Source: Edinburgh Evening News

IAN SWANSON
SCOTTISH POLITICAL EDITOR

EDINBURGH contributes more to the economy per head of population
than any UK city outside London, according to a new study.

And the Capital also has the highest-skilled workforce - but lags
behind in wages.

Academics compared Scotlands six cities with eight English "core"
cities on a range of issues including employment, economic
performance, skills, crime, house prices and transport links.

Edinburgh emerged with one of the highest rates of employment in the
UK, the second highest house prices and as one of only four cities
with a growing population.

The study, which also compares the UK cities with key European
rivals, was commissioned by the Scottish Executive and undertaken by
researchers from Liverpools John Moores University.

Unveiling the report today, Finance Minister Tom McCabe said all six
Scottish cities had a crucial role to play in growing Scotlands
economy. He said they were all performing well against UK and
continental counterparts, but acknowledged there was room for
improvement and pledged the Executive would work to ensure
Scotlands cities could compete effectively in the world.

The report said Scottish cities tended to perform impressively in
terms of employment rates and well-qualified workforces, but
productivity and innovation were lower than in many successful
European cities.

Air links were improving, with low-cost carriers increasing
connections between Scotlands cities and many English and European
destinations.

The report quoted 2001 figures showing Edinburgh contributed 9.954
billion to the Scottish economy.

That translates into around 22,000 per person in the city, the
highest out of all 14 cities included in the study.

Between them, Edinburgh and Glasgow account for more than 30 per
cent of Scotlands "gross value added" (GVA) - the total of wages,
rents, profits and interest charges paid into the economy.

Edinburghs GVA increased by 36.2 per cent between 1995 and 2001 -
not as much as Glasgows (38.3 per cent), but well ahead of the
Scottish average (24.8 per cent) and only slightly below the English
average increase (37.5 per cent).

But Edinburgh came only third in the earnings league.

In 2003, average full-time earnings in the Capital were 467 a week,
compared with 472 in Manchester and 525 in Aberdeen. And over a
four-year period between 1999 and 2003, wages in Edinburgh rose by
17.1 per cent, below both the Scottish average rise of 18 per cent
and the UK rise of 18.5 per cent.

Economists say the quality of life in the Capital helps attract
people to work here, creating a ready supply of labour, which can
keep wages down.

The report said Edinburgh and Glasgow had been leading in terms of
jobs growth between 1998 and 2002. Employment in Edinburgh increased
by 11.1 per cent and in Glasgow by 10.8 per cent, compared with the
Scottish average of 5.4 per cent.

Only two other UK cities had greater percentage growth rates -
Manchester (17.1 per cent) and Newcastle (15.2 per cent).

But these figures relate to the number of people employed in each
city and many of them will live outside and commute.

So the study also looked at the employment rate - the proportion of
a citys working-age residents who are in work. By this measure, on
2003 statistics, Edinburgh (74.8 per cent) comes third behind
Bristol (77.7 per cent) and Aberdeen (79.5 per cent).

According to the report, unemployment - as measured by the
International Labour Organisation - was 5.7 per cent in Edinburgh in
2003-04, compared with a British average of five per cent, 8.3 per
cent in Glasgow and 9.1 per cent in Birmingham, but just 3.6 per
cent in Aberdeen.

The proportion of households receiving income-based benefits varied
across Scotlands cities. In 2003, just 17.8 per cent of households
in Edinburgh were on benefits, compared to 35.6 per cent in Glasgow.

The study found Scotland has a well-qualified workforce with 28 per
cent of working-age residents educated to the equivalent of degree
level.

Edinburgh comes out top with 37.3 per cent of residents in
possession of such qualifications, followed by Aberdeen (36.5 per
cent) and Stirling (35.5 per cent).

In terms of a well-qualified workforce, the six Scottish cities
out-perform all the English cities except for Bristol.

Edinburghs total population, on 2003 figures, was fifth behind
Birmingham, Leeds, Glasgow and Sheffield.

The study noted that cities across the UK have experienced
significant falls in population over the last 30 years, though some
are now seeing modest population growth.

However, between 1996 and 2003, only Edinburgh, Manchester, Bristol
and Leeds saw an increase in their residential population. All the
other Scottish cities are continuing to shrink, with Aberdeen and
Dundee suffering the biggest population decreases.

When it comes to house prices, the study said the average price in
Edinburgh in the first quarter of last year was 155,666, second
only to Bristol on 160,866, and a 55.4 per cent increase on three
years earlier.

The report also said Scottish cities were becoming safer, but added:
"Edinburgh saw a 1.9 per cent increase in crimes of dishonesty
between 1997 and 2003". Recorded crime in the Capital rose by 10.5
per cent over the same period.

Edinburgh Airport is listed fourth for percentage growth in
passenger numbers, but the study points out that the top two,
Liverpool and Dundee, were starting from a very small base.

The report said expenditure on research and development in Scotland
was concentrated in a few key areas, with West Lothian accounting
for 29.8 per cent of Scottish R&D expenditure and Edinburgh for a
further 19.7 per cent.

Mr McCabe said: "This report underlines why the Executive believes
our cities have such a vital role in driving economic growth and
building a better Scotland. We recognised this through Building
Better Cities - our long-term strategy to help competitive city-
regions to grow - and the Cities Growth Fund.

"The fund will deliver 90 million of additional funding between
2003 and 2006. And we recently announced a further 83m from 2006 to
2008."

He said the report showed Scottish cities performed well in key
areas against their UK and European counterparts, but added: "There
are, however, some areas where we can do better and the Executive
and the cities are working together to ensure Scottish cities can
compete effectively."

Losing on location, top by degrees

SCOTLANDS cities lag behind several European rivals in productivity
and choice of business location, the study shows.

But a league table on workforce qualifications puts Edinburgh top
for the number of people educated to the equivalent of degree level,
well ahead of cities like Stockholm, Munich and Lyon.

And Edinburgh has the fourth-lowest unemployment rate in a table of
26 cities across Europe.

Edinburgh and the East of Scotland were ranked 16th out of 27 in a
European table of productivity per head. Frankfurt and Munich came
top. Glasgow was one place ahead of Edinburgh, but none of the
English cities in the study performed better.

Another table measuring regional prosperity was topped by
Luxembourg, Munich and Hamburg. Edinburgh and the East of Scotland
came in at number 20, well behind Aberdeen and the North East in
eighth place, but still ahead of all the English cities looked at.

In a section of the study on how the private sector views cities,
Edinburgh does not feature in the top 30 best European cities to
locate a business. The table is headed by London, Paris and
Frankfurt and includes Manchester and Glasgow.

But the report said: "When asked which other European cities are
important business centres, Edinburgh features with fewer mentions
than Birmingham and Luxembourg but ahead of Stuttgart and Toulouse."

The study found UK cities had relatively low levels of employment in
high-tech manufacturing sectors. None of the Scottish cites have
employment in these sectors ahead of the UK average. The German and
Italian cities were found to perform particularly well in this area.

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