Chapter 7: Employment and Economic Development

Objectives:

• To maintain a prosperous and competitive city economy and to direct investment to sustainable and accessible locations
• To protect existing industrial and storage areas of importance for a mixed and varied economy
• To maintain and enhance the diversity of jobs available in the city, paying special attention to small business needs

7.1 Policies in this chapter deal with the land uses which are central to Edinburgh's economic functioning. This includes hotel development and business uses, which in planning terms can mean developments that can be used as office or for research or light industry. The chapter deals also with developments for general industrial use, storage and distribution.

Background

7.2 Edinburgh's economy has in many respects performed well in recent years, and studies suggest that there are good prospects for growth in the future. It has seen a particularly high rate of job growth - from 244,000 in 1993 to 311,000 in 2004. The majority of new job growth has been in the city centre, and much of this has been associated with office developments, in particular, the burgeoning financial services sector. Large scale office development have had a major regenerative impact on the area west of Lothian Road, which is now the city's recognised financial services hub. Edinburgh Park/The Gyle provides a similar opportunity for businesses that prefer a lower density, business park environment on the city's western edge, close to the airport and motorway network. Work has begun on another significant development – a centre for biomedical research, known as Edinburgh BioQuater, at Little France, adjoining the new Edinburgh Royal Infirmary.

7.3 Policies in this Plan aim to ensure that the local economy develops sustainably within an overall framework that emphasises the importance of realising the city's growth potential while protecting its environmental qualities. The importance of Edinburgh as a source of growth for the Scottish economy is a key theme of the first National Planning Framework for Scotland, prepared by the Scottish Executive in 2004. In particular, Government, the Council and other stakeholders are focusing on knowledge-intensive businesses and sectors such as ICT, life sciences and other research fields. In these, Edinburgh is seen as having world-leading potential, based on its universities and research institutes.

7.4 Edinburgh functions as the core of a wider economy and job market: one in three employees in Edinburgh live in neighbouring Council areas and commute to work. Conversely, one in five Edinburgh residents in employment travel out of Edinburgh to their work places. The quality of Edinburgh's transport connections is becoming increasingly important, as is the availability of affordable housing in locations that might help to reduce travel to work.

7.5 The trends in the economy have resulted in lower demand for sites and premises in less accessible sites in older neighbourhoods, notably in Leith, Bonnington and Gorgie. Industrial firms which formerly were able to operate from these areas have closed or relocated to nearby Council areas. High land values and the demand for housing land has also put pressure on these areas, and provided an incentive for many firms to close or relocate.

Key Sectors Survey

7.6 In 2005, the Council conducted a survey of businesses in the key employment sectors such as finance, tourism and higher education, to gauge issues, needs, growth prospects, etc. The survey indicated that the operations of the property market in Edinburgh, the availability of sites and premises in suitable locations, were not a barrier to further growth. An exception to this was the retail sector, where growth opportunities in the city centre are not currently readily available or easily created - this is addressed in the next chapter. Businesses confirmed the importance of an efficient, reliable transport system to cope with rising travel needs. The shortage of affordable housing is clearly a particular recruitment issue for employers who are more dependent on lower paid workers. Many employers cited the quality of the environment and the city's attractiveness and liveability as its biggest single economic asset.

Employment Policies

7.7 Policies in this Plan aim to promote economic development in sustainable locations, taking full account of the need to protect and enhance environmental quality, and to protect existing sites and premises which have value for Edinburgh's economic functioning and for ensuring that some essential services can be provided as locally as possible.

Office Development Policies

7.8 The city centre is the most appropriate location for major office development giving rise to high levels of travel. It is still the preferred location for most large businesses, which benefit from the proximity of other businesses and services. The regeneration of the city centre can be assisted by high quality office development. The area around Lothian Road and Morrison Street in particular has provided opportunities for a series of major developments. These in turn have enabled businesses to bring under one roof operations which had previously been dispersed around numerous buildings. There are further opportunities for this financial district, the 'Exchange' district, to expand westwards, onto sites that will become available following the closure of the Fountain Brewery. A development brief has been prepared in anticipation of this, and is summarised in Chapter 10 of the Plan dealing with the city centre. The development of other suitable sites for office use in the city centre will be encouraged, although it appears likely that there will be fewer opportunities for large floorplate office developments in the future, and developers may have to amalgamate sites to meet this need. This must be done with full respect for the historic environment. Offices must be provided for in ways which sustain city centre vitality at street level especially. The provision of shops and other appropriate commercial uses at ground level may be necessary to achieve this.

7.9 There is also significant, but ultimately limited opportunity for major office developments at Edinburgh Park, where development is required to follow strict design guidelines. The opening of a new rail halt, and the prospect of the tram link with the city centre, means that higher density can be achieved, enhancing the development capacity of the area (Proposal BUS 2).

7.10 The regeneration of Leith Docks and Granton Waterfront also provides the opportunities for high quality business centres. In Leith, an area for development primarily with offices has been designated on the Proposals Map, as provided for in the approved framework for the Dock area. It will occupy a critical location which will be served by the tram, between Ocean Terminal and the government offices at Victoria Quay. In view of the possibly more limited opportunities in the city centre in the future, it is important that the potential of this area is properly safeguarded through any short-term downturns in the office property market.

7.11 Granton Waterfront regeneration area also provides opportunities for major office development in and around its core area, which is centred around the new neighbourhood centre and close to adjoining areas of special employment need. However, it is likely that substantial development will only take place in the longer term once the construction of the tram line has provided the incentive for office development of the kind and quality that the plan will support.

7.12 The first phase of these proposals was identified in the previous local plan for this area, and a master plan for that part has been approved. The project is intended to provide a high quality environment adjoining the new Royal Infirmary and close to King's Buildings (part of the University of Edinburgh). Development will include new medical school buildings and life science-related academic and research institutes as well as commercial 'spin-offs' and business start-ups from these. This is a joint project of the University of Edinburgh and the government through Scottish Enterprise Edinburgh & Lothian. It will contribute to a nationally important cluster of life science-related research facilities in Edinburgh and adjoining Council areas. Development of the highest architectural and landscape design quality is being sought, to ensure that the necessary environmental quality is realised.

7.13 This plan proposes an allocation larger than the 25 hectares identified by the Structure Plan, in order to enable further clinical healthcare facilities, medical education and research to be provided on-site, along with ancillary commercial uses and support services which will contribute to the success of the project as a whole. The additional land rises towards the Edmonstone estate to the south-east, making it essential that development heights there are restricted to two-storeys in order to minimise impact on the landscape setting of the city. An amended master plan for the whole of the allocated area will be required.

Business and Industry Areas

7.14 The following policy applies to industrial estates identified on the Proposals Map, including the extensive estate at Sighthill and other smaller estates dispersed across the city.

7.15 It is important that a range of employment sites are retained to provide for a variety of development needs. The amount of land that is available to meet industrial and storage needs is now relatively limited. The above policy will protect land for these purposes in planned industrial estates such as Sighthill, and a new area of consolidated industrial uses in eastern Leith (Proposal BUS 3). These areas have been designed to cater for a diversity of uses and building sizes, and are mostly in locations which are readily accessible to heavy goods vehicles which use the trunk road network. As these areas mature, new development addresses more modern needs for new office space, bringing a higher quality of design. The above policy is intended to achieve the second objective of this chapter.

Loss and Replacement of Employment Sites and Premises

7.16 The following policy applies to sites or premises generally in the urban area which are or were last in employment use and could still be used to provide suitable accommodation for business, general industrial or storage uses. These include sites within larger areas of mixed business and industrial activities, such as Bonnington, large and small employment sites within predominately residential areas, and small business premises other than shop units, which are addressed in the next chapter.

7.17 In 2005 the Council commissioned an independent study of the very small business sector, business with fewer than 10 employees normally, to identify issues relating to the operations of these in a property market that is seeing some small workshops and business units being replaced by housing. The Small Business Study (pdf,527kb) identified the very large number of small businesses in Edinburgh, over 14,000, accounting for 14% of the city's employees. The study also identified a sub-set of small business 'artisans', encompassing a wide range of skilled activities including manufacture, maintenance and crafts. These businesses contribute to the diversity of job opportunities available in the city, and provide services to its residents and other businesses.

7.18 These types of small businesses tend to rely upon the city's stock of small industrial premises for accommodation, much of which is located in small managed estates or concentrations of similar uses in older parts of the city. The study found that supply of such premises is insufficient for market demand, and forecast an annual requirement for the construction of a significant number of new and replacement small industrial units within the city in order to maintain an adequate stock. A 2008 update forecast the need for such new floorspace across different parts of the city.

7.19 Traditional purpose-built small industrial units provide relatively cheap, flexible space capable of accommodating a wide range of business and general industrial activities. They are characteristically low-rise and physically separated from non-employment uses, such as housing. In 2006 the Council commissioned a study to find more innovative and compact design concepts. The study provided examples of how flexible small business premises can be created as part of mixed use redevelopment, and of high-density buildings suited to general industrial uses. The latter would be acceptable in the Business and Industry Areas covered by Policy Emp 3.

7.20 Policy Emp 4 seeks to ensure that proposals for redevelopment of sites which are or were last in employment use contribute to the city’s stock of flexible small business premises and avoid introducing conflict, for example between new housing with any remaining employment uses in the vicinity. Where they lie within an area in which there is pressure for wider redevelopment, individual proposals should contribute to the comprehensive improvement of the whole area, particularly in terms of providing new small business premises and achieving the placemaking objectives of the Design chapter. The Council has prepared development briefs to help co-ordinate development in such areas, including Bonnington and the Stead's Place/Jane Street area.

Hotel Development

7.21 Tourism is the third biggest source of employment in Edinburgh, providing jobs for 31,000 people. Maintaining and developing this key sector in the city's economy relies upon sufficient provision of high-quality tourist accommodation. In 2006 a study looking at tourist accommodation demand and supply was commissioned by the Council and others. The study identified the particular importance of hotels to generating economic benefit from growth in tourism and satisfying the main sources of demand for accommodation. It found that room occupancy levels are currently high, even after two decades of growth in the total number of hotel rooms in the city. The study identified a theoretical requirement for 4,000 new hotel rooms in Edinburgh by 2015 to help meet predicted growth in demand. The city centre is the preferred location for most visitors, but Leith and Granton waterfront have potential as hotel destinations.

Development Proposals

Business Development Proposals and Opportunities

7.22 Table 7.1 identifies three large-scale proposals intended to support this chapter's objectives. Further significant employment space is to be created as part of the mixed use proposals identified in the City Centre chapter.

Table 7.1 Business Development Proposals and Opportunities

Description	Comments
Reference: View BUS 1 on map Site Name: Edinburgh Bioquarter, Little France Site Area: 1a -25 hectares (total), 1b - 15 hectares (total) Proposed floorspace: 133,500m2 (first phase, second phase to be confirmed)	The development is a joint project of the University of Edinburgh and Scottish Enterprise Edinburgh & Lothians (SEEL). The approved master plan for the first phase (BUS 1a) provides for 82,500m2 of research accommodation, and 51,000m2 for an inter-linked mix of medical education and research, directly related commercial activity and appropriate ancillary and support services. Development in the second phase to the south-east (BUS 1b) will be guided by an amended master plan, which will restrict building heights to two-storeys and provide a more extensive parkland setting, resulting in a lower density of development. Existing trees within the site are part of a Local Nature Conservation Site and should be retained.
Reference: View BUS 2 on map Site Name: Edinburgh Park Site Area: 16 hectares (total) Proposed floorspace: 200,000m2	The southern phase of Edinburgh Park was granted outline planning permission in 2001. The high quality of building design and landscaping will be continued from the first phase, and development densities will generally be higher, making use of underground car parking. Includes permission for a hotel and ancillary service uses.
Reference: View BUS 3 on map Site Name: Leith Eastern Industrial Area> Site Area: 20 hectares (total) Proposed floorspace: Not yet determined	The Leith Docks Development Framework proposes a consolidated area of industrial and storage use to the east of the proposed Leith Links Seaward Extension (Proposal OSR 7). This will help replenish the stock of small industrial units in the north of the city, particularly suited for general industrial uses which cannot be accommodated in mixed use development. This proposal should also make provision for retained rail freight transfer, and related waste management and/or combined heat and power facilities. Creating better access to the site will require new streets as shown in Figure 11.1 and on the Proposals Map.