Capital sets out on Long road to economic recovery
- Published Date: Wednesday 28th July 2010
Edinburgh was originally tipped to be one of the cities in Europe most likely to be impacted by the recession driven by the failures in the financial services sector because it is perceived to have a reliance on financial services and was home to a number of head office functions. This doesn’t seem to have come to pass to the extent foretold by some doom and gloom merchants.
Financial Services jobs in Edinburgh were concentrated around back office functions which are still necessary when markets take a turn for the worse so the people in these roles have weathered the storm, albeit with lower bonus or zero bonuses. Edinburgh has also benefitted from being the choice of Tesco for its banking operations and 100s of new jobs have been created at Haymarket.
Edinburgh was also heavily dependent on public sector jobs and these are now under threat as the need to reduce spending in these areas is now accepted politically. Job losses will be very significant but there will not be the brutal and sudden loss of jobs which the private sector focused on – instead there will be a phased reduction in public sector headcount. This and the threat of job losses are cutting people’s appetites for spending until the uncertainty is removed
If Edinburgh is to grow again it will be from the private sector, outside financial services, and this is where local advice and support is needed. It is tough for smaller businesses when banks are not prepared to lend to them and there is so much uncertainty. Edinburgh needs to focus more in this area to be less dependent on the government and financial services sectors.