TRANSPORTATION AND INFRASTRUCTURE COMMITTEE 24 MARCH 2021 POLICY AND RESOURCES COMMITTEE 31 MARCH 2021

AIR TRAFFIC MANAGEMENT STRATEGY: ISLANDS COMMUNITIES IMPACT ASSESSMENT

Report by Chief Executive

PURPOSE

1.1 The purpose of the Report is to update the Comhairle on the findings of the retrospective Island Communities Impact Assessment commissioned by Highlands and Islands Ltd (HIAL) and undertaken by Reference Economic Consultants.

EXECUTIVE SUMMARY

2.1 In January 2018, approved HIAL’s intention to proceed with their Air Traffic Management Strategy (ATMS) proposals. HIAL approved the ATMS business case in October 2019 which was subsequently approved by Transport in December 2019.

2.2 The retrospective Island Communities Impact Assessment (ICIA) commissioned by Highlands and Islands Airports Ltd (HIAL), undertaken by Reference Economic Consultants, was published in February 2021 and received by the Comhairle earlier this month.

2.3 The scope of the ICIA did not include any consideration or judgement as to whether HIAL’s ATMS proposals should proceed as planned or not, neither is it an Options Appraisal, but is instead confined to assessing the economic and community impacts of the ATMS. In that sense, it is limited in scope and the findings could be regarded as predictable in that the ATMS will impact significantly, socially and economically, on individuals, families and communities affected.

2.4 This Report is concerned only with the impacts on families, communities and the wider local economies on Lewis and Uist, rather than the merits of a complex technical solution, unilaterally pursued by HIAL and Transport Scotland, and about which there is much current debate about cost effectiveness. HIAL’s Air Traffic Management Strategy’s Island Communities Impact Assessment can be viewed here. The ICIA is redacted. Key findings for Uist and Lewis, respectively, are at paragraphs 9.1 to 9.14 and paragraphs 10.1 to 10.9 of the Report.

2.5 On 24 June 2020, the Comhairle took a decision to “authorise the Chief Executive, in consultation with the Chairs and Vice Chairs of the Policy and Resources and Transportation and Infrastructure Committees, to pursue an urgent dialogue with Highlands and Islands Airports Limited with reference to the Comhairle’s view that HIAL’s procedures and processes are legally questionable and, thereafter, to take such action, again in consultation with the Chairs and Vice-Chairs of the Policy and Resources and Transportation and Infrastructure Committees, as may be required to safeguard the Comhairle and Western Isles communities’ interests”.

2.6 Having already sought legal advice on this matter, and in light of the findings of HIAL’s ICIA, an update will be provided to both Committees on the legal aspects of this matter.

RECOMMENDATION

3.1 It is recommended that the Comhairle authorise the Chief Executive, in consultation with the Chairs and Vice Chairs of Policy and Resources, and Transportation and Infrastructure, Committees, to pursue dialogue with Scottish Government, and thereafter to take such action, again in consultation with the Chairs and Vice-Chairs of the Policy and Resources and Transportation and Infrastructure Committees, as may be required to safeguard the Comhairle and the social and economic interests of the Western Isles communities’ interests.

Contact Officers: Malcolm Burr, Chief Executive, [email protected] Angus Murray, Principal Strategy Manager, [email protected] Appendix: None Background Papers: HIAL’s Air Traffic Management Strategy Island Communities Impact Assessment

IMPLICATIONS

4.1 The following implications are applicable in terms of the Report.

Resource Implications Implications/None Financial There are financial implications for the communities affected. Legal Legal implications will be advised to both Committees. Staffing There will be staffing implications if ATMS goes ahead. Assets and Property There may be implications. Strategic Implications Implications/None Risk The key risk is the adverse social and economic impact on communities affected if HIAL’s ATMS proposals proceed as planned. Equalities None Corporate Strategy: Priority 1.6: Transport Policy Recovery and Introduce a new Local Transport Strategy to support the Renewal: 2020-2022 delivery of affordable, reliable and high quality external and inter-island transport links, underpinned by principles of decarbonisation and social inclusion. Ensure continued engagement with Scottish Government and key transport stakeholders to identify resources and further the interests of local priorities. Environmental Impact There may be environmental implications. Consultation HIAL’s retrospective ICIA was a consultative exercise with affected communities, including local authorities, trade unions and air operators, albeit a little late in terms of the overall process.

BACKGROUND

5.1 In January 2018, Scottish Government approved HIAL’s intention to proceed with their Air Traffic Management Strategy (ATMS) proposals. HIAL approved the ATMS business case in October 2019 which was subsequently approved by Transport Scotland in December 2019.

5.2 The retrospective Island Communities Impact Assessment (ICIA), commissioned by Highlands and Islands Airports Limited (HIAL) and undertaken by Reference Economic Consultants was published in February 2021 and was received by the Comhairle earlier this month.

5.3 HIAL’s current Air traffic Management Strategy (ATMS) is seeking to change the way in which air traffic management is delivered for the following eight airports: • • Dundee • • Kirkwall • • Kirkwall • Sumburgh • Wick John O’ Groats

SCOPE OF THE ISLAND COMMUNITIES IMPACT ASSESSMENT

6.1 The retrospective Island Communities Impact Assessment (ICIA) commissioned by Highlands and Islands Airports Ltd (HIAL), undertaken by Reference Economic Consultants, was published in February 2021 and received by the Comhairle earlier this month, initially through the Trade Union, Prospect.

6.2 The scope of the ICIA does not include any consideration or judgement as to whether HIAL’s ATMS proposals should proceed as planned or not, neither is it an Options Appraisal, but is instead confined to assessing the economic and community impacts of the ATMS on affected communities. In that sense, it is somewhat limited in scope and the findings could be regarded as predictable in that the ATMS will impact significantly, socially and economically, on individuals, families and the communities affected. This Report is concerned only with the social and economic impacts of the ATMS centralisation in Lewis and Uist. HIAL’s Air Traffic Management Strategy’s redacted Island Communities Impact Assessment can be viewed here.

6.3 The ICIA’s secondary research included:

• a review of figures on changes in direct employment levels and salaries at each ; • age and gender profiles; • economic and demographic profiles of the affected communities; • profile of passengers and aircraft using each of the airports; and • a review of information on potential economic benefits.

6.4 In addition, all HIAL staff were consulted on ATMS proposals via an online survey and further consultation was undertaken with affected communities, local authorities, community councils, national politicians, the Trade Union Prospect and Air Operators.

SUMMARY OF ATMS PROPOSALS

7.1 ATMS essentially comprises two elements:

• a move to centralised, remote air traffic control at five airports, including Stornoway, to Inverness; and • continued local airport air traffic management at two airports, including Benbecula, albeit with a change in how this is delivered. An Aerodrome Flight Information Service (AFIS) centre of excellence is proposed for Benbecula.

7.2 ATMS will introduce remote integrated ATC services for five airports including Stornoway. This will be delivered via a Combined Surveillance Centre (CSC) based in Inverness. These premises have already been purchased. There would no longer be staff controlling traffic from a tower at each of these five airports. Instead, centralised staff will remotely monitor air traffic using cameras located at each of the five airports. The transition to remote towers will require CAA (Civil Aviation Authority) approval before it can proceed. ATMS also includes the introduction of controlled airspace which Stornoway does not presently have.

RATIONALE

8.1 The rationale for HIAL’s proposals can be summarised as follows:

• the air traffic control industry is experiencing staff retention and recruitment challenges, presenting resilience difficulties; • ageing aircraft infrastructure requires modernisation; • adaptation to meet changing legislative and regulatory requirements within the aviation industry; and, • the organisation needs to demonstrate best value and must operate in the most efficient but effective way.

8.2 It is acknowledged that some of that rationale has been challenged by stakeholders, particularly as to the economics and in regard to staff recruitment and retention. On the latter point, as per the ICIA Report (pg.22), “ a number of consultees referred to previous recruitment rounds where local residents had been successfully recruited and trained and were still in air traffic management posts at their local airport”.

8.3 It is noted in the Report (S3/pg.iii) that “apart from airlines, almost all consultees regarding Kirkwall, Stornoway and Sumburgh were opposed to ATMS and/or concerned about the lack of detail on certain aspects of it ……a lack of transparency on how HIAL had reached the decision to proceed with ATMS”.

CURRENT POSITION AND KEY FINDINGS: BENBECULA

9.1 The following is a summary of the current position and key findings:

9.2 Air Traffic Control (ATC) at Benbecula is currently provided by a staff complement of 7 FTE staff (excluding AFISOs) with total gross salaries of >£310k and <£330k (in 2019/20) (pg. 9). In addition, there are five part-time AFISOs (Aerodrome Flight Information Service Officers) at Benbecula. These posts would be retained.

9.3 The proposed timescale for the move to AFIS operations is April 2022 and possibly earlier. The proposal is to have a centre of excellence at Benbecula (pg. 31) which will have two full-time AFIS management roles including a functional manager and a training manager. Existing staff who move to AFIS or the centre of excellence would have full pay protection for 12 months, followed by protection of salary for a further four years. This would not apply to new entrants at that level to the service.

9.4 It is stated in the Report (pg. 32) that “the detailed analysis included in the December 2019 Business Case did not include Benbecula and Wick John O’Groats being operated from the CSC”.

9.5 Almost all consultees, apart from airlines, in respect of Benbecula, were opposed to ATMS and/or concerned about various aspects of it.

9.6 Consultees’ concerns in relation to a change from ATC to AFIS included:

• a reduction in safety in comparison with the current position; • an increase in flight delays and cancellations; • a lack of transparency around the decision to transition from ATC to AFIS; and • reduced demand in the use of as some operators would not use an AFIS airport.

9.7 Uist has a decreasing population and if families affected relocated, and there is no certainty about that, it would account for 18 people (11 adults and seven children). This is compounded by the loss of income to the local economy. The Report states that with ‘induced impact’, i.e. the spend of employees’ wages in the local economy, the total impact is estimated at 7.7 FTEs and >£350k <375k in gross salaries.

9.8 AFIS and the centre of excellence is forecasted to provide 6 FTEs at Benbecula with £250k in gross salaries. With ‘induced impacts’, the total impact is estimated at 7.5 FTEs and £283k in gross salaries (plus the retention of five existing part-time AFISOs).

9.9 If Benbecula was not to move to AFIS and a centre of excellence, it would have been included in the Central Surveillance Centre in Inverness. In that sense, present proposals retain air traffic employment at Benbecula, although admittedly not at the same rates of remuneration.

9.10 In 2019 scheduled flights at Benbecula were estimated to include:

• 5,800 return business trips; • 7,600 inbound visitors, with £1.6 million spend supporting 27 FTE jobs; and • Visiting friends and relatives’ trips accounting for c.40% of all scheduled passengers.

9.11 In conclusion, staff in Benbecula have been given the option of moving to Inverness to be controllers as a part of ATMS or remaining in Benbecula as AFISO staff. It is not clear if there is much of an appetite for relocation, but if there was, the impact would be as follows:

• potential loss of four families from Uist (, Benbecula and ) totalling 19 residents; • potential loss of seven children from and Iochdar schools; and • significant loss of economic activity and voluntary support in the communities.

9.12 It can be reasonably deduced that the relocation of families affected would have significant social and economic impacts and related knock on economic impacts on communities, businesses and other sectors, in what is already an area with a fragile economy and a decreasing population.

9.13 Prospect has reported that very few of those people affected would relocate and of course it is acknowledged that to leave one’s community is a wrench and the costs of relocation to Inverness would be considerably higher, particularly for a similar standard and size of housing, to that on the islands. It is stated in the ICIA (pg. 18) “that it is intended that the staff will be supported by HIAL to relocate to the Inverness area. However, the actual terms of this are not presently known”. A policy on that will be available “at some point” in 2021.

9.14 Prospect also suggest that AFISO staff and ATC staff salaries are not comparable, ATC being a more onerous position, and over time it is unlikely that the average salary intimated would be retained by HIAL, with that commitment eroding over time.

CURRENT POSITION AND KEY FINDINGS: LEWIS

10.1 Consultees’ concerns and issues about the change from ATC to centralised air traffic control included:

• the feasibility and resilience of ATMS in delivering air traffic management; • a lack of information on some of the aspects of the remote tower solution; • there is no problem with staff recruitment or retention at ; and, • a loss of confidence in air traffic control services with more delayed and cancelled flights.

10.2 Consultees viewed air travel as being more reliable than ferry services during bad weather and the shorter journey times, in comparison with sea and overland, was highlighted. Great emphasis was placed on lifeline services. Consultees flagged up the loss of economically active people, should relocation happen, in an area with a challenging demographic imbalance.

10.3 Between April 2019 and March 2020, there was a total of 5,431 scheduled flights at Stornoway Airport. In 2019 around 133,000 passengers used scheduled flights at Stornoway, split between residents and those who lived elsewhere. More than two thirds (69%) of flights were made for leisure purposes, although these statistics also include health related travel for treatments elsewhere. The other 31% were for business purposes including commuting by offshore workers.

10.4 There are 11 affected staff at Stornoway Airport (excluding part-time AFISOs). Based on the staff survey, it is estimated that between 22 and 33 people live in the affected households, with a relatively small number of children. These households have people who work in a range of other sectors, public and private, and the report states that “around one third of their jobs could prove hard to fill if the household moved away from Lewis”. In addition, there is the loss to the social fabric of communities through community and voluntary work which is feature of communities in the Western Isles.

10.5 In 2019/20 there were 11.2 FTEs (including part-time AFISOs) in air traffic control at Stornoway Airport. Their total gross salaries were £509k. Once ‘induced impacts’ are included, i.e. spend of employees’ wages in the local economy, the total impact is estimated at 14.4 FTE jobs and £579k in gross salaries. These jobs and salaries would be lost in 2025 with the advent of ATMS.

10.6 Consultees have flagged up the significance of the loss of these jobs to the islands. These jobs are seen as highly skilled and highly paid. In contrast, the local surveillance alternative is estimated by HIAL as requiring employment of 27 FTE posts at Stornoway airport with salary payments of £1.7m (pg. 55).

10.7 In 2019, estimated air activity included:

• c.20,000 return business trips; • c.33,000 inbound visitors, with £8.1m spend supporting 135FTE jobs; • visiting friends and relatives’ trips accounting for 27% of all scheduled passengers

10.8 In conclusion, the Report states that the “potential net loss in employment - up to c.36 FTE jobs - from ATMS compared to the local surveillance alternative, is assessed as a potentially very significant negative impact, as are the reduction in gross salaries and the average wage of jobs.

10.9 Aside from the negative impacts on business, leisure, and other key sectors, if ATMS is unable to deliver, there are undoubtedly adverse local economic and demographic impacts. There would be, as the report states, less impact on school rolls and community activities. That is arguable.

UNCERTAINTIES AFFECTING THE ASSESSMENTS

11.1 The Report highlights a number of caveats (pg.vi):

• the number of existing HIAL staff willing to relocate is not known; • the employment and salary levels for the CSC, local Surveillance and AFISO are estimated; • the design of digital connections to and from the CSC require further development; • the form of surveillance to be procured requires a regulatory decision by the CAA; and, • the AFIS at Benbecula (and Wick) is subject to a safety case by the CAA.

11.2 It is noted that an assessment of the safety aspects of ATMS, the local surveillance alternative or AFIS is not within the scope of the ICIA Report. Each would require CAA approval based on a safety case and would not be introduced if deemed unsafe.

ISLAND COMMUNITIES IMPACT ASSESSMENT

12.1 Island Communities Impact Assessments (ICIAs) are a requirement under the Islands (Scotland) Act 2018 in terms of government and public agencies’ policies, strategies, and services. HIAL’s ICIA is retrospective which to some degree came about as a result of public pressure. However, it does not address fundamentally the decision taken by HIAL in 2018 and approved in 2019 by Transport Scotland. While HIAL’s substantive decision precedes the Islands Act, the downgrading of Benbecula Airport does not.

12.2 As per paragraph 5.9 of the ICIA (pg. xxiii), it is stated that “based on the area assessments it was concluded that there is the potential of “an effect on an islands community which is significantly different for its effect on other communities for Uist, Lewis, ……….”.

12.3 The ICIA has taken cognisance of:

• the scale of potential job and salary losses in communities affected as a result of ATMS; • the extent and nature of dependence on air services compared to Inverness and Dundee; and, • the nature and extent of economic and demographic challenges that islands face.

CONCLUSIONS

13.1 In January 2018, Scottish Government approved HIAL’s intention to proceed with their Air Traffic Management Strategy (ATMS) proposals, a move to centralised remote towers at five airports, subsequently approved by Transport Scotland in December 2019. The basis of this was that HIAL was of the view that the air traffic control industry was experiencing staff retention and recruitment challenges which presented resilience difficulties; aircraft and infrastructure required modernising; adaptation was required to meet changing legislative and regulatory requirements within the aviation industry; and, the organisation needed to demonstrate best value and must operate in the most efficient but effective way.

13.2 This appears to have been a unilateral decision by HIAL and Transport Scotland with limited meaningful consultation with those individuals, families and communities likely to be affected, at least at the beginning of the process. There has been considerable debate since then among stakeholders, including Unions, Government, local authorities, community councils and affected employees. Thus far, HIAL has continued to progress with their centralisation proposals at considerable cost.

13.3 To summarise the Report’s recommendations, the ICIA Report states at S5.10 (pg. xxiii) that “it is not certain that HIAL’s proposed mitigations could fully address the potential impacts on local employment and possible loss of population”. Many would conclude that is perhaps an understatement.

13.4 It is further stated that “HIAL should also commission an independent Report which would identify ways in which their operations can create more economic activity in the communities they serve”. This applies across all the geographical areas affected.

13.5 To allay consultees concerns, “HIAL should publish much greater information on the ATMS section of their web site which has seen very few updates since early 2020. That should include the basis of the ATMS business case and budget approval in December 2019, such as the detail to which it and their local surveillance alternative had been worked up at that point in time, including estimated employment levels. Similar information should be provided regarding the introduction of AFISO at Benbecula”.

13.6 However, the potential social and economic impacts of these actions on affected families and communities is undeniable, and any public proclamations at this advanced stage in proceedings is unlikely to assuage stakeholder and wider public and local political opinion.

13.7 HIAL’s centralisation of ATMS has had several hearings at the Scottish Parliament’s Public Petitions Committee and representations by stakeholders have been received favourably by the Committee. The Comhairle has supported local stakeholders in that process. A current petition seeks greater representation from island communities on Boards of public organisations delivering lifeline services to island communities, in keeping with the Islands (Scotland) Act 2018. The Comhairle would welcome any developments in that respect, in addition to the decentralisation of high quality jobs to these islands.