Blog: The business of sleep

by Susan Murray, Director, David Hume Institute

25th May 2022

One in four people are already losing sleep over their finances and the cost of living crisis hasn’t fully hit yet.

This is bad news for people’s health and the economy.  The long term health implications are well known for individuals living in a state of acute stress, with lack of sleep increasing the risk of health conditions such as obesity, heart disease and depression.  Relationships suffer and the likelihood of family breakdowns increase.

These negative effects cause short and longer-term harm to the economy, as well as increasing public health costs. Lack of sleep affects your ability to make decisions and reduces productivity.

The cost of living crisis is already affecting individual lives and our research shows worrying signs for business too.  

70% of people have already cut back spending on anything that isn’t essential.  With the majority of Scotland’s business being small and medium sized, this reduction in spending will have a big impact.

Business leaders also have Brexit, labour and skills shortages, higher energy costs and supply chain issues to manage. Some have enjoyed unprecedented profits in recent times but others haven’t yet recovered from the pandemic.  There are tough times ahead for many businesses in Scotland and for some, there isn’t any slack in the system. 

It is understandable that many are calling on the UK treasury, bolstered by increased tax receipts, to step in swiftly with a basket of interventions aimed at reducing the length and depth of the recession.  In the long term we need to create more resilience in the system, but with an increasing number of people experiencing hunger and struggling to heat their homes, looking to the long term now feels like a luxury.

Whilst the big actions rest with government, if you have money and are not on the breadline, are you thinking about the impact of your spending or charitable giving?  

Making conscious choices with money - a priority people told us last year as part of the Action Project, is now even more important. 

With so many people in work using foodbanks and skipping meals - work is clearly not a guaranteed way out of poverty.  If you employ people, what support are you offering the lowest paid in the organisation?  Big employers like John Lewis are openly speaking about the range of measures they have put in to help their lowest paid staff.

In small businesses it can be harder to offer holistic support to employees - and we have thousands in Scotland. For small businesses cash flow is often critical for keeping their heads above water.  Although only a drop in the ocean in terms of the issues facing small businesses, paying invoices on time can make a big difference and saves hours of time chasing up payments.

Some rules are making it harder for those that are struggling most, and here regulators have a role to play. For example higher standing charges for prepayment energy customers.  I can understand Martin Lewis’s anger at Ofgem - it seems as though our energy market is in desperate need of an overhaul.  

The Understanding Scotland - Economy research shows the cost of living crisis is already affecting the majority of people in the country - a minority have savings and a cushion for the hard times ahead.  Let’s hope the pending announcement from the Treasury does something rapidly to help or the prospect of a peaceful night’s sleep is a long way off for many people.

New research reveals widespread economic anxiety in Scotland

Press release from the David Hume Institute & Diffley Partnership

25th May 2022

A new survey produced in partnership between DHI and the Diffley Partnership has revealed widespread anxiety about Scotland’s economic outlook. Amid surging prices, the new Understanding Scotland - Economy survey finds:

• A quarter of people have lost sleep due to stress over personal finances, rising to 3 in 10 people in the most deprived areas.

• Adverse financial conditions have pushed many to forego basic necessities, with 3 in 5 going without heating, and more than a fifth skipping or cutting down on meals to save money. 

• Rising prices also appear to be pushing people into more vulnerable circumstances, with a third of people eating into their savings, and a quarter taking on debt. The equivalent figures are even higher in deprived areas, at 36% and 32% respectively.

While concern is widespread, rising prices have not hit everyone equally: 23% of people in the most deprived areas say their finances have become ‘much worse’, compared to 13% in the most affluent areas. Parents and families are also feeling the squeeze, with 43% of households with children having taken on debt or borrowed money. In addition, three quarters of those unable to work due to sickness or disability, and four fifths of the unemployed also report feeling worse off.

While the present picture is concerning, most people expect things to get worse before they get better. The poll finds that 84% of people believe that economic conditions in Scotland have deteriorated over the past 12 months, and 77% expect this downward trajectory to continue. A similar picture emerges with regards to people’s personal finances, which 62% judge to have worsened over the same time period, and 59% expect this to continue over the coming year.

Mark Diffley, founder and director of Diffley Partnership said:

 “These are some alarming results with no silver lining in sight. Our polling finds extensive and, for some, acute anxiety over a cost of living crisis that is hitting people across all parts of society. A majority of people in all forms of work say that their incomes simply aren’t going far enough, and the picture is even more alarming for those out of or unable to work.”

Susan Murray, Director of the David Hume Institute said:

 “These findings draw attention to the urgent need for action to help those at the sharpest end of surging prices. A quarter of people across the country are losing sleep because of worry about their finances and over half of people are cutting back spending. The potential long-term impacts on the nation's health and economy are huge.”

ENDS

Notes to editors:

1. Designed by the Diffley Partnership, the survey received 2,203 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 5th - 9th

   May 2022, and received 2,170 responses from the adult population, aged 16+, across

   Scotland. Results are weighted to the Scottish population (2020 estimates) by age and sex.

2. About Understanding Scotland: Understanding Scotland is a high-quality quarterly survey

   that delivers insights into Scottish behaviours and attitudes towards society, the economy

   and the environment. The survey fills a vital gap in research, providing the socioeconomic

   insights and indicators needed for effective decision-making, with regularity and timeliness.

Blog: Prioritise the 3 R’s for over 50s - recruit, retain, and retrain

Blog by Tom Ockendon, Project Co-ordinator, David Hume Institute

18th May 2022

Mass exodus of over 50s contributing to UK labour and skills shortage

The past two years have turned many people’s lives upside down. The way we lived, worked and played were upended by the pandemic and only now are we starting to understand some of the longer term effects. Shortages in the labour market have prompted grand theories like ‘The Great Resignation’, later downgraded to ‘The Great Contemplation’, but now might be better referred to as ‘The Great Retirement’.

One of the most important economic statistics emerging post Covid is the number of over-50’s dropping out of the labour market. This is reversing a trend for older people staying in the workforce longer that dates back to 1971.

It’s hard to begrudge people choosing to work less as they approach older age, if this is a conscious choice. Many people of all ages have evaluated what really matters in life since covid. There is also some information we don’t yet fully know on the impact of long-term sickness and clinical vulnerability amongst older workers. However, this trend is significant and affects us all, and for some leaving the labour market might not be a choice. 

Older workers bring a wealth of knowledge and experience, and maintaining a diverse workforce is crucial for organisations that want to be innovative and resilient. 

Although the connection between older workers leaving the labour market and rising inflation might not be immediately apparent, it almost certainly exists. The Bank of England recently announced they expect inflation will top 10% by the end of the year and the UK economy contracted in March, boosting fears of a prolonged recession. 

Since the end of 2019, a third of inflation has been caused by domestic factors, including labour shortages. Between the end of 2019 and 2021, 522,000 left the labour market and those aged 50 or over contributed 94% to the overall change. As the furlough scheme came to an end in 2021, redundancies were highest for the age group 50-64 and many of those made redundant have not returned to employment.

Those from the professional occupations, particularly men educated to degree level or equivalent, were more likely to leave the workforce between the ages of 50 and 64 between 2019 and 2021. On the flip side, as the state pension age increased from 65 to 66, those found to be working for longer were disproportionately women, those with lower levels of education, and those living in the most deprived areas of the country. Potential diverging retirement ages for different groups within society bring issues of fairness and equality. This matters as it is long established that more equal economies have higher productivity.

What can be done to address this trend? We need to value what older workers can bring to the table, challenge assumptions about ageing, and invest in older workers with training and development to ensure we do not lose people that want to work. Some older workers might benefit from more targeted support to stay in the workplace.

We also need to better understand how pension policy could be making the problem worse. This includes whether the ability to access defined contribution pensions from the age of 55 has played a part in enabling older workers to step out of the labour market and whether some of them might need to rethink in the context of stock market volatility and high rates of inflation. On top of this, the loss of older staff as a result of taxation rates, often perceived as punitive, for those workers who have reached their lifetime pension savings allowance could be making the problem worse. This is especially a problem in the NHS as the BMA have highlighted.

Moving forward, as our population ages, we need to be thinking about 3 R’s for over 50s - retain, recruit, and retrain. Making the most of our highly skilled and experienced workforce for longer will be essential to ensure a prosperous, inclusive and fair Scotland.

Blog: Scotland’s declining population – a crisis looming?

Blog by Eric Hildrew, Communications Lead, David Hume Institute

28 April 2022

As demographers, you might think Esther Roughsedge and Michael Anderson deal firmly with hard facts, however as they were keen to stress at our recent event on Scotland’s changing populations, predicting future population size is a practice laced with uncertainty. In the 1930s, it was estimated that Scotland’s population by the first quarter of the 21st century could be as low as 1.5m (fewer than now live in the central belt alone), though thankfully methods of projection have also improved since then.

So the headline of recently released figures from National Records Scotland – that Scotland’s population will peak at 5.48m in 2028 before declining, making Scotland the only UK nation to forecast a downturn – should be treated with caution. If accurate, a 1.5% decline would put Scotland in the company of Italy, Slovenia, and Finland (all predicting similar reductions) but significantly more stable than either Iceland (predicting 30% growth in population) or Latvia (23% decline).

Graph courtesy of National Records Scotland.

What is more certain is that whether births, deaths, and migration combine to decrease or grow Scotland’s overall population, the age profile of the country is going to change dramatically. In just 23 years’ time, Scotland is expected to have almost a quarter less children and almost a third more over 65s. The proportion of working age people is also expected to decline, particularly in the 30-and-under age-range.  The Scottish Government established a population taskforce in 2019 to investigate barriers to having children in light of the country’s steadily declining birth rate, but current estimates don’t predict a significant change in this trend is on the horizon.

To complicate this picture, we don’t know exactly how these changes will be distributed across our towns, cities and rural areas, but we do know that population decline will affect some areas more than others, with west, south west Scotland and the islands likely to see steeper a drop than central and eastern areas. On a more granular level, specific council areas are likely to see significant decline while others nearby grow, creating markedly different pressures and life experiences for residents. 

Graph courtesy of National Records Scotland.

These changes have huge implications for local, national, and UK governments. From the size of Scotland’s tax base and the UK Government block grant, to education, housing and social care provision, matching resources with demand will be an ongoing challenge. Much like climate change and inequality, population change is an underlying structural issue which outlives any  election cycle or immediate crisis. 

Scotland’s slow but steady population growth this century has been fuelled not by babies but by migration, specifically (until Brexit) from the EU though also from the rest of the UK. Other countries have tried incentivising couples to have more children, but there is little evidence to suggest this approach works. Uncertainty about future circumstances such as home ownership and job security is unlikely to be assuaged by modest cash incentives or tax breaks. 

Instead, an effective adaptation strategy will need to reconsider outdated attitudes to ageing and older people, ensuring that they stay economically and physically active for longer as well as being offered better options to combat loneliness, isolation, and declining health. The delivery of effective social care must be seen as an investment, not a cost. 

Scotland has been shaped by outward and, more recently, by inward migration. As the trajectory of our population growth begins to diverge from that of other UK nations, so must our ability to implement a devolved migration policy which fits the needs of our labour market and which encourages movement of labour to those parts of Scotland most affected by population decline in the years to come.

Population change is inevitable, but its consequences are not.

DHI responds to Resource Spending Review Framework

The Scottish Government recently launched its first multi-year Resource Spending Review since 2011, outlining proposed spending plans on administration and the day-to-day delivery of services and programmes, such as school meals, concessionary bus passes and most public sector staff salaries.

In publishing the review framework, Scottish Government pledged to take an outcomes-focussed, evidence-based, and consultative approach to the review process, which it aims to complete by May 2022.

The David Hume Institute responded to questions on the spending priorities indicated by the review, the primary drivers of public spending, the public sector workforce, equality, and achieving value from public sector spending. 

About our submission
DHI welcomed the opportunity to contribute to the review and our response drew on a number of our recent research projects. Broadly, we call on the Scottish Government to:

• More clearly situate the Review Framework and its priorities within the overall context of Scotland’s existing National Performance Framework to focus on long term change

• Prioritise cross-government collaboration including focusing on tackling tensions between different policy areas in addressing the Scottish Government’s priorities 

• Ensure demographic change is factored into resource spending and planning, including better recognising the contribution older people make to society and the economy 

• Revise its modelling of the impact of rising inflation, which is now likely to exceed previous estimates

• Include climate change as a key driver of public spending, as well as being a resource spending priority

• Use public procurement and planning policy as a means of prioritising long term gains to maximise the impact of public spending

• Take action to radically shift to preventative spending, as suggested over 10 years ago by the Christie Commission

• Improve equality by reforming local taxation

DHI recognises that the challenging economic conditions mean tough choices will need to be made. There is a need to be transparent about priorities and trade-offs. A mature debate will ensure that political point scoring doesn’t increase polarisation in society and negatively impact on the economy. We welcome the pragmatic cross-party approach and look forward to further conversation.

Blog: Another strategy launch, will it make a difference?

Blog by Susan Murray, Director, David Hume Institute

2 March 2022

It seems to be the time of year for governments to announce strategies.  However, as our hearts and minds are drawn to events in Ukraine, it can be hard to focus on domestic policy.

Cabinet Secretary Kate Forbes acknowledged world events at the start of the launch of the National Strategy for Economic Transformation (NSET) yesterday.  After months of meetings and consultations, there is a “laser focus on delivery” of Scotland’s new economic strategy.

This is good news but what will be different this time from previous economic strategies?  The biggest difference I observed is the focus on the interconnectedness of different policies and action, along with the role of women.

More women were involved in the development of the strategy and it's clear the government is keen to power up The Double X economy.  What does this mean?  It's not one action but lots of small ones to address structural inequality such as investor bias.

Linked to NSET is another Scottish Government strategy the David Hume Institute has been looking at in partnership with Open Data Scotland.  Our briefing paper on Open Data, released later this week, highlights a 2015 strategy with good intentions but a subsequent lack of delivery.

Lack of open data is a barrier we keep coming up against in our research and, from our conversations, we know that others are too.  Open data is a driver of economic activity estimated to be worth over £2bn to the Scottish economy.  It is fast becoming as much about data as mindset and culture in a country. It is an opportunity but one Scotland is failing to grasp and risks being left behind on.

Open data should be viewed as part of having a global outlook.  It is part of the UN Sustainable Development Goals which are the central operating principle underlying the National Performance Framework.

The UNSDGs are now a common operating language across the world for all sorts of organisations and the good news is the Welsh Assembly and the UK Government are signed up to them too. However, the UK Government Levelling Up strategy only had one mention of them - which seems like a missed opportunity for collaboration on shared goals across the UK.

A recent Westminster environmental audit committee evidence session looking at aligning the UK’s economic goals with environmental sustainability feels very relevant.  It is well worth watching both evidence sessions, including the hard hitting evidence from our partners, the Institute and Faculty of Actuaries.

The content of the evidence session was not new - what feels fresh is that the discussion is at the heart of Westminster at a time when business as usual is not an option. Whether it's the Levelling Up Strategy or National Strategy for Economic Transformation nothing works in isolation as we live in a deeply interconnected world.

So while the many policy brains wade through the reams of paper making up these new strategies, will they make a difference?

The answer to that lies with people – all of us make choices every day that impact on others both at work and in our personal lives.

What’s clear from reading Poles Apart by Ali Goldsworthy, is that everyone reading the strategies is doing so with a lens looking for confirmation of what they already believe. How many of us will change our actions and behaviours at a result of a new strategy - perhaps only time will tell?

Blog: The future is curious

Blog by Eric Hildrew, David Hume Institute

23 February 2022

The past two years have brought changes to the David Hume Institute’s work in ways which could never have been predicted when Susan Murray joined as Director in 2019. Through the necessary shift away from in-person events and networking, we’ve significantly grown our online audience, and while the greater geographic reach made possible by the web has been a rewarding trend, we do miss seeing new and familiar faces in a (real) room together. As the light at the end of the Covid tunnel finally starts to shine a little brighter, we decided it was time to find out a bit more about our current audience and engage in a conversation about where the DHI should be heading next.

We approached social researchers  The Lines Between to undertake research with DHI audiences and stakeholders to find out more about who they are, how they think we’re doing, and where we might be best focusing our resources as Scotland emerges from the pandemic. Through a combination of survey responses and anonymised in-depth interviews, The Lines Between explored a range of questions relating to our work and brand.

Given our historical association with Edinburgh we weren’t surprised to find the majority of our audience is based in the city, however the ‘pandemic effect’ has been real – over half of those who started interacting with us in the last year live outside Edinburgh and the surrounding area. Overall, 10% of the DHI audience lives outside Scotland, spread across the UK from Glamorgan and Oxford, to York and London.

DHI engages with a wide spectrum of professionals, spanning the public, private and charity sectors. Many of our stakeholders are in senior positions, although we have a growing audience of younger professionals.

Positive perceptions of DHI include seeing us as dynamic, trusted, independent, and thoughtful, though a minority of our stakeholders feel we’re old-fashioned and stuffy (interestingly, these responses were from people who have not engaged with us recently). Open access events, original research and briefing papers were identified by our audience as their most valued elements of our work.

Some of our stakeholders feel we should be more actively political and provocative, while others feel we should direct our efforts towards improving the diversity and inclusion of our work and reach, particularly outwith Edinburgh and by engaging with younger professionals. In contrast, other stakeholders specifically value our impartiality and role as a trusted convener of divergent views. A minority of those surveyed felt the Institute should engage in a more public discussion about David Hume’s legacy and a small number felt our name should change as a result. 

Asking colleagues and constituents what they really think of you can be a daunting process but it’s a vital learning journey for any organisation which wants to inform strategy with meaningful data. We’ve been pleased and motivated to learn that the majority of our stakeholders value our work and respect the values we hold dear. 

There was clear feedback to do more to define our areas of strategic interest and our impact. We have to communicate better with our various audiences and we need to make a stronger case for the funding of our work to ensure our future sustainability. We are committed to an open conversation about the legacy of David Hume, recognising that views and perceptions may change over time and that ignoring contemporary concerns runs contrary to our values. The research indicates a clear direction of travel for DHI as a bridge and facilitator within the realm of economic and social policy, connecting a diverse range of people with evidence-led insight.

The DHI team and trustees have found this consultation exercise hugely informative. We are now committed to acting on the feedback we’ve received and are embarking on a strategic planning process which will shape our work in the months and years ahead as we all adapt to the post-pandemic landscape. We’re grateful for your support and constructive feedback, and look forward to you joining us on the exciting journey ahead.

DHI teams up with the Institute and Faculty of Actuaries

Press release from the David Hume Institute

15th February 2022

The David Hume Institute and the Institute and Faculty of Actuaries are teaming up to learn more about how people in Scotland are managing financial risks.

We are pleased to announce a new partnership with the Institute and Faculty of Actuaries (IFoA) exploring the ways in which people think about and manage financial risks and the practical measures that might help them.

The IFoA has been campaigning since early 2020 on what it calls ‘the Great Risk Transfer’ which is the trend to transfer risks from institutions – such as employers, the state and financial services providers – to individuals who are often not well equipped to handle those risks.

Drawing on examples already explored with IFoA stakeholders, including changes in pension provision and access to affordable insurance, we are working with groups and individuals to better understand their perceptions of the risks they face. We also want to find out what helps people when they make decisions and take practical steps to mitigate risks.

Nicholas Chadha from the IFoA Scottish Board said:

 “We think there are opportunities to ease the burden for consumers, who are not often well-equipped to manage complex risks by shifting prime responsibility for certain risks back towards institutions. New products and services are also necessary to help consumers to make informed decisions which lead to better outcomes for themselves and for wider society. 

 Our recommendations focus specifically on pensions and insurance, in which actuaries’ skills and experience enable them to contribute to solutions. They include the development of Collective Defined Contribution schemes, investment pathways for drawing down pension pots, and defining a minimum level of insurance protection needed by all.

 Working in partnership with the David Hume Institute will help us further develop our thinking and our policy recommendations in this area.”

 Susan Murray, Director of the David Hume Institute said:

 “The Great Risk Transfer reflected much of what we heard from individuals during our previous research on The Action Project. We heard from households that the ability to plan for the future is severely compromised by the pressures of everyday financial challenges. 

 This partnership allows us to explore the implications of that for the IFoA’s policy recommendations as well as enabling us to reach out to a diverse range of people. Our work will focus on finding out what people consider to be the most important areas of financial risk for them, the ways in which they have addressed or plan to address them, and what barriers they might face.”

Insights from the research will be published later this year.

Charity is everybody's business - do we know enough about the leaders?

Press release from the David Hume Institute

7th February 2022

New research shows a lack of diversity in Scotland’s top charity leaders.

Scotland’s leading independent think tank, the David Hume Institute, today publishes new research finding a lack of diversity in Scotland’s highest income charities.

The top 300 charities by income represent just 1% of the total charities in Scotland and control over £10 billion each year - 73% of the sector's total annual income - but their leaders are not representative of the communities they serve.

The research, which analyses the backgrounds of the chairs and chief executives of the 300 highest income charities in Scotland, finds that:

• Only 1 in 3 leaders (34%) are women and only 1 in 50 (2%) are black or Asian, compared to 10% female and 1% people from ethnic minorities in business and investment leaders

• 1 in 25 (4%) hold a top leadership position in another one of the top 300 charities. 

The research showed the picture is not uniform across the top 300 charities which include universities, colleges, housing associations, fee-paying schools, health and social care charities. 

Researchers also found it harder to find information about some organisations and their leaders than for other sectors in Scotland. There was less diversity and transparency for religious organisations and school leaders.

Susan Murray, director of the David Hume Institute, says:

“In a sector that is often associated with bake sales rather than billions in income, many will be surprised at the scale and the range of charities analysed in this research. 

“We thought we would find it easier to find out about leaders in this sector and that was not the case across the board.  

“Charitable status comes with high levels of public trust and tax breaks, as well as the legal responsibility to deliver public benefit. But not all organisations are open about who is in control. It is hard for the public to hold people to account if they don’t know who they are.” 

Unlike businesses, there is no searchable public register of who is making the decisions and it is difficult to find out when an individual is connected to multiple charities. Before the creation of Scottish Charitable Incorporated Organisations) many more charities were limited companies and were required to declare their directors.

The research recommends an extension of the Scottish Charity Regulator’s (OSCR) powers to create a publicly searchable register of charity trustees to bring them in line with company directors. This change will increase transparency and enable monitoring on diversity. 

The research found one significant difference to the recent analysis of business leaders; there was a wider range of experience in the two key leadership positions, often with the Chair and CEO having professional backgrounds. In both roles, the public sector was the most common background at 18% and 19% respectively:

Susan Murray, Director of the David Hume Institute, continued:

“Scotland needs all its current top leaders to actively champion diversity and provide the opportunities to ensure faster progress. 

“Increasing diversity of thought is in everyone’s interests as it helps avoid the pitfalls of group think, and improves risk management and productivity. More equal societies have higher productivity, and high productivity allows more investment to create more equal societies. 

“Charity leaders are no different and if anything, have more responsibility to champion diversity given their legal duty to deliver public benefit.”

New starters at The David Hume Institute

The DHI team expanded this week with the welcome arrival of two new part-time appointees. 

Shelagh Young joins the Institute in the newly-created role of Engagement Lead, with a focus on reaching and consulting with a wide and diverse audience. Shelagh is an experienced leader, writer and facilitator in the not-for-profit and co-operative sector. Moving from journalism to in-house communications work, she joined Oxfam GB before moving to Scotland to focus on leadership development with disabled people and their families. She was Chair of the UK's only co-operative telecoms provider The Phone Co-op and a founder director of the sustainable food and farming organisation Nourish Scotland.

Eric Hildrew takes up the new role of Communications Lead, tasked with raising the Institute’s profile and increasing the impact of its work. Eric brings over 20 years of experience in research and communications to the David Hume Institute. From a background in cultural research, he has gone on to lead marketing and brand development for a range of organisations including Sheffield Theatres and National Museums Scotland. As a freelance consultant, Eric’s clients have included Historic Environment Scotland, Forth Rivers Trust, and Glencoe Folk Museum.

Susan Murray, director of the David Hume Institute, says:

“I’m delighted to welcome Shelagh and Eric to our small but ambitious team. Through developing our communications and engagement capacity we aim to increase the impact of our work, both allowing more voices to be heard through our research and by reaching the widest possible audience with our findings and insights. We’re committed to flexible working and the opportunity that part-time working presents to expand our organisation’s skillset.”

DHI: The Movie

Thank you for being part of the Institute's journey in 2021.

This year we published research that brought people together from across Scotland to consider the actions required to move faster towards a more prosperous, sustainable, inclusive and fair country. Over 5,000 people from across Scotland told us their actions to help Scotland build forward better. You can read about these actions - and tell us yours - here.

From how to build A Scotland of Better Places, to delivering multi-year spending plans, and levelling up on Scotland's broadband, these conversations showed the appetite for change and transformation.

Throughout 2021 we have also been expanding our analysis of Team Scotland: diversity of thought is essential to improving productivity and resilience to risk - things that have proven to be essential in the 2020s. This year we turned our attention to actions for business and investment leaders, and Scottish Parliament.

This year DHI have brought you 11 insightful events on the economy, productivity and more. These are all available to watch now on catch up. We particularly recommend our most recent events on political philosophy and the pandemic, and our partnership event with Black Professionals Scotland and the Institute of Directors on how to unlock greater potential in Scotland's economy.

Blog: Level up Scotland's virtual bridges

by Lucy Higginson, David Hume Institute

29th October 2021

Many of us evolved into screen junkies over the course of the pandemic. Ofcom found that the average adult spent over 6 hours a day watching TV and online video during the first lockdown. Demand for streaming services rocketed, and there was a massive rise in use of Zoom, Microsoft Teams and new apps like HouseParty as people adapted behaviours to socialise, learn, work and care online. 

Without the internet and the ability for organisations of all scales to pivot to online working, the pandemic would have been far more disruptive. Experts acknowledge that if this had happened ten years ago or even five, the impact on our lives and the economy would have been far greater.

As part of the David Hume Institute’s research conversations for the Action Project, we heard from young people about new opportunities at home that they hadn’t imagined before.  Staying at home to study has lowered costs and other pressures for some students. The Stay Local orders meant they could keep their support networks without fear of being judged for not flying the nest.  

Will the pandemic change the old rite of passage of leaving home to study? Online learning has shown that you can study anywhere - you just need a reliable internet connection.

As part of the David Hume Institute’s commissioned research, A Scotland of Better Places, the Rural Youth Project shared insights of what is most important for young people in rural Scotland. Housing, transport, employment and education opportunities all came out unsurprisingly high - but an eye-watering 98% cited digital connectivity as critical to their future. Currently, only 13% currently have access to high-speed broadband. 

For many people operating businesses in rural areas, reliable broadband is their biggest issue. Turning on a camera for a Zoom meeting can require a coordinated shut down of all other devices. If you want good sound, many can’t have a picture too. As business moves increasingly online, unless we dramatically accelerate rollout of superfast broadband across the country, levelling up will remain a pipe dream - without the pipes.

Our places and the infrastructure we need to connect them have changed fundamentally.  The mass realisation of what the internet can do means people’s priorities have changed. People are no longer tied to cities as they were before. Many have moved closer to family or are planning to do so in the near future.  

But with this great opportunity, we are also facing great inequality.

We heard through A Scotland of Better Places about Balquhidder.  Village volunteers worked for years to bring broadband to the village, finally resorting to digging the ditch and laying the cable themselves after years of fundraising. This included European LEADER funding.  Other villages would struggle to follow this route without community capacity and with EU funds fast drying up. Replacement UK Levelling Up funds appear to have very different infrastructure priorities. 

The rollout of superfast broadband is fundamental to economic recovery from Covid.  Good broadband connection is now intrinsically linked with all aspects of people’s lives and livelihoods.  The UK and Scottish Governments must work together to make rollout happen faster as the current timetable is far too slow.  

The full picture of the UK Government’s new infrastructure priorities are beginning to emerge - the first announcements for the Levelling Up fund showing some unexpected projects. The Fraser of Allander Institute’s examination of criteria shows puzzling inclusion and exclusion of criteria for different parts of the UK. The focus for politicians remains stuck on traditional infrastructure like bridges and roads, rather than the critical high speed virtual connections the final 5% of Scotland is crying out for.

Scottish Government consultation response: tax policy and the budget

In autumn 2021 the Scottish Government sought views on the overarching approach to tax policy, through Scotland’s first framework for tax.

Our consultation draws on:

• The largest multi generational research project in Scotland in the last five years, The Action Project. In 2020-21 we brought together people from across Scotland to consider the actions needed to move faster towards a more prosperous, sustainable, inclusive and fair country.  Over 5,000 people from across Scotland told us their actions to help Scotland build forward better.

• We worked with partners to reach people of all ages and backgrounds across Scotland.  These included U3A, the Scottish Youth Parliament, the Children’s Parliament and local organisations like InspirAlba in Campbeltown and Resonate Together in Alloa. By listening to the many voices and then analysing themes and patterns, WhatsYourAction.scot presents the findings and encourages others to have their say.

• Our 2021 briefing paper on multi-year budgeting, explains how a new agreement on multi-year budgeting between the Scottish Government and Scottish Parliament will help long-term thinking and support a more open conversation about spending plans and investment choices.

• David Hume Institute events and discussions such as Talking Tax with Charlotte Barbour and Dr Arun Advani last year.

Summary

• DHI welcomes the framework.  The clear, accessible language is critical to create more understanding about the important role tax plays in society. Research conversations as part of the Action Project emphasised the lack of understanding of Scotland’s tax powers.

• Having a coherent narrative that joins up tax policy with the National Performance Framework and Climate Change Plan helps businesses and investors plan for the medium term direction of travel.

• Simplification and public understanding are rightly identified as important factors to underpin a fair tax system and are critical to accountability. The framework’s movement away from language like “tax burden” is important for a fresh conversation.

• DHI welcomes the proposed Citizen Assembly on council tax - this is an area that is widely recognised as needing reform but has become highly political. It came up consistently in Professor Duncan Maclennan’s work A Scotland of Better Places. Continuing the status quo indefinitely should not be an option and this work should be expedited.

Tell us what you think about DHI

Please could you spare a few minutes to tell us what you think about the David Hume Institute (DHI)?

We want to hear your thoughts about DHI’s research and events, as well as our role influencing decision makers in Scotland.

The survey should take no more than 10 to 15 minutes to complete depending on the detail of your answers and is anonymous: DHI will not see individual responses but will receive a report from external agency, The Lines Between. The Lines Between will not hold the data after they have processed it for us.

NB: Research completed.

David Hume Institute gives evidence to Scottish Parliament committee

Susan Murray, Director of the David Hume Institute, gave evidence to the Scottish Parliament Finance and Public Administration committee following its response to the consultation on Public Finances in 2022-23.

The Institute is calling for Scottish Government to:

• Publish draft multi-year spending plans to help longer term planning for service improvement, investment and productivity, and increase transparency over forward planning.

• Publish how it has prioritised for a fair and equal recovery, and provide underlying evidence for those priorities, recognising trade offs between shorter and longer term choices.

• Link budget priorities to the National Performance Framework and the United Nations Sustainable Development Goals (UNSDGs), using them to analyse how the pandemic has affected some groups and communities worse than others.  Continued use of the UNSDGs assists collaboration with other organisations and governments around the world.

• Focus on climate action and a fair transition to net zero, faster delivery of digital infrastructure and measures to directly influence reductions in poverty and promote greater inclusivity.

• Work to improve Scotland’s places by devolving resources and putting more power in the hands of local communities.

• Ensure support for jobs where skills can be developed rather than skills development alone.

• Commit to a full review of the Fiscal Framework which considers external changes including the loss of European Funding and new direct spending in Scotland from Westminster as well as the interactions between both devolved and reserved taxes and social securities.

Blog: To field our best team we need a more diverse squad

Blog by Susan Murray, the David Hume Institute

6th September 2021

As the football transfer deadline day passed last week, many teams made key appointments to their squads. Player’s data and match statistics underpinned transfer decisions. It’s no different in business: data matters and should affect the choices being made. 

However, new data from the David Hume Institute shows that business leaders are limiting Scotland’s potential by not prioritising diversity in their top decision makers.  Diversity of thought increases resilience, productivity and innovation as well as improving risk management.  Scotland’s top team is missing out.

The research investigated investment and angel investment leaders in Scotland.  Scotland’s investment companies have less diversity at the top than companies elsewhere in the UK. Although angel investment leaders are more diverse than the bigger companies.

The data on who is, and isn’t securing business investment and who can access the resources to grow is shocking - and again, limiting potential.

The data shows those with resources and connections are more able to reach the top.  This limits the pool of top decision makers and risks group-think - a risk Scotland should be aware of after the last financial crisis.

Business and investment leaders lag behind other sectors, and are not responding to the data linking diversity of thought with successful outcomes.  

So why isn’t change happening faster? 

Studies from around the world show overt and covert bias is limiting the pool - so this is a great opportunity.  Awareness is the first step - just like players on a football pitch, knowing your own statistics helps improvement.  Leaders have the power to champion and deliver change in Scotland.

Three out of ten of the top 50 business leaders also hold positions on other boards, meaning they can influence change beyond their own companies.  Similarly, the power to decide who gets investment is in the hands of the investment leaders.

Why does this matter? Improving gender diversity alone could add up to £250 billion of new value to the UK economy, if women’s new businesses were invested in and scaled up at the same rate as men’s. If women’s participation rates matched men’s there would be the potential of c.35,000 more direct jobs in the Scottish economy.

The leaders have the power to bring change. The country has big challenges ahead and leaders need to rise to those challenges.  Scotland needs its top team on the pitch.

The IOD conference last week challenged Scotland’s Directors to think about the IPCC code red: “the costs of inaction on climate change are greater than the cost of action.  There needs to be a bias towards change rather than a bias against it.”  

The same is true of diversity of thought.  The benefits are widely known and there are costs to inaction.  It's time for Scotland’s top business and investment leaders to bring more breadth to their squad and champion change.

This piece was originally published in The Times on 6th September.

New research shows business and investment leaders are limiting Scotland's potential

Press release from the David Hume Institute

6th September 2021

The David Hume Institute is challenging business and investment leaders to embrace change to realise the benefits of greater diversity in top leadership roles.

Scotland’s leading independent think tank, the David Hume Institute, today publishes new research finding a shocking lack of diversity in the top 200 business and investment leaders, less than in previous sectors analysed by the Institute.

Faster growth in diversity at the top level is needed if Scotland is going to benefit from a wider spectrum of thought leadership to maximise the country’s ability to overcome challenges such as increasing  productivity, innovation and improving risk management.

The research analysed the leaders of top businesses, investment companies, angel investors and family businesses in Scotland. The analysis found: 

• There are still more leaders called John than there are female leaders (7% John and 5% female)

• One in four (26%) have held positions at four services companies (Accenture, EY, McKinsey, PwC)

• 2 out of 3 (65%) of investment company leaders attended an elite university with 1 in 5 of these attending Oxford or Cambridge.  This compares to 49% of Angel Investment leaders who attended an elite university.

• 9% of investment company leaders are female - falling behind the UK average (13%)

• 1 in 5 (20%) of angel investor leaders are female - higher gender diversity than others in the business sector

With 31% of the top business leaders also holding positions on other boards, this narrow pool of decision makers has significant influence beyond their own companies.  

Understanding the diversity of who is making investment decisions in Scotland is critical as access to capital is cited as one of the barriers for increasing entrepreneurs from female and minority backgrounds. 

The research also found

• Three out of ten (31%) top leaders have postgraduate qualifications with 39% of these are MBAs.  

Postgraduate education is becoming the norm for top leaders, so decision makers need to be mindful of who has access to postgraduate education if they want to reap the benefits of diversity of thought.

Susan Murray, director of the David Hume Institute, says:

“The David Hume Institute’s research clearly shows limited diversity of Scotland’s top business and investment leaders. Scotland needs its business leaders to not only champion diversity across their organisations.  They need to be open to more immediate change at the most senior level to reap the benefits of more diverse thinking now.

“Currently those with resources and connections are more able to reach the top.  This limits the pool of top decision makers meaning organisations are risking group-think.  Diversity of thought helps risk analysis, innovation and productivity.

“Every business leader must choose to prioritise diversity of thought as we recover from the pandemic if Scotland’s businesses are to increase productivity and resilience to future risks.  For Scotland to be in the Champions’ League for business and investment we need a more diverse squad.”

Scottish Parliament consultation response: Public Finances in 2022-23

Response from the David Hume Institute to the Scottish Parliament call for views on Scotland’s public finances in 2022-23 and the impact of COVID

About our submission

DHI welcomes the opportunity to respond to the Finance and Public Administration Committee’s call for views on Scotland’s public finances 2022-23 and the impact of Covid.

Our submission draws on evidence from:

• The largest multi generational research project in Scotland in the last five years, The Action Project. In 2020-21 we brought together people from across Scotland to consider the actions needed to move faster towards a more prosperous, sustainable, inclusive and fair country.  Through facilitated conversations with over 5,000 people, we identified actions which will help Scotland build forward better.
  

• Working with partners to reach people of all ages and backgrounds across Scotland.  These included U3A, the Scottish Youth Parliament, the Children’s Parliament and local organisations like InspirAlba in Campbeltown and Resonate Together in Alloa. By listening to the many voices and then analysing themes and patterns, WhatsYourAction.scot presents the findings and encourages others to have their say.
  

• Our 2021 briefing paper on multi-year budgeting, which sets out the enabling action needed for the Scottish Government to publish multi-year spending plans.

Summary

We call on the Committee to recommend that the Scottish Government:

• Publish draft multi-year spending plans to help longer term planning for service improvement, investment and productivity, and increase transparency over forward planning.

• Publish how it has prioritised for a fair and equal recovery, and provide underlying evidence for those priorities, recognising trade offs between shorter and longer term choices.

• Link budget priorities to the National Performance Framework and the United Nations Sustainable Development Goals (UNSDGs), using them to analyse how the pandemic has affected some groups and communities worse than others. Continued use of the UNSDGs assists collaboration with other organisations and governments around the world.

• Focus on climate action and a fair transition to net zero, faster delivery of digital infrastructure and measures to directly influence reductions in poverty and promote greater inclusivity.

• Work to improve Scotland’s places by devolving resources and putting more power in the hands of local communities.

• Ensure support for jobs where skills can be developed rather than skills development alone.

• Commit to a full review of the Fiscal Framework which considers external changes including the loss of European Funding and new direct spending in Scotland from Westminster as well as the interactions between both devolved and reserved taxes and social securities.

Press release: action to make Scotland’s budgeting clearer

11th August 2021

Today the David Hume Institute publishes a briefing paper proposing a new agreement on multi-year budgeting to deliver more open discussion about funding for public services and to enable longer-term planning for their delivery which will support a more open conversation about spending plans and investment choices. 

Over the last year the David Hume Institute’s Action Project considered the actions needed to move faster towards a more prosperous, sustainable, inclusive and fair country.  

Multi-year planning helps effective investment and productivity, and can be particularly useful on longer term projects, many of which are linked to climate action.

Despite repeated calls over many years to publish multi-year spending plans, it has proved difficult for Scottish Government to achieve this.  As public finances become even tighter post pandemic, this will remain a challenge.

Public and third sector organisations want more certainty about funding to allow them to plan for more than one year at a time. Draft multi-year budgets will help public services plan more efficiently as we emerge from the pandemic.

The Institute’s paper proposes a way forward for the Scottish Parliament, Scottish Government and Audit Scotland to make multi-year budgeting the established norm in Scotland.   

Susan Murray, Director of the David Hume Institute, says:

“The Scottish Parliament and Scottish Government must work together to make multi-year budgeting the established norm in Scotland.  More open discussion about money and budgets, the predictions, assumptions and choices being made is important for Scotland is to achieve its climate, economic and equality targets.

The urgency for this change is backed by findings from the Institute’s Action Project - Scotland’s largest multi-generational research in the last five years. 

Multi-year budgeting would have an enabling impact for organisations, businesses and charities across Scotland.”

Notes to editors:

• For media enquiries please contact Susan Murray, Director@davidhumeinstitute.com 

• The David Hume Institute is an independent Scottish think tank which works towards a prosperous, sustainable, inclusive and fair Scotland. Find out more here.

• The David Hume Institute’s Action Project brought together people from across Scotland to consider the actions needed to move faster towards a more prosperous, sustainable, inclusive and fair country.  Through facilitated conversations with over 5,000 people we identified actions which will help Scotland build forward better. 

• The David Hume Institute worked with partners to reach people of all ages and backgrounds across Scotland.  These included U3A, the Scottish Youth Parliament, the Children’s Parliament and local organisations like InspirAlba in Campbeltown and Resonate Together in Alloa 

• WhatsYourAction.scot research investigated people’s thoughts on action they would like to see to build a more prosperous, sustainable, inclusive and fair country. Whatsyouraction.scot is a resource for everyone who lives in Scotland  and wants to build forward better. WhatsYourAction.scot wants to inform positive action by magnifying real people’s voices and helping them know they are not alone.

• This briefing paper was developed with support of the Action Project Steering Group, with special thanks to Eleanor Ryan and Stephen Boyle with additional support from Professor David Bell and Dr Katherine Trebeck. 

What next for Scotland’s places?

Global Expert considers the actions needed to help all of Scotland’s places thrive post-pandemic

A new report by Professor Duncan Maclennan, commissioned by the David Hume Institute, examines how the country can move forward to A Scotland of Better Places.  

The report explores how thinking has to move to comprehending place policies that match real social, environmental and economic systems and that connect places rather than separate them into different, arbitrary categories for policy action. 

Covid shone a light on the places in which we live, work, study, play and grow.  Our places will play a central role in Scotland’s recovery. They are inter-connected, inter-dependent and impact on every aspect of our lives.

The report is part of David Hume Institute’s Action Project investigating actions for Scotland to move faster towards a country that is more prosperous, sustainable, inclusive and fair. The project engaged more than 4,500 people from across Scotland, bringing together a broad range of perspectives. 

Professor Duncan Maclennan said “There is not a single magic action to make all of Scotland’s Places thrive. Over the years there have been many policies, strategies and initiatives, often top down and not involving local people. The events of the last year have dramatically changed many people’s relationships with the places in their lives.  

This is an opportunity to build forward better from Covid-19 and recognise the connections within and between places.  There are major long-term changes required, and much agreement about what needs to change and how to change it. Bold policy choices could remake the sub-national governance and government of Scotland to match modern place challenges.”

Professor Maclennan suggests “Using reformed financial and tax structures, listening to communities and individuals, (and especially younger and poorer Scots) in the democratic processes that will make Scotland a more prosperous, sustainable, inclusive and fair country.” 

Professor Maclennan’s report is based on conversations with over 600 people in webinars.  The conversations revealed the broad range of new ideas that individuals and communities are ready to share and enact with governments.

Catch up with our launch event with report author Professor Duncan Maclennan and Deputy First Minister and Cabinet Secretary for Covid Recovery John Swinney MSP.