‘Scotland lacks means to boost productivity’

A tour guide in Edinburgh. The report on productivity criticises jobs in tourism. Picture: Pamela Grigg

Research suggests it would not be possible to boost productivity to provide an extra £2.5 billion in revenue for a new Scottish government, an aim of the SNP.

The Scotland Institute paper said the problem was not a lack of education among the workforce but the “type of work” they undertake.

The study concluded that Scotland has the workers it needs, but not the work.

The report also criticised the tourism industry, which employs 400,000, for having a productivity rate 25 per cent below the Scottish average.

Dr Roger Cook, the institute’s research director and author of the report, said that regardless of the referendum result on 18 September, there would need to be a changed approach away from an education-only solution.

He said: “If Scotland is to meet the SNP’s target, and the goal is valid regardless of the outcome in September 2014, then there is a need to shift the focus from education to industrial strategy and the nature of work.

“If Scotland is serious about addressing the productivity problem there is a need first for an industrial strategy.

“In effect, growing employment in, say, tourism will not contribute effectively to raising Scotland’s overall GVA [gross value added]. Instead, those sectors that employ substantial numbers of people and have GVA at about the average level should be the focus both for expansion of employment and for raising productivity.”

He said that increasing investment and treating employees fairly were key to raising productivity in Scotland.

The report said a focus on education has created a workforce capable of increasing productivity, but not the type of work to “fulfil potential”.

Dr Cook said business investment in Scotland remains below 2008 levels and too many workers are on fixed term, part-time or zero hours contracts. Of those who have contracted hours, almost 10 per cent report they are looking for more.

In-work poverty also affects a substantial number of people who are in turn unable to access in-work training.

The report concludes: “If the Scottish Government is to realise its, seemingly modest, aim of increasing productivity by 5.2 per cent between 2017 and 2029, then it needs to start from an industrial strategy that supports the creation of well-paid, productive work.”

A Scottish Government spokesman yesterday said an independent Scotland would establish a fair work commission to propose a new Scottish minimum wage and ensure that benefits, allowances and tax credits rose with the cost of living.

He also said it would lead to Scotland being able to provide “one of the most comprehensive childcare packages in Europe”.