National Economic Forum: March 2022

Host: Richard Lochhead, Minister Just Transition, Employability and Fair Work

Facilitator: Louise Macdonald, Nations Director, Institute of Directors Scotland

Scribe: Naomi Magnus, Scottish Government

Summary

A candid discussion took place about how businesses can play a role in delivering the fairer prosperity actions of NSET; how barriers to pursuit of fair work, including structural inequalities, can be addressed; and how the Scottish Government can use the levers it has to meet the Government’s priority of creating a fairer and more equal society. Delegates focused on the need for interventions which enable businesses to help disadvantaged groups and holistic, preventative interventions which enable structural change.

Introduction and background

The Transformational Programme of Action which this session focused on was ‘Fairer and More Equal Society’: Reorient our economy towards wellbeing and fair work, to deliver higher rates of employment and wage growth, to significantly reduce structural poverty, particularly child poverty, and improve health, cultural and social outcomes for disadvantaged families and communities.

The Minister introduced Just Transition as a window of opportunity about working to create a fairer society, noting that 14.4% of people earn below living wage in Scotland, 16.6% live in poverty and there is a gender pay gap of over 11% and a minority ethnic pay gap of 13.7%.

The facilitator first asked delegates how all cross-sector businesses can play a part in delivering the fairer prosperity actions of NSET, and what support is needed for businesses to further tackle barriers for disadvantaged groups?

Delegates stressed the importance of getting businesses together to share their needs and problems. The importance of harnessing employment law to enable fairer and just employment for people with disabilities was noted, e.g. by legislating for long-term absence for long-term illness or caring responsibilities; and overcoming fear of employers around e.g. health and safety concerns. Immediate priorities highlighted to tackle these barriers were employer education and making employers aware of opportunities to employ people with disabilities.

Delegates spoke of the need to make it simpler for SMEs to support future employees and help those who face barriers e.g. by making conditionality simpler, or improving take-up on employer recruitment centres. The success of Youth Build was mentioned, as this de-risks for the employer and supports the worker into employment.

The benefits of an ecosystem model specifically taking into account the needs of Scotland’s SMEs that builds mechanisms to make it easier to access expertise was also noted.

Several delegates discussed the role of land and business ownership in Scotland, for example in relation to supporting businesses such as social enterprises, community businesses and B-Corps with less access to land, as well as in relation to rural housing and services. Delegates also noted the need to ensure rural communities and businesses are not disadvantaged, with issues of depopulation in rural/remote areas referenced, causing a shortage of workers to staff infrastructure projects where they are developed.

Delegates also discussed the need to tackle regional disparity in supporting a Just Transition, as well as to focus more specifically on communities.

In responding to these comments, the Minister stressed the need to foster a culture of equality across Scotland.

The facilitator then shifted focus to discussing barriers to the pursuit of fair work and closing the gender, race and disability pay and employment gaps, and maximising the impact of Scottish Government levers e.g. through conditionality

The need for structural change was consistently noted by delegates, e.g. by fostering strong co-design models, as was the need for Scotland to lead the way with levers it does have, and the success it has demonstrated in doing so in the past.

The NSET’s embedding of the concept of Community Wealth-building was also praised. The success of other economies in this regard was highlighted – e.g. Swedish job centres employing social workers, thereby ensuring jobseekers not only gain a job but also retain it.

The Minister was challenged about encouraging employers to support a  Fair Work model, while currently there is evidence of some Scottish Government contracts not fulfilling this threshold due to the challenge of stakeholder funding being  annual rather than multi-year. The variation in the level of income tax being paid by employees in Scotland vs. England was also raised as a potential point of tension.

A few further points to note were:

• the need to utilise people’s lived experience in a meaningful way to inform policy
• the need for firms to write business purpose into their DNA
• one delegate noted that the NSET speaks of the role of the state in fostering entrepreneurship yet lacks a focus on public sector “intrapreneurship”, or on the lever of taxation

Delegates then considered how the Scottish Government, employers and the third sector can work better together to increase fair working opportunities for parents of priority families.

The need for holistic interventions that move beyond considering individual issues was stressed by delegates, as was the need for wraparound services, e.g. health, childcare etc. Delegates also noted the need for investment in preventative models.

These comments were reinforced with regards to child poverty, as delegates noted that the majority of children in poverty in Scotland have one working parent. The impact of benefit caps on many parents  was also stressed, as were the systemic inequalities women face, and delegates noted the need for policies that address these, e.g. menopause policies and maternity pay being paid above the living wage etc.

Another delegate noted that the NSET does not acknowledge  care services and providers – paid and unpaid – which they felt implied that infrastructure for caring was not seen as key to wellbeing and economic transformation, and that current challenges around difficulties in recruiting staff were not recognised.

The Minister responded to these comments, noting the role of the National Care Service consultation and the economic dimension within this, and recognising the importance of Scottish Government efforts to take a holistic approach, and to support all communities as part of a Just Transition. The Minister also highlighted the challenges of delivering some of these aspects when many important levers remain reserved to the UK Government.

Closing comments

The Minister thanked all delegates for their insightful contributions and concluded by focusing on the need for a Just Transition to create genuine economic transformation across society, highlighting that Scotland has the opportunity to become a highly prosperous, decarbonised society. While there are major issues to address, getting them right could transform Scotland’s economy and society.