The Index shows that Aberdeen’s ongoing recovery has moved the city up to number six in the ranking, overtaking Edinburgh which fell one place to number seven.

Increases in income, jobs growth and skills development opportunities have been the drivers of growth among the seven Scottish cities on the index between 2016-18, with Glasgow – the only other Scottish city on the national index – moving up one spot to 24.

The index, which is based on a basket of 11 indicators that show there is more to life, work and wellbeing than GDP alone, measures 42 cities across the UK in its national index. These include employment, health, income and skills, while housing affordability, commuting times, environmental factors and income inequality are also included, as is the number of new business start-ups.

A separate index covering cities with devolved administrations shows Inverness topping a table of 11 cities, ahead of Aberdeen, Edinburgh and Perth. Stirling was the lowest placed Scottish city on the list, in ninth.

The overall performance of the seven Scottish cities on the Devolved Administrations index was relatively strong. Among the highlights is above average growth for job creation over the three year measurement period, while income is above the UK average in all Scottish cities with the exception of Glasgow, where it is in line with the UK. Another area of strength for Scotland is in skills development, where it performs above average across the board, with absolute increases in five of the seven cities measured.

However, Scotland performed below par in the new businesses per head metric. Aberdeen was only Scottish city not to fall below the national average, while Edinburgh, Inverness and Stirling saw absolute decreases.

Scotland also performed well in the environment measure, which looks at carbon emissions relative to average earnings. All seven cities saw absolute improvements in their score for environment, with six scoring above the national average.

The Scottish Government is set to introduce a Climate Change Bill, intended to create a net-zero society by 2045. Scotland is also moving to adopt a target to reduce emissions by 75% by 2030.

Stewart Wilson, head of government and public sector for PwC Scotland, said: “Scotland is in an incredibly advantageous position as the world moves into a new age where digitalisation and climate change dominate business and political agendas.

“With huge natural resources and a commitment to lower emissions, this year’s Good Growth for Cities index shows that Scotland’s key cities are outperforming the national average in carbon emissions per average earnings, and in improving skills.

“Challenges remain, of course. This year’s index shows that despite widespread perceptions, Scotland is becoming a less affordable place to live, with owner-occupation down across the board. Edinburgh and Stirling have also seen notable decreases in income distribution. Health also continues to be a drag on Scotland’s cities performance, which reinforces the requirement to alleviate long-term sickness issues.

“As a country known for its entrepreneurial spirit and successes, it’s disappointing to see our cities underperform in new business creation.

Overall, Scotland is well-placed to welcome the 2020s, but to realise our full potential, there remains a requirement for business, government and academia to collaborate to encourage the investment required to ensure Scotland’s cities grow both economically and through quality of life.”

Of the three Scottish cities which make the national index, Aberdeen scored above the national average in seven of the 11 indicators. Its increase from ninth to sixth on the index, having dropped outside the top ten in 2017, confirms that the Granite City is well on the way to recovering from the oil and gas downturn.

The city’s higher position is down to improvements in health, work-life balance, housing affordability and income distribution, while it is the best performing city in the UK when measuring house prices relative to earnings. Aberdeen stood out from other Scottish cities due to its above average performance on new businesses.

The lasting effects on the downturn can be seen in the jobs metric however, where Aberdeen is the worst performing city in the UK, a score contrary to the city’s overall performance.

Kevin Reynard, PwC’s Aberdeen office senior partner, added: “The return to growth in the oil and gas sector and the above average performance in new business creation means Aberdeen is at a crossroads in its recovery. The number one issue in Aberdeen at the moment is ensuring that as growth returns the right people with the right skills are filling available positions. 

“We have seen signs that this is happening in 2019, so I would expect to see an improvement in this area in next year’s index, as the benefits felt from improvements in other metrics flow through to the jobs market.

“Overall our city is a good position to move forward into the 2020s with renewed confidence. Beyond the oil and gas sector, which remains crucial to the local economy, Aberdeen is becoming an important centre for renewable energy, while our food and drink companies have much to offer local and international markets.”

Edinburgh remains one of the most attractive cities in the UK at number seven on the list, down from six. The Scottish capital saw above absolute increases in five indicators including jobs growth, income and work-life balance but house price increases have led to a further reduction in owner occupation as house prices to earnings fell below the national average.

Income distribution was the worst-performing variable for the city. Transport – which takes commuting times into account – was Edinburgh’s best performing variable. Edinburgh’s improvement in this year’s index was the smallest of the Scottish cities, sitting at 29th of the 42 UK cities, 10 of which showed declines in performance.

Mark Hoskyns-Abrahall, Edinburgh office senior partner for PwC, said: “Edinburgh is well-positioned to continue to be one of the best cities to live and work in the UK throughout the 2020s. Thanks to the likes of City Deals funding, we are seeing huge investment in digital technologies and education while our financial services – particularly FinTech – industry continues to grow, making valuable contributions to the UK economy.

“This year’s Good Growth for Cities Index reveals there are challenges Edinburgh must work to overcome. These include income distribution and housing affordability, while we also note that the city is below the national average for new business creation and improving skills in the over 25 demographics.”

Glasgow was the most improved Scottish city in the 2016-2018 index, and the 13th most improved overall. However, Scotland’s largest city continues to sit midway in the table, increasing one position this year to 24. Its improvement this year was led by a strong performance in the jobs metric, where it was 11th overall.

In total, Glasgow performed above the national average in five of the 11 indicators, with absolute increases in nine of the 11. Jobs was the city’s best scoring indicator, with other stand-outs including work-life balance, skills and income distribution.

Kenny Wilson, Glasgow office senior partner at PwC, added: “It is encouraging to see Glasgow come in as the most improved Scottish city in this year’s Good Growth for Cities index. This is largely down to an increase in employment in the city. The city is also making huge improvements with City Deal funding bringing about huge investment in regeneration, which will only help make Glasgow a more attractive city in which to live and work into the next decade.

“The city is also increasing its standing on the global stage and all eyes will be on Glasgow next year, with the COP26 climate conference bringing 30,000 delegates to the city. As climate change moves to the top of the political agenda, it is a huge seal of approval for Glasgow that a conference of such global importance will be held here – so it’s great to see us outperform the UK in the environment indicator too.”

Looking to Scotland’s next tier of cities, Inverness retained its place as the number one city in the devolved administrations. Quality of life in the ‘capital of the Highlands’ is seen as key to its success, with above-average scores in jobs, income, transport and the environment. Inverness’ recent success is having an impact on affordability however with work-life balance, owner occupation and house price to earnings all underperforming.

In Dundee, jobs, income and work-life balance were the stand-outs in a city which had benefited from huge regeneration on its waterfront. The opening of the V&A Museum in September 2018 had more than 800,000 visitors in its first year and has put Dundee firmly back on the map.

Like other parts of Scotland however this comes at a price. House prices relative to earnings still performed above average but there was a decrease in the absolute score in this metric, while owner occupation has fallen in absolute terms and against the national average.

In Perth, job creation was the best performing metric, with above average scores in income, work-life balance and transport.

Stirling also saw growth in jobs, income and transport though health, work-life balance and house prices led to it propping up the table of devolved cities.

Stewart Wilson added: “Looking at Scotland’s cities collectively there are some clear themes that emerge. Unemployment has fallen over the period measured, while income has picked up in all but two cities. These positive steps are reinforced with strong scores in the likes of work-life balance, commuting times and the environment, all of which shows Scotland as a country moving in the right direction in spite of currently political upheaval.”