How Scotland can escape vicious circle of ill-health, unemployment and poor public services

According to the latest figures, some 786,300 people aged 16 to 64 are economically inactive in Scotland

In November, Keir Starmer announced a plan to tackle the most intractable drivers of unemployment and economic inactivity. The Prime Minister’s proposals will go some way to address the problem in England, but this is just as much of an issue in Scotland, and the Scottish Government is similarly concerned about the trends.

The government’s latest figures suggest there are 786,300 people aged 16 to 64 who are economically inactive in Scotland. That means those who are not employed or actively looking for work. The economic inactivity rate in Scotland is 23.7 per cent, around 2 per cent higher than the UK as a whole.

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Across the UK, the number of people classed as economically inactive surged during Covid to over nine million and has remained at that level since. Nearly three million people are out of work due to long-term sickness.

Large numbers of people in Scotland and across the UK are not in work, for a variety of reasons, including ill health (Picture: Jack Taylor)Large numbers of people in Scotland and across the UK are not in work, for a variety of reasons, including ill health (Picture: Jack Taylor)
Large numbers of people in Scotland and across the UK are not in work, for a variety of reasons, including ill health (Picture: Jack Taylor) | Getty Images

Mental health problems

The Scottish Government has also reported deeply concerning evidence that workers in their 20s are more likely to be economically inactive due to ill health than workers in their 40s, and that mental health conditions appear to be particularly prevalent. The not-for-profit organisation I lead, Fedcap, has pulled together data which confirms this, with half the people we see citing ill health as a barrier to work.

The result is a vicious circle involving lower economic growth, which means less government expenditure on health and education, which means fewer productive workers, which means lower economic growth.

At Fedcap, we focus on the cross-section of people who feel that their mental or physical health is an obstacle to getting work in the first place. We specialise in identifying those who are furthest from the jobs market, and over the last five years we supported over 100,000 people to overcome the barriers they face as they start the journey to education, training or the workplace.

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More can be done

We tackle the challenge in the only viable way: from the ground up. Examples include our partnership with Falkirk Health and Social Care Partnership, supporting young people with mental health challenges into employment or training; identifying specific coping strategies and work skills for jobseekers in Dumfries and Galloway; and our clubhouses in England, which offer non-clinical and peer-led support for people living with mental health conditions, which builds their confidence and improves their lives.

The UK Budget resulted in an unexpectedly large grant for the Scottish Government and Cabinet Secretary for Finance Shona Robison’s Budget statement did include extra money for community-based support for teenage mental health, but there’s so much more that can be done.

Health Secretary Neil Gray has identified his four priorities as improving the population’s health, focusing on prevention and early intervention, providing quality services, and maximising access to healthcare.

His vision is right and good. It would reduce the burden on the NHS, increase economic activity and productivity, thereby increasing the tax revenue to spend on public services. This is key to creating a virtuous cycle underpinned by employment and health.

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The employability sector, which Fedcap is proud to be part of, has the expertise and experience to play an important role in the Scottish Government’s support for those with complex health challenges to get back into work. We look forward to helping create that virtuous circle.

Brian Bell is chief executive of Fedcap UK

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