The Economic and Social Impact of CalMac Ferries Ltd on Scotland

Transcription

1 The Economic and Social Impact of CalMac Ferries Ltd on Scotland A report to CalMac Ferries Ltd from the Fraser of Allander Institute April 2015 The Fraser of Allander Institute for Research on the Scottish Economy, University of Strathclyde 100 Cathedral Street Glasgow G4 OLN Scotland, UK Tel: fraser@strath.ac.uk Website: The place of useful learning The University of Strathclyde is a charitable body, registered in Scotland, number SC015263

2 Key Findings This study examines several facets of the Scottish ferry operator CalMac Ferries Ltd (CalMac). It focuses on the economic activity created by the company s operations, particularly on how it supports lifeline economic activity on the Scottish islands which it serves. CalMac s key objective is to provide support to those living on the Scottish Islands. It does this both by providing residents with access to the mainland, but also by ferrying the majority of items sold by local retailers, without which it would be difficult to maintain an acceptable quality of life on the islands. Finally, CalMac s activities are a vital support for island produce. Items exported from the islands include food and drink products, notably high value exports such as whisky and shellfish, both of which contribute significantly to total Scottish exports. The study also shows the extent to which that CalMac delivers support for island tourism Volume of Business Figures on its volume of business, both for passengers and for shipments on goods and services, provide an initial indication of its importance in this regard. CalMac carried an average of 4.64 million (M) passengers per annum between and carried 4.65 M passengers in 2014 CalMac carried 1.1 M cars in 2014 CalMac is the key channel of support for commercial activity on the islands it serves, and carried 92,734 commercial vehicles in 2014 Economic Impact Scotland The study estimates that: CalMac s 145 M of turnover supports a total of worth of turnover across Scotland as a whole The 1,476 jobs at CalMac support a total of 5,883 jobs across Scotland as a whole Average wages at CalMac ( 29,683) are 12% higher than the average wage in Scotland

3 Employee experience The jobs provided at CalMac tend to be long term - on average, each employee has spent 13.6 years with the company CalMac employees have a total of more than 20,000 years of experience. Economic Impacts Local areas A key aspect of this study examines the extent to which CalMac provides support for local communities, particularly fragile island communities where there are limited alternative opportunities for employment ( lifeline communities). Some of the key results concerning lifeline communities served by CalMac include: CalMac employs 281 people and spends 7.99 M on wages in Argyll & Bute CalMac employs 184 people and spends 5.00 M on wages in Comhairle nan Eilean Siar CalMac employs 148 people and spends 4.26 M on wages in Highland region Argyll & Bute island communities Coll - jobs at CalMac account for 1 job in every 26 jobs on the island Colonsay - jobs at Cal Mac account for 1 job in every 17 jobs on the island Gigha - jobs at CalMac account for 1 job in every 11 jobs on the island Islay - jobs at CalMac account for 1 job in every 73 jobs on the island Mull - jobs at Cal Mac account for 1 job in every 34 jobs on the island Tiree - jobs at CalMac account for 1 job in every 41 jobs on the island Bute - jobs at CalMac account for 1 job in every 66 jobs on the island CalMac is also a significant employer in Oban, where it accounts for 1 job in every 48 jobs Comhairle nan Eilean Siar island communities Barra - jobs at CalMac account for 1 job in every12 jobs on the island Harris and Lewis - jobs at CalMac account for 1 job in every 66 jobs on the island North Uist - jobs at CalMac account for 1 job in every 28 jobs on the island South Uist - jobs at CalMac account for 1 job in every 33 jobs on the island Eriskay - jobs at CalMac account for 1 job in every 16 jobs on the island

4 Highlands island communities Eigg - jobs at CalMac account for 1 job in every 9 jobs on the island Skye - jobs at CalMac account for 1 job in every 154 jobs on the island Impact in Inverclyde CalMac s HQ is based in Inverclyde and the company is a major employer in the area it employs 169 people directly and supports the employment of a total of 262 local residents once the effect of wage spending by its employees is taken into account. Inverclyde is an area of relative deprivation, where unemployment has been above the Scottish in recent years and where average wages in 2014 were around 12% below the Scottish average We estimate that it supports 1 in every 136 jobs in Inverclyde Average pay for CalMac employees in Inverclyde is 30,660, around 56% above the Inverclyde average CalMac injected more than 9 million ( 9.21 million) into the Inverclyde economy in 2014, including both wage payments to local residents and supply purchases from companies based in Inverclyde 1 Island Tourism While CalMac does not itself create activity in tourism, it enables tourists to visit the Scottish islands. The study calculates the extent to which CalMac s support for island tourism creates economic activity on the islands and, using conservative assumptions, we estimate that: CalMac enables 3,247 jobs in island tourism CalMac enables 53.4 M worth of wages in island tourism 1 This excludes 18.9 million paid to Caledonian Marine Assets Limited.

5 Introduction and Background This study examines several aspects of the Scottish ferry operator CalMac Ferries Ltd (CalMac). The key findings of this study are estimates of CalMac s economic impact, both on Scotland as a whole and on specific areas within Scotland - for the latter, we focus on estimates of how CalMac supports lifeline economic activity on Scottish islands. In addition, the study also examines a range of other impacts for example, the results demonstrate that the company s activity in transporting tourists to the islands has a very considerable effect on the local tourism industry. The study also examines its involvement with and support for local businesses and communities among other issues. It also examines a number of recent performance indicators. CalMac - History CalMac has a long history of operating ferry services in Scotland. The company now operating as CalMac began life in 1851, as David Hutcheson & Co, and operated services from Glasgow to Inverness through the Crinan and Caledonian canals. In the late 1870 s the company was taken over by David MacBrayne and services were expanded as new railways were built in the Highlands. The company eventually merged with railway companies in 1928 and a new company (David MacBrayne (1928)) was formed. This company was nationalised in 1948 and in 1953 was amalgamated into the Scottish Transport Group (STG). Caledonian MacBrayne was reformed as a ferry company in CalMac Ferries Ltd, (CFL) was incorporated in 2006 as a wholly-owned subsidiary of David MacBrayne Ltd, which is wholly owned by Scottish Ministers.

6 Business Volumes - Caledonian MacBrayne CalMac s key objective is to provide support to people living on the Scottish Islands by providing access to the mainland and figures on its volume of business, both for passengers and for shipments on goods and services, provide an initial indication of its importance in this regard. Chart 1 shows the number of passengers carried from 2009, during which time it carried an average of 4.64 million (M) passengers per annum 2. Chart 2 also shows that the company has carried more than 1M cars in all years. The falloff in both passengers and cars in 2011 and 2012 is most likely to be due to reduced economic activity in Scotland. We note that passenger numbers actually rose (by around 3%) between and that over the same period the number of cars carried rose by around 5% (see Chart 2). Millions Chart 1 - CalMac Passenger Numbers The passenger numbers include both residents using the ferries and visitors to the islands.

7 Millions Chart 2 - Number of Cars Carried CalMac also transports goods as well as people, and is clearly the key channel of support for commercial activity on the islands it serves. Perhaps the most significant indicator of how CalMac supports activity in the island economies is indicated in Chart 3, which details the number of commercial vehicles carried by CalMac ferries. On average, the company transported 95,415 commercial vehicles per annum over the period. Items exported from the islands include food and drink products, notably high value exports such as whisky and shellfish, both of which contribute significantly to total Scottish exports. CalMac s commercial activity also involves imports to the islands, and is likely to cover the majority of items sold by local retailers 3, including fuel, food, mail, medical supplies, oil, gas, and utilities, without which it would be difficult to maintain an acceptable quality of life on the islands. 3 CalMac is not the sole means of transporting goods and services others include the Skye Bridge, air services provided by companies such as LoganAir and some bulk goods are carried by tanker or by barge. Tourists can also access the islands from cruise ships and by private yachts.

8 102,000 Chart 3 - Commercial Vehicles Carried 100,000 99,603 99,219 98,000 96,000 95,674 94,000 92,000 92,673 92,589 92,734 90,000 88,

9 Economic Impact - Scotland Table 1 below details CalMac s total economic impact on Scotland, in terms of the number of jobs and the total amount of both wages and turnover it supports across Scotland as a whole 4. The company s total economic impact is the sum of what are termed its direct, indirect and induced impacts. The direct effect results from its ongoing business operations in providing ferry services - for example, the company employs 1,476 people, and this measures the company s direct effect on employment in Scotland. Secondly, however, in order to support these ongoing business operations, CalMac will pay wages to its employees, and it will also purchase goods and services, some proportion of which will be spent on goods and services produced by other companies located in Scotland. Two further additional economic effects result from these wage and supplier expenditures, in both cases because the recipients of CalMac s initial spending will then re-spend the monies paid by the company. The first, known as the induced impact, occurs because employees will spend wages and salaries on other goods and services produced in Scotland. The second effect (indirect impact) results because CalMac s suppliers will in turn spend money on staff and on other goods and services produced in Scotland. This re-expenditure of the initial payments made by CalMac therefore means that the total amount of economic activity created is greater than the initial amount created directly at CalMac itself. The company s total economic impact on Scotland is measured by the sum of the direct, induced and indirect impacts. Table1 details these total impacts and shows that CalMac, which employs 1,407 people directly, is estimated to support a total of 5,689 Full-Time Equivalent (FTE) jobs across Scotland as a whole. The million paid to its Scottish employees support a total of 85.8 million worth of wages in Scotland and CalMac also supports more than a quarter of a billion worth of turnover at companies based in Scotland 5. 4 Cal Mac actually employs 1,476 people, but 69 employees live outside Scotland, and so have been excluded from the estimates of its Scottish impacts. 5 The estimates in Table 1 are based on Scottish Government figures published in the Scottish Input Output Tables, available at

10 Table 1 - Economic Impact of CalMac on Scotland Employment Cal Mac Employment 1,407 Additional Jobs supported by Cal Mac in Scotland 4,282 Total Jobs supported by Cal Mac in Scotland 5,689 Wages ( million) Cal Mac Wages 41.2 Additional Wages supported by Cal Mac in Scotland 44.7 Total Wages supported by Cal Mac in Scotland 85.8 Turnover ( million) Cal Mac Turnover Additional Turnover supported by Cal Mac in Scotland Total Turnover supported by Cal Mac in Scotland The estimates in Table 1 detail CalMac s considerable impact on Scotland for example, the 1,407 CalMac employees are estimated to support a further 4,282 jobs in other industries in Scotland. The Scottish Government figures used to develop the estimates in Table 1 show that, out of 123 Scottish industrial sectors, the CalMac s sector (Water Transport) sector has the 4 th highest employment multiplier. One reason for this is that the average wage paid to CalMac employees is significantly above the average Scottish wage, meaning that employees are likely to spend more than the average Scottish employee. Table 2 below details that the average wage paid to workers at CalMac is just over 12% higher than the Scottish average. Table 2 - Average Wage, CalMac and Scotland, 2014 ( ) Cal Mac 29,683 Scotland* 26,472 % Cal Mac above Scotland 12.1 * Scottish figure from Earnings in Scotland" Scottish Parliament Information Centre, available at

11 Table 3 below also details that the jobs provided at CalMac tend to be long term - on average, each employee has spent 13.6 years with the company and its employees have a total of more than 20,000 years of experience. Table 3 - CalMac employee experience Average number of years served 13.6 Total number of years served (all current employees) 20,072 Longest serving employee has 49 years servce - joined employees (36.2% of total) have been with Cal Mac for at least 15 years CalMac - Economic Impact by area in Scotland Later sections of this report focus on CalMac s supports economic activity in fragile areas in Scotland, particularly in island communities, and we focus on these areas below. However, while CalMac is of considerable importance in a number of the smaller lifeline communities, (see below), Table 4 below shows that the company has employees throughout Scotland - Table 5 details the position regarding wage payments. For example, CalMac has a significant number of employees in Ayrshire (165 employees) 6 and in Glasgow (120 employees). The company also provides a large number of jobs in Inverclyde (169) where its headquarters are based. Not surprisingly, CalMac does have a significant concentration of employees in the local authority areas where it sails - for example, % of all employees are in Argyll & Bute, Comhairle nan Eilean Siar and the Highlands, and Table 5 shows that it injects a significant level of wages into each. In Inverclyde, where its headquarters are based, it employs 169 people 8 and pays out an annual worth of wages (see Table 5). 6 The majority of these employees are based at Ardrossan in North Ayrshire. 7 Excluding those living outside Scotland. 8 An estimated 64 of these live in Gourock alone.

12 Table 4 - CalMac employees by Local Authority Area Argyll & Bute 282 Comhairle nan Eilean Siar 184 Highlands 175 Inverclyde 169 Ayrshire 165 Other Scotland 432 Outside Scotland 69 Total 1,476 Table 5 - CalMac wage payments by Local Authority Area million Argyll & Bute 8.15 Comhairle nan Eilean Siar 5.12 Highlands 4.27 Inverclyde 5.18 Ayrshire 4.97 Other Scotland 13.5 Outside Scotland 2.33 Total 43.5

13 CalMac - Support for economic activity in lifeline areas The analysis in Table 1 has shown that CalMac has a considerable impact on Scotland as a whole - most notably that its activities support almost 6,000 Scottish jobs. We now focus on another aspect of its how it affects local economic activity in Scotland, particularly how it supports activity in lifeline communities on the Scottish islands 9. We assess CalMac s impact through two channels. For the four local authorities which contain the majority of island communities (Argyll & Bute, Ayrshire, Comhairle nan Eilean Siar and the Highlands), we firstly measure CalMac s employment on the islands. 10 Secondly, we also estimate the employment supported by wage spending by CalMac employees in these communities. By summing both, we can then assess the extent to which employment in lifeline communities depends on CalMac spending. Argyll & Bute Table 6 shows how the company s employment is distributed across communities in Argyll & Bute, including seven small island areas, and the number of jobs supported by employee spending. Table 6 - CalMac employment Direct Supported Total - Argyll & Bute Local areas Employment Employment Employment Coll Colonsay Gigha Islay Mull Oban Tiree Campbeltown Bute We focus mainly on the islands, but Tables 6 and 7 shows that it also provides considerable support for some mainland communities, most notably in Oban. 10. Only four other local authority areas in Scotland (Fife, Stirling and West Dunbartonshire and Perth & Kinross) contain islands and the estimated island population across all four is only twelve people. Information from Census day estimates of population and households on Scotland's inhabited islands, 2001 to Scottish Census, 2011.

14 Table 7 sums up the extent to which employment in these areas depends on the jobs provided by CalMac, both CalMac s own employment and through employee wage spending. The table demonstrates that CalMac is in many cases an important component of the local economy, even in areas where it employs relatively few people. For example, Coll has a population of only 195 people, and we estimate that there are a total of only 90 jobs on the island CalMac employees therefore account for 1 one in every 26 jobs on Coll. Other islands, notably Gigha and Colonsay, are even more dependent on the jobs provided by CalMac. The company also provides one in every 34 jobs on Mull, and is also of considerable importance to the local economy in Oban, where one in every 48 employees is supported by CalMac, either directly or through wage spending by CalMac employees. Table 7 - Local reliance on CalMac jobs, Argyll & Bute Coll - jobs at Cal Mac account for 1 job in every: 26 Colonsay - jobs at Cal Mac account for 1 job in every: 17 Gigha - jobs at Cal Mac account for 1 job in every: 11 Islay - jobs at Cal Mac account for 1 job in every: 73 Mull - jobs at Cal Mac account for 1 job in every: 34 Oban - jobs at Cal Mac account for 1 job in every: 48 Tiree - jobs at Cal Mac account for 1 job in every: 41 Campbeltown - jobs at Cal Mac account for 1 job in every: 118 Bute - jobs at Cal Mac account for 1 job in every: 66 Comhairle nan Eilean Siar Table 8 details CalMac jobs in local areas in Comhairle nan Eilean Siar and Table 9 shows the extent to which the island areas depend on jobs at CalMac. Table 8 - CalMac employment Direct Supported Total - Comhairle nan Eilean Siar Employment Employment Employment Barra Harris and Lewis North Uist South Uist Eriskay 3 1 4

15 CalMac also makes a significant contribution to island economies in Comhairle nan Eilean Siar, even in areas where it employs relatively few people. This is very apparent in Barra, which has a population of only 1,147 people and where the 46 jobs supported by CalMac accounts for 1 in every 12 jobs. On Eriskay, which has a population of only 143 people, the four CalMac employees represent 1 in every 16 jobs. On both North Uist (population of 1,254) and South Uist (1,754), CalMac supports 1 in every 28 and 33 jobs respectively. Despite the relatively large number of employees (105), the dependence estimate for Harris and Lewis (CalMac supports 1 in every 66 jobs) is smaller than on other islands because this is a much larger area with a population of 21,031. Table 9 - Local reliance on CalMac jobs, Comhairle nan Eilean Siar Barra - jobs at Cal Mac account for 1 job in every: 12 Harris and Lewis - jobs at Cal Mac account for 1 job in every: 66 North Uist - jobs at Cal Mac account for 1 job in every: 28 South Uist - jobs at Cal Mac account for 1 job in every: 33 Eriskay - jobs at Cal Mac account for 1 job in every: 16 Highlands The company s only significant employment on island communities in the Highlands is on Skye and Eigg. Skye is, in the present context, a relatively large island with a population of 10,008 and where CalMac has only 24 employees, so the estimate for dependency - jobs at CalMac account for only 1 job in every 154 is relatively small. However, the situation is very different for Eriskay which has a population of only 83 where CalMac supports 1 job in every 9 jobs through direct employment and associated employee spending. Table 10 - CalMac employment Direct Supported Total - Highlands Employment Employment Employment Skye Eigg Table 11 - Local reliance on CalMac jobs, Highlands Skye - jobs at Cal Mac account for 1 job in every: 154 Eigg - jobs at Cal Mac account for 1 job in every: 9

16 Ayrshire Table 12 details the position in Ayrshire CalMac only has island employees on Arran, and supports a total of 17 jobs on the island, an estimated 1 in every 120 local jobs (Table 13) Table 12 - Local reliance on CalMac jobs, Ayrshire Arran - jobs at Cal Mac account for 1 job in every: 120 Inverclyde Cal Mac s HQ is based in Inverclyde and the company is a major employer in the area Table 13 shows that it employs 169 people directly and supports the employment of a total of 262 local residents once the effect of wage spending by its employees is taken into account. Table 14 shows our estimate of its importance within the Inverclyde economy, that it supports 1 in every 136 local jobs Table 13 - CalMac employment Direct Supported Total - Inverclyde Employment Employment Employment Table 14 - Local reliance on CalMac jobs, Inverclyde Inverclyde - jobs at Cal Mac account for 1 job in every: 136 Further evidence of the importance of Cal Mac to the Inverclyde economy can also be shown from figures for Inverclyde 11. Chart 4 below shows one indicator of Inverclyde s performance in terms of unemployment despite a considerable narrowing from 2013, the unemployment rate in Inverclyde has consistently been higher than the Scottish average in recent years The figures in Chart 4 show the percentage of economically active residents who were unemployed. 12 We discuss Cal Mac s local spending at companies in Inverclyde below.

17 Unemployment Rate (%) 14 Chart 4 - Unemployment, Inverclyde, Scotland Inverclyde Scotland Source: National Online Manpower Information Statistics (NOMIS) Inverclyde s relatively poor economic performance also affects average pay in the area. Table 15 shows that it ranks 21 st out of 31 Scottish Local Authorities 13 and that average pay in Inverclyde is 12% below the Scottish average. Cal Mac data shows that the average pay for Cal Mac employees in Inverclyde is 30,660, around 36% above the Inverclyde average. For employees at the company s HQ in Gourock, Cal Mac estimates average pay at 35,060, 56% higher than in Inverclyde as a whole. Indeed, HQ employees earn 3.2% more than those employed in the highest paid areas of Scotland (Aberdeen City). 13 The data source did not report figures for one local authority (East Lothian).

18 Table 15 -Annual Pay, Local Authority Scotland (2104) Aberdeen City 33,973 City of Edinburgh 30,419 Glasgow City 27,244 South Ayrshire 26,157 Dundee City 25,571 Renfrewshire 25,491 Shetland Islands 25,298 North Lanarkshire 24,695 Aberdeenshire 24,343 Falkirk 24,084 Stirling 23,824 Midlothian 23,465 West Lothian 23,411 Argyll and Bute 23,388 South Lanarkshire 23,291 Highland 23,053 North Ayrshire 22,762 West Dunbartonshire 22,744 Perth and Kinross 22,705 Fife 22,642 Inverclyde 22,539 Dumfries and Galloway 22,531 East Dunbartonshire 22,267 Moray 21,807 Clackmannanshire 21,292 Orkney Islands 20,769 East Ayrshire 20,702 Scottish Borders 20,546 Angus 20,510 Eilean Siar 20,166 East Renfrewshire 19,138 Scotland 25,584 Source: Annual Survey of hours and earnings, 2014 (Table 7.7a Annual pay - Gross ( ) - For all employee jobs: United Kingdom, 2014

19 Orkney We estimate that the total of 112 jobs supported by Cal Mac (Table 15) on Orkney represents around 1 in every 100 local jobs (Table 16). Table 15 - CalMac employment Direct Supported Total - Orkney Employment Employment Employment Table 16 - Local reliance on CalMac jobs, - Orkney Orkney - jobs at Cal Mac account for 1 job in every: 101 Shetland Using a similar process, we calculate that the 20 Cal Mac jobs on Shetland support a total of 30.6 jobs once jobs supported by employee spending is taken into account, representing around 0.25% of all employment on Shetland.

20 Supplier Spending The analysis above estimates the employment supported by CalMac directly by CalMac employees and by employee wage spending. Additionally, the company will provide further support for local jobs local through its supplier spending. However, data was not available to allow us to estimate the employment on island communities supported by spending at suppliers. Table 17 below details some of the local communities where CalMac supports significant local spending. Table 17 - CalMac Supplier spending ( M) Local Areas Bute Mull Oban Lewis and Harris Barra Skye Supplier Spending in Inverclyde We were able to obtain more detail on Cal Mac s supplier spending in Inverclyde where its HQ is located. Total supplier spending in Inverclyde is estimated at million. A significant amount of this ( 18.9 million) is paid to Caledonian Maritime Assets Ltd (CMAL) and is spent on maintaining marine assets such as vessels and the land and property around piers and harbours. The remaining 4.03 million is spent at other local companies in 2014, Cal Mac purchased supplies from 49 firms based in Inverclyde. In total, Cal Mac injected more than 9 million ( 9.21 million) into the Inverclyde economy in 2014, including both wage payments to local residents and supply purchases from companies based in Inverclyde Excluding the 18.9 million paid to CMAL.

21 CalMac- Effect on Island Tourism Tables 18 and 19 below use another method of assessing impact, termed enabled impact. This method has been developed by the New Economics Foundation (NEF), who have employed it to assess the impact of the Crown Estate 15. NEF define enabled impact in terms of the activities carried out on the Crown Estate s properties by its customers and argues that the Estate therefore enables these activities to take place. An equivalent measure for CalMac would be the extent to which it enables tourists to travel to the islands. While it may be possible in some instances to argue about the validity of this measure for example, many of the Crown Estate s commercial activities could presumably take place elsewhere - CalMac clearly does directly enable tourism to the islands which it sails since the majority of travellers would be unable to visit the islands unless CalMac transported them. On many of the company s major routes, passengers are not required to state the purpose of their journey, and it was therefore not possible to obtain detailed figures on the number of passengers who use CalMac for tourist purposes. Cal Mac s own passenger data, however, suggests that tourists do account for a very significant proportion of all travellers. For example, Table 18 below shows one example of how passenger numbers varied by month in Assuming that January represents a low season figure for tourists while July is high season, it is very clear that a significant proportion of all passengers are visitors to the island passenger number in July are 541,236 more than in January, when Cal Mac carried more than four times as many passengers in July 16. Table 18 CalMac passenger numbers by month, 2014 January ,136 July , The Total Contribution of The Crown Estate 2011/12, Report on methodologies. New Economics Foundation (nef consulting), May Available at 16 We have obtained figures back to 2007, and the pattern shown in Table 18 is similar in all years. A similar picture also applies to the number of cars and coaches transported indeed, the number of coaches carried in July 204 was more than 11 (10.7) times greater than the number carried in January of that year.

22 Given, however, the uncertainty regarding the number of tourists, we have used what we fell is a very conservative assumption regarding the number of tourists, which is that only 30% of all Cal Mac passengers use the service for tourism. The estimates in Tables 19 and 20 are based on this estimate (that 30% of all passengers are tourists) and on visitor spending figures published by VisitScotland. 17, 18. The extent to which the tourist economy on the islands depends on CalMac is clearly very substantial, amounting to an estimated 3,247 jobs and over 53 million worth of wages. Table 19 - Employment in Tourism by CalMac - Island areas Enabled million Accommodation 1,214 Eating/Drinking out 748 Retail 694 Recreation/Culture 590 Total 3,247 Table 20 - Wages in Tourism Enabled by CalMac - Island areas million Accommodation 18.1 Eating/Drinking out 11.5 Retail 14.2 Recreation/Culture 9.6 Total VisitScotland, Key facts on tourism, available at 18 The estimates in Tables take account of both day-trippers and tourists who stayed on accommodation in the islands while visiting.

23 Performance Tables 21A and 21B below detail two measures of CalMac s recent performance. Table 21A details its time keeping record in 2013, during which time 86.4% of sailings arrived on time and 94% of sailings arrived within 15 minutes. Table 21B shows, also for 2013, that the majority of late sailings, an estimated 83.5%, occurred for reasons outwith CalMac's control, and were mostly due to weather-related problems. Table 21 A- CalMac Performance (2013) - Timekeeping 1-7 minutes late in arriving minutes late in arriving minutes late in arriving minutes late in arriving minutes late in arriving 0.1 Over 60 mins. late in arriving 0.2 Cancelled sailing 2.8 No delay (or arrived early) 86.4 Sailing returned to port 0.01 Diverted sailing 0.2 Additional sailing 1.3 Table 21 B - CalMac Performance (2013) - Reasons for delayed sailings Adverse weather 40.4 Late passengers or other traffic 18.1 Knock-on delay from extra sail 25.0

24 Other activities undertaken by CalMac Marketing and Sponsorship The extent to which CalMac enables tourism on the islands is discussed above. The company also supports Visit Scotland and local Destination Marketing Organisations (DMOs) with marketing activity designed to draw tourists to islands. Its main direct involvement is through direct sponsorship of local cultural events and its recent involvement has been its support for the Best of the West festival and its own CalMac Culture Music initiative. Best of the West is an annual event which takes place at Inveraray Castle and showcases local culture, hosting over 70 musicians, including local young talent, Gaelic musicians and local pipe bands. The festival also provides a platform for local food and drink specialities and the 2014 event featured over 20 whisky distilleries and local foods including Mull Cheese, Inverawe Smokehouse salmons, Loch Fyne Oysters and Bute jams and chutneys. CalMac has supported the festival for many years and took a silver package in CalMac Culture Music was initiated by CalMac in 2014, when it designed, alongside three local festivals (Hebridean Celtic Festival, Tiree Music Festival and the Best of the West festival), a showcase for new local musicians who would be given a half hour slot on a secondary stage at each festival. YouTube viewers were then encouraged through CalMac s social media channels to vote on their favourite performer, who could then win a chance to perform at King Tut s in Glasgow, and then perform at the each festival. The initiative was designed as a platform for island culture and was promoted in 483 music establishments throughout the central belt and received coverage in 28 local newspapers in Scotland. CalMac also set up a CalMac Culture channel on YouTube ( Support for wider ferry infrastructure CalMac advises Transport Scotland on a variety of fares issues and has also undertaken research on behalf of Transport Scotland. The company has also provided a variety of reports for Caledonian Maritime Assets Ltd, which maintains the port and harbour infrastructure in the west coast of Scotland and the Clyde Estuary. CalMac has provided information on traffic management plans, berthing arrangements and navigational risk and is scheduled to report an appraisal of required long-term port infrastructure and is currently leading an appraisal of longterm vessel replacement needs. CalMac has also provided information to support the Scottish Governments Ferries Plan on issues including integrated ticketing, and timetables.

25 Customer support and consultation CalMac is required to consult with communities and attends all Hi-Trans (Highlands and Islands Transport Partnership) user groups as well as other significant consultation with community, council and other ferry groups. It has also operated a significant number of additional non-timetabled sailings to meet demand, including over 1,000 additional Cumbrae sailings. It works alongside the CFL the Transport Scotland resilience team to provide assistance in cases of emergency. The company has also supported commercial activity on the islands by creating travel products alongside island - based partners, and helped promote these to travel companies. Training and Apprenticeships CalMac operates two apprenticeship programmes, the Cadet and Rating Training Programmes. Apprentices are deck and engine apprentices, and CalMac currently has 20 people in this category. Training involves both college and seagoing aspects. Cadets are officer rating trainees, and are not employed by CalMac, but are sponsored by CalMac through a tripartite agreement with Clyde Marine and Northern Marine in Clydebank. Cadets undergo a three - year training programme, involving both college and sea training. CalMac sponsors 15 cadets per year and so will sponsor 45 cadets at any one time. The Royal National Mòd Finally, a key aspect of CalMac local contribution is its support for the Royal National Mòd. The Mòd is organised by An Comunn Gàidhealach, which since 1891 has supported the teaching, learning and use of the Gaelic language and the study and cultivation of Gaelic literature, history, music and art. Through the the Royal National Mòd and a network of provincial Mòds, An Comunn Gàidhealach supports the development of the Gaelic language, culture and heritage at local, national and international levels. Caledonian MacBrayne has a long association with Mòd and has been its principal commercial supporter since Several trophies have been awarded in CalMac s name over the years, most notably the CalMac Cup for junior choirs. The Mòd also has a significant economic impact in the area where it takes place, with an evaluation of the 2014 Mòd in Inverness suggesting that it may have created as many as 135 jobs.