Nearly half of population will be pensioners by 2037, report says

Shetland is sitting on a demographic timebomb according to guidelines for UK government departments that are intended to prevent legis­lation having a negative impact on remote island areas.

According to a section in the guidelines titled “Island Demo­graphics – Key Challenges” almost half Shetland’s population may be pensioners by 2037 despite Shetland being one of the few rural or island areas forecast to show population growth between 2012 and 2037.

The estimates are that 44.2 per cent of Shetlanders will be drawing a pension by the end of the period compared with 29.3 per cent in Orkney and 19.6 per cent in the Outer Hebrides.

The number of over-75s is also set to more than double, rising by 130 per cent, compared with 80 per cent in Scotland as a whole.

On the other hand Shetland is forecast for an 8.3 per cent rise in population to 25,147 in the same period compared with 5.5 per cent in Orkney and a fall of 10.8 per cent in the Outer Hebrides.

Migrants to Shetland will form the biggest part of the population increase (about 5.5 per cent) but less so than for Scotland as a whole, whose popu­lation is forecast to rise by over seven per cent owing to net migration.

The growth in the elderly pop­ulat­ion and its concomitant costs comes when dwindling revenues from the oil industry have forced a period of austerity on council spend­ing.

Without these funds being replaced the fiscal situation is bound to have heavier future impacts on services.

SIC social services committee chairman Cecil Smith said that it was important not to paint too gloomy a picture of the future.

The demographic problem had been discussed and factored into the council’s long term financial plan.

A growth in spending of three per cent per annum over the 25-year period would be needed to maintain the level of service.

This took into account inflation and an annual pay increase for the workforce of one per cent over inflation.

Another problem with an ageing population is that a larger proportion of the workforce will be engaged in looking after elderly people.

The trend for care at home would also have a knock on effect on the coun­cil’s ability to deliver services.

Mr Smith said: “We are very buoyant now with our economy. If we can keep that going and keep young people here and get them back from university it will help immensely.”

But any future council will be faced with tough decisions where to spend its finances, es­pecially if central government fund­ing continues to dwindle.

Mr Smith said that even with recent staff shortages community care was still better in Shetland than anywhere else in the country.

Shetland’s rural care model is generally recognised as being an excellent one, if expensive to run.

Councillor Jonathan Wills, himself a pensioner, said that he was fed up of pensioners being cast as a drain on the economy and society, when they had earned their pensions and were fully entitled to them.

He also said that pensioners were active contributors to the economy and tended to spend the money that they had rather than hanging on to it.

Local authorities were ultimately dependent on central government and if the authority did not have the money to perform its functions, the government had a duty to step in.

Dr Wills added that the projections were very far into the future and as well as   there being “lies, damned lies and statistics” the worst sort of statistics were those based on extrapolation.

The document also outlines that the cost of maintaining the “acceptable minimum standard of living” for a two-child family in the Northern Isles is on average 29 per cent higher than in an urban area of the UK.

And for a family living in a settlement defined as “remote from town” this increases to 66 per cent above the UK urban average.

The Scottish Islands areas suffer to a disproportionate extent from fuel poverty with up to 62 per cent of the population in fuel poverty and up to 28 per cent in extreme fuel poverty.

Heating costs, even in towns, are typically 50 to 90 per cent higher “which can place considerable strain on household incomes.”

The higher energy bills are due to high levels of climatic exposure, high fuel costs and construction methods.

Shetland fares better than the Outer Hebrides or Orkney for fuel poverty, but even so 43 per cent of households are reckoned to suffer fuel poverty.

The official figures for the Outer Hebrides is 62 per cent but the local energy advisory service has put the true figure as high as 71 per cent. The figure for Orkney is listed as 58 per cent, with 28 per cent said to be in extreme fuel poverty – 18 per cent higher than the Scottish average.

Other cost of living “drivers” include higher prices for household goods and clothing – which typically cost 20 to 30 per cent more due to higher prices and delivery charges.

Island communities also lack universal access to government services such as passport and tax offices.

The document adds that the islands are some of the most remote regions of the UK and Europe.

“This remoteness from major population, administrative and economic centres leads to particular challenges in terms of access to services and transport links, which are not generally experienced by mainland areas.

“The communities represented by the islands councils share many of the same characteristics as mainland rural areas, but their remoteness and the relative fragility of their economies are what make policy delivery in these communities unique in a UK context,” it adds.

Issues of distance, low population density, transportation costs and limited connectivity put significant pressure on service delivery in the islands. None of the island groups contain any areas that would meet the definition of “urban”.

The island economies are characterised by a reliance on a small number of key industries – agriculture, construction, energy, fishing and aquaculture, the public sector and a private sector dominated by very small businesses and self employment.

Unemployment levels tend to be lower than the national average with only 0.6 per cent of people on Jobseekers Allowance in Shetland compared with a national average of 2.4 per cent.

Those classed as “economically inactive” are only 11.9 per cent of the Shetland population compared with a national average of 22.4 per cent.

According to the document low unemployment rates, are due in part to people leaving the islands if there is a lack of attractive employment opportunities which can “place additional constraints” on business growth potential.

Gross weekly pay varies, with both Orkney and Shetland similar to the Scottish average while the Outer Hebrides has a much lower level of gross weekly pay.

Shetland’s gross value added (GVA) economy was worth over half a billion in 2013, with a per capita GVA of £22,586 compared with £17,849 in Orkney, £15,255 in the Western Isles and £21,982 in Scotland overall.

The guidelines show that all three island economies are “highly productive”.

The guidance also sets out an indicative series of questions for departments to consider with the Scotland Office and island communities to take account of island characteristics during policy development.

Some of the statistics quoted in the guidelines are published at http://www.nrscotland.gov.uk/files/statistics/council-area-data-sheets/shetland-islands-factsheet.pdf