Scottish Government

Annex A Employability and Skills Scottish, UK and International Comparisons

1. As the Scottish economy emerges from the economic downturn, the major challenge will lie in tackling unemployment and its damaging effects, focusing on the long-term goal of restoring growth in output and raising Scotland's economic performance through increased levels of productivity and labour market participation.

2. The Scottish economy has historically grown at a slower rate than the UK and many other advanced economies. Chart 1 highlights that Scottish GDP growth has lagged behind the UK over the past decade. Indeed over the past 30 years the average annual growth rate of the Scottish economy has been 0.5 percentage points below the UK and 0.8 percentage points below Small EU countries ¹⁰. This has translated into lower levels of GDP per capita in Scotland compared to many of our competitors in the OECD.

3. The central challenge to raising Scotland's future economic performance and living standards within the economy is to improve our productivity performance. Productivity levels in the Scottish economy (based on output per hour worked) currently lie below a number of other OECD countries. Raising our productivity performance will enhance the competitiveness of Scottish firms and help to ensure that the Scottish economy is well-placed to seize the future growth opportunities which arise as the global economy recovers.

Labour Market

4. In the three months to September 2009, Scotland had the highest employment rate of the 4 countries in the United Kingdom at 73.9%. This is 1.0 percentage point higher than the next highest country (England, 72.8%) and 1.3 percentage points higher than the UK average (72.5%). Several regions in England had employment rates above the Scottish average (East 77.2%, South East 77.0%, South West 75.7% and East Midlands 74.9%).

5. The employment rate in Scotland, using the European age definition (15-64), in 2008 was 72.1% which is 0.3 percentage points lower than the previous year. Compared to the other countries in the Organisation for Economic Co-operation and Development ( OECD) Scotland has maintained it position as having the 10th highest employment rate. Scotland's employment rate in 2008 remained above the UK, which had an employment rate of 70.8% (Chart 3).

Current Skills Position

6. Scotland's investment in skills stands comparison with any other part of the United Kingdom. Qualification levels over the last 30 years, for example, have been higher than in the rest of the United Kingdom. Indeed, the UK Leitch Review of Skills highlighted Scotland as the only nation or region of the United Kingdom where the percentage of people with a Higher Education qualification outnumbers the percentage with a basic school leaving qualification.

7. Table 2 shows that Scotland is ranked 3rd in terms of percentage of the population with degree level qualification or above, behind the South East and London. Moreover, in terms of the population with SVQ level 4 qualification or above, Scotland is ranked 2nd behind London. Therefore, within the UK context, Scotland performs strongly, with only London and the South East in a stronger position.

8. In relation to skill attainment from an international perspective, the change on the previous year and relative position to 1999 can be summarised from the most recent Education at a Glance ( OECD).

9. As regards Low/No qualifications; relative to OECD countries, Scotland is in the lowest quartile (ranked 23 out of 30); a positive position (Chart 4). The percentage of the population that had a lower secondary qualification stood at 14.7 per cent. This improved on the position in 2006 (15.3 per cent), and has fallen from 19.3 per cent in 1999. Of all the G8 countries, only the United States, Canada and the United Kingdom have lower proportions.

10. As regards, Intermediate qualifications, relative to OECD countries, Scotland is in the second quartile for this measure (ranked 10 out of 31), with Germany, Japan and the United Kingdom the only G8 countries with higher proportions (Chart 5).

11. As regards, Higher Qualifications, Scotland is in the second quartile out of the OECD countries (ranked 14 out of 31), with Japan, United States, Canada and the United Kingdom the only G8 countries with higher proportions (Chart 6). The percentage of the population that had a higher education has risen to 21.2 per cent. This improved on the position in 2006 (20.7 per cent), and has risen from 15.3 per cent in 1999.

Benefits

12. Benefit claimants are allocated to statistical groups to give an indication of the main reason why they are claiming benefit. As at May 2009, 17.6% of the working age population in Scotland were claiming one or more key DWP benefits, compared to 15.7% in Great Britain. The key benefits are: bereavement benefit, carer's allowance, disability living allowance, incapacity benefit, severe disablement allowance, employment support allowance, income support, jobseeker's allowance, and widow's benefit. Each person is classified according to the main reason why they are claiming benefit. Benefits are arranged hierarchically and claimants are assigned to a group according to the top most benefit they receive. In Scotland, 15.1% of working age clients were claiming key out-of-work benefits* as at May 2009, above the average for Great Britain (13.4%).