Mike Beale: Unemployment statistics hint at Scottish resilience

Apr 3 2009 by Our Correspondent, Perthshire Advertiser Friday

RECENT published unemployment figures made interesting reading for Scotland. It would appear that we have not experienced as rapid an increase in unemployment as other areas of the UK. One thousand additional unemployed in the three months to January 2009 making a total of 135,000 (5.1% as opposed to 6.5% in the UK) hints at a welcome resilience, difficult as the personal circumstances of those concerned will be.

In the year to December, 24,000 jobs were lost in finance and distribution and 7,000 in manufacturing. Success was reflected, however, in 8,000 new jobs in rural industries, 1,000 in construction and 9,000 in the public sector.

It is the latter figure that may be of special interest. There is no doubt that in those areas with a strong public sector, a cushion is provided against the worst effects of recession. This is not a new phenomenon - previous recessions have illustrated this very point. The Scottish economy through the downturns of the 1980s and early 1990s never reached the lows experienced in London and the South East. Equally, however, the Scottish economy has not reached the peaks experienced elsewhere at other times.

A question arises therefore, as to whether a strong and stronger public sector is good for the economy long term. Just now, the early advancement of state funded projects, or the additional money allocated by some local authorities, not least Perth and Kinross for economic recovery are very welcome. However, historically a smaller private sector has been a drag on the local economies. A warning sign is obvious therefore.

The answer rests in the public sector adopting a fundamental change in its risk averse approach to economic development. The efforts made by Perth and Kinross Council in its Economic Recovery Consultation are very welcome, and indicate a positive ‘can do’ approach across the board to economic stimulus. This is why the review of the Economic Recovery programme is so welcome. It should mean examining all things that will assist the broader locality from old chestnuts like parking that encourages shoppers and shopping, or property development that encourages new activity in deprived areas, to potential new areas like accessing major pots of development monies from Europe or the Scottish Executive. This fundamental shift in attitude within the public sector at large is not easy, but is nonetheless essential if Perthshire and other local areas are to be ready to take advantage of the up turn when it comes. The increase again in mortgage approvals this month may just be another welcome sign of things to come and all sectors of the economy need to be ready.