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Land Values and the Implications for Planning Policy

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LAND VALUES AND THE IMPLICATIONS FOR PLANNING POLICY

CHAPTER FOUR: TRENDS IN THE LOCATION OF EMPLOYMENT

4.1 It has been argued that a possible detrimental impact of rising residential land values - as in Edinburgh - may be the relocation of employment sites (particularly employment uses where an intensification of site use may not be possible, such as manufacturing) to lower value areas. If this hypothesis is correct, employment - especially manufacturing employment - should be decreasing in cities with strongly increasing residential land prices, and increasing in the lower value surrounding areas.

4.2 This is not been an easy hypothesis to explore, as employment data tends to become available only after a substantial time lag - for instance at the time of writing (Feb 2002), the Annual Business Inquiry 55 data for 2000 has only just been published, so that it has not been possible to review the most recent trends in employment. As the steepest increases in residential land values occurred from 1999 onwards, this is a potential problem.

4.3 Nothwithstanding these difficulties, trends in the location of employment were explored through analysis of employment in different sectors in cities and their surrounding areas. Material from the Annual Business Inquiry (ABI) sourced through NOMIS provided a time series from 1995 to 2000 56, the most recent year for which employment is currently available. Tables 4.1, 4.2 and 4.3 show employment change in cities and areas around cities over the 1995-2000 time period.

Total Employment

4.4 Total employment figures suggest that some cities may be seeing a decline in employment relative to their surrounding areas (Table 4.1, Figures 4.1-4.4). In Aberdeen and Dundee there has been a decline in total employment. In Dundee, for example, total employment has shrunk by 6% over the 1995 - 2000 time period whilst in Perthshire and Kinross it expanded by 24%.

4.5 In Glasgow and Edinburgh there has been substantial employment growth. In Edinburgh, employment increased by 7% - by over 23,000 jobs - and there has been even sharper growth in employment in surrounding areas such as West Lothian where total employment has expanded by 14,000 jobs, a 26% expansion over the period. Employment in Glasgow has grown by 34,000 jobs or 10% over the period, and some of the areas around Glasgow such as North and South Lanarkshire have also seen employment levels rise but other old industrial areas such as Renfrew and West Dunbartonshire have seen a substantial decline.

Table 4.1: Change in Total Employment Level, 1995-2000

Area

Absolute Change

Percentage Change

Aberdeen City

-2,576

-1.5

Aberdeenshire

10,274

14.7

Dundee City

-4,202

-5.6

Perthshire & Kinross

10,944

23.8

Angus

6,866

22.3

Edinburgh, City of

23,215

8.6

Fife

11,844

10.2

West Lothian

13,973

26.0

Midlothian

3,839

20.0

East Lothian

3,994

18.9

Glasgow City

34,303

10.3

North Lanarkshire

6,206

6.1

South Lanarkshire

13,609

13.6

East Renfrewshire

1,214

7.8

Renfrewshire

-4,095

-4.9

West Dunbartonshire

-4,406

-13.3

East Dunbartonshire

3,093

13.5

Scotland

126,736

5.69

Great Britain

2,411,701

9.59

Source: Annual Business Enquiry, NOMIS

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Manufacturing Employment

4.6 There is some evidence of manufacturing employment declining in cities and rising in the surrounding hinterland (Table 4.2, Figures 4.5-4.8), but the pattern is not entirely clear or consistent. (The long-term national trend is toward a decline in manufacturing employment, so it is perhaps not surprising that many edge of city districts are also losing manufacturing employment.)

4.7 The clearest example of this pattern is in Aberdeen City. Manufacturing employment has contracted by 17% whilst it has risen by 14% in Aberdeenshire - but elsewhere patterns are less clear. Dundee gained slightly in manufacturing employment over the period. In Glasgow, the city has lost manufacturing employment but there has been less consistency in employment gain in surrounding districts - most have lost employment whilst some have gained. There has been a rise in employment in South Lanarkshire and Renfrewshire, for example, whilst North Lanarkshire experienced declining manufacturing employment. In Edinburgh, there has been a decline in manufacturing employment but only West Lothian and Fife experienced an expansion of manufacturing employment.

Table 4.2: Change in the level of Manufacturing Employment, 1995-2000

Area

Absolute Change

Percentage Change

Aberdeen City

-3,155

-17.5

Aberdeenshire

1,617

14.5

Dundee City

486

4.6

Perthshire & Kinross

529

13.4

Angus

1,632

26.4

Edinburgh, City of

-3,433

-14.3

Fife

2,421

9.6

West Lothian

3,726

26.0

Midlothian

-302

-8.5

East Lothian

-458

-13.9

Glasgow City

-4,596

-13.3

North Lanarkshire

-5,585

-23.0

South Lanarkshire

1,065

4.6

East Renfrewshire

-370

-20.7

Renfrewshire

1,001

7.2

West Dunbartonshire

-1,472

-26.7

East Dunbartonshire

646

29.4

Scotland

-16,492

-5.45

Great Britain

-194,626

-5.12

Source: Annual Business Enquiry, NOMIS

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Services Employment

4.8 Employment in services has expanded sharply in the two major cities and in Aberdeen. Over the 1995-2000 period, service employment in Dundee has fallen, although there has been a modest rise in the last year. Some adjoining districts - West Lothian and North Lanarkshire - have seen service employment increase (Table 4.4 and Figures 4.9-4.12).

Table 4.4: Change in Services Employment, 1995-2000

Area

Absolute Change

Percentage Change

Aberdeen City

3475

2.8

Aberdeenshire

1561

3.1

Dundee City

-2936

-5.0

Perthshire & Kinross

8296

21.9

Angus

3045

13.5

Edinburgh, City of

29327

12.7

Fife

8711

10.7

West Lothian

8194

23.0

Midlothian

2668

19.3

East Lothian

3342

22.4

Glasgow City

36585

13.2

North Lanarkshire

10764

15.6

South Lanarkshire

11700

17.5

East Renfrewshire

1247

10.1

Renfrewshire

-5394

-8.5

West Dunbartonshire

-3042

-12.4

East Dunbartonshire

2733

14.9

Scotland

145,843

8.48

Great Britain

2,479,810

12.53

Source: Annual Business Enquiry, NOMIS

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Source: Annual Business Inquiry, NOMIS; services employment in distribution, hotels, restaurants, transport, communications, banking, finance, insurance, public administration, education, health and other service sectors

Financial Services

4.9 The evidence suggests that Scotland's two largest cities have seen an expansion in financial services employment. Elsewhere, there is no consistent pattern.

Table 4.5: Change in Financial Services Employment, 1995-2000

Area

Absolute Change

Percentage Change

Aberdeen City

3,016

8.1

Aberdeenshire

697

7.8

Dundee City

-988

-11.2

Perthshire & Kinross

1,122

18.0

Angus

358

13.9

Edinburgh, City of

18,168

25.7

Fife

1,484

11.4

West Lothian

1,054

14.4

Midlothian

838

49.9

East Lothian

-20

-0.8

Glasgow City

16,908

23.8

North Lanarkshire

4,564

45.9

South Lanarkshire

2,326

24.2

East Renfrewshire

307

11.9

Renfrewshire

-2,893

-23.1

West Dunbartonshire

-1,300

-29.1

East Dunbartonshire

2,112

63.7

Scotland

52,330

13.96

Great Britain

917,455

18.53

Source: Annual Business Enquiry, NOMIS

Conclusions

4.10 There is some evidence that manufacturing employment is being driven out of cities, but factors other than land values are also at play. Many manufacturers look for sites that will allow 24 hour access, and so are not too close to residential areas, good access to motorways, primary roads and sites with sizeable parking and loading areas - attributes which can often only be found on the edge of urban areas 57. However, this contraction in manufacturing employment is counterbalanced by growth in service employment in sectors such as financial services in city centres.

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Land Values and Employment Trends

4.11 The nature of the land values data make it inappropriate to consider further statistical manipulation of the data. In an effort to compare trends in the two data sets indices were produced and assessed. They are set out in Appendix 1.

4.12 Although these revealed relatively little, the following could be concluded:

  • No clear relationship emerges between land values and employment trends in the four cities. The localised nature of patterns suggests a number of factors at work influencing the future of cities.
  • Where land values are lower there is little evidence that manufacturing employment has risen in response, although Dundee has seen some modest growth in manufacturing employment.
  • There is some evidence of changing land use. In Glasgow, residential land values and employment in financial services have risen in tandem, perhaps reflecting the rise of a more service-based economy.
  • These indices reveal the dramatic increase in residential land values, particularly in Edinburgh but also to a lesser extend in Glasgow, in recent years, but accompanied by employment growth rather than employment loss.