Analysis: Patient is sickly but should be OK with right treatment

THESE unemployment statistics are a grim reminder of the real damage that the credit crunch and the recession has done to individuals, businesses, families and communities up and down Scotland.

Furthermore, the Bank of England's forecasts that inflation will remain above 2 per cent until the end of next year reinforces the bad news.

Scotland isn't in the best shape. Like our temperature taken by a doctor, these statistics describe symptoms, but we still need to diagnose the country's problems and put together a treatment plan - recognising that different physicians, treatments and surgeries might be needed to nurse us back to health.

As other evidence has shown, the unemployment figures suggest the recovery north of the Border isn't as strong as in the rest of the UK. Further, nothing is more dangerous to the prospects of a sustained recovery than an extended period of mass unemployment.

And this is before many elements of the Scottish public sector make real-terms cuts, perhaps inevitably leading to fewer Scots being employed by the public sector.

What can be done? Getting flexible, affordable finance to the country's business community is a good start - allowing some of them to take advantage of a wider worldwide upturn.

While welcoming the British Bankers' Association business lending task force's acknowledgement that they "believe that there is a real need to make sure that viable businesses obtain the finance they need to support the recovery of the UK economy", more needs to be done to set up real competition to the big banks who, until recently, denied there was even a problem and that there was no demand from the business community.

A state-owned Postbank is one solution that many politicians and the small business community agree on.

If, and it's a big if, we can get the financing right, there is a real opportunity for the Scottish private sector to expand, but more needs to be done. Concerted and co-ordinated action at local, Scottish and UK level is needed.

The UK government needs to look at cutting payroll taxes for new jobs in all small businesses, not just start-ups. And, at Holyrood, surely it is now time to shift the focus of enterprise support from a small number of favoured companies and sectors to the solid small businesses that are going to form the foundation of any sustained recovery.

Further, the Federation of Small Businesses (FSB) has been arguing that we may need to focus some effort on helping the 200,000-strong army of single-member enterprises in Scotland to educate them about the benefits of becoming an employer.

Scottish local authorities, government agencies and others must try to make smart decisions about how and where to make savings, understanding their actions could have a real effect on local economies, and try to look beyond their own organisations' short-term priorities.

The faith some politicians have put in the private sector to power the recovery will only be borne out if businesses are given access to fair finance and they're supported appropriately. With that, I'm sure the patient will make a full recovery.

l Colin Borland is public affairs manager, Scotland, for the FSB.