Please find below the recent Labour Market Analysis of Scottish New Towns by
Alex Morton, Senior Policy Advisor, Enterprise Resources - Strategic
Services, South Lanarkshire Council, Scotland.
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SCOTTISH NEW TOWNS LABOUR MARKET ANALYSIS

A report by Strategic Services Section, South Lanarkshire Council

1. Background
1.1 In 1996, at the time of re-organisation of local government in Scotland,
the five New Town Corporations in Scotland were also formally wound up.
These operated in Cumbernauld, East Kilbride, Glenrothes, Irvine and
Livingston.
1.2 This report looks at the trends in the labour market in these areas in
the run up to their dissolution and since then. The old Development
Corporations used to maintain significant economic monitoring systems but
these all ceased to operate when they were wound up. As a result, this
report uses official information that is readily available.
1.3 The council areas that the New Towns were in – North Lanarkshire, South
Lanarkshire, Fife, North Ayrshire and West Lothian – were approached and
geographical definitions of the areas of the respective New Towns were
agreed using the 1991 District Wards.
1.4 Employees in employment data from 1984 to 1997 were used, as was
claimant unemployment data for the period 1991 to 1998. It was not possible
to go back further in time due to the inability to get small area
information prior to these dates.
1.5 In the time available, it has not been possible to adjust the figures
for changes in official methods of collecting employment and unemployment
data during these periods. As a result, the interpretations contained in
this report should be viewed as indicative of trends rather than of actual
changes of the size described.

2. Summary of Findings
2.1 Taking the New Town’s together, then since dissolution, in employment
terms, they have continued to create more employment opportunities than
Scotland as a whole. In unemployment terms, the situation is more complex.
Unemployment differentials have narrowed, and more of Scotland’s unemployed
live in these areas than in the past. This reflects both a younger age
profile and higher economic activity rates in these areas creating a
relatively greater labour supply.
2.2 However, the analysis suggests that the momentum of the New Towns as
‘growth poles’ in the West of Scotland was seriously effected by the
dissolution of the New Towns Corporations in April 1996. Since then, in both
employment and unemployment terms, the three Western Scotland New Town
areas, in general, have under-performed in comparison to Scotland as a
whole.
2.2 In the case of Livingston and Glenrothes, the situation is one of
continuing faster employment creation and a decline in unemployment greater
or near to the Scottish average.
3. Trends in Employee jobs

3.1 In 1984, New Towns accounted for 4.6% of Scotland’s total employee in
employment jobs – 87,420 jobs in total. They accounted for 5.6% of its
Industrial jobs (Manufacturing, Construction and Energy production) and 4.2%
of its Service employment. For Manufacturing alone, their share was 7.2%.
3.2 In 1995, the year before they were wound up, their share of total
employee jobs was 5.4%, with their share of Industrial employment being
8.5%, and of Service’s employment being 4.5%. Their share of Scotland’s
Manufacturing employment was then 11.2%
3.3 By 1997 – the latest date for which information is available, the former
new Towns accounted for 5.5% of all Scotland’s employee jobs, 8.6% of its
Industrial employment and 4.6% of its Service employment. In terms of
Manufacturing employment their share was 11.4%.
3.4 Table 1 shows the numbers in Total, Industrial, Services and
Manufacturing employment in Scotland and the New Towns as a whole, as well
as the percentage change over the 1984-95 and 1995-97 period.
Table 1: Employees in Employment – 1984, 1995 and 1997

1984 1995 1997 1984-95 1995-97
Total
Scotland 1,903,863 1,998,636 1,963,384 +5.0 -1.8
New Towns 87,420 107,790 109,015 +23.3 +1.1

Industrial
Scotland 637,781 479,128 472,542 -24.9 -1.4
New Towns 35,701 40,905 40,793 +14.7 -0.4

Services
Scotland 1,229,408 1,480,271 1,478,534 +20.4 -0.1
New Towns 51,319 66,707 68,165 +30.0 +2.2

Manufacturing
Scotland 433,708 321,207 322,067 -25.9 +0.3
New Towns 31,426 36,077 36,580 +14.8 +1.4

3.5 As the above table shows, overall during the earlier period – 1984 to
1995 – the New Towns as a whole ‘out-performed’ Scotland by a factor of
nearly 5 times (+23.3% compared to +5%).
3.6 This better performance was led by the Industrial (and within it
Manufacturing) sector. Manufacturing employment grew by +14.8% compared to a
fall of –25.9% in Scotland as a whole. Service employment showed the largest
percentage increase in both the New Towns as a whole and in Scotland. In
grew in the New Towns by +30% compared to a +20.4% increase in Scotland as a
whole.
3.7 To some extent this faster growth reflects the continuing efforts of
inward investment promotion agencies encouraging investment and
re-investment in the New Towns during this period. It may also reflect the
population characteristics - and the population growth - of the New Towns,
which are generally younger and attracting service provision
3.8 Over the 1995-97 period, whilst total employment fell in Scotland as a
whole (by –1.8%), it grew overall in the New Towns by +1.1%. Industrial
employment fell in both the New Towns and Scotland as a whole, but the
decline in the New Towns was less than a third of the Scottish decline.
3.9 Within the Industrial sector, Manufacturing employment grew in both
Scotland and the New Towns, but the rate of growth in the New Towns was
nearly five times that in Scotland as a whole.
3.10 In terms of Industrial employment, the changes here reflect, in the
main, declines in Construction employment. This decline was more than
sufficient in the New Towns as a whole, to offset the growth in the
Manufacturing element of Industrial employment.
3.11 This fall may be as a result of construction activity running down as
the Development Corporations ceased their investment plans, but it may also
reflect a more general decline in construction investment since the areas
lost their New Town status.
3.12 Service employment grew by +2.2% in the New Towns between 1995 and
1997. This compares with a –0.1% decline in Scotland as a whole.
3.13 Looking at the trends in each of the New Towns individually shows a
more complex pattern. Table 2 shows the percentage change in Total
employment experienced as a whole and for each New Town over the 1984-95 and
1995-97 periods.
3.14 As this table shows, over the earlier period, all the New Towns
experienced significant overall job growth, ranging from +50% in Livingston
and +43.3% in Cumbernauld to +20.1% in Irvine and +14.2% in East Kilbride.
However, the job growth in Glenrothes, at 3.7%, was actually below the
Scottish average. This was the only New Town with a smaller employment
growth than in Scotland as a whole.



Table 2: Percentage change in Total employee jobs 1984-95 and 1995-97

1984-95 1995-97
SCOTLAND +5.0 -1.8
NEW TOWNS +23.3 +1.1

Cumbernauld +43.4 -9.5
East Kilbride +14.2 -5.5
Glenrothes +3.7 +11.1
Irvine +20.1 -1.4
Livingston +50.0 +14.1

3.15 Over the 1995-97 period, the situation has changed. Only in Livingston
and Glenrothes has employment continued to grow – by +14.1% and +11.1%
respectively. This compares with a fall in employment in Scotland as a whole
of –1.8%.
3.16 In the West of Scotland New Towns, total employment fell during this
period. In the case of East Kilbride and Cumbernauld, the fall in employment
of –5.5% and –9.5% was significantly higher than in Scotland as a whole.
Irvine’s fall of –1.4% was below the national decline of –1.8%.
3.17 In the case of Cumbernauld, employment in all sectors – Manufacturing,
Industrial and Services – has declined over the 1995-97 period. Industrial
employment has fallen by –25%, and Services employment by –0.9%.
Manufacturing employment fell by -22% over this period.
3.18 In East Kilbride, the same situation occurred, with its Industrial
employment falling by –11.8% and Service employment falling by –1.4%.
Manufacturing employment fell by –9.3%.
3.19 In Irvine, Industrial employment only fell by –0.2% (and Manufacturing
employment actually grew by +0.5%). Service employment fell by –2.3%, the
largest percentage fall in each of the New Town areas.
3.20 In Glenrothes, employment grew in all sectors, with Industrial
employment growing by +22.9% and Services employment by +2.1%. Livingston
saw its Industrial employment grow by +16.3% over the 1995-97 period and its
Service’s employment by +13.1%. Manufacturing employment grew by +23.9% in
Glenrothes over this period, and by +15.7% in Livingston.


4. Trends in Claimant unemployment

4.1 Small area unemployment information only really became readily available
with the introduction of the claimant unemployment statistics in late 1982.
During the 1980s, there were a number of changes made to the regulations
governing eligibility to claim the then Unemployment Benefit. Data at a ward
level also only became available much later.
4.2 This analysis has been undertaken using claimant unemployment annual
averages from 1991 to 1998. Unemployment rates have been calculated for the
New Towns by dividing the number of resident claimants by the economically
active population of the area taken from the 1991 Census of Population.
4.3 In 1991, just over 5% (5.02%) of Scotland’s claimant unemployed lived in
the New Town areas. This increased to 5.24% in 1992, before falling to a low
of 4.83% in 1995. Since then, it has been increasing and by 1998, the former
New Town areas accounted for 5.34% of Scotland’s unemployed – their highest
percentage ever recorded in the 1990s.
4.4 Although claimant unemployment is dominated by men – with on average
over three-quarters of claimants being men – the New Towns actually have a
greater proportion of Scotland’s female claimants than of male claimants in
every year. During the 1990s, their share of Scotland’s female unemployed
was always over 5% - reaching a low of 5.16% in 1995, and peaking at a 5.74%
share in 1998. In over half the years, their share of male unemployed was
under 5% - with its low point being a 4.73% share in 1995, and its high
being a share of 5.22% in 1998.
4.5 This difference may well reflect the greater job opportunities for women
in the New Towns compared to Scotland as a whole, and therefore a greater
opportunity for them to be eligible for benefit should they become
unemployed.
4.6 In terms of unemployment rates, the overall rate for the New Towns is
close to the Scottish average. Over the whole period, the rate was lower in
4 years and higher in 4 years. For women, the unemployment rate was higher
in every year, with a marked differential in the relative situation
appearing in 1996.
4.7 For men, the unemployment rate was lower in every year except 1992. It
experienced a relative decline between 1992 and 1995, but since then the gap
has narrowed, with its 1998 relative figure being the highest since 1993.
4.8 Over the 1991-98 period, the number of claimant unemployed fell by
-31.6% in the New Town areas. This was below the Scottish decline of –35.8%.
4.9 Between 1996 and 1998, unemployment has continued to fall in both the
New Town areas and in Scotland as a whole, with the decline in the New Town
areas being less than in Scotland as whole – falls of –25.1% compared to a
Scottish decline of –27.5%.
4.10 Table 3 shows the unemployment rates for the combined New Towns and
Scotland, the relative rate and its share of the overall total between 1991
and 1998.
Table 3: Annual average claimant unemployment figures

Scottish rate New town rate Relative rate Number of New Town
claimants Share of unemployed
1991 8.8 8.6 97.7 11,050 5.02
1992 9.5 9.8 103.2 12,635 5.24
1993 9.8 9.8 100.0 12,684 5.15
1994 9.4 8.9 94.7 11,464 4.95
1995 8.1 7.6 93.8 9,287 4.83
1996 7.8 7.8 100.0 10,088 5.17
1997 6.6 6.3 95.4 8,093 5.07
1998 5.8 5.8 100.0 7,553 5.34

4.11 Looking at the situation for each of the individual New Town areas,
again shows significant differences between them. Table 4 shows summary
information for each New Town in 1991, 1996 and 1998, and the percentage
change in total claimant unemployment over the 1991-98 and 1996-98 period.
The Scottish averages are also shown.
Table 4: Claimant unemployment rates and percentage changes

1991 1996 1998 1991-98 1996-98
Scotland 8.8 8.1 5.8 -35.8 -27.5
New Towns 8.6 7.8 5.8 -31.6 -25.1
Cumbernauld 7.9 6.6 5.4 -31.6 -18.4
East Kilbride 7.4 6.7 4.3 -41.2 -32.5
Glenrothes 7.8 8.9 6.5 -16.1 -26.8
Irvine 11.1 10.0 8.3 -25.6 -17.4
Livingston 8.7 7.7 5.2 -40.7 -33.0

4.12 Over both of the period being analysed – the 1991-98 and 1996-98
periods – the declines in claimant unemployment in both East Kilbride and
Livingston were greater than in Scotland as a whole. Over the whole period
the decline was around 5 percentage points faster, and over the shorter
period, it was around the same for East Kilbride but nearer six percentage
points in the case of Livingston.
4.13 East Kilbride’s unemployment rate has been below the national average
throughout the period, and the gap has widened steadily since 1992. Then it
was 90% of the national average, but by 1998, it was less than 75% (74.7%)
of the national average.
4.14 In the case of Livingston, its unemployment rate was above the national
rate in 1992 –when it was nearly 5 percent above the national rate – and has
declined but not as significantly as in East Kilbride. It remained around
the 94% of the national rate for the 1993-95 period, but by 1997 it was down
to only 86.4% of the national rate. In 1998, it had, however, come closer to
the national average (at 89.2%). This was still its second best relative
position during the 1990s.
4.15 In the case of Cumbernauld, its unemployment rate was below the
national rate throughout the period. It reached a relative low in 1995, when
it was just 82% of the national rate. Since then it has increased steadily,
so that by 1998, its unemployment rate was 93% of the national rate (5.4% as
compared to 5.8%). This is its highest relative position since 1992. Whereas
over the entire period, its fall in unemployment was only just over 4
percentage points lower than the national decline, over the 1996-98 period,
this difference grew to be over 9 percentage points.
4.16 Whilst across the entire period, the decline in Glenrothes’s
unemployment was the lowest of any of the New Towns at just -16.1% (less
than half of the national decline of –35.8%). However, between 1996 and
1998, its unemployment decline of 26.8% (although still below the national
average), was significantly closer to the national average of 27.5%.
4.17 Throughout the early 1990s, the unemployment rate in Glenrothes was
below the national average, reaching a figure of only 83.6% of the national
rate in 1995. Since then, the relative position has worsened so that in
1998, its estimated rate of 6.5% is some 12% higher than the national rate
of 5.8%.
4.18 In Irvine’s case, its unemployment rate has always been above the
national average, and the highest for any New Town area. In both 1992 and
1993 it was over a third higher than the national rate. Its low point was in
1994, when it was only just under a quarter higher than the national rate.
Since then, its relative position has worsened so that in 1998, its
unemployment rate was 43% higher than the national rate (8.3% compared to
5.8%).
4.19 Over the entire period, claimant unemployment has fallen by –25.6% in
Irvine, over 10 percentage points lower than the national rate (-35.8%).
Over the 1996-98 period, its decline in unemployment was again around 10
percentage points lower than the national decline.


A Morton / A Lambie
Strategic Services, Enterprise Resources
South Lanarkshire Council
December 1999

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