Borders Railway Baseline Study - Final Report
6 Business Survey
6.1 As discussed in Chapter 3, the business survey collected information on a number of business metrics including turnover, employment and access to markets (e.g. suppliers and customers) and is particularly important for informing the evaluation of the Wider Economic Benefits (WEBs) of the scheme. This chapter provides a summary of the findings from the business survey.
6.2 In total, 100 businesses responded to the survey. Table 6.1 and Figure 6.1 show the breakdown of responses received by location. Of the 100 responses, 3 fell outside of the Scottish Borders and Midlothian local authority areas and have therefore been excluded from the subsequent analysis. It is important to note that not all respondents provided an answer to all survey questions and therefore the sample size varies for each question.
Figure 6.1: Geographical Distribution of Business Survey Responses
About Your Business
Location of Principal and other Offices
6.3 The majority (95%, n=92) of the businesses surveyed stated that their principal office was located in the Scottish Borders or Midlothian, with just 2% (n=2) of businesses in Midlothian and 3% (n=3) in the Scottish Borders stating that their principal office was outside these areas. Of these, 2 had their principal office in North Lanarkshire, 1 was based in Edinburgh and 2 stated they did not know.
6.4 As shown in Figure below, the majority of businesses in the Scottish Borders (72%, n=43) and Midlothian (79%, n=34) stated that they had no other offices, with 13% (n=8) and 14% (n=6) respectively stating that they had other offices in the UK and 15% (n=9) and 7% (n=3) respectively stating that they had other offices in the Scottish Borders and/or Midlothian specifically.
Figure 6.2: Other Premises Outside Study Area
6.5 The tables below show the breakdown of the responses by sector and the Gross Value Added (GVA) by sector for each local authority area. As shown the proportion of responses is broadly comparable to the size of the sector in each local authority area. However, it should be noted that there is some over and under representation of certain industry groups. For example, in the Scottish Borders, a large number of responses were received from the Accommodation, Food Services and Recreation sector and the Wholesale and Retail sectors, while a lower proportion of responses was received from the Construction industry and Professional and Other Private Services. Similarly, for Midlothian, the Transport and Storage sector is overrepresented and Professional and Other Private Services are underrepresented. While it is acknowledged that this could introduce an element of bias into the survey results, it was felt that this was outweighed by the benefits of maximising the number of responses.
|Industry Sector||Number of Responses by Sector||Responses by Sector
|GVA by Sector 2014 (£mn CVM 2011 prices)||GVA by Sector 2014 (%)|
|Accommodation, Food Services & Recreation||13||23%||110||6%|
|Agriculture, Forestry & Fishing||3||5%||93||5%|
|Extraction & Mining||1||2%||1||0%|
|Finance & Insurance||1||2%||29||2%|
|Information & communication||2||4%||24||1%|
|Professional & Other Private Services)||8||14%||415||23%|
|Transport & storage||3||5%||49||3%|
|Wholesale & Retail||15||27%||265||15%|
|Industry Sector||Number of Responses by Sector||Responses by Sector
|GVA by Sector 2014 (£mn CVM 2011 prices)||GVA by Sector 2014 (%)|
|Accommodation, Food Services & Recreation||2||5%||75||5%|
|Agriculture, Forestry & Fishing||2||5%||14||1%|
|Extraction & Mining||0||0%||3||0%|
|Finance & Insurance||2||5%||38||2%|
|Information & communication||0||0%||31||2%|
|Professional & Other Private Services)||5||12%||378||23%|
|Transport & storage||8||20%||57||3%|
|Wholesale & Retail||8||20%||259||15%|
Awareness of New Line
6.6 As may be expected there was good awareness of the new line amongst the businesses surveyed, with all of those based in the Scottish Borders familiar with the project and just 10% (n=4) of those based in Midlothian stating that they were unaware prior to receiving notification of the survey (see Figure 6.3).
Figure 6.3: Awareness of the Reopening of the Borders Rail Line
6.7 Knowledge of the closest Rail Station was also high, particularly in the Scottish Borders. In total 86% (n=48) of the businesses based in the Borders and 68% (n=28) of the businesses based in Midlothian stated that they were aware of their closest station, with 4% (n=2) and 17% (n=7) respectively in each area stating that they were unaware (see Figure 6.4).
Figure 6.4: Business Awareness of closest Borders Rail Station to their Site
Years of Operation at Current Site
6.8 As shown in Figure 6.5 below, the majority of businesses surveyed in both the Scottish Borders (55%, n=31) and Midlothian (68%, n=28) had been at their current location for more than 10 years, with just 13% (n=7) in the Scottish Borders and 7% (n=3) in Midlothian moving within the last three years.
Figure 6.5: Length of time at current site
6.9 As shown in Figure 6.6, the majority of businesses in the Scottish Borders (29%, n=16) and Midlothian (24%, n=10) stated that they had set up a new business at their current location, with 7% respectively relocating from elsewhere and just one business (2%) opening as a result of a business expansion. Of those who relocated from elsewhere, two moved from Edinburgh to Midlothian, two made internal movements within the Scottish Borders, one moved from Portobello to Midlothian, one from Edinburgh to the Scottish Borders, and one from Stirling to the Scottish Borders.
Figure 6.6: Situation with regard to business opening for those operating at current location for less than ten years
6.10 Businesses were also asked whether the reopening of the rail line had been a factor in their decision to begin operating in the area. 95% (n=20) of the businesses in the Scottish Borders and 92% (n=12) in Midlothian said that it had not been a factor in their decision, with the remaining 5% and 8% respectively stating that they did not know. No businesses said it had been a factor in the move.
Key Point: Of those business that had moved to the Scottish Borders or Midlothian recently, none cited the new rail line as a factor in the decision to locate in the area.
Advantages/Disadvantages of Operating in the Area
6.11 Figure 6.7 and Figure 6.8 below show how businesses from each local authority area rated a number of potential advantages/disadvantages of operating in the area. In general, businesses in Midlothian were more positive about operating in the area than those based in the Scottish Borders.
6.12 As shown in Figure 6.7, the biggest advantages in the Scottish Borders were it being a pleasant area to work (83%, n=45); it being easy to park/deliver (67%, n=36); and there being high demand in the local area (57%, n=31), while the biggest disadvantages were public transport links to the site (54%, n=29); there not being a wide labour catchment (43%, n=23) and the lack of a skilled/experienced local labour force (41%, n=22).
6.13 In Midlothian the biggest advantages were it being good road links to the site (72%, n=26); easy to park/deliver (69%, n=25); and it being a pleasant area to work (58%, n=21), while the main disadvantages were demand in the local area (31%, n=11); the local area expanding/thriving (31%, n=11) and good public transport links to the site (28%, n=10).
Figure 6.7: Advantages/Disadvantages of operating in the Scottish Borders
Figure 6.8: Advantages/Disadvantages of operating in Midlothian
6.14 Respondents were also asked what they considered to be the main single advantage and disadvantage of operating in their current location. In the Scottish Borders the most common advantage provided was the pleasant nature of the local area (29%, n=12) whilst the most frequently cited disadvantage was there being poor transport links (27%, n=12). In Midlothian the most common advantage provided was the proximity to Edinburgh (23%, n=7) whilst the most commonly cited disadvantage was high rent (17%, n=5).
Key Point: The most common disadvantage cited by businesses of being located in the Scottish Borders was poor transport links
Plans to Relocate
6.15 Figure 6.9 shows a breakdown of the future plans of businesses in Midlothian and the Scottish Borders. The majority of businesses in the Scottish Borders (69%, n=37) and Midlothian (67%, n=24) intend to maintain the businesses in their current form and 9% (n=5) of those in the Scottish Borders and 14% (n=5) in Midlothian intend to expand operations on their current site. None of the businesses in the Scottish Borders stated that they were planning to relocate and only 6% (n=2) in Midlothian plan to relocate to other areas. Of these, one said they plan to move to southeast England and one said they did not know where they are likely to move.
Figure 6.9: Future Intentions regarding Business Location
Number of Employees
6.16 Figure 6.10 and 6.11 show the average number of people employed by respondent businesses at their current location by principal sector for the Scottish Borders and Midlothian respectively. As shown the majority of respondent businesses are small companies with the overall average number of employees in the Scottish Borders and Midlothian businesses being 16 and 22 respectively.
Figure 6.10: Average Number of Employees by Sector for companies based in the Scottish Borders
Figure 6.11: Average Number of Employees by Sector for companies based in Midlothian
Employee Travel to Work Mode
6.17 Figure6.12 displays the main mode of commute for the businesses’ employees. Most employees depend on the car to travel to work, with approximately 70% of employees in each business in Midlothian and 67% on average in the Scottish Borders travelling to work by car. However, a significant proportion of employees in each business walk or take the bus to work, with the former more popular in businesses based in the Scottish Borders and the latter more popular in businesses based in Midlothian. In the Scottish Borders a number of businesses selected ‘other’, with all of these stating that their staff worked from home.
Figure 6.12: Main mode of commute by area (average proportions)
Key Point: The traveltowork market in the business survey is dominated by the private car, with the majority of employees in both Midlothian and the Scottish Borders travelling to work by car. Walking, bus travel and to a lesser extent cycling are also used, with working from home also popular within the Scottish Borders.
6.18 Figure 6.13 shows the geographical markets of businesses within each of the local authority areas. As shown, the Scottish Borders is by far the key market for the Scottish Borders businesses surveyed, accounting for, on average, 62% of the overall market share. In comparison the Edinburgh market and ‘other UK’ each account for just 10% of total outputs.
6.19 In contrast, the Edinburgh market plays more of a key role for the Midlothian businesses surveyed, accounting for 20% of market share on average compared to 32% for Midlothian itself and 10% for ‘other UK’. Interestingly, the overseas market is also more important amongst the Midlothian businesses, accounting for 11% on average, compared to just 2% for the businesses surveyed in the Scottish Borders.
Figure 6.13: Markets Served
6.20 A similar picture is evident when the location of businesses’ key competitors is examined. As shown in Figure 6.14, the majority (53%) of competitors of the Scottish Borders businesses surveyed are located within the same local authority, with just 13% on average based in Edinburgh and 12% based in ‘other UK’ locations. In contrast, just 31% of competitors of the Midlothian businesses surveyed are located in the same local authority, with 24% based in Edinburgh and 15% based elsewhere in Scotland. In addition, the Midlothian businesses surveyed face greater competition from overseas competitors who account for, on average, 8% of competitors compared to just 1% for the Scottish Borders.
Figure 6.14: Location of Main Competitors
6.21 Figure 6.15 below shows the location of the suppliers of the businesses surveyed. As shown the businesses in both areas draw the majority of their supplies from the local area, as well as other areas of the UK and overseas. However, while suppliers in both locations come from a broad area, the Edinburgh supplier market is less important to the Scottish Borders businesses surveyed, accounting for just 6% of the supplier market compared to 17% for Midlothian.
Figure 6.15: Location of Suppliers
Key Point: The customers and competitors of the Scottish Borders businesses surveyed tend to be more locally based than that of Midlothian. While suppliers come from a broader area, the Edinburgh supplier market amongst the businesses surveyed is less important for the Scottish Borders compared to Midlothian.
Employee Travel in the course of Work
6.22 Employee travel during the course of work was more common in Midlothian, with 67% (n=24) of the Midlothian businesses who responded to this question stating that their employees travelled during work hours compared to just 47% (n=25) in the Scottish Borders (Figure 6.16).
Figure 6.16: Employee Travel in the course of Work
6.23 As shown in Figure 6.17, the businesses in Midlothian indicated that their staff travel to a broader range of destinations than those in the Scottish Borders. While 95% (n=20) of Midlothian businesses responding to this question stated that their employees travel to Edinburgh during the course of their work, just 76% (n=13) of businesses based in the Scottish Borders said this was the case. Similarly, 81% (n=13) of Midlothian businesses responding to this question stated that their staff travel to other locations in Scotland, compared to just 71% (n=12) of businesses in the Scottish Borders.
Figure 6.17: Percentage of businesses based in the Scottish Borders who indicated their employees travel to various locations
Figure 6.18: Percentage of businesses based in Midlothian who indicated their employees travel to various locations
6.24 Businesses who indicated that their employees travel to the above destinations in the course of work were also asked to provide an approximate frequency of travel, either per week or per month. These figures were used to estimate an average annual trip rate to each destination for businesses in the Scottish Borders and Midlothian (see Figure 6.19). As shown, on average, businesses in Midlothian make more trips to each of the locations specified.
Figure 6.19: Average number of annual trips made during the course of work to various locations
Main Mode used for Business Travel
6.25 Figure 6.20 sets out the main mode used for travel during the course of work. As shown, car travel is again the dominant mode with, on average, approximately 70% of employees in each business in the Scottish Borders and 68% of those in Midlothian using the car for business travel. As would be expected, in contrast to the travel to work mode, rail and air travel feature within the business travel data, with employees likely using these modes for longer distance journeys outside of the immediate local authority area. Van travel was also a popular choice, particularly within Midlothian. This may be a result of the large number of businesses within the transportation and storage sector within the Midlothian sample.
Figure 6.20: Main Mode Used during the course of Work
Key Point: In keeping with the markets served, business travel in Midlothian tends to have a much more widely dispersed destination set than the businesses in the Scottish Borders. The car is again the dominant travel mode accounting for 68% of travel in Midlothian and 70% in the Scottish Borders.
Recent Business Conditions
6.26 Figure 6.21 below shows the level of satisfaction with business trading conditions amongst businesses in each local authority area. As shown, 52% (n=25) of businesses in Midlothian and 48% (n=18) of businesses in the Scottish Borders felt that current trading conditions were either very good or good, with a further 29% (n=10) in Midlothian and 42% (n=22) in the Scottish Borders describing conditions as fair. Overall, just 10% (n=5) of businesses in the Scottish Borders and 20% (n=7) in Midlothian felt business conditions were poor or very poor.
Figure 6.21: Perception of current Business Trading Conditions by Location
6.27 Businesses were also asked which factors had influenced recent business conditions. As shown in the Figure below, the key factor in both areas was current market trends, with 57% (n=20) of respondents in Midlothian and 56% (n=29) of respondents in the Scottish Borders selecting this factor. In Midlothian market competition was also considered a major factor with 57% of businesses selecting this, whilst in the Borders the availability of labour (35%, n=18) and the perception of remoteness (33%, n=17) were more important factors. In total three businesses in the Scottish Borders and two in Midlothian selected ‘other’, with responses given including the economy, the Scottish Referendum and the weather.
Figure 6.22: Factors which have Influenced recent Business Conditions
6.28 Figure 6.23 below shows how businesses rated the ease with which it is possible to recruit staff across the two local authority areas. Overall, businesses in the Scottish Borders found recruitment more difficult than those in Midlothian, with 46% (n=24) of Scottish Borders respondents rating recruitment as either very difficult or difficult compared to 38% (n=13) in Midlothian.
Figure 6.23: Ease of Recruiting Staff
6.29 Businesses were also asked about their business employment levels. As shown below, while the majority of respondents across both areas indicated that their employment levels have remained stable over the last three years, a large proportion of those in the Scottish Borders (29%, n=15) stated that their employment levels had decreased.
Figure 6.24: Business Employment Levels
Level of Investment
6.30 Figure 6.25 below shows how businesses described the level of investment in their businesses at the current site over the last year. As shown, the majority of businesses in the Scottish Borders (56%, n=29) and Midlothian (63%, n=22) stated that their investment had remained stable.
Figure 6.25: Change in Level of Investment at Current Site
6.31 Businesses were also asked whether the opening of the Borders Railway had influenced their level of investment. All of the businesses in Midlothian who responded to this question (100%, n=13) stated that the reopening of the railway had no influence and just one business in the Scottish Borders (4%, n=1) stated that it had had a slight influence on them increasing their investment.
6.32 Figure 6.26 shows the annual turnover for businesses across the two areas. As shown, businesses taking part in the survey had a range of turnovers, with some with less than £50 thousand per year and others producing more than 5 million.
Figure 6.26: Business Turnover
6.33 The Figure below shows the change in annual turnover for businesses across the two locations. Overall, the majority of businesses in the Scottish Borders (57%, n=20) and Midlothian (64%, n=14) have experienced an increase in turnover over this period.
Figure 6.27: Change in Turnover
Key Point: The business survey suggests relatively stable / slightly growing market conditions in the Scottish Borders and Midlothian local authority areas. In addition to current market trends, the main issues affecting business performance identified in the survey include competition in Midlothian market and the availability of labour and the perception of remoteness in the Scottish Borders. Almost all businesses interviewed in the Scottish Borders and Midlothian explained that the reopening of the rail line had no impact on their level of investment
Impact of the Borders Railway
6.34 Businesses taking part in the survey were also asked to consider the potential impact of the Borders Railway on their business. As shown in Figure 6.28 and Figure 6.29 below, businesses based within the Scottish Borders were generally more positive about the impact of the railway than those in Midlothian. However, while generally more positive, businesses based in the Scottish Borders did not feel that the railway would result in universal benefits. For example, while the majority (53%, n=27) felt that the reopening of the line would make it easier for them to recruit staff, a large proportion (37%, n=19) felt that it would also make it more difficult to retain staff. Similarly, the majority (50%, n=26) of respondents did not feel that the reopening of the line would enable them to expand their customer base and 72% (n=37) felt that it would not lead to an increase in the use of suppliers from other areas.
Figure 6.28: Potential Impact of the Borders Railway – Businesses based in the Scottish Borders
Figure 6.29: Potential Impact of the Borders Railway – Businesses based in Midlothian
6.35 Figure 6.30 and Figure 6.31 below show businesses perception of the impact of the reopening of the rail line on turnover/customer base and employment levels. As shown, 63% of businesses in the Scottish Borders felt that the reopening of the line would have a positive impact on turnover/customer base compared to 23% in Midlothian. Similarly, 45% of businesses in the Scottish Borders felt that the railway would have a positive impact on employment levels compared to 15% in Midlothian.
Figure 6.30: Potential Impact of the Borders Railway on Turnover/Customer Base – Scottish Borders Businesses
Figure 6.31: Potential Impact of the Borders Railway on Turnover/Customer Base – Midlothian Businesses
Key Point: Businesses in the Scottish Borders were more likely to believe that the reopening of the railway would have a positive impact on turnover/customer base and employment levels compared to businesses in Midlothian.