Moray can fulfil its economic potential

Bow Fiddle Rock, one of Morays tourist attractions. Picture: Contributed

Nestled between vast tracts of rich Aberdeenshire farmland and huge, rugged Highland landscapes, Moray might appear geographically limited.

But what it lacks in space it more than makes up for in global reach.

The River Spey runs through it, providing clean, pure water for the whisky that is exported to every corner of the world from Speyside’s 84 distilleries, including Glenlivet, Glenfiddich, Macallan and Benromach.

Moray is also internationally renowned for its food production – Baxters and Walkers Shortbread are among its iconic brands.

Until recently, the third leg of Moray’s economic triumvirate was defence. What was later to become RAF Lossiemouth was built just before the Second World War and became a training base for RAF Bomber Command, including the famous Dambusters squadron. Westward along the coast, RAF Kinloss opened in 1939 as a pilot training school.

The bases employed thousands of people directly and required a plethora of support services, which in turn meant many more jobs.

But under severe financial pressure following the financial crisis, in 2010 the Ministry of Defence (MoD) took the Nimrod MR2 aircraft which operated from Kinloss out of service and cancelled plans for its replacement, the MRA4.

Kinloss closed down as an RAF base in July 2012. RAF Lossiemouth was spared and will this year become home to three squadrons of Typhoon aircraft.

The closure of Kinloss, with the loss of 2,500 jobs, fell like a sledgehammer on the Moray economy.

Yet the blow was softened by some quick forward thinking and the formation of a successful public-private partnership designed to harness skills, create new businesses and jobs and even push up wages in Moray. That partnership is the Moray Economic Partnership (MEP), which evolved in June 2011 from the Moray Task Force which had been formed to fight the MoD’s proposals.

The MEP consists of Moray Council, Highlands and Islands Enterprise, Moray College UHI, Skills Development Scotland, Moray Chamber of Commerce, NHS Grampian, Highlands and Islands Transportation Partnership, Cairngorms National Park Authority and the Moray Strategic Business Forum.

The partnership has set itself formidable long-term goals: diversifying the Moray economy and making it less reliant on defence, whisky and food; increasing the local population; creating more high-quality jobs; retaining more young people in the area; and increasing wage and salary levels.

However, the early results are very promising. Historically quite low, wages have risen slightly in real terms in recent years.

And relative to other areas of the country, according to the GMB union, Moray has done very well, with average earnings increasing in real terms by 1 per cent since 2008, while falling by 13.8 per cent across the UK as a whole.

Business growth has also been strong. By the end of the first half of this financial year, 71 new businesses had been created and if, as expected, that growth rate is maintained, Moray is on course to have more than 140 new businesses in 2013-14.

That’s up 16 per cent on last year and the year before. In 2011-12 there were 120 new businesses and in 2012-13, there were 123.

Most gratifyingly, two-thirds of new Moray businesses survive beyond 12 months – compared to just one in five across the country as a whole.

When it comes to demographics, the population of Moray is predicted to rise from just under 88,000 in 2010 to almost 97,000 by 2035. Within that, there is expected to be a slight rise in the number of people in the 16-29 age group.

The MEP recognises that to achieve further success Moray will need to raise its game on tourism, life sciences, digital health services, energy and business services. Different teams of experts have been formed to drive improvements in tourism and culture, transportation, skills and training, inward investment and business growth and development.

With Aberdeen’s economy overheating, the MEP has already achieved notable inward investment successes such as Electro-Flow Controls (EFC), which produces instrumentation, monitoring, handling and control systems for the oil and gas industry.

The company is already moving to larger premises at the Enterprise Park in Forres. Visitors to the company’s website are asked: “Tired of the commute? Want to work locally in Forres and still earn Aberdeen wages? EFC has the answer.”

While there is obviously a long way to go, it is clear that the concept of public-private partnership has worked for Moray in staving off the potentially disastrous impact of the closure of RAF Kinloss and laying strong foundations for a more diverse economy in the years ahead.

• John Cowe is chairman of Moray Economic Partnership