Understanding Scotland Economy Tracker - May 2023
The most recent data from the David Hume Institute and Diffley Partnership’s regular economy tracker reveals a mixed picture of public opinion on the economy: 62% of Scots think general economic conditions will be worse in a years’ time and 45% think their personal financial situation will be worse in a years’ time.
The most recent data from the David Hume Institute and Diffley Partnership’s regular economy tracker reveals a mixed picture of public opinion on the economy.
The economic outlook from Scots remains bleak with 62% thinking that general economic conditions will be worse in a years’ time (although this is down very slightly from 66% in February) and 45% think their personal financial situation will be worse in a years’ time (down from 48% in February).
However, while we have seen a reduction in the number of people thinking that things will be worse, optimism is not rising. Many Scots think that the economic outlook will remain the same over the next 12 months suggesting that they think that the costs and challenges they face are here to stay.
Is this a sign of people adjusting to a new normal?
In order to meet increased costs, many Scots are running down their savings, turning to credit and stopping paying into pensions:
4 in 10 Scots (42%) report having taken money out of their savings to
cover higher costs1 in 4 have used a credit card to make for purchases that they wouldn’t
usually1 in % have used ‘buy now pay later’ schemes to cover everyday
spendingA small but increasing number of Scots have stopped contributing to a
pension (7%)
Turning to high-cost borrowing options for everyday essentials can cause the accumulation of substantial debt which will affect people’s lives for many years to come.
The Understanding Scotland: economy tracker is produced in partnership between the David Hume Institute and the Diffley Partnership. The survey gathers economic attitudes and insights from more than 2,000 members of the Scottish adult population every 3 months to track changes over time.
Is trust an undervalued ingredient for a thriving economy?
When governments talk of increasing productivity and economic growth, are they focusing sufficiently on the challenges posed by an unhappy workforce or the hours lost in contract disputes? This new discussion paper argues that, although improving levels of trust can take time, it is time well spent as it saves resources in the long term.
Discussion paper by Charlie Woods
Published May 2023
Labour market disputes, concerns about public contracts and declining trust in government and institutions have risen up the news agenda in recent times. All of these things impact on our economy but the importance of trust in building thriving economies, as an issue in its own right, feels under-explored.
When governments talk of increasing productivity and economic growth, are they focusing sufficiently on the challenges posed by an unhappy workforce or the hours lost in contract disputes? This paper argues that, although improving levels of trust can take time, it is time well spent as it saves resources in the long term.
This paper aims to stimulate discussion about the role that trust and more collaborative relationships can play in strengthening the economy. It is written from the perspective of experience in working to stimulate economic development, help resolve commercial conflicts, facilitate dialogue and develop more effective relationships.
This paper builds on previous David Hume Institute work on the labour market including the 2020 briefing paper on the Danish model of Flexicurity.
About the Author
Charlie Woods has wide-ranging experience of industry, commerce, and public and private sector organisations, ranging from SMEs to government. He was previously Director of Strategy and Chief Economist at Scottish Enterprise and is now executive director of the Scottish Universities Insight Institute and Vice-Chair of the Economic Development Association Scotland (EDAS).
Charlie is an Associate of Core Solutions and has extensive mediation and facilitation experience in a wide range of fields including planning, family business, management, PPP contracts, transport infrastructure, government policy and professional services.
Latest Understanding Scotland: Economy
The latest insights from our quarterly economic survey reveal a stark differences in experience of the Scotland’s economy.
The most recent data from the David Hume Institute and Diffley Partnership’s regular economic survey reveals a mixed picture of public opinion on the economy: while overwhelming pessimism coupled and evidence of harsh financial realities for households persists, people’s predictions for the next year appear less dire than in previous waves of data collection. Whether this is a sign of people adjusting to a new normal, or genuinely feeling things are improving, remains to be seen.
Scots are continuing to struggle to make ends meet as dissatisfaction with income levels remains high and people carry on cutting their discretionary spending levels in response to rising prices. On top of this people are being pushed into forgoing basic necessities, engaging in risky financial behaviours, and looking to change jobs or take on extra hours.
New questions for this iteration have displayed a stark financial fragility across the population, although this is not experienced equally. A significant minority of people are not confident that they could pay an emergency expense of £100 without having to borrow or take out a loan, and this number sharply increases for an emergency expense of £500. For those in the most deprived areas of Scotland, these numbers are much higher.
Latest Understanding Scotland: Economy
New research on economic attitudes and behaviours has revealed widespread pessimism about Scotland’s economic outlook.
Latest research insights from the David Hume Institute and the Diffley Partnership on economic attitudes and behaviours has revealed widespread pessimism about Scotland’s economic outlook.
The Understanding Scotland: economy survey shows that households’ are continuing to cut their spending and go without necessities, despite many attempting to boost their income in different ways.
Intentions to cut spending have increased for every good and service listed in the survey since Understanding Scotland began, posing a big challenge for the Scottish economy.
The public mood on the economy has moved dramatically in the last 12 months. Just 1 in 10 Scots think the economy works primarily in their own interests, whilst 8 in 10 think it works primarily in the interests of the wealthy.
As we enter into economic recession and the UK faces its biggest drop in living standards on record, understanding people’s perceptions and behaviours is essential for all decision-makers.
Read the press release.
Research: The Great Risk Transfer - have we got the balance right?
How many people have the knowledge and time to manage the financial risks they face in life? To what extent does it matter? Find out more in our latest research about the Great Risk Transfer.
How many people have the knowledge and time to manage the financial risks they face in life? To what extent does it matter?
We partnered with the Institute and Faculty of Actuaries (IFoA) to explore these questions. We aimed to find out more about what people in Scotland understand to be the key risks in relation to their long-term financial wellbeing and what helps and holds them back from addressing them.
Our engagement with people in Scotland was designed to build on recent work carried out by the IFoA which has been exploring the ongoing trend of transferring risks from institutions – such as employers, the state, and financial services providers – to individuals.
The IFoA calls this the ‘Great Risk Transfer’ describing it as posing one of the most significant yet little understood social, financial, and political challenges of our time. The changes described in this work show that far greater responsibility is being placed on individuals for managing their lifelong financial wellbeing than has been the case for most people living in Scotland since the establishment of the modern welfare state.
The Great Risk Transfer research showed that the causes of this trend are complex. They include increasing life expectancy, technological advances, changes in financial regulation and political choices. The IFoA highlighted four important areas of risk transfer: pensions, work, health and insurance. Our work was designed to find out more about relevant perceptions of risk in the Scottish population and how people respond to risks which can affect their financial wellbeing.
We explored people’s awareness of the Great Risk Transfer and their ability to manage and respond to financial risks. This revealed two interlinked themes which have implications for policymakers and others interested in either mitigating against or rebalancing responsibility for the relevant risks.
Cultural – what people know, how they feel and what they do to manage risk
Structural – the wider social and economic system
Our work commenced in December 2021 and concluded as inflation grew to levels not seen since the early 1980s, with rapidly-increasing fuel, energy and food prices dominating the headlines. This comes at a time when wages and social security payments have generally not kept pace with inflation, leading to widespread acknowledgement of a significant rise in the cost of living.
Not surprisingly, many of the people we spoke to were focused on immediate financial challenges. These included high housing costs, insecure tenancies and jobs, low incomes and debt, and, for some retired people, the challenge of living on a fixed income. This report is structured around four key areas which emerged strongly in our research:
Knowledge and awareness of risks to financial wellbeing
Trust in information providers
Stress, fear, stigma and embarrassment
Ability to access and understand guidance and information
Understanding Scotland: Economy - August 2022
New research shows 80% of people have already cut down on leisure and/or non-essentials, over a quarter of people are skipping or cutting down on meals to save money and 1 in 3 Scots now losing sleep due to financial stress,
New research produced in partnership between the David Hume Institute and the Diffley Partnership on economic attitudes and behaviours has revealed widespread anxiety and pessimism about Scotland’s economic outlook.
The Understanding Scotland: economy survey shows that despite households’ best efforts to cut their outgoings, the support on offer from governments is widely seen as inadequate.
Eighty per cent of people have already cut down on leisure and/or non-essentials, and over a quarter of people are skipping or cutting down on meals to save money.
Since starting this regular survey last year, sadly most people have seen their financial situation deteriorate. With three in ten people now losing sleep due to financial stress, and over a quarter skipping or cutting meals.
There are obvious consequences for the economy, labour market and people’s health. This is essential data to help inform the actions of decision-makers.
Read the press release.
Understanding Scotland: Economy - May 2022
A new survey produced in partnership between the David Hume Institute and the Diffley Partnership has revealed widespread anxiety about Scotland’s economic outlook. The survey measures people’s attitudes and behaviours to build a picture of the public’s perceptions of the economy.
Report: Who will do the jobs in Scotland?
Current employment rates in Scotland are at a near-record high. However, Scotland’s population is ageing fast and there is a low birth rate.
By 2041, the pension-age population is projected to increase by 265,000, while the working-age population is only projected to rise by 38,000.
This report discusses the challenges facing Scotland with changes to migration patterns and a shortage of workers. What can we do to meet the labour supply challenges in Scotland. Who will do the jobs?
Current employment rates in Scotland are at a near-record high. However, Scotland’s population is ageing fast and there is a low birth rate.
By 2041, the pension-age population is projected to increase by 265,000, while the working-age population is only projected to rise by 38,000.
This report discusses the challenges facing Scotland with changes to migration patterns and a shortage of workers. What can we do to meet the labour supply challenges in Scotland. Who will do the jobs?
Report: Scotland's Productivity Challenge
Scottish productivity has all but stalled in the last fifteen years and a turnaround is required if future living standards are to improve. This report makes recommendations for government, policymakers, business and trade unions, based on the conclusions of new research and case studies. It details five evidence-based stories of what has worked in comparable places and draws lessons from their experiences. In each case a ruthless focus on evidence, building consensus across the political divide, and developing strong and credible institutions were all necessary to turn things around.
Further Education, the Scottish Labour Market and the Wider Economy
HOP 94. Further Education, the Scottish Labour Market and the Wider Economy
Kristinn Hermannson, Ewart Keep, Patrizio Lecca, Jeremy Peat, Lesley Sutton, J Kim Swales
Three research papers on the role of Further Education colleges within the Scottish labour market and wider economy. Includes analysis of the College sector, finance vs benefits and the role of incentives.