3 Socio-Economic Context

3 Socio-Economic Context

3.1 Introduction

3.1.1 There has been local concern voiced that the socio-economic prospects of the Dunoon area have been damaged by the loss of the town centre vehicle ferry service in 2011. However, given that the change to the town centre ferry service is relatively recent, there is very little empirical published data to provide a substantive and controlled analysis of the before and after impacts of this measure.

3.1.2 This chapter therefore considers the local socio-economic context more generally to provide the background information.

A Brief History

3.1.3 Dunoon has been a historically prosperous place and is perhaps the most famous of the Glasgow 'tourist towns'. Its scenic location, yet proximity to Glasgow City Centre by both boat, rail and, also made it an attractive location for holiday homes. Once the granting of paid holidays for employees became a legal reality, Dunoon became a hugely popular destination for short breaks and day trips 'doon the watter'. The popular steamer services, generally operated by the great railway companies, further expanded the day trip market, not just for Dunoon, but also for places like Hunter's Quay and Innellan.

3.1.4 However, as wider UK and then foreign holidays became more cheaply available during the 1960s and 1970s, the Cowal tourist economy declined gradually and then rapidly. The presence of the major American submarine base at the nearby Holy Loch helped cushion this decline somewhat, but its closure in 1992 resulted in a steady and long-term economic run-down of the town. Dunoon is now facing a number of economic challenges, including a high level of unemployment, vacant town centre premises and high benefit claimant rate. The next section considers this evidence in more detail.

3.2 Socio-Economic Data

3.2.1 This section provides an overview of the key socio-economic characteristics of Dunoon and the surrounding hinterland, stretching as far north as Hunter's Quay and as far south as Innellan and the southern tip of Cowal.

3.2.2 The principal data sources used to compile this section were:

  • NOMIS Labour Market Statistics;
  • Scottish Neighbourhood Statistics;
  • a review of the Dunoon economy undertaken by EKOS as part of the CHORD programme; and
  • the Scottish Index of Multiple Deprivation (SIMD).

3.2.3 NOMIS2 provides the most disaggregate labour markets statistics albeit these are based on the 2001 Census (2011 Census data is not yet available). This data is available at the ward level and we have compiled data from four relevant wards, namely:

  • 04C23 Ardenslate - this ward covers the town centre pierhead, the majority of the Dunoon foreshore and the most easterly extremities of the town centre;
  • 04C24 Milton - the area immediately to the west of Ardenslate, covering the western edge of the town centre and the hospital;
  • 04C22 Kirn and Hunter's Quay - the area immediately to the north of the town centre, covering the village of Kirn, northwards past the Western Ferries terminal at Hunter's Quay; and
  • 04C25 Auchamore and Innellan - the large rural hinterland to the south and west of Dunoon, covering Innellan, toward and west along the banks of Loch Striven.

Economic Activity Rate - NOMIS

3.2.4 The economic activity rate defines the proportion of the working age population who are actively seeking employment (ie in work or seeking work). A high economic activity rate is viewed as positive as it suggests an area has a deep labour pool and low dependency ratio (ie the ratio of economically active to economically inactive people). It is important to note that the latest figures of economic activity rates are from the 2001 census and are thus somewhat dated, but they do provide a useful snapshot of the area and the census does provide disaggregated data. Figure 3.1 below shows the economic activity rates for the four wards listed above as well as the Argyll & Bute and Great Britain averages. Note that NOMIS does not include equivalent 'Scotland' figures for 2001.

Figure 3.1 Economic Activity Rates (2001)

Figure 3.1 Economic Activity Rates (2001)

3.2.5 Figure 3.1 therefore shows that the four Cowal wards have a lower economic activity rate than the Argyll & Bute and GB averages (note that working age (16-64) economically inactive people are defined as: students, looking after family / home, temporary sick, long-term sick, and retired). The picture is particularly poor in Ardenslate (ie the town centre seaboard), where the figure was only 67%. The lower economic activity rate in both Auchamore & Innellan and Kirn & Hunter's Quay is partially the result of a greater proportion of retired residents.

Employment by Occupation - NOMIS

3.2.6 Figure 3.2 below shows the 2001 employment by occupation for the four wards, Argyll & Bute and GB.

Figure 3.2 Employment by Occupation (2001)

Figure 3.2 Employment by Occupation (2001)

3.2.7 The key point to emerge here is that the two wards that broadly comprise Dunoon town centre have a considerably lower proportion of the resident population concentrated in higher status / income occupations. In contrast, these wards tend to have a greater cluster of employees in elementary occupations.

3.2.8 This trend is reversed to some extent in the more affluent areas of Auchamore & Innellan and Kirn & Hunter's Quay, which both more closely reflect the local authority and national averages.

Qualifications - NOMIS

3.2.9 The level of qualifications is generally seen as a meaningful barometer of the skills base of an area. Moreover, there is reasonably strong correlation between qualification levels and other socio-economic indicators such as economic activity, employment and levels of social deprivation.

3.2.10 Figure 3.3 below shows how qualification levels in the four Cowal wards compare with the Argyll & Bute and GB average.

Figure 3.3 Level of Qualifications (2001)

Figure 3.3 Level of Qualifications (2001)

3.2.11 Both Milton and Ardenslate wards have a high proportion of the resident population with no qualifications when compared against the Argyll & Bute and British averages. Both wards also have an unfavourable proportion of residents with higher level qualifications compared to the Argyll & Bute average, but they do actually perform well in terms of the wider British average.

3.2.12 Auchamore & Innellan and Kirn & Hunter's Quay broadly conform with the local authority average and outperform the national average.

Job Seekers Allowance Claimants - NOMIS

3.2.13 Figure 3.4 below presents the percentage of the resident population eligible for work which is claiming Job Seekers Allowance (JSA) in 2013.

Figure 3.4 JSA Claimants (March 2013)

Figure 3.4 JSA Claimants (March 2013)

3.2.14 The figure clearly demonstrates that there is a significant problem of unemployment (particularly male unemployment) in both Milton and Ardenslate. The percentage of people seeking JSA is more than double the local authority and national average.

3.2.15 Data on wider benefit claims from NOMIS from August 2012 suggest that both Milton and Ardenslate have a larger proportion of the resident population claiming other non-JSA benefits, including incapacity benefit, lone parent allowance, carers allowance etc. One particular statistic stands out - 13.2% of Milton residents and 14.6% of Ardenslate residents claim some form of Employment Support Allowance and Incapacity Benefit compared to the local authority and UK average of just over 6%.

3.2.16 The claimant data does suggest that there is a concentrated unemployment problem in and around Dunoon town centre, with claimant levels substantially outstripping local authority and national averages. The two wards of Auchamore & Inellan and Kirn & Hunter's Quay conform more closely to the local authority and national averages.

Scottish Index of Multiple Deprivation3

3.2.17 The notion of pockets of concentrated deprivation in and around Dunoon town centre is borne out by the Scottish Index of Multiple Deprivation (SIMD). The SIMD identifies small area concentrations of multiple deprivation across all of Scotland in a consistent way. The index is used to rank datazones from 1 (most deprived) through to 6,505 (least deprived). Figure 3.5 below highlights the SIMD rankings of the relevant Cowal datazones:

Figure 3.5 SIMD, Cowal (2012 Dataset)

Figure 3.5 SIMD, Cowal (2012 Dataset)

3.2.18 The red shaded areas represent areas that are in the 20% most deprived in Scotland. The map demonstrates that the area to the north-west of Dunoon is included within this grouping. The actual ranking for two of these datazones suggests that they are in the top 2%-3% deprived in Scotland. The town centre and foreshore are in the second 20% most deprived. The wider Cowal area performs somewhat better - from Kirn northwards and southbound towards Innellan, there are very few areas of deprivation.

Scottish Neighbourhood Statistics

3.2.19 Scottish Neighbourhood Statistics report some more recent data and at the 'intermediate geography' level including Dunoon, Cowal South and Hunter's Quay are of relevance here. The breakdown of the local population by age group is shown in Figure 3.6 below.

Figure 3.6 Local Demographics (2011)

Figure 3.6 Local Demographics (2011)

3.2.20 Cowal South and Hunter's Quay both contain a high proportion of those of pensionable age - higher than the Argyll & Bute and Scotland figure. The profile of Dunoon is actually more typical of the Argyll and Bute picture. The relatively high proportion of working age population in Dunoon itself clearly means that access to potential employment opportunities is of particular importance here.

3.2.21 'Income Deprivation' (based on the combined count of claimants of a number of benefits) and 'Employment Deprivation' (based on a range of employment related benefits claims) are also available at this level, and these indicators are shown in Figure 3.7 below.

Figure 3.7 Income and Employment Deprivation (2008)

Figure 3.7 Income and Employment Deprivation (2008)

3.2.22 Once again it can be seen that Dunoon itself sees a higher proportion of its residents identified as income and employment deprived, compared to other local areas, Argyll & Bute and Scotland as a whole.

3.2.23 The evidence available therefore suggests that Dunoon town centre is suffering from a sustained run-down of its economy, with consequent impacts on employment and living standards. This scenario is seen in many indictors which precede the withdrawal of the town centre vehicle carrying ferry service, although some more recent data is presented later in this chapter.

Business Base

3.2.24 Research undertaken in 2008 suggests that there are approximately 450 businesses in the Dunoon locality, accounting for around 11% of the total business base in the Argyll & Bute area. Given its urban core and proximity to the central belt, Dunoon tends to host a number of larger (and often public sector) employers.

3.2.25 The Dunoon economy is very heavily orientated towards the service sector. In keeping with the town's past, the predominant private sector industry is 'distribution, hotels and restaurants', accounting for some 20% of total employment. However, there is also a large public sector presence within the town (53% of total employment), including the NHS at Dunoon General Hospital.

3.2.26 Dunoon has a lower proportion of residents employed in the 'manufacturing' and 'banking, finance and insurance' sector than the local authority and Scottish averages.

Town Centre Property

3.2.27 The CHORD research made use of Argyll & Bute Council health check data to baseline the town centre business property stock. At that time, there were 151 business units in Dunoon town centre, of which 16 were vacant. The vacancy rate has likely risen in line with many parts of Scotland as a result of the difficult economic conditions since this report was published in 2010.

3.2.28 The CHORD report suggested that there was very little forthcoming commercial development in Dunoon town centre.


3.2.29 Dunoon is considered to be within the wider catchment area for Loch Lomond and the Trossachs National Park. Data from 2006/07 shows that Dunoon attracted 84,600 staying visitors who contributed an estimated £4.3 million to the local economy. Overall tourism (ie both day and overnight visitors) contributed £6.3 million to the local economy and accounted for approximately 3% of the total spend within the National Park area.


3.2.30 This brief review has highlighted a number of socio-economic issues associated with the Dunoon area.

3.2.31 This was underlined in a recent research exercise which complied 'A Vulnerability Index of Scottish Towns', undertaken by SAC (Scottish Agricultural College) in 2011. The 'Vulnerability Index' provides a means of comparing the vulnerability of 44 different towns across Scotland.

3.2.32 This index was based on data relating to:

  • the proportion of the local population of working age;
  • the proportion of the local population claiming Job Seekers Allowance;
  • the proportion of the local population working in the public sector; and
  • a measure of income deprivation derived from the Scottish Index of Multiple Deprivation (SIMD).

3.2.33 In this index, Dunoon was ranked in the top four most vulnerable communities, together with Campbeltown, Stranraer and Girvan.

3.3 Impact of Vehicle Ferry Withdrawal

3.3.1 As noted above, few 'standard' local data sets are yet available to analyse the impact of the withdrawal of the vehicle ferry service on the town on a consistent basis. Scottish Neighbourhood Statistics do report on the proportion of the population by age group claiming key benefits4 in each quarter at 'intermediate geography' level however. This data is shown in Figure 3.8 below for Dunoon, in a time series between Quarter 1 2010 to Quarter 2 2012.

Figure 3.8 SNS Key Benefits Claimants - Dunoon and Argyll & Bute

Figure 3.8 SNS Key Benefits Claimants - Dunoon and Argyll & Bute

3.3.2 This data underlines the general point that Dunoon has a far higher proportion of residents claiming key benefits compared to the Argyll and Bute local authority area in all of the working-age age groups.

3.3.3 The town centre vehicle carrying ferry service ceased at the end of Quarter 2 2011. Between Quarter 2 2011 and Quarter 2 2012, the proportion of residents claiming key benefits in all age groups at the Argyll & Bute level has decreased. In Dunoon however, this proportion has increased (16-24 and 50-64) or stayed the same (25-49). It is however not possible to be certain of any link between this and the withdrawal of the town centre vehicle carrying ferry without more detailed analysis.

3.3.4 There is however anecdotal evidence cited locally concerning the negative impacts of the current passenger only town centre ferry service. It has to be borne in mind however that there are clearly other communities across Scotland (on the islands and mainland) which have not been affected by a change to their ferry service but have also been suffering due to the current economic situation and factors such as the increase in internet shopping. While the limited evidence does suggest that the town of Dunoon has seen a decline in its recent economic performance, further research would be required to determine the extent to which the problems facing Dunoon are due to the removal of the vehicle carrying town centre to town centre ferry service.