Blog: The Great Risk Transfer - a view from the culture sector

by Kathryn Welch, Director, Culture Counts

Kathryn Welch, is Director of Culture Counts, a network supporting the arts, heritage, and creative industries in Scotland. Kathryn explores the relevance of the David Hume Institute’s Great Risk Transfer research to the culture sector and wider society.

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The Great Risk Transfer: employment and financial wellbeing report explores the changed relationship between employers and employees. For Culture Counts, a network supporting the arts, heritage and creative industries in Scotland, many of the concerns raised feel resonant to our sector.

A financially strained funding environment, combined with the long-term effects of Covid and the cost of living crisis, means many cultural organisations are struggling to create the conditions for fair work. Workers in the sector - particularly the high numbers of freelance workers and low-paid staff, bear the brunt of these conditions.

A freelance workforce

Freelancers are a hugely significant part of the creative workforce. Creative Scotland reports that 41% of creative workers in Scotland work on a freelance basis.

This is not a low-skilled or casual workforce but represents people of all levels of seniority, in vital-to-the-sector functions including technical, production and creative roles. Whilst a good number of these individuals relish the flexibility and variety of self-employment, the Cultural and Creative Freelancers’ study notes that many freelancers face a lack of opportunity to move into permanent or salaried jobs, which are simply unavailable in their job roles. Instead, freelance contracts are typically available on a project-by-project basis, shifting job precarity from employers onto the individuals they hire. 

Freelancers are not currently included in fair work legislation and 60% of freelancers are not members of a union, leaving them without much of the protection afforded to salaried staff. As a consequence, freelance artists are less likely to report feeling supported in their work than employed artists working in similar settings. And this support is much-needed; creative freelancers report extremely long hours, low pay, limited training opportunities and the necessity of undertaking unpaid work to maintain relationships and complete projects.

The Big Freelancer Survey 2024 carried out by Freelancers Make Theatre Work, presents “a workforce that is at breaking point due to unsustainably low pay and long hours”. Their research found that a third of freelancers reported average hourly earnings below the National Living Wage for that period; wages that would be illegal in the context of a PAYE job. Furthermore, almost a fifth of respondents reported working an average of 50 or more hours per week over the past year, which is over the legal limit defined in the Working Time Directive.

The Great Risk Transfer’s concerns about pensions are magnified amongst the freelance workforce: just 17% of self employed workers, and 13% of self employed women workers, participate in a pension scheme. Research found that the precarious nature of their work adversely affects the mental health of creative freelancers, exacerbated for many by a (financial) reluctance to take time off for sickness or holiday - bouncing unpredictably from full-on, intensive contracts followed by periods of stress and anxiety associated with lack of work. The Campaign for the Arts has raised concerns that the recent increases in many Employers’ National Insurance contributions following the UK budget may incentivise employers to move current employees into self-employment, placing workers against their will into these highly precarious working conditions.

Whilst creative freelancers face particular risks, all is not rosy for those in employed roles either.

The creative and heritage sectors have long been reliant on low-waged staff, especially in vital roles such as front of house and box office teams.

For creative roles, unpaid internships and very poorly-paid entry level roles have been an established route into certain career paths. There are social class distinctions here; unpaid internships have long been the privilege of those who can afford to work for free. Managing the challenges of chronically low-paid but creatively rewarding employment is, ironically, fast becoming available only to those with a financial cushion. Those who simply cannot afford to stay in very low-paying roles are increasingly leaving the sector altogether.

The Sutton Trust, for example, found that 43% of classical musicians have attended an independent school, compared to 7% of the general UK population.

The Heritage Alliance cite research from UK Heritage Pulse in their analysis of the impact of cost of living issues on staff working in the heritage sector, finding that stress levels within the sector are continuing to increase, with more than one in four heritage workers now reporting that they feel uncomfortably stressed on most days. They cite museum staff taking steps such as avoiding workplace social events, working from home to cut commuting costs, and taking less annual leave or time off in lieu in order to manage their heavy workloads.

The connection drawn by the Great Risk Transfer between financial precarity and organisational productivity feels particularly important.

For the creative sector, there is an existential risk created by its reliance on low paid staff. In an environment of increasing costs of living and entrenched low pay, even for experienced and skilled staff, it becomes increasingly difficult for employees to remain in the sector, or for workers from low income backgrounds to consider joining.

This is doubly problematic: organisations lose key people, skills and capacity, and the sector as a whole becomes less reflective of the diversity of Scotland’s people, backgrounds and experiences.

Concurrently, our creative institutions become less able to do what they do best - a recent Museums Galleries Scotland report finds that organisations faced with redundancy decisions are prioritising ‘keeping the doors open’ via front of house roles.

Instead, the report finds, museums and galleries are losing positions in curation, education, learning and participation roles - with long-term consequences for museums and galleries’ ability to preserve stories and support meaningful engagement with our past; what MGS calls “the ability to care for and share the stories of the collections we hold for the people of Scotland”.

For many creative and heritage organisations, volunteering is a mainstay of their operations, with volunteers contributing their time, passion and skills for the benefit of others. With narrowing economic margins, people may well have less capacity to contribute. The 2023 Scottish Household Survey found that the Scottish volunteering rate had dropped to 18%, a drop of four percent from 2022, and eight percent lower than pre-Covid. 

Scotland’s geographies bring additional financial issues for this low-paid creative workforce; concerns shared with other sectors such as hospitality. The heritage sector, in particular, is defined by sites across rural areas, where prospective employees face challenges associated with lack of affordable public transport, high costs of housing and the harder impacts of the cost of living crisis to rural areas.

#EvenHereEvenNow, a manifesto created by artists across Scotland’s islands, highlights higher energy costs, fuel poverty, digital connectivity and limited transport as challenges that disproportionately affect islands-based artists.

The risks of precarious and low-paid employment are not borne equally across Scotland’s creative sector.

The Equal Media and Culture Centre for Scotland found that 60% of part-time roles in the arts sector are held by women, and that almost three times the number of women to men cited care responsibilities as a major barrier to their work in the arts.

Reflecting on the impact of the pandemic to the sector in terms of reductions in job opportunities, Chi Onwurah MP, Chair of the All-Party Parliamentary Group for Creative Diversity, highlighted that “without action, we risk exacerbating inequalities further in the creative industries and an entire generation of talent – the future of the sector – could be lost”.

This is a matter of inclusion and equity. For the creative industries it also represents a loss of creative talent, a narrowing of our creative ambition and a reduction in the breadth and diversity of our creative output - a very particular rendering of what the Great Risk Transfer describes as “productivity”.

The narrowing of participation in culture and heritage, whether in paid work or in volunteering, could mean that these sectors - which are important forums in which society experiences and understands itself - in turn reduce in creativity, in inclusion, and ultimately in relevance. 

Organisational challenges

At Culture Counts, whilst we echo the overall concerns highlighted by the Great Risk Transfer, we recognise the challenges facing employers and organisations in the cultural and creative sector.

This picture is not a battle between exploitative employers and vulnerable workers.

Many creative organisations are tiny (a mapping exercise by Scottish Contemporary Art Network found that 84% of arts organisations report an annual income of less then £425k), and dependent to a very large extent on public funding.

Many employers actively champion aspirations to improve working conditions in the sector, and are acutely aware of the importance of widening access to creative careers, creating sustainable livelihoods in the arts, and supporting the wellbeing of staff.

Creative and cultural employers consulted for Culture Radar’s Review of Fair Work prioritised actions to help them resolve low pay and precarious work, support workers most impacted by Covid lockdowns, invest in workforce skills and improve employee wellbeing.

Initiatives to prioritise Fair Work are directly connected to a funding landscape that has been stagnant - and in some cases declining - over a period of years and decades. As wages - rightly - rise due to increases in the Minimum and Real Living wages, many organisations report a direct impact on their financial stability - leading to operational deficit and/or having to use reserves to meet the cost of increased wages.

For some organisations, adapting to provide increased wages has come at a cost of job security for employees, with employers unable to provide stability for workers due to being unable to commit to longer term contracts thanks to their own annual funding settlements. Whilst financial risk is being transferred from employers to employees, it’s also important to note that the chain continues upward, with three year funding settlements for Scottish Government core funded cultural organisations promised in the 2021 SNP Manifesto, but as yet unrealised. 

The experience of the arts, heritage and creative industries largely echoes that of the Great Risk Transfer more broadly, sharing concerns in terms of employee wellbeing, inadequate pensions, financial precarity and its impact on productivity and society in Scotland.

The sector-specific contexts for the creative sector, notably a low-paid and largely freelance workforce, the importance of a diverse workforce for a vibrant creative output, and the challenge of managing standstill and short-term funding commitments, add further food for thought to the findings.

At Culture Counts, we echo DHI’s recommendations for further steps to embed the principles of Fair Work and Living Pensions into the future of the creative workforce - whilst noting the particularities of the sector that add further nuance and challenge to the equitable and sustainable implementation of such initiatives.

Culture Counts looks forward to being part of these conversations going forward via our role on the Scottish Government’s Fair Work Taskforce. We call for a wide-ranging consideration about the whole picture of investment in culture, encompassing not just Creative Scotland and Scottish Government funding, but philanthropy, trusts and foundations, Local Authorities and earned income. Investment in culture fundamentally affects the current and future workforce, and the possibilities for Fair Work for all.

Culture and the arts cannot become solely by rich people for rich people - a broader, fairer and more sustainable sector enriches us all.

Ends

Sharing thumbnail image - Pianodrome (2018). Photo: Andrew Downie. Edinburgh Festival Fringe Society.

Blog: When Paying Tax Could Save You Money

30th October 2024

Shelagh Young reflects on today’s budget announcements in the context of our recent Great Risk Transfer research on the changed relationship between employees and employers in the context of financial wellbeing.

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Has the Government broken its promise not to increase taxes on working people by increasing employer’s payroll costs?

No one can pretend that the 1.2% increase in employer’s National Insurance Contributions (NICS) and reduction in the threshold at which this tax kicks in announced in Rachel Reeves’s budget statement won’t increase costs to business.

But, is arguing, as many critics have, that this amounts to a tax on workers backed by evidence?

The immediate budget post-mortem, driven partly by the opposition’s outraged response, delved into questions of whether voters were betrayed. But while the trustworthiness of Governments obviously matters, these are surely not the most important questions to be focused on in the aftermath of what is generally agreed to have been a very significant budget indeed.

Trotting out common sense assumptions that a tax on employers is a tax on the workers simply isn’t good enough.

Superficially it seems obvious that many employers will pass on this cost - for example in higher prices to consumers, lower wage rises, redundancies or reductions in growth through recruitment meaning a contraction of the jobs market. 

Indeed the same was said when the National Minimum Wage (NMW) was first introduced and will no doubt be said about other measures in this budget which will increase the NMW significantly in 2025.

Unfortunately for the critics there is very little evidence that such measures do have the dire negative impact on “working people” so often predicted by the business sector and its representatives.

For one thing this budget, like others before it, maintained and, in some cases increased the corporate welfare measures that will reduce the impact on some employers.

In the case of NICS, the Employment Allowance was increased significantly meaning that the smallest employers with four or fewer employees on the NMW will pay no employer NICS at all. But, over time, there will be other ways in which many employers can compensate for higher taxes.

Paying more to spend less

For example, if this budget really does lead to greater investment in the NHS and other important public services, might employers need to spend less on mitigating the impact of poor public services by providing ever more costly employee benefits?

Earlier this year we explored how employers were addressing diminishing employee wellbeing.  Measures being taken ranged from enhanced private healthcare plans including services such as “virtual” GPs to schemes offering loans for rent deposits.

The reasons for investing in employee wellbeing were clear - employers are seeking to reduce absenteeism and increase productivity by mitigating the stresses and strains affecting their employees many of which they attribute to matters such as the difficulty people have in accessing NHS care, expensive housing and childcare and even, poor public transport

So the question we would like to add into the budget debate mix is why employers and their representatives rarely mention the costs to business of what the Chancellor referred to as public services that are “on their knees”?

Whether or when this budget will achieve the Government’s stated goal of “rebuilding Britain” remains to be seen but the hope that it could help rebalance the burden of risk employers currently bear for the poor health and wellbeing of their workers should not be ignored.

Image credit: sharing thumbnail image by Michiele Henderson free from Unsplash on 30.10.2024.

Reflections: Transforming the housing system in Scotland

16th October 2024

Callum Chomczuk reflects* on the recent launch of our work with Professor Duncan Maclennan to Transform Scotland’s Housing System. Callum is the national director of Chartered Institute of Housing in Scotland. 

Photo Credit: Allan Lloyds, Live to Air

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The David Hume Institute has launched a new project with Professor Duncan Maclennan to consider the actions needed to transform the housing system in Scotland. 

Transforming the housing system is a fairly large statement of intent but given the challenges we face today with the declaration of local and national housing emergencies, rising homelessness, falling supply and increasing unaffordability, the ambition set out in Duncan's remit is both proportionate and necessary. Indeed, given that we have been in a housing crisis since at least the 1980s, the challenge facing this review is to thoughtfully look at the whole housing system and consider the question of what a fixed housing system would look like?

Now, it is easy to set out a menu of policy interventions that we believe are required to improve housing outcomes for a certain client group. We do it all the time, and we all have our biases. This could be a housing and infrastructure agency, market led approaches to affordable housing, rent caps, professionalisation, increased grant levels, or meeting the demand for owner occupation amongst many, many more.

However, the repeated failure of our housing policy over the decades has been looking at it as a tenure or sectoral issue rather than a systemic issue. We can’t ignore the fact that we are part of a wider UK housing sector with social security, monetary and fiscal policy all reserved to Westminster, and we can’t ignore the fact that changes to one part of the housing sector, have consequences across it all.

That is why, for example, so many housing representatives in Scotland are concerned about the proposed model for private rented sector rent controls in the Housing (Scotland) Bill being considered by parliament. It is not that rent controls by themselves are undesirable or unworkable, but without recognition of the impact it will have on landlord investment, homelessness presentations and mid-market rent supply and meaningful measures to address them, it will only exacerbate the existing housing emergency. Housing is systemic and interconnected so our policy prescriptions must be so too.

But regardless of the recommendations that Duncan’s report produces, and I know there will be things we instinctively agree and disagree with, the biggest challenge will be how much capacity, curiosity and resource is there in the sector and government for system change and risk taking? Will we engage with the process or just judge the recommendations at the end depending on how many of our priorities have made it into the final draft?

I think back to the publication of the Scottish government’s Housing to 2040 paper and how it set out a positive vision for our housing system, but it was just a vision. Like any vision, it needs a framework for delivery, it needs evidence, it needs new structures, more collaboration, more ownership and more humility. We need to look at the foundations of a better housing system and how we correct market failure.

So, this review is a chance to re-start the discussion on getting to that improved system but also being honest about the things we can’t do, or the things we need to wait to do.

Are we willing to be part of an open discussion? Can we all compromise on the things that we have fought so hard for to create a better housing system. Can we prioritise the outcome and not the input? It will be great to be part of the conversation. I hope we can.

*This blog is kindly reproduced with the permission of Callum Chomczuk, National Director of the Chartered Institute of Housing.

Press Release: Globally renowned Scottish expert to shape policy to end the housing emergency

 12th August 2024

Professor Duncan Maclennan to lead a major project for the Edinburgh based think tank, the David Hume Institute

The David Hume Institute has announced a new programme of work with Professor Duncan Maclennan to look at the actions needed to transform the housing system in Scotland.

Housing is essential infrastructure for people and the economy. Currently too many people are unable to find a home or are living in poor quality housing that is affecting their health and their ability to be productive and thrive.

The work will look at the actions needed in the whole system from homelessness, unaffordable rents and planning, to skills shortages and supply-chain issues. 

Professor Maclennan has had a long and internationally distinguished career as an applied economist specialising in housing, neighbourhoods and cities. His professional roles have spanned senior positions in both academic and government settings, in the UK, Canada and Australia. At the University of Glasgow in the 1980s he established and led the Centre for Housing and Urban Research, and in the 1990s directed the ESRC Cities and Competitiveness Program and Joseph Rowntree Foundation programs on Housing Finance, Housing and the Macro-Economy and Housing and Area Regeneration. In recent years he has advised governments in Australia and Canada on housing system shifts to improve economic and environmental outcomes.

Professor Maclennan said

“I am delighted to be working with the David Hume Institute again to help understand the housing emergency. Difficult housing outcomes - homelessness, rising rent burdens and lengthening queues for social housing, falling home-ownership rates for the under 40’s - have spread and deepened for decades. They reflect a failure both of  income growth, especially for poorer Scots, and of the functioning of the housing system that has driven the sustained rise of housing prices ahead of incomes.

The roots of the emergencies in the overall housing system need to be understood and their consequences, not least for the economy and environment, recognised. Policy solutions may involve additional rights and fiscal resources, but the scale of emerging difficulties means that we urgently need to disrupt how we govern, plan and deliver new and improved homes that work for people, places, the economy and the environment. The work will aim to deliver proposals that can act to reduce difficulties now but will also frame a transformation of Scotland’s  housing system for the decades ahead”

Ken Ross, David Hume Institute Trustee and former Chair of both the Scottish Property Federation and Scottish House-Builders Association said

“I am proud that we have initiated this ambitious project to follow-up Duncan’s previous work for the David Hume Institute, A Scotland of Better Places. Business as usual is not an option. This project will help take Scotland’s housing system from a hideous emergency to one fit for the future to ensure this vital infrastructure is there to support people and the economy.”

ENDS

Notes to Editors

• The David Hume Institute is an independent think tank based in Scotland. The charity was established in 1985 to increase diversity of thought on the economy and related public policy. Find out more on our website

• About Professor Duncan Maclennan: Duncan was a member of the Board of Scottish Homes from 1989 until 1999 and then  spent a decade working in government, as special Adviser to the First Minister of Scotland, as a Chief Economist in the Government of Victoria and as Chief Economist in Canada’s Federal Department for Infrastructure and Cities. He has acted as adviser to Ministers in the UK, Scotland, France, Poland and Norway, Canada, Australia and New Zealand.  He is a fellow of the Royal Society of Edinburgh, the Academy of Social Sciences and Honorary Member of the Royal Town Planning Institute, The Chartered Institute of Housing and the Royal Institute of Chartered Surveyors. He was awarded a CBE for services to UK housing research in 1997. He remains affiliated to the University of Glasgow as an Emeritus Professor of Urban Economics and holds Professorial appointments in Housing Economics at McMaster University (Ontario) and UNSW (Sydney).

Image credit: sharing thumbnail image by Neil Wallace free from Unsplash  12.08.2024

Blog: Shaking off our misery?

Blog by David Gow, DHI Trustee

If the public mood in Scotland, as measured by the latest quarterly Understanding Scotland Economy Tracker, is pretty much as bad as it seems, we might as well call off the final five weeks of campaigning in the UK general election and put the politicians out of their misery by voting now. 

After all, there are critical and more exciting events coming up like the opener in the Euros 24: Germany v Scotland on June 14 in Edinburgh's twin city Munich.

The latest tracker certainly paints a sombre picture of how we Scots feel. Almost two in three (62% compared with 58% three months ago) believe Scotland is moving in the wrong direction - the highest level since the series began. And less than one in five (19% compared with 23% in February) think it's heading the right way. These are devastating findings for our political class as a whole (which should read the findings and wake up to reality). 

The reality is that Scots are worried above all by Healthcare/the NHS - 52% view this as the top issue - and the cost of living (40%) though this latter concern is easing though hardly to the point where "turned the corner" talk is credible. And almost one in five (18%) list trust in politics as the critical issue - a number that's rising.

This does not amount to a conducive environment for a bog-standard campaign centred around "tax and spend" policies (like the one we're having now). Scottish voters are more than disgruntled. Their mood may not (or perhaps even may) amount to despair or rage but they certainly need a dose of hope and optimism. And please don't talk about the constitution - only 7% think it the priority issue.

The overall findings gave plenty of food for thought - and lively discussion - at the latest tracker's presentation in the historic home of RBS on St Andrew Square. It was a lovely late spring morning with sun shining through the upstairs windows and birds carolling us but the discussants were reflective, pondering the state we're in - not the one the politicians are peddling elsewhere.

Introduced by Scott Edgar of the Diffley Partnership, the tracker's results were analysed by Sebastian Burnside, NatWest Chief Economist, and João Sousa, Deputy Director at the Fraser of Allander Institute, with a strong emphasis on cost of living issues, labour market developments and fiscal outcomes and outlooks.

This attendee was struck by several things, notably João's point that the rise in average earnings in Scotland, albeit outpacing inflation now, still remains below the increase in prices - i.e., people do not feel and indeed are not better off than last they were when they went to the polls in 2019. Indeed, this is the first time this has happened. The tracker shows Scottish sentiment in line with this: "...economic pessimism may prove hard to shake despite incremental improvements."

Women, especially those with children, are among the most pessimistic.  Even if some of the pessimism has lifted overall only 11% think things generally will improve (be much better or somewhat better) in 12 months' time and, when it comes to personal wellbeing, this rises to just 17%. Still, fewer folk are cutting down on leisure activities to make ends meet or losing sleep over their finances albeit the decline is quite marginal - and three in five Scots are still cutting back on non-essential purchases.

Sebastian intrigued the audience with the bank's internal evidence that its customers are dipping into their savings/deposit accounts when they're forced to make bigger outlays such as repairing the car. Overall, it seems, the struggle to remain on top of the monthly budget is as tough as it can get, notably for lots of younger folk. More than half of Scots (53%) remain dissatisfied with income covering the cost of living.

Campaign mantras such as "change" or "stability" in this context seem beside the point, especially when the fear lurks that the next government will be forced, willy nilly, to raise taxes in order to deal with a worsening UK fiscal position as the IMF and others have warned. It's a frequent message from a weary public when the TV crews conduct 'voxpops' in the pub or coffee shop.

Will the next tracker findings - due in late August or several weeks after the July 4 general election - reveal an uptick in optimism?

Don't hold your breath! It's more than likely that, whatever the outcome, voters will be suspending judgement (as many may do by abstaining and driving turnout down to historic lows) . What they most want is services delivery, not warm promises things can only get better. Are the candidates paying attention on the stump?

Watch the event recording:

Understanding Scotland Economy Tracker - May 2024 Insights

Image credit: sharing thumbnail image by Tadeusz Lakota free from Unsplash 03.06.2024

Blog: People’s priorities laid out for politicians

Blog by Catriona Matheson, DHI Trustee

As any parent of young children will be able to tell you, a lack of sleep can be hugely detrimental to your wellbeing.

With two very young children at home, I wasn't surprised to learn that more than one in three Scots surveyed about their finances said their mental health had taken a nosedive when their money worries were keeping them awake at night.

The latest Understanding Scotland Economy Tracker recently surveyed Scots about their financial wellbeing. The reading was bleak, though unsurprising in the current economic climate. More than half (54%) of Scots reported that their financial wellbeing is worse than 12 months ago, and this was higher among women (57%) than men (50%). In addition to losing sleep and poor mental health, significant numbers reported a negative impact on home relationships (22%), a detrimental impact on physical health (16%) or feeling less effective at work (13%).

Only one in three (34%) of respondents expressed contentment with their income levels and their ability to cover the cost of living, down from 37% previously. This decline is particularly pronounced in the ability of Scots to meet household bills, reflecting the difficulties faced by families and individuals across the country as they continue to navigate increased costs against stagnant incomes.  

Interestingly, despite these figures the cost of living was prioristed second (40%) to healthcare (52%) as top issues facing Scotland. This means Scotland's political parties should focus on the NHS as much as economic recovery when speaking to the electorate over the course of the General Election campaign. 

While the survey presented nuanced attitudes, a prevailing sentiment was clear: there is unease with Scotland's trajectory. A striking 62% of Scots think things in Scotland are going in the wrong direction which marks a notable surge from 58% in February 2023, and is the highest ever recorded in the Understanding Scotland series. Conversely, the proportion believing that Scotland is headed in the right direction has dwindled to 19%, the lowest the David Hume Institute has ever recorded. This unhappiness among Scots regarding the direction of the nation presents a steep challenge for political leaders. Not only does Scotland's economic prospects need to improve but Scots will need to feel the benefit before they have confidence in the country's leadership.

Survey fieldwork took place in early May when First Minister Humza Yousaf announced his resignation, and there was still uncertainty over his successor. At a UK level, an election was on the horizon but the timings were unconfirmed.

A few short weeks later, we now have John Swinney in Bute House and an imminent General Election with Labour poised to enter Number 10. The new First Minister has put economic growth at the heart of his plans for the Scottish Government, and Keir Starmer has already hit the campaign trail talking of "rebuilding Britain."

Whether our new First Minister and the next Prime Minister can turn the ship around remains to be seen, and whether Scots will start to see any benefit in their bank balance is even more uncertain. In the meantime, political leaders would do well to focus on the NHS and the cost of living crisis as they pound the pavements over the next few weeks. And let's hope, for the sake of getting a good night's sleep, the economy significantly picks up before too long.

Further reading:

Understanding Scotland Economy Tracker May 2024

Image credit: sharing thumbnail image by Ch_pski free from Unsplash 27.05.2024

Press Release: Healthcare and Cost of Living Top Priorities for Scots ahead General Election

Latest in the Understanding Scotland Economy Tracker series shows that healthcare and the cost of living remain the top concerns as candidates get set to make their offer to voters for the 4th of July election.

As Scotland gears up for the General Election, the latest survey from the Understanding Scotland Economy Tracker series reveals that healthcare and the cost of living are at the forefront of Scottish voters' minds as they get ready to decide how to cast their votes in July. 

Latest findings from the series show the top two issues for voters in Scotland are:

• one in two Scots (52%) cite healthcare and the NHS

• two in five (40%) the cost of living and inflation is a key issue

Graph to show the top priorities and issues cited in the Understanding Scotland Economy Tracker over time.

A host of other issues remain important to Scots, including poverty/inequality, trust in politics, the economy, and housing, which are regularly selected as top issues facing Scotland by upwards of 15% or more of Scots. However, there are notable changes in prioritisation among these issues, with emphasis on trust in politics rising two percentage points to 18% and emphasis on the economy falling two percentage points to 17%.

The constitution and devolution is reported as a top issue by only 7% of Scots in the latest figures for May 2024.

As parties craft their platforms and campaign messages, these results indicate that healthcare and the cost of living will be key battlegrounds in the upcoming election. 

Scott Edgar, Senior Research Manager at Diffley Partnership, said: 

“With 52% of Scots prioritising healthcare and 40% focused on the cost of living, it's clear that these will be decisive factors in the upcoming election. Parties who can effectively present solutions to these concerns over the course of the campaign are likely to gain a significant advantage at the polls.”

Susan Murray, Director of the David Hume Institute said: 

“These findings underscore the critical importance of healthcare and the cost of living for Scots as we approach the general election in July. Political candidates will need to address these issues head-on if they want to resonate with voters and secure their support”

Ends

Notes to Editor:

Designed by the Diffley Partnership and the David Hume Institute, the survey received 2,275 responses from a representative sample of the adult population, aged 16+, across Scotland. Invitations were issued online using the ScotPulse panel, and fieldwork was conducted between the 2nd-7th May . Results are weighted to the Scottish population (2021 estimates) by age and gender.

Image credit: sharing thumbnail image Nicholas J LeClerq free from Unsplash 27.05.2023

Press release: Top International diplomat captivates Edinburgh audience

28th March 2024

Photo credit: EICC

Baroness Catherine Ashton delivered a powerful message about the power of diplomacy at the Edinburgh International Conference Centre this week

The event organised by the David Hume Institute as part of the EICC Live conversations shared unique insights from someone who was “in the room” negotiating with global leaders, including Putin and Obama. 

Baroness Ashton, who likes to be known as Cathy, called for compromise to be reinstated in the dictionary as a positive word:  

"I want to see compromise put back in the dictionary as a positive word. For instance a compromise candidate means they are the one which everyone can agree on. They are the most popular."

The conversation, hosted by former BBC journalist Clare English, took us behind the scenes of Baroness Ashton’s life as an international diplomat, sharing insights from building trust in negotiations to constructing trade deals and conflict resolutions: 

"Often deals are complicated jigsaws which negotiators have to fit together. When there are entrenched positions there is no fit and that makes it hard to solve the jigsaw. You have to build enough trust in the room that people can test out ideas they don't have a mandate for."

David Hume Institute Director, Susan Murray said

 “The audience of over 200 people were captivated by Cathy’s practical approach and humble nature.  As the US Consul, Jack Hillmeyer acknowledged in his vote of thanks to Baroness Ashton, like the song in the Hamilton musical, she’s been in the room where it happens on so many of the top issues facing the world. It was a privilege to hear Cathy in-person in Edinburgh.”

The event recording is free to view here

Blog: Big or small - are numbers a tall order?

Blog by Helen Chambers

From my experience of the last three decades working in policy and service delivery, many people have a poor underpinning foundation of statistical analysis and struggle to meaningfully read and interpret data. 

And for good reason. Most people in social policy, political and public service realms have had absolutely no training in how to go about this.

Tim Harford, the economist, Financial Times columnist and BBC broadcaster often asks in his programme More or Less “is this a big number?” when starting to get under the skin of any rather dubious number assertions. 

In the UK, I don't think we ask ourselves often enough "is this a meaningful number?". 

And often, even if we did, would people have the mental analytical tools to be able to give a competent answer?

An example lies within the statement, exaggerated for the purposes of illustration: “the success of this intervention has increased by 100%”. If the initial success rate was 0.0001% then increasing it to 0.0002% is close to meaningless; but often that second step of analysis isn’t taken and the initial declaration accepted. 

You might find this example derisory. Perhaps you can find your way round a set of financial or economic outputs but how comfortable are you with a paired t-tests, chi square tests and p-values? 

And what about your colleagues? 

These are fundamental tools when it comes making sense of the world, especially in social policy. Development of policy, public services and their delivery sits across a very wide realm in Scotland: from small charities, the NHS, private companies and government at all levels. 

The Scottish Government is able to retain the services of qualified and skilled analysts, but in many of the spaces that are crucial to changing the outcomes for communities, access to this type of support is absent. 

So we rely on thousands of individuals being able to understand the material put in front of them in various oversight, governance and decision roles. 

A high percentage of the time, people do not have significant comfort or understanding when they are reviewing the reams of data we are currently capable of producing and sharing with each other, in the name of evidence for decision making.

Developments in AI mean we are experiencing the dawn of some of the strongest analytical tools ever seen. But this brings risks, if we do not understand the data we are manipulating with AI or potential malevolent actors wish manipulate our perception and understanding of the world. 

We are now at a point where this matters more than ever.  AI could make things worse rather than better. In computing worlds there is the concept of GIGO, ”Garbage In, Garbage Out”.

Decision makers as well as the general public need to be able to sense check and interrogate numbers that are placed in front of us. 

And beyond that, with so many organisations in a position of extreme resource squeezing, we have to know how to allocate assets whether financial, human or physical to have the greatest impact. 

Right now I don't think we are in a position to do that at the level required. Perhaps it is time for a little more honesty, humility and access to Statistics 1.01, until more of us are confident in understanding and working with the data and evidence placed before us.

About Helen Chambers

Helen is a freelance consultant specialising in strategy, implementation, and influencing skills. She works with senior teams to optimise impact and resources for social good across the private, public and voluntary sectors. Her practice is underpinned by a belief in using strong critical thinking skills to deliver conscious intent. 

Further reading and listening

• Tim Harford’s More or less and Cautionary tales podcasts

• Blog and discussion podcast from the Office for National Statistics, Communicating Uncertainty: how to better understand an estimate.

Image credit: sharing thumbnail by Tyler Easton free from Unsplash 25.03.2024

Press release: First Co-chairs announced to lead the David Hume Institute

Ahead of its 40th anniversary DHI announces changes to the board

19th March 2024 

For the first time in its history, the David Hume Institute board will be led by Co-chairs. Professor Jan Bebbington and Liz Ditchburn were elected to the new roles on Tuesday evening.

Professor Jan Bebbington and Liz Ditchburn take over from Kenneth Barker, former partner of Baillie Gifford, who will stand down as Chair after six years on the board. Also standing down as a trustees after six years is Christine O’Neill KC, Chair of Brodies LLP.

The David Hume Institute, a leading Scottish think tank, was set up in 1985 to increase diversity of thought on the economy and society.  Its recently launched Economy in Plain in English events underline their mission to demystify the economy and build on its quarterly Understanding Scotland Economy Tracker which collates people’s spending intentions and perceptions of the economy.

Professor Jan Bebbington said: “I am delighted to be elected Co-Chair of the David Hume Institute at this critical time where we enter a new age and stage of the organisation.  Our society has big challenges ahead and DHI will be there supporting Scotland’s decision makers to better understand data and trends.

Liz Ditchburn said: “The David Hume Institute has been at the centre of public debate for almost forty years. I am thrilled to be joining such a strong board and take up the role of Co-Chair alongside Professor Bebbington.”

David Hume Institute Director, Susan Murray said “We would like to thank Kenneth Barker as Chair and fellow long-standing trustee, Christine O’Neill KC for their hard work and dedication.  It is only because of volunteers like them that DHI exists and can continue to deliver rigorous research and thought-provoking events. We are delighted to welcome Jan and Liz to their new roles as Co-chairs and look forward to the organisation going from strength to strength in the years ahead.”

About Jan

Professor Jan Bebbington is Director of the Pentland Centre for Sustainability in Business at Lancaster University where she researches the intersections between sustainable development concerns and organisations. Alongside her academic work, Jan has been Vice Chair of the Sustainable Development Commission from 2006 to 2011. In 2018 the Royal Scottish Geographical Society awarded her an Honorary Fellowship.

About Liz

Liz Ditchburn has more than 35 years’ experience as a public sector leader.  Her last executive role was as Director General for Economy for the Scottish Government.  She is currently a Non-Executive Director of the Net Zero Technology Centre, a board member of Women’s Enterprise Scotland, Trustee at NESTA and an honorary professor at the Adam Smith Business School, University of Glasgow.  She has recently been appointed as a Commissioner for the UK Independent Commission for Aid Impact.

Press Release: Two-Thirds of Scots continue to reduce spending

Latest in the Understanding Scotland series continues to shed light on Scots’ survival tactics during challenging economic times

The Understanding Scotland Economy Tracker survey tracks economic attitudes and spending intentions from more than 2,000 members of the Scottish adult population every 3 months.  The fast turnaround time, this data was collected only two weeks ago, means early identification of changes in trends to support decision-makers.    

The latest insights show two in three Scots (67%) have resorted to reducing non-essential purchases, while significant proportions continue measures such as cutting back on energy use (64%) and leisure activities (62%). Additionally 45% report decreased savings contributions, and over a third are tapping into them for everyday expenses. These coping mechanisms are particularly prevalent among younger age groups, underscoring the disproportionate impact of the high cost of living on  working-age individuals.

The study reveals a cautious outlook among Scots regarding future spending. Both essential and non-essential spending expectations show little change, indicating ongoing caution amidst economic uncertainty.

Furthermore, the latest findings highlight generational divides in priorities.  Healthcare and the NHS are paramount among older age groups, whilst younger individuals are more focused on addressing rising living costs.

The study also reveals growing doubts among Scots about Scotland's trajectory, with the majority (58%) believing that the country is heading in the wrong direction. This marks a three-percentage-point increase from the previous wave and reflects an increasing sense of pessimism about the future.

Mark Diffley, Founder and Director of Diffley Partnership, said:

“The latest findings from our regular Understanding Scotland series continue to shed light on the economic landscape in Scotland today. The fact that seven in 10 Scots think that economic conditions are worse than 12 months ago and six in 10 think conditions will be worse in 12 months’ time, reveal ongoing and widespread pessimism. The data also again reveals the challenges posed by rising living costs and offers a glimpse into the daily struggles of many Scots, particularly those from disadvantaged backgrounds, highlighting that the cost-of-living crisis is far from over in terms of real life experiences.”

Susan Murray, Director of the David Hume Institute said:

“These findings reveal  a stark snapshot of the economic reality  of living in Scotland today. For anyone wanting to improve productivity or economic growth, focus on the number of Scots continuing to lose sleep over their finances, which creeps up another one percent this quarter to 30% and rises to 43% of 35 to 45 year olds. With so many of your workforce affected, we can only hope that things don’t get worse before they start to improve.”

The full report can be found here.

Notes to editors

Designed by the Diffley Partnership, the survey received 2,305 responses from a representative sample of the adult population, aged 16+, across Scotland. Invitations were issued online using the ScotPulse panel, and fieldwork was conducted between the 1st-5th February. Results are weighted to the Scottish population (2020 estimates) by age and gender.

Image credit: Sharing thumbnail image: photo by Paul Rysz free on Unsplash 28.02.2024

Blog: Scotland's new generational divide - the economy

by David Gow, DHI Trustee

The Germans have a great (long) word for it: Politikverdrossenheit. Or a state of being pissed off by politics. Scots are far from alone in Europe in being disenchanted by their political leaders – in Holyrood as much as in Westminster. Politics is broken is a common sentiment. Government doesn’t work. No wonder then – albeit alarming – that increasingly sullen, weary voters are tempted by extremists on the fringes such as the Far Right.

Pessimism is indeed the leitmotif of the latest (February) quarterly survey in the Understanding Scotland series. Talk of the economy “turning the corner” or being “on the right course” falls on deaf Scottish ears: a majority (58%) believe the contrary – Scotland is heading in the wrong direction in their eyes.

This 3% rise in negative sentiment matches the highest percentage in the series that was last seen in May 2023 while less than a quarter of Scots (23%) believe things are heading in the right direction – a new record since this survey began in autumn 2021. Again, this is hardly surprising – the economic forecasts are almost universally pessimistic about the UK and/or Scotland exiting the perennial cycle of low growth, low productivity.

What is especially concerning is that this pessimism is prevalent amongst young adults. GenZ, like many millennials before them, sense they’ll be permanently worse off than their parents, let alone their grandparents who “never had it so good” at the same age. More than likely unable to buy their own house/flat or afford soaring private sector rents, their faith in the NHS to deliver lifelong good health is wavering to say the least.

A stark generational divide, shown up in previous surveys but now more and more salient, is marking Scotland. During 25 years of devolution the divide was increasingly between Yes and No to independence on the constitutional question but this latest survey in the series shows just 9% think this is one of the three most important issues facing the country compared to 25% in October 2021. That’s even fewer than those still concerned about Brexit (11%) – even though Scotland, especially its young folk, voted decisively against it and the overwhelming evidence is of the hugely damaging effect this is having on the economy.

As in the UK as a whole, healthcare is the top issue for Scots, with 49% citing it compared with “just” 41% pointing to the cost of living/inflation even though the latter remains untamed. Of course, the NHS is the most pressing concern for the elderly (55% of the over-65s), whether frail or not, but it is cited by 45% of 16-34-year-olds too. Again, unsurprisingly, the youngest generation (54%) thinks the cost of living matters most compared with just one in four (27%) of those of pensionable age who can rely on the ”triple lock” and their own savings/capital. Young people especially are cutting back on non-essentials such as leisure and even essentials such as heating.

A picture emerges from the survey of a nation, whatever its demographic, pre-occupied with personal/private concerns: food and energy costs, income, health. Reflecting similar trends in mainland Europe, the environment/climate change has slipped down the agenda (from 18% to 11%) while that shift in priorities is even more marked for issued such as mental health (-10 points) or poverty/inequality (-14) throughout the life of this series.

This is not to say that Scots have lost their sense of collective responsibility for society: between 75% and 87% back a safety net and the duty on employers to provide a (real) living wage and they recognise that neglect for people’s basic needs proves more costly in the long run.

However, a third of Scots (versus 23% two years ago) now rank spending on public services as a top priority, followed closely by managing public finances (tax and spending) at 27%.  The elderly are particularly concerned about managing public finances, with only a fifth of young people finding this a salient issue. Maybe the latter generation already sees greater private provision of services such as health inevitable…?

Overall, this survey re-emphasises that the governments in Westminster and Holyrood have a mountain to climb if they are to rebuild voters’ trust in politics and in their personal and collective future. There can be little optimism that the upcoming Scottish and UK Budgets will adequately address these issues. We owe it to our younger generation to do so: they have every right to feel badly let down.

Blog: Avoiding the cost of living carnage

By Shan Saba, Director of BrightWorks Staffline

and Founder of Scotland Against Modern Slavery

I remember lots of arguments in my house about money when I was growing up. Whilst I was too young to know the value of a pound, the anxiety about my parents being able to make ends meet is still a sore memory for me.  

Our family finances were very tight back in the 80s, despite both my parents having “good” jobs in the NHS. Sadly, now this seems the same for a significant number of Scots.

The last Understanding Economy tracker from the David Hume Institute brought back those arguing voices in my head again.  Three in every ten Scots are losing sleep over their finances. This is huge. Financial stress causes family tensions and creates a lasting impact on the next generation.   

Pay rates have risen for some to keep up with inflation and unemployment is low. The jobs market is stable, for the moment. But people are worried about what is ahead, especially those not in permanent employment.

The lack of sleep data is just the tip of the iceberg. 

Sickness rates are high and many older workers are leaving the jobs market.  On top of this there is pessimism about the economy which can translate into that horrible feeling that you might not have a job if the economy does not improve next year.  There’s little doubt that financial worries will be increasing for some.

In 2023 employers saw this translate into higher absences across all sectors and whilst this has a huge impact on productivity, we will never truly know the damage being inflicted to struggling households behind closed doors.

Some employers understand this and support staff through salary advances and with financial well-being programmes but sadly the data shows fewer people are able to find £500 for an emergency than there were at the start of last year.  

Although money worries have always affected some households, the carnage caused by the scale of the challenges posed by cost of living rises feels worryingly deep. 

The long term implications are more than distressing memories as we know people’s health is being affected by the high levels of financial stress and lack of funds to buy nutritious food or heat their homes. 

If the way out of this crisis is greater productivity to create higher growth, this requires action beyond individual behaviour. Reducing financial stress is a critical part of creating a healthy, focused workforce and every employer can help make a difference.