Loch Eriboll Harbour Development Business Case

Jim Bennett

Shona Sinclair

Annie Tunnicliffe

Revised, 16th November 2014

Contents

1.0  Summary

2.0  Introduction

3.0  Background

3.1  An overview of Durness

3.2  The Development Group, its Structure and Leadership

3.3  History and Past Performance

4.0  Vision, Values and Objectives

5.0  Policy Landscape & Market Analysis

5.1  Policy Landscape

5.2  Market Analysis

5.2.1  Leisure Boating, Tour & Cruise Boats

5.2.2  Fishing

5.2.3  Pelamis

5.2.4  MoD & Service vessels

5.2.5  Cruise Ships

5.2.6  Ancillary Services

5.2.7  Comparator harbours

5.2.8  Café (& Micro-brewery/distillery)

5.2.9  Culture & Heritage

6.0  Loch Eriboll Harbour Plan

6.1  Background and Vision

6.2  Options Appraisal

6.3  Plan detail

6.4  Capital Costs

6.5  Financing the Plan

6.6  Implementation Mechanism

7.0  SWOT Analysis

8.0  Impacts

8.1  Economic

8.2  Social

8.3  Environmental

9.0  Financial Summary

10.0 Appendices

10.1  Bibliography

10.2  List of Consultees

10.3  Review of Previous Work

10.4  Policy Background on Rurality

10.5  Café & Micro-Brewery/Distillery

10.6  Pelamis Background Paper

10.7  Market Research Background Paper

10.8  Culture and Heritage Research Paper

10.9  Financial Forecasts

10.10  Impacts summary Paper

10.11  Architectural Plans

1.0  Summary of the Durness Development Group Business Plan for a Harbour at Loch Eriboll

Introduction & Background

This document sets out The Durness Development Group’s business case for the establishment of a community owned harbour at Loch Eriboll. The plan builds on a number of years work by DDG and previous input of specialists. The plan is to build a harbour which will provide an integrated approach to social and economic development in the parish. The project will tackle the issues of isolation, de-population, an aging demography and limited business base by establishing a harbour business which will act as an anchor for the economic and social development of the area.

The harbour will

·  accommodate fishing, aquaculture, leisure and supply craft

·  provide associated shore based buildings will provide a café & facilities for visiting leisure craft (and potentially a micro-brewery/distillery in the future)

·  create nine local jobs, provide additional training opportunities to the local community, and

·  develop community owned and run assets that will deliver economic and social benefits to the parish.

Vision, Values and Objectives

Vision / Ensuring a growing, happy and sustainable community in Durness Parish.
Aims / To provide economic opportunity / To ensure social development / To protect and enhance the environment
Objectives / To establish a harbour at Port Chamuill, Loch Eriboll, which will support fishing, aquaculture, leisure and supply craft. / To establish and maintain a Heritage facility at the harbour in order to maintain and develop local cultural and linguistic heritage / To integrate immediately adjacent rock into the harbour construction
To establish a café (with potentially a micro-distillery/brewery as a destination venue). / To establish and maintain a cafe facility integrated into the harbour provision. / To source and utilise local produce for use in the café.
To provide toilet/shower provision for leisure craft users. / To provide opportunities for vocational training for local young people in order to stem out-migration / To integrate green functioning into construction undertaken
To create a minimum of nine permanent, additional jobs / Develop a demographically balanced community safeguarding the future of the primary & secondary schools / Act as a demonstration project promoting renewables & energy efficiency
To increase the asset base, turnover and profitability of DDG / Ensure that the harbour is equal opportunities compliant promoting equal access for all / Utilise local food in the café and support a local food supply chain.

Market

In our Market Analysis section, we outline a business based on the following market segments:

Leisure Boating, Tour boats & Cruise Ships; Fishing & Aquaculture; MoD & Service vessels; Ancillary Services and Culture & Heritage provision. In determining our market, we have:

·  Conducted a structured survey with marine based businesses in Durness

·  Conducted a structured survey with leisure boat owners in Durness

·  Obtained detailed information from industry specialists

·  Spoken with comparator harbours

·  Discussed our plans and sough opinion from the Crown Estates Commission, HIE, Highland Council and the Highlands Harbour Manager

·  Completed research for the proposed cafe

·  Reviewed relevant industry literature

Impacts

We outline the economic, social and environmental impacts of our proposals not least of which is the creation of nine local jobs.

Financial Summary

Proposed Funding Plan for discussion with potential funders:

Item / Funder / Amount
Planning & Design / HIE/Trusts / £125000
Project Management / HIE/Trusts / £34192
Breakwater etc. / HIE / £1000000
Breakwater/Cafe etc. / Coastal Communities Fund/BLF GCA / £1500000
Breakwater etc. / ERDF / £1500000

Revenue Calculations

Loch Eriboll Harbour Forecasts
Ending / Income / Expenditure / Surplus/deficit / Grants
Total
2017 / 144,356 / 144,350 / 6 / 144,356
2018 / 4,023,600 / 4,022,762 / 838 / 4,023,600
2019 / 139,571 / 129,390 / 10,181 / 0
2020 / 142,985 / 139,483 / 3,502 / 0
2021 / 157,244 / 142,968 / 14,276
Totals / 4,167,956

Funding is being sought to contribute towards the capital costs of the project and to fund the design and project management of the build.

2.0  Introduction

This document sets out The Durness Development Group’s business case for the establishment of a community owned harbour at Loch Eriboll. The plan is to build a harbour which will provide an integrated approach to social and economic development in the parish. The project will tackle the issues of isolation, de-population, an aging demography and poor business base by establishing a harbour business which will act as an anchor for the economic and social development of the area.

The plan is to provide a harbour which will accommodate fishing, aquaculture, leisure and supply craft. Associated shore based buildings will provide leisure craft facilities, a café and potentially a related micro-distillery/microbrewery. The development will create 9 local jobs (excluding those potentially to be created by a micro-distillery/brewery), provide additional training opportunities to the local community and develop a community owned and run assets that will deliver economic and social benefits to the parish.

It was planned to build an adjacent pontoon system to act as a Forward Operating Base for the wave energy company, Pelamis. However, Pelamis went into receivership coinciding with the final draft of the initial business plan in 2014. With the demise of other wave energy companies since, it was found to be unlikely that a major operator such as the former Pelamis would locate a similar facility at Loch Eriboll.

Funding is being sought to contribute towards the capital costs of the project and to fund the design and project management of the build.

3.0  Background

3.1  An overview of Durness

Durness lies two and a half hours north of Inverness on the North West edge of Scotland. The parish of Durness comprises of a string of hamlets from Hope in the East to Gualin. Loch Eriboll lies 3 miles east of Durness, adjacent to the hamlet of Laid. Durness sits in the North, West and Central Sutherland Ward, which is a sparsely populated area, with 1.1 people per hectare (pph) in 2001. This compares with a population density of 8.4pph in Highland, and 67.4pph in Scotland as a whole.

Durness Data Zone and Community Council map:

·  Durness and Loch Eriboll is a sparsely populated area, with an ageing and declining population.

  • The population predicted to decline by c. 7% over the next 20 years[1].
  • Compared to Scotland, the Durness datazone had a slightly higher proportion of children (19% compared to 17%), and a significantly higher proportion of people of pensionable age (26% compared to 20%), in 2011. The proportion of the population in Durness who were of working age, however, was considerably lower than for Scotland (55% as opposed to 63%).

·  In 2011 there were 230 households in the Durness data zone. Just over 16% of these were living in private rented accommodation, which is double the figure for Scotland (8%). The social rented sector is less prevalent in Durness, at 17%, compared to Scotland (29%). This pattern of tenure would suggest there may be more issues around fuel poverty and poorer quality housing, as these tend to be more common in the private rented sector.

  • There are 17 children in local primary school. Kinlochbervie High School serves the North West Sutherland corner: Scourie, Kinlochbervie and Durness.

·  Employment in this area is very reliant on a land based and tourism economy, nearly one fifth of the population working in food service and accommodation provision.

·  The traditional fishing industry in Northern Scotland is in decline.

·  Average earnings are lower than Highland averages and considerably lower than national averages.

·  Living costs are up to 40% higher than urban areas.

·  The area suffers from a lack of equity in public service provision

  • The budgets that households need to achieve a minimum acceptable living standard in remote rural Scotland are typically 10-40 per cent higher than elsewhere in the UK.[2]
  • Loch Eriboll is an important resource for naval training exercises, particularly for weather avoidance and aspects of amphibious and specialist training activity.

Additional Challenges include

·  The A838, the main arterial route through the area is single track carriageway with passing places for 15 miles to the East and 20 miles to the West. The route flows well most of the time with relatively low traffic volumes but can be slow during peak season.

·  Poor public transport links.

·  Challenging sailing conditions around the north coast.

3.2  The Development Group, its Structure and Leadership

The Durness Development Group was founded in 2001. It is a charitable company limited by Guarantee with a membership open to all residents. DDG has eight Directors:

  • Mike Fitch (Secretary): Remote Editor
  • Sheila Frazer (Treasurer): Formally local Business woman
  • Sarah Fuller (Chair): MSC in Environmental Resource Management and BAHonsin History.
  • Jacqueline Hird: Local Business Woman
  • Andrew Marsham: Estate factor, former fishfarmer and hatchery manager.
  • Iain Morrison: Former off shore worker and fish farmer
  • Dawn McKenzie: Runs youth club parents committee and school PTA
  • Martina Macleod: Local Ceramics Artist

DDG is the community anchor organisation for Durness, employing four staff including Development Officers and Youth Workers. Community Anchor Organisations were first defined in the UK government report, Firm Foundations, published by the Home Office in 2004. It stated:

"We are calling them `community anchor organisations` because of the solid foundation they give to a wide variety of self-help and capacity building activities in local communities and because of their roots within their communities."

In 2009, Scottish Government and COSLA jointly launched the Scottish Community Empowerment Action Plan. This plan endorsed the concept of community anchor as the key feature of when genuine community empowerment takes place. The Durness Development Group is such an organisation and has a proven record of achievement in:

  • Over 13 years ofcontinual youthengagement and projects
  • Calor Community of the Year 2003 (YouthCategory)
  • Currently employing three part time Community Youth Workers and two part time development workers
  • Building purchased at £20000, now valued a £80000 and will soon generate a rental income as a domestic residence
  • Ceannabeinne Township Project: development of a local history trail
  • Loch Croispol Schoolhouse: £68000 achieved to develop this local historic building
  • Community Right to Buy Registration for the Tourist Information building and Cape Wrath
  • Establishment and operation of a cycle hub
  • Provision of public internet access and campaigns on IT and new generation broadband.

3.3  History and Past Performance

DDG’s previous financial performance is as follows:

Year / Income / Expenditure
2009 / £38,560.00 / £32,079.00
2010 / £60,821.00 / £62,607.00
2011 / £113,591.00 / £115,674.00
2012 / £51,475.00 / £68,408.00
2013 / £62,365.00 / £65,320.00
2014 / £78,894.00 / £75,279.00

DDG has a strong history of enterprise, asset acquisition and management of complex grant and loan income. This includes:

  • Ownership of an £80000 asset, soon to be providing a regular rental income
  • The Quaker Housing Trust provided loan funding for affordable housing provision.
  • Working with Highlands & Islands Enterprise which funds development officer posts
  • Historic Scotland, Highland Legacy Fund and the Heritage Lottery Fund grant funding
  • Scottish & Southern Electric Community Grant Fund
  • Big Lottery Fund
  • Significant local fundraising

4.0 Vision, Values and Objectives

In order to meet the challenges of ageing, out-migration, de-population and economic stagnation, DDG has developed a comprehensive vision with aims and objectives:

Vision / Ensuring a growing, happy and sustainable community in Durness Parish.
Aims / To provide economic opportunity / To ensure social development / To protect and enhance the environment
Objectives / To establish a harbour at Port Chamuill, Loch Eriboll, which will support fishing, aquaculture, leisure and supply craft. / To establish and maintain a Heritage facility at the harbour in order to maintain and develop local cultural and linguistic heritage / To integrate immediately adjacent rock into the harbour construction
To establish a café (with potentially a micro-distillery/brewery as a destination venue). / To establish and maintain a cafe facility integrated into the harbour provision. / To source and utilise local produce for use in the café.
To provide toilet/shower provision for leisure craft users. / To provide opportunities for vocational training for local young people in order to stem out-migration / To integrate green functioning into construction undertaken
To create 9 permanent, additional jobs / Develop a demographically balanced community safeguarding the future of the primary & secondary schools / Act as a demonstration project promoting renewables & energy efficiency
To increase the asset base, turnover and profitability of DDG / Ensure that the harbour is equal opportunities compliant promoting equal access for all / Utilise local food in the café and support a local food supply chain.

5.0  Policy Landscape and Market

5.1  Policy Landscape

The policy framework into which the DDG’s plans fit can be summarised as follows.