About Cornwall and the Isles of Scilly

The Cornwall and Isles of Scilly region is a rural and maritime area, with a population of 519,400 in 2005. Cornwall itself is the second largest county in the South West of England in terms of area, but has the lowest population density. The County comprises the westernmost part of the South West peninsula and has over 697 km of coastline, the longest of any English county. The Isles of Scilly are an archipelago of islands lying 45km off the coast of Cornwall, with a population of just over 2,000.

Geography

Truro is the main commercial and employment centre of Cornwall and acts as a sub-regional centre for the West and Mid Cornwall.  However, there are 13 other key towns geographically spread throughout the County. These towns act as the key centres for employment, retailing, service use and social activity in Cornwall and the Isles of Scilly and will provide a key focus for achieving sustainable regeneration in the future. Nevertheless 46% of the population lives outside these towns. This distinctive dispersed settlement pattern reflects the special economic history of farming, fishing and mining. There is a strong Celtic culture and tradition, which has at its core a sense of identity linked to place.

Business Facts

At the start of 2006, there were 18,745 VAT registered businesses in Cornwall & the Isles of Scilly9. Between 1999 and 2006 there has been an overall increase in business stock of 955 (+5.4%). This growth rate is less than those recorded at both the South West (+8.3%) and UK (+8.8%) levels. The volume of new registrations has been increasing; reflecting a stronger national and regional economy, the number of de-registrations has also increased. High levels of registrations and de-registrations are indicative of a dynamic and competitive economic climate.

In 2003, there were approximately 41 business registrations per 10,000 working age people in Cornwall & the Isles of Scilly. This was higher than start-up rates recorded at the South West (38 per 10,000) and England and Wales level (30). Indeed, Cornwall & the Isles of Scilly had the eighth highest start-up rate of all local authorities across England and Wales.

Cornwall also has very good survival rates, and these have been improving for some time. Over 70% of businesses are still trading three years after being set up.

Industry & Heritage

Cornwall has had a long history of mining and quarrying, with associated industrial and engineering activities. This expertise has been exported world wide, with the Cornish influence extending far beyond the United Kingdom. Cornwall led the world in technology for over 60 years during the Industrial Revolution. Over the last century Cornwall has also established itself as a major tourist destination and is maintaining its share of a competitive market. Given the geographical context of the area, agriculture and fishing remain important industries which, despite severe difficulties, are responding to the challenge to restructure themselves. Successful diversification has taken place into growth sectors such as the manufacturing and service industries, and there are some clusters of businesses which have potential global significance.

These clusters are developing around the chemical/medical, environmental technology, creative, food and maritime business sectors. This pooling of intellectual capital is improving the competitiveness of the economy.

Economic Facts

In 2003 the total Gross Value Added (GVA) for Cornwall was £5.322 Billion. This represented approximately 7% of the total South West GVA. The Cornish economy has expanded at a much faster rate since 2000, with growth easily outstripping the regional and national economy. The GDP per capita figures produced at the European level indicate that Cornwall and the Isles of Scilly has experienced a marked improvement relative to the EU average – from 68.6 to 75.8 (2000-2003). However, Cornwall continues to have the smallest GVA per head (£10,400) in the UK compared with a UK average of £16,500.

The most marked increase in GVA per head has been in Carrick and Kerrier, with Carrick being the only Cornish district above 80% of the national average. In spite of a marked increase in Caradon, it remains the lowest of the districts. The GVA per head figures for Caradon, Penwith and Kerrier are exceptionally low with all below 65% of the national average.

Low GVA manifests itself in low wages (average weekly wages in 2005 were £341, significantly below the South West at £401 and the UK average at £431) and low household income. Low wages are associated with low skilled, part-time jobs. The wage distribution of Cornwall reflects the industrial structure of the County, where there is a greater dependence on lower value added sectors, with correspondingly low wages than that seen nationally. In addition, there is a high proportion of workers in low paying occupations in Cornwall. This is partly related to the industrial structure, but also the high level of small businesses that restricts the types of occupations available.

Economic Activity

As with economic activity rates, employment rates for Cornwall and the Isles of Scilly are broadly in line with national levels but are lower than regional levels. In September 2006, 5,500 people were claiming job-seekers allowance, equating to 1.8% of the working age population. This very low rate is typical of the average for the year, however, seasonal unemployment, although now less pronounced, is still a problem due to the area’s continuing reliance on tourism in the summer months. Cornwall and the Isles of Scilly’s unemployment claimant count (JSA) rate has reduced from 3.7% in August 1999 to 1.8% in August 2006. The rate has been below the national unemployment claimant count since February 2002 and has converged with the South West rate. However, although Jobseekers Allowance claimant counts are useful for analysing trends, they are considered an under-estimate of the total numbers that are unemployed as not all those who are entitled to the benefit claim it.

Economically inactivity refers to people who are not looking, or are not available for work.  This applies mainly to students and people looking after the family and home in the first instance, and people receiving benefits due to ill health in the second instance.  In Cornwall, economic activity rates for working age people in Cornwall were 78.1% in 2005, in line with the national figure of 78.4% and only marginally below the regional figure of 80.6%.

Worklessness refers to people of working age who are in receipt of benefits due to unemployment, ill health or because they are bringing up children alone. There are 39,600 people of working age in receipt of primary benefits in Cornwall, representing 13.2% of the working age population. Evidence highlights that high proportions of workless people would like to return to work but are currently excluded due to lack of opportunity and support. Whilst there is a need to focus on productivity in employment, there is also a need to ensure that workless people can take advantage of the employment growth so that economic and social exclusion issues do not become more acute.

Skills

Approximately 70% of all adults of working age in Cornwall and IOS are qualified to Level 2 and above, 43.3% are qualified to Level 3 and above and 20.2% are qualified to Level 4 and above. Compared with the South West, the percentage of working age adults qualified to Level 2 in Cornwall is broadly similar. However, at levels 3 and 4, Cornwall falls behind the South West. Indeed at Level 4, there is a difference of 6.7% points between achievement levels among the economically active in Cornwall (22.8%) in comparison to the South West (29.5%). This difference is accentuated when compared to Level 4 across England, which stood at 30.3% in 2005, a difference of 7.5%.  However, the high quality of life offered in Cornwall and IOS does attract investment and people, including sectors that are related to the distinctive environment and culture. This factor is becoming increasingly important and will be recognised in this strategy.

Infrastructure

The infrastructure servicing the economy is constrained by the geographical position of Cornwall and the Isles of Scilly. Transport is a key issue with costs and lack of access reducing competitiveness of local businesses and has the potential to limit the economic success. Car ownership is a necessity in rural areas, and whilst the maritime history of Cornwall and the Isles of Scilly has left major assets in terms of port and harbour facilities, they need investment to survive and expand. Market rents can be a constraint on the provision of industrial and commercial property and the majority of supply is in smaller properties and land.

Newquay Airport is Cornwall’s primary external link, providing connectivity for businesses, visitors and residents. The airport has grown rapidly in recent years and in 2004 handled approximately 280,000 passengers. Newquay Airport is now a key economic driver in the County, with the potential to handle at least 1.2 million passengers per annum in 20 years time. It is currently estimated that the Airport directly and indirectly supports 610 jobs in the Cornish economy and makes a contribution to GVA of £18.2m per annum, excluding benefits from military personnel and civilian jobs at RAF St. Mawgan.

Environment and Culture

The geographical position of Cornwall and Scilly has ensured a physical environment which is internationally renowned. It has a strong sense of place and community and, largely because of its relative isolation. It has maintained much of its own identity in traditions and culture. The quality of the environment is one of the unique assets of Cornwall and the Isles of Scilly, generating considerable benefits for residents and providing a major draw for economic migrants and businesses to the County. Natural resources provide the bedrock of a large part of the economy, whether it is agriculture, fishing or tourism. The substantial coastline also offers outstanding opportunities for innovative and sustainable environmental technology.

Information taken from the revised Strategy and Action 2007-2021 and its underpinning evidence base.

Information taken from Strategy and Action