A new economic assessment of Leith has revealed that 3500 jobs have been lost from the area in just five years, confirming the failure of masterplan after masterplan for the port area.
With unemployment higher than the city average, and the collapse of plans to bring an offshore wind-turbine manufacturer to the docks, a new draft economic strategy for the area pins future hopes for growth in Leith on trams, creatives and tourism – predicting that the docks will remain, “an under-used investment-starved asset right at the heart of Leith.”
The latest draft proposals are apparently a consequence of public sector exasperation over privately-owned Forth Ports’ approach to their extensive land holdings on the docks.
The port operator was purchased in 2011 by private-equity backed Arcus as public sector agencies worked to put together plans to bring Leith Docks up to “21st century” standards, altering development plans, providing tax breaks for development on the docks and investing more than £2.5m of tax payers cash in feasibility studies.
But despite Forth Ports’ claims that they are now focussing on developing the existing port business at Leith, the report baldly states: “There is no evidence at Leith of significant numbers of new port-related jobs created in the last 5 years or so, or of proposals or strategies from the current operators for further port-related investment and growth which could result in new jobs.
“An analysis of their financial structure shows that they [Arcus] achieved their acquisition by heavy borrowing, so have very high leverage gearing (ie debt-to-capital ratio).
“Operating surpluses are focused on meeting interest payments, with the remainder going principally to fund high rates of immediate return in the form of substantial directors’ and management remuneration, rather than towards any value-adding reinvestment in the property.
“To date, no significant investment has been made or announced for modernising the port, even if a business case could be made for it.”
The authors continue their bleak assessment of the dock’s future: “Taking this financial focus together with the changed nature of cargo handling, the low remaining traffic at Leith, and the availability of adequate superior facilities such as container and bulk liquid handling in other nearby ports, there is little scope for any large-scale expansion of existing traditional freight activity.
“In the present situation the docks are therefore likely to remain an under-used investment-starved asset right at the heart of Leith.”
You may be wondering whatever happened to the much vaunted plan to create hundreds of renewable energy jobs at Leith.
Although officials to do not blame Forth Ports entirely for the no-show from Spanish wind turbine firm Gamesa in Leith, it’s clear from the report that Arcus have been less than helpful.
The firm reportedly expected tax-payers to foot much of the multi-million pound bill for the infrastructure investment needed to modernise Leith docks, even whilst the private backers of Forth Ports would be in-line for a share of the profits.
The report contrasts Arcus with one of their competitors, Associated British Ports – pointing out that a similar development in Hull that will create hundreds of ‘green collar jobs’ through wind turbine manufacturer Seimens was funded entirely by the private sector.
The authors explain why there is little chance of major investment in the docks: “Sourcing funding for the infrastructure works has been a challenge.
“Forth Ports are quoted as expecting ‘a substantial part’ of the required modernisation to be funded from public sources. However, at Hull a £130m upgrade of the port, comparable to the works identified as necessary at Leith including construction of an outer berth, is being undertaken by Forth Ports’ main competitors, Associated British Ports. This will unlock an £80m investment from the German Siemens group to build a factory to assemble parts for offshore wind turbines, and is being met entirely from private funds with no financial input from the public sector. By implication, the upgrade of Leith Docks could, in principle, be funded in the same way.”
Forth Ports, was only privatised in 1992. Prior to this it was publicly owned.
This failure of Forth Ports new debt laden owners to invest in Leith, or come up with a clear plan for the area, has had wider implications for the land immediately adjacent to the docks. The dwindling ongoing operations in the dock, coupled with uncertainty over the future use of the site seems to have effectively sterilised many of the brown-field sites adjacent to the working port areas.
Afterall, few people would wish to purchase homes adjacent to 24 hour shipping activity, given the choice. And Greener Leith is aware of home owners who bought homes close to the docks, in the years when Forth Ports were proposing to cease industrial use of the site, who are now planning to sell up and leave at a substantial loss, after concluding the council can or will do little to enforce noise laws in the areas around the port.
And in any case, much of Western Harbour, which remains notionally zoned for housing is thought to have been ‘land banked’ by investors through a company based in the British Virgin Islands.
Thus, short of compulsory purchase of these under-invested in areas, perhaps the only option available to public agencies is to bring the tram to the Waterfront in a bid to get these shadowy non-investors to open their wallets.
Not all gloom and doom
Despite this gloomy report card from the waterfront there are some bright spots in the latest economic assessment of the area.
It turns out that Leith is a hotbed of entrepreneurial activity, with the neighbourhood claiming a place in the top three areas in Scotland for new business start-ups. This is supported by demographics – the area is younger, better educated and more cosmopolitan than many parts of Edinburgh and Scotland – with cheaper housing attracting immigrants from all over the world and cheaper property attractive to small businesses.
Other than supporting the extension of the tram to Leith, the latest proposals for supporting economic growth focus on this start-up success, instead of another ‘mega masterplan’ that relies on the grace and favour of Leith largest land owners. As part of this, the small business incubator, Creative Exchange, on Constitution Street looks set to expand as all the desks on offer there have been filled.
Many may also take heart from council economic development proposals that talk of focussing on assets such as Leith Theatre and Customs House, a recognition that good quality public realm is important, and that the success of initiatives such as Leith Late can push forwards the cultural regeneration of the area.
But will it be enough?
If Leith really is losing 700 jobs a year, will these proposals be enough to turn the tide as the wider economy grows?
If the waterfront regeneration is unlikely to materialise is Leith fated to become a dormitory settlement supplying cheap labour to fill the offices along the tram line further west?
The draft Leith Economic Framework is strangely blind to some community priorities that have been identified by local consultation work that might help to avert such a future.
The proposals make no mention of ideas that have won public support in the past such as free public space wifi, The Leith Bridge project, or of investment in Leith Links play facilities – even as the report wrestles with the strategies for encouraging tourists to visit – and families to stay – in Leith.
Recently it has turned out that there are still private firms who harbour designs on establishing a hovercraft link between Fife and Edinburgh. Surely, such a link would dovetail well with the tram line, and help to bring more people to Leith? But it is not mentioned in this report.
Indeed there is little acknowledgement that the council closure of visitor attractions such as Leith Waterworld, or underinvestment in community assets such as Duncan Place Resource Centre, may have played a role in pushing the unemployment rate up alongside anything that the private sector has done.
And as the property market recovers it seems that many of the old workshops and light-industrial business units are being bought up and converted into more small flats – a development trend that does little to support the economic diversity or resilience of the area – or encourage families to stay.
Lastly, there seems to be no evidence that the local neighbourhood management team are doing much to address the areas where they are failing in maintaining local public spaces as well they could be.
Without a commitment to ensuring that affordable, flexible business units will be protected in the neighbourhood, to spending more cash on public infrastructure other than the tram, and to improving the maintenance of what Leithers already have it’s thus to difficult to assess the purpose of the document as anything other than another slightly less aspirational master plan, compared with those that have gone before.
But then its fair to say Leithers may have had enough of big ideas.
What do you think the council can and should do to boost the economic fortunes of Leith? Let us know in the comments, or better still, you can respond to the council consultation online here.