Glasgow : Edinburgh Collaboration Initiative

High Speed Rail

Wider Economic Benefits Study
Final Report 16 October 2009

Halcrow Group Limited

Glasgow : Edinburgh
Collaboration Initiative

High Speed Rail –

Wider Economic Benefits Study

Final Report

16 October 2009

Halcrow Group Limited

Sustaining and improving the quality of peoples lives

Halcrow Group Limited

16 Abercromby Place Edinburgh EH3 6LB Scotland
Tel +44 (0)131 272 3300 Fax +44 (0)131 272 3301
www.halcrow.com

Halcrow Group Limited has prepared this proposal in accordance

with the instructions of the client, Glasgow : Edinburgh
Collaboration Initiative and their stakeholders and partners for their
sole and specific use. Any other persons who use any information
contained herein do so at their own risk.

© Halcrow Group Limited 2009

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

4.1 International Experience 16
4.2 France, Paris to Lyon – South-East TGV 17
4.3 Netherlands, Thalys Corridor 18
4.4 Spain, High Speed Rail Network – AVE 19
4.5 Taiwan, High Speed Rail Network 20

5 Economic Context 22
5.1 Economic Trends and Drivers 22
5.2 Glasgow : Edinburgh City Region Economic Context 22
 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

11 Land Use 42
11.1 Land Use and Enabling Infrastructure 42
11.2 Infrastructure and Land Uses: Glasgow 42
11.3 Infrastructure and Land Uses: Edinburgh 45
11.4 Enabling Infrastructure and Policy: Central Scotland 47
11.5 Land Use Forecasts 47
11.6 Office Market 48
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 the
regional economic benefits to Scotland from High Speed Rail (HSR) can be realised
and maximised.

This study will also feed into Transport Scotland’s work on a business case for High
Speed Rail Line 2 to Glasgow and Edinburgh. The Transport Scotland business case
work is being submitted to the HS 2 Group (national body charged by UK
Government 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 review
of 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 business
sectors which most benefit from HSR and understanding the other requirements of
such businesses if they are to capture the potential that HSR opens up for the benefit
of Scotland.

1.2 Introduction

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

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

Experience shows that HSR will influence socio-economic trends rather than initiate
new ones. Trends in the economy and labour market will be influenced by much
more powerful forces. Taken in isolation, the economic impacts and immediate wider
benefits of HSR in Scotland will not transform the Scottish economy into a world
class performer. However, the foundation that world class transport infrastructure
would provide if linked to an aspirational economic development strategy and
implementation plan could facilitate a step change in economic performance. The
current potential for economic development within Glasgow and Edinburgh city
regions in particular should be a focus for Scotland. The movement towards a single
economic area and integrated labour market for Scotland’s two largest cities linked to
world class transport infrastructure can provide the basis for economic transformation
in Scotland. HSR can facilitate major new opportunities which will produce economic
and spatial distribution benefits at a city, city region and national level.

HSR can facilitate greater interactions between key businesses working in different
markets. This could result in a positive economic flow outward from London, creating
powerful regional partners within the UK economy. Scotland must not be left behind
in this process and therefore Scotland’s immediate involvement in phase 1 of HSR is
of fundamental importance.

1
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 this
can be as high as 50%. Including these wider economic benefits will significantly
improve the understanding of the impact of transport projects and see a
strengthening 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 changes
which can occur in parallel with HSR will provide continued benefits over many
generations, 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 a

geographical concentration or cluster of businesses and employees. The benefits
derive from close interaction between businesses, and from an enlarged pool of
specialist skills, talents and shared support industries within a rapid access area.
Generally it is understood that the larger the agglomeration economy, the greater the
agglomeration benefits. The clear implication of this is that if the scale of a city and
city region is increased, the agglomeration economies available are increased and as
a consequence economic performance is enhanced. However, it is should be
recognised that effective density is a more important influence than absolute size –
indeed large sprawling areas of low density development fail to show the benefits of
agglomeration. Increasing effective density means increasing the number of people
and businesses who can access the city effectively and efficiently though high class
connectivity. For example, collaboration and effective connectivity of Glasgow and
Edinburgh will increase effective density and size (critical mass) and as a
consequence increase agglomeration benefits. It should be noted that city regions
with 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 Scottish
economy. Scotland’s two largest cities already make a disproportionate contribution
to national wealth creation and are of such significance that their step change in
performance is fundamental to the future prospect of achieving sustainable economic
growth and building a world class economy in Scotland.

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 about
3% of the respective workforces commute from the Glasgow city region to Edinburgh
or vice versa. A larger and more integrated labour market could offer more productive
and more specialised jobs. Having reached what could be described as a critical
mass, the two economies would be more balanced, less prone to business and
economic cycles and better protected from external shocks. In short, a more
integrated labour market and economy would provide greater economic resilience
and increase potential opportunities. Furthermore, Scotland’s economic potential
would increase. In order to achieve this, both Glasgow and Edinburgh city regions
will need to place greater emphasis on integration by coordinating economic
development and fundamentally by improving connectivity, accessibility and transport
infrastructure quality.

2
There are undoubtedly European regions which share a similar dual city pattern, but
Glasgow and Edinburgh's proximity and their complementary structures make the
potential of their collaborative impact extremely significant. Economists who have
tried to measure this suggest that doubling city and city region size could result in up
to 8% productivity increases (Rosenthal and Strange, 2004; Venables, 2006).
Understanding the geography of economic development and key industries in
Scotland will be critical to exploiting the opportunities that will be presented by HSR.
A single integrated economic area for Glasgow and Edinburgh will provide the
environment to maximise the benefits for Scotland.

1.6 Productivity

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

High speed rail can facilitate a one-off effect on the level of productivity (along with
focused economic development interventions) by enabling an increase in higher
value businesses that could result in a significant increase in productivity growth
rates. If sustained over a 20 year period of development this increased rate of growth
could enable the cities to close the production gap with the top international
performers. World class transport would support a sustained impact on productivity
level. Transport can support impacts on the growth rate of productivity by stimulating
innovation through its impact on agglomeration economies, inward investment and
international trade.

At a time of economic uncertainty an integrated transport network is more important

than ever to link businesses with markets and people with jobs. Greater integration
and investment is critical to economic resilience and providing the foundation for
accelerating economic growth, productivity and prosperity. Currently, Glasgow and
Edinburgh fall behind their international comparators and competitors whose
transport systems and productivity rates are significantly superior. There is a need to
understand and exploit economic and market trends and opportunities and
undertaking focused interventions that exploit their full potential. This could result in a
positive economic flow from London and other parts of the UK to Scotland. There is
an opportunity to close the production gap and provide a basis for international
competitiveness and first mover advantages.

1.7 Integrated Policy and Intervention

A key to achieving a sustainable long term future is successful integration between

economic development, land-use, regeneration and transport planning. Integration
between policies and interventions would help to align land-use and infrastructure
with business and jobs thereby improving city and city region labour markets. A focus
is required on key themes such as sustainable economic growth, global
competitiveness, key sectors and growth businesses, regeneration and spatial
distribution, environmental improvement and quality of life.

3
At a city region level, transport, economic and spatial strategies across the UK have
not been as well integrated as in other countries, where concepts of smart growth
and transit oriented development are more deeply embedded. Innovative approaches
should be considered including more streamlined planning regimes and use of
special development zones. Nevertheless, there is reason to believe that legislative
changes to the planning system in Scotland will provide an improved policy context
and a more streamlined system. The Planning (etc) Scotland Act 2006 includes
provision for a National Planning Framework for Scotland, larger city region strategic
development 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, and
the South East Scotland Strategic Development Plan. This means that two strategic
level plans will be covering the central belt of Scotland, allowing for greater inter-
regional collaboration. Moreover, the establishment of Regional Transport Strategies
and associated partnerships increases the scope for policy integration at the regional
level, 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 National
Planning Framework priorities.

There is evidence that strategic priority areas in both Glasgow and Edinburgh are
aligned with accessibility opportunities which will facilitate the flow of benefits from
the 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 and
economic development can be integrated in the spatial context to deliver a strategic
development corridor. These recent strategic developments provide a model for a
more 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 offer
scope for integration and the flow of wider benefits, in particular the Edinburgh Tram
Project 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 existing
and upgraded Scottish transport network particularly in the Glasgow and Edinburgh
city regions is fundamental to assuring the benefits of improved connectivity, and the
distribution of economic benefits throughout Scotland. City centre hub and spoke
models 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 and
Edinburgh, although HSR is not viewed as a requirement as few benefits would be
accrued from high speed operation over such a short distance.

A coherent approach and integration of policy and intervention is essential for HSR.
It also provides a wide range of opportunities for extending links across the whole of
Scotland including Dundee, Aberdeen and Inverness. Feeder services can be
enhanced as required to link other parts of Scotland and its international airports with
the HSR network. This regional network needs to deliver improved speeds, increased
frequency and capacity and an improved working environment to complement the
HSR network itself and spread the benefits across Scotland.

Connecting Scotland’s strategic corridors to national and international networks is a

priority. The development of global connections, particularly new business routes

4
from Scotland’s airports to the European continent, is an essential element of
improving international positioning and competitiveness. Domestic air travel will be
significantly reduced by HSR. Consequently, airports can develop direct international
business routes from the freed capacity. However close linkages with Heathrow as a
major transport hub is also important.

1.9 City Centre Stations

Edinburgh and Glasgow city centres are established as major agglomerations of

businesses 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 a
gateway and magnet for business key sectors and other commercial activities. Well
designed and strategically focused transport infrastructure, bringing together at one
location the hubs of local, national and international transport networks, can enhance
city and national accessibility and facilitate major land-use developments. They can
improve the attractiveness of a location for inward investors, facilitate productivity
gains as key sectors and higher value activities cluster around major hubs, increase
local and tourist spending and have a positive impact on the economic outputs and
the wider benefits of the city regions and nations they serve.

Bringing HSR into Scotland’s big cities is therefore critical to maximise economic
impacts and wider benefits and could have a major impact on their identity, image
and behaviour, since their location characteristics (fast high quality access to the
centre of London, other UK cities and the European continent) and development
values would be transformed. Clustering higher value activities of the knowledge
economy around city centre hubs, such as financial and business services and
creative industries, would provide further momentum to success achieved over the
last decade. Furthermore, improved connectivity and accessibility would provide a
major boost to city and Scottish business and leisure tourism as well as a significant
if short to medium term boost to the construction industry.

Central Station has been identified by Glasgow City Council and its partners as the
option for Glasgow’s station and terminus. Its location is in the heart of the city
centre, close proximity to the International Financial Services District and the best
retail offer outside of London and with easy access to the HE quarter and the Clyde
Waterfront. Furthermore, Central Station provides a unique development opportunity
to create a Glaswegian St Pancras. It also sits at the heart of a corridor of
development opportunities, stretching south-east and north-west of the city, all
directly served by rail.

In Edinburgh, Waverley and Haymarket have been identified as possible stations for
Edinburgh. Waverley Station is the preferred option in terms of its location in the city
centre, but access from the west is problematic and there will be serious constraints
on development around the potential hub, in particular because of townscape and
heritage issues which preclude higher density development. Nevertheless, Waverley
is in close proximity to redevelopment proposals including the new St James’s Centre
and Caltongate. Haymarket offers an opportunity within an existing masterplan
centred on station redevelopment, the interchange with the Edinburgh Tram and
access to western Edinburgh’s financial service centres. It is less central than
Waverley and may be constrained in terms of opportunities for expansion, although
higher densities would be more acceptable than for Waverley. At either location the
national and local rail networks serve a wide hinterland, and the Edinburgh tram will
provide access to a corridor of development opportunities running from the Airport to
the Waterfront.

5
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 as
a fully functional economic region and Scottish economic driver and support global
ambitions by improving connectivity and increasing its investment attractiveness.
However, it is worth noting that HSR interchanges would need to be connected and
integrated with the existing network and other key gateways through very efficient,
attractive and sustainable links to maximise the benefits for the surrounding regions
and Scotland. Strategically located secondary hubs that focus on key development
sites and areas will play a major role in spatial distribution and the development of
secondary clusters.

1.10 Land Use Requirements

Assuming the successful implementation of HSR in Scotland and focused

complementary measures, the demand for business land uses in Glasgow and
Edinburgh is likely to increase significantly over the next 20 years. Distribution land
uses are also likely to increase over the same period. In comparison, the demand for
industrial land will continue to decline, although the position is relatively static in the
Edinburgh city region. Hence, estates in the West of Scotland in particular with
predominantly industrial land use should be carefully assessed to test their
appropriateness for meeting future demand requirements. Furthermore, any
employment land identified to be unsuitable to meet the future requirements and
unsuitable and unviable for redevelopment should be considered for release. The
development of mid-urban business parks utilising industrial land closely linked with
the expanding city centres (economically and geographically) within the hub and
spoke model should be considered as a priority. The planning system can affect this
distribution by managing the redevelopment or change of use of existing land or
buildings, or by guiding the location and form of new development. In both Edinburgh
and Glasgow this strategic direction to land-use allocation, driven by considerations
of 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 city
centre 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-based
locations. Other sectors identified the linking with other centres or clusters of activity
to be of potential business benefit such as life sciences in Cambridge, digital media
in Manchester. Furthermore, discussions should take place to identify potential
benefits from closer collaboration links and common causes with other UK cities such
as Manchester, Leeds and Newcastle.

1.12 Political Support and Governance

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 will be canvassed to gain the commitment to drive the development
forward. Scottish Government must take the lead in securing HSR for Scotland and
to drive the need for Scotland to proactively maximise benefits and minimise any
potential disbenefits.

6
It is clear that changes in governance are needed to support more joined-up action
within both national and local government and between national decisions on HSR
routing and local/regional action on complementary measures. Unresolved this could
prove 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 national
agencies. Current Forum members include Scottish Government, Highlands and
Islands Enterprise, Scottish Enterprise, Scottish Funding Council and Skills
Development Scotland. Closer partnership working with Transport Scotland will be
essential 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 and

partners have the instruments and powers to achieve change both in securing
opportunities and in managing conflicts. They must also ensure that the incentives
and resources to deliver the desired outcomes have legitimacy in the eyes of
stakeholders and the public. The following principles of strong and effective
governance 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 significant
economic growth and world-class business development. Edinburgh and Glasgow
city centres are at the heart of these businesses, and will drive the Scottish economy
forward.

There is evidence however that HSR alone will not deliver these benefits, but
requires the positive support of government, local government and business if the
opportunities are to be fully realised.

With many of the tools already developed, and some of the key policies and
programmes already in place, it is less a question of what, but how these can be
implemented effectively. Twenty-four actions are identified which need to be
undertaken by the main actors at national and local levels.

Despite increasing productivity, employment has the potential to increase

significantly over the next 20 years. World class economic performance is a very real
possibility and success or failure to achieve this – assuming there will be positive
global economic trends – is in the hands of the various stakeholders and partners
involved.

7
2 Introduction
2.1 Background

The Glasgow : Edinburgh Collaboration Initiative through its partners Glasgow City
Council, the City of Edinburgh Council and Scottish Enterprise are committed to
securing HSR service between Scotland, the south, London and Europe.
Collaboration Initiative partners are pursuing a joint approach that will result in a step
change 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 on
HSR has been established that will help to shape policy and intervention across the
two cities.

Halcrow has been commissioned by the Glasgow : Edinburgh Collaboration Initiative

(GECI) to undertake a study to identify the measures required to ensure that the
regional economic benefits to Scotland from High Speed Rail (HSR) can be realised
and maximised.

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

The focus of the research is upon identifying the characteristics of the business
sectors that most benefit from HSR and understanding the other requirements of
such 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 time
dedicated by consultees to supporting this study is very gratefully acknowledged by
Halcrow and the Glasgow : Edinburgh Collaboration Initiative. This study has been
influenced significantly by the views and evidence provided by consultees.

The stakeholder consultation process was designed to identify and explore key
issues, opportunities and constraints faced in delivering and maximising the
economic benefits of HSR. A series of one-to-one consultation meetings, telephone
interviews and group discussions with:

• Transport Scotland
• SPT
• SESTran
• Scottish Council for Development and Industry
• Scottish Enterprise
• Glasgow-Edinburgh Collaboration Initiative
• Glasgow City Council
• City of Edinburgh Council
• Scottish Financial Enterprise
• Glasgow Chamber of Commerce
• Edinburgh Chamber of Commerce
• Glasgow City Marketing Bureau

8
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 high
speed 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 experience
on projects such as the Great Western Main Line (Economic Impact Assessment) in
the UK demonstrates that high quality rail infrastructure facilitates economic
development. Such infrastructure if designed and managed effectively can make
significant tangible contributions, not least to economic output. Through facilitating
the efficient movement of goods, services and people, rail infrastructure can also
deliver considerable intangible benefits, such as productivity improvements,
increased inward investments and wider sustainability impacts such as low per capita
carbon emissions.

Learning lessons from new rail infrastructure projects internationally and in the UK is
vital. Experience demonstrates that new railway stations can bring significant
economic additionality at a local level, not least by developing a hub of new
economic activity, creating demand for workforce and other resources, including
land. 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 the
centre of London to Scotland. The route would link the centres of London,
Birmingham, Manchester, Liverpool, Glasgow and Edinburgh. Travel times between
London and Scotland would be reduced to a little over two hours.

Network Rail’s analysis uses the latest government guidelines and modelling for
calculating the benefits. It considers time savings and their associated value, and the
reduction in overcrowding. It also assesses the value of additional freight routes and
the reduction in congestion, accidents and carbon emissions. Wider benefits such as
productivity improvements and regeneration were not been included. These benefits
would further enhance the case.

Network Rail suggests that existing north-south rail routes have insufficient capacity
to meet the total demand for inter-city and local passenger services, and freight,
within the foreseeable future. Additional capacity will be necessary simply to maintain
rail’s current role in meeting the needs of businesses and the economy.

There is clear evidence that HSR can create and facilitate significant economic
impacts and wider benefits. Strong evidence has emerged from international

9
experience, including research by Greengauge21 and Network Rail. It is over greater
distances that decreased journey times, economic impacts, environmental benefits
from modal shift can be best secured and maximised. Scotland’s aspirations are
driven by a different balance of priorities from other parts of the UK, due to the
potentially 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 immediate
involvement in phase 1 of HSR is of fundamental importance.

Glasgow : Edinburgh Collaboration Initiative and its partners recognise that the
benefits are greater when journey time reductions are maximised, and therefore look
for a frequent service from both cities, offering journey times around two and a half
hours or less to London, with comparable reductions in journey times to other cities in
England.

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

Experience shows that HSR will influence socio-economic trends rather than initiate
new 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 not
transform the Scottish economy into a world class performer. However, the
foundation provided by world class transport infrastructure, if linked to an aspirational
economic development strategy and implementation plan, could facilitate a step
change in performance. The current economic development potential in Glasgow and
Edinburgh city regions in particular should be a focus for Scotland. The movement
towards a single economic area and integrated labour market for Scotland’s two
largest cities, linked to world class transport infrastructure, can provide the basis for
transforming Scotland economically. HSR can facilitate major new opportunities with
economic and spatial distribution benefits locally and nationally.

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

10
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 very
important in the case of HSR investment1 because freight transport does not benefit
from HSR, and because service industry economic activity may concentrate in core
urban areas. However, this has been challenged by the OECD Joint Transport
Research Centre, which cites more recent research2 as an indication that wider
benefits, such as agglomeration, may be greater for sectors such as financial
services, and that it is erroneous to conclude that scale economies, agglomeration
economies and productivity impacts are limited to manufacturing and freight
transport.

Reduction in regional inequalities is invoked in support of HSR investment, but

potential difficulties in the spatial distribution of benefits have been highlighted.
However, reducing trade or transport costs is seen as a decisive factor in the spatial
location of economic activities, by affecting the balance between dispersion and
agglomeration. Also, European regional policies have the explicit aim of reducing
regional inequalities by improving transport infrastructure. Nevertheless, it is not
clear that this always facilitates convergence, and HSR invariably favours ‘main
nodes’ 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 transport
projects. Traditionally, transport investment was based on assumptions and analysis
that clearly underestimated economic impact and wider benefits. However, a new
methodology has been developed that enables a measure of the value of wider
economic benefits. Research by the Centre for Cities suggests that focused transport
infrastructure 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 significantly
improve the understanding of the impact of transport projects and see a
strengthening in the justification of the business case for HSR to Scotland.

11
Wider economic benefits will only accrue over the longer term. Direct benefits decline
over time, indirect benefits will reach a plateau. However the structural changes
which can occur in parallel with HSR will provide continued benefits over many
generations, 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 on
supporting economically vital locations such as congested urban areas, inter-urban
corridors, ports and airports. The consideration of previously hidden wider economic
benefits including agglomeration effects and land values reinforces SACTRA and
Eddington’s focus on cities, city regions and important inter-urban corridors which will
enhance the case for HSR. Furthermore, particular high value sectors are more
responsive to transport improvements. This will include some of Scotland’s key
sectors 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 reliability
savings can significantly contribute to business improvement and economic impact.
Gains include both efficiency improvements with the supply and distribution of lower
cost goods and services and effectiveness improvements.

Business and economy

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

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

Land development and investment

Major development opportunities will present themselves in the city centres
particularly around HSR stations and hubs. Land demand for office land use is set to
increase significantly as the activities of the knowledge economy would cluster in city
centre locations. Investment in Glasgow and Edinburgh would be set to increase.

Locational attractiveness
Transport is an important, but not the determining factor, in business location. Other
factors such as a skilled and/or inexpensive workforce, the quality of the local
environment and property costs, have been shown to be equally, if not more
important when considered in isolation. However, when considered with other
factors, transport significantly influences location decisions. Availability of qualified
staff, easy access to markets and external transport links were the three most

12
important criteria identified by Invest UK. As attractiveness increases there would be
opportunities to encourage larger numbers to live and work in Scotland.

Regeneration and social inclusion

The links between transport, planning, economic development, regeneration and
social inclusion are essential to maximise distributional benefits. Improvements to
public transport services can help promote access to employment and services to
vulnerable groups, particularly those without private transport. The introduction of
high speed rail could have a profound effect on the opportunities for achieving
greater participation levels, but only if the developments are integrated to ensure that
need and opportunity are firmly linked. Clear opportunities to reduce poverty and
deprivation would be presented.

Environmental
HSR can deliver these economic benefits with limited environmental impact. Its
carbon footprint is better than either road or air travel, particularly if electricity is
generated from low carbon sources. Electric traction is potentially independent of oil
supplies, 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 and
passengers by electric traction will therefore make the UK economy less vulnerable
to disruption from changes in the price/supply of oil. Capacity released on
conventional lines will reduce overcrowding, improve reliability and enable more
services to operate from local stations, and more freight services. It will also enable
conventional 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 a

geographical concentration or cluster of businesses and employees. The benefits
derive from close interaction between businesses, and from an enlarged pool of
specialist skills, talents and shared support industries within a rapid access area.

Generally it is understood that the larger the agglomeration economy, the greater the
agglomeration benefits. So if the scale of a city and city region is increased, the
agglomeration economies available are increased and consequently economic
performance is enhanced. However, it is should be recognised that effective density
is a more important influence than absolute size – indeed large sprawling areas of
low density development fail to show the benefits of agglomeration.

Increasing effective density means increasing the number of people and businesses
who can access the city effectively and efficiently though high class connectivity. For
example, collaboration and effective connectivity of Glasgow and Edinburgh will
increase effective density and size (critical mass) and as a consequence increase
agglomeration benefits. It should be noted that city regions with high productivity
levels will benefit more from agglomeration benefits.

Conventional appraisals capture some of the economic benefits from reduced travel
times, but when agglomeration benefits of transport investment are considered it is
the productivity gains that are the focus. Until recently there has been no reliable
methodology for quantifying this wider economic benefit. Consequently
agglomeration benefits have been excluded from standard assessments and
appraisals. However, there is now a robust methodology that can measure
agglomeration.

13
However, the main effects of HSR on regional economic distribution are viewed as
mixed. There is a perceived tension, between the benefits of the agglomeration
advantages arising from lowered costs and greater competition, with the wider
locational choices offered to businesses which may offer more dispersed patterns of
activity and the consequential ‘two way road’ that is opened up, which allows a
stronger region to penetrate a weaker region, increasing regional inequalities.
Furthermore, ‘localisation’ effects of transport (i.e. economic benefits derived from
increasing the proximity of businesses to each other) fall off quite rapidly with
distance, with little or no effect beyond 50 km, and the most significant effects much
closer than this.

In terms of inter-regional connectivity and business/spatial relationships, two views

are cited. Firstly that the ‘status quo’ of London economic dominance should be
recognised, and that centres originally grew because of the quality of existing links to
larger centres. Secondly, that HSR provides an opportunity for a ‘new economic
geography’ rather than just replacing radials to London. Research5 indicates the
importance of cities in regional growth, but their productivity relative to national and
regional hinterlands tends to be lower than European collaborators; partly due to lack
6
of connectivity at sub-regional levels. This is used to support the model of
‘functional spatial clustering’. This considers the scope for ‘super clusters’ created
from existing ‘sub clusters’ centred on locations including London and the Midlands
(potentially leading to ‘urban England’ agglomeration following the Tokyo-Osaka
model) and of course the central belt of Scotland.

The indirect benefits of agglomeration are thought to be larger where there is good
7
inter-regional and intra-regional connectivity to share the benefits of core city

14
growth, even though direct benefits are highly centralised and focussed on key
locations and sectors.

1
Puga (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 October
2008.
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.
5
Wong (2006), cited in reference 3.
7
Department for Transport (2006) cited in reference 3.

15
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 the
US, 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 route
has secured 90% of the air market between these two cities, although the passenger
numbers have led to some to conclude that the route is not viable, with some 5m
trips per annum as opposed to the widely-held assumption that 9m-15m passenger
trips per annum are required8. It is now estimated that the TGV South-East holds
91% of the air/rail market.

The distance of the service offered also provides a different business context. For
example, the medium-distance service offered in Spain by Renfe (96 miles on
average with government-set fares, including Madrid-Toledo, 30 minutes for 44
miles, 22 trains per day) requires government subsidy, whereas the long-distance
route (345 miles on average with market fares) is in fact profitable9. In Taiwan the
Government is currently considering taking HSR back into public ownership as a
result 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 was
launched, office space in Part-Dieu (station location) increased by 43%. In
Maastricht, office rental values are now the highest in the region particularly around
the Thalys HSR station. The European Commission has estimated that HSR as a
whole 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 wider
economic benefits, research indicates that benefits would not be expected to exceed
10%-20% of assessed impact, or influence GDP by more than 2%. However, other
studies point to greater wider benefits (including 40% in the Netherlands), and the
overall conclusion is that the benefits (economic, environmental and wider) that can
be anticipated are variable and dependent upon regional factors10. It is widely
recognised that economic impacts and wider benefits can be maximised with the
focused implementation of complementary actions.

The following international case studies focus on HSR developments in:

• France11
• Netherlands12
• Spain13
• Taiwan

16
4.2 France, Paris to Lyon – South-East TGV

Development of the TGV network has led to the evolution of Lyon into a city which
supports a Euro region
linking Paris with South
France, Switzerland, and
soon, Turin. TGV has
had a significant impact
on tourism in the
Burgundy region. The
European Commission
estimated that the High
Speed Rail as a whole
would add 0.25% to EU
GDP and 0.11% to
employment over 25
years.

Lyon has prospered with

the arrival of TGV. The
routeing of TGV services to a newly built station at Part-Dieu has acted as the
catalyst to redevelopment of the area as a commercial centre. Part-Dieu is now
considered to be a second city centre for Lyon. Commercial developments include
major shopping malls and office developments. Between the opening of TGV in 1982
and 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-Dieu
were already based in
Lyon. Therefore, the
impact of TGV has
primarily led to an intra-
urban distribution of
economic activity,
rather than inter-
regional. Around one-
third of firms which
relocated stated that
TGV was the main
factor in locational
choice. TGV has
allowed Lyon-based
firms access to Paris
markets, without the
same reverse impact.
The increase in tourism is reflected at micro-level with the increase in hotel
developments around TGV stations and the reorganisation of coach travel to ensure
closer integration between the two modes.

TGV South-East led to massive modal shift from plane/car to train for journeys
between Paris and Lyon. Between 1981 and 1984, mode share increased from 40%
to 72% for trains, and decreased from 31% to 7% and 29% to 21% for planes and
cars respectively. Now, it is estimated that TGV holds 91% of the air/rail travel market
share. TGV services are also estimated to be three times more energy efficient than
aircraft for these journeys. 

17
4.3 Netherlands, Thalys Corridor

The Thalys high speed rail route has

connected cities in The Netherlands to
Belgium, France, Germany and Great Britain
since 1996. By 2020, the network is expected
to lead to GDP uplift of 0.10%. This could
relate to the boost the tourism industry has
benefited from since the advent of Thalys, as
many journeys on the network are associated
with holiday and leisure trips.

Thalys has had a positive impact on

economic activity on the towns in which HSR
stations are located. In general there has
been an increase in property values, rents and real estate prices, the number of jobs
available and the presence of businesses in the vicinity of Thalys stations. In
Maastricht, 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 a
number of major developments, which have been sparked by the attractiveness of
accessibility 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 been
developed. Interviews conducted with office managers around stations in The Hague
indicate 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 in
other countries, most new
developments represent intra-
urban rather than inter-regional
redistribution of economic
activities.

The modal shift impacts of

Thalys link to The Netherlands
should not be underestimated.
The number of passengers
travelling between France and
The Netherlands via Thalys is
estimated at 700,000. This
represents a 25% increase in rail
trips along this corridor since the introduction of HSR. At the same time, the growth in
air travel between the two countries has slowed significantly, and the market share
for air travel has dropped by 4%. Research suggests 21% of people using Thalys are
former air passengers, whilst 16% previously made the journey between France and
The Netherlands by car. Also, Ecopassenger claim that greenhouse gas emissions
are greatly reduced for passengers using Thalys compared to air/car travel. For
every passenger per 1 way journey, emissions are 12.1kg for users of Thalys,
compared to 55.1kg for car users and 75.1kg for air passengers.
 

18
4.4 Spain, High Speed Rail Network – AVE

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

The growth of the AVE is a having

a significant impact on life in
Spain. Tourism has risen
dramatically in towns and cities
located close to an AVE route, for
example the town of Llieda in the
north-east of Spain has seen a
15% increase in tourism, and as
result has received over €150
million of investment in its
infrastructure and local economy
since 2006.

Historically Spain has been a

country where many nationals choose to live and work within their local region, the
arrival of the AVE has seen a significant increase in commuter travel (over 150km)
since 2001, suggesting that improvements in accessibility allow people to travel
further for work, thus increasing the size of labour markets and improving overall
prosperity.

The economic benefits associated

with the AVE have not been limited
to Spain’s major cities. The
development of the AVE means
that the town of Ciudad Real is
now only 50 minutes away from
Madrid and easily commutable. As
a result the population has
increased by 12% since 2002, with
property prices increasing at
almost twice that of the national
average.

AVE has lead to a massive modal

shift from plane and car to rail. Passenger numbers on domestic flights fell 20% in
2008. In 1991 60% of journeys between Madrid and Seville were car trips, that figure
has been reduced to 34% while 52% of those trips are now carried out using the
AVE. The HSR network is also helping Spain control carbon emissions, straight
tracks and fewer stops mean AVE trains use 19% less energy than conventional
trains.  

19
4.5 Taiwan, High Speed Rail Network

The Taiwanese Government has

built a 345 km high speed rail link
connecting the northern and
southern regions of the country.

The HSR track crosses 14 counties,

68 townships, 32 urban planning
districts and has a land area of over
2,000 acres. After beginning public
operation in January 2007, the HSR
has laid a solid foundation for
Taiwan's continued development in
the 21st century. In particular, the
HSR is viewed as a symbol of
economic and technological exchange in the private sector between Japan and
Taiwan.

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

The regional indirect economic benefits in terms of inward investment, job creation
and 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 boasts
of centres scientific research and for the production of other knowledge services, has
maximised the indirect impacts of this vital infrastructure. However, the southern
economy, which lacks a knowledge intensive economic structure, has shown no
signs of the spontaneous innovative processes that would facilitate the economic
transformation. This said, the government is of the view that bringing economically
prosperous areas closer to struggling economic regions will result in long term
economic gain for the Taiwan.

HSR has had a significant impact

on the economic growth of towns /
cities located close to HSR
stations. Stations were deliberately
located in town centres in order to
act as a catalyst for regeneration.
Development land in HSR zones is
auctioned periodically. The
Government uses the resources
from high prices paid for auctioned
land around the HSR stations to
supplement development activities.

THSRC, the private company operating Taiwanese HSR since 2007, had already
incurred an accumulated loss of NT$70.2 billion as of the end of June this year, or
about two-thirds of its total paid-in capital of NT$105.3 billion (US$3.23 billion). The
Taiwanese Government is currently exploring options of converting HSR into public
ownership.  

20
8
Russ and Nash 2007, cited in High Speed Rail Investment, Overview of Literature, Network
Rail
9
Capturing 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 Rail
Investment, 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 Employment
Impacts of Investments in Trans-European Transport Network;
Kamel et al (2008) – The Non-Transport Impacts of High Speed Trains on Regional Economic
Development;
Mannone V (1997) - Gares TGV et nouvelles dynamiques urbaines en centre ville: Le cas des
villes 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 of
Cities;
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 RUS
University of Las Palmas Spain
High Speed Trains and the Development and Regeneration of Cities, June 2006-
Greengauge 21
Spain's high-speed train the envy of Obama, April 2009- Valencia Life (quoting the Wall
Street Journal

21
5 Economic Context
5.1 Economic Trends and Drivers

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

Attractive and dynamic city centres are fundamental for supporting sustainable
economic growth. High quality connectivity and accessibility through world class
transport infrastructure can enhance economic prosperity by acting as a gateway and
magnet for business, key sectors and other commercial activities. The city centre is,
almost by definition, at the heart of the local, regional and national transport
networks, both because historically the networks have been built to serve the city, but
also conversely because the existence of transport hubs has created the conditions
for business growth. Attractive, well designed and strategically focused transport
infrastructure can enhance city and national accessibility and act as a facilitator for
major land-use developments. They can improve the attractiveness of a location for
inward investors, facilitate productivity gains as key sectors and higher value
activities cluster around major hubs, increase local and tourist spending and have a
positive impact on the economic outputs and the wider benefits of the city regions
and nations they serve.

It is important to understand the role and contribution of the Glasgow and Edinburgh
economies and their transport hubs towards achieving wealth creation and
distribution. It is also important to consider the potential of HSR for facilitating wider
economic 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 contribution
to national wealth creation and are of such significance that a step change in their
performance is fundamental to the future prospect of achieving sustainable economic
growth and building a world class economy in Scotland.

Combined, the Glasgow and Edinburgh city regions account for 63% of Scotland’s
population and 66% of GDP/GVA. Furthermore, growth rates do not systematically
differ between the two city regions. Glasgow and Edinburgh city regions have similar
economic structures, but closer analysis reveals some differences. Edinburgh’s
financial sector is more significant than Glasgow’s and has a higher growth rate,
although Glasgow has seen a significant increase in the related business services
sector. Glasgow grew faster between 1995 and 2000 and growth in Edinburgh was
higher after 2000.

Since 1995, 50% of Scotland’s additional jobs have been created in Glasgow and
Edinburgh, the rate of increase was more than double that experienced in Scotland
as a whole. It could be argued there has already been a step change in employment
in Glasgow city centre over the past decade. Over 60,000 new jobs have been
located over the last decade or so, more than 80% of all those created in Glasgow

22
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 UK
average. Furthermore, the growth rates of Edinburgh city during this period were
amongst the best in Europe. Glasgow and Edinburgh has become the focus for
Scotland’s higher value knowledge economy and creative industries jobs.
Interestingly, the political sector, i.e. the public sector and activities strongly shaped
by state intervention, plays a more prominent role in Glasgow than in Edinburgh.
However, labour productivity rates remain relatively low in international terms and
tackling 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 about
3% of the respective workforces commute from the Glasgow city region to Edinburgh
or vice versa. A larger and more integrated labour market could offer more productive
and more specialised jobs. Having reached what could be described as a critical
mass, the two economies would be more balanced, less prone to business and
economic cycles and better protected from external shocks. In short, a more
integrated labour market and economy would provide greater economic resilience
and increase potential opportunities. Furthermore, Scotland’s economic potential
would increase. In order to achieve this, both Glasgow and Edinburgh city regions
will need to place greater emphasis on integration by coordinating economic
development and fundamentally by improving connectivity, accessibility and transport
infrastructure quality.

There are undoubtedly European regions which share a similar dual city pattern, but
Glasgow and Edinburgh's proximity and their complementary structures make the
potential of their collaborative impact extremely significant. Economists who have
tried to measure this suggest that doubling city and city region size could result in up
to 8% productivity increases (Rosenthal and Strange, 2004; Venables, 2006).
Understanding the geography of economic development and key industries will be
critical to exploiting the opportunities that will be presented.

Understanding the geography of economic development and key industries in

Scotland will be critical to exploiting the opportunities that will be presented by HSR.
A single integrated economic area for Glasgow and Edinburgh will provide the
environment to maximise the benefits for Scotland.

5.3 Productivity

Glasgow and Edinburgh cities and city regions currently have a production gap with
the top international performers. The primary reason for this gap is their relatively low
productivity rates. Improving this must be the major focus of any economic
development policy. In the long term, it is productivity which determines the economic
success, higher wages and living standards of any highly developed economy. A
world class transport system is recognised as one of the key enablers for enhancing
productivity and sustainable economic growth, through closer interaction between
complementary businesses, and improved use of scarce skills.

High speed rail can facilitate a one-off effect on the level of productivity (along with
focused economic development interventions) by enabling an increase in higher
value businesses that could result in a significant increase in productivity growth
rates. If sustained over a 20 year period of development this increased rate of growth
could enable the cities to close the production gap with the top international
performers. World class transport would support a sustained impact on productivity

23
level. Transport can support impacts on the growth rate of productivity by stimulating
innovation through its impact on agglomeration economies, inward investment and
international trade.

At a time of economic uncertainty an integrated transport network is more important

than ever to link businesses with markets and people with jobs. Greater integration
and investment is critical to economic resilience and providing the foundation for
accelerating economic growth, productivity and prosperity. Currently, Glasgow and
Edinburgh fall behind their international comparators and competitors whose
transport systems and productivity rates are significantly superior. There is a need to
understand and exploit economic and market trends and opportunities and
undertaking focused interventions that exploit their full potential. This could result in a
positive economic flow from London and other parts of the UK to Scotland. There is
an opportunity to close the production gap and provide a basis for international
competitiveness and first mover advantages.

24
6 Policy Context
6.1 Strategic Framework

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

6.2 Scottish Government

The Government Economic Strategy recognises that the drivers of sustainable

economic prosperity in Scotland are businesses, key sectors and the knowledge
economy. A world class transport system is recognised as one of the key enablers
for enhancing productivity and sustainable economic growth. It also recognised that
greater collaboration between Glasgow and Edinburgh city regions is required to
develop a metropolitan region with the critical mass and quality of assets that can
compete effectively in a global market.

The Scottish Government is supportive of HSR and it is included as an aspiration in

the new National Planning Framework. This appears to have cross party support in
Scotland. The Scottish Parliament’s Transport Infrastructure and Climate Change
Committee concluded that ‘probably the single most important message’ of its recent
report is that it is ‘imperative that the development of high speed rail services in the
UK must include Scotland as a component of any plans from the outset.’…’the
Scottish 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 the
opportunities and benefits for employment, business and the economy. Improved
connectivity is viewed as an opportunity to increase economic participation levels,
increased social inclusion and sustainable economic growth for Scotland. It is also
seen 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 work
closely with Scottish Government particularly in relation to the long term transport
infrastructure investment plan to ensure that the future needs and opportunities of
business influence developments. SE and HIE prioritise projects to increase the
competitiveness of Scotland’s key industries and high growth businesses.

6.3 City and City Region Policy and Strategy

The importance of cities and city regions has been growing and is recognised
internationally. In response, Glasgow’s groundbreaking economic development
strategy, A Step Change for Glasgow, raised aspirations, and Edinburgh focused on
the pursuit of world class performance through the city region framework. Both cities
recognise that in collaboration, Glasgow and Edinburgh offer a complementary and
potentially world class economic powerhouse for Scotland in an increasingly
globalised and competitive market. Collaboration can deliver a wealth of increased
and additional benefits to both cities. A significant start has been made focused on

25
the most important areas of common interest, such as key sectors, connectivity and
international profile.

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

26
7 Transport Network
7.1 Connectivity Context

Glasgow and Edinburgh’s recent attractiveness for inward investment has increased
in recent years, not least by strengthening of its economic assets, including its major
transport interchanges and infrastructure, which bring people to the cities and open
up markets for the city region and Scottish economy. There is scope to further
improve the strengths and economic value of these interchanges. Being at the heart
of Scotland’s transport network, the enhancement of supporting facilities and a step
change improvement of its major transport interchanges are essential to achieve the
goal of establishing a world class identity and image of Glasgow and Edinburgh as
the gateways to Scotland and economic prosperity.

7.2 International Accessibility

In a globalised economy, accessibility is a key factor in the pursuit of competitive

advantage and sustainable economic prosperity. Without good and efficient
accessibility, a city region cannot secure economic development benefits as
effectively and is less attractive as a destination and location.

Renowned international economists, BAK Basel Economics have identified two

different indicators of accessibility: global accessibility and continental accessibility.
They believe the accessibility of a region is driven by two factors: geography and
infrastructure. With Glasgow and Edinburgh in a position at the periphery of Western
Europe 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 important

than its connections to one of the large world airports. The global accessibility of the
Glasgow city region is assessed of average quality. It is less developed compared to
Europe’s major metropolitan regions, but assessed as better than that of several
medium-sized city regions, including Edinburgh. It is not surprising that city regions
with large international hubs such as London, Frankfurt, Amsterdam and Paris rank
highest. Taking geographical location into account, Glasgow’s position is a significant
achievement. However, its relative position has declined compared to its competitors
and Edinburgh. For Edinburgh to improve its global accessibility, it would need to
improve its connections to global airports, especially Heathrow.

BAK Basel Economics view the accessibility of Glasgow and Edinburgh to the
European Continent as not particularly well developed. Currently, overland
connections to Continental Europe hardly play a role, because of distance, which
means that good air transportation is crucial. Generally, the geographical position of
a region is important. A good connection to a big global hub is viewed as significant
along with the availability of fast and efficient overland connections.

7.3 Comprehensive and High Class Transport Infrastructure

HSR cannot be viewed in isolation, but as part of a comprehensive transport

strategy. In this context, there are already enabling infrastructure initiatives which will
offer scope for integration and the flow of wider benefits, in particular the Edinburgh
Tram Project and strategic rail network improvements in central Scotland. Integration
with the wider transport infrastructure ensuring high levels of access from other

27
modes will maximise distributional benefits. Full integration with the existing and
upgraded Scottish transport network, particularly in the Glasgow and Edinburgh city
regions is fundamental to assuring the benefits of improved connectivity, and the
distribution of economic benefits throughout Scotland. City centre hub and spoke
models 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 and
Edinburgh; although HSR is not a requirement, as few benefits would be accrued
from high speed operation over such a short distance.

A coherent approach and integration of policy and intervention is essential. It will

provide a wide range of opportunities for extending links across the whole of
Scotland including Dundee, Aberdeen and Inverness. Feeder services can be
enhanced as required, linking other parts of Scotland and its international airports
with the HSR network. This regional network needs to deliver improved speeds,
increased frequency and capacity and an improved working environment to
complement 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 4.2
million and Edinburgh 6.5 million. As Glasgow Central currently handles around 21
million passengers a year, accommodating an additional 3.6 million represents 17%
more passengers which is a challenge. At Waverley the proportional increase is
greater; accommodating 5.4 million extra passengers in a station which currently
handles 16 million, an increase of 33%. At Haymarket, currently handling 1.6 m
passengers a year, the contrast is starkest of all.

Data from Greengauge21 suggests that around 55 to 60% of the HSR passengers at
Edinburgh would be from a wider area of Scotland. Edinburgh would be the principal
interchange for onward travel to much of Scotland, although Glasgow will be the
interchange for west and south-west. This suggests that the rail network centred on
Edinburgh could have to accommodate in the order of 2.5 million extra passengers
per year making connections with HSR services. The Strategic Transport Projects
Review has already approved a range of enhancements to rail services centred on
Edinburgh and Glasgow through the Edinburgh-Glasgow Improvement Plan. This
includes increase capacity between Edinburgh and Glasgow, and also from
Edinburgh to the north over the Forth including Aberdeen, Dundee and Inverness. In
addition the project to reopen the link between Airdrie and Bathgate provides further
capacity across the central belt. Part of the strategy will deliver two fast services
each hour between Edinburgh and Glasgow city centres. It is beyond the scope of
this study to quantify the specific increase in travel that HSR will generate within
Scotland. However it is noted that the enhancements approved in the STPR are
designed to cope with projected demand without HSR. An additional 2.5 million
passengers dispersing by rail from Waverley represents a very substantial further
increase in demand for capacity on the existing Scottish network. Specifically the
need for further capacity northwards across the Forth, which has seen relatively
modest expansion from EGIP is to be expected. Consultees have also stressed the
importance of further reducing travel times on the internal Scottish network so that
the benefits of High Speed Rail are not lost in slow access times from homes and
businesses outside the two major cities. Complementary investment in the existing
network is therefore essential to secure the maximum benefit from HSR itself.

To support economic development, connecting Scotland’s strategic corridors to

national and international networks is a priority. It is critical that Scotland has strong
direct international links to compete at a European and global level. The development

28
of global connections, particularly new business routes from Scotland’s airports to the
European continent, is an essential element of improving international positioning
and 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 principally
London) served by HSR, although it is to be expected that domestic services from
Inverness and Aberdeen will be less affected due to the greater distances involved.
Edinburgh, Glasgow and Prestwick Airports will in any case be better utilised as
international hubs rather than commuter airports for London, and airports can utilise
freed 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. Consideration
must be given to the most effective way of ensuring connectivity by HSR with this
international hub and gateway to assure global connections for business.

29
8 Policy and Intervention
8.1 Integrated Policy and Intervention

A key to a sustainable long term future is successful integration between economic

development, land-use, regeneration and transport planning. Integration between
policies and interventions would help to align land-use and infrastructure with
business and jobs, improving city and city region labour markets. A focus is required
on key themes such as sustainable economic growth, global competitiveness, key
sectors 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 have
not been as well integrated as in other countries, where concepts of smart growth
and transit oriented development are more deeply embedded. Innovative approaches
should be considered, including more streamlined planning regimes and use of
special development zones. Nevertheless, there is reason to believe that legislative
changes to the planning system in Scotland will provide an improved policy context
and a more streamlined system. The Planning (etc) Scotland Act 2006 includes
provision for a National Planning Framework for Scotland, larger city region strategic
development plans and a hierarchy of development including strategic development

Two strategic level plans will be covering the central belt of Scotland, allowing for
greater inter-regional collaboration. Moreover, the establishment of Regional
Transport Strategies and associated partnerships increases the scope for policy
integration at the regional level, 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 National Planning Framework priorities.

8.2 The National Planning Framework

The first National Planning Framework (NPF1), published in 2004, set out a strategy
for Scotland’s development to 2025. The preparation of a second National Planning
Framework (NPF2) is seen as providing an important vehicle. It guides Scotland’s
development to 2030, setting out strategic development priorities to support the
Scottish Government’s central purpose – sustainable economic growth. The Planning
etc. (Scotland) Act 2006 puts this and future iterations of the National Planning
Framework on a statutory footing.

The Framework is intended to play a key role in co-ordinating policies with a spatial
dimension and aligning strategic investment priorities. It will take forward the spatial
aspects of the Government Economic Strategy, highlighting the importance of place
and identifying priorities for investment to enable each part of the country to play to
its strengths. It provides the strategic spatial policy context for decisions and actions
by the Government and its agencies.

Planning authorities are required to take the Framework into account when preparing
development plans and it is a material consideration in the determination of planning
applications. This will streamline the planning process, to an extent, with regard to
proposals relating to HSR and wider infrastructure. Indeed, HSR links from the
Central Belt to London are identified within the National Planning Framework (NPF2)

30
as a ‘national development’, including the consideration of connections to the rest of
the rail network and effects on communities.

The National Planning Framework Strategy Map14

8.3 Planning System Reform and Strategic Development Plans

Now the National Planning Framework is on a statutory footing, with other reforms,
which became effective on 1 August 2009. In particular, there is a hierarchy of
development including ‘national developments’ designated in the National Planning
Framework, and also ‘major developments.’ This Act also introduces Strategic

31
Development Plans, which cover multiple local authority areas, placing spatial
planning within a regional context and allowing integration with other regional plans
and 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 in
particular. They will form the ‘upper tier’ of the development plan framework.

The Strategic Development Plan Areas, and City Regions15

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

• Greater scope for integrated policy and plan-making within the regions and
sub-regions covered;
• Greater scope for collaboration between Strategic Development Plan
authorities in the Central Belt;
• Greater scope for integration of land-use planning with other policy areas at
the regional level, for example with the Regional Transport Partnerships.

8.4 Enabling the Flow of Benefits

32
There is evidence that strategic priority areas in both Glasgow and Edinburgh are
aligned with accessibility opportunities which will facilitate the flow of benefits from
the 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 and
economic development can be integrated in the spatial context to deliver a strategic
development corridor. These recent strategic developments provide a model for a
more joined-up approach in the future.

14
National Planning Framework for Scotland 2
http://www.scotland.gov.uk/Resource/Doc/278232/0083591.pdf
15
Strategic Development Plans in Scotland: The Way Forward
http://www.scotland.gov.uk/Resource/Doc/212607/0084258.pdf

33
9 City Centres
9.1 City Centre Stations

Edinburgh and Glasgow city centres are established as major agglomerations of

businesses in key growth sectors, and attractive and dynamic city centres will remain
fundamental for supporting sustainable economic growth. The cities act as a gateway
and magnet for business key sectors and other commercial activities. Well designed
and strategically focused transport infrastructure, bringing together at one location
the hubs of local, national and international transport networks, can enhance city and
national accessibility and facilitate major land-use developments. They can improve
the attractiveness of a location for inward investors, facilitate productivity gains as
key sectors and higher value activities cluster around major hubs, increase local and
tourist spending and have a positive impact on the economic outputs and the wider
benefits of the city regions and nations they serve.

Bringing HSR into Scotland’s big cities is therefore critical to maximise economic
impacts and wider benefits and could have a major impact on their identity, image
and behaviour, since their location characteristics (fast high quality access to the
centre of London, other UK cities and the European continent) and development
values would be transformed. Clustering higher value activities of the knowledge
economy around city centre hubs, such as financial and business services and
creative industries, would provide further momentum to success achieved over the
last decade. Furthermore, improved connectivity and accessibility would provide a
major boost to city and Scottish business and leisure tourism as well as a significant
if short to medium term boost to the construction industry.

Recent research has challenged the traditional view that the freight and distribution
industries are the only beneficiaries of agglomeration, and that such wider benefits
are most evident in sectors such as financial services. Both Glasgow and Edinburgh
are recognised as major centres of financial and business services. Both cities have
potential 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 in
need of regeneration.

However, experience has demonstrated that linkages between business and

transport hubs with support can create limited benefit from close proximity.
Consequently, the clustering of higher value businesses and industries around HSR
stations in city centres needs to be strongly supported to generate significant
agglomeration benefits.

The planning and land use development processes around HSR stations need to be
streamlined to speed up delivery and encourage the location of the key sectors to
adjacent locations. Innovative approaches need to be considered to ensure benefits
are maximised.

9.2 Central Station, Glasgow

Central Station has been identified through our consultation with key business as the
preferred option for Glasgow’s station and terminus. It is in the heart of the city
centre, close to the International Financial Services District and the best retail offer
outside London, and with easy access to the HE quarter and the Clyde Waterfront.
Furthermore, Central Station provides a unique development opportunity to create a

34
Glaswegian St Pancras. There have been recent improvements in this part of the city
centre, especially development along the river front in both directions. There is an
opportunity to improve the established urban structure around the station area. There
are pockets of development land around the station area. Development on this site
would 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 prominent
north elevation are distinctive; the main entrance has an elaborate front elevation that
hides the impressive high structure behind. This façade is a prominent landmark.
Capacity issues at Central Station high level would need to be resolved. However
there 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 area
though 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 Glasgow
Central by rail, as well as services onward to the Clyde coast.

9.3 Waverley Station, Edinburgh

In Edinburgh, Waverley and Haymarket are possible HSR stations. Waverley Station
is the preferred option because it is in the heart of the city centre; but access from the
west is problematic, and there are serious constraints on development around it.
Nevertheless, Waverley is relatively close to under-used, derelict and vacant land
and buildings, and to redevelopment proposals including the St James Centre and
Caltongate; flagship developments that can provide the impetus for significant
regeneration.

There are plans to redevelop Waverley and to improve the links from the station to
the city. The Tram will pass by the station, although the nearest Tram stops will be
some distance from Waverley and do not constitute a tram - rail interchange as
convenient as Haymarket.

35
Any new development at Waverley would be severely restricted by the existing tight
urban structure and attractive historic setting of Edinburgh. It is part of a World
Heritage 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 points
and any alterations or height increase to the station would be visible from
surrounding locations, further limiting potential development opportunities.

This location is a landmark within the city centre with an impressive backdrop of
Edinburgh Castle and Princes Street Gardens. The location is very prominent
offering 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 a
surge in demand with prime office developments in the West End and a mixed-use
development on the site. Haymarket is a gateway location with potential for
improvement. The site is in an area of strategic change, part of the masterplan for a
transport interchange at Haymarket, including integration with the Edinburgh Tram. It
is less central than Waverley and is constrained in terms of opportunities for
expansion, although higher densities would be more acceptable than at Waverley.
There is potential for reasonable design freedom. There are development and
redevelopment sites in the area that could offer opportunity for growth.

The Haymarket area has always been a transition area, separated from the city
centre and more sporadic in its urban form than at Waverley. The location good links
to the west compare with restricted connectivity with the east, due to the intervening
city centre. Visually the area is less impressive and less distinctive than Waverley.
The scale of surrounding buildings would limit development opportunity in terms of
height. The materials palette is less restrictive than in the city centre which could
offer more freedom in terms of architectural design.

36
At either location the national and local rail networks serve a wide hinterland, and the
Edinburgh Tram will provide access to a corridor of development opportunities
running from the Airport to the Waterfront.

9.5 Integration and Secondary Hubs

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 Glasgow and Edinburgh’s role as a
fully functional economic region and Scottish economic driver, and support global
ambitions by improving connectivity and increasing its investment attractiveness.
However, it is worth noting that HSR interchanges need to be connected and
integrated with the existing network and other key gateways or secondary hubs
through very efficient, attractive and sustainable links to maximise the benefits for the
surrounding regions and Scotland. Strategically located secondary hubs that focus
on key development sites and areas closely related to main railway stations, which
themselves have fast and frequent services to an HSR interchange, will play a major
role in spatial distribution and the development of secondary clusters outside
Edinburgh and Glasgow City Centres.

37
10 Lessons from UK Station Developments
10.1 UK Case Studies

The UK case studies present recent or planned major redevelopments of some of the
most significant interchanges in England. These include Kings Cross and St Pancras
International which has recently been opened, although the surrounding
redevelopment is still in progress, and plans for Birmingham New Street and
Manchester Victoria. The purpose of these case studies is to understand the nature
and potential scale of economic impacts of such high profile redevelopments of major
gateways. The studies suggest how major redevelopments of key gateways might
deliver a step change in the image of their surrounding areas, not least by creating
attractive places to live, work and for recreation. In particular, high profile station
redevelopments can intensify development and create conditions to bring higher
quality land uses which are generally not be associated with rail stations. Such
catalytic impacts could result in job creation, better use of available land, brownfield
regeneration, increase in land values, inward investments, increased consumer
spending and eventually a significant contribution towards the area’s economic
output.

38
10.2 Kings Cross and St Pancras International

Improvement works across St

Pancras International to
accommodate High Speed
Rail connecting London to
mainland Europe has
facilitated the regeneration of
the area around the station.
The land around King's Cross
and St. Pancras stations
presented one of the largest
inner city redevelopment
opportunities in Europe with
planning and listed building
applications for 72 ha. The
development comprises
business 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 impact

assessment undertaken as
part of the Environmental
Impact Assessment submitted
to the London Boroughs of
Camden and Islington
indicated significant benefits
for the local community as
well as London as a whole.
Estimation included around
3,005 full time equivalent jobs
created during construction
phase, 25% of which would
be taken up by residents of
the wider area around King’s
Cross.

The development is expected to generate between 24,800 and 29,500 direct jobs
after accounting for displacement and multiplier effects. It is further estimated that
without any positive intervention, local residents would account for between 7,500
and 8,800 jobs. The number of jobs created is expected to increase the potential total
expenditure in local services and shops, enabling them to increase income and
possibly expand and improve. Other significant social benefits include increased
open space availability as well as reduced perception and actual incidence of crime.

39
10.3 Birmingham New Street

Birmingham Gateway is a £600

million project by Network Rail,
Advantage West Midlands and
Birmingham City Council for
the improvement of New Street
station in the city centre. The
project will transform the
station, the shopping centre
above it and the surrounding
areas. The works include
remodelling 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 using
stunning architecture, and creating a major commercial mixed-use development
opportunity for two tall towers to the southern aspect, all surrounded by pleasant new
public 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 can
potentially lead to up to 10,000 new jobs created across the city. Redevelopment of
New 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 project
as estimated by the Department of Transport amounts to about £1.4bn.

A Department for Transport appraisal also highlighted additional wider economic

benefits for the city centre: 125,000 sq m of additional office development across the
city centre by 2018, levering around £620m of private sector investment and
accommodating some 11,100 additional direct jobs, productivity benefits across the
city centre resulting from agglomeration effects of some £35bn per annum by 2018,
uplift in the value of existing property and potential development of 16 sites in the
southern half of the city centre amounting to a potential uplift of £100m, and up to an
additional £100m from the regeneration of other existing property in city to the south
of the project.

40
10.4 Manchester Victoria

In 2007, a £300m Masterplan was

launched to redevelop Manchester’s
Victoria station and the surrounding
area. Covering approximately 2.3
acres this mixed use development
will include office, retail, hotel and
residential accommodation, together
with station improvements including
interconnections with light and heavy
rail.

Key features include:

• Mixed used premises with the

potential to provide up to
15,000 jobs.
• An integrated energy system
aiming to provide 100 per
cent of the development's
heat and power needs from
renewable sources.
• 4.5 acres of public open
space.
• Heavy emphasis on green
transport with the aim of
making cycling, walking and
public transport the preferred
options.

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

41
11 Land Use
11.1 Land Use and Enabling Infrastructure

Although the policy context is encouraging, this needs to translate to delivery of

enabling infrastructure, particularly with regard to the potential ‘flow’ of wider benefits
from each centre to the region, and across the wider Central Belt. Consideration
needs to be given to both transport infrastructure and land uses as they relate to
policy 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 offer
scope for integration and the ‘flow’ of wider benefits. In particular the Commonwealth
Games 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 to
the bus and metro services. This focuses on the rail network as offering closest
alignment 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 this
connectivity.

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

42
Outwith the core, future opportunities will most likely arise in the planned strategic
business / 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 of
employment 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 the
Corridor;
• Use and enhancement of the established infrastructure, particularly water
services, 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.

Some 133ha of vacant and derelict land lies within 500m of the railway stations, with
some 22ha on 48 sites of less than 1ha, 52ha on 24 sites of between 1ha and 5ha,
and 59ha on six sites on land between 5ha and 25ha.

43
In addition to wider benefits from employment land development, there are potential
benefits from urban renewal and community growth. The Glasgow and Clyde Valley
Structure Plan identifies three wider Metropolitan Flagship Areas, in particular Clyde
Waterfront 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
© Crown Copyright. .All Rights Reserved. 1000 23 420 (2009)

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

44
Map 11.4 Brownfield Opportunities, Strategic Business/Industrial Land, Urban
Renewal Areas and Priority Areas
© Crown Copyright. .All Rights Reserved. 1000 23 420 (2009)

Finally, the need to balance urban renewal with community growth is highlighted in
the 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 integration
with policy initiatives, focussed on the re-use of long-term vacant and derelict land, to
allow 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 need
to 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 more
established in delivering a wide-area strategic development plan than the authorities
in East Central Scotland. The Edinburgh and the Lothians Structure Plan, which is
the current Development Plan, will be replaced in 2015 by the South East Scotland
Strategic Development Plan centred upon Edinburgh and stretching into Fife, the
Borders and westwards to Falkirk, beyond the traditional hinterland of the Lothians. It
is necessary to look to the future South East Scotland Strategic Development Plan to
deliver policies which will enable the flow of wider benefits.

Nevertheless, in the Edinburgh context, there are enabling infrastructure initiatives

which will offer scope for integration and the ‘flow’ of wider benefits, in particular the
Edinburgh Tram Project and waterfront and city centre developments at higher
densities which offer greater agglomeration benefits.

The Edinburgh Tram will start operating in 2011/2012. The first phase will link Leith
with Edinburgh Airport via Princes Street, Haymarket, Edinburgh Park and the Gyle
business and retail centres. An interchange is planned on the Fife-Edinburgh heavy
rail line to link with the Tram. The role of the bus service should not be overlooked;

45
this will continue to serve much of Edinburgh, particularly areas not served by the
Tram.

The relationship between connectivity to the centre and wider opportunities is shown
in Map 11.5. Major employment land (Class 1, Class 2, Class 3) is identified and
monitored by the City of Edinburgh Council. Some of this lies within the ‘Core
Development Areas’ identified in the Structure Plan, including the City Centre (1 on
map), the Waterfront (2 on map), Edinburgh Park / South Gyle / Sighthill (3 on map)
and Newbridge / Kirkliston / Ratho (4 on map). Other major areas include Granton
Waterfront, the South East Wedge, the west of the City Centre, and flagship
proposals 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 and
land use planning and policy. There are fewer vacant and derelict sites within the
Edinburgh area than in Glasgow, but there are regeneration and redevelopment
opportunities 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

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

Within 500m of tram and rail stations, there are some 26 brownfield sites of up to 1ha
totalling 8ha, some 21 sites of between 1ha and 5ha totalling 42ha, and four sites of
between 5ha and 15ha totalling 42ha.

A map of the city centre and surroundings is shown below.

46
Map 11.6 Edinburgh City: Tram and Rail Network, Brownfield Opportunities,
Strategic Employment Land and Core Development Areas
© Crown Copyright. .All Rights Reserved. 1000 23 420 (2009)

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’, to
allow maximum benefit, and to benefit the other centres between these two cities.

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

11.5 Land Use Forecasts

The fundamental requirement of an employment land review is to assess the

employment land needed to support the growth target of an area. There is also a
need to test the employment land implications of other possible economic outcomes
in the area.

Assuming the successful implementation of HSR in Scotland and focused

complementary measures, the demand for business land uses in Glasgow and
Edinburgh is likely to increase significantly over the next 20 years. Distribution land
uses are also likely to increase over the same period. In comparison, the demand for
industrial land will continue to decline, although the position is relatively static in the
Edinburgh city region. Hence, estates in the West of Scotland in particular with
predominantly industrial land use should be carefully assessed, to test their
appropriateness for future demand requirements. Furthermore, any employment land
which is be unsuitable to meet future requirements and unsuitable and unviable for
redevelopment should be considered for release.

47
The development of mid-urban business parks using industrial land closely linked
(economically and geographically) with the expanding city centres in the hub and
spoke model should be considered a priority. The planning system can affect this
distribution by managing the redevelopment or change of use of existing land or
buildings, or by guiding the location and form of new development. In both Edinburgh
and Glasgow this strategic direction to land-use allocation, driven by considerations
of connectivity, can be seen to be a continuation of recent practices. Further
consideration should be given to housing and population projections, as these may
constrain the uptake of jobs created.

11.6 Office Market

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

Edinburgh and Glasgow have very different characteristics with regard to office
17
supply and demand. In recent years , there has been little growth in demand in
Edinburgh, although it is believed there is pent-up demand, particularly in the legal
sector. Glasgow, by contrast, has displayed greater growth, with increased financial
services activity and inward investment. In both cities there is a shortage of grade A
accommodation, particularly with the completion of flagship developments in both
cities. Nevertheless, there has been a clear trend of static or declining rental values
in 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 around
10%), Edinburgh and Glasgow were equal in terms of prime rentals and on a par with
Bristol, and Glasgow’s growth outstripped other locations.

The impact of the recession on office property market has been significant.
18 19
Research indicates that rentals in both Edinburgh and Glasgow are forecast to
decline slightly (from £29 per sq ft per year to around £25 per sq ft per year), before
modest improvement commencing in 2013.

Glasgow could approach or exceed the relative positions of Birmingham and

Manchester, and Edinburgh could do likewise as well as gaining ground on Glasgow
in terms of growth in demand.
16
Scottish Vacant and Derelict Land Survey, Scottish Government (2008).
17
GVA Grimley, Edinburgh and Glasgow Office Commentary, Spring 2007.
18
DTZ Property Market Overview, 2009 Q2.
19
DTZ Office Market Research for Edinburgh, Glasgow, 2009 Q2.

48
12 Governance and Leadership
12.1 Political Support and Governance

It is clear that changes in governance are needed to support more joined-up action
within both national and local government, and between national decisions on HSR
routing and local/regional action on complementary measures. Unresolved, this could
be 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 development
forward. Scottish Government must take the lead in securing HSR for Scotland and
drive Scotland to proactively maximise benefits and minimise any potential
disbenefits.

Scottish Government leadership is essential to making the case for HSR in Scotland
within 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 also
critical that business leaders, higher education principals and others are fully
engaged. Clear communication to gain and maintain the general public’s support is
essential.

Transport Scotland is not currently a member of the Government’s Strategic Forum,

the body charged with driving alignment across Government and its national
agencies. Current Forum members include Scottish Government, Highlands and
Islands Enterprise, Scottish Enterprise, Scottish Funding Council and Skills
Development Scotland. Closer partnership working with Transport Scotland will be
essential 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 social

development must be developed. There must be a coherent and consistent set of
investments that are binding upon lower tier authorities and organisations. Any
assessment 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 maximum
benefits from HSR. For example, national planning framework sets the right context
for delivering HSR, but needs to be extended to include, not just the infrastructure,
but also the land allocations around the stations, so that appropriate land is made
available for business and industry. There should be a presumption in favour of
planning consent for appropriate business uses around HSR hubs.

To be effective, governance arrangements need to ensure that stakeholders and

partners have the instruments and powers to achieve change in securing
opportunities and managing conflicts. They must also ensure that the incentives and
resources to deliver the desired outcomes and have legitimacy in the eyes of
stakeholders and the public. The following principles of strong and effective
governance must be applied:

• Achieving stakeholder and partner buy-in

• Clear aspirational vision

49
 • 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 and
strategy to realise an agreed vision and objectives and monitor performance.

50
13 Conclusions
13.1 Key actions

Scotland needs a modern world class, efficient, comprehensive and integrated

transport system to meet the challenges of the next 30 years and beyond. HSR
symbolises a modern, dynamic and accessible state, and combined with good air
and local and regional transport links, will help Scotland address its productivity
constraints and compete in the Global marketplace.

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

With many of the tools already developed, and some of the key policies and
programmes 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 shared
action plan with responsibilities and timescales will be critical to achieving ownership
and alignment. Every action will require lead responsibility, support and commitment
from partners and close partnership working to realise HSR and maximise its
benefits.

Strategic:

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

2. Scotland has no strategic role in HS2, although Transport Scotland is one of

numerous ‘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 approach

and Transport Scotland’s business case for High Speed Rail. Canvass cross-
party support. Scottish Government must take the lead in securing HSR for
Scotland and drive Scotland to proactively maximise benefits.

4. Strategic thinking at a national, regional and city level is aligned, but this
consensus will be tested as hard strategic choices are made. Consider how to
engage and secure support from a wide range of stakeholders and partners
across Scotland. This includes fully engaging business leaders, higher
education principals and others. Clear communication to gain and maintain
the general public’s support is essential.

5. Consider the nature and potential of the relationship with London and other
UK cities:

51
 • For key sectors, particularly financial services, HSR will further boost
Scotland’s cost competitive advantages. Other sectors of potential
business 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 as
Manchester, 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 maximising
agglomeration opportunities. Opportunities and benefits created by the
development of a single economic space and integrated labour market in the
Central Belt should be recognised as a strategic priority.

7. Glasgow and Edinburgh need to understand and exploit economic and

market trends and undertake focused interventions that exploit their full
potential.

8. Central Scotland: Glasgow - Edinburgh connectivity is key. They need to

operate as a single bi-polar economic region (a ‘super cluster’), to allow
maximum benefit, and to benefit the other centres between the two cities.

9. Strongly support clustering higher value businesses and industries around

HSR stations in city centres to generate significant agglomeration benefits.
Make a presumption in favour of planning consent for appropriate business
uses 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 over
the longer term. Direct benefits decline over time, indirect benefits will reach a
plateau.

11. Develop an integrated and holistic approach to branding and marketing to

build the image and attractiveness of Scotland.

Planning and Land Use:

12. Land use and infrastructure plans, policies and proposals provide the
opportunity to spread wider benefits intra-regionally. 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 National Planning
Framework priorities.

13. Recent changes to the planning system in Scotland may provide an improved
policy context and more streamlined system, but still consider innovative
approaches to transport, economic and spatial strategies, including more
streamlined planning regimes and special development zones.

14. Edinburgh: look to the future South East Scotland Strategic Development
Plan to enable the flow of wider benefits. Key enabling infrastructure
initiatives are Edinburgh Tram, waterfront and city centre developments.

52
 15. Estates in the West of Scotland in particular with predominantly industrial land
use should be carefully assessed, to test their appropriateness for future
requirements. 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. Also
need to test the employment land implications of other possible economic
outcomes 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 and
spoke model should be considered a priority.

Transport:

18. There must be a coherent and consistent set of investments that are binding
upon lower tier authorities and organisations. Any assessment of transport
needs should be based on holistic benefits and development strategies, not
modes looked at in isolation.

19. Scottish Enterprise and Highlands and Islands Enterprise to work closely with
the Scottish Government on the long term transport infrastructure investment
plan.

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

21. Glasgow: focus on the rail network as offering closest alignment with a future
HSR terminal and the city core, but bear in mind access by other modes:
• Outwith the core, future opportunities will most likely arise in the
planned ‘Corridor of Growth’ promoted by the Structure Plan;
• Potential benefits from urban renewal and community growth. The
Glasgow and Clyde Valley Structure Plan identifies Clyde Waterfront
and 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 work
together with a key sector focus to achieve these through:
• the provision of effective high quality gateway hubs in each city;
• the provision of accessible sites for development in the city centres
and at satellite nodes well connected to the city centres; and
• the development of both national and local transport networks feeding
into the hubs.

23. Other areas will not experience the same benefits; therefore, the Scottish rail
network must continue to develop to ensure these areas gain as many
benefits as possible. Integration with the wider transport infrastructure;
connections significantly more integrated, effective, efficient, faster, reliable,
safe, affordable.

24. Consider overland connections to Continental Europe, and relationship to air

transport.

53
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 : Edinburgh
Collaboration 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 of
Edinburgh Council, Glasgow City Council)

7. Understand and exploit economic and market trends particularly in relation to

key sectors
(Scottish Enterprise, City of Edinburgh Council, Glasgow City Council)

8. Develop comprehensive, integrated and efficient transport network

(Scottish Enterprise, City of Edinburgh Council, Glasgow City Council,
SESPlan, GCVSPDA, SEStran, SPT)

9. Consider planning and land use implications

(Scottish Government, SESPlan, GCVSPDA, City of Edinburgh Council,
Glasgow City Council)

10. Establish strong and effective governance

(Scottish Government and all stakeholders and partners

54
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, Greengauge
21 (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 October
2008)
Shifts in Economic Geography and their Causes, Venables (2006)
Spain's high-speed train the envy of Obama, Valencia Life, (April 2009)
UK Rail, A Case for Investment, Inversys (February 2009)
Policy
National Planning Framework for Scotland, Scottish Government (2009)
Strategic Development Plans in Scotland: The Way Forward, Scottish Government (2009)
Glasgow and the Clyde Valley Structure Plan 2000
Edinburgh and the Lothians Structure Plan to 2015
Data Sources
Scottish Vacant and Derelict Land Survey, Scottish Government (2008).
Edinburgh and Glasgow Office Commentary, GVA Grimley (2007)
Property Market Overview, DTZ (2009)

55
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  

56
Appendix 2 – Socio-Economic Baseline
Introduction

This analysis sets out the prevailing socio-economic conditions in the Edinburgh and
Glasgow, the two likely destinations for the HSR Stations on the envisaged UK wide
network. In particular, the conditions appraised include demographics, characteristics
of the labour supply, demand for labour, sectoral strengths and dynamism of the local
business base.

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

• Edinburgh City Region includes Edinburgh, East Lothian, Midlothian, West

Lothian, Fife and Scottish Borders local authority areas.
• Glasgow City Region includes Glasgow, East Dunbartonshire, West
Dunbartonshire, North Lanarkshire, South Lanarkshire, Renfrewshire, East
Renfrewshire and Inverclyde local authority areas.

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

Demographics

In 2007, Edinburgh and Glasgow accounted for some 20% of Scotland’s total
resident population. Further, the two city regions combined accounted for around
60% of the Scottish population base. The population of Edinburgh and its wider city
region grew by 5% respectively between 1998 and 2007. This growth is nearly four
times higher the growth of population in Scotland. In comparison, both Glasgow’s
and its city region’s population base shrunk by approximately 1%.

With regards to the age structure, both Edinburgh and Glasgow appear to have a
much 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 ten
year period. However, the growth achieved in Glasgow was nearly half of the rate
achieved in Edinburgh. The high quality higher and further education infrastructure of
the cities could be accountable for such trends. In comparison, this pool of youth has
declined in both city regions, Scotland and Great Britain.

Considering the significance of Edinburgh and Glasgow as key centres of economic

activity for Scotland, the cities have witnessed a significant decline in 65 – 79 year
olds between 1998 and 2007. The rise in local property prices during this period
could imply that older members of the resident population find it difficult to sustain a
high quality of life in the cities.

57
Table 1: Population: Age Structure (Source: Mid Year Population Estimates 1998 and
2007, NOMIS)
Population in 1998

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

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

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

City of Glasgow Edinburgh Glasgow Great

Age Bands Scotland
Edinburgh City City Region City Region 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 the
cities have a comparatively larger supply of working age residents compared to the
Scottish and Great Britain-wide benchmarks. Further, the proportion of working age
residents 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 Edinburgh
and Glasgow, compared to the growth achieved by the Scottish labour market
between 1998 and 2007. Further, the workforce in the Edinburgh City Region also
achieved a significant growth during the same period. However, Glasgow City Region
achieved a small growth of 1.1% during the ten year period.

58
Table 1: Availability of Working Age Population (Source: Mid Year Population
Estimates 1998 and 2007, NOMIS)
Working Age Working Age
Population as a Population as a Percentage change
Working Age Working Ae Population
Working Age Population percentage of total percentage of total between 1998 and
Population in 1998 in 2007
resident population in resident population in 2007
1998 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 the
dynamism of its workforce. At a rate of nearly 80%, Edinburgh’s and its wider city
region’s working age population appears to be more dynamic than most other
comparators. On the other hand, the economic activity rate of Glasgow is nearly ten
percentage points below the performance of Edinburgh City Region. On a positive
note, the economic activity rate in Glasgow City Region is nearly five percentage
points higher than the city’s average.

The economic activity across all areas of analysis increased only marginally between
2004 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 sustainable
employment opportunities for the local working age population to keep them
economically active.

59
Figure 4: Economic Activity Rate (Source: Annual Population Survey 2004 and 2008,
NOMIS)
Economic Activity

78.8%
Great Britain 78.2%

79.6%
Scotland 79.0%

76.0%
Glasgow City Region 75.5%

81.5%
Edinburgh City Region 81.1%

71.1%
Glasgow City 70.4%

79.9%
City of Edinburgh 79.7%

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

Economic Activity Rate 2004 Economic Activity Rate 2008

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

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

NOMIS)
Unemployment

10.0%

9.0%

8.0%
Percentage of Economically Active Population

7.0%

6.0%

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%
Unemployment Rate 2004 Unemployment Rate 2005 Unemployment Rate 2006 Unemployment Rate 2007 Unemployment Rate 2008

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

 
Nearly half of Edinburgh’s working age population possesses a degree compared to
approximately a third in most other comparators. The local educational infrastructure

60
in Edinburgh along with the City’s economic structure could be viewed as a key driver
for such a high quality labour supply.

On the other spectrum of skills supply, only 6% of Edinburgh’s working age

population has no formal qualifications. In comparison, nearly one-fifth of Glasgow’s
workforce lacks formal qualifications. However, on a positive note, the proportion of
working 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 2005

and 2008, NOMIS)
Skills Base: Qualifications of the Workforce

100%
6% 9%
10% 12% 11%
14% 15% 15% 17%
18% 19%
90% 10% 24% 8%
7% 7%
9% 7% 7%
7% 8%
7% 7%
80% 9%
Percentage of Working Age Population

8% 6%
10%
7% 14% 11% 11%
10%
13% 14% 8% 14% 11%
70%
9% 18%
17%
60% 13% 18% 18% 16%
18% 17%
19% 18% 19%
17%
50%
19%
21%
18% 19%
20% 20%
40% 18% 18%
16% 18%

30%

43% 45%
20% 37%
33% 34% 32%
28% 29% 31% 31% 30%
27%
10%

0%
City of City of Glasgow Glasgow Edinburgh Edinburgh Glasgow Glasgow Scotland Scotland Great Great
Edinburgh Edinburgh City (2005) City (2008) City Region City Region City Region City Region (2005) (2008) Britain Britain
(2005) (2008) (2005) (2008) (2005) (2005) (2005) (2008)

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 of
employment in high quality jobs, namely in managerial, professional and technical
occupations. In particular, more than half of Edinburgh’s workforce is employed in
high value adding occupations. In comparison, Glasgow City and all other
comparators have a nearly 40% of their workforce employed in high value adding
occupations.

Also worth noting is the low proportion of lower quality jobs (plant and process
operators and elementary occupations) in Edinburgh, compared to all other
comparators. However, the number of these jobs and their percentage share of such
jobs in the local economy in Edinburgh have increased between 2005 and 2008. In
comparison, all other comparators witnessed the opposite trends.

61
Figure 7: Employment by Occupations (Source: Annual Population Survey 2005 and
2008, NOMIS)
Occupational Structure: Employment by Professions

100%
8.5% 8.8% 11.7% 11.4% 11.3% 10.1% 11.7% 11.0% 11.3% 11.6% 11.4%
12.4%
90% 3.2% 3.8%
6.9% 6.8% 6.9% 7.3% 7.5% 7.1%
8.4% 6.9% 7.2% 8.1% 7.9% 7.5%
8.1%
Percentage of Employment in ...

80% 7.4% 9.5% 9.1% 9.5% 8.1% 7.9% 7.6%

7.7% 10.9% 9.4% 8.8%
7.8% 8.3% 7.7% 8.2%
70% 7.2% 8.1% 8.1% 9.5% 8.9%
9.0% 8.0% 8.3%

10.0% 11.1% 11.3% 10.9%

60% 12.3% 9.4% 10.5% 10.2% 11.7%
15.9% 9.3% 11.5%

50% 12.0% 11.4%

15.0% 10.3% 14.1% 11.9% 11.5% 12.7%
17.7% 13.4% 12.8%
13.5%
40%
15.2% 14.6%
15.9% 13.0% 15.3% 14.9% 13.9%
15.6% 15.0% 13.8%
30%
20.4% 19.9%
14.1% 14.6% 12.5% 13.1%
20% 14.4% 11.9% 12.5% 12.1% 12.9%
13.9%

10% 15.1% 15.4% 13.6% 13.6% 12.9% 13.0% 14.9% 15.7%

9.7% 11.9% 11.9% 12.4%

0%
City of City of Glasgow Glasgow Edinburgh Edinburgh Glasgow Glasgow Scotland Scotland Great Great
Edinburgh Edinburgh City (2005) City (2008) City City City City (2005) (2008) Britain Britain
(2005) (2008) Region Region Region Region (2005) (2008)
(2005) (2008) (2005) (2008)

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

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

.. sales and customer service occupations .. process, plant and machine operatives .. elementary occupations

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% of
Scotland’s economic output. Considering that the two cities only house approximately
20% of Scotland’s population base, the high contributions towards the Scottish GVA
implies above average per capita GVA in Edinburgh and Glasgow. However,
Edinburgh’s more skilful workforce implies that the City boasts of some of the most
productive (highest per capita GVA) workers in Great Britain.

Collaborating to Compete: Glasgow and Edinburgh, a recent report prepared by the

Scottish Enterprise suggests that from 1995-2005, Glasgow and Edinburgh's per
capita economic output grew at a rate double the rest of Scotland's and 50% above
the UK average.

The report suggests that academics in the past have referred to the potential of
collaboration between the two cities. In particular, the report suggests that Glasgow
and Edinburgh working together offers the opportunity to create critical mass of
population, services and infrastructure between the 2 cities, which public policy has
often considered in isolation, despite their relative proximity, so that they cross the
metropolitan threshold and compete more effectively against larger, more prosperous
locations.

Furthermore the document states that there are undoubtedly European regions which
share a similar dual city pattern, but Glasgow and Edinburgh's proximity, and their
very different characters as cities make the prospects of their collaborative impact so
potentially exciting. A view among economists who have tried to measure this is that
doubling city size could lead to a sizeable 3-8% increase in productivity (Rosenthal
and Strange, 2004; Venables, 2006). Glasgow : Edinburgh Collaboration Initiative
states that transport infrastructure investment can play a key role in achieving such
economic gain.

62
Table 8: Gross Value Added (Source: Office of National Statistics, 2006)
Gross Value Added (2006) Per Capital Gross Value
Areas
(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 highest
average annual wage of full time workers, when compared to Glasgow, Scotland and
Great 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 earned
in Great Britain.

However the gap in average wage between the Glasgow and Edinburgh has not
always been so prevalent. In 1999 the gap in income between the two cities was only
6% (compared to 12% in 2008). This could be attributed to the local city’s local
educational infrastructure and attainment, economic structure, and an improving
perception 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 in
the 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 the
disparity between average income in Edinburgh City and the Edinburgh City Region.

63
Figure 9: Average Annual Earnings (Source: Annual Survey of Hours and Earnings
1999-2008, NOMIS)
Wage Structure

£24,027
Great Britain £16,914

£25,230
Scotland £17,866

£24,219
Glasgow City Region £16,280

£23,527
Edinburgh City Region £16,382

£23,631
Glasgow City £17,397

£26,153
City of Edinburgh £18,383

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

Per Capita Annual Gross Pay (median)

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 vitality
and demand for its workforce. In 1998 there were over 24 million people employed in
Great Britain, a figure which had risen by 9.4% by 2007 to over 26 million. The
employment levels in 2007 in Great Britain relate to approximately 0.72 jobs per
working 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 and
2007, NOMIS)
Total Total Change
Areas Employment Employment between 1998
1998 2007 and 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%
Glasgow City Region 742,121 836,676 12.7%
Scotland 2,137,728 2,380,923 11.4%
Great Britain 24,144,263 26,420,108 9.4%  

Employment density in Scotland rose at a more escalated rate than that of the rest of
Great Britain over the ten year period. This greater increase in demand for workers in
Scotland is partly due to the above average increase in number of jobs between
1998 and 2007 (11.4% in Scotland compared to 9.4% in Great Britain).

Historically, both Edinburgh and Glasgow have operated at a very high employment
density. Both cities had 0.95 jobs per working age population, more than 25% more
than in their respective city regions and Scotland. This highlights the economic

64
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 jobs
available per person, surpassing Edinburgh which had 0.97 jobs per person.

Figure 11: Job Density (Source: Annual Business Inquiry and Annual Population
Survey 1998 and 2007, NOMIS)
Demand for Labour

0.72
Great Britain 0.69

0.74
Scotland 0.67

0.75
Glasgow City Region 0.67

0.74
Edinburgh City Region 0.71

1.02
Glasgow City 0.95

0.97
City of Edinburgh 0.95

0.50 0.60 0.70 0.80 0.90 1.00 1.10

Job Density: Number of jobs per working age population

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 city
regions, meaning an additional 48,000 jobs created within the city and an additional
94,000 within the city region. Growth of employment was not as significant in
Edinburgh or its city region, with employment growth remaining on a par with the
Scottish national average at 11% in the city and 11.3% in the city regions. This may
be 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 and
social work. On a promising note, all but one of the city’s staple sectors has
expanded in employment terms between 1998 and 2007. In particular, the wholesale
and retail sector has contracted by 5% over the ten year period. Other sectors,
currently providing more than 10,000 jobs each in Edinburgh and suffering from
decline include manufacturing and construction industries. On the other hand hotels /
catering, transport storage / communications and other services sectors, which
provide more than 15,000 jobs each in Edinburgh have grown between 1998 and
2007.

65
Table 12: Percentage of Employment by Industrial Sectors (Source: Annual Business
Inquiry 1998 and 2007, NOMIS)
Percentage of employment by Industrial Sectors in 1998
City of Glasgow Edinburgh Glasgow Great
Sectors (1998) Scotland
Edinburgh City City Region City Region Britain
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

City of Glasgow Edinburgh Glasgow Great
Sectors (2007) Scotland
Edinburgh City City Region City Region Britain
Agriculture, 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 Business
Inquiry 1998 and 2007, NOMIS)
City of Edinburgh City Glasgow City
Sectors (% change between 1998 and 2007) Glasgow City Scotland Great Britain
Edinburgh Region Region
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%
Wholesale/retail distribution; repair -5% 10% 2% 0% 2% 2%
Hotels and catering 32% 32% 9% 22% 12% 14%
Transport storage and communications 12% 4% 21% 14% 14% 10%
Financial and business services 26% 35% 30% 48% 38% 27%
Public services,admin and defence 7% -2% 14% 17% 18% 22%
Health and social work 50% 61% 51% 50% 46% 28%
Other service activities 9% -9% 36% 1% 19% 22%
Total Employment 11% 14% 11% 13% 11% 9%

The Edinburgh City Region has a slightly different economic structure. The city
region has a lower proportion of jobs in the financial and business services sector.
On the other hand, the area has a much stronger manufacturing sector compared to
Edinburgh City. Furthermore, the city region appears to have a key sectoral strength
in the other services sector.

66
Glasgow historically had a weaker financial and business services sector. However,
recent investment in creating a new financial district has improved the sector’s
prospects in the City. Like Edinburgh, other key sectors in Glasgow include public
administration, wholesale and retail, health and social work. All but one of the city’s
staple sectors has expanded in employment terms between 1998 and 2007. In
particular, the public administration has contracted by 2% over the ten year period.
Other sectors, currently providing more than 15,000 jobs each in Glasgow and
suffering from decline include manufacturing, construction and other services
industries. On the other hand hotels / catering, transport storage / communications,
which provide more than 20,000 jobs each in Glasgow, have grown between 1998
and 2007.

Despite the difference in the economic structure of the two cities, the economic
structure of Glasgow City Region is very similar to that of Edinburgh City Region, with
similar sectoral breakdown. This said, as demonstrated in the table above, the
prospects 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)

Manufacturing
1.50

1.25
Other service activities Construction

1.00

0.75

0.50

Health and social work 0.25 Wholesale/retail distribution; repair

0.00

Public services,admin and defence Hotels and catering

Financial and business services Transport storage and communications

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

Business Base

Edinburgh and Glasgow, together, account for some 22% of Scotland’s business
base. Further, the two city regions account for more than half of Scotland’s
businesses. The business base in Edinburgh grew by 12% between 1998 and 2007
compared to a 16% growth in Great Britain. The business base of Scotland and
Edinburgh City Region has been much slower than this rate over the ten year period.
Additionally, the growth of business base in Glasgow and its wider city region was
even slower at 4% and 6.8% respectively, during the analysis period.

67
Table 15: Businesses in the Area (Source: Annual Business Inquiry 1998 and 2007,
NOMIS)
Number of Number of Change
Areas Businesses Businesses between 1998
1998 2007 and 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 has
allowed the city to have a much higher density of businesses than most other parts of
Scotland. Further, it has allowed the city to reduce its reliance on relatively large
businesses. However, with an average size of 16 employees per business and some
60 enterprises per 1,000 working age population, even Edinburgh’s business base
appears to be underperforming compared to Great Britain.

Table 16: Comparative Business Stock (Source: Annual Business Inquiry and Annual
Population Survey 2007, NOMIS)
Avegare Size of Number of
Businesses (number Businesses per
Areas
of employees per 1,000 working age
business) population
City of Edinburgh 16 60
Glasgow City 19 53
Edinburgh City Region 14 52
Glasgow City Region 16 47
Scotland 14 55
Great Britain 11 65

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

Net business formation activity in Edinburgh has been much better than Scotland.
Further, Edinburgh’s performance is comparable to that of Great Britain. Glasgow
has been one of the worst performers nationally in terms of net creation of new
businesses. At an average of 4.6 net new enterprises created per annum per 10,000
working age population, Glasgow’s performance highlights the prevalence poor
demand (culture / attitude of potential entrepreneurs) and supply conditions
(business support infrastructure) related to enterprise activity.

68
Figure 17: Net Business Creation: 2000 - 2007 (Source: VAT Registration/De-
registration Data and Annual Population Survey 2000 - 2007, NOMIS) 
Business Creation (VAT Registrations Minus VAT De-registrations)

20.0
Net VAT registrations per 10,000 working age population

15.0

10.0

5.0

0.0
Net Business Net Business Net Business Net Business Net Business Net Business Net Business Net Business
Formation 2000 Formation 2001 Formation 2002 Formation 2003 Formation 2004 Formation 2005 Formation 2006 Formation 2007

-5.0

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

City of Edinburgh, 9.4

Great Britain, 9.5

Glasgow City, 4.5

Edinburgh City Region, 7.8

Scotland, 6.4

Glasgow City Region, 5.8

Net Business Formation (VAT Registration Minus VAT De-registration) per 10,000 working age population: Average for 2000 to 2007
 
 
Lack of dynamism of Glasgow’s business base is also exemplified through reliance of
the economy of large employers from struggling employment sectors. This said, the
recent investments in the financial and business services sectors to some extent
appear to have offset the negative effects of loss of businesses from nearly all
significant sectors in Glasgow.

69
Table 19: Change in Business Stock by Industrial Sectors (Source: Annual Business
Inquiry 1998 and 2007, NOMIS)
City of Edinburgh City Glasgow City
Sectors (% change between 1998 and 2007) Glasgow City Scotland Great Britain
Edinburgh Region 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%

70
Appendix 3 – Analysis of HSR Terminal Locations
Edinburgh Waverley
City Wide
dimension
Role of the A new development would have the
site within opportunity to enhance the quality and
urban diversity of the built heritage. This
structure however would be architecturally
restricted by the existing tight urban
structure and historic architecture of
Edinburgh. Physical links to the west of
the city are cumbersome.
Planning The site is part of the World Heritage
restrictions Site and therefore has restrictions in
terms of built form and other important
design issues. This would limit the
potential of the station.
Skyline The established Edinburgh city skyline
implications is to be protected, especially from
public vantage points. The roofscape in
this location is important as it can be
seen from various locations in the town
centre.
Scale Scale (mass and height) to be
appropriate to those prevailing in the
wider area, existing topography and
urban grain. This will restrict new
development.
Connectivity Bus, tram, taxi, cycle paths and
pedestrian routes are all found in this
area. There are restrictions due to
availability of space in this city centre
location.
Score Edinburgh Haymarket
The site is along an arterial route -
development should be sympathetic to
the character of the route - staged
introduction to the city centre at this
gateway location.
In an area of strategic change,
including the masterplan/transport
interchange at Haymarket. This would
allow for reasonable design freedom.
No skyline issues but height restrictions
due to surrounding buildings.
Some level changes between street
level and rail track level due to
tunnelling to Waverley. Views to and
from station are restrictive especially
coming from the west.
Bus, tram, taxi, cycle paths and
pedestrian routes are all found in this
area. There are restrictions due to
availability of space due to being on a
strategic corridor.
Score Glasgow Central Score
The location of the existing central
station is ideally placed for the town
centre of Glasgow as well as the South
side. There are pockets of development
land around the station area but the
established centre does not have much
scope for further expansion. Close links
to the M8 and other modes of transport
nearby.
Opportunity to improve on the
established urban structure around the
station area.
Height restrictions due to surrounding
buildings and existing roof profile.
Scale (mass and height) to be
appropriate to those prevailing in the
wider area, existing topography and
urban grain. This will restrict new
development.
Underground, low level train, bus, taxi,
cycle paths and pedestrian routes are all
found in this area. There are restrictions
due to availability of space in this city
centre location.
71
Relationship Development on this site would have a
to City's significant impact on the city's identity
identity - due to the central location. New
contribution to development should enhance the
distinctiveness image of the city. North Bridge station
which became Waverley station was
formed in 1846. Many changes have
occurred to the station over the last 150
years.
Landmarks This location is a landmark area - there
is an important relationship with the
Castle and Princes Street Gardens.
The location is very prominent which
could offer both advantages and
disadvantages.
Development Scale of new development restricted
potential due to the existing buildings already in
the area. Proposal should not cause
unsympathetic change.
Orientation Orientation - visual and physical
orientation is good. Once outside the
station this becomes clear.
Strategic Link to Princes Street gardens from the
Open Space Waverley Bridge entrances/exits.
Links
Linkages Opportunity to link to network of
cycleways and footpaths.
Local Area
dimension
Lively and Edinburgh's historic core is attractive.
attractive local People live and work in the city centre
places and this good mix creates vitality. This
is a clear advantage to improving the
station offer.
The site is within a new development of
importance - contributing to the image
of a modern prosperous city. A gateway
site from the west.
Transition area of the city and therefore
more flexible in terms of alterations and
potential to contribute to
distinctiveness. There are still
restrictions due to existing historic
buildings and tunnelling.
Opportunity to develop around the area
and improve distinctiveness.
Visual orientation to centre of town is
not clear despite closeness to town
centre. Physical connection with
central/ eastern side of the city is
complex.
The site currently has no link to public
open space. Space limited to provide
this and the station facility.
Opportunity to link to network of
cycleways and footpaths.
Mix of uses in the area but less so than
at Waverley.
Development on this site would have a
significant impact on the city's identity
due to the central location. The internal
space and prominent north elevation are
distinctive elements. The station was
opened in 1879 and has historic value.
The front elevation of the building,
including the stylish awning to Gordon
street is a prominent landmark in the
town centre area. This would not be
advisable to alter.
Scale of new development restricted
due to the existing buildings already in
the area. Proposal should not cause
unsympathetic change externally or
internally.
Glasgow city centre is a grid pattern.
Once outside the station building
orientation becomes clear.
There are linear routeways along the
Broomielaw and Clyde Street for
walking.
Opportunity to link to network of
cycleways and footpaths.
Glasgow's core is vibrant with more
people now choosing to live in the city
centre as well as work there.
72
Amenity and There is a good balance between
scale buildings and amenity in the Waverley
area but lack of opportunity for increase
in retail/commercial floor area for future
economic improvement.
Connectivity The site offers connections along desire
lines to public transport, mixed uses
and open/public spaces are available.
Local identity The proposal site should reinforce
existing character and location on the
boundary between each distinctive area
of the new and old towns. Grid pattern
of new town and linear pattern of the
old town.
Open spaces Identify opportunity for new civic and
open spaces to create identity and act
as an organising element. Difficulty due
to lack of available space.
Building Reinforcement of local character is
Materials difficult to enhance due to existing
traditional materials of surrounding
buildings.
Massing New development should not be higher
nor of greater mass than adjacent
existing development unless there are
special townscape reasons. The views
between the old and new towns and
from North Bridge/The mound would be
severely affected by any change in
development height at Waverley.
Distinctive Scale of the station and its location in a
urban form topographical hollow makes does not
make for a coherent layout.
Human scale important to retain. There
are a range of building scales in this
location including the colony buildings,
office buildings and tenements.
Priority of pedestrian and cycle
movement is low. Cars/trams/buses
dominate this area.
Integration into existing development
pattern for the Haymarket area would
be required.
Identify opportunity for new civic and
open spaces to create identity and act
as an organising element.
Less structured palette of materials
than at Waverley.
Identify needs/opportunities to improve
the components of urban design, form,
space and activities. This area is
currently sporadic in its massing.
Smaller development area available
than at Waverley. Block definition
relates to a human scale.
There has been improvement in
Glasgow in terms of mixed use,
especially along the river front.
The site offers connections along desire
lines to public transport, mixed uses
including shops, offices and general
amenities
The proposal site should reinforce
existing character and grid pattern of the
city centre. The identity of the area is
well established.
Identify opportunity for new civic and
open spaces to create identity and act
as an organising element. Difficulty due
to lack of available space.
Less structured palette of materials than
in Edinburgh. Good quality materials,
mostly stone in this location would be
required.
New development should not be higher
nor of greater mass than adjacent
existing development unless there are
special townscape reasons. The station
is surrounded on 3 sides by buildings
which enclose the current station facility.
The station facility is surrounded by
buildings which would make any
development problematic. The form of
the station is not very apparent
externally.
73
Linkages The site offers the opportunity to link
well with surroundings due to the
central location.
Frontages Building frontage should address the
boundary with streets, open spaces,
walkways. Development area lacks
opportunity in terms of length of
boundary and impact of a main
entrance area.
Meeting Opportunity to create
places landmark/meeting place - extending the
already important location. Station
facility not always clear from the street.
The site offers the opportunity to link
well to the west but more restricted to
the east due to negotiating the city
centre.
Only 2 frontages, one main entrance at
Haymarket junction.
a Opportunity to create a more
impressive landmark/meeting place.
The site offers the opportunity to link
well with surroundings due to the central
location.
The station has 3 short frontages, the
main entrance to George Street is
impressive. Increasing these frontages
is complex due to ownership around the
station in the form of smaller units.
Opportunity to create a
landmark/meeting place - extending the
already important location. Difficulty due
to the hidden location of the station.

Street and
site
dimension
Surrounding In this location it will be important to Avoid overdevelopment to the area In this location it will be important to
area establish key elements to ensure fit with despite the opportunity this part of town establish key elements to ensure fit with
surroundings. offers. surroundings.
Block size Integration of new with old should not New buildings should integrate with Integration of new with old should not be
be forced or crude. A station is a large established local character where this forced or crude. An extension to this
development block and will have a is of merit. station would mean an increase to an
noticeable impact on the area. already large development block and will
have a noticeable impact on the area.

Roof and It will be necessary in this location to Respect building lines, rhythms, The height of the existing station
building line. consider the roof as the fifth elevation. density, mass, existing footprint and internally is constricted by the external
This is an added design complication. height elevations to the building. This does
offer a good height internally.

Street Building line important at 5 exits around At street corner provide effective Building line important at 3 exits around
frontage the existing station footprint, Princes turning and give emphasis where the existing station footprint, Gordon
Street, two at Waverly Bridge, Calton appropriate. Street, Hope Street and Union Street.
Road and Market Street

74
Resolving Large footprint required by station Large footprint required by station Large footprint required by station needs
conflicts of needs is currently wrapped around needs could be wrapped around other is currently wrapped around other
scale other building elements. The large building elements. The large mass building elements.Additional mass
mass should be broken into smaller should be broken into smaller elements should be broken into smaller elements
elements adapting proportions to adapting proportions to express adapting proportions to express rhythms
express rhythms and grain. rhythms and grain. and grain.
Promote New development should connect with, A pedestrian friendly approach that New development should connect with,
pedestrian extend or improve the local street integrates with the surrounding extend or improve the local street
access structure. More circulation space for community links existing streets and structure. More circulation space for
pedestrians for new development would provides direct links to bus stops and pedestrians for new development would
be required in this location. tram stops. be required in this location. There is not
much availability of space on the
surrounding streets.
Value of open Any new development should enhance Lack of civic space at the Haymarket Any new development should provide
space existing, and provide new open space. area. new open space. The station should
The station should provide a range of provide a range of functions including
functions including both visual and local both visual and local amenity.
amenity. Opportunity for a civic space Opportunity for a civic space at this
at this location but limited available location but limited available space.
space.
Integration of Integrate parking without allowing it to Parking should be safe and secure. Integrate parking without allowing it to
drop off, dominate the development, streetscene Vehicles accessing the station should dominate the development, streetscene
parking and or adjacent developments. Taxi pick up not disrupt traffic flow out with the or adjacent developments. Taxi pick up
taxi ranks and drop off and public transport links station. and drop off and public transport links
should be visible. should be visible.
Public realm
dimension
Public spaces Public spaces require as much care Provide south facing, sunny and Public spaces in the area include mainly
and attention as the buildings in their shaded spots for sitting. Protection from shopping streets, malls and arcades.
design and future maintenance. elements and physical comfort. Improvement could be made in provision
Protection from elements and physical Opportunities to incorporate public art of public open space but difficult due to
comfort is required at station within active public space. Complex lack of space.
entrances/exits. due to lack of available space and
vehicular/tram movement in the area.
Pedestrian Connect into existing network of Connect into existing network of Connections can easily be made into
routes pedestrian routes which are plentiful in pedestrian routes. existing pedestrian routes.
this location.

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Enclosure Ensure a satisfactory enclose of space
with human scale.
Materials and Ensure that high quality streetscape
street furniture design, street furniture and materials
are used. Ground surfaces will form an
important sign at the 5 entrances to the
station to highlight their locations.
Ensure a satisfactory enclose of space
with human scale.
Ensure quality comes from simplicity
and durability. Relate to the existing
material and street furniture to offer
continuity.
Ensure a satisfactory enclose of space
with human scale. Scale of existing
station internal space/structure is very
grand.
Ground surfaces will form an important
sign at the 3 entrances to the station to
highlight their locations.

Lighting New development should encourage
removal of superfluous items keeping
markings and signs to the statutory
minimum. Lighting is important due to
operating times of the station.
New development should encourage
removal of superfluous items keeping
markings and signs to the statutory
minimum. Lighting is important due to
operating times of the station. This is a
key junction so street lighting should be
integrated into the development.
New development should encourage
removal of superfluous items keeping
markings and signs to the statutory
minimum. Lighting is important due to
operating times of the station. This is a
key location with streets on 3 sides so
street lighting should be integrated into
the 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

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