Low Carbon Manufacturing Challenge Fund: equality impact assessment

Background

The Low Carbon Manufacturing Challenge Fund (LCMCF) is a new capital fund of £26 million, over five years, and was announced in the Programme for Government (PfG) 2020-21.

Manufacturing is a key source of business research and development, and of high-quality employment. Pre-COVID-19 figures show the sector was worth £12.5 billion in Gross Value Added (GVA) – approximately 13% of total GVA – and employed approximately 169,000^[3] people (6.5% of all total employment in Scotland), with 21.4%^[4] of those in highly-skilled jobs (compared to 27.6% of all those working in Scotland as a whole).

Manufacturing generates almost 19,500 circular jobs*^[5] (over 9% of all circular jobs). The remanufacturing industry in Scotland employs an estimated 19,000 people - over 9,000 directly in circular jobs in the manufacturing of products and over 10,000 in repair^[6]. The Circular Economy Strategy for Scotland indicated remanufacturing could potentially create an additional £620 million turnover and create 5,700 jobs. ^[7]

The aim of the LCMCF is to support manufacturing businesses to seize the opportunities from the Scottish Government's legal duty to achieve net zero emissions by 2045.

The key aims of the Fund are:

• to support innovation in low carbon technology, processes and infrastructure and encourage adoption;
• to encourage collaboration and high project standards;
• to better enable firms to enter low carbon markets and/or their existing supply chains.

The Fund is consistent with the aims of the Making Scotland's Future programme and the Manufacturing Recovery Plan (MRP) - to boost productivity among manufacturing firms, including through the stimulation of innovation and investment to help firms compete globally.

Innovation, training and upskilling the workforce will be supported by our investment of £75 million in the National Manufacturing Institute Scotland (NMIS). NMIS is already adding to existing services such as the Scottish Manufacturing Advisory Service (SMAS) to enhance the sector's skills, test new processes or technologies and de‑risk investment.

The direct effect of the Fund will be on manufacturing businesses in Scotland – they will be able to secure funding to undertake R&D projects in the challenge areas identified. The greatest immediate impact of the funding will be on those people employed by or in the communities of the organisations involved in funded projects.

The Fund will be outcomes-focused and the long-term aim is to effect changes that will help the transition to a low carbon economy, playing its part in meeting the net zero emissions target set by the Scottish Government for 2045. As such, successful achievement of the aims of this Fund could indirectly benefit every person in Scotland, as well as future generations, through improved ecosystem resilience, employment, health and Scotland's increased industrial competiveness. As the fund will be available Scotland wide, the benefits of the low carbon manufacturing transformation could be shared by everyone in Scotland, enhancing and supporting inclusive growth as Scotland recovers from the impact of COVID-19.

The Scope of the EqIA

The Scottish Government's Advanced Manufacturing team have completed this EQIA for the development of the LCMCF, to identify opportunities to boost equality across the manufacturing sector. Specifically, the EQIA considers impacts on equalities groups based on the three tests it is required to address:

• Does this policy eliminate discrimination for each of the nine protected characteristics? If not is the discrimination justifiable? Can it be mitigated?
• Does this policy advance equality of opportunity between people who share a protected characteristic and those who do not?
• Does this policy foster good community relations between people who share a protected characteristic and those who do not?

This full EQIA for the LCMCF is a strategy focused document which has been produced following consultation with stakeholder equality groups, business organisations, trade unions and industry.