Memorandum submitted by Cumbria County
1.1 Evidence will be given by Hazel Broatch,
Director of Policy and Performance and by Mick Elliot, Director
of Safety Services and Chief Fire Officer from Cumbria County
1.2 Hazel Broatch is part of the Chief Executive's
Directorate and is on the Cumbria FMD Task Force, chairs the Regeneration
Sub-Group and is a member of the Local Authorities FMD Executive.
She is responsible for the Policy and Performance Department in
the County Council which covers all aspects of policy development
including economic development and regeneration, best value, scrutiny,
human resources, community safety and e government.
1.3 Mick Elliot is a member of the Cumbria
FMD Task Force and the Local Authorities FMD Executive and chairs
the Sub-Group responsible for local authority services response
to FMD. He is Chief Fire Officer for the Council and is also responsible
for emergency planning and corporate health and safety.
1.4 Cumbria County Council set up the Cumbria
FMD Task Force. It is chaired by the Leader of the Council. The
Officer Steering Group supporting the Task Force is chaired by
the Chief Executive of the County Council. The Cumbria FMD Task
Force has met twice and brings together the local MPs, MEPs, Local
Councils, Key Agencies and Organisations, Voluntary Sector and
Private Sector. The Steering Group meets weekly.
2. RELIANCE ON
Over one quarter of all Cumbrian jobs are dependent
on tourism or agriculture.
Agriculture accounts for 13,000 direct jobs with
a further 3,500 in supporting industries, representing almost
8 per cent of the total Cumbrian workforce.
2.1 The MAFF Census (1998 and 1999) shows
that agriculture accounts for almost 14,000 direct jobs of which
60 per cent are full time (the remainder are part time or casual).
These jobs are distributed across 6,344 agricultural holdingsthe
majority small to medium in size. The dominant farm enterprises
are sheep rearing, beef rearing and dairying. A further 3,500
people are employed in closely related industries such as agricultural
supply, animal feeds meat processing etc (AES 1998). This means
that, in total, the agricultural sector accounts for more than
8 per cent of the Cumbrian workforce, although this concentration
is much greater in certain parts of the county.
Tourism accounts for over 47,000 direct and indirect
jobs, representing 20 per cent of the total Cumbrian workforce.
2.2 Tourism accounts for almost 39,500 direct
jobs and 7,500 indirect jobs, representing almost a quarter of
all employment in the county. These jobs are spread across a wide
range of sectors, including accommodation, food and drink, recreation,
shopping and transport. More than half are located within the
Lake District National Park. Countywide, the value of tourism
to Cumbria is £964 million, a quarter of which is generated
through expenditure of the tourism businesses in the local economy.
This income is generated throughout the year but rises steeply
from April (7 per cent of all income) until July (14 per cent)
before dropping back in October (10 per cent). In value terms,
£729.2 million of revenue (75 per cent) is generated during
this period. (Source: Cumbria Tourist Board, STEAM Model).
2.3 The Cumbria Household Survey 2000 found
that one in six working residents believed their job was dependent
on tourism to some degree. This rose to one in four of the self-employed
and one in five of those working part time. It is likely that
these figures under-estimate dependence as not all workers will
recognise the link, particularly those in supporting industries.
Not surprisingly, those working in hotels/restaurants (62 per
cent) and retail (30 per cent) were the most likely to recognise
the dependence of their jobs on tourism. However, more than a
quarter (26 per cent) of those working in agriculture also recognised
the dependence, demonstrating clearly the close links between
the two sectors. This dependence on tourism was most evident among
those with low level skills29 per cent of those with qualifications
no higher than NVQ level 1 (or equivalent), compared with just
3 per cent of those qualified to level 5. This is a major concern
because those with low level skills are not ideally placed to
seek out and take advantage of alternative opportunities if their
employment is threatened.
2.4 The Cumbria Employer Survey 2000 asked
employers their opinion of the dependence of their workforce and
turnover on tourism. A fifth of firms said that some of their
workforce were dependent on tourism and well over a third said
some of their turnover was. This reliance goes beyond the obvious
sectors, for example a third of manufacturing firms say some of
their jobs are reliant on tourism. The reliance on tourism by
key sectors is shown in the table below.
Proportion of Firms Reporting that Some
of Their Workforce/Turnover is Reliant on Tourism
Source: Cumbria Employer Survey 2000.
3. EFFECT OF
40 per cent of all FMD cases Nationwide are in Cumbria.
If the outbreak is over at the end of July:
Tourism Spend will be down by over £400 million.
3.1 All members of the Tourist Board, (approximately
2,000) together with members of other tourism organisations have
received a postal questionnaire in the last three weeks. To date
515 have been returned, with the following results comparing March
2001 with March 2000.
Average reduction in turnover: 65 per cent.
Reported financial losses from the sample 515 businesses
Number of job losses from the sample 515 businesses surveyed:
3.2 The total number of job losses across the industry
is probably over 1,000 to datefrom the survey data almost
1 per cent business. The true scale of job losses is not reflected
in the claimant count statistics as many of the workers will have
other part time jobs, or working partners, making them ineligible
for job seekers allowance. By 6 April 2001, the Employment Service
had recorded 399 new claims as a direct result of foot and mouth.
3.3 Tourism Information Centre activity in Cumbria showed
that total bookings are down by 58.7 per cent in March 2001 compared
to March 2000. The worst affected areas are in the Lake District,
down by an average of 75 per cent. This trend continued in the
first week of April.
3.4 Over the Easter weekend, the situation improved slightly,
with many accommodation providers at full occupancy. However,
a CTB survey still found 45 per cent of tourism providers reporting
lower occupancy than Easter 2000, compared to 12 per cent reporting
higher occupancy. The trend at visitors attractions was more positivewith
56 per cent reporting an increase over last Easter compared to
255 reporting fewer visitors. This would be expected due to the
lack of informal recreation opportunities resulting from the access
Lost Agricultural Output will be over £130 million in
The County's GDP will be down by around 10 per cent.
4. VULNERABILITY OF
The total number of jobs in Cumbria has fallen by 6 per cent
since 1991, against the national trend of an increase of 8 per
Half of Cumbrian jobs are in two sectors: manufacturing(23
per cent, compared to 17 per cent nationally); and distribution,
hotels and catering(27 per cent, compared to 22 per cent
4.1 The Cumbrian rural economy is largely dependent for
jobs and wealth on a few sectors. The relative over-reliance of
rural Cumbria on jobs in manufacturing and in hotels and catering
is clearly shown in the table below, as is the significant under-representation
in financial services.
Distribution of Firms/Employees by Sector
| ||Rural Cumbria
Source: AES 1998, Crown Copyright (analysis excludes
agriculture and the self employed)
4.2 However, employment in manufacturing has declined
steadily over the last 10 years and is forecast to continue to
do so. This, together with declining employment in agriculture
necessitated major restructuring within the Cumbrian economy even
before the current FMD crisis. The shift away from traditional
industries towards high value added service sector employment
presents a huge challenge given the under-representation of Cumbria
in these areas (both in terms of jobs and businesses) and the
differing skill needs of these compared with the declining sectors.
This restructuring will be made more difficult by the impact of
FMD on the tourism sector which had been experiencing steady growth
and was providing alternative employment for someparticularly
within agricultural tourism.
Manufacturing employment is declining, and has weak local
supply chains, so will not provide the impetus needed to pull
the economy through this recession.
4.3 Employment in manufacturing has declined by 41 per
cent since 1990 and is expected to decline by a further 14 per
cent over the next 10 years, with 33,200 jobs being lost between
1990 and 2010 (source: Cambridge Econometrics). Coupled
with this reducing employment, manufacturing firms in Cumbria
are only half as likely to source their supplies locally compared
with the county average (22 per cent compared with 53 per cent)
and almost half (45 per cent) have their main customer base outside
the county (source: Cumbria Employer Survey 2000). Whilst
this may make them less vulnerable to the direct impact of FMD,
it also means they may not play a significant role in re-building
the local economy, particularly given the difficulties facing
the sector in other ways.
Most other businesses have well developed local supply chains
and will be directly affected by the economic downturn caused
by the crisis. (40 per cent of Cumbrian businesses are at least
partially dependent on the tourist industry)the economic
effect of the crisis will be felt throughout the local economy.
4.4 For almost three quarters of Cumbria's businesses
(74 per cent) their main market is within the county and more
than half (53 per cent) buy most of their goods/supplies locally
too (source: Cumbria Employer Survey 2000). This high level of
dependence on local markets by the majority of firms makes them
vulnerable to economic downturn (See above for information on
the reliance on tourism).
Service sector employment in Cumbria is disproportionately
reliant on small SMEs and micro businesses. Agriculture and tourism
are characterised by self-employment and micro businesses. Such
businesses are most vulnerable to severe economic shocks as they
are reliant on a single market, have very limited opportunity
to raise new working capital, and few reserves.
Per cent of service sector employment is within businesses
of less than 25 employees, compared to 41 per cent nationally,
36 per cent is within businesses of 1-10 employees, compared to
27 per cent nationally.
Cumbria has a higher rate of self-employment at 13.5 per
cent of all employment, compared to 11.9 per cent nationally.
5. THE COUNTY
5.1 The community have looked to the County Council for
leadership in this time of crisis. The Council was quick to set
up the Task Force which met on 19 March and 9 April 2001 to date
and meets again on 30 April. The Task Force has developed two
communiqués on the issues faced in Cumbria which have been
submitted to Central Government and it has given evidence to the
Rural Task Force.
5.2 We are administering Objective 2 funding that was
made available by GONW to support immediate needs resulting from
FMD. This was matched by funding from the North West Development
Agency. A substantial proportion of this has gone to support marketing
by Cumbria Tourist Board for Easter and now for May. The balance
has gone to support businesses to survive through the Small Business
5.3 Our Public Relations and Media Team have been diverted
to provide support to improving information and communication.
The Council is also leading a small cross-sector group of PR and
Media specialists and works closely with the Cumbria Tourist Board.
This has resulted in a local "Open for Business" campaign
heavily supported by the local press and media. The County Council's
own website has been substantially amended to provide up-to-date
information. We have also, supported by others, opened a telephone
information service on local authority services.
5.4 The Task Force has clearly stated that top priority
is the eradication of the disease. To that end the County Council,
working with others, has been responsible for decisions regarding
closure of footpaths and siting of preventive matting. Two hundred
disinfectant mats have to be maintained daily. Guidance has been
sought throughout from MAFF and priority given to preventive action.
However, much of the decision-making has also involved balancing
5.5 This balance has not always been easy to achieve.
The County Council is leading a Sub-Group of the Task Force which
brings together the key stakeholders and is tasked with reviewing
restrictions. It has re-opened 100 footpaths and continues to
look at opening others.
5.6 Cumbria covers an area as large as Greater London,
Hertfordshire, Bedfordshire, Buckinghamshire, almost half of Oxfordshire
and Berkshire, part of Hampshire and all of Surrey, plus parts
of Kent, Essex and Cambridgeshire. It has approximately 5,400
miles of footpaths and 1,800 miles of bridleway. The scale of
action in the county has been significant.
5.7 We have also led a Regeneration Sub-Group who have
developed a working document on recovery which proposes that Cumbria
become a trailblazer for modernising the rural economy in line
with Government and European policies as a Rural Action Zone.
This would need the scale of funding to Cumbria to be increased
over that proposed before the crisis and would need the funding
to flow quicker. The regeneration of tourism is a key programme