Annex 2 - Cornwall's Challenges and Concerns - The Evidence Base

Cornwall has been characterised by a narrow economic base and a preponderance of very small businesses, and low value sectors. We are recognised by the European Union as being an area in need of special support through its Objective One programme. Cornwall was awarded Objective One status in 1999. The 2001 Gross Domestic Product (GDP) figures released by Euro Stat indicate that we may, despite the accession of former Eastern bloc countries, qualify for further structural funding in 2006. Cornwall may be the only UK region to re-qualify.

Cornwall has, in the past, had some of the highest rates of unemployment in the South West.  In January 2005, unemployment was 3.1% in Cornwall compared to 2.6% in the South West and 2.3% nationally. 

Cornwall has approximately 19,500 businesses.  90% of all businesses employ less than 10 people and 67% employ less than five people.  A high proportion (16% compared to 10% UK – 2001) of the population are self employed, which owes itself to spatial, historical and cultural aspects of the County.  Given the geographical context of the area, agriculture and fishing remain important industries that, despite severe difficulties, are responding to the challenge to restructure themselves.  Successful diversification has taken place into growth sectors such as the service and manufacturing industries, and there are some clusters of businesses that have a potentially global significance. Employment growth has taken place in manufacturing, wholesale/retail and health and social care related industries, with many jobs being full time in contrast to the national trend.  The growth of the working population in Cornwall since 1995 is the fastest in the South West of England, with a growth of 13% compared to a South West average of 8.3%. There are promising signs of economic recovery - GVA for the period from 1991 – 2003 showed significant % increases for the County, particularly over the last four years since Objective One funding has been available. However, this is still against a relatively low starting point when compared to the UK and the South West.

There are several factors contributing to a new, higher level of economic confidence that has acted as a catalyst for private sector investment since the development of the first LTP:

• An Urban Regeneration Company has been formed for the Camborne/ Pool/ Redruth (CPR) area (one of three in the South West), which will be managing a predicted £150m capital investment programme.

• Truro has continued growth as an administrative and retail centre with 'Zone A' rental levels increasing by 30% in the last four years; a rapidly expanding Truro college; and the new Peninsula Medical School and Knowledge Spa.

• Falmouth/Penryn has the first phase of the CUC Hub established at Penryn and a major urban framework study being completed, with a range of regeneration proposals identified.

• St Austell has the successful Eden Project, which has attracted international acclaim; the Cornwall College relocation in a £17m investment; and major town centre renewal is underway.

• Newquay has had a major urban framework study completed, with a range of regeneration proposals identified, which includes a major 'growth area' on the eastern side of the town.

The majority of jobs are located within the main towns and this is also where many of the larger employers are situated. Around 40% of businesses are located in Truro, CPR and the Falmouth/Penryn area.

Skills levels in education in Cornwall are higher than the national average, but this is not maintained in the workforce.  NVQ level 3 skills or higher are only achieved by 44.3% of the workforce compared to a 52% nationally.  Skills shortages are apparent in specialist areas and recruitment can be difficult because of the attractiveness of wages and employment conditions elsewhere.