Larkhall – Milngavie Railway Project Evaluation Study Final Report
7. IMPACT ON WIDER ECONOMY
7.1. This chapter assesses the impact of the Larkhall – Milngavie railway project on the wider economy. It considers a number of local socio-economic indicators:
- population;
- key benefits and Jobseeker's Allowance claimants;
- house prices and house sales; and
- housing completions.
7.2. Identifying and isolating the impacts of a new transport scheme is a challenging task as these indicators are typically influenced by a number of factors simultaneously.
7.3. To assess whether the project has had an impact, it was therefore important to understand the counterfactual as discussed in Chapter 4 (i.e. what would these socio-economic indicators in the local area have been had the project not been implemented).
7.4. A control group was therefore defined against which the areas impacted by the Larkhall – Milngavie project were compared. Assuming economic conditions are similar in the control group and the areas impacted by the project, the rail project is then the key differentiating factor and may therefore explain any differences between the indicators in the control group and the project area. While the approach applied in this context is not perfect, it is regarded as reasonable and within the principle of proportionality emphasised by STAG.
7.5. Due to the large geographical coverage of the Larkhall – Milngavie project (it extends over three unitary authorities: Glasgow, East Dunbartonshire and South Lanarkshire), the national average (i.e. Scotland as a whole) was selected as the most appropriate control group.
7.6. Socio-economic data was sourced from the General Register Office for Scotland and Scottish Neighbourhood Statistics. Data was taken from the years immediately prior to the completion of the project in 2005 as well as from 2006 to the present to establish whether post-2005 trends were simply a continuation of the pre-2005 trend or were impacted by the rail project.
7.7. It is reasonable to assume a new railway line or improved rail frequency will, over time, lead to an increase in the local population due to improved accessibility (although this may take many years to materialise). There was some evidence from the User Survey that people's decision to move home had been influenced by the rail improvements (see Table 49 and Table 50, Appendix C). To assess this, the population since 2002 to the present from the General Register Office for Scotland was analysed to identify whether there has been any change in trends.
7.8. Figure 9 shows the indexed population in the three authorities impacted by the rail project and the Scotland average. The total population change between 2002 and 2013 was lower in the three authorities impacted by the rail project than the national average: -1.4% in East Dunbartonshire; 3.3% in Glasgow and 4.2% in South Lanarkshire, compared to 5.4% in Scotland as a whole. The population in South Lanarkshire grew faster than the national average in 2003 and 2004 but this was prior to the new stations being built. In East Dunbartonshire, the population declined each year until growing in 2012.
Figure 9 Population Index (Unitary Authority Level), 2002 – 2013
7.9. Comparing the population change before (2002 to 2005) and after (2005 to 2013) the project was completed shows whilst there was a higher growth post-completion in all three unitary authorities, this was also true of the control group (i.e. Scotland as a whole) and so growth was likely due to other factors rather than the rail project ( Table 9).
7.10. Assessing the population of the individual settlements (data only available from 2003 to 2012) impacted by the rail project reveals that despite South Lanarkshire displaying sustained population growth from 2003 onwards, Hamilton and Larkhall do not follow this trend ( Figure 10). The population of Hamilton increased slowly from 2003 until 2008, after which it grew substantially, at a rate twice the national average. By 2012 its population was 10% higher than in 2003. In contrast, Larkhall, which benefited from the two new stations in 2005 (Larkhall and Merryton), has shown a continuous population decline since 2007; its population in 2012 was 4% lower than it was in 2003.
Figure 10 Population Index (Settlement Level – Hamilton & Larkhall), 2003 – 2012
7.11. In East Dunbartonshire, whilst at the unitary authority level, the population declined from 2003 to 2011, the population in Milngavie showed a marked increase in 2007 and 2008 ( Figure 11), which may have been partly in response to the service frequency improvements.
Figure 11 Population Index (Settlement Level – Milngavie), 2003 – 2012
The evidence to link population growth to the Larkhall – Milngavie railway project is inconclusive. The population change between 2005 and 2013 in the three unitary authorities impacted by the project has actually been lower than the national average since 2002.
In Larkhall, the main beneficiary of the project with two new stations, the population has shown a consistent decline from 2007 onwards. However, as evidenced in the User Survey the rail project may have contributed to retaining or attracting residents to the area and therefore mitigated some of the population decline.
Key Benefits & Jobseeker's Allowance Claimants
7.12. Evidence from chapter 5 suggests the Larkhall – Milngavie project has improved accessibility and increased employment opportunities. Additionally, the impact of the new stations in Larkhall may have helped to promote more local economic activity with the creation of new job opportunities.
7.13. To assess whether the rail project has had an impact on local employment opportunities, the percentage of the working population claiming key benefits and Jobseeker's Allowance since 2002 to the present from the Scottish Neighbourhood Statistics was assessed to identify whether there has been any change in trends.
7.14. Figure 12 shows the index of the percentage of working age population claiming key benefits from 2002 to 2013 for the areas impacted by the rail project and the control group. All areas show broadly the same trend in the rate of decrease of claimants from 2003 to 2007 in line with the economic growth experienced during this period. This was followed by an increase in 2008 and 2009 presumably as a result of the recession. Since 2010 there has been a gradual decrease in line with the economic recovery.
7.15. As the 2006 to 2008 trend appears to be a continuation of the pre-2006 trend, there does not appear to be any clear evidence that the Larkhall – Milngavie project has had an impact on the number of key benefits claimants.
Figure 12 Percentage of Working Population Claiming Key Benefits Index, 2002 – 2012
7.16. The index of the percentage of working age population claiming Jobseeker's Allowance is shown in Figure 13. Although more volatile than the key benefits claimants, there was an overall decrease in the percentage claiming Jobseeker's Allowance between 2002 and 2007 across all areas after which there was a marked increase in 2008 and 2009. Since 2009 there has been little change in the percentage of claimants.
7.17. As per the key benefit claimants, the trends in Jobseeker's Allowance observed appear to be in line with the macro-economic conditions rather than the impact of the Larkhall – Milngavie project, with no noticeable difference between the areas impacted by the improvements and the control group from 2006 onwards.
Figure 13 Percentage of Working Population Claiming Jobseeker's Allowance Index, 2002- 2012
There is no conclusive evidence to link the percentage of benefit claimants to the Larkhall – Milngavie railway project. The changes observed since 2005 are most likely as a result of the economic recession and subsequent recovery rather than the impact of the rail improvements.
7.18. The User Survey suggested there was anecdotal evidence that residents close to the new stations believed the Larkhall – Milngavie project had helped raise house prices and influenced people's decision to move (see Table 49 and Table 50, Appendix C).
7.19. To assess whether the rail project has had an impact on house prices and the number of house sales, data from 2002 to the present from the Scottish Neighbourhood Statistics was analysed to determine whether there has been any change in trends.
7.20. Figure 14 shows the index of median house prices from 2002 to 2012 for the unitary authorities and settlements impacted by the rail project and the control group. Across all areas including the control group, a similar trend is observed. Between 2002 and 2007 a substantial increase was observed with median prices increasing by a least 70% in all areas; in Glasgow and Scotland as a whole, prices almost doubled. There was a notable increase of 22% in Milngavie in 2006 which could perhaps be an immediate response to the rail improvements. From 2008 however median prices have decreased, with notable falls in Milngavie and Hamilton. In Larkhall, which has seen the biggest improvement in connectivity, the decrease has been less and more in line with the national trend.
7.21. The trend in median house prices is in line with the macro-economic environment with prices falling in 2008 and 2009 in response to the recession. Whilst there may have been some short-term localised impacts (e.g. in Milngavie), the house price data in the areas impacted by the rail project broadly follow the same trend as the control group. There is therefore no firm evidence that the rail project has had an impact on house prices.
Figure 14 Median House Prices Index, 2002- 2012
7.22. Figure 15 shows the index of number of house sales from 2002 to 2012. The areas impacted by the rail project typically follow the control group trend with an increase up to 2007 (in line with house prices) followed by a significant fall in 2008 and 2009. Since 2010, there has been a small recovery. There are however some local variations, notably in Hamilton and Larkhall which had a decrease in the number of home sales at the start of the period.
7.23. Given there are no significant differences with the control group, as per house prices, there is no conclusive evidence that the rail project has had an impact on the number of house sales. The changes observed are more likely in response to the macro-economic conditions rather than local factors.
Figure 15 Number of House Sales Index, 2002- 2012
The data does not provide a firm link between house prices or the number of houses sold and the Larkhall – Milngavie railway project. The variations in the housing market since 2005 are most likely in response to the period of strong economic growth to 2007 followed by the recession in 2008 and 2009.
However, evidence from the User Survey suggests the rail project may have had a small beneficial impact on the housing market with the perception that the improvements have boosted house prices.
Housing Completions and New Developments
7.24. To assess whether the rail project has led to more housing being built, housing completion data since 2003/4 to the present from the Scottish Neighbourhood Statistics was assessed to determine whether there has been any change in trends.
7.25. Figure 16 shows the index of housing completions from 2003/04 to 2013/14. This shows that the number of completions in East Dunbartonshire has been most volatile compared to South Lanarkshire, Glasgow and the national average and in particular has shown a strong recovery since 2009/10. However, given the relatively small number of homes built (typically between 100 and 300 per annum), this is unsurprising. In South Lanarkshire there was an increase of over 300 completions between 2005/06 and 2006/07 which may have been in response to the opening of the new stations in the Larkhall area. However, since 2006/07 there has been a broadly declining trend in completions in South Lanarkshire and Glasgow, in line with the national average.
Figure 16 Number of Housing Completions Index, 2003/04 – 2013/14
7.26. To assess whether there was an impact on housing completions at a more local level, data from South Lanarkshire Council was obtained regarding private sector housing completions since 2005 in Larkhall and Ferniegair (the settlement served by Chatelherault station) as shown in Figure 17. This shows that the highest level of completions in Larkhall were in 2005 (63) and 2006 (45). This may in part have been in response to the opening of Larkhall and Merryton stations in 2005. Since 2006, there has been a lower level of activity in Larkhall but in Ferniegair there were nearly 150 completions between 2008 and 2012; again the rail improvements may have been a factor.
Figure 17 Number of Housing Completions in Larkhall and Ferniegair, 2005 – 2012
7.27. Further housing developments in Larkhall and Ferniegair are due with construction work already started or planning consent given. This is primarily a result of the local area being classed as a Community Growth Area[21]. In Larkhall, this is expected to deliver 1,500 new homes and in Ferniegair, 300 new homes are expected with 150 of these completed by 2020. South Lanarkshire Council believe that the rail improvements were a key factor in securing the growth area status and boosting the level of housing investment in the area. The sites for new developments are considered as more sustainable as a result of the new rail link and developers are more prepared to invest as a result; it is unlikely the same scale of building would have been seen without the existence of the rail link. In the long term, therefore, the station re-openings have contributed to the building of new homes in Larkhall and Ferniegair.
7.28. For most of the local economic indicators examined (population, benefit claimants, house prices and house sales), there is no clear evidence to suggest that the Larkhall – Milngavie project has had a significant or measurable wider economic or social impact.
7.29. Comparing the indicators in the areas impacted by the rail project against the control group showed that there was no significant variation between the two suggesting that the impact of the rail improvements was minimal. In addition, some of the positive trends observed such as population tend to have been continuations of what was being experienced prior to the completion of the rail project in 2005.
7.30. In the indicators where volatility was observed (e.g. the labour and housing markets), the trends were in line with the economic growth experienced up to 2007 followed by the subsequent recession of 2008 and 2009 and finally recovery from 2010 onwards. Although there may have been localised and small-scale impacts due to the rail project, it is likely that, considering the granularity of the data available, these have been masked by the prevailing macro-economic conditions.
7.31. Housing completions is the one indicator examined where there is evidence to support the positive impact of the rail improvements. The station re-openings is thought to have been fundamental to the designation of the Larkhall area as a Community Growth Area. In the long term, this will deliver 1,800 new homes in Larkhall and Ferniegair. In time, these new developments may deliver wider positive social and economic impacts.