Scottish draft Budget 2018-2019: equality statement

Chapter 3
Inclusive Growth

Strategic Context

Scotland is a wealthy country with low unemployment levels and high living standards. Despite this, levels of in-work poverty are rising and inequalities in income, wealth and health remain high, following a similar pattern to many other advanced nations. Moreover, among some protected characteristic groups, poverty and economic disadvantage are more prevalent as evidenced in indicators such as the gender pay gap and gaps in employment participation for disabled people and ethnic minorities. There is now international consensus that inequality such as this is not only bad for social resilience but also for economic resilience and growth. ^[1,2]

Sustainable economic growth has been a long-term ambition for the Scottish Government, and the notion of inclusive growth as a strategic priority underpinning our economic ambitions was set out in ‘Scotland’s Economic Strategy’ in 2015. Inclusive growth is growth that combines increased prosperity with tackling inequality, creating opportunities for all and distributing the dividends of increased prosperity fairly.

The strategy sets out that a strong, vibrant and diverse economy is essential to our national prosperity and to creating the wealth to support high quality public services. Ensuring that growth is shared and sustainable is the key to unlocking all of Scotland’s potential and to strengthening our greatest asset: the people of Scotland. The Scottish approach to inclusive growth thus centres on both the pace and pattern of growth across the country, and across different groups within our society.

Our actions focus on:

• driving competitiveness and raising productivity through investment, innovation, internationalisation and fairer work;
• tackling inequalities and barriers that prevent individuals from participating in the economy in areas such as skills, health, social capital, networks, access to services and opportunities;
• promoting more equal growth and opportunity across cities, towns, regions and rural areas, embracing joint working with local actors and ensuring sustainable communities; and
• taking an evidence-based approach, ensuring that our priorities, planning, programmes and policies are focused on making the greatest impact at national, regional and local levels.

Inclusive growth cuts across many of the strategic priorities of the Scottish Government and partners. It sits at the heart of ‘Scotland’s Economic Strategy’ and ‘Scotland’s Labour Market Strategy’, and is embedded in the review, now in its implementation phase, of the enterprise and skills support provided by economic development and skills agencies. Contributions to the economy from our social policies are important too, such as those set out in our ‘Fairer Scotland Action Plan’.

We are already making progress in delivering the Scottish approach to inclusive growth. We are:

• Improving the quality of work through the Fair Work agenda which promotes effective voice, opportunity, security, fulfilment and respect for employees; and the Business Pledge which promotes internationalisation, workplace innovation, the Living Wage and employment practises that support both higher levels of productivity and employee wellbeing.
• Increasing access to early learning and childcare ( ELC). We will almost double the funded ELC entitlement from 600 to 1,140 hours by 2020 in a bid to transform the life chances of children in Scotland.
• Equipping our young people for the future through the Scottish Attainment Challenge, providing £750 million during the course of this parliament to tackle the poverty-related attainment gap.
• Increasing Modern Apprenticeship opportunities to 30,000 per year by 2020, and supporting young people aged 16 to 24 who have been out of work for six months or more by introducing a Job Grant (a one-off payment of £100, or £250 for people with children, plus a bus pass for three months) aiming to help meet the costs of getting into, or back into, employment.
• Incorporating inclusive growth in national and regional planning and regeneration activities. For example, nationally through the new Planning Bill and the on-going National Transport Strategy Review, and regionally and locally through the Regeneration Capital Grant Fund. Progress has also been made in our work on the Clyde Gateway, City Region Deals ( CRDs) and regional partnerships (see below).
• Improving population health, including preventative measures, as well as improving access to mental health services and support for people with health conditions, and their carers, to stay in work.

In addition, the Scottish Government hosted an international conference on inclusive growth in Glasgow in October 2017, establishing Scotland’s place as leaders in delivering inclusive growth. It was attended by delegates from organisations including the Organisation for Economic Co-operation and Development, International Monetary Fund ( IMF) and World Economic Forum, with the IMF noting that Scotland is well placed to take forward inclusive growth as a country that places a high value on education and community, and is outward-looking.

Examples Of Portfolio Contributions To Inclusive Growth

This section illustrates some of the ways in which different portfolios are delivering inclusive growth across the Scottish Government. Further information can be found in the relevant portfolio chapters in this document.

Communities, Social Security and Equalities

Children who live in poverty are known to have poorer outcomes, and this can limit their opportunities in later life. Taking an inclusive growth approach will be key in meeting the ambitious interim and 2030 child poverty targets encapsulated within the Child Poverty Bill.

Community-led regeneration delivers inclusive growth by supporting interventions which respond to local circumstances and increase opportunities to attract investment and jobs in disadvantaged and fragile communities, while building community and regional cohesion.

Finance and the Constitution

The Scottish model of procurement plays a major role in supporting inclusive growth, by balancing business needs and social responsibility to secure the maximum benefits from the £11 billion spent by the public sector each year.

Health and Sport

Disabled people, those with long-term health problems – particularly mental ill health – and those with low levels of qualifications are particularly disadvantaged in the labour market and often experience worsening ill health and poverty as a result.

Health and care services play a crucial role in delivering inclusive growth by ensuring that as many people as possible benefit from being in work; not only in terms of income and maximising our workforce, but also from the self-worth and expression that can come from employment.

Economy, Jobs and Fair Work

Inclusive growth is at the heart of Scotland’s Economic Strategy and is therefore central to the Economy, Jobs and Fair Work portfolio. Fair Start Scotland will take great strides towards achieving equality of opportunity in the labour market, and the Fair Work directive will continue to ensure that those who are in work are in jobs that are secure and well paid and are treated with respect.

A Place-Based Approach To Inclusive Growth

Within Scotland, economic and social outcomes vary considerably between regions, local authorities and places. Ensuring that all areas and people can prosper is fundamentally important for Scotland’s overall performance and for ensuring that equality is advanced in all parts of Scotland.

Driving inclusive growth across Scotland’s cities, regions and rural areas requires an understanding of the unique opportunities and challenges that exist in Scotland’s places and communities. To support local, regional and other partners in this, the Scottish Government is creating a Centre for Regional Inclusive Growth which will be a platform for disseminating analysis at a local and regional level, sharing best practice and developing ways to support the use of local and regional data and evidence to inform inclusive growth policies.

The centre will build on the inclusive growth diagnostic work which is currently being undertaken in a number of economic geographies and will be supported by the development of a monitoring framework that captures the five main themes of inclusive growth:

• economic performance and productivity;
• labour market participation;
• fair work;
• the distribution of opportunities and benefits across different groups of people; and
• the pattern of growth across different places in Scotland.

This will complement and sit as an aligned framework to the refreshed National Performance Framework, providing clear metrics for national, regional and local organisations to use to track progress. This framework will include metrics for race and disability outcomes alongside gender.

Another mechanism for driving inclusive growth in Scotland’s regions is the City Region Deals approach, which encourages local authorities to operate strategically at regional level, in partnership with national governments. City Region Deals, as well as Regional Partnership Plans such as the Clyde Gateway, provide additional resources while encouraging local and regional partners to identify and deliver a vision for inclusive growth in their areas.

These actions, in combination with the work already being conducted at community and local authority level, will support local areas to deliver the change required in their communities, and help achieve our ambitions of delivering inclusive growth across all of Scotland.