Edinburgh is famous for its architecture, but few of the Scottish capital’s healthy supply of visitors will ever see the most astonishing recent addition to the cityscape. Drive out to the edge of the city, towards the airport, and you will pass under a silver bridge with a huge Royal Bank of Scotland logo hanging from it. Hidden behind the trees is Gogarburn, RBS’s £350m, 110-acre global headquarters.
The vast, gleaming office stands amid manicured lawns; pale and stately Gogarburn House, a 19th-century listed building that now houses the RBS staff bar and bistro, is by its side. Beyond it lies the cultivated wilderness of what amounts to a corporate country estate. Along the pathways cut into the long grass, RBS-branded lecterns provide titbits of information about the local wildlife. For instance, did you know that “RBS is helping otters in various ways”?
Let’s hope the otters are grateful. Edinburgh’s human population – about 10 per cent of which works in the financial sector – is less impressed by the company’s efforts. RBS is the city’s biggest private-sector employer. It is thought that a large chunk of the 5,000 financial jobs axed from Edinburgh-based companies in the nine months after September 2008 were at RBS (357 within Edinburgh itself). Following the announcement this year that at least 4,500 of the bank’s UK employees would be made redundant, Edinburgh is braced for further losses. Meanwhile, the city’s second-largest private employer until last year was HBOS (now part of Lloyds). Since the beginning of 2009, the company has cut 400 jobs in Scotland, most of them in Edinburgh. In June, Lloyds announced that 2,100 jobs in Scotland, the Midlands and West Yorkshire would be cut.
The fear is that if Edinburgh now loses its foothold in finance – an industry at its heart since the mid-18th century – the local economy will not recover. “I don’t know what Scotland’s got to offer,” says Simon, an Edinburgh accountant who works in mergers and acquisitions. “Over the past five or ten years, talented people have come to university here, then there are quite a lot of well-paid jobs for them so they stay in Edinburgh. All those talented people, if those jobs go, are just going to go to London. And there’ll be less coming in the next couple of years.”
It is an understandable worry; but then again, it is late August and we are talking under the cupola of Adam House, a university building that serves as a huge, multi-theatre venue during the Edinburgh Fringe. We would be sitting in the building’s bar if there were room, but stay-at-home holidaymakers have served the festival well this year, and few seats are free.
Laura, who works in IT research and development for a major financial institution, agrees that the job market has become a lot tougher. She recently ended one contract and was able to find another relatively quickly, but says: “For a lot of other people right now, the market is saturated with skilled workers. I am very conscious of the fact that the market isn’t healthy, particularly in Edinburgh.” She is not sorry to see Edinburgh’s financial sector slimmed down: “Large organisations are using this to get rid of the deadweight. There’s not as much time-wasting; there are longer hours and not as many freebies.”
“If the recession has taught Edinburgh one thing, it has surely taught it that an overprovision of a particular industrial sector or a reliance on jobs in a particular sector can be very challenging,” says Councillor Tom Buchanan, Edinburgh’s economic development convener. The city council is looking for new investment from bioscience, among other industries: the sector already has a strong reputation.
Yet Buchanan does not believe Edinburgh is about to lose its financial industry. Tesco Personal Finance recently opened its headquarters in the city, opting for something a little more modest than RBS’s out-of-town behemoth – a sandstone office near the city centre. It is welcome news locally, and a good business move for Tesco. “Obviously,” says Buchanan, “if you’re making people redundant, they may take jobs at lower salaries, so there is an opportunity.” Just 400 staff are employed at the HQ, but Tesco plans to start providing current accounts in 2010. If its rate of expansion as a supermarket is any benchmark, many more jobs will be created.
Unemployment has risen sharply over the past year to 3.2 per cent, its highest level since August 1999. Things are likely to get worse before they get better. But, as Buchanan puts it, “Where would you go that’s doing better than Edinburgh at the moment? All of our competitor cities are in a less well-off position.”
And that’s the thing: Edinburgh is lively, busy and open for business. The huge gash cut into the middle of Princes Street for the new tram system is ugly, and the redevelopment has been heavily criticised, but the money to pay for it is still there and the works are going ahead. In the short term, for many Edinburgh residents, the repercussions of the RBS and HBOS disasters will be grave. But the city routinely performs well in polls of desirable places to live and invest. Edinburgh’s prosperity – in part thanks to its centuries as a financial centre – has bequeathed it a labour force that is highly educated and highly skilled, and its economy will bounce back faster than most. Even if nobody else does, Edinburgh’s residents still have a lot to thank RBS for.
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