Scotland politics

'Clutter' of strategies stifling Scotland's growth, say economists

Scottish bank notes
Image caption The Fraser of Allander Institute said the Scottish economy continued to grow, but at a slow pace

Scotland's growth is being held back by the clutter of initiatives coming from the Scottish government, according to a leading economic think tank.

The Fraser of Allander Institute (FAI) has criticised the number of different strategies and advisory groups looking at Scotland's economy.

It has warned they can lead to confusion and duplication.

The Scottish government said it was supporting business and continuing to grow the "already strong" economy.

A spokesman said Brexit was the biggest threat to the Scottish economy and that a hard Brexit could cost £12.7bn a year by 2030.

'More resilient'

The Strathclyde University economists made their comments while issuing their latest forecast for the Scottish economy, growing this year by 1.2%, and 1.4% for each of the next two years.

That remains unchanged from the last forecast it published at the end of last year, and is not as weak as the forecast from the Scottish Fiscal Commission, at 0.7%.

The latest analysis showed that over the past 12 months, Scotland's economy grew by 0.6%.

The economists said the oil and gas sectors had stabilised somewhat, but that a further sharp decline in construction was the key driver of more recent sluggish economic performance.

Prof Graeme Roy, FAI director said: "The Scottish economy continues to grow, but at a slow pace. However, beyond the construction sector, growth in many other key sectors of Scotland's economy is actually more resilient than the headline figure suggests."

The Fraser of Allander Institute listed 16 strategies across the Scottish government and its agencies:

  • Economic Strategy
  • Digital Strategy
  • Energy Strategy
  • Circular Economy Strategy
  • Climate Change Plan
  • Trade and Investment Strategy
  • Labour Market Strategy
  • Social Enterprise Strategy
  • Hydro Nation Strategy
  • Strategy Action Plan for Women in Enterprise
  • Manufacturing Action Plan
  • Youth Employment Strategy
  • Innovation Action Plan
  • National Islands Plan
  • Agenda for Cities
  • Arctic Strategy

There are also a number of "sector specific" strategies - including food and drink, tourism, textiles and life sciences, as well as an infrastructure investment plan.

The strategies are overseen by the Scottish government, Scottish Enterprise, Skills Development Scotland, Scottish Funding Council, Visit Scotland, Highlands and Islands Enterprise, South of Scotland Enterprise Agency, Scottish Futures Trust, Scottish National Investment Bank, Business Gateway and 32 local authorities.

The FAI also listed more than 20 advisory boards or forums looking at various aspects of Scotland's economy.

The forecast report highlighted positives, including low unemployment, a strengthening global economy and rising exports.

However, it emphasised the need for "effective economic policymaking" in the years ahead - given the risks and opportunities the Scottish economy faces from Brexit, weak productivity or technological and demographic change.

It said a "clarity of purpose" was "more important than ever".

'Weakened accountability'

Prof Roy added: "In 2007, the Scottish government set out a novel approach centred upon a single economic strategy around which the entire public sector was to be aligned.

"However, the past decade has seen a proliferation of different strategies, advisory groups and bodies which have arguably cluttered the policy and delivery landscape.

"Whilst many will no doubt have improved Scotland's economic performance, do we know which ones?"

He said the "risk" with such an approach was that it could "lead to confusion, a lack of alignment, duplication and weakened accountability".

Image copyright PA
Image caption The FAI said the challenges posed by Brexit could present an opportunity to undertake "a fundamental review" of economic policy in Scotland

The FAI also suggested the challenges posed by Brexit could present an opportunity to undertake "a fundamental review" of economic policy in Scotland.

John Macintosh, tax partner at Deloitte said: "The range of issues industries will face during the Brexit process and in the years afterwards is as broad as it is complex.

"What's vital is that business and government work together to ensure Scotland remains an attractive place to do business, an attractive investment opportunity, and an attractive place to work."

'Damning verdict'

A Scottish government spokesman said: "We are supporting business and continuing to grow Scotland's already strong economy by focusing on investment, internationalisation, innovation and inclusive growth.

"These key areas remain increasingly relevant for policymaking in current economic conditions.

"Our latest analysis, confirmed by the UK government's own analysis, shows a hard Brexit could cost Scotland's economy £12.7bn a year by 2030, so we continue to use all of the powers at our disposal to grow our economy."

Opposition parties accused the Scottish government of harming economic growth.

The Scottish Conservatives said the Fraser of Allander report was a "damning verdict" on the SNP's economic policy, while the Liberal Democrats said recent figures showed performance was "listless and stagnant".

Scottish Labour said the Scottish government had been "doing nothing but tinkering around the edges" on the economy.

Analysis from Douglas Fraser, BBC Scotland business and economy editor

It's often said that the advantage of public policy-making in Scotland is that the people you need to get to a decision can fit into one room.

That doesn't look true of the economic who's who. Fraser of Allander economists have highlighted the proliferation of strategies and advisory boards.

There may be membership duplication. But the message in this report is that the furniture is a clutter, risks confusion, and there's a lack of curiosity about evidence of what works.

The attempt to reorganise and streamline the enterprise agencies was a unforced botch, which only added to the fog of advisory boards.

Prof Graeme Roy, atop the Strathclyde institute, was at the heart of economic policy-making in St Andrew's House until last year, so he's got valuable insight and a blunt message for his former political bosses.

What his commentary might have added is that responsibility for economic policy is spread widely across ministerial portfolios, and is reputed to be left in the ante-room of the first minister's office, while she tends to social policy.

The point is that Scotland has strengths and opportunities to improve its very poor growth prospects. But government is not giving the economy the laser focus it needs, or that it was given 11 years ago, when the SNP first came to power.

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