Critical report

Failure to tackle sickness sees north-south gap widen

Mairi Spowage: the strategy is already being reviewed (pic: Terry Murden / DB Media Services)

A failure to tackle long term sickness has contributed to a widening of the productivity gap between Scotland’s and the rest of the UK, it has been claimed.

The latest CBI-Fraser of Allander Scottish Productivity Index says budget cuts have resulted in a lack of action recommended in former Finance Secretary Kate Forbes’ National Strategy for Economic Transformation, published two years ago.

Mairi Spowage, director fo the Fraser of Allander Institute, notes that despite being a 10-year strategy it is already being reviewed and the support needed to get people back into work has not materialised.

This has been acknowledged by Wellbeing Economy, Net Zero and Energy Secretary Mairi McAllan who made a pledge in her first address to reduce the 240,000 economically inactive people due to ill health. She said this would help tackle skills shortages.

The CBI-FoA report pointed to a number of measures that reveal a growing north-south divide and calls for greater collaboration between the devolved and UK governments to even out economic activity.

It said Scotland’s percentage of economic inactivity between October 2022 and September 2023 because of long-term ill sickness, remains the highest of all the four nations at 31.7%.

Among other key trends, business investment as a share of Scottish GDP contracted by 0.3% in 2022 to 9.5%, underperforming the UK, which in the same period, had a 0.3% rise to 9.8%.

More optimistically, Scotland has the highest percentage of the working-age population with higher education certificates or above (50%), surpassing the UK average (43.5%).

Ms Spowage said: “The latest Index highlights that Scotland’s productivity is still lagging the rest of the UK’s performance. This is mainly down to the strength of London and the Southeast of England.

“There’s still plenty of work needed to improve workforce health with the indicators, suggesting a worsening of the situation with regard to sickness absence and inactivity in the last year.

“This is supported by wider evidence, such as the increases in the numbers of people claiming disability-related benefits. There is an urgent need to get on top of pandemic legacy issues around long COVID and mental health, and to tackle the long waits for NHS treatment.”

Kate Forbes delivering Scottish budget
Kate Forbes: introduced the strategy two years ago

Ms Spowage pointed to failure to follow up on key recommendations in Ms Forbes’ plan, echoing a report last month by Audit Scotland criticising a lack of clear targets and leadership in ensuring the plan was implemented.

“A key plank of the National Strategy for Economic Transformation is on getting people back into the jobs market via investment in employability programmes,” said Ms Spowage.

“However, despite a 10-year strategy, NSET is already being reviewed and refreshed. Some of the investment needed to support people back into work has often been subject to in-year budget cuts in the last two years, which means it has not materialised.”

Tracy Black, CBI chief strategy officer and devolved nations and Regions ambassador, added: “Discussions around our country’s potential have gone on for far too long – now is the time to take decisive action as the window narrows on Scotland’s target of achieving net zero by 2045.

“With the Spring Budget tomorrow and a General Election looming, it is right to move beyond talking about ambitious goals and to take swift action before time runs out.”

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