South of Scotland's economic ills addressed in new report

by DOUGLAS SHEPHERD

A daunting list of issues and challenges ranging from obesity to low wages have been highlighted in a draft Regional Economic Strategy [RES] for the South of Scotland where investment on a massive scale will be required if the region is to catch up with the rest of the country.

The document covering the local government areas of Scottish Borders and Dumfries & Galloway acknowledges that the south has an ageing, declining population which is putting pressure on services and labour supply.

There is a comparatively small and shrinking working age population; the region has the highest dependency ratio in Scotland (over 70%); and 39,000 job openings are forecast from 2019-2029. 

According to the authors of the RES: "Our economy is changing, creating the need for investment in people, skills and infrastructure · Greatest job losses seen in: Mining and Quarrying (-50%); Public Administration and Defence; Compulsory Social Security (-33%); Financial and Insurance Activities (-20%); and Manufacturing (-14%) · Manufacturing expected to lose up to 1,800 jobs by 2029.

"Some of our jobs pay poorly, are insecure and are limiting standards of living for people across the South of Scotland · Median annual wages are around £3,000 less than Scotland; 9% more people earn below the living wage in the region, versus the Scottish average · Out-commuters earn more than those working in the region; Gender pay gap four times greater than Scottish average in parts of the region."

The economic plight of the South of Scotland is exacerbated because local businesses are not investing enough in research and innovation and fewer new/start-up businesses are being created. The statistics show a mere £60 per head of business expenditure was devoted to research and development in the region in 2019, compared to a Scottish average of £258 per head.

The draft report claims: "Infrastructure deficits are holding back growth, inclusivity and reducing our region’s attractiveness · Lack of full fibre broadband and mobile coverage in rural areas is leaving the region exposed to a growing digital divide · Rates of new home building lag Scottish trends by a considerable margin · Public transit a barrier to accessing jobs, services and education.

"We are falling behind others in terms of productivity, reducing opportunities for shared prosperity. Regional GVA per head ~£6,000 lower than national average · GVA per job in region was 70% of the national figure in 2019 · Human Health and Social Care by far the largest sector but generated third highest total GVA in 2018".

The region has some areas of high deprivation which are limiting mobility, health and economic participation.

"Burnfoot, Langlee, Lochside and Lincluden are amongst the 20% most deprived areas in Scotland · 69% of people are overweight or obese – 4% higher than the national average · 46% of people in the region report long-term illnesses."

And young people are less likely to attain higher level skills, harming growth and accentuating skills gaps. Seven per cent fewer people hold a degree level qualification in the region versus the Scottish average · The employer and workforce skills gap has been growing · There is evidence of skills underutilisation in local jobs, meaning skills are not being put to their most effective use.

The measures to be deployed in a bid to turn round the economic fortunes of the region are outlined in some detail.

The strategy report says: "With a 10-year timeframe, the RES targets a significant shift in the region’s economic performance, its outward profile, and the way by which wealth is created by and shared amongst people. It also seeks to draw a renewed focus on the region’s exceptional quality of life and natural capital, to attract a new generation of resident, worker, learner, visitor and investor to the South of Scotland. 

"Throughout, we therefore emphasise the importance of supporting change, whilst retaining the essence of what makes the South of Scotland truly special. Key to our new strategic impetus is the ability to take control, make decisions locally and speak with a unified voice on behalf of the South of Scotland. 

"With the backing of both the Scottish and UK Governments, the region has an exciting platform from which to do more and go further – at the heart of this are the Regional Economic Partnership (REP), Dumfries and Galloway and Scottish Borders local authorities and South of Scotland Enterprise (SOSE). Never has there been such momentum, coupled with the ability to seize control of regional agendas, reflecting, and responding to the issues that are most important to local people, communities, and businesses."

In a reference to the need to improve workforce skills the document comments: "Skills and training will be open and accessible to all, physically, financially and virtually, unlocking job prospects, encouraging economic participation, driving career progression and making sure people’s skills are aligned with the needs of our economy."