Orkney leads way in disposable income rises

The data shows that after tax and national insurance the cash left in the pocket of the average island dweller has increased by 137 per cent in cash terms over just six years.

That constitutes a 69 per cent rise in real terms once inflation has been taken into account.

While the Scottish average available to spend on food, drink, household bills, savings and other items now stands at £17,095, on Orkney it is £18,722, meaning the island now boasts the third highest level of Gross Disposable Household Income (GDHI) in Scotland.

According to a briefing for the Scottish Parliament Information Centre (SPICE), residents of Aberdeen and Aberdeenshire still have the highest rate of GDHI at £20,547.

The north east was followed by Edinburgh at £19,481 - although disposable income sharply dropped in the capital by just over 4 per cent in real terms between 2013 and 2014.

Glasgow City has the lowest levels of disposable income in Scotland at £14,757 with residents of North Lanarkshire, Eilean Sar, Falkirk and Angus and Dundee City also having some of the smallest rates of spending power in Scotland.

Meanwhile, Orkney has seen a rise in income levels, aided by the likes of the marine energy centre.

Claire Ross, senior economist with Highlands and Islands Enterprise, said: “Orkney has always done well in terms of farming, crofting, food and drink and tourism.

“These are the mainstay of the rural economy and have been for many years.

“What we have been seeing is a growth of businesses being set up as a lifestyle choice as broadband provision increases, perhaps in marketing, media and freelancing opportunities.

“On Orkney, there has also been a huge focus on research and development opportunities linked to the European Marine Energy Centre (EMEC).

“This has also brought a different type of person to the area.

“We are seeing an increase in graduates within the workforce which also brings with it higher salaries.”

Ms Ross also noted that migration of older residents with disposable income also boosted spending power on the island.

According to the SPICE briefing, five of the 10 areas of Scotland where disposable income rose the most between 1997 and 2013 are in Highlands and Islands.

Inverness, Nairn and Moray; the Shetland Isles; Caithness and Sutherland and Lochaber along with Skye and Lochalsh have all experienced a rise in personal spending power.

Ms Ross said: “Over that period, there has been substantial investment in transport connections and digital and physical infrastructure.

“We have been really focussed on community capacity and improving conditions that are important to a rural economy.

“There have been significant changes across the region to improve the prosperity of the Highlands and Islands.”