I had missed that bit out thinking it was a separate issue. I found and changed the setting to 'Automatic' and the shelves were then automatically created as per metadata settings.
When I started this thread I knew nothing about metadata management. I was just hoping I could manage my Kobo bookshelves from Calibre, hence in my mind it related to Kobo devices. However if you feel this thread is better placed in metadata management - and I can see your point - then by all means have it moved.
Thanks again, PeterT.