Cost of living on islands still 40% higher

New HIE study updates rural cost of living in Scotland.

In 2013, Highlands and Islands Enterprise in partnership with a range of other public agencies commissioned the Centre for Research in Social Policy (CRSP) to establish a minimum income standard for remote rural Scotland including highlands and islands.

Discussions were centered on what was common and what was different in a minimum household ‘basket’ of goods and services in these communities, compared with other parts of the UK.

In 2016, HIE commissioned the CRSP to update the research.

Original study showed costs were up by 10-40%

The 2013 study found that the budgets required by households to achieve a minimum acceptable standard of living in remote rural Scotland were typically 10- 40% higher than elsewhere in the UK. For households in more remote island locations, these additional costs could exceed 40%.

The premiums were most modest for pensioners and greatest for single people and families with dependent children, and were driven by:

  • The higher prices that households were required to pay for food, clothes and household goods.
  • Considerably higher household fuel bills, influenced by climate and fuel sources.
  • The longer distances that people have to routinely travel, particularly to work.

Update shows no improvements in costs for rural areas.

The main findings of the updated report are as follows:

  •  In 2016, a minimum acceptable standard of living in remote rural Scotland typically requires between a tenth and a third more household spending than in urban parts of the UK.
  •  This picture is similar to 2013, although the lower price of petrol and diesel has significantly reduced the additional cost for people having to travel long distances, particularly regular travel for work.
  •   The additional costs come from a range of sources. In particular, the costs of travelling, heating one’s home and paying for goods and their delivery are much higher for many residents of the areas under review, especially those in the remotest areas.

    Conclusions

The update was asked to consider these costs are being and could addressed through national and regional policy:

  • Despite some easing of costs, the continuing high cost of living in remote rural Scotland, and its exposure to any renewed rise of energy costs, makes their mitigation as urgent as ever. A framework for addressing these costs needs to consider issues around energy costs, shopping costs and travel costs in a joined up way, which takes account of the influence of local infrastructure and the development of jobs and communities.
  • There is scope for some reduction on home energy costs, but mainstream energy efficiency measures have limited effect in the particular circumstances of remote rural Scotland. The Scottish Rural Fuel Poverty Task Force needs to identify particular ways in which energy efficiency improvements and better functioning markets and charging structures can be designed to meet the unique circumstances of remote rural Scotland.
  •   Retail costs could potentially go down if delivery networks are improved and charges reduced. Imaginative solutions are needed that use technology to join up delivery networks, and aim to reduce charges that are higher than they need to be.
  •  The best way to get travel costs down is for people to reduce the need to travel long distances for work. This requires a focus on developing more jobs that are both local and reasonably paid, which in turn requires the fostering of new skills in the workforce and the development of external markets.
  •  An improved infrastructure is needed to support these developments. In particular, the roll-out of high speed broadband is crucial, both for work and other purposes. Since a reliable network reaching all households is likely to be elusive in the medium term, the potential for having community hubs with good broadband and other amenities needs to be explored.
  •   All these improvements will work better to the extent that the population of the area can be maintained and boosted, especially among young adults. This requires in particular a focus on developing young people’s skills and opportunities, and on improving amenities such as mobile signal which are particularly important to them.