The beautiful breath-taking vistas of the English and Welsh coasts are a facade covering the dire straits of its residents and economic sustainability. Quick Loans Express explores coastal town debt and the steps the councils need to take to bring the towns back from the brink.
In this article, Quick Loans Express, offering same day loans for bad credit, consider coastal town debt. You’ll be able to read information about:
According to recent figures released by the Insolvency Service, coastal towns are suffering from problem debts, especially among the young. In this article, we look at what the statistics tell us about their situation and attempt to explain why. We conclude by looking at what could be done to solve this problem.
High Numbers of Personal Bankruptcies in Coastal Towns
The Insolvency Service revealed that the Isle of Wight has the highest level of insolvencies for the 18-34 age group – followed by Torbay and then Scarborough. The number of young people in the country declaring bankruptcy rose by 31.3% from 2015 to 2016.
For the first time since 2009, personal insolvencies across the whole country have risen. For all age groups, the number one spot for insolvencies is held by Torbay with a rate of 43 per 10,000 inhabitants. Compared to a national average of 9, this makes the figure nearly five times higher. The Isle of Wight and Scarborough came in joint third place with other coastal towns like Hastings, Hull, Great Yarmouth and Plymouth also affected by higher than average personal insolvency rates.
Coastal Town Debt – Why is it happening?
Consumer debt is on the rise in the entire country with factors like high rental costs and wage freezes or caps being blamed for people struggling to make ends meet. Therefore, they use credit as a way to pay for essential goods and services.
However, seaside towns are affected by other problems which make their situation worse. Let’s look at some of them.
According to the ONS Annual Survey of Hours and Earnings (2016), people in Scarborough earn the least money in Great Britain. The mean salary there is £19,925 which is £8,517 below the national average.
Scarborough isn’t unique. In an analysis by the Social Market Foundation (SMF) think-tank, 85% of Britain’s 98 coastal local authorities had below-average salaries in 2016.
High unemployment rates also tend to affect coastal towns more than other areas. The ONS Annual Survey found that Hartlepool had the second highest unemployment rate in the country (11%) while other coastal towns faced similar problems like Hastings with a 9.3% rate. This is significantly higher than the national average of 4.8% for 2016.
But why do seaside towns suffer from both low salaries and high unemployment?
Employment Opportunities in Seaside Towns
It’s evident that many of the jobs available in British seaside towns tend to be in the tourist industry. However, such jobs are traditionally largely unskilled and therefore, low-paid. Also, employment is seasonal so workers can’t be guaranteed to work more than 4-5 months of the year.
To make matters worse, the popularity of domestic holidays has been steadily falling since the 1980s. Many British people prefer to go abroad for their fortnight summer holiday and this change in people’s habits has hit seaside towns particularly hard.
This change has also coincided with the loss of traditional key industries like fishing, whaling and ship-building. The option of commuting to a nearby inland town or city to work also has its challenges. The SMF chief economist commented that such towns are often served by poor infrastructure making travelling to other places for work extremely difficult.
What effect does this have on the inhabitants of seaside towns?
Challenges Facing Coastal Town Residents
What this means for residents of coastal towns is that although they might be able to find work during the summer, when the autumn comes they’re once again out-of-work. With few vacancies available, they’re forced to apply for state benefits and rely on credit to see them through until they eventually receive benefits. Without regular year-round work, it’s very easy for them to fall behind with their credit or instant cash loan repayments. From there, it’s a short step into spiralling out-of-control debts.
To make their situation worse, many of the prices in seaside towns are set for the tourist market. The worker there might find themselves paying more for many goods and services from petrol to food – but most of all for accommodation.
Local authorities data show that there’s evidence of the worst levels of social and economic deprivation among coastal communities. This has shown to have an impact on all aspects of their life including health and education. Worrying about finances particularly takes its toll on their physical and mental well-being.
How to Fix Coastal Town Debt
There are two basic ways to improve the situation: investment in tourism and to attract other industries to the coastal towns. Some seaside towns have been able to avoid the fate of fewer visitors by investing in more attractions. Instead of depending on the traditional beach/penny arcade type of British summer holiday, they offer visitors much more. Visitors stay for longer than a one-day seaside trip and attractions appeal to domestic tourists all year round.
The other way to improve the situation is to diversify and bring more industries – and therefore much-needed jobs – to the area. Local authorities are strapped for money by funding cuts and poverty-stricken coastal are hit harder by not being able to raise money from business rates, etc. The obvious solution is for the government to step in. Although the creation of the Coastal Communities Fund has been successful in attracting investment to seaside towns, more needs to be done.
Conclusion – Coastal Town Debt
The potential for seaside towns to adapt and flourish once again is there. However, there has to be more investment in coastal regions. Until that is done, their residents will continue to suffer financially and depend on benefits for half of the year.