‘Second Only to London’: Devolution is the Key to Scotland’s Surging Development Says Government’s Investment Head Posted on: September 24th, 2019 Devolving the Scottish government and granting it decision-making powers has allowed the country to boom despite laggard growth in the rest of the UK, the Scottish Government’s head of investment, Kat Feldinger has said. Speaking at our London Property Club event, Feldinger highlighted the role that devolution has played in boosting the Scottish economy: She said: “What happened 20 years ago with devolution is that we created a nimble and responsive small economic unit, which is able to coordinate much better it is easier to coordinate policy between Edinburgh and Glasgow than it is across Whitehall.” “We are second only to London in terms of being a destination for foreign direct investment, or three biggest cities are all in the UK Top 10. We have got four of the world’s top 200 universities within an hour’s travel of each other.” Among the success stories of the Scottish economy over the past two decades is the growth of both Edinburgh and Glasgow as hubs for finance, tourism and other sectors. Cabinet member for finance and economy Derek Mackay cited the Scottish investment bank’s commitment to provide £2bn of funding over the coming decade for businesses. He said: “This bank will say of businesses and communities who wish to innovate and grow but find the traditional funding routes are challenging. So, we want to be more ambitious for Scotland and to provide the financing that businesses need for every stage of their investment lifecycle.” The St James development in Edinburgh will represent a £1bn new retail destination when complete. Ms Feldinger added that the development had been facilitated by the Scottish Government’s plans to support growth in regional economies.She added: “What the growth accelerator model allowed Edinburgh city council to do was to borrow the funding to put in all the enabling infrastructure, which then enabled the developers and investors to come in and develop this, it’s like it [St James] can be pretty fantastic.” Compared to other parts of the UK, developing schemes in Scotland was also relatively inexpensive, with costs up to 30% lower than other part of the UK. Paul Lewis, Managing Director of Scottish Development International said that yields on investments in both Edinburgh and Glasgow have been above the norm. He says: “In our two major cities, both Edinburgh and Glasgow seem to be performing in yield terms above comparable European locations, which I think is good for those looking for healthy return investment figures.” Mr Lewis added that the lower costs of setting up business in Scotland helped in part to lure Barclays to establish its European hub in Glasgow and create over 2,500 jobs. He adds that the new scheme, which will include 100,000 sq m development, will transform the south side of the river. “the really exciting thing for me is most of Glasgow’s growth for the last 15 years has been on the north side of our river, JP Morgan and Morgan Stanley, other companies have all put very large investments on the north of the river. “This [Barclays financial hub] is on South of the river, it doesn’t sound very big move because the river is quite narrow. But it’s huge in terms of the psychology and what it will do to transform a whole area of Glasgow that has been frankly, crying out for development, and therefore presents a huge opportunity. And I think that sense of opportunity, both in the commercial class accommodation space where there’s more demand and the supply is a big opportunity for the investment market”.