How exploiting Scotland's unique strengths can lead to a prosperous future and decent public services

The month of May seems an eternity ago given all that’s happened since Rishi Sunak called the general election. It’s instructive, though, to revisit that month, during which time the incoming First Minister John Swinney delivered a statement at Holyrood, noting that improving Scotland’s public services should be seen “not as a cost, but as a vital investment in our future health, equality and prosperity”.

Public services – those led from Holyrood and those from Westminster – have inevitably been the focus of all parties’ campaigns. These services aren’t luxuries but components of a functioning democracy, ensuring that every individual, regardless of socioeconomic status, has access to basic necessities and opportunities for advancement. Every government has a duty to provide these services, ensuring that they are robust, accessible, and efficient. Each government must also constantly assess whether these services are meeting the evolving needs of our society.

Many of our fellow citizens are prepared to pay more for these. Deloitte’s The State of the State 2024 research, an annual report that examines attitudes to government and public services, last year found that 36 per cent of Scots want to see higher levels of public spending – even if that means higher levels of tax and more borrowing – to fund improved public services, compared to a UK average of 30 per cent.

Scotland has many of the essential ingredients of a successful entrepreneurial nation, including world-class colleges and universities, like Edinburgh (Picture: David Cheskin/PA)

The report also found the top areas that the Scottish public need the government to address are the cost-of-living crisis and NHS waiting lists. The availability of affordable housing, jobs, economic growth, and climate change were also noted as areas for concern. These issues, which directly impact the financial stability and health of countless individuals, have been at the forefront of public discourse for some time. That has only increased with the election.

Talk is cheap, action is harder

Years of successive challenges, from Brexit and austerity to Covid and the cost-of-living crisis, combined with reduced spending power, tight budgets, and mounting pressure on public finances, have left our Scottish public services fragile.

Whatever the outcome, political leaders have to convince the public on the ambition and reality of delivering changes that improve public services. My hope is that there will be increased momentum in Westminster and Holyrood for the reform of our public services, which can only be tackled through cross-party support, efficiency in our institutions, and trust in government, all of which require ambitious leadership and bold, innovative thinking. It is easy to say this; it is much harder to deliver.

Amid the political debate, we shouldn’t lose sight of Scotland’s strength and opportunities. Scotland already has many of the essential ingredients of a successful entrepreneurial nation – world-class colleges and universities producing exceptional people and cutting-edge research, an active investment market, and respected initiatives such as CivTech, Scottish Edge, Young Enterprise Scotland, and Scotland Can Do. The commitment of £50 million over the lifetime of this parliament to support more women into entrepreneurship underscores the importance of tapping into a more diverse talent pool to drive new business creation and growth.

Deloitte is involved in a range of activities around furthering this space. One key initiative is Pathways, an independent review into women in entrepreneurship in Scotland. Based on thorough data analysis and stakeholder engagement, the report’s recommendations seek to address the root causes of female under-participation in entrepreneurship.

Market opportunities of net zero

Scotland's policy shift towards net zero also presents opportunities. While there has been significant progress, our research found a prevailing sentiment among the public and public sector leaders that the pace of change is insufficient. The urgency of advancing alternative energy solutions, such as hydrogen, cannot be overstated. Accelerating these initiatives will be crucial for Scotland to meet its environmental goals and create new market opportunities.

Improving productivity must be an element of that acceleration. The State of the State findings indicate a need for systemic change, advocating for bold and innovative approaches. Government and industry must work in tandem to develop holistic strategies that leverage Scotland's unique strengths. Only then will we have the economic performance that enables investment and creates jobs, providing the tax revenues and environment necessary to support public sector reform.

The State of the State report reveals that the existing system is strained, necessitating comprehensive and systemic changes. Policymakers must adopt innovative solutions to address these challenges, recognising the financial constraints while striving for collective progress.

As we navigate the highly politicised environment of the general election, it is crucial to maintain a focus on the substantive issues at hand. It is easy to put these at the top of the agenda by talking about them. It is also easy to be distracted by how difficult change is in reality and to let reform fall to the bottom of the agenda.

The State of the State findings highlight the difficulties facing public services and the necessity for bold, innovative approaches. By capitalising on Scotland's strengths in entrepreneurship, market opportunities, workforce development, and equality, we can pave the way for a more resilient and prosperous future.

Lesley Smillie, partner, public sector, Deloitte