Chamber and committees

Your questions sum up the complexity of the issue that we are discussing today; there is no easy answer to some of them. I will address your first question first, then come to the second one.

The first question was about where the best interventions are and what makes the biggest difference. My point earlier about not being able to identify specific reasons why we are making progress was about the combination of practical support for people and changing culture, particularly in workplaces. The latter is quite difficult to measure, but we want it to happen and it is beginning to happen. The extent to which progress is due to practical support or due to culture changing is difficult to measure. That is the point that I am trying to make.

Since you have asked the question, I will say that I think that the biggest obstacle is culture change in workplaces. If we can open the minds of all employers in Scotland to the fact that there are steps that they can take to tap into the massive talent pool that we have in this country, in the disabled population who are not in work, that will clearly help to address these inequalities. We must focus on culture change. There are some positive signs—especially, as we have said before, in some big employers. I think that the convener just said that some of the feedback that the committee has had is that the private sector is now doing much more to be adaptable and flexible. Culture change is the biggest area.

As to how we identify disparity across the country in our interventions, including the “no one left behind” strategy, every partnership at the local level should be looking at the local labour market and coming up with projects and initiatives and funding workstreams to address that. “No one left behind” is a relatively new approach, so we must understand why some areas are performing better than others and we must identify gaps.

Yes. You are absolutely right that the issues affect our rural communities. We have a forum—I am trying to remember its name—for disabled people and people with mobility issues that advises on transport policy and works with transport colleagues. There is an “access to work” theme, as well. I do not have the name of that forum in front of me but, I give members the assurance that it exists. I will happily send details of the forum to the committee. I am sure that it has its own workstreams and issues that it is looking at.

I am not aware that such provision exists at the moment. Lewis Hedge might be able to say something about that.

Our fair work action plan includes an aspiration that Scotland will become a leading fair work nation by 2025 and contains a lot of measures to push that forward. As I said previously, we now have labour shortages in Scotland, but we also have talent pools of people who could be working. Now is the time for employers to be more open minded, adaptable and flexible and for the Government to play as big a role as possible. It is important that we speed things up.

Yes, absolutely. There are some projects under way. I have mentioned the Salvesen Mindroom Centre and other relatively new projects that are looking at the issues.

Of course, the fair work action plan is about the employment gap that faces racial minorities, the disability employment gap, the gender employment gap, the gender pay gap and so on. The disability employment gap is a big part of it, but the plan applies much more widely than just to disabilities.

In 2021, the Scottish Government adopted the “Learning/Intellectual Disability and Autism Towards Transformation” plan. Various recommendations from that have been taken forward. All those things are being joined up and there are specific actions being taken within the employment sphere. I want to assure you that the issues are being addressed. I am happy to include that in my response to the committee.

The answer is probably no. A lot of new work is under way, which we referred to in answer to earlier questions, to support this agenda in schools and, in particular, on the transition of young people from school to young adulthood. It is now recognised that we have to do a lot more.

It is exciting that new policies and plans will be developed in the coming months and years to address some of the issues. No doubt, there is a lot more we could do in schools to promote equalities and to support disabled people to be prepared for employment.

Good morning. I am grateful for the opportunity to appear before the committee for the first time to discuss the pandemic’s impact on the labour market and key reasons for economic inactivity.

It is worth starting with a brief look at the labour market in Scotland overall. It remains in strong shape, with low unemployment rates—it is welcome that we have not seen the significant increase in unemployment rates after the pandemic that we might have feared. However, many businesses across the country and the economy still face labour shortages, even if vacancy rates are more stable now than they have been at points in recent months. The wider economic context is also concerning—the effects of Brexit are still being felt, there is an acute cost crisis and there could be a recession on the horizon.

It is important to put economic inactivity in the right longer-term and international perspective. Scotland’s inactivity rate is not a significant outlier in comparison with the United Kingdom or other countries, but our population is increasingly older and less healthy, and inactivity has increased over a number of years, which means that we need to take the issue seriously.

In the medium-term picture, the UK and Scotland may be experiencing different effects from Covid. There are significant increases in inactivity rates in the UK, which have reversed the previous downward trend. Scotland’s rate pre-pandemic was higher than that for the UK, and the rate has increased in recent years—between 2019 and 2021, the net increase in inactive people was 42,000, which is 5.5 per cent. However, we have not seen the dramatic reversal in trends that other places have seen.

I emphasise that the data for the very short term is volatile and is subject to many dynamics, which makes it difficult to pinpoint and be totally accurate about some issues that we will discuss today. However, the latest data suggests that the inactivity rate may be falling in Scotland, which is good news, whereas it is still rising in the UK. The gap has been closing over the past year or two.

All of that means that we should be cautious about assuming that all the commentary about and analysis of economic inactivity elsewhere automatically reads across to Scotland—it may or may not. However, that does not mean that we can rest easy—inactivity has still increased in Scotland in recent years, and the longer-term picture remains of some concern.

Long-term sickness appears to be the main driver of the recent increases in inactivity in Scotland. It was the largest single contributor to the increase in inactivity between 2019 and 2021, when it accounted for 24,100 people out of the total increase of 42,000. I welcome the committee’s engagement on the topic and I look forward to seeing your report and recommendations in due course.

The picture on early retirement is less clear than the picture on long-term sickness. It is too early to draw strong conclusions, but we do not see clear evidence of significant recent increases in the number of people who are inactive because of early retirement in recent years. Inactivity has increased among 50 to 64-year-olds, but that increase appears to be driven more by sickness and caring for others than necessarily by retirement. Our emerging sense is that early retirement is not on the same scale as long-term sickness as a driver of increasing inactivity.

On the health side, our emerging sense is that Covid and long Covid are not directly driving the increase in inactivity because of ill health, although they could be indirect factors. Health and health services are enormously important, but we should not forget that the drivers of inactivity overall can be complex and multifaceted and vary for each person. We cannot take a one-size-fits-all approach to the problem or the solutions.

I could talk about what we are doing to address some of those issues, but I think that the convener wanted my remarks to be relatively brief. I will therefore say only that I look forward to working with the committee on these issues, which are important to Scotland’s future.

We take that into account. The Cabinet Secretary for Finance and the Economy and others are probably a bit closer to that work than I am, but overall we look at how we can support people in getting back into work or education. That includes support through the national health service—for instance, through the expansion of mental health services or occupational health support. The Government makes that support available, but we also need support for employers and—you mentioned young people—educational institutions. That is all taken into account in the round. The Government wants a healthy working population, and that is why those services are made available.

There is more than £50 million in the no one left behind strategy. That is not including fair start Scotland—there is more than £80 million overall. The money is allocated to each of the partnerships across all 32 local authorities. The money is held by local government, but it is not for local government to invest or spend; it is for the partnerships to agree how that money will be allocated locally to commission local services. In my constituency, the local employability partnership is called Moray Pathways. Every other area of the country will have its own way of approaching it.

I am encouraged by the development of those partnerships. I have visited the partnership in Renfrew, I think it was, and in the Shetlands and two or three other partnerships across the country, and it is heartening to see how local authorities are approaching this, because you go into a hub and there are different services within the hub.

To go back to Alex Rowley’s question, those hubs are good one-stop shops for the public to use, and some mental health support, counselling or other services can be brought in to that one location. I think that clients are finding it really helpful to have that one-stop shop approach. Not all local authorities are doing that, but some of them are being very innovative and forward thinking in doing that. It is a decentralised, devolved way of approaching employability services.

The short answer is yes, in that the data guides us to the mental health services and support that we are delivering. I gave examples of how we are helping employers, so that they in turn can help employees. There are many different ways in which the NHS is responding to the mental health crisis, and there has been a huge expansion of resource for that.

Alastair Cook may know more about the data and how we use it in detail.