Aberdeen’s north-east economy is grappling with a significant erosion of confidence, driven by job market anxieties, escalating operational costs, and persistent uncertainty within the vital oil and gas sector, according to a prominent hospitality boss. Allan Henderson, managing director of the McGinty’s Group, a prominent hospitality operator in the city, recently articulated a “growing weariness” pervading businesses across the region in conversation with the P&J.
Hospitality venues, including the nine operated by McGinty’s Group – which notably is the preferred operator for the forthcoming £40 million Flint food and drink market – are contending with soaring overheads. Simultaneously, the energy industry, a cornerstone of Aberdeen’s economy, has seen workers increasingly concerned about redundancies.
“People are seeing other people lose their jobs, they’re worried for their own jobs,” Henderson stated. This sentiment was underscored by recent developments, with Spirit Energy announcing plans in April 2026 to restructure its UK operations, placing approximately 100 jobs at risk in its Aberdeen office.
“Just the other week there was news that another 100 people will be laid off at Spirit Energy,” Henderson noted, adding, “These are real people and it has to affect confidence in the area.”
A perennial concern for the hospitality sector remains business rates, which Henderson described as the “elephant in the room.” He argued for a fundamental overhaul, stating, “Any hospitality operator will tell you they need to radically change the way business rates are done.”
While acknowledging a shift in political discourse, with “Politicians seem to be starting to listen to us. There’s a change of tone towards it,” Henderson stressed the urgent need for “action, not words.” The Scottish Government did launch an independent review of the valuation methodology for licensed hospitality premises, chaired by BJ Gill KC, in its Programme for Government 2025-26, with findings expected by the end of 2026. Henderson welcomed the review but cautioned against delays in implementing meaningful reforms.
Beyond sector-specific challenges, Henderson also highlighted the broader issue of rising youth unemployment, attributing part of the problem to “ridiculous” increases in employers’ National Insurance contributions introduced by Westminster. Data indicates that increases in employer NICs, alongside minimum wage rises, have had a “particularly acute” effect on youth employment in the UK. “We need to really address that, because the country’s got a major problem with youngsters not getting into work,” he asserted. “There should be some sort of incentives for employers to get young people into work, whether it’s by way of apprenticeships or grants or whatever. We can’t just sit back and watch a whole generation fail on the back of youth unemployment.”
The businessman further connected Aberdeen’s economic struggles to the ongoing uncertainty surrounding the future of the North Sea oil and gas industry. This issue, alongside city centre decline, was a significant concern for voters in the recently held Scottish Parliament election.
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“We’ve got all these oil and gas reserves on our doorstep and we’re not taking it out of the sea,” Henderson lamented, calling for “a serious conversation about oil and gas” for the sake of jobs, the region, and national energy security. He urged politicians to strike a balance between energy transition ambitions and the necessity of protecting employment and investment in the north-east.
With businesses owners seeking practical solutions over political pledges, Henderson voiced concerns about a perceived lack of government support for entrepreneurial risk-taking.
“You need to actually reward the people taking risks and investing their own money in businesses,” he stated. “But when the return becomes so small that you might as well put your money in the bank and not take any risks, that’s a danger for the economy. The best way to get out of poverty is through jobs and growth. We need to get back to the point where work pays.”
