Mark McFall: Diversification key to ending public sector reliance

For the moment though, I can’t help but feel that independence is a smokescreen detracting from the real, and more pressing, issue of the day: the health of the Scottish, and indeed UK, economy is still in need of urgent life support.

Figures released recently by the Office for National Statistics have once again highlighted Scotland’s dependency on its public sector, with almost a quarter (23.75 per cent) of the population employed by the state. Public sector employment fell by 3.8 per cent last year in Scotland, during the same period private sector employment increased by only 1.6 per cent, failing to plug the gap.

Scotland is overdependent upon its public sector – not just state dependent in terms of direct employment, but also in relation to the number of private firms that feed off public sector contracts. There are a high number of private firms, and in turn jobs, that are reliant upon these contracts. Yet, at the same time, the public sector procurement processes are in need of revision in order to ensure that they enable all types of businesses to bid for contracts.

All too often these contracts go to the large national and international players, leaving smaller businesses not even eligible to enter the procurement process. Smaller firms need to be given the opportunity, where it is commercially viable, to show they can deliver.

Another report last week painted a fairly gloomy picture, stating that one in ten people could be unemployed in Scotland by the end of 2012, so clearly job creation needs to be a priority.

In order for the private sector to be able to plug the jobs gap, there has to be greater focus on enterprise.

Broadening the offer and ensuring that the product is available to as wide a customer base as possible, perhaps through innovative online marketing strategies, is one way Scottish firms can begin to diversify for survival.

• Mark McFall is the managing director of Change Recruitment