1. Scottish Ferries Review Economic Work Package Key findings – September 2009

2. Scottish Ferries Review Economic Work Package Structure of Presentation 1.Introduction 2.Direct employment impacts 3.Approach used in ‘Options for change’ report 4.Emerging findings from ‘Options for change’ report Economic Work Package key findings – September 2009

3. Five main elements 1.Evaluate the current and future economic prospects of the islands/areas served by the ferry network (i.e. identify a baseline and future trends) 2.Identify islands/areas with greatest potential to contribute to Scotland’s economic growth and/or greatest challenges/disadvantage  Baseline Report, Future Analysis Report, Overview Report 3.Assess how far the characteristics of existing ferry provision serve to either support economic development or contribute to challenges faced by these communities 4.Suggest changes/improvements to ferry services that will best support economic development of these communities  Options for Change Report 5.Assess the economic impact of the wider range of service options considered in the Ferries Review (possibly?) Scottish Ferries Review Economic Work Package Economic Work Package key findings – September 2009

4. Scottish Ferries Review Direct employment impacts: Data Coverage  Data covers ABC, CalMac, Highland Council, Northlink, Orkney Ferries, Pentland Ferries, SIC and Western Ferries  Employment data encompass all crew and shore staff (including relief) with the following exceptions: *At this time, SIC shore staff (i.e. management and operational) other than those employed in ticket offices at ferry terminals *Relief staff for Orkney Ferries for whom numbers were not available *Shore staff for Pentland Ferries for whom numbers were not available  Salary data: *Are basic salaries (i.e. exclude overtime and other payments) * Exclude employer’s contributions * Exclude relief staff for Orkney Ferries, SIC and ABC as actual salary payments are highly variable *Were estimated for Pentland Ferries and Western Ferries as data were not available Economic Work Package key findings – September 2009

5. Scottish Ferries Review Direct employment impacts: jobs and salaries Economic Work Package key findings – September 2009

6. Scottish Ferries Review Economic Overview Economic Work Package key findings – September 2009 (Areas are listed from south to north)

7. Scottish Ferries Review Options for Change: Approach  Similar, in some respects, to MVA’s gap analysis  Relating characteristics of each identified island/area economy against existing ferry provision  Using a range of data sources, including business and household surveys, WP1 Freight Report, and consultations.  Some islands’/areas’ challenges may not relate strongly to existing ferry service provision  Forms the basis for identifying options for changes to ferry services  Work complete for most areas, but additional analysis required for off- islands in Orkney and Shetland. Economic Work Package key findings – September 2009

8. Scottish Ferries Review Options for Change: Approach Economic Work Package key findings – September 2009

9. Scottish Ferries Review Options for Change: Approach Economic Work Package key findings – September 2009

10. Scottish Ferries Review Options for Change: Approach Economic Work Package key findings – September 2009 Scale: 1 = most important, 5 = least important

11. Scottish Ferries Review Options for Change: Approach Economic Work Package key findings – September 2009 Scale: 1 = most important, 5 = least important

12. Scottish Ferries Review Options for Change: Approach Economic Work Package key findings – September 2009 Role of primary vs. secondary ferry services: Island/areaPrimary ServiceSecondary Services ArranArdrossan-BrodickClaonaig-Lochranza ButeWemyss Bay-RothesayColintraive-Rhubodach Lewis and HarrisUllapool-StornowayUig-Tarbert Sound of Harris MullOban-CraignureLochaline-Fishnish Orkney mainlandPentland FirthAberdeen-Kirkwall SkyeSkye BridgeMallaig-Armadale UistsUig-LochmaddyOban-Lochboisdale Sounds of Barra & Harris

13. Arran Key tourist destination plus strengths in food & drink, scale of economy, consistent population growth since 1971, relatively young age profile Islands/areas with greatest economic potential (1) Scottish Ferries Review Options for Change Economic Work Package key findings – September 2009 Ardrossan-Brodick: Increase frequency Longer sailing day Two vessel operation to facilitate commuting, provide additional capacity and offer a range of timings Improve reliability-possibly by change of mainland port but need to maintain public transport connectivity Consider lower fares Claonaig-Lochranza: May support 15-20% of car-borne visitor trips and permits round-trips to Kintyre / Argyll Continue operation Consider reduction of its car and passenger fares

14. Kennacraig-Islay:  Create greater capacity through dedicated freight sailings with discounted rates  Lower fares  Increase frequency  Longer operating day  Also consider possibilities for reducing crossing time and improved integration with public transport Islands/areas with greatest economic potential (2) Scottish Ferries Review Options for Change Economic Work Package key findings – September 2009 Islay Key strengths in tourism and food & drink, plus potential in offshore renewables and contact centres, scale of economy, stable population levels since 2001, relatively young age profile

15. Islands/areas with greatest economic potential (3) Scottish Ferries Review Options for Change Economic Work Package key findings – September 2009 Mull Key tourist destination and strengths food & drink, scale of economy, significant population growth since 1971 and 2001, relatively young age profile Oban-Craignure: Two vessel operation providing additional frequency and capacity A longer operating day, including to facilitate commuting Lower fares Consider possibilities for improved integration with public transport Lochaline-Fishnish: Carries 28% of car / CV traffic to Mull and permits round-trips northwards towards Mallaig / Skye Continue service with consideration of reducing car and passenger fares

16. Islands/areas with greatest economic potential (4) Scottish Ferries Review Options for Change Economic Work Package key findings – September 2009 Orkney mainland Key strengths in food & drink, energy and tourism, good location for future inward investment, high number of UHI-registered HE students, scale of economy, population growth since 1971 and 2001, good age profile, GRO(S) forecast population growth Orkney external services: Pentland Firth rather than Aberdeen ferry connections are the most economically important There appear to be no significant economic benefits to Orkney from having two vehicle ferry ports in Caithness All things being equal (in particular reliability, capacity and frequency, but also fare levels and adequate on-board facilities) the shortest crossing offers the greatest potential economic contribution There is a case for retaining the Aberdeen-Kirkwall ferry link, particularly in view of its role in livestock exports

17. Islands/areas with greatest economic potential (5) Scottish Ferries Review Options for Change Economic Work Package key findings – September 2009 Shetland mainland Key strengths in food & drink, energy, creative industries and tourism, high proportion of companies of scale, good location for future inward investment, high level of export activity, high number of UHI-registered HE students, high levels of educational attainment and workforce qualifications, scale of economy, population growth since 1971, very good age profile Shetland external services: Ensure that service reliability and capacity meet customer needs Lower fares Aberdeen valued by passengers as a landfall-in its own right and for onward transport connections Potential for some freight sailings to Rosyth-but arrival times are key for time sensitive exports Daily services to and from Shetland Consider possibilities for reduced crossing time, while recognising that air services are also available Consider possibilities for improved integration with public transport

18. Islands/areas with greatest economic potential (6) Scottish Ferries Review Options for Change Economic Work Package key findings – September 2009 Skye Key tourism destination, plus strengths in food & drink and creative industries, good number of UHI-registered HE students, scale of economy, consistent population growth since 1971, young age profile Mallaig-Armadale: Despite toll-free bridge, remains popular seasonal service for tourists, including coach tours. Used by residents & businesses as provides shorter journey time to Lochaber & Central Belt. Maintain existing summer service but run earlier sailings than at present to facilitate business travel and commuting Winter-introduce weekend sailings and earlier and later weekday sailings for business travel and commuting Consider lower passenger and car fares Consider possible improvements to integration with public transport in winter (The above assumes that the winter service continues to be provided by the vessel whose principal duty is to serve the Small Isles)

19. Bute Some strengths in financial and business services, tourism, food & drink, scale of economy Challenges in population decline since 1971 and 2001, ageing population profile, identified as an area of potential further population decline, relatively high unemployment Islands/areas exhibiting both potential and challenges (1) Scottish Ferries Review Options for Change Economic Work Package key findings – September 2009 Colintraive-Rhubodach: Carries 36% of cars, 76% of coaches & 51% of CVs to Bute, plus provides important link to Argyll mainland, including for Local Authority functions  Continue service, with consideration of lower fares Wemyss Bay-Rothesay: An extended operating day Reduced crossing time and increased frequency-possibly through a new terminal at Kilchattan Bay as per MVA report Lower fares, including for the encouragement of commuting Consider possibilities for improved integration with public transport

20. Lewis and Harris Some strengths in food & drink, energy, financial & business services and tourism, plus potential in creative industries, potential for inward investment, relatively high number of UHI registered HE students, high educational attainment, scale of economy, relatively young population profile Challenges in perceived low level of entrepreneurialism, poor workforce qualifications, low GVA, narrow economic base, dependence on public sector activity, population drift from rural areas, expectation of future population decline, notable unemployment rates Islands/areas exhibiting both potential and challenges (2) Scottish Ferries Review Options for Change Economic Work Package key findings – September 2009 Uig-Tarbert: Service is significant for tourism and some businesses and carries over 1/3 of total traffic between L&H and mainland. Provides shortest crossing and link with key tourist destination of Skye. Winter timetable poorly regarded. Could operate on a seasonal basis with a seven day operation, providing Ullapool-Stornoway winter operation is improved Ullapool-Stornoway: Increased frequency of sailing and extended operating day, with increased reliability for freight movement. Consider possibilities for reduced crossing time and improved public transport integration Sound of Harris: Lower fares would encourage increased tourism activity and greater interaction with other parts of the Outer Hebrides

21. Colonsay and Lismore Narrow economic base & dependence on primary sectors, significant population decline 1971-2001, old age profile, low household income, identified as fragile in consultations Islands/areas facing greatest challenges (1) Scottish Ferries Review Options for change Economic Work Package key findings – September 2009 Lismore: All things being equal (including service reliability and public transport integration) the shortest vehicle ferry crossing to the mainland offers the greatest potential economic contribution Improve commuting and other travel opportunities in terms of frequency and extended operating day for vehicle ferry operations Lower car and freight fares Colonsay: External port to remain Oban rather than Islay Lower fares Increase number of days of operation Encourage greater use of the Oban air service for less than daily commuting and to avoid extended stays on mainland Consider possibilities for more overnight berthing at Colonsay to allow earlier arrivals on mainland Consider possibilities for improved integration with public transport

22. Small Isles (Canna, Eigg, Muck, Rum) Less than 100 inhabitants per island, population decline 1971-2001, very low household income, identified as fragile in consultations Islands/areas facing greatest challenges (2) Scottish Ferries Review Options for change Economic Work Package key findings – September 2009 Enhanced timetable to allow an appropriate amount of time ashore on mainland and schoolchildren to return home at weekends, and also to include Sunday sailings Ensure adequate levels of service reliability Lower passenger, car and, in particular, freight fares Consider possibilities for shorter crossing times Consider possibilities for public transport integration

23. Uists (Berneray, North Uist, Benbecula, South Uist, Eriskay) Some strengths in tourism, food and drink and financial & business services, relatively high number of UHI registered HE students, and scale of economy, but high population decline since 1971 and 2001, identified as an area of potential further population decline, good age profile but forecast to get older, notable unemployment rates, high long term unemployment, identified as fragile in consultations Islands/areas facing greatest challenges (3) Scottish Ferries Review Options for change Economic Work Package key findings – September 2009 Provision should benefit the Uists as a whole. To maximise effectiveness, focus resources on providing one single improved ferry route to the mainland All things being equal this should be the shortest crossing (presently Uig-Lochmaddy), with increased frequency and longer sailing day than at present. Consider possibilities for reducing crossing time. Direct link to Skye is important for tourist traffic Oban-Lochboisdale provides unsatisfactory service (timing, frequency, costs), and used by less than 1/5 of traffic between Uists and the mainland. Mallaig-Lochboisdale option would result in lower frequency, longer sailing time and higher fares than Uig-Lochmaddy Ensure adequate public transport integration Lower fares on two Sounds services would encourage increased tourism activity and greater interaction with other parts of the Outer Hebrides

24.  Eday-narrow economic base/dependence on primary sectors, significant population decline 1971-2001, low household income, identified as fragile in consultations, defined as a ‘threatened’ community in Orkney Population Change Study  Flotta-narrow economic base, less than 100 inhabitants, old age profile, very low household income, identified as fragile in consultations, defined as a ‘threatened’ community in Orkney Population Change Study  North Ronaldsay-dependence on primary sectors, less than 100 inhabitants, consistent and high population decline 1971-2001, old age profile, very low household income, identified as fragile in consultations, defined as a ‘threatened’ community in Orkney Population Change Study  Sanday, Stronsay-narrow economic base/dependence on primary sectors, significant population decline 1971-2001, good age profile but starting to age, very low household income, identified as fragile in consultations, defined as ‘becoming threatened’ communities in Orkney Population Change Study  Shapinsay-dependence on primary sectors, consistent and high population decline 1971-2001, old age profile, very low household income, identified as fragile in consultations Islands/areas facing greatest challenges (4a) Scottish Ferries Review Options for Change Economic Work Package key findings – September 2009

25. Scottish Ferries Review Options for Change Eday, Sanday, Stronsay  Longer sailing day, using island based vessels  Lower fares Flotta, Shapinsay  Longer sailing day  Enhanced Sunday services  Lower fares-including for commuters North Ronaldsay  Air service to remain main passenger link  Improve sailing frequency and reliability  Lower freight fares Economic Work Package key findings – September 2009 (Options for these islands currently provisional – analysis still to be completed) Islands/areas facing greatest challenges (4b)

26. Fetlar-narrow economic base/dependence on primary sectors, less than 100 inhabitants, significant population decline since 2001, old age profile, dependence on public sector employment/lack of private sector activity, identified as fragile in consultations Unst-significant population decline since 1971 and 2001, rapidly ageing population profile, identified as fragile in consultations Given current very good level of ferry service to these islands, not yet evident what further improvements could be made. A number of small islands / areas have been identified for which insufficient data is available to permit meaningful analysis – these will require further study to determine future ferry service requirements. Islands/areas facing greatest challenges (5) Scottish Ferries Review Options for Change Economic Work Package key findings – September 2009

27. Scottish Ferries Review Economic Work Package Work still to do:  Options analysis for Orkney and Shetland off-islands  Consider economic significance of options for change – i.e. what are key changes that will make a difference economically  Second round of consultations with tour operators  Finalisation of reports for circulation Economic Work Package key findings – September 2009