Introduction
This report was commissioned by CalMac Ferries and the Ferries Community Board to better understand the needs of ferry users, island communities, and the economic and social value of Hebridean and Clyde ferry services. The ultimate purposes of the research are to:
Identify island needs as part of an ongoing strategic conversation;
Help better reflect the value of service improvements to island communities;
Inform the ongoing debate about value for money from ferry expenditure; and
Provide information to help prioritise investment or plan services to deliver improved island outcomes.
The project is divided into two Phases as follows:
Phase 1: Qualitative exploration of how ferry service characteristics are linked to island outcomes, based on a programme of virtual interviews with Community Board members, businesses, public service providers and residents across the network.
Phase 2: Quantitative analysis of the impacts of CalMac as a company (employment, VA, turnover, and employee compensation supported directly and through the supply chain) and of impacts of service levels on island communities (ferry users' welfare, economic activity, employment, population), based on Phase 1 findings, desk research, analysis, fieldwork, and socio-economic modelling. This report is the outcome of Phase 2.
CalMac's Economic Footprint
Direct, indirect, and induced impacts for CalMac's operations between FY 2016-17 and FY 2020-21 were estimated. In the key analysis year of FY 2019-20, CalMac directly:
Generated £227.2 million in turnover, with an aggregate footprint of £350.6 million; a multiplier of 1.54.
Generated £95.8 million in Gross Value Added (GVA), with an aggregate impact of £162.9 million; a multiplier of 1.70.
Supported 1,513 FTE jobs, with a total of 2,527 across the economy; a multiplier of 1.67.
Supported £92.9 million in employee compensation, with a total of £127.5 million across the economy; a multiplier of 1.37.
CalMac also supported significant business turnover and GVA across its network through provision of ferry services to business users.
Socio-Economic Impacts
Socio-economic modelling of two future scenarios of contrasting investment (Optimistic and Pessimistic), estimated the following benefits associated with realisation of the Optimistic rather than Pessimistic scenario in 2032:
Annual passenger journeys 6.1% higher, at 6.1 million rather than 5.7 million.
Generalised cost savings to travellers of £67.7 million annually (15-year present value of £571.9 million). These benefits mainly represent value of time savings from improved capacity, reliability, and frequency.
The biggest relative increases by journey purpose are for business and tourist travellers.
The biggest growth in absolute demand is for Ardrossan-Brodick, with almost 100,000 additional passenger journeys made.
Big reliability improvements also deliver large growth in passenger numbers for the Islay routes and routes out of Mallaig to Skye and the Small Isles.
The 172,000 additional tourist journeys are estimated to result in £13.8million of additional tourism spending per year, resulting in over 200 more tourism jobs with associated earnings of £4.3 million.
Growth in freight journeys would support an additional 10 million bottles of whisky production (roughly half the current output of Islay's largest distillery), associated with 46 jobs and £1.6 million of earnings.
Agglomeration benefits of £1.5 million per year and competition benefits of £1.2 million per year, directly increasing GVA.
429 jobs (including the tourism/whisky jobs estimated separately), with an earnings impact of £11.9 million.
In 15-year present value terms, the combined value of generalised cost savings, agglomeration benefits, competition benefits, and earnings impacts is £695.0 million.
Over 1,000 additional island residents attracted by improved connectivity and quality of life - around 2% of the islands' current population.
Robbie Drummond, Managing Director of CalMac, said: "I very much welcome the findings of this report, which we commissioned in partnership with the Ferries Community Board so that we could work together to improve services.
"The report evidences our large socio-economic footprint, quantifies the importance of our service to our communities and the wider Scottish economy, and examines how these impacts can increase and thrive when there is investment in the fleet and infrastructure.
"It also highlights the economic value of ferry services to our communities and the importance of economic growth sustainability when considering investment in future service needs.
"The places we serve are at the very heart of everything we do at CalMac and supporting them is of the highest priority for the organisation.
"The publication of this report is an excellent example of the importance of working with the Community Board, as well as our communities and wider stakeholder groups."
Angus Campbell, Chair of Ferries Community Board, said: "The Ferries Community Board warmly welcome the publication of this report.
"Since the inception of the board we have campaigned for the public evidencing of the critical value and importance of a fully functioning ferry service for Island life.
"This report clearly demonstrates the existing value both in monetary terms but also most importantly from a community perspective starts to illustrate the social and defining role that Ferries play in Islanders everyday life and life choices.
"There is no doubt that appropriate investment in our Ferry system will open the door on the opportunity for islanders to have equality of access and provision in so many ways. In addition, national priorities such as population, demographics and opportunity for each and every citizen plus the need to contribute to National Strategy for Economic Transformation are totally dependent on inclusive, reliable and affordable ferry services.
"As the Ferries Community Board, we would encourage decision makers to use the evidence in this report to accelerate the necessary improvements in Ferry provision to the benefit of not only Islanders but the country as a whole."
CalMac Ferries Socio-Economic Impact Phase 2 Report [1MB]
CalMac Ferries Socio-Economic Impact Phase 1 Report [1MB]