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

Cornwall has been characterised by a narrow economic base, a preponderance of very small businesses, and low value sectors. Due to its low economic output, Cornwall was awarded European Union (EU) Objective One status in 1999 and has qualified for the next round of EU Convergence funding from 2007 to 2013, as its GVA is less than 75% of the European average.

Despite Cornwall's low GVA, there has been strong growth  in recent  years, particularly since EU Objective One funding has been available  - 6.8% between 2002 and 2003 compared to 5.4% nationally and 64.9% between 1995 and 2003 with the UK average at 53.5%.

This boost to Cornwall’s economy over the last six years has attracted both businesses and residents to the County. Kerrier and Carrick have seen the biggest increase in GVA per head between 2000 and 2003 (40% and 38% respectively), considerably more than the UK rate (12%). Cornwall’s GVA is projected to increase on average by 3.4% per year between 2006 and 2011. In terms of accommodating anticipated economic growth, a significant amount of employment space will be needed. The main employment space allocated to 2016 amounts to 142ha and is situated in Cornwall’s key towns with over 40% in CPR, 13% in St Austell, 11% in both Newquay and Bodmin, 9% in Falmouth and 8% in Truro.

Cornwall has approximately 19,500 businesses.  90% of all businesses employ less than 10 people and 67% employ less than five people (ABI).  A high proportion of the population are self employed (16% compared to 10% of the UK in 2001), which owes itself to the spatial, historical and cultural aspects of the County. 

Between 1993 and 2003 the fastest growing business sectors in Cornwall (compared to the UK) were distribution (10.6%), real estate & business activities (10.2%), education (9%), construction (7.6%) and manufacturing (7.3%).  Economic forecasts to 2026 predict significant job increases in non-market services in Truro and Falmouth, market services in St Ives and distribution and hotels in Falmouth, Helston, Newquay and St Ives.  The creative industries and health and educational research sectors are also expected to expand.

Monitoring the growth in key sectors is vital to understanding the demands for transport. Figure 3.1 compares the national and Cornish growth rates by sector as recorded in 2003. The growth in the manufacturing, distribution and education sectors will impact significantly on the transport network. At the same time, growth in telecommunication sectors may reduce the need to travel (telecommunication is the fastest growing sub sector of  Transport & Communication).

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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 (DWP). However, the growth of the working population in Cornwall since 1995 is the fastest in the South West, with an increase of 13% compared to a South West average of 8.3%. 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 the Truro, CPR and the Falmouth-Penryn urban centres.

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 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.

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 52% nationally.  Skills shortages are apparent in specialist areas and recruitment can be difficult because of the attractiveness of wages and employment conditions elsewhere.