Coronavirus (COVID-19): review of physical distancing in Scotland - June 2021

Annex

The impact of physical distancing on the four harms

1. The following information is collated from information that has been available through government data sources and external studies and reports.^[25]

2. Data and information about the social and economic impact of physical distancing has been collected in different ways across different areas. Detailed information is not available about many of the possible effects, particularly for specific subgroups and places within Scotland. Many of the effects of distancing policies are indirect, diffuse and not easily quantifiable, so this report inevitably represents only a partial account of the full effects of physical distancing.

Harm 1 - Direct health impacts

3. Multiple factors affect the risk of transmission including the distance, duration , the frequency of contact between individuals, the community prevalence of COVID-19 cases, as well as the ventilation and crowdedness of settings. Physical distancing remains a key mitigation for reducing Harm 1 impact as close contact for prolonged periods, particularly indoors with poor ventilation and no face masks is inherently high risk.

4. There is no 'safe' distance to prevent transmission. However, SAGE EMG suggest that in general there is a significant reduction in exposure of viral containing droplets by around 2 metres.^[26] The WHO advise to stay at least 1 metre away from others, and different countries have adopted different physical distancing guidelines from 1 metre to 2 metres.^[27] There is some evidence suggesting that there is a substantial difference in risk of exposure between 2 metres and 1 metre. Physical distancing reduces the risk from aerosols and droplets and there is potentially anywhere from 2 to 10 times less risk of infection at 2 metres compared to 1 metre.^[28] However, it is not possible to remain risk free in indoor environments, the greater the distance between individuals reduces the risk of infection. There is little increased benefit of distancing beyond 2 metres.

5. Risk outdoors is lower than risk indoors. For example, studies found a low proportion of reported global SARS-CoV-2 infections occurred outdoors (<10%) and the likelihood of indoor transmission was very high compared to outdoors.^[29] However, outdoor mixing is not completely risk free. Prolonged close contact, particularly if face to face and/or involving shouting or singing carries a risk. The duration of contact impacts on all possible transmission routes, the longer the duration of exposure the greater the likelihood of infection. In close proximity and in face to face interaction there is an increased risk from short range droplets and aerosols. Several studies have shown that singing increased the number of aerosols.^[30]

6. Some reviews of physical distancing highlight that due to the many risk factors for transmission a one-rule-fits-all approach is not appropriate. There will be situations where 2 metres is perhaps overly cautious and there will be other situations where 2 metres is not sufficient to mitigate risks.^[31][32]

7. We are currently at an uncertain stage of the pandemic. Case numbers are rising, and we are monitoring data to assess the impact of this on hospitalisations and whether the vaccine roll out is advanced enough to successfully prevent a peak in cases of severe disease and deaths.

8. An average of 1,050 cases were reported per day in the 7 days to 17 June, which is a 29% increase in reported cases since the 10 June.^[33] There were 123 weekly cases per 100,000 in the week to 14 June, which is an increase since last week. This compares to 302 weekly cases per 100,000 on 8 January and is similar to the weekly case rate observed on 3 February. Case rates saw a rise amongst all age bands, except for the over 80s. The highest case rates were observed amongst 20-39 year olds, followed by those aged 0-19, 40-59, 60-79 and 80+ this week (7 days to 14^th June).

9. The reproduction rate R in Scotland is currently estimated as being between 1.2 and 1.4. This is unchanged from last week. At a national level hospital bed and ICU occupancy are projected to rise over the next few weeks, but at a lower rate than previously projected.

10. The roll out of the vaccine is going well with over 3.5 million people in Scotland been given a first vaccine against SARS-CoV-2, and over 2.5 million have now received a second dose. 80.2% of the adult population in Scotland has now been vaccinated with the first dose, and 56.6% of adults have received their second dose.

11. Vaccination will reduce the risk of transmission and there is evidence that vaccines are highly effective in protecting against death and severe disease.^[34] However, vaccines are not 100% effective and a large part of the population is still unvaccinated.

12. The variant of concern Delta (VOC-21APR-02 first identified in India) is spreading rapidly and is now the dominant strain in Scotland.^[35] SAGE say "R is now estimated to be 40–80% higher for delta than for Alpha (B.1.1.7), although a figure higher or lower than this cannot be ruled out".^[36] The secondary attack rates for contacts of cases with Delta (VOC-21APR-02) and no travel history are higher than those for contacts of non-travel cases with Alpha (VOC-20DEC-01).^[37]

13. Public Health England preliminary analysis of vaccine effectiveness against symptomatic disease with Delta suggests that while vaccine effectiveness against symptomatic disease is lower in Delta cases compared to Alpha cases after one dose, any difference in vaccine effectiveness after 2 doses of vaccine is likely to be small.^[38] There remains a high level of uncertainty regarding the impact of the Delta variant on severity of illness, treatment or reinfections. PHE preliminary analysis also shows that vaccines are highly effective against hospitalisation from Delta variant^[39]. Preliminary EAVE II data from Scotland also shows that both the Oxford–AstraZeneca and Pfizer–BioNTech COVID-19 vaccines are effective in reducing the risk of SARS-CoV-2 infection and COVID-19 hospitalisation in people with the Delta VOC, but these effects on infection appeared to be diminished when compared to those with the Alpha VOC^[40].

14. There remains uncertainty regarding the impact of the Delta variant on severity of illness, treatment or reinfections. Early evidence suggests there may be an increased risk of hospitalisation for Delta compared to Alpha. Current data from the EAVEII project shows that compared to the Alpha variant, the Delta variant is associated with an increase in the risk of Covid-19 hospitalisation in Scotland by 85% (95% CI 39-147). As more data is analysed we shall become more certain on the impact of Delta on hospitalisations and disease severity.

15. We are monitoring the situation carefully, especially on hospitalisation in different groups.

16. As yet we do not know the full extent to which cases turn to hospitalisations with this variant. Neither do we yet know the impact of infection on long-term or non-hospitalised health outcomes. Finally, 'population immunity' with Alpha is estimated to be around 80% of the entire population. It may be higher with Delta and we are still some way from that level of vaccine coverage.

Harm 2 - Health impacts not directly related to COVID-19

17. During the early stage of the outbreak many health and social care services were paused or reduced and there were fewer referrals. Some services adapted the way they delivered, for example, making increased use of remote consultations. This has led to changes in the way people have used these services, including how likely people are to seek health care for non-COVID health issues. Evidence also suggests both positive and negative changes in people's mental and physical health over the course of the pandemic.^[41]

18. It is not easy to understand the specific effects of physical distancing on these wider health impacts. There were other mitigation measures introduced at the same time as physical distancing, such as the wearing of face coverings, "stay at home" guidance and travel advice. However, the impacts which are likely to be specifically related to people's ability to be in close proximity to others are the delivery and use of health services, social care provision, mental health and levels of physical activity (particularly team sports). There is also an impact on health-related work in research labs (including COVID-19) of capacity constraints arising from physical distancing requirements, with one Medical Research Institute operating at only 25% capacity.

Delivery of health services - Secondary care

19. From 19 June 2020, Health Boards started to resume some services as part of the planned remobilisation. Then, as a second wave of COVID-19 cases emerged through the autumn months, a Strategic Framework was introduced on 2 November with the aim of suppressing the virus to the lowest possible level whilst tackling the four 'harms' caused by the pandemic. This included maximising the safe and effective resumption of planned services where possible, whilst balancing this with the need to ensure sufficient capacity to respond to the resurgence of COVID-19.

20. Secondary Care is continuing to operate at reduced capacity as a result of COVID-19. Additional cleaning requirements, testing in hospitals, use of PPE, physical distancing and staff re-deployment have all reduced capacity. Getting back to pre-COVID-19 levels of activity will be challenging and the longer COVID-19 related mitigation measures are required, the more pronounced backlogs in secondary care are likely to be:

• There has been a large increase in the number of people waiting to be seen as outpatients. At 31 March 2021, 354,782 patients were waiting to be seen as outpatients, 37.1% higher than at 31 March 2020. People are also typically waiting longer to be seen. For example, 48.1% of people for the quarter ending 31 March had been waiting 12 weeks or less, markedly down on the 74.4% reported at the same date in 2020.^[42]

• There has also been an increase in the number of patients waiting to be admitted as inpatients or day cases covered by the Treatment Time Guarantee (TTG). At 31 March 2021, 94,781 patients were waiting to be admitted, 19.6% higher than at 31 March 2020. Of those waiting, 34.7% had been waiting 12 weeks or less, markedly down on the 64.5% reported at the same date in 2020. The reduction in activity is also reflected in the number of patients admitted for treatment under TTG. During the quarter ending 31 March 2021, 36,582 patients were admitted for treatment, 43.4% lower than the same quarter in 2020. ^[43]

21. Delays in treatment may lead to worse outcomes, impacting on quality of life and the scale and cost of intervention required. Physical distancing measures will have impacted on this but it is difficult to establish the precise scale of the impact as there are other important factors causing the delay in treatment.

Delivery of health services - Primary care

22. Primary Care is where the bulk of health interactions take place; services including GPs, dentists, and ophthalmologists are how most people most often engage with healthcare. GP and other services remained available throughout the pandemic but were impacted by challenges of restrictions on face-face activity:

• YouGov polling^[44] in mid-May 2021 indicated that 24% of people thought they would avoid contacting a GP practice for immediate non-COVID-19 health concerns. This figure has reduced recently, but overall has been relatively consistent while weekly data have been gathered, but it is not known how many people would have sought to avoid going to their GP before the pandemic. In November 2020 this poll asked people who would avoid contacting their GP for their reasons (respondents could select more than one reason). The most common reasons were 'not wanting to burden the NHS / thinking other people might need the service more' (around half of respondents); that they would use alternative NHS services such as NHS Inform (around half of respondents); and worry about the risk of COVID-19 infection (around one quarter of respondents).

• One impact ofCOVID-19 has been a reduction in the number of cancer referrals. As well as patients being less likely to seek help, cancer screening programmes (which can also take place in primary care) were paused and the number of patients treated following an urgent referral for suspected cancer in the last quarter of 2020 fell by 5.9% compared with the same period in 2019.^[45] Waiting lists have increased for key diagnostic tests and fewer patients have had a pathological confirmation of cancer diagnoses.

• There is likely to be a backlog in people seeking dental treatment as dentists were limited to largely urgent care for much of the past 15 months. In March 2020, there was an abrupt and sharp fall in the number of patients seen by NHS dentists, followed by an even larger fall in April. ^[46] Reduced services over the last year in both dentistry and optometry may have led to reductions in the number of people being referred on for further investigation and potentially a reduction in early detection of cancer and other serious health conditions.

23. Any loss or limitation of the preventative/early intervention role of primary care during the pandemic is a cause for concern. For many serious conditions, delays in treatment will lead to worse outcomes. GPs can address behaviours related to preventable illnesses and routine health checks and blood tests capture early indications of illnesses that contribute substantially to mortality rates and have potential for severe impacts on quality of life, such as Type 2 diabetes and heart disease. The same applies in dentistry and optometry where regular check-ups play an important preventative role, which also goes beyond oral or eye health.

Remote delivery of services

24. There has been an increase in remote consulting (telephone and video). 'Near Me' is the video consulting (VC) service used across health and social care in Scotland. An evaluation of the rollout of Near Me in the context of the COVID-19 pandemic^[47] established that there was a 50-fold increase in video consultations between March and June 2020, from 330 per week to just under 17,000. Hospital and other community care services constituted a much higher proportion of activity (77%) than GP services (23%). In August, overall activity dropped slightly, but remained 64 times that of the pre-COVID-19 levels. This drop was more significant within GP services than hospital and other community care services. Survey data from a public and clinician engagement exercise ^[48] indicated wide support among the public and healthcare professionals for the use of video during, and beyond, the pandemic. Further analysis of the post-consultation survey data conducted as part of the wider evaluation of the rollout of 'Near Me' has shown that most patients and professionals perceived VC as beneficial, both during the COVID-19 pandemic (i.e. to reduce risk of infection) and longer-term (e.g. by improving access, reducing travel). However, findings from the evaluation and the engagement exercise highlighted concerns around digital access and health inequalities, and lack of privacy at home for video appointments. Patients from disadvantaged groups or areas have faced particular barriers to benefiting from video consultations, including lack of internet access, low bandwidth, inability to afford the data connection, and language barriers.

Social care

25. Social care provision has been substantially affected by COVID mitigation measures, including physical distancing. However, it is difficult to establish the impact of physical distancing alone, as it is only one of a range of infection, prevention and control (IPC) measures implemented in response to the pandemic.

26. The population receiving social care and support is diverse, with wide ranging needs and circumstances. The majority (77%) of people requiring social care support are aged 65 and over, however, younger adults with physical and learning disabilities or mental health conditions also receive vital support. ^[49]

27. Social care is provided in many settings, including at home, in care homes and in the wider community; all of these settings have in some ways been affected by COVID protective measures including physical distancing.

Mental health

28. Mental health and wellbeing has been impacted by the COVID-19 pandemic, which might be a result of the virus itself (e.g., anxiety around contracting it) and/or the mitigation measures (e.g., physical distancing). There is a lack of data specifically on the impacts of physical distancing on mental health and wellbeing, as it is difficult to separate the effects of physical distancing from the effects of other mitigation measures. However, research has focused on mental health-related factors that are likely to have been particularly impacted by physical distancing, including loneliness, and social support and isolation.

29. The majority of research, referred to in the section below, that has investigated impacts on mental health and wellbeing is also subject to the following limitations: reliance on self-report assessments; and not having pre-pandemic baseline data against which to compare the findings. Comparisons across findings are also limited due to being conducted at different points during the pandemic, and using different measures of mental health assessment tools. Furthermore, the majority of reported evidence relates to earlier stages of the pandemic, so does not reflect the effects of how more recent developments (e.g., vaccination programmes) might be influencing the potential impact of mitigation measures on mental health and wellbeing.

Adult mental health

30. The Scottish Government commissioned the SCOVID (Scottish COVID-19) Mental Health Tracker study^[50] to understand the impacts of the pandemic on mental health and wellbeing in Scotland, and views on mitigation measures. Two waves of the SCOVID study have been completed and published to date (Wave 1, May-June 2020; Wave 2, July-August 2020). Overall, Wave 2 of the SCOVID study found that 24% and 17% of respondents reported levels of depressive and anxious symptoms, respectively, to an extent that reflects a possible need for treatment.

31. From the SCOVID study and other surveys (CHARIS-MH,^[51] Scottish Government Wellbeing Survey^[52],[53]), during the pandemic, those most likely to experience loneliness and social isolation – factors that are potentially particularly influenced by physical distancing – have been indicated to be younger adults (in terms of loneliness), adults between 30 and 59 (in terms of social support), women, people with physical and/or mental health conditions, and people from lower socio-economic groups or more deprived areas. In general, younger adults, women, people with health conditions and people from more deprived areas were also found to have poorer mental health and wellbeing during the pandemic (e.g., higher levels of depressive symptoms).

32. The previously mentioned surveys also found that those reporting greatest concern about being in close proximity or interacting with others were adults 60 and over, women, and people with a mental health condition. Younger adults, women, and people with physical and/or mental health conditions also found the measures more difficult to cope with, and adults 60 and over, women and people with mental health conditions expressed greatest concern about strangers' adherence to guidelines.

Children's and young people's mental health

33. The TeenCovidLife surveys (1: May-July 2020^[54]; 2: August-October 2020^[55]) found that, overall, 65% of the Scottish 12 to 18 year-olds completing the survey reported adhering to the physical distancing guidelines most or all of the time, and 93% reported they were very or quite likely to self-isolate in line with guidance. A higher proportion of female students (48%) reported being at least moderately worried about returning to school compared to male students (30%).

34. A YouthSight survey of university students (May 2021) found that 73% feel the restrictions on in-person learning last year has had a strong or slightly negative impact on them feeling anxious and 77% of students said that the same restrictions had a slight or strong negative impact on them feeling lonely.^[56]

35. Lastly, for younger children, the COVID-19 Early Years Resilience and Impact Survey^[57] (June-July and November-December 2020) found that over half (52%) of the parents of 2 to 7 year-old children who were surveyed indicated that that their children found it difficult or upsetting to stay 2 metres apart from others.

Harm 3 – Societal impacts

36. Physical distancing guidance and restrictions were introduced at the same time as a range of other protective measures, including recommendations for wearing face masks, bans on gatherings, the closure of offices, shops, education settings, and public transport.

37. This means that it is not easy to isolate the specific effects of physical distancing from other interventions. The effects of the general restrictions on people's ability to be in close proximity, are however apparent in evidence about behaviours in a range of indoor and outdoor work, education, health, leisure and neighbourhood settings.

Impact on health and wellbeing

38. There has been a large reduction in social connectivity during the pandemic, and this is most notable for younger people but it is also evident across all age groups. These impacts may be partly driven by the reduced opportunities for social contact and as such it is not possible to attribute them wholly to the practice of physical distancing behaviours. They may also be driven by anxiety regarding economic, health, and personal issues.

Communities and neighbourhoods

39. Other data, detailed in Figure 1 below, shows changes to communities and neighbourhoods during the pandemic, including reductions in levels of neighbourhood safety, belonging, and help/advice. These negative impacts are all also more pronounced in key groups including younger people, women, and disabled people.

40. It is not possible to attribute these effects wholly to the practice of physical distancing behaviours, and they may also be driven by anxiety regarding economic, health, and personal issues.

Working from home

41. High proportions of workers experienced changes to their work since the start of the pandemic (as measured in December 2020) including 61% of full time workers, 65% of part time workers and 79% of self-employed workers.

42. One in four people also reported having lower income than before the pandemic, and self-employed people and people living in the most deprived areas of Scotland were more likely to report having a lower income.^[58] These changes to work may have been driven by a number of factors, including the effects of physical distancing restrictions.

43. Apart from the economic effects from greater amounts of people working from home, other studies have shown the social impact of these policies. A study from Australia showed that the loss of work during the COVID-19 pandemic was associated with mental and physical health problems, and this relationship is moderated by social interactions and financial resources.^[59]

Children and Young People

44. A summary of available evidence about the impact of the pandemic on children and young people highlights some of the impacts of physical distancing.^[60] This evidence is still being collected and studied, but information from qualitative sources, and non-representative sources, suggests that whilst they are largely in favour of distancing measures, there are negative impacts from the physical distancing procedures on children and young people, particularly during the stages of the pandemic when there were stronger limitations on social contact. This includes challenges with communication, particularly for disabled people, and the impact of distancing on relationships, and friendships.

45. A recent survey of students, commissioned by Universities Scotland, found that 80% of respondents think the restrictions on in-person learning over the last year at university have had a slight or strongly negative impact on their personal progress with learning^[61]. Universities and Colleges are clear that maintaining 2 metre physical distancing will mean they need to plan on the basis of most learning being online rather than in-person for the next academic year, with further significant impacts on the wellbeing of young people and risks to their progression.

46. Both the Scottish Government Commissioner for Fair Access^[62] and the Sutton Trust^[63] have published analyses of the impact of the pandemic and resultant restrictions on higher education students including on widening access. Both note that it is not only the impact on in-person tuition that has had a negative impact but also restrictions on the wider university experience, an important part of developing the skills needed by graduates. Moreover, articulating college students have not had the chance to fully integrate with their cohort or to be fully immersed in the HE experience and higher education institutions will have to deal with the legacy of significant lost learning by school pupils.

Justice systems and delays

47. The public health crisis generally, and in particular the lockdowns and physical distancing rules have had a huge impact on the justice system – both in terms of backlogs building up within the system and in terms of how services are delivered.

48. Courts are a venue where multiple parties need to come together for a case to progress. A lot of events – from plea hearings to evidence led trials – happen in a courthouse on any given day. Many of these events will require the participation of a large number of people – including the defence, the prosecution, court staff, victims and witnesses, jurors etc. As a result of this, courts have been severely affected by physical distancing – with implications that extend across the justice system.

49. From late July 2020 onwards, much of the court activity that was paused re-started - but often only in particular types of court. Initially, courts focussed on activity which was feasible to run – often activity that involved a limited number of participants. Subsequently, they focussed on that which was a priority to run as various measures (including remote jury centres) helped courts to re-establish different types of activity (such as jury trials). The second lockdown of January 2021 saw the shutting down of some court activity again, with custody cases prioritised (for example via evidence led trials in high court, which, by then, had adopted remote jury centres). Non-custodial activity progressed more slowly over this period – for example Justice of the Peace Courts did not reopen until 7 June 2021.

50. Looking at the total period since April 2020, backlogs have built up in all of Scotland's criminal courts, with Sheriff Solemn courts having seen the largest growth in scheduled trials outstanding, (a growth of 280%).^[64]

51. Backlogs have also built up downstream of courts. Whilst prison numbers in terms of those who were found guilty dropped off (both in terms of numbers being sentenced and also as a result of an emergency release programme) at the start of the pandemic, remand numbers grew and remain at a high level. The remand population has grown from levels considered high pre-pandemic (around 1,500) to new record highs (peaking at just over 2,000 in September 2020 and broadly stabilising at around 1,900 thereafter). Remand now accounts for over a quarter of the prison population in Scotland compared to 16% in England and Wales.^[65] This is against the context of the Scottish Prison Service (SPS) operating with reduced capacity as they try to maximise the use of single cell occupancy in order to safely manage the prison population. A range of preventive and protective measures to stop the spread of Covid-19 throughout the prison estate such as physical distancing and use of PPE meant a restrictive regime was in place in our prisons. This meant the suspension of in-person visits and other aspects of the regime including the amount of time spent outside their cells. Consistent with the wider community, the prison service is lifting regime restrictions but may need to continue with precautionary measures in order to keep those who work, live and visit our prisons safe during the remainder of this pandemic.

52. The capacity for justice social work services to work in person with those on community sentences (particularly the delivery of unpaid work as part of a Community Payback Order) was initially impacted by COVID restrictions and remains constrained due to physical distancing measures. As justice social work is delivered by Scotland's 32 local authorities, the challenges faced by justice social work services and their capacities will vary according to local circumstances (e.g. how easily local facilities can be adapted to accommodate physical distancing). In response to this, the Scottish Government has reduced outstanding hours on eligible Unpaid Work or Other Activity Requirements of Community Payback Orders by 35%. Nonetheless, the sector remains constrained in terms of what it can deliver in the face of ongoing public health measures.

Culture, leisure participation

53. Physical distancing has an impact on the positive social value of cultural activities. It places substantial constraints on cultural events, activities, and venues' capacity, thereby opportunities to attend and participate in cultural activities. A Creative Scotland survey on attitudes towards participation in culture, following COVID (from January), showed that a majority missed attending venues and events.^[66]

54. The arts have a role in improving health and wellbeing. A Department for Culture Media and Sport review from September last year summarised the available evidence (including pre-COVID). It provides an overview of quality of evidence for different effects, and also highlights evidence available on positive impact in improving social cohesion (including reducing loneliness in older people) and some on mental illness (including among young people).^[67]

55. The 2019 Scottish Household Survey report, also highlighted the impact of culture on people's lives: 46% agreed that culture and the arts make a positive difference to their lives; 50% agreed they make a positive contribution to their community. Of those indicating a positive impact in their lives, 77% indicated it makes them happy / something they enjoy; 44% indicated positive impact on mental health.^[68]

56. As well as the economic, and employment benefits of the tourism industry there are also social benefits that have been affected by the COVID-19 physical distancing restrictions, and other restrictions.^[69]

Harm 4 – Economic impacts

Channels of economic impact

57. Economic harm is strongly linked to social harm and the impacts of the pandemic have been unequal across sectors, groups and regions. Physical distancing, in its widest sense, has impacted negatively on economic activity in a number of different ways and has affected all businesses. The requirement for physical distancing has constrained the capacity of consumer facing parts of the economy impacting on their profitability, sometimes to the extent that they are no longer commercially viable and are unable to open. The requirement for staff members to remain distanced has also had an impact on areas such as productivity in the manufacturing sector and research and development in laboratories. More generally, the closure of large parts of the services based economy throughout the pandemic has limited opportunities for consumers to spend and this has dampened overall consumer spending in the economy.

58. Physical distancing has not only led to economic harm and social harm but have also exacerbated wider health harms through its effect on mental health and wellbeing, including that of business owners. Sectors such as culture, arts and tourism, for example, have been shown to improve wellbeing and social cohesion.^[70]

59. Even for the sectors and businesses that have remained open (or those that have recently reopened), physical distancing requirements have had an economic impact through restricting throughput and affecting the extent to which a business is viable operating at reduced capacity. Physical distancing may also have temporarily lowered the productivity of firms as many businesses have had to make adjustments and incur additional costs in order to adhere to distancing guidance. The limits on capacity have also had knock on impacts on the workforce, with some businesses not being able to accommodate all employees and requiring some of the workforce to remain on furlough.

60. Differences in physical distancing requirements between Scotland and the rest of the UK could result in some businesses being disadvantaged. Businesses in England have had a 1 metre plus physical distancing rule since summer 2020.

61. On the whole, it is important to emphasise the sustained negative impact of physical distancing on business viability given that businesses are likely to have made sustained losses since the beginning of the pandemic, which are likely to have been only partially offset by support schemes.

62. Working from home, a consequence of physical distancing, has had a negative effect on city centre economies.

Unequal impact on sectors and groups

63. Overall, as at March 2021, Scotland's economy is 5.4% below its pre-pandemic level in Feb 2020. Figure 2 shows that recovery from the national lockdown in 2020 is unequal across sectors with some recovering close to pre-pandemic levels whilst others continue to lag behind. For example, output in Accommodation and Food fell 83% between February and April 2020 but its output remains 70% below its level in Feb 2020. Other sectors, such as manufacturing (which fell 21% over March-April 2020), have now recovered to pre-pandemic levels.

Source: Scottish Government, Monthly GDP statistics

64. Different impacts across sectors are illustrated by data on the level of businesses trading. At various times during the pandemic, substantial portions of businesses in the Accommodation and Food Sector and the Arts, Entertainment and Recreation Sector have paused trading. While the sectors have begun to reopen in recent weeks, the Arts, Entertainment & Recreation and Accommodation & Food Services industry sectors continued to have the lowest shares of businesses 'currently trading' - estimated at 81.5% and 83.0% respectively.

65. The varying sectoral impacts can also be seen in the labour market data. Although furlough rates have fallen recently, the Accommodation and Food Sector and the Arts, Entertainment and Recreation Sector had 31% and 29% of their respective workforces furloughed during May 2021 compared to the overall Scottish level of 9.6%.^[72] During the course of the pandemic, these sectors have tended to be among the largest users of the furlough scheme, relative to the size of their overall workforces, and have made greater relative use of the furlough scheme than for the Scottish economy as a whole.

66. The sectoral impacts have fed through to differential regional impacts as, for example, areas most reliant on tourism, such as rural areas, have the highest rates of jobs on furlough. For example, the Highlands is the local authority area in Scotland with the highest furlough take-up rate at 14.3% at the end of April 2021, reflecting its reliance on tourism and visitor trade.^[74]

67. Moreover, some sectors have a high share of self-employed, particularly sectors such as arts and culture, where there is a high number (c. 70%) of freelancers in these sectors, many of whom will have seen significantly reduced incomes despite support schemes.

68. Impacts from physical distancing may have also been distributed unevenly across the workforce, with those most directly affected sectors employing relatively larger portions of younger, female, part-time and lower skilled workers. For example:

• The sectors most affected by physical distancing have the highest share of employment of 16-24 year olds and this group has therefore been impacted disproportionately. For instance, in 2019 36% of workers in the tourism sector (which includes substantial portions of Accommodation & Food Services) and 26% of the retail sector workforce were aged 16-24, compared to 12% overall for Scotland.^[75]
• 61% of the retail workforce and 52% of the tourism workforce were female.
• Non-UK nationals formed a larger portion of the tourism workforce (16%) compared to the Scotland average (8%).
• Around 63% of the workforce in retail, and 44% of the tourism workforce, were in part-time positions;
• Over 45% of the workforce in Accommodation and Food Services (45.4%) were employed in 'low skilled' occupations in 2019, compared with 10.8% of the workforce in the Scottish economy overall.

69. The sectors most affected by physical distancing are those with higher than average share of employees earning less than the real living wage (£9.30). Figure 5 shows that by far the highest share of employees earning below the real living wage is in Accommodation & Food at around two thirds of employees.

Source: ONS, Annual Survey of Hours and Earnings, 2020

Impacts arising from physical distancing in various settings

70. Physical distancing requirements, specifically 2 metre rules, have varied by setting and this has resulted in differential impacts by sector and on businesses.

71. Some survey evidence from business organisations in the engineering sector suggests that up to 20% loss of productivity due to social distancing.^[76]

72. Within manufacturing, physical distancing has resulted in continuing high rates of furlough (around 5.6% remain on furlough), despite the sector being allowed to reopen. This has arisen because workplaces cannot accommodate all workers under 2 metre rules. In universities, the 2 metre rule has also significantly limited the numbers of students who can benefit from in-person teaching to a maximum of around 10 per cent at any one time, with significant impacts on student wellbeing and progression.

73. A further consequence of physical distancing rule is a reduction in turnover for those businesses that are operating. Businesses in both the Arts, Entertainment and Recreation Sector and the Accommodation and Food Sector have experienced substantial reductions in turnover throughout the pandemic compared with what would normally be expected. The retail sector has also experienced reductions in turnover, while production activities such as manufacturing have also been impacted. Figure 6 shows that during mid-May 30% of manufacturing businesses reported that turnover had decreased, which will in part be due to capacity constraints arising from physical distancing restrictions.

74. Within the wider scientific community, 18% of businesses in that sector report that their turnover has decreased. Within specific settings, such as research labs, a 2 metre rule results in businesses/universities operating well below capacity. This then has broader economic consequences such as future revenue forgone, if, for example, it results in international students choosing not to study in Scotland or Scottish research institutes losing out on research funding to competitor labs operating under fewer restrictions.

75. For businesses in the health and social work services sector, 32% currently report decreases in turnover. This will include provision of day care services for elderly persons as these services are not viable with a 2 metre rule.

76. Sectors that enable economic activity, such as Public Transport, have also been impacted as they continue to follow physical distancing guidelines which limits capacity. As the economy reopens and the demand for public transport grows, physical distancing rules could be a constraint and this has implications for the ability of the workforce to get to workplaces and for people to access services.

Impact of home working

77. The impacts from working from home have largely been felt through the loss of footfall to city centres and the associated loss in office trade. Figure 7 shows visits to retail and recreation by local authority area in mid-April compared to pre-pandemic. The major cities (Edinburgh, Aberdeen and Glasgow) have been impacted the most with footfall over 40% down compared to pre-pandemic levels at the end of May but typically have been around 50% down during 2021.

78. Working from home is also likely to have lowered productivity in the early stages of the pandemic as businesses and employees adjusted to new working practices. All of these effects may have dissipated as COVID-related restrictions have eased and businesses and employees have adapted.^[78]

79. As we move forward into level 0 we will start to see a staged return of the workforce to offices. The current requirements for physical distancing would constrain office capacities meaning that working from home would still be necessary for some. This is likely to have a negative effect on city centre economies, as well as potential impacts on productivity and morale in the workplace.

Economic impact of options to loosen physical distancing restrictions

80. In terms of specific options, loosening restrictions on physical distancing for socialising outdoors and in private settings indoors (already implemented) does not impact directly on businesses or jobs but impacts indirectly via consumer spending.

81. However, loosening physical distancing restrictions in business settings, such as reducing from 2 metre to 1 metre, as opposed to private settings, would have greater economic impact as physical distancing restrictions impact on the productivity of the business and the ability to service more customers directly. Loosening of physical distancing restrictions for businesses will help improve business viability through improving the capacity at which businesses can operate, improving profitability.

82. Feedback from business stakeholder representatives during the pandemic has consistently highlighted the challenges of physical distancing measures, including 2 metre and 1 metre rules, for business viability.^[79] Stakeholder feedback has also highlighted that these challenges would not be fully ameliorated by reducing distances from 2 metres to 1 metre, particularly in hospitality, and also that moving from 2 metre to 1 metre, or removing 1 metre, are beneficial even in viable businesses by increasing capacity. This will be particularly important in hospitality, tourism, events and culture, where businesses are likely to have made sustained losses since the beginning of the pandemic, which are likely to have been only partially offset support schemes.

83. The same can be said of the university and college Sectors, where reductions in physical distancing measures will facilitate a return to increased in-person teaching and learning. This will improve both the experience and wellbeing of students and, for the university sector in particular, increase the attractiveness of Scotland's institutions vis-à-vis those in rUK. Maintaining 2 metre physical distancing into the next academic year intensifies the risk of competitive disadvantage and significant loss of income (in particular from international students), and at its most extreme could risk the failure of one or more institutions.

84. The extent of economic impact from of loosening restrictions on physical distancing has to be seen in conjunction with other restrictions: the more of the economy that is opened up when more socialising is possible, the more opportunities consumers have to spend in different places and on different products and the greater the economic impact.

Ongoing voluntary physical distancing

85. Even if restrictions on physical distancing are removed entirely, there is uncertainty around how much voluntary physical distancing will persist. Some voluntary physical distancing could continue after COVID restrictions are lifted, reflecting ongoing fears linked to COVID variants, for example. The vaccination programme is expected to lead to a fall in voluntary physical distancing, although the extent of that is uncertain.^[80] Some economic impacts of physical distancing could therefore be lasting.

Impact of differences with rest of the UK

86. A divergence in physical distancing rules and restrictions between Scotland and the rest of the UK could put businesses in Scotland that are in direct competition with businesses in the rest of the UK at a competitive disadvantage and result in contracts going elsewhere. This also applies to universities and colleges competing with counterparts in the rest of the UK for fee-paying students.