30/05/2024

Scotland’s Economic Blueprint: Aligning with SNP’s New Initiatives for Job Growth

By Betsy Williamson – CEO Core-Asset Consulting

Note: This article is based on research conducted by Core Asset Consulting. We acknowledge the contributions of Kate Forbes and John Swinney in wishing to stimulate economic growth discussions.

Scotland’s professional, technology and financial services sector is vital to the country’s economy. With new Scottish leadership stating aims to stimulate economic growth, it’s essential to focus on strategies that enhance job opportunities, attract and retain talent, and foster entrepreneurship. This article explores key areas for improvement:

1. Attracting Out-of-Work Highly Skilled Individuals

Scotland has a pool of highly skilled individuals, including a large percentage of women, who are out of work due to various reasons as indicated in our 2024 Salary Guide. To boost employment within this marketplace, we recommend:

  • Flexible Work Arrangements: Promote flexible work arrangements (such as part-time and reduced working week options) to attract professionals who may have caregiving responsibilities.
  • Office Based Working: Many firms in the Professional, Financial and Technology sectors are now benefiting from "majority office" based working weeks. This has been discussed with us as benefiting from training, collaboration, culture and overall wellbeing of the employee.
  • Upskilling Initiatives: Invest in upskilling programs to bridge the gap between available skills and industry requirements. Collaborate with universities, vocational institutions, and industry bodies to design relevant courses to allow these individuals to return to work.

2. Addressing Demographic Challenges

  • Age Diversity: Maximise the experience of older professionals by creating pathways for them to re-enter the workforce or transition into advisory roles.
  • Social and Economic Diversity: Encourage social diversity by ensuring equal opportunities in talent acquisition processes. This is a challenging area that generally requires external oversight and assistance to embed this method and ensure that the process is equitable and inclusive, in line with equal opportunities guidance.

3. Reducing Bureaucracy

Excessive bureaucracy can hinder business growth. To streamline processes, we recommend:

  • Digital Transformation: Invest in digital platforms that simplify administrative tasks, reduce paperwork, enhance efficiency and reduce risk. As quoted in the latest salary guide Scotland is in a prime position to lead the market through its background in entrepreneurship of change management, and tackle the issues being faced by the professional and financial services by closer integration and sponsorship of the technology sector.
  • Regulatory Simplification: Collaborate with the Financial Conduct Authority (FCA) and local regulators such as the Central Bank of Ireland to simplify compliance requirements, making it easier for businesses to operate and utilise a geographically close talent pool without compromising integrity.

4. Tax Breaks for Entrepreneurs and Businesses

Encourage entrepreneurship by offering tax incentives:

  • Start-Up Tax Relief: Provide tax breaks for new businesses during their initial years of operation to encourage entrepreneurship and job growth. Scotland has the skill set to be able to continue to start and grow Financial, Professional and Technology sector jobs. By providing financial benefits to encourage this entrepreneurship, the talent pool can foster the right business relationships to grow as a collective.
  • Tax Savings: Offer benefits on rent, rates and other areas for investments made in Scottish businesses. Highlight Scotland’s  deep talent pool and world class educational sector to make this the location of choice for growth industries such as technology.

5. Addressing Tax Disparity

The increasing tax disparity between Scotland and the rest of the UK is a concern for the financial sector. While Scotland has introduced progressive tax bands1, there are worries about attracting and retaining talent due to higher tax rates 2. Addressing this disparity is crucial for maintaining competitiveness.

6. Reconsider VAT on Private Education

The proposal to charge VAT on private education is a complex issue, and we recommend further consultation from policymakers, as well as consideration of these unintended consequences:

  • Impact on Families: Families paying for private education may face higher costs, affecting their disposable income.
  • Education Quality: Imposing VAT may lead to reduced investment in private schools, potentially impacting education quality.
  • Knock-on Effects: This is likely to exacerbate the current decline in private school enrolments and could increase pressure on state schools, which are already oversubscribed.

In conclusion, boosting professional, technology and financial services jobs in Scotland requires a multi-faceted approach that considers talent retention and attraction, regulatory efficiency, entrepreneurship support, and tax fairness. By implementing these strategies, we can start to create a thriving ecosystem that benefits both individuals and the broader economy.

Note: This article is based on research conducted by Core Asset Consulting. We acknowledge the contributions of Kate Forbes and John Swinney in wishing to stimulate economic growth discussions.

The 2024 Salary Guide, which contains the industry insight and research that forms the basis of this article, can be accessed here.