Addressing the labour market emergency: Scottish Government response

Introduction

The ESSB is a body independent of government with members drawn from business and stakeholder bodies, and with responsibilities which cover the role of the enterprise and skills system in Scotland across four missions and a particular focus on how collaboration across the system can create greater impact. As such, they were considered the group best placed to provide rapid and expert input to the immediate challenge of addressing rising unemployment.

Economic Context

The economic context for the work of both groups is set out clearly in our response to the Advisory Group on Economic Recovery. The ESSB sub-group has focused specifically on the labour market impacts of COVID-19.

In June, Scotland's Claimant Count (the number of claimants of Job Seekers Allowance and Universal Credit 'searching for work' conditionality) was 215,200, around double the level in March and the rate increased marginally to 7.7% from 7.6% in May. Scottish Government estimates overall unemployment in Scotland could reach around 10% towards the end of this year, roughly 275,000 people.

Alongside this, we know that some groups and geographic areas could be disproportionately impacted by the current emergency. This includes young people, women, and low earners, those living in disadvantaged areas, lone parents, disabled people and black and ethnic minority people. Rural and island communities, whose employment relies more heavily on sectors like Tourism and Hospitality, may also be more adversely affected.

Our Response - moving forward from a position of strength

The COVID-19 pandemic has intensified many of the challenges facing Scotland’s labour market. In all our actions towards a better recovery, we will consider: the continued impact of demographic challenges - particularly in rural and island communities; Brexit; the Global Climate Emergency and just transition to net zero; and technological advance/digitalisation.

However, in comparison to previous periods of recession, Scotland has strong foundations in its employment and skills provision to build on. Developing the Young Workforce, our Youth Employment Strategy running from 2014 to 2021 was successful in tackling youth unemployment, while our local, regional and national employability system is better integrated and aligned than ever with strong partnerships in place.

Our apprenticeship family of Foundation, Modern and Graduate Apprenticeships continue to develop and strengthen and we have a world class tertiary education system delivered through our colleges and universities.

Finally, the key indicators in our Labour Market Strategy remain as relevant as ever and will act as a guide for the actions we take to support a wellbeing economy. They are:

• A skilled, productive and engaged workforce capable of meeting the needs of employers
• Equality of opportunity to access work and to progress to ensure everyone is able to maximise their potential
• Fulfilling, secure and well-paid jobs, where employees' contributions are encouraged, respected and valued
• Low unemployment and high employment
• An economy that supports a sustainable working population and that can retain and attract new talent, to meet our wider economic and social ambitions.

It is on these foundations that we can build with partners across Scotland to support recovery. Despite the challenges in the current labour market, Scottish Government investment is stimulating demand, for example in our transition to a net zero economy. Investment like this will lead to more job opportunities, and we are further strengthening the links between skills and training supply to emerging strategic areas of demand to maximise outcomes. This will be critical as we move towards labour market recovery.