Significant macroeconomic and fiscal implications will change the economic context for the foreseeable future
What will be the shape and form of the recovery from the crisis and the what will be the implications for the future growth and structure of the
In the wake of the Great Recession that was caused by the financial crash of 2007/08, the Labour Government first responded with a programme of quantitative
easing, and from the election of the Conservative-Liberal Democrat Coalition in 2010 heralded a period of public sector spending retrenchment known as
‘austerity’. The spending cuts associated with the austerity agenda have been shown to been taken disproportionately from the incomes of women. Subsequently,
wider economic inequality has worsened, leading to an overall lack of aggregate demand (Stiglitz 2016). It is argued therefore that in response to the current
public health crisis and inevitable recession, stimulating demand may be a more inclusive and more effective way to restart economic growth. As the productive
economy begins to re-open under Phases 2 and 3 of the Scottish Government’s ‘route map’ out of the crisis, stimulating consumer spending by boosting the
incomes of those individuals with the highest marginal propensity to consume (i.e. the poorest) will lead to a multiplied increase aggregate demand.
Stiglitz, J (2016) “An agenda for sustainable and inclusive growth for emerging markets” in Journal of Policy Modelling 38 pp693–710.
Scotland’s tax base is already fragile and insufficient – reflective of the low-wage economy in Scotland. The Scottish Government previously stepped back from
Council Tax reform. The analysis of the Commission on Local Tax Reform still offers relevant data, and the proposals for re-valuation, alterations to the bands,
and consideration of Land Value Tax, alongside reform of NDR, etc. still stand. As Scotland’s income levels with fall for many in Scotland, it will be imperative to
look across tax instruments for revenue generation, including ensuring maximum effectiveness in minimising revenue lost to avoidance and evasion.
Different sectors and businesses will be impacted in different ways.
What are the medium- to long-term consequences of the lockdown on businesses, including loss of employees, debt overhang, loss of markets,
reduced investment and unemployment?:
Feminist organisations in Scotland and globally have outlined the need for a feminist economic recovery plan, which recognises the gendered realities of the
impact of the crisis, and takes a broad view of economy as embedded (see for example Engender 2020, WBG 2020, Hawaini State Commission on the Status of
Women 2020, Alon et al 2020). A feminist approach to economic recovery is essential in ensuring that gender inequality is addressed and not actively reinforced
as the economy recovers from the crisis.
Existing models of infrastructure have been demonstrated to not be fit for purpose. In particular the social care sector, with its mixed provision of public and
private ownership and management must be addressed. While the regulatory frameworks provide some cohesion, it has become more evident than before that
social care must be regarded as core to our economic and social infrastructure.
The childcare expansion due to have been fully implemented by August 2020 must be continued. Access to affordable, flexible childcare continues to be a major
barrier to labour market participation for women, and particularly poorer women. For many low income women, publicly provided childcare continues to fail to
meet their needs as shift workers and aytpical workers – the mainly women keyworkers who have sustained economic activity during the lockdown. Prior to the
current crises, childcare costs were prohibitive, preventing women from accessing new jobs, more hours of work, or education and training opportunities.
Evidence from multiple sources has illustrated, in detail, the economic and social benefits to parents and carers in paid employment, childcare workforce, and
Investment in childcare yields significantly higher returns that investment in construction alone. UK Women’s Budget Group study (de Henau et al.,) showed that,
for the UK, investing in care
– produced twice as many jobs as investing in construction
– produces almost as many jobs for men as construction and far more for women
– raised women’s employment rate by 5.1% and men’s by 2.3%
– reduces the gender employment gap by 2.8 percentage points (almost a third of the existing gap of 9.9%).
Results from seven high income countries on the impact of government spending on social infrastructure revealed that investment in childcare and elder care
services is more effective in reducing public deficits and debt than austerity policies which reduce spending, boosting employment, earnings and economic
growth. And more social infrastructure spending fosters gender equality.
Investing 2% of GDP in the UK care sector would generate twice as many jobs as the same investment in construction.
The International Trade Union Confederation (ITUC) (2017) report shows that investing 2% of GDP in the caring industries would generate up to one million jobs
in Italy, 1.5 million in the UK, two million in Germany and 13 million in the USA. 39
Looking at similar investments in the caring and construction industries, you see that Investment in the caring sector creates more jobs overall, with a higher
proportion of those jobs going to women. Findings are consistent across seven countries: Australia, Denmark, Germany, Italy, Japan, UK and USA. Investing
public funding worth 2% of GDP in care services would boost overall employment rates by between 2.4 percentage points in Italy (one million jobs) to 6.1
percentage points in the US (13 million jobs).
It would raise women’s employment rates by much more than that, given their greater concentration in the care industry: between 3.3 percentage points in Italy
(660,000 jobs) and 8.2 points in the US (8.7 million jobs) with rises of more than five points in Japan (two million jobs), the UK (1.1 million jobs), Australia
(400,000 jobs) and Germany (1.4 million jobs).
This data underscores the importance of investment in care, and points to the potential for the care economy to be integral to the renewal and re-shaping of
Scotland’s economy. There is a clear role for the Scottish National Investment Bank to consider investment in care through social enterprise as within scope.
Workforce remuneration in childcare and social care setting must be reviewed. Wage increases and improvements in terms and conditions would produce
significant multiplier effects. As has been shown by feminist economists, public investment in health, child and social care delivers more GPD growth through
direct indirect and induced effects than investment in physical infrastructure such as construction (Kim et al 2019, Antonopoulos and Kim 2011, de Henau et al
2016 and 2017). Furthermore, given that so many health and social care workers have now been recognised as essential and/or key to the functioning of the
economy, public investment in health, child and social care offers the opportunity to address the systematic market undervaluation of these jobs.
Antonopoulos, R and K Kim (2011) Public Job-Creation Programs: The Economic Benefits of Investing in Social Care? Case Studies in South Africa and the
United States Levy Economics Institute Working Paper No. 671
De Henau, J, S Himmelweit and D Perrons (2017) Investing in the Care Economy – Simulating employment effects by gender in countries in emerging economies
International Trade Union Confederation available at https://www.ituc-csi.org/IMG/pdf/care_economy_2_en_web.pdf
De Henau, J, S Himmelweit and D Perrons (2016) Investing in the Care Economy – A gender analysis of employment stimulus in seven OECD countries available
Engender (2020) Women and COVID-19 available at https://www.engender.org.uk/content/publications/?cat=1
Hawaini State Commission on the Status of Women (2020) Building Bridges, Not Walking on Backs: A Feminist Economic Recovery Plan for COVID-19 available
Kim, K, I Ilkkaracan and T Kaya (2019) “Public investment in care services in Turkey: Promoting employment & gender inclusive growth” in Journal of Policy
Modelling 41(6) pp1210-1229
The crisis will impact differently on different groups in society, and on different parts of the labour market; and, has already revealed some
thorny issues about relative wages across key occupations.
What will the implications of the recovery be for different groups, unemployment and on the nature of work? How is the recovery likely to impact on
socio-economic inequality as a whole?:
The COVID-19 pandemic is set to have a detrimental effect on gender equality primarily in the labour market, but also in the household. The crisis is impacting
more heavily on women due to horizontal occupational segregation which means that women make up 77% of healthcare workforce (NHS IDS 2019), their
over-representation in low paid work and the uneven burden of unpaid domestic work and care that is done by women.
NHS IDS (2019) NHS Scotland Workforce latest statistics available at
Given the limitations of time and space, these data and analysis sources highlight the depth of the crises of gender inequality and the economic, health, and
social damage of C-19.
Women’s Budget Group (2020) Crises Collide: Women and COVID-19 available at https://wbg.org.uk/wp-content/uploads/2020/04/FINAL.pdf
A recent summary by the Commission on a Gender Equal Economy captured the inter-relationships in its Spirals of Inequality Report – available as a 3 minute
video at https://wbg.org.uk/analysis/spirals-of-inequality/
Calls for basic income payments do not by themselves guarantee a gender equal impact. Similarly, from a feminist economics perspective, public investment in
the health and social care sector offers the opportunity to stimulate demand through increasing the wages of low paid women working in the sector. It would also
serve to strengthen the sector’s capacity to address the gendered dimensions of the ‘care crisis’ as the burden on our reproductive (unpaid domestic) economy
Scotland has enjoyed a certain reputation as a pioneer for its commitment to wellbeing economy approaches, and to gender budgeting. The progress on gender
budgeting and equalities budgeting has been limited. Processes, practical applications, and above all clear and consistent direction from Scottish Government
Exchequer is essential in order to integrate equality analysis in the budget process and to advance human rights budgeting as an approach to underpinning the
National Performance Framework and secure the realisation of rights. Recent research from the Scottish Human Rights Commission (SHRC) has highlighted the
ongoing lack of transparency in the budget process. SHRC has led #YourBudgetYourRights, a collaboration between the SHRC, the Alliance, Glasgow
University, Glasgow Caledonian University, and the Centre for Economic and Social Rights –
The recent submission to the Finance Committee on the The impact of COVID-19 on the public finances and the Fiscal Framework must be central to the
analysis and recommendations of the Economic Advisory Group.
A blatant issue made clearer during the pandemic has been that inequality is structural; often institutional, and that it hits harder those already living in the hardest
conditions including Black and Minority Ethnic (BAME) people. The recommendation for fair economic recovery is that, whilst Scotland cannot amend the Equality
Act 2010, Scotland can explore ways to clearly embed the concept of intersectionality into policy, and mainstream the understanding that experiences of
disadvantage are complex but identifiable. Patterns are visible and reflect both, structural inequalities and instances of institutional discrimination. Scotland could
make it a duty for public authorities to identify, tackle and prevent intersectional discrimination. More so is the case given the current concern about BAME
peoples’ health inequalities, and the occupational risks of those working for the NHS, care services, transport, etc.
Clear and specific guidance on intersectionality needs to be produced so that a broad intersectional approach can be adopted in order to unveil, assess and
prevent real experiences of discrimination. This can help tackle structural injustice and ease the disparate effects of discrimination against people who are in
particularly disadvantageous intersections. Tackling discrimination against people with protected characteristics in silo is simpler but often ineffective.
Recent calls from disabled people’s organisations have reinforced the necessity of intersectional analysis and informed policy making. Highlighting the potential
for existing inequalities to be worsened, and the rights of disabled people to eroded, Glasgow Disability Alliance, with almost 50 other organisations, have issued
a call to action. “Scotland’s recovery must leave no-one behind: Equalities duties and the involvement of equalities groups must pave the road to recovery every
step of the way. (http://gda.scot//content/publications/DPO-call-to-action-on-Amendment-49.pdf).
What can be done now to ensure the transition to a wellbeing-oriented, inclusive economy on a transition to net zero
How can the wellbeing of the people of Scotland flourish and what are the environmental implications of the crisis?:
There will be big changes in the form, nature and interactions between different institutions.
How will the crisis change the role and relationships between the UKG/SG/LAs, business and other institutions?:
Community and individual resilience have been tested in many ways in recent months, and will be further strained by the legacy of economic and social damage.
The hollowing out of local services and local councils has also weakened local communities and the access of individuals to the services and support they need.
Recently introduced structures, such as Community Health Partnerships and the management of community-based social care services have had to find different
ways of working that have broken down the siloed and territorial ways of working.
As part of a care-led economic renewal, the development and investment in national care services will require a revisiting and re-visioning of the institutional
structures to deliver and sustain social care provision. Evidence from multiple sources, including Inclusion Scotland and Glasgow Disability Alliance among
others, demonstrates the distance from decision-making and participation that disabled people and households continue to experience. During the lockdown,
disabled people have had services withdrawn, access to social security payments disrupted, and been further islolated from decision making processes that
impact on their personal services and wellbeing. Describing the pandemic and lockdown measures as having “supercharged” the inequalities experienced by
disabled people (https://www.suse.org.uk/blog/covid-19-has-supercharged-inequalities-gda/), GDA’s findings reflect realities of disabled reported to Inclusion
Scotland. The pressures on community level social care, community pharmacies, access to food, and personal care all reveal structural weaknesses that need to
be addressed, in relation to resources and organisational structures and relations.
Scotland has sought to progress community engagement and participation, underpinned by the Community Empowerment Act 2015, and through participatory
innovations such as participatory budgeting and citizens’ assemblies. Research for the Scottish Government evaluating participatory budgeting revealed a
general level of positive engagement in the concept, but mixed levels of institutional readiness and preparedness. The report highlighted the need for local
councils and public sector organisations to engage in alternative models of power sharing and different relationships. Moving from current transactional
characteristics, to transference of power and resources is required if a fully transformed relationship between government/public sector and communities is to be
realised Additionally, the evaluation revealed low levels of equality analysis informing participatory governance design and delivery, and the need for significantly
improved compliance with equalities legislation. (O’Hagan, et.al 2019,’Evaluation of participatory budgeting activity in Scotland 2016-2018′, available at
In its Framework for Decision Making),
(https://www.gov.scot/publications/coronavirus-covid-19-framework-decision-making-scotlands-route-map-through-out-crisis/), the Scottish Government
expressed its commitment to ensuring the approach to economic recovery would be based on equality and framed around the realisation of human rights. The
framework sets out a highly significant commitment and ambition, consistent with expressed aspirations to create a wellbeing economy. These commitments are
foundational for a renewed social contract in Scotland, based on the realisation of human rights through the direction of public spending and revenue raising, and
across all domains of public policy. The experience to date of equalities budgeting, recent work to advance human rights budgeting, and evidence of areas for
improvement in transparency and accountability in Scotland’s finances and the budgetary process provide clear direction and underpinning. Existing tools and
practice require to be secured with more consistent leadership at Director level, and led across Cabinet. The deliberations of the Advisory Group on Economic
Recovery must be formulated on the basis of improving current practice, and operationalising the already stated commitment to equality and human rights.
The pandemic is a shock which will provide insights and data across a range of areas
How do we ensure that we learn from the impact of the crisis and respond accordingly?: