New study highlights need for Government to continue economic growth funding for Cornwall

The economy of Cornwall and the Isles of Scilly has outgrown other comparable UK regions thanks to the impact of economic growth investment since 1998 according to new research.

The independent study, conducted by South West-based consultants Ash Futures, shows the local economy is now £2.1 billion larger than if it had followed comparable growth rates.

It evaluates the impact of public investment initiatives leading up to the current Shared Prosperity Fund aimed at boosting economic development in Cornwall and Isles of Scilly, and benchmarks the region’s performance against other UK areas.

Key findings show that between 1998 and 2022, the Cornwall and Isles of Scilly economy grew by 68%, far surpassing the 42% growth seen in comparable regions and the 49% growth of the overall UK economy during the same period. 

The region’s economy was valued at £13.9 billion in 2022 – £2.1 billion higher than if it had grown at the same pace as other comparable areas.

For the past 25 years, Cornwall and Isles of Scilly have benefited from successive public investment programmes designed to uplift its historically low economic base and support its transition into a sustainable high-growth, high-value economy.

The latest initiative, through the Shared Prosperity Fund, has allocated £137 million over three years starting in April 2022, and is being managed by Cornwall Council through its Cornwall and Isles of Scilly Good Growth Programme.

The new research highlights that regional economic funding for Cornwall and Isles of Scilly has delivered significantly greater value than in comparable areas receiving similar support.

While productivity in Cornwall and Isles of Scilly still lags behind the UK average, between 1998 and 2022 the region outperformed comparable areas in terms of employment, Gross Value Added (GVA), and productivity growth.

Key statistics from the study include:

• Growth: CIoS economy is £2.1bn bigger than it would have been due to public investment into local growth. Over the period 1998-2022 strategic use of public funding for economic development has resulted in impressive growth of the CIoS economy. Our performance is significantly over and above that of comparator areas (jobs, GVA and productivity). 
• CIoS’s growth over that time as a recipient of the highest level of support from growth funding has been 68% against a national growth figure of 49%.
• Employment growth: 19.5% in Cornwall and Isles of Scilly compared to 12.2% in comparator regions and 17.1% for the UK as a whole. This equates to about 16,500 more jobs in Cornwall and Isles of Scilly than if it had grown at the same rate as comparable areas.
• Productivity: Cornwall and Isles of Scilly’s productivity now stands at 76.6% of the UK average, compared to 75.3% if we had grown at the same rate as similar regions.
• GVA per filled job is £820 higher than it would have been and has seen faster growth than transition regions and helped hold our position against the UK average

These findings come as the government prepares to announce a new local growth funding mechanism, with more details expected in the autumn Budget on October 30. Local leaders and businesses are calling for a £133 million annual investment program to maintain the momentum of the Cornwall and Isles of Scilly economy, protect and build on successes to date and avoid a “cliff edge” when current funding ends in March 2025.

Cllr Louis Gardner, Cornwall Council’s portfolio holder for the economy, said: “This study clearly shows that between 1998 and 2022, the strategic use of public funding for economic development has led to impressive growth in Cornwall and Isles of Scilly, well above that of similar regions.

“We urge the government to continue nurturing these green shoots of growth and help us unlock Cornwall’s full potential as a key player in reshaping the UK economy through developing new technologies, skills and training, driving quality employment and supporting strong local communities.”

ENDS

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