Home   News   New report shows Arran requires national support to combat 'long-term scarring' of Covid-19

New report shows Arran requires national support to combat 'long-term scarring' of Covid-19

Posted on 29 Sep 2020

The full scale of the economic impact of Covid-19 on the island of Arran has been revealed in a new report.

The report by the Fraser of Allander Institute, commissioned by North Ayrshire Council, highlights the need for continued support to island communities which have been hit disproportionately by the economic impact of Covid-19.

The independent report shows the significant contribution of Arran in economic terms – with Arran GVA (Gross Value Added) estimated to be over £77m in 2018. With a third of Arran’s economy reliant on the tourism and hospitality sector, the loss of visitors and reduced ferry capacity, the report warns that there could be “long-term scarring effects in the local labour market”.

The report has also shown the importance of the ferry to the island’s economy, which contributes £170,000 each day of ferry operation to Arran, supporting jobs and livelihoods.

Councillor Alex Gallagher, Cabinet Member for Post Covid-Renewal and the Islands at North Ayrshire Council, said the report is a wake-up call.

“Nowhere has escaped the economic impact of Covid-19 but some areas have felt it far more sharply than others – areas such as Arran,” said Councillor Gallagher.

“The report highlights that Arran’s labour market has been more severely affected than surrounding areas and Scotland as a whole.

“Beyond this, the finding that each day of ferry operation contributes £170,000 to the island’s economy shows the economic and social lifeline the ferry provides to Arran.

“Even as restrictions have eased, the report shows Arran is still struggling to recover and that there will be longer term impacts on Arran’s businesses and communities. It is vital that Governments provide further support for islands given the unique challenges they face.

“The Council launched its own Economic Recovery and Renewal Approach earlier this month to build back better, fairer and greener through Community Wealth Building and we are committed to supporting our islands to recover. However, it is clear that national intervention and support is required to support island economies at this difficult time.”

According to the report, Arran’s Gross Value Added (GVA) – the measure of the value of goods and services produced on the island -  in the first half of 2020 has fallen by 33 per cent as a result of a lower number of ferry passengers compared to the first half of 2019.

Mairi Spowage, Deputy Director of the Fraser of Allander Institute, said: “Arran is a unique part of North Ayrshire and is a strong island economy in Scotland. The current economic outlook for Arran is dominated by the impact of Covid-19. Like the rest of Scotland, challenging times lie ahead for our islands, both in the short and long term.

“Arran’s dominant hospitality sector has made it particularly exposed to the initial lockdown restrictions and the ensuing capacity and social distancing regulations as the economy began to open back up.

“Like most island economies Arran is constrained by its infrastructure and is reliant on its ferries, the primary mode of transport to and from Arran, for transport commuters and tourists. The Arran economy is highly sensitive to the route map out of this crisis and the following economic recovery plan.

“National policy must recognise the unique challenges that island economies are facing in the months and years ahead as we recover from this economic crisis.”

Linda Johnstone, co-founder and managing director of Auchrannie Resort, one of the major tourist destinations on Arran, said: “We are delighted that North Ayrshire Council have commissioned this important research from the Fraser of Allander Institute which focuses on the impact of Covid-19 on the Arran economy. 

“For the island to recover successfully, it is absolutely essential that individuals on and off the island understand the unique issues which affect us, and this will be pivotal in ensuring the island receives the support it needs.”

A full copy of the report – called ‘The Impact of Covid-19 on the Arran Economy’ - is available for download at http://www.north-ayrshire.gov.uk/Documents/EconomyCommunities/Impact-of-Covid-19-on-Arran-economy.pdf