Economic And Social Regeneration Of Highlands And Island Region

This essay will discuss and evaluate the economic and social regeneration of the Highlands and Islands region. It will pay particular attention to the strategies and philosophies of the Highlands and Islands Development Board and its successor, Highlands and Enterprise with some examples from each organisation's developments in their efforts to achieve social and economic regeneration.

Background

The Highlands and Islands covers a large geographical area (approximately 39,050 km ) with and average population density of 9.3 people per km (ERDF:2008). This amounts to an land area of one sixth of the United Kingdom which is disadvantaged physically, economically and socially (Hughes 1:1980).

The challenge of regeneration is particularly difficult and many factors play a part in this challenge. A recent 2008 report published by the Highlands and Islands European Regional Development Fund Operational Programme, highlights some of the following observations in relation to challenges faced in the process of regeneration:

A low population density and settlement pattern which is dispersed, emphasising how much the Highlands and Islands are a rural and peripheral area.

Low levels of earnings in comparison with the rest of Scotland and United Kingdom averages.

Moving trends towards an ageing population in comparison with other areas of Scotland as a result of young people migrating out of the Highlands and Islands region.

The negative effect of depopulation which include decreased confidence of communities and the decrease in sustainable services, particularly in fragile areas.

In a report outlining the powers and work of the Highlands and Islands Development Board, it was noted that there was and is huge potential in the Highlands and Islands for development. It was found that the advantages of the area could hold the key to social and economic development such as: winter sports, the beauty of the natural landscape, sheltered deep-water harbours, hydro electric power and closeness to the North Sea oilfields, amongst others. At that time investment in the trunk road system and selective improvements in the railway lines alongside improved ferry transportation to allow access to the major islands, had a knock on effect to helping improve the area. (Hughes 1:1980). This however seems not to be the case in more recent times with calls for improved road infrastructure and transport services as the demands of the social and economic developments cannot be catered for without changes to these services.

It appears that many social and economic developments have taken place in the last 50 years to help regenerate the Highlands and Islands, some may have succeeded in re-populating key areas but may, on the other hand, have been unsuccessful in others. The key agencies that will be highlighted next have helped and are still helping to regenerate the Highlands and Islands area.

Highlands and Islands Development Board

In 1965 an act of parliament by the new labour government's Scottish secretary, resulted in the establishment of the Highlands and Islands Development Board (HIDB). The Scottish secretary, Willie Ross was concerned that the problems of the poor performance from the Highlands and Islands economy needed to be tackled on a wide front. This led to a wide remit of power for the newly established board. (Hunter 355:1999). HIDB were able to provide assistance to any enterprise or company, financially which was thought to encourage the expansion of the Highlands and Islands economy. The board were permitted to acquire land, build factories, set up businesses, produce promotional materials and assist with the construction of community facilities as well as marketing the Highlands and Islands area as a tourist destination (Hunter 355-56:1999).

The HIDB believed that their broadly based strategy played a big part in the process of preserving the social status of communities across the Highlands and Islands area. They justified this by stating that it would keep different avenues available for more major developmental opportunities to be secured in the future when the need arose. They also felt that the strategy recognised the fact that employment levels were dependant on the accumulation of decisions made on a small scale, in the first instance (Hughes 2-3:1980).

The main aims of the HIDB were to help people in the Highlands and Islands with a view to improving social and economic conditions within their own communities. They also were there to help the Highlands and Islands area to undertake the more effective role within the development of their nation, both socially and economically (Hughes 1:1980).

It seemed that the only way that HIDB thought that Highlands and Islands economy could be renewed was through a substantial industrial industry (Hunter 356:1999). The board really thought that this industry, specifically manufacturing, was unrepresented in the Highlands and Islands and if steps were not taken to generate such an industry then regeneration (in their eyes) could not be possible (Hunter 357:1999).

Prospective entrepreneurs in the Highlands and Islands had access to HIDB grants as well as loans which complemented the Highland fund which was launched in 1953. The Highland fund was a charitable organisation which made low-interest and unsecured loans available for the purposes of development (Hunter 366:1999). Unfortunately in July 2010 the Highland Fund came to an end after dispensing more than one million pounds (Ross:2010).

Highlands and Islands Enterprise

In the early 1990s under a Conservative Government of the United Kingdom, the HIDB was replaced by Highlands and Islands Enterprise (HIE) and an associated network of ten local enterprise companies (LECs) (Hunter 371:1999). In the present day, HIE is the economic and community development agency for the Highlands and Islands area, working on behalf of the Scottish Government. Similarly to the HIDB, HIE works to develop sustainable growth across the region's economy. Their strategy sets out to achieve the creation of pathways for future investment, providing assistance to large and small businesses who aspire to grow and uniquely helps to strengthen communities, especially areas which are seen to be fragile (HIE 2011).

HIE helps to support communities in the acquisition and development of land and other assets. They also work closely with businesses and social enterprises with a view to increasing the region's Gross Added Value (GVA). Investment in various renewal projects around the Highlands and Islands also help the area to grow economically and socially.

The HIE outline their priorities to address the opportunities and challenges faced in the delivery of sustainable economic growth. These priorities cover a wide range of activities in four key areas, such as supporting businesses and social enterprises, strengthening communities and fragile areas, the development of key sectors and the creation of pathways for a competitive and low-carbon region (HIE 2011).

Particular attention is paid to areas of fragility and employment deficit. HIE characterise fragile areas by looking at various factors which include: population loss, low incomes, limited employment opportunities, inadequate infrastructure and remoteness. HIE state that over 56,000 people live within these so called fragile areas, which they class as the highest priority within the development of the Highlands and Islands region.

Financial assistance is available in various forms from HIE and since the demise of the Highland fund in July 2010 (Ross 2010), it appears that there are still other organisations interested in the social and economic development of the Highlands and Islands. In February 2011 it was announced that a new Scottish Loan Fund (SLF), worth 55 million, was established to provide loan assistance to businesses across Scotland (HIE 2011). It is also noted that the Nuclear Decommissioning Authority's socio-economic policy has created more funding for development in the economically and socially challenged communities in Caithness and Sutherland (NDA 2006).

Attempts at regeneration

In 1965 the roots of a new industrial sector were starting to take hold. In the first half of the 20th Century aluminium smelting was established but this was later overshadowed by further developments made with the assistance of and investment from HIDB. These new exciting developments consisted of: a fast-breeder reactor centre at Dounreay in Caithness, the arrival of a large grain distillery and aluminium smelter in Invergordon (Easter Ross) and in Fort William (Lochaber) a pulp and paper mill (Hunter 356:1999).

For example the Invergordon aluminium smelter opened in 1971 and by the end of 1981 its closure was announced. This had a terrible effect on the local communities of Alness and Invergordon. The local people could not believe that this could happen as they thought the investment in such an industry provided them with major long term employment. Prior to the smelter closure in 1981 it saw the closure of the pulp and paper mill in 1980. The HIDB really thought that they could turn around an underdeveloped manufacturing industry to the social and economic gain of the Highlands and Islands area. It certainly increased the size of each local town within these invested areas but it led to these areas in to trouble in more ways than one (Hunter 356-357:1999).

The boost of loans from the HIDB given to other industries ranged from sole-traders to companies enabling them to build workforces within areas such as tourism and electronics. The intended outcome was a boost to the many communities that were threatened socially and economically. The development of Salmon farming in 1970s and 80s was one of these welcomed boosts with the focus on the west coast of Scotland, providing jobs for many across the Highlands and Islands (Hunter 366:1999).

The Salmon fishing and farming industries seem to still be of great importance to HIE in this current climate with more cash injections into the industry. Almost 1 million was awarded to Loch Duart Ltd in March 2011 to allow the business more freedom to adhere to stricter standards imposed on them, therefore easing pressure and preserving employment for those within the industry (HIE 2011).

In response to the recent economic threat to the Moray area due to UK government Ministry of Defence cuts, HIW have made measures with the Scottish Government to help drive the Moray economy forward with an Economic Response Plan (HIE 2011). This could have been a possible solution in light of the closures within industry in the 1980s and 90s. Could this kind of focus have helped turn the economy around quicker with far less of a struggle? It seems that HIDB and HIE certainly have differing views in respect to dealing with the loss of economic boosts to areas within the Highlands and Islands.

The investment in outsider companies doesn't seem to have changed from the transition between HIDB and HIE. HIE seems focussed on encouraging small local businesses whilst maintaining links and development of larger companies working within the Highlands and Islands. This appeared to be unsuccessful choice for HIDB and it could be for HIE. Yet HIE are still investing millions of pounds, for example the underdeveloped area of Kintyre has recently received a boost which will help transform the area with the creation of a 9 million development. HIE are providing 2.2 million as a support package to a US based international golf and leisure developer (HIE 2011). It is certainly a huge investment but why support an outsider company and not local businesses? Only time will tell if this is a wise investment and hopefully it will not end up like the HIDB major investments of the 1960s and 70s.

Conclusion

At a first glance it appears that HIDB and HIE have similar thoughts on priorities for social and economic development within the Highlands and Islands, but looking a lot deeper this view point certainly changes. The HIDB were primarily focussed on one industry which they thought was going to regenerate the social and economic structure of communities in a good way. Unfortunately for HIDB this dream did not last long and HIE, although not perfect, have picked up and diverted the focus in a few different directions to try and repair what has been lost. It seems that HIE have realised that we have to keep the people we have by focussing on encouraging and engaging people of varying ages to prevent the depopulation and economic deprivation of the Highlands and Islands communities, building a future to make way for further developments when the opportunities arise.