28th September 2020

At what point in the size of communities do desirable services and commodities become unrealistic?  There IS a finite point and Chris Brock has turned his data spotlight on to what is possible, rather than merely desirable. This is an extract of his findings with the full report available on his criticaleconomics.com site

What constitutes the ‘ideal island’ in terms of: land area, population levels, economic profile, social infrastructure and wellbeing, fiscal performance and climate. This question is impossible to answer but while all islands experience varying degrees of isolation, some island communities have a distinct advantage over others purely because of their critical mass and their ability to benefit from economies of scale. 

These scenarios equally apply to the Channel Islands which has an overall population of 173,000 and where total public sector operational expenditure is well in excess of £1 billion annually. This is in addition to some very costly capital infrastructure projects which are either in the pipeline or being considered (e.g. new hospital facilities, secondary schools, airport rehabilitation, etc.). The archipelago also comprises four main islands only a very short distance apart, each with a separate government structure and constitution but with populations ranging from 108k down to 500. 

This summary paper is designed to be thought-provoking by highlighting current issues facing the Channel Islands and where the adoption of ‘economies of scale’ policies would be most appropriate across all of the islands in meeting these challenges. Above all, the primary objective is to engender rational debate rather than ‘sparking’ inter-island rivalries and competing agendas. 

In an island context, critical mass is defined as the minimum level that an island’s population needs to be viable and financially self-sustaining. Above all, the island’s very existence should not be reliant on external support from a neighbouring island or country. When an island reaches this critical mass, a decision needs to be taken on whether: 

it should pursue further, perhaps unsustainable, economic growth to provide ever-increasing levels of service with associated costs, or whether: 

it should focus on following a sustainable economic track with affordable on-island services. 

Key Historical Lifecycle Factors 

A rebuilding of the economic and social infrastructure after the end of the Second World War led to a transformation of the Channel Islands as compared to pre-war conditions. Rapid growth in tourism, horticulture and agriculture attracted net immigration made up of both returning islanders and new residents. 

In the 1950s and 1960s, tourism, in particular, benefited from the expansion of the UK holiday market, greater affluence generally, and cheap travel options available to British Rail employees and their families. (At the time, UK/CI passenger ferry services were owned and operated by British Rail – a public sector organisation). In addition, CI population levels, as in the UK, were also further enhanced by the immediate post-war boom in birth rate. 

It was from the early 1970s onwards that things started to diverge between the islands. Therefore, 1971 is used as a benchmark year (immediately prior to the UK joining the European Economic Community (EEC)). This divergence was primarily driven by different economic factors and policies adopted by each of the Channel Islands. 

Over the last half century, there have been some major events which have impacted both positively and negatively on the Channel Islands. The rate of change in population growth between the islands since 1971 can be viewed as an indicator of key economic and social circumstances at the time. 

Key Impact Factors Population Change 

In 2019, the Channel Islands population stood at 173,000, a 40% increase over 1971. The population distribution between the islands has also changed significantly with 62% (56% in 1971) of the total now residing in Jersey, 37% (42% in 1971) in Guernsey, and 1% (2% in 1971) in Alderney and Sark. Jersey’s current population is 55% greater than it was in 1971 (+38.5k people) while Guernsey’s population is 23% larger (+11.7k people). There has been no real change in the population levels of Alderney and Sark now as compared to 1971 albeit the population in these islands did increase during the 1970s and 1980s only to decline since the turn of the millennium.

Challenges and Opportunities Examples 

Ageing Population: Resource Demands. The number of people aged over 80 in the Channel Islands will treble (from 8k to 20/25k) over the next 20 years. This will significantly increase health costs and impact immensely on CI resources as a whole with a real danger of service duplication in each island. Another factor which is often overlooked is the need for carers which will draw economically active residents away from the work environment. A pan-CI strategy solution is only common sense. 

Future Delivery of Education and Training

In terms of vision, there could well be a time when the traditional school model will change and the use of remote learning will become the norm with schools being gradually replaced by centres for ‘soft skills’ training. Such a change would justify a common approach across the Channel Islands particularly in the provision of e-learning facilities. 

Pan-CI Flexible Employment Pool 

The COVID Pandemic will only hasten changes in work practices and lifestyle choices, let alone the growth of artificial intelligence which will impact on all the islands both positively and negatively. This is arguably one the most important areas which should be dealt with on a pan-CI basis. A policy of the free movement (physically and virtually) within the CI of economically active persons should be given real thought. 

Climate Change and the Environment 

The ever-pressing demands of climate change issues have not diminished in any way. Again, the ramifications on the Channel Islands are significant. Three obvious impact areas are sea level rise (storm surges and flooding), water supply security, and CO2 emissions policy. Again, a common pan-CI strategy only enhances the reputation of the CI in being seen as working as one.

Find out more on CRITICAL ECONOMICS: www.criticaleconomics.com