Veterinary profession's value to Scotland: preliminary economic assessment

Executive Summary

• The role of veterinarians in Scotland goes beyond private farming or general household clients, reaching into government, food processing industries, pet organisations, wildlife organisations, sporting animal organisations, animal welfare organisations, policing, etc.
• Six central categories of impacts for the veterinary profession were identified namely: 1) farm animal productivity and related industries; 2) companion animals and related industries; 3) horse and equine industry; 4) public health, hygiene and surveillance activities; 5) tourism; 6) other impacts such as environment, wild life, education, research and policy.
• In 2016 there were 2,134 registered veterinary surgeons in Scotland and 948 registered veterinary nurses operating in 474 registered practices (246 of which were part of the RCVS Practice Standards Scheme). Additionally, in 2017 there were 197 approved veterinary training practices (TPs) in Scotland offering clinical training and work experience to 426 student veterinary nurses.
• Despite increased corporatisation of the veterinary landscape the sector in 2016 was dominated by micro businesses. At the UK level, one in ten veterinary businesses had a turnover of less than £50,000 per annum with just over a quarter of businesses in the under £100,000 category. Nearly 60% of veterinary businesses generated £500,000 turnover with one-in-five having turnovers of over £1 million. Over 40% of the UK veterinary businesses have fewer than 5 staff, with 62% having less than 20 employees, reiterating how it is a sector dominated by micro businesses.
• In 2015, Scottish veterinary businesses were estimated to be generating £308 million in turnover, generating £186 million in Gross Value Added and spending £134 million on goods and services and spending £83 million on wages. However, veterinarians have impact beyond this, particularly into education, research, and official government food hygiene and public health services.
• Whilst there are very high levels of job satisfaction, over 90% of veterinarians reported that their work was stressful. There has been a long term increase in the proportion of veterinarian work focusing on small companion animals, whilst the proportion of veterinarians working on large/farm animals falls. A "spiral of disillusionment" has been identified in the large animal sector that leads to a drift by newly qualified veterinarians to small animal medicine, even where that is not their original intention. Another longer term trend is greater veterinary research activity and reduced government veterinarians.
• In 2016, the Scottish universities accounted for 30% (£159) of the UK's veterinary graduates and it is estimated that their net additional lifetime earnings (i.e. after studying costs) was £165,000 for men and £128,000 for women. Veterinary earnings five years after graduating are second to only medicine and dentistry, with average earnings of around £36,000. There is, however evidence of a gender pay gap in new graduates with the starting salary of women estimated to be 7.2% lower than their male counterparts.
• The veterinary sector is now dominated by women (59% veterinary surgeons and 98% veterinary nurses), but the smaller proportion of women in the older cohort of veterinary surgeons reflects the historic male dominance within the industry. With proportionately fewer women in the older age group it means women in the industry are less likely to have a senior position within veterinary businesses (i.e. owners, partners, directors) that affects average salaries across the sector. Average earnings in the profession were £41,152 for women and £46,921 for men in 2016/17 meaning a 12% gender pay gap (which is up to 20% for those with more than 11 years' experience). Care should, however, be taken when considering the gender pay as the differences are largely driven by the unequal distribution of women in senior position that in turn is driven by age structures, which are gradually changing.
• Veterinary, and related, research is of significant social and economic benefit, but it is challenging to attribute these impacts fully to the veterinary profession, as RCVS acknowledge: "Veterinary research is carried out by individuals with a range of scientific backgrounds, including veterinarians, at research institutes and universities, by industry, including pharmaceutical companies, and in privately-owned veterinary practices."
• The farming sector places a great deal of trust in the advice and support they receive from veterinarians. The veterinary profession support the £1.77bn output generated annually from livestock in Scotland, and safeguard the £1bn of breeding livestock and £1bn of trading livestock in the country. It is estimated that farmers spend about £64m a year on veterinary services across Scotland. The impacts of veterinary profession on farm animals in relation to improve health and productivity are categorised under three groups: i) prevention, control and treatment of diseases and improving animal welfare conditions; ii) other health and farm management supports; and iii) contribution to feed, pharmaceutical and other related industries.
• Whilst the avoided costs from endemic and exotic diseases of farm animals, and the size of the sectors were estimated but it must be noted that it is (a) difficult to assess the contribution of vets and (b) as the avoided costs are highly probabilistic and difficult to assess, they should not be added to provide accumulated impacts. They do however provide indicative figures for the significant role to be played in monitoring, preventing and controlling animal diseases in Scotland and the scales of potential costs of outbreaks. With those caveats, it is estimated that veterinary interventions have significant economic impact through avoidable costs to the industry and taxpayer. The avoided costs attributable to veterinary services in Scotland for 30 endemic diseases of farm animals were estimated to be between £100m and £154m per annum. The avoided costs due to veterinary control measures stopping exotic disease outbreaks (FMD, Bluetongue and AI) were estimated at £135m per annum. Likewise, avoided costs from controlling and minimising outbreaks of BSE, salmonella, campylobacter and E.coli O157 were estimated at £96m per annum.
• The value of the UK veterinary medicine market in 2017 was estimated at £700m, with 42% percent of the sales are relating to farm animals. It is estimated that the Scottish veterinary pharmaceutical market is worth £59m for farmed animals and £33m for pets.
• The contribution of veterinary profession to the economy of Scotland through companion animals/pets can be viewed under three main categories namely: i) health and well-being of pet animals, ii) impact on health and well-being of pet owners, and iii) direct and indirect contributions to the related industries such as pet food, pharmaceuticals, accessories and insurance. In the UK the pet population stands at around 57 million, with an estimated 40% of households owning a pet. It was estimated that through reduced doctor visits and other healthcare expense the total health benefit of pets for the economy in Scotland is £209m.
• It is estimated that the pet insurance premiums paid by Scottish households in 2016 amounted to £71 million, with claims of £57 million paid out in 2016 (£44 million on dogs). The UK pet insurance market is expected to continue to expand with some estimates suggesting it will grow from £976 million in 2015 to £1.6 billion by 2021. The full cost of insurance claims cannot be attributed to the veterinary profession, as insurance also covers non-veterinary expenses such as third party liability, replacement cost, advertising costs, pet care in case of hospitalisation, holiday cancellation, etc.
• It is estimated that 10% of the UK veterinarians are equine specialists, servicing1 million horses and ponies in and an industry that has an economic impact of over £7 billion and employs about 250,000 people (half the employment is in horse racing). It was estimated that the total value of the horse industry in Scotland is £1.2 billion with £554 million generated from racing, and £90 million generated from other events.
• The veterinary profession play pivotal role in Scottish meat processing sector, acting as Official Veterinarians and overseeing meat hygiene inspections. In 2016, the direct cost to the meat industry for this role was £5.9m.
• In addition to their familiar roles, veterinarians are increasingly contributing to the "One Health" concept, covering areas such as bioterrorism, antimicrobial resistance, climate change, transboundary disease, ecosystem health and sustainability, and zoonotic disease. As veterinarians routinely observe and treat these diseases in a wide variety of animal species they have often adopted diagnostic methods and treatments that may be applicable to human disease interventions, thereby improving the effectiveness and cost of human treatments.
• The Scottish Government spends approximately £4 million per year on its Veterinary Services Programme (VSP), delivered by SRUC, to support livestock disease surveillance and animal health planning and welfare activities. In 2016/17 through the VSP diagnostic tests were carried out on 5,475 farmed animal carcases and over 93,000 submissions of blood, faeces, swabs and other materials. Farmers and veterinarians in Scotland also pay privately for diagnostic services undertaken by SAC Consulting and the Moredun Research Institute.