utilised asinternational hubs rather than commuter airports for London, and airports can utilisefreed capacity to develop direct international business routes.

However close linkages with Heathrow as a major transport hub will remain important

to complement the direct international services from Scottish Airports. Considerationmust be given to the most effective way of ensuring connectivity by HSR with thisinternational hub and gateway to assure global connections for business.



8 Policy and Intervention

8.1 Integrated Policy and Intervention

A key to a sustainable long term future is successful integration between economicdevelopment, land-use, regeneration and transport planning. Integration betweenpolicies and interventions would help to align land-use and infrastructure withbusiness and jobs, improving city and city region labour markets. A focus is requiredon key themes such as sustainable economic growth, global competitiveness, keysectors and growth businesses, regeneration and spatial distribution, environmental

improvement and quality of life.

At a city region level, transport, economic and spatial strategies across the UK havenot been as well integrated as in other countries, where concepts of smart growthand transit oriented development are more deeply embedded. Innovative approachesshould be considered, including more streamlined planning regimes and use ofspecial development zones. Nevertheless, there is reason to believe that legislativechanges to the planning system in Scotland will provide an improved policy context

and a more streamlined system. The Planning (etc) Scotland Act 2006 includesprovision for a National Planning Framework for Scotland, larger city region strategicdevelopment plans and a hierarchy of development including strategic development

Two strategic level plans will be covering the central belt of Scotland, allowing forgreater inter-regional collaboration. Moreover, the establishment of RegionalTransport Strategies and associated partnerships increases the scope for policyintegration at the regional level, between strategic development planning and

strategic transport planning. However, there may be a need to focus on delivery atthe national government level, to ensure that strategic transport priorities continue tobe aligned with National Planning Framework priorities.

8.2 The National Planning Framework

The first National Planning Framework (NPF1), published in 2004, set out a strategyfor Scotland’s development to 2025. The preparation of a second National Planning

Framework (NPF2) is seen as providing an important vehicle. It guides Scotland’sdevelopment to 2030, setting out strategic development priorities to support theScottish Government’s central purpose – sustainable economic growth. The Planningetc. (Scotland) Act 2006 puts this and future iterations of the National PlanningFramework on a statutory footing.



as a ‘national development’, including the consideration of connections to the rest ofthe rail network and effects on communities.

The National Planning Framework Strategy Map 14



Development Plans, which cover multiple local authority areas, placing spatialplanning within a regional context and allowing integration with other regional plansand policies.

Strategic Development Plans are to be prepared for Scotland’s four largest city-regions, Glasgow and the Clyde Valley and the wider Edinburgh City Region inparticular. They will form the ‘upper tier’ of the development plan framework.

The Strategic Development Plan Areas, and City Regions 15

This provides for a Central Belt of Scotland with two Strategic Development Plans forthe bulk of the area, including the critical corridors. This will have three mainbenefits.



There is evidence that strategic priority areas in both Glasgow and Edinburgh arealigned with accessibility opportunities which will facilitate the flow of benefits fromthe centres across the city regions. Further, the West Edinburgh Planning Framework

is an example (the only example in Scotland to date) of how planning, transport andeconomic development can be integrated in the spatial context to deliver a strategicdevelopment corridor. These recent strategic developments provide a model for amore joined-up approach in the future.

14National Planning Framework for Scotland 2

http://www.scotland.gov.uk/Resource/Doc/278232/0083591.pdf15

Strategic Development Plans in Scotland: The Way Forwardhttp://www.scotland.gov.uk/Resource/Doc/212607/0084258.pdf



9 City Centres

9.1 City Centre Stations

Edinburgh and Glasgow city centres are established as major agglomerations ofbusinesses in key growth sectors, and attractive and dynamic city centres will remainfundamental for supporting sustainable economic growth. The cities act as a gatewayand magnet for business key sectors and other commercial activities. Well designedand strategically focused transport infrastructure, bringing together at one locationthe hubs of local, national and international transport networks, can enhance city and

national accessibility and facilitate major land-use developments. They can improvethe attractiveness of a location for inward investors, facilitate productivity gains askey sectors and higher value activities cluster around major hubs, increase local andtourist spending and have a positive impact on the economic outputs and the widerbenefits of the city regions and nations they serve.

Bringing HSR into Scotland’s big cities is therefore critical to maximise economicimpacts and wider benefits and could have a major impact on their identity, image

and behaviour, since their location characteristics (fast high quality access to thecentre of London, other UK cities and the European continent) and developmentvalues would be transformed. Clustering higher value activities of the knowledgeeconomy around city centre hubs, such as financial and business services andcreative industries, would provide further momentum to success achieved over thelast decade. Furthermore, improved connectivity and accessibility would provide amajor boost to city and Scottish business and leisure tourism as well as a significantif short to medium term boost to the construction industry.

Recent research has challenged the traditional view that the freight and distributionindustries are the only beneficiaries of agglomeration, and that such wider benefitsare most evident in sectors such as financial services. Both Glasgow and Edinburghare recognised as major centres of financial and business services. Both cities havepotential HSR terminus sites within reach of areas of prime demand for office space,which also coincide with pockets of long-term decline and urban blight which are inneed of regeneration.

However, experience has demonstrated that linkages between business andtransport hubs with support can create limited benefit from close proximity.Consequently, the clustering of higher value businesses and industries around HSRstations in city centres needs to be strongly supported to generate significantagglomeration benefits.



Glaswegian St Pancras. There have been recent improvements in this part of the citycentre, especially development along the river front in both directions. There is anopportunity to improve the established urban structure around the station area. There

are pockets of development land around the station area. Development on this sitewould have a significant impact on the city's identity, due to the central location.

The station opened in 1879 and has historic value. The internal space and prominentnorth elevation are distinctive; the main entrance has an elaborate front elevation thathides the impressive high structure behind. This façade is a prominent landmark.Capacity issues at Central Station high level would need to be resolved. Howeverthere is substantial space behind this façade, including redundant pillars from a

bridge deck over the Clyde that has long been removed, to expand the station areathough at a cost. It sits at the heart of a corridor of development opportunities,stretching south-east and north-west of the city, all directly served from GlasgowCentral by rail, as well as services onward to the Clyde coast.

9.3 Waverley Station, Edinburgh

I Edi b h W l d H k ibl HSR i W l S i



Any new development at Waverley would be severely restricted by the existing tighturban structure and attractive historic setting of Edinburgh. It is part of a WorldHeritage Site and therefore would be constrained by planning restrictions and various

onerous design restrictions. This would limit the potential for a station expansion.Edinburgh is protective of its distinctive skyline, especially from public vantage pointsand any alterations or height increase to the station would be visible fromsurrounding locations, further limiting potential development opportunities.

This location is a landmark within the city centre with an impressive backdrop ofEdinburgh Castle and Princes Street Gardens. The location is very prominentoffering both advantages and disadvantages in terms of development.

9.4 Haymarket Station, Edinburgh

Haymarket was traditionally a secondary station along a key arterial route to the city

centre with access to west Edinburgh’s financial service centres. It has experienced asurge in demand with prime office developments in the West End and a mixed-usedevelopment on the site. Haymarket is a gateway location with potential forimprovement. The site is in an area of strategic change, part of the masterplan for atransport interchange at Haymarket, including integration with the Edinburgh Tram. Iti l t l th W l d i t i d i t f t iti f



At either location the national and local rail networks serve a wide hinterland, and theEdinburgh Tram will provide access to a corridor of development opportunitiesrunning from the Airport to the Waterfront.

9.5 Integration and Secondary Hubs

Further enhancement of the city centres and their core uses would accelerateeconomic development and regeneration opportunities across Scotland.Furthermore, this would integrate and strengthen Glasgow and Edinburgh’s role as afully functional economic region and Scottish economic driver, and support globalambitions by improving connectivity and increasing its investment attractiveness.However, it is worth noting that HSR interchanges need to be connected andintegrated with the existing network and other key gateways or secondary hubsthrough very efficient, attractive and sustainable links to maximise the benefits for thesurrounding regions and Scotland. Strategically located secondary hubs that focus

on key development sites and areas closely related to main railway stations, whichthemselves have fast and frequent services to an HSR interchange, will play a majorrole in spatial distribution and the development of secondary clusters outsideEdinburgh and Glasgow City Centres.



10 Lessons from UK Station Developments

10.1 UK Case Studies

The UK case studies present recent or planned major redevelopments of some of themost significant interchanges in England. These include Kings Cross and St PancrasInternational which has recently been opened, although the surroundingredevelopment is still in progress, and plans for Birmingham New Street andManchester Victoria. The purpose of these case studies is to understand the natureand potential scale of economic impacts of such high profile redevelopments of major

gateways. The studies suggest how major redevelopments of key gateways mightdeliver a step change in the image of their surrounding areas, not least by creatingattractive places to live, work and for recreation. In particular, high profile stationredevelopments can intensify development and create conditions to bring higherquality land uses which are generally not be associated with rail stations. Suchcatalytic impacts could result in job creation, better use of available land, brownfieldregeneration, increase in land values, inward investments, increased consumerspending and eventually a significant contribution towards the area’s economic

output.



10.2 Kings Cross and St Pancras International

Improvement works across StPancras International toaccommodate High SpeedRail connecting London tomainland Europe hasfacilitated the regeneration ofthe area around the station.The land around King's Cross

and St. Pancras stationspresented one of the largestinner city redevelopmentopportunities in Europe withplanning and listed buildingapplications for 72 ha. Thedevelopment comprisesbusiness and employment,

residential uses, serviced apartments and hotels, shopping, cafes and restaurants,professional services, a full range of community, health, education, cultural,assembly and leisure facilities, multi storey and other car parking, open space etc.

The socio-economic impactassessment undertaken aspart of the EnvironmentalImpact Assessment submittedto the London Boroughs ofCamden and Islingtonindicated significant benefitsfor the local community aswell as London as a whole.Estimation included around3,005 full time equivalent jobscreated during constructionphase, 25% of which would

be taken up by residents ofthe wider area around King’sCross.

The development is expected to generate between 24,800 and 29,500 direct jobs



10.3 Birmingham New Street

Birmingham Gateway is a £600million project by Network Rail,Advantage West Midlands andBirmingham City Council forthe improvement of New Street

station in the city centre. Theproject will transform thestation, the shopping centreabove it and the surroundingareas. The works includeremodelling the platforms,enlarging the concourse with

airport style passenger lounges and with a large atrium to bring in natural light,improved pedestrian links to the city centre, redefining the image of the building usingstunning architecture, and creating a major commercial mixed-use developmentopportunity for two tall towers to the southern aspect, all surrounded by pleasant newpublic spaces and squares.

The Gateway project is expected to contribute around £2bn to the wider region.Furthermore, physical regeneration of the areas surrounding the station canpotentially lead to up to 10,000 new jobs created across the city. Redevelopment ofNew Street station and regeneration of the surrounding area are also expected to

raise around £60 million in retail revenues. In total the net present value of the projectas estimated by the Department of Transport amounts to about £1.4bn.

A Department for Transport appraisal also highlighted additional wider economicbenefits for the city centre: 125,000 sq m of additional office development across the



10.4 Manchester Victoria

In 2007, a £300m Masterplan was

launched to redevelop Manchester’sVictoria station and the surroundingarea. Covering approximately 2.3acres this mixed use developmentwill include office, retail, hotel andresidential accommodation, togetherwith station improvements includinginterconnections with light and heavy

rail.

Key features include:

• Mixed used premises with thepotential to provide up to15,000 jobs.

• An integrated energy system

aiming to provide 100 percent of the development'sheat and power needs fromrenewable sources.

• 4.5 acres of public openspace.

• Heavy emphasis on greentransport with the aim of

making cycling, walking andpublic transport the preferredoptions.

There has been careful integration of the site's historic features, which include listedbuildings and the remains of Arkwright's Mill. A sustainable drainage system ensureswater is stored and recycled as needed.



11 Land Use

11.1 Land Use and Enabling Infrastructure

Although the policy context is encouraging, this needs to translate to delivery ofenabling infrastructure, particularly with regard to the potential ‘flow’ of wider benefitsfrom each centre to the region, and across the wider Central Belt. Considerationneeds to be given to both transport infrastructure and land uses as they relate topolicy at the regional, inter-regional and national levels.

11.2 Infrastructure and Land Uses: Glasgow

In the Glasgow context, there are enabling infrastructure initiatives which will offerscope for integration and the ‘flow’ of wider benefits. In particular the CommonwealthGames should regenerate a significant area of the east end and central Glasgow;and the existing rail network offers access to the wider suburban area, in addition tothe bus and metro services. This focuses on the rail network as offering closestalignment with a future HSR terminal and the city core, although accessibility by

other modes should also be borne in mind. Map 11.1 below illustrates thisconnectivity.

Map 11.1 Accessibility from Glasgow Central (and map legend for all maps)



Outwith the core, future opportunities will most likely arise in the planned strategicbusiness / employment land within the ‘Corridor of Growth’ promoted by the Structure

Plan. This seeks to promote a Corridor of Growth which linking the major centres ofemployment and services to all communities, in particular the Priority Areas by the:

• Promotion of key renewal opportunities in or related to the Corridor;• Enhancement of the key centres of business, education and commerce in the

Corridor;• Improvement of public transport access along, across and into the Corridor;• Completion of the road and rail network serving the Corridor;

• Safeguarding and expansion of the international transport terminals within theCorridor;

• Use and enhancement of the established infrastructure, particularly waterservices, to serve development needs within the Corridor.

Map 11.2 below illustrates the connectivity to the opportunities in the Corridor.Identified are:

• 500m buffers surrounding railway stations• Vacant and derelict land sites16, including those within 500m of a railway

station• Strategic industrial and business locations• Transport action plan priorities identified in the Structure Plan• The ‘Corridor of Growth’

Map 11.2 Brownfield Opportunities, Strategic Business / Industrial Land, Corridor of

Growth.



In addition to wider benefits from employment land development, there are potentialbenefits from urban renewal and community growth. The Glasgow and Clyde Valley

Structure Plan identifies three wider Metropolitan Flagship Areas, in particular ClydeWaterfront and Clyde Gateway, but also Ravenscraig and Motherwell.

Map 11.3 below shows the connectivity of these broad areas with the city centre,brownfield and strategic industrial and business locations.

Map 11.3 Brownfield Opportunities, Strategic Business/Industrial Land, Metropolitan Flagship Areas

Underpinning the Metropolitan Flagship initiatives are Urban Renewal Areas andPriority Areas. The Structure Plan identifies the major source of future developmentland as brownfield urban land and identifies a number of priority areas for urbanrenewal. The need for long-term dedicated programmes of action to tackle the scaleof vacant and derelict urban land in the area is identified. This is presented below inMap 11.4, showing connectivity with the centre.

© Crown Copyright. .All Rights Reserved. 1000 23 420 (2009)



Map 11.4 Brownfield Opportunities, Strategic Business/Industrial Land, Urban Renewal Areas and Priority Areas

Finally, the need to balance urban renewal with community growth is highlighted inthe Structure Plan, which identifies a number of Community Growth Areas.

The Glasgow and the Clyde Valley Structure Plan covers a wide metropolitan area,and existing and planned infrastructure projects should provide scope for integrationwith policy initiatives, focussed on the re-use of long-term vacant and derelict land, toallow the flow of wider benefits outwards from the centre into the metropolitan area.However, it is recognised that long-term action plans are needed, and these will needto integrate with plans for HSR and wider connectivity.

11.3 Infrastructure and Land Uses: Edinburgh

The planning authorities in the Glasgow and the Clyde Valley area are moreestablished in delivering a wide-area strategic development plan than the authoritiesin East Central Scotland. The Edinburgh and the Lothians Structure Plan, which isthe current Development Plan, will be replaced in 2015 by the South East ScotlandS i D l Pl d Edi b h d hi i Fif h




this will continue to serve much of Edinburgh, particularly areas not served by theTram.

The relationship between connectivity to the centre and wider opportunities is shownin Map 11.5. Major employment land (Class 1, Class 2, Class 3) is identified andmonitored by the City of Edinburgh Council. Some of this lies within the ‘CoreDevelopment Areas’ identified in the Structure Plan, including the City Centre (1 onmap), the Waterfront (2 on map), Edinburgh Park / South Gyle / Sighthill (3 on map)and Newbridge / Kirkliston / Ratho (4 on map). Other major areas include GrantonWaterfront, the South East Wedge, the west of the City Centre, and flagshipproposals for the St James Centre and Caltongate. The strategic West Edinburgh

corridor centred on the Airport and RBS headquarters should also be considered,subject to a comprehensive planning framework integrating economic, transport andland use planning and policy. There are fewer vacant and derelict sites within theEdinburgh area than in Glasgow, but there are regeneration and redevelopmentopportunities that could arise from wider benefits.

Map 11.5 Edinburgh City Region: Tram and Rail Network, Brownfield Opportunities, Strategic Employment Land and Core Development Areas


M 11 6 Edi b h Cit T d R il N t k B fi ld O t iti



Map 11.6 Edinburgh City : Tram and Rail Network, Brownfield Opportunities,Strategic Employment Land and Core Development Areas

11.4 Enabling Infrastructure and Policy: Central Scotland

The overriding issue is the connectivity between Edinburgh and Glasgow. These

cities need to operate as a single bi-polar economic region, or a ‘super cluster’, toallow maximum benefit, and to benefit the other centres between these two cities.

The Glasgow-Edinburgh heavy rail journey currently takes some 50 minutes, with atrain every 15 minutes. This will seem relatively more distant and slower compared topossible HSR journey times southwards. Nevertheless, the planned electrification ofthe Glasgow-Edinburgh rail line will allow fastest journey times of around 35 minutesand increased frequencies of six trains per hour.

11.5 Land Use Forecasts

The fundamental requirement of an employment land review is to assess theemployment land needed to support the growth target of an area. There is also aneed to test the employment land implications of other possible economic outcomes


The development of mid urban business parks using industrial land closely linked



The development of mid-urban business parks using industrial land closely linked(economically and geographically) with the expanding city centres in the hub andspoke model should be considered a priority. The planning system can affect this

distribution by managing the redevelopment or change of use of existing land orbuildings, or by guiding the location and form of new development. In both Edinburghand Glasgow this strategic direction to land-use allocation, driven by considerationsof connectivity, can be seen to be a continuation of recent practices. Furtherconsideration should be given to housing and population projections, as these mayconstrain the uptake of jobs created.

11.6 Office Market

It is important to consider the office market prior to the recession. Although the rateand duration of recovery are uncertain, the property market will return to pre-recessionary levels at some point. Moreover, the wider economic benefits of HSRare a medium to long term phenomenon, so it can be assumed that the starting pointmay well be the pre-recession market position.

Edinburgh and Glasgow have very different characteristics with regard to office

supply and demand. In recent years

17

, there has been little growth in demand inEdinburgh, although it is believed there is pent-up demand, particularly in the legalsector. Glasgow, by contrast, has displayed greater growth, with increased financialservices activity and inward investment. In both cities there is a shortage of grade Aaccommodation, particularly with the completion of flagship developments in bothcities. Nevertheless, there has been a clear trend of static or declining rental valuesin Edinburgh, although Glasgow has remained buoyant.

When compared to other regional cities, the Midlands performed better up to 2007.Birmingham and Manchester experienced higher prime rentals (and growth of around10%), Edinburgh and Glasgow were equal in terms of prime rentals and on a par withBristol, and Glasgow’s growth outstripped other locations.

The impact of the recession on office property market has been significant.Research

18indicates that rentals in both Edinburgh and Glasgow are forecast

19to

decline slightly (from £29 per sq ft per year to around £25 per sq ft per year), beforemodest improvement commencing in 2013.

Glasgow could approach or exceed the relative positions of Birmingham andManchester, and Edinburgh could do likewise as well as gaining ground on Glasgowin terms of growth in demand.

12 G d L d hi



12 Governance and Leadership

12.1 Political Support and Governance

It is clear that changes in governance are needed to support more joined-up actionwithin both national and local government, and between national decisions on HSRrouting and local/regional action on complementary measures. Unresolved, this couldbe the biggest barrier to reaping the full rewards of HSR.

A commitment should be sought from the Scottish and UK Parliaments to support a

joint approach and Transport Scotland’s business case for High Speed Rail. Cross-party support should be canvassed to gain the commitment to drive the developmentforward. Scottish Government must take the lead in securing HSR for Scotland anddrive Scotland to proactively maximise benefits and minimise any potentialdisbenefits.

Scottish Government leadership is essential to making the case for HSR in Scotlandwithin the first phase of development. The future vision should be developed from

consensus and have the support and focus of all stakeholders and partners. It is alsocritical that business leaders, higher education principals and others are fullyengaged. Clear communication to gain and maintain the general public’s support isessential.

Transport Scotland is not currently a member of the Government’s Strategic Forum,the body charged with driving alignment across Government and its nationalagencies. Current Forum members include Scottish Government, Highlands andIslands Enterprise, Scottish Enterprise, Scottish Funding Council and SkillsDevelopment Scotland. Closer partnership working with Transport Scotland will beessential to maximise benefits during HSR development and implementation.Business will provide a critical role in the development of this relationship.

A long-term integrated strategy for transport, economic, planning and socialdevelopment must be developed. There must be a coherent and consistent set ofinvestments that are binding upon lower tier authorities and organisations. Anyassessment of transport needs should be based on holistic benefits and development

strategies, not modes looked at in isolation.

Innovative approaches to policy and intervention will be key to securing the maximumbenefits from HSR. For example, national planning framework sets the right contextfor delivering HSR, but needs to be extended to include, not just the infrastructure,

• Establish mission values and principles



• Establish mission, values and principles• Clear strategy and objectives• Comprehensive and integrated implementation plan

• Clear leadership and communication• Clarity of roles and responsibilities (individual and partnership)• Business and technical excellence• Appropriate resourcing for long term management• Risk management• Critical success factors• Key performance indicators and performance management

Effective governance provides the foundation to build and develop the vision andstrategy to realise an agreed vision and objectives and monitor performance.

13 Conclusions



13 Conclusions

13.1 Key actions

Scotland needs a modern world class, efficient, comprehensive and integratedtransport system to meet the challenges of the next 30 years and beyond. HSRsymbolises a modern, dynamic and accessible state, and combined with good airand local and regional transport links, will help Scotland address its productivityconstraints and compete in the Global marketplace.

HSR provides Scotland with a major opportunity for significant economic growth andworld-class business development. Edinburgh and Glasgow city centres are at theheart of these businesses. However, HSR alone will not deliver these benefits, butrequires the positive support of government, local government and business to fullyrealise the opportunities.

With many of the tools already developed, and some of the key policies andprogrammes already in place, it is less a question of what, but how these can be

implemented effectively.

Twenty-five actions have been identified. The development of an agreed and sharedaction plan with responsibilities and timescales will be critical to achieving ownershipand alignment. Every action will require lead responsibility, support and commitmentfrom partners and close partnership working to realise HSR and maximise itsbenefits.

Strategic:

1. HSR implies a timescale of two or three decades, and varying costs for eachstage. Scotland’s involvement in the first phase is an absolute priority forScotland. A strong and robust case needs to be sustained throughout theplanning phase.

2. Scotland has no strategic role in HS2, although Transport Scotland is one ofnumerous ‘stakeholders’. It is essential that this situation is changed with the

Scottish Government taking a proactive role.

3. Seek a commitment from the Scottish and UK Parliaments to a joint approachand Transport Scotland’s business case for High Speed Rail. Canvass cross-party support. Scottish Government must take the lead in securing HSR for

• For key sectors, particularly financial services, HSR will further boost



For key sectors, particularly financial services, HSR will further boostScotland’s cost competitive advantages. Other sectors of potentialbusiness benefit include life sciences in Cambridge, digital media in

Manchester;• Discussions should take place to identify benefits from closer

collaboration and common cause with other UK cities such asManchester, Leeds and Newcastle.

Economic Development:

6. As travel times are reduced, economic opportunities are created in an

expanded catchment area increasing the scale of city regions and maximisingagglomeration opportunities. Opportunities and benefits created by thedevelopment of a single economic space and integrated labour market in theCentral Belt should be recognised as a strategic priority.

7. Glasgow and Edinburgh need to understand and exploit economic andmarket trends and undertake focused interventions that exploit their fullpotential.

8. Central Scotland: Glasgow - Edinburgh connectivity is key. They need tooperate as a single bi-polar economic region (a ‘super cluster’), to allowmaximum benefit, and to benefit the other centres between the two cities.

9. Strongly support clustering higher value businesses and industries aroundHSR stations in city centres to generate significant agglomeration benefits.Make a presumption in favour of planning consent for appropriate businessuses around HSR hubs for those sectors best able to build upon the benefits

of HSR connectivity.

10. Adopt strategies that recognise that wider economic benefits accrue only overthe longer term. Direct benefits decline over time, indirect benefits will reach aplateau.

11. Develop an integrated and holistic approach to branding and marketing tobuild the image and attractiveness of Scotland.

Planning and Land Use:

12. Land use and infrastructure plans, policies and proposals provide theopportunity to spread wider benefits intra-regionally. However, there may be a

d t f d li t th ti l t l l t th t

15. Estates in the West of Scotland in particular with predominantly industrial land



p p yuse should be carefully assessed, to test their appropriateness for futurerequirements. Consider for release any employment land which is unsuitable

for future and unviable for redevelopment.

16. Employment land is needed to support the growth target of an area. Alsoneed to test the employment land implications of other possible economicoutcomes in the area.

17. Development of mid-urban business parks using industrial land closely linked(economically and geographically) with expanding city centres in the hub andspoke model should be considered a priority.

Transport:

18. There must be a coherent and consistent set of investments that are bindingupon lower tier authorities and organisations. Any assessment of transportneeds should be based on holistic benefits and development strategies, notmodes looked at in isolation.

19. Scottish Enterprise and Highlands and Islands Enterprise to work closely withthe Scottish Government on the long term transport infrastructure investmentplan.

20. A fast, efficient point to point link between Glasgow and Edinburgh is critical.May also require strategically located secondary hubs focussed on keydevelopment areas.

21. Glasgow: focus on the rail network as offering closest alignment with a futureHSR terminal and the city core, but bear in mind access by other modes:

• Outwith the core, future opportunities will most likely arise in theplanned ‘Corridor of Growth’ promoted by the Structure Plan;

• Potential benefits from urban renewal and community growth. TheGlasgow and Clyde Valley Structure Plan identifies Clyde Waterfrontand Gateway, Ravenscraig and Motherwell;

• However, long-term action plans are needed; these must integrate

with plans for HSR and wider connectivity.

22. The biggest economic gains will be in the city centres; partners must worktogether with a key sector focus to achieve these through:

• the provision of effective high quality gateway hubs in each city;

Governance



25. Apply the following principles of strong and effective governance:

• Achieving stakeholder and partner buy-in;• Clear aspirational vision;• Establish mission, values and principles;• Clear strategy and objectives;• Comprehensive and integrated implementation plan;• Clear leadership and communication;• Clarity of roles and responsibilities (individual and partnership);

• Business and technical excellence;• Appropriate resourcing for long term management;• Risk management;• Critical success factors;• Key performance indicators and performance management.

Key Actions and potential Lead Responsibilities:

1. Develop an agreed and shared action plan(Transport Scotland, Scottish Enterprise and Glasgow : EdinburghCollaboration Initiative)

2. Develop a strong business case for HSR(Transport Scotland and Glasgow : Edinburgh Collaboration Initiative)

3. Secure strategic role in HS2

(Scottish Government and Transport Scotland)

4. Secure commitment and support from the Scottish and UK Parliaments(Scottish Government and Glasgow : Edinburgh Collaboration Initiative)

5. Full engagement with stakeholder and partners(Scottish Government and Glasgow : Edinburgh Collaboration Initiative)

6. Develop Glasgow : Edinburgh into a single economic space / labour market(Glasgow : Edinburgh Collaboration Initiative, Scottish Enterprise, City ofEdinburgh Council, Glasgow City Council)

7. Understand and exploit economic and market trends particularly in relation tokey sectors

Appendix 1 – Bibliography



Appendix 1 Bibliography

Presentations and Papers Capturing the Value of High Speed Rail, presentation by Renfe to High Speed Rail Summit,(September 2009)

Complementary Measures to Facilitate Regional Benefits from High Speed Rail, Greengauge21 (June 2009)

The Economic Effects of High Speed Rail Investment, De Rus, (2008)

The Economic Impact of the California High-Speed Rail in the Sacramento/Central Valley

Area , Kantor, (2008).The Eddington Transport Study: The Case for Action, Eddington (2006)

European Regeneration Experience , Greengauge 21 (2006)

Evidence on the nature and sources of agglomeration economies, Rosenthal and Strange(2004)

Fuel Efficiency of Travel in the Twentieth Century , Lawyer (2002)

Gares TGV et nouvelles dynamiques urbaines en centre ville: Le cas des villes desservies

par le TGV Sud-Est [Urban stations TGV and new dynamics of urban centres: the case of the cities served by the South-eastern TGV] Mannone (1997)

High Speed Rail: International Comparisons , Steer Davies Gleave (2004)

High Speed Trains and the Development and Regeneration of Cities , Greengauge 21 (2006)

HST Impact Study , South East England Development Agency (2008)

Impact of High Speed Railway Accessibility on the Locational Choices of Office Establishments , Willigers (2006)

The Likely Macro-economic Benefits and Employment Impacts of Investments in Trans- European Transport Network ; European Commission (1997)

Monitoring the Effect of the Thalys High Speed Train , Ettema et al (2006)

Network Rail: High Speed Rail Investment; An Overview of the Literature , Nash (undated)

The Non-Transport Impacts of High Speed Trains on Regional Economic Development ,Kamel et al (2008)

OECD Joint Transport Research Centre Discussion Paper 2008-16 , De Rus (revised October2008)

Shifts in Economic Geography and their Causes, Venables (2006)

Spain's high-speed train the envy of Obama , Valencia Life, (April 2009)

UK R il A C f I I (F b 2009)

Office Market Research for Edinburgh and Glasgow , DTZ (2009)



Mid Year Population Estimates 1998 and 2007 , NOMIS

Annual Population Survey 2004, 2005, 2007 and 2008 , NOMIS

Gross Value Added 2006 , Office of National Statistics online

Annual Survey of Hours and Earnings 1999-2008 , NOMIS

Annual Business Inquiries 1998 and 2007 , NOMIS

VAT Registration/De-registration Data and Annual Population Survey 2000-2007 , NOMIS

Appendix 2 – Socio-Economic Baseline



pp

Introduction

This analysis sets out the prevailing socio-economic conditions in the Edinburgh andGlasgow, the two likely destinations for the HSR Stations on the envisaged UK widenetwork. In particular, the conditions appraised include demographics, characteristicsof the labour supply, demand for labour, sectoral strengths and dynamism of the localbusiness base.

It also presents a similar analysis for the wider city regions, within which theseeconomies function. In particular, the city regions have been defined as following:

• Edinburgh City Region includes Edinburgh, East Lothian, Midlothian, WestLothian, Fife and Scottish Borders local authority areas.

• Glasgow City Region includes Glasgow, East Dunbartonshire, WestDunbartonshire, North Lanarkshire, South Lanarkshire, Renfrewshire, EastRenfrewshire and Inverclyde local authority areas.

Further, the analysis compares the performance of cities and their respective cityregions against Scottish and Great Britain-wide benchmarks.

Demographics

In 2007, Edinburgh and Glasgow accounted for some 20% of Scotland’s totalresident population. Further, the two city regions combined accounted for around

60% of the Scottish population base. The population of Edinburgh and its wider cityregion grew by 5% respectively between 1998 and 2007. This growth is nearly fourtimes higher the growth of population in Scotland. In comparison, both Glasgow’sand its city region’s population base shrunk by approximately 1%.

With regards to the age structure, both Edinburgh and Glasgow appear to have amuch stronger presence of younger members of the workforce (aged 20 – 34 years).This age group has expanded significantly in Edinburgh between 1998 and 2007.The presence of 20 – 34 year olds has also grown in Glasgow during the same tenyear period. However, the growth achieved in Glasgow was nearly half of the rateachieved in Edinburgh. The high quality higher and further education infrastructure ofthe cities could be accountable for such trends. In comparison, this pool of youth hasdeclined in both city regions, Scotland and Great Britain.

Table 1: Population: Age Structure (Source: Mid Year Population Estimates 1998 and2007 NOMIS)



2007, NOMIS)Population in 1998

Age BandsAged 0 - 9 years 48,000 10.8% 71,100 12.1% 146,100 12.0% 219,500 12.4% 617,100 12.2% 7,265,700 12.8%

Aged 10 - 19 years 51,300 11.5% 72,900 12.4% 148,700 12.2% 228,300 12.9% 641,700 12.6% 7,124,000 12.5%

Aged 20 - 34 years 117,000 26.2% 143,500 24.4% 272,200 22.3% 384,400 21.8% 1,075,000 21.2% 12,047,300 21.2%

Aged 35 - 49 years 92,500 20.7% 117,300 20.0% 260,700 21.4% 375,300 21.3% 1,083,600 21.3% 11,752,600 20.7%

Aged 50 - 64 years 67,700 15.2% 88,600 15.1% 203,700 16.7% 292,700 16.6% 867,000 17.1% 9,557,000 16.8%

Aged 65 - 79 years 52,300 11.7% 71,900 12.2% 144,300 11.8% 207,400 11.7% 610,000 12.0% 6,813,300 12.0%

Aged 80 and over 17,400 3.9% 22,000 3.7% 44,900 3.7% 58,300 3.3% 182,600 3.6% 2,237,300 3.9%

All Age Bands 446,200 100.0% 587,300 100.0% 1,220,600 100.0% 1,765,900 100.0% 5,077,000 100.0% 56,797,200 100.0%

Population in 2007

Age Bands

Aged 0 - 9 years 43,200 9.2% 59,900 10.3% 135,600 10.6% 191,200 10.9% 548,600 10.7% 6,786,500 11.5%

Aged 10 - 19 years 50,000 10.7% 68,100 11.7% 153,400 12.0% 217,900 12.4% 632,300 12.3% 7,468,000 12.6%

Aged 20 - 34 years 130,300 27.8% 151,900 26.1% 265,500 20.7% 357,400 20.4% 976,100 19.0% 11,636,300 19.7%

Aged 35 - 49 years 101,400 21.7% 129,300 22.2% 291,200 22.7% 401,400 22.9% 1,166,300 22.7% 13,119,400 22.2%

Aged 50 - 64 years 75,000 16.0% 89,600 15.4% 234,600 18.3% 313,200 17.9% 975,300 19.0% 10,670,200 18.0%

Aged 65 - 79 years 48,200 10.3% 61,500 10.6% 147,500 11.5% 203,900 11.6% 628,800 12.2% 6,848,800 11.6%

Aged 80 and over 20,200 4.3% 21,800 3.7% 54,000 4.2% 67,000 3.8% 216,900 4.2% 2,687,000 4.5%

All Age Bands 468,300 100.0% 582,100 100.0% 1,281,800 100.0% 1,752,000 100.0% 5,144,300 100.0% 59,216,200 100.0%

Scotland Great Britain

City of Edinburgh Glasgow City Edinburgh City Region Glasgow City Region Scotland Great Britain

City of Edinburgh Glasgow City Edinburgh City Region Glasgow City Region

Table 2: Population: Age Structure (Source: Mid Year Population Estimates 1998 and2007, NOMIS)Change in the Age Structure between 1998 and 2007

Age BandsCity of

Edinburgh

Glasgow

City

Edinburgh

City Region

Glasgow

City RegionScotland

Great

Britain

Aged 0 - 9 years -10.0% -15.8% -7.2% -12.9% -11.1% -6.6%

Aged 10 - 19 years -2.5% -6.6% 3.2% -4.6% -1.5% 4.8%

Aged 20 - 34 years 11.4% 5.9% -2.5% -7.0% -9.2% -3.4%

Aged 35 - 49 years 9.6% 10.2% 11.7% 7.0% 7.6% 11.6%

Aged 50 - 64 years 10.8% 1.1% 15.2% 7.0% 12.5% 11.6%

Aged 65 - 79 years -7.8% -14.5% 2.2% -1.7% 3.1% 0.5%

Aged 80 and over 16.1% -0.9% 20.3% 14.9% 18.8% 20.1%

Total 5.0% -0.9% 5.0% -0.8% 1.3% 4.3% As highlighted earlier, the economic role of Edinburgh and Glasgow implies that thecities have a comparatively larger supply of working age residents compared to theScottish and Great Britain-wide benchmarks. Further, the proportion of working ageresidents in the cities is greater than that in their respective city regions.

The supply of labour (working age population), grew at a significant rate in Edinburghand Glasgow compared to the growth achieved by the Scottish labour market

Table 1: Availability of Working Age Population (Source: Mid Year PopulationEstimates 1998 and 2007 NOMIS)



Estimates 1998 and 2007, NOMIS)

Working Age Population Working AgePopulation in 1998

Working Age

Population as a

percentage of total

resident population in

1998

Working Ae Populationin 2007

Working Age

Population as a

percentage of total

resident population in

2007

Percentage change

between 1998 and

2007

City of Edinburgh 291,900 65.4% 318,100 67.9% 9.0%

Glasgow City 366,100 62.3% 388,500 66.7% 6.1%

Edinburgh City Region 770,800 63.1% 818,500 63.9% 6.2%

Glasgow City Region 1,102,700 62.4% 1,115,300 63.7% 1.1%

Scotland 3,168,100 62.4% 3,226,600 62.7% 1.8%

Great Britain 34,759,000 61.2% 36,815,100 62.2% 5.9% Qualities of the Labour Supply

Economic Activity rate of an area’s working age population is a proxy for thedynamism of its workforce. At a rate of nearly 80%, Edinburgh’s and its wider cityregion’s working age population appears to be more dynamic than most othercomparators. On the other hand, the economic activity rate of Glasgow is nearly tenpercentage points below the performance of Edinburgh City Region. On a positivenote, the economic activity rate in Glasgow City Region is nearly five percentagepoints higher than the city’s average.

The economic activity across all areas of analysis increased only marginally between2004 and 2008. Areas such as Edinburgh, Edinburgh City Region and Scotland,which are operating at very high economic activity rates, such trends are acceptable.However, similar growth trends for Glasgow suggest a lack of sustainableemployment opportunities for the local working age population to keep them

economically active.

Figure 4: Economic Activity Rate (Source: Annual Population Survey 2004 and 2008,NOMIS)



O S)

79.7%

79.9%

70.4%

71.1%

81.1%

81.5%

75.5%

76.0%

79.0%

79.6%

78.2%

78.8%

64.0% 66.0% 68.0% 70.0% 72.0% 74.0% 76.0% 78.0% 80.0% 82.0%

Percentage of Working Age Population Economically Active

City of Edinburgh

Glasgow City

Edinburgh City Region

Glasgow City Region

Scotland

Great Britain

Economic Activity

Economic Activity Rate 2004 Economic Activity Rate 2008

In addition to a low economic activity rate, Glasgow suffers from a very highunemployment rate. However, on a positive note, the city’s unemployment rate hasbeen gradually declining since 2005.

Figure 5: Unemployment Rate (Source: Annual Population Survey 2004 - 2008,NOMIS)

Unemployment

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

o n o m i c a l l y A c t i v e P o p u

l a t i o n

in Edinburgh along with the City’s economic structure could be viewed as a key driverfor such a high quality labour supply.



g q y pp y

On the other spectrum of skills supply, only 6% of Edinburgh’s working agepopulation has no formal qualifications. In comparison, nearly one-fifth of Glasgow’sworkforce lacks formal qualifications. However, on a positive note, the proportion ofworking age population without formal qualifications in Glasgow (and in Edinburgh),has declined significantly between 2005 and 2008.

Figure 6: Qualifications of the Workforce (Source: Annual Population Survey 2005and 2008, NOMIS)

43%

19%

13%

7%

7%

10%

45%

18%

14%

7%

10%

6%

28%

16%

17%

9%

7%

24%

33%

18%

13%

8%

8%

18%

27%

18%

19%

14%

8%

14%

29%

18%

18%

14%

9%

12%

31%

20%

18%

11%

7%

15%

31%

20%

18%

11%

7%

15%

34%

21%

17%

10%

7%

11%

37%

19%

18%

9%

8%

9%

30%

18%

17%

11%

6%

19%

32%

19%

16%

10%

7%

17%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

P e r c e n t a g e o f W o r k i n

g A g e P o p u l a t i o n

City ofEdinburgh

(2005)

City ofEdinburgh

(2008)

GlasgowCity (2005)

GlasgowCity (2008)

EdinburghCity Region

(2005)


(2008)

GlasgowCity Region

(2005)

GlasgowCity Region

(2005)

Scotland(2005)

Scotland(2008)

GreatBritain(2005)

GreatBritain(2008)

Skills Base: Qualifications of the Workforce

Working Age Population with NVQ 4+ Working Age Population with NVQ 3 Working Age Population with NVQ 2

Working Age Population with NVQ 1 Working Age Population with 'Other' Qualifications Working Age Population with No Qualifications

Mirroring Edinburgh’s skills base, the City also boasts of a significant proportion ofemployment in high quality jobs, namely in managerial, professional and technicaloccupations. In particular, more than half of Edinburgh’s workforce is employed in

high value adding occupations. In comparison, Glasgow City and all othercomparators have a nearly 40% of their workforce employed in high value addingoccupations.

Also worth noting is the low proportion of lower quality jobs (plant and process

Figure 7: Employment by Occupations (Source: Annual Population Survey 2005 and2008, NOMIS)



15.1%

20.4%

13.5%

15.9%

7.2%

7.7%

8.4%

3.2%

8.5%

15.4%

19.9%

17.7%

12.3%

7.8%

7.4%

6.9%

3.8%

8.8%

9.7%

13.9%

15.6%

15.0%

9.4%

8.1%

9.5%

7.2%

11.7%

11.9%

14.4%

15.9%

10.3%

9.3%

9.0%

10.9%

6.9%

11.4%

13.6%

14.1%

13.0%

14.1%

10.0%

8.1%

9.1%

6.8%

11.3%

13.6%

14.6%

15.2%

12.0%

11.1%

8.3%

8.1%

6.9%

10.1%

11.9%

11.9%

15.0%

13.4%

10.5%

8.0%

9.4%

8.1%

11.7%

12.9%

12.5%

15.3%

11.9%

10.2%

9.5%

9.5%

7.3%

11.0%

12.4%

12.1%

13.8%

12.8%

11.5%

8.3%

8.8%

7.9%

12.4%

13.0%

12.9%

14.9%

11.5%

11.7%

8.9%

8.1%

7.5%

11.3%

14.9%

12.5%

13.9%

12.7%

11.3%

7.7%

7.9%

7.5%

11.6%

15.7%

13.1%

14.6%

11.4%

10.9%

8.2%

7.6%

7.1%

11.4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

P e r c e n t

a g e o f E m p l o y m e n t i n . . .

City of

Edinburgh(2005)

City of

Edinburgh(2008)

Glasgow

City (2005)

Glasgow

City (2008)

Edinburgh

CityRegion

(2005)

Edinburgh

CityRegion

(2008)

Glasgow

CityRegion

(2005)

Glasgow

CityRegion

(2008)

Scotland

(2005)

Scotland

(2008)

Great

Britain(2005)

Great

Britain(2008)

Occupational Structure: Employment by Professions

.. managerial and senior officials positions .. professional occupations .. associate prof & tech occupations

.. administrative and secretarial occupations .. skilled trades occupations .. personal service occupations

. . sa les and customer servi ce occupat ions . . process , p lant and machine operati ves . . e lementary occupa ti ons

Glasgow and Edinburgh are Scotland's largest cities, some 46 miles (75 kilometres)apart in Scotland's Central Belt. The cities, together, account for more than 30% ofScotland’s economic output. Considering that the two cities only house approximately20% of Scotland’s population base, the high contributions towards the Scottish GVAimplies above average per capita GVA in Edinburgh and Glasgow. However,

Edinburgh’s more skilful workforce implies that the City boasts of some of the mostproductive (highest per capita GVA) workers in Great Britain.

Collaborating to Compete: Glasgow and Edinburgh, a recent report prepared by theScottish Enterprise suggests that from 1995-2005, Glasgow and Edinburgh's percapita economic output grew at a rate double the rest of Scotland's and 50% abovethe UK average.

The report suggests that academics in the past have referred to the potential ofcollaboration between the two cities. In particular, the report suggests that Glasgowand Edinburgh working together offers the opportunity to create critical mass ofpopulation, services and infrastructure between the 2 cities, which public policy hasoften considered in isolation, despite their relative proximity, so that they cross the

Table 8: Gross Value Added (Source: Office of National Statistics, 2006)

AreasGross Value Added (2006)

(i Milli )

Per Capital Gross Value

Add d (2006)



(in Millions) Added (2006)

City of Edinburgh 14,192 30,620

Glasgow City 14,867 25,602 Edinburgh City Region 26,588 17,879

Glasgow City Region 31,963 16,387

Scotland 93,361 18,246

England 985,477 19,413

Edinburgh’s skills base and its productivity suggest that the city has the highestaverage annual wage of full time workers, when compared to Glasgow, Scotland andGreat Britain. The average wage in 2008 was £26,153, nearly 12% more than the

average full time wage in Glasgow City, and 9% more than the average wage earnedin Great Britain.

However the gap in average wage between the Glasgow and Edinburgh has notalways been so prevalent. In 1999 the gap in income between the two cities was only6% (compared to 12% in 2008). This could be attributed to the local city’s localeducational infrastructure and attainment, economic structure, and an improvingperception of Edinburgh being a desirable and wealthy place in which people want to

live, thus attracting a more affluent population.

In 1999, a full time equivalent in Edinburgh earned 13% more than someone living inthe Glasgow City Region, however by 2008 this gap has been narrowed to just 8%,suggesting that higher earners working in Glasgow prefer to live outside the city,while top earners in Edinburgh prefer to remain within it; this also explains thedisparity between average income in Edinburgh City and the Edinburgh City Region.

Figure 9: Average Annual Earnings (Source: Annual Survey of Hours and Earnings1999-2008, NOMIS)



£18,383

£26,153

£17,397

£23,631

£16,382

£23,527

£16,280

£24,219

£17,866

£25,230

£16,914

£24,027

£0 £5,000 £10,000 £15,000 £20,000 £25,000 £30,000

Per Capita Annual Gross Pay (median)

City of Edinburgh

Glasgow City


Glasgow City Region

Scotland

Great Britain

Wage Structure

Average Annual Wage of Full Time Workers in 1999 Average Annual Wage of Full Time Workers in 2008

Employment Base

Total employment within an area is a critical factor to understand its economic vitalityand demand for its workforce. In 1998 there were over 24 million people employed inGreat Britain, a figure which had risen by 9.4% by 2007 to over 26 million. Theemployment levels in 2007 in Great Britain relate to approximately 0.72 jobs perworking age population. This was higher than the job density of 0.69 in 1998,suggesting an increase in demand for workers nationally.

Table 10: Employment in 1998 and 2007 (Source: Annual Business Inquiry 1998 and2007, NOMIS)

Areas

Total

Employment1998

Total

Employment2007

Change

between 1998and 2007

City of Edinburgh 278,004 308,610 11.0%

Glasgow City 347,242 395,257 13.8%

Edinburgh City Region 547 341 609 378 11 3%

significance of the cities as hubs of economic activity. This trend has continued.However in 2008, Glasgow had more jobs than working people with 1.02 jobsavailable per person surpassing Edinburgh which had 0 97 jobs per person



available per person, surpassing Edinburgh which had 0.97 jobs per person.

Figure 11: Job Density (Source: Annual Business Inquiry and Annual PopulationSurvey 1998 and 2007, NOMIS)

0.95

0.97

0.95

1.02

0.71

0.74

0.67

0.75

0.67

0.74

0.69

0.72

0.50 0.60 0.70 0.80 0.90 1.00 1.10

Job Density: Number of jobs per working age population

City of Edinburgh

Glasgow City


Glasgow City Region

Scotland

Great Britain

Demand for Labour

Number of jobs per working age population in 1998 Number of jobs per working age population in 2007

Employment density in Glasgow rose more significantly than elsewhere in Scotland

with an increase of 13.8% identified in the city and 12.7% identified in the cityregions, meaning an additional 48,000 jobs created within the city and an additional94,000 within the city region. Growth of employment was not as significant inEdinburgh or its city region, with employment growth remaining on a par with theScottish national average at 11% in the city and 11.3% in the city regions. This maybe due to a low unemployment rate when comparing against Glasgow.

Sectoral Strengths

Edinburgh’s economy is skewed towards the financial and business services sector,which currently accounts for nearly one third of the local employment opportunities.Other key sectors include public administration, wholesale and retail, health andsocial work. On a promising note, all but one of the city’s staple sectors has

Table 12: Percentage of Employment by Industrial Sectors (Source: Annual BusinessInquiry 1998 and 2007, NOMIS)Percentage of employment by Industrial Sectors in 1998



Percentage of employment by Industrial Sectors in 1998

Sectors (1998) City ofEdinburgh

GlasgowCity


GlasgowCity Region

Scotland GreatBritain

Agriculture, forestery and fishing 0.4% 0.0% 0.6% 0.1% 0.7% 0.3%

Mining 0.1% 0.0% 0.3% 0.1% 1.3% 0.3%

Manufacturing 8.8% 9.0% 16.0% 14.7% 15.3% 16.7%

Electricity, gas and water supply 1.1% 1.7% 0.8% 1.1% 0.9% 0.5%

Construction 4.1% 5.4% 4.8% 7.3% 6.5% 4.6%

Wholesale/retail distribution; repair 13.5% 14.3% 15.3% 16.4% 16.3% 18.0%

Hotels and catering 6.5% 6.2% 7.2% 6.0% 7.3% 6.5%

Transport storage and communications 5.0% 6.0% 4.5% 6.3% 5.4% 5.8%Financial and business services 27.8% 22.1% 19.5% 16.6% 15.3% 18.7%

Public services,admin and defence 16.0% 17.9% 14.5% 14.3% 14.1% 13.4%

Health and social work 11.2% 11.5% 11.2% 11.7% 12.0% 10.4%

Other service activities 5.6% 5.7% 5.3% 5.4% 5.0% 4.7%

Total Employment 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Percentage of employment by Industrial Sectors in 2007

Sectors (2007)City of

Edinburgh

Glasgow

City

Edinburgh

City Region

Glasgow

City Region

ScotlandGreat

BritainAgriculture, forestery and fishing 0.3% 0.0% 0.5% 0.1% 0.5% 0.3%

Mining 0.1% 0.0% 0.2% 0.1% 1.1% 0.2%

Manufacturing 3.7% 6.0% 8.3% 8.8% 9.3% 10.7%

Electricity, gas and water supply 0.6% 1.0% 0.7% 0.8% 0.7% 0.4%

Construction 3.4% 4.0% 5.2% 5.8% 5.8% 4.9%

Wholesale/retail distribution; repair 11.6% 13.8% 14.0% 14.5% 14.9% 16.7%

Hotels and catering 7.8% 7.2% 7.1% 6.5% 7.3% 6.8%

Transport storage and communications 5.0% 5.5% 4.9% 6.4% 5.5% 5.9%

Financial and business services 31.6% 26.1% 22.7% 21.8% 19.0% 21.8%

Public services,admin and defence 15.4% 15.4% 14.9% 14.8% 15.0% 14.9%

Health and social work 15.1% 16.3% 15.2% 15.6% 15.6% 12.2%

Other service activities 5.5% 4.6% 6.4% 4.8% 5.3% 5.2%

Total Employment 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Table 13: Change in Employment by Industrial Sectors (Source: Annual BusinessInquiry 1998 and 2007, NOMIS)

Sectors (% change between 1998 and 2007)City of

Edinburgh

Glasgow CityEdinburgh City

Region

Glasgow City

Region

Scotland Great Britain

Agriculture, forestery and fishing -16% 13% -9% 23% -18% 2%

Mining 11% -91% -48% -5% -5% -22%

Manufacturing -53% -24% -42% -33% -32% -30%

Electricity, gas and water supply -38% -36% -7% -21% -16% -13%

Construction -8% -15% 21% -10% -1% 17%

Glasgow historically had a weaker financial and business services sector. However,recent investment in creating a new financial district has improved the sector’sprospects in the City Like Edinburgh other key sectors in Glasgow include public



prospects in the City. Like Edinburgh, other key sectors in Glasgow include publicadministration, wholesale and retail, health and social work. All but one of the city’sstaple sectors has expanded in employment terms between 1998 and 2007. Inparticular, the public administration has contracted by 2% over the ten year period.Other sectors, currently providing more than 15,000 jobs each in Glasgow andsuffering from decline include manufacturing, construction and other servicesindustries. On the other hand hotels / catering, transport storage / communications,which provide more than 20,000 jobs each in Glasgow, have grown between 1998and 2007.

Despite the difference in the economic structure of the two cities, the economicstructure of Glasgow City Region is very similar to that of Edinburgh City Region, withsimilar sectoral breakdown. This said, as demonstrated in the table above, theprospects of these sectors have been quite different in the two city regions.

Figure 14: Sectoral Strengths (Source: Annual Business Inquiry 2007, NOMIS)

Sectoral Strenghts: Location Quotients in 2007 (benchmarked against Great Britain)

0.00

0.25

0.50

0.75

1.00

1.25

1.50Manufacturing

Construction

Wholesale/retail distribution; repair

Hotels and catering

Transport storage and communicationsFinancial and business services

Public services,admin and defence

Health and social work

Other service activities

City of Edinburgh Glasgow City Edinburgh City Region Glasgow City Region Scotland Great Britain

Business Base

Table 15: Businesses in the Area (Source: Annual Business Inquiry 1998 and 2007,NOMIS)

N b f N b f Ch



Areas

Number of

Businesses1998

Number of

Businesses2007

Change

between 1998and 2007

City of Edinburgh 16,905 18,969 12.2%

Glasgow City 19,722 20,507 4.0%

Edinburgh City Region 39,126 42,962 9.8%

Glasgow City Region 49,398 52,744 6.8%

Scotland 162,768 176,297 8.3%

Great Britain 2,061,767 2,392,906 16.1%

Strong performance of Edinburgh’s business base between 1998 and 2007 hasallowed the city to have a much higher density of businesses than most other parts ofScotland. Further, it has allowed the city to reduce its reliance on relatively largebusinesses. However, with an average size of 16 employees per business and some60 enterprises per 1,000 working age population, even Edinburgh’s business baseappears to be underperforming compared to Great Britain.

Table 16: Comparative Business Stock (Source: Annual Business Inquiry and AnnualPopulation Survey 2007, NOMIS)

Areas

Avegare Size of

Businesses (number

of employees per

business)

Number of

Businesses per

1,000 working age

population

City of Edinburgh 16 60

Glasgow City 19 53

Edinburgh City Region 14 52

Glasgow City Region 16 47Scotland 14 55

Great Britain 11 65

New businesses are usually the source of ‘real’ new employment opportunities andwealth creation in an area. VAT registration data is a good proxy to assess an area’sability to create new businesses. On a similar note, VAT de-registration data providesan assessment of the resilience of new businesses that sustain themselves throughtheir early development period. Hence, VAT registration net of de-registration or netbusiness formation provides an assessment of the area’s entrepreneurial culture andthe supply / quality of infrastructure to support business creation.

Net business formation activity in Edinburgh has been much better than Scotland.F th Edi b h’ f i bl t th t f G t B it i Gl

Figure 17: Net Business Creation: 2000 - 2007 (Source: VAT Registration/De-registration Data and Annual Population Survey 2000 - 2007, NOMIS)

B i C i (VAT R i i Mi VAT D i i )



Business Creation (VAT Registrations Minus VAT De-registrations)

-5.0

0.0

5.0

10.0

15.0

20.0

Net BusinessFormation 2000







Net BusinessFormation 2007 N

e t V A T r e g i s t r a t i o n s p e r 1 0 , 0 0 0 w o r k i n g a g e p o p u l a t i o n

City of Edinburgh Glasgow City Edinburgh City Region Glasgow City Region Scotland Great Britain Figure 18: Average Net Business Formation (Source: VAT Registration/ De-registration Data and Annual Population Survey 2000 and 2007, NOMIS)

Net Business Formation (VAT Registration Minus VAT De-registration) per 10,000

working age population: Average for 2000 to 2007

Edinburgh City Region, 7.8

Scotland, 6.4

Glasgow City, 4.5

City of Edinburgh, 9.4

Great Britain, 9.5

Table 19: Change in Business Stock by Industrial Sectors (Source: Annual BusinessInquiry 1998 and 2007, NOMIS)

Sectors (% change between 1998 and 2007)City of

EdinburghGlasgow City

Edinburgh City

Region

Glasgow City

RegionScotland Great Britain



( g )Edinburgh

g yRegion Region

Agriculture, forestery and fishing-8% 25% -3% 7% -1% 0%

Mining 86% -71% -42% -55% -27% -36%

Manufacturing -20% -19% -12% -15% -12% -13%

Electricity, gas and water supply 23% 44% 41% 95% 99% 19%

Construction 4% -4% 15% 11% 15% 28%

Wholesale/retail distribution; repair -2% -6% -1% -6% -3% -3%

Hotels and catering 9% -7% -1% 2% 2% 11%

Transport storage and communications 15% 1% 12% 9% 5% 7%

Financial and business services 41% 28% 40% 29% 36% 47%

Public services,admin and defence 8% -30% 0% 1% 1% 17%

Health and social work 7% 46% 18% 34% 29% 29%

Other service activities -16% -5% -13% -8% -11% 0%

Total Employment 12% 4% 10% 7% 8% 16%



Enclosure Ensure a satisfactory enclose of spacewith human scale.

Ensure a satisfactory enclose of spacewith human scale.

Ensure a satisfactory enclose of spacewith human scale. Scale of existingstation internal space/structure is very



76

stat o te a space/st uctu e s e y

grand.Materials andstreet furniture

Ensure that high quality streetscapedesign, street furniture and materialsare used. Ground surfaces will form animportant sign at the 5 entrances to thestation to highlight their locations.

Ensure quality comes from simplicityand durability. Relate to the existingmaterial and street furniture to offercontinuity.

Ground surfaces will form an importantsign at the 3 entrances to the station tohighlight their locations.

Lighting New development should encourageremoval of superfluous items keepingmarkings and signs to the statutory

minimum. Lighting is important due tooperating times of the station.

New development should encourageremoval of superfluous items keepingmarkings and signs to the statutory

minimum. Lighting is important due tooperating times of the station. This is akey junction so street lighting should beintegrated into the development.

New development should encourageremoval of superfluous items keepingmarkings and signs to the statutory

minimum. Lighting is important due tooperating times of the station. This is akey location with streets on 3 sides sostreet lighting should be integrated intothe development.

Key:

Difficult to incorporate or a restriction that will limit development significantly

Potential problem issue which may limit development significantly

No issues expected for a successful development

high speed rail - wider economic benefits study glasgow edinburgh

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