Draft circular economy strategy: Fairer Scotland Duty summary

Summary of evidence

The Fairer Scotland Duty (the Duty) places a legal responsibility on named public bodies in Scotland to actively consider how they can reduce inequalities of outcome caused by socio-economic disadvantage, when making strategic decisions.

This interim Fairer Scotland Duty Assessment will be updated following a public consultation prior to being published alongside the final Strategy.

The publication of the Strategy itself will not directly impact people or communities. In addition, the priorities set out in the Strategy are intended to apply across Scotland and do not specifically target particular groups, geographical locations or sections of society.

However, we acknowledge the vulnerability of people living with social and economic disadvantage and that there is potential as individual interventions related to the Strategy priorities are developed and implemented, for them to affect everyone in Scotland (including individuals, businesses, public sector and third sector organisations).

It is therefore important to ensure that the impact on those who experience socio-economic disadvantage is understood, whether this is through low income, low wealth, material deprivation, area deprivation or socio-economic background, and that the impact of future interventions, related to the Strategy priorities, are assessed.

Across each of the priorities there may be potential for associated future actions to impact people differently across socio-economic groups.

At this stage, there are not expected to be any potentially positive or negative impacts across different socio-economic groups due to the publication of the Strategy.

The evidence gathered suggests the potential impacts outlined below should be considered when interventions related to the Strategy priorities are designed, developed and implemented.

Climate Crisis and Environment

The Strategy seeks to influence behaviours by consumers, businesses and organisations to drive circular practices and principles. This is likely to include messaging that frames circular economy imperatives around environmental issues and addressing the climate crisis.

Adults in the most deprived areas are less likely to view climate change as an immediate and urgent problem. In addition, the proportion of adults viewing climate change as an immediate and urgent problem in 2019 was highest amongst those with degree level qualifications (80%) and lowest for those with no qualifications (49%)^[22].

As such the impact of behavioural change work and public communications relating to the Strategy priorities needs to account for these differences.

Creation of green jobs

'Green Jobs in Scotland: An inclusive approach to definition,

measurement and analysis'^[23] states that green jobs are generally better paid and that the median advertised wage is greater than those defined as non-green jobs.

This report, published by Skills Direct Scotland, suggests that poorer skills attainment associated with socio-economic disadvantage can impact people’s ability to gain secure and well-paid employment. This would include jobs created by a growing circular economy.

There are several reasons for this, including that those living in poverty are more likely to have caring responsibilities, be one parent households or have limited or no access to a car. People from disadvantaged backgrounds are also less likely to have access to networks and opportunities for placements or work experience which would reduce their job market opportunities, compared to those from higher incomes.

The Strategy also seeks to increase uptake of circular practices through improved skills and education opportunities. It is likely that these groups of people may be more likely to miss out on circular economy job opportunities, for the reasons highlighted above.

Socio-economic disparities also exist for some people in Scotland across and within the protected characteristic groups in terms of educational and labour market outcomes. For example, gender segregation happens from school via approaches to subject choice and paths to employment being developed with a gendered lens^[24]. This carries into the labour market, resulting in under-representation in certain subjects and occupations by different genders^[25]. These disparities contribute towards an overall gender pay gap of 8.7% in Scotland^[26].

In addition to this, while some ethnic minority groups achieve highly in the education system in terms of attainment, labour market outcomes^[27] are far lower in comparison to the wider population. Finally, outcomes for disabled individuals both, in education and the labour market, also tend to be lower than the wider population^[28].

The impact of the Strategy on those with protected characteristics can be seen in the associated Equalities Impact Assessment (EQIA).

Low incomes, low wealth and material deprivation 

The Strategy seeks to empower consumers and organisations to adopt circular behaviours and support businesses to increase circularity and uptake of circular business models. This may lead to changes in the price of specific items depending on the nature of future interventions.

Over a million people in Scotland live in relative poverty and around a quarter of them are children, with nearly half a million of these people are in very deep poverty^[29]. According to the 2023 household survey^[30], 13% of those aged 16-34 and 11% of 35-59 years old said they are not managing well financially.

As such the potential impacts, positive or negative, on costs for consumers on low incomes should be assessed as and when appropriate.

Rural communities 

Living in more rural areas in Scotland incurs additional costs.

A Scottish Government report from 2021 estimated that the minimum cost of living in ‘remote rural’ Scotland is between 15% and 30% higher than urban parts of the UK^[31].

It is unclear how the impact of the Strategy priorities would be significantly different for people living in rural communities – in addition the Strategy seeks to expand the application of a place-based approach to the circular economy.

Nevertheless, it is important that potential impacts, positive or negative, on rural communities should be assessed as and when appropriate.

The impact of the Strategy on those living in island communities can be seen in the associated Island Communities Impact Assessment (ICIA).

Food insecurity

The Strategy seeks to develop effective options with stakeholders to support food waste reduction by businesses, improve circularity across the supply chain and guide long-term practices on household food waste reduction behaviour.

Food waste and food insecurity are interconnected and 9% of adults in Scotland in 2021 experienced food insecurity in the previous 12 months^[32].

Zero Waste Scotland calculates that 59% of Scotland’s food waste comes from households and that the average UK family of four stands to save £1,000 a year simply by wasting less food^[33].

In 2019 WRAP estimated that around 3.6 million tonnes of food surplus and waste are generated in UK primary production – with a market value of £1.2 billion^[34]. WRAP calculated that if 10% of this was fit to redistribute it would be the equivalent of around 850 million meals a year. Along with edible, surplus food that goes to waste from retailers and manufacturers this figure rises to 1.3bn meals a year, which could be utilised to feed economically vulnerable people in the UK.

As such the potential impact, positive or negative, in relation to food insecurity should be assessed as and when appropriate.

Transport

This Strategy, alongside the Transport Strategy, seeks to improve circularity of passenger and light goods vehicles.

Socio-economically disadvantaged groups are less likely to use cars or own them.

This fact can adversely affect access to employment, education, training, and ability to travel to see family and friends, attend medical appointments or access to shops and public services.

As such the potential impact, positive or negative, in relation to car use and car ownership should be assessed as and when appropriate.

Access to affordable housing

The Strategy seeks to increase reuse of construction materials.

Interventions in the built environment are complex and there are many factors determining house prices (such as land value, wider housing market trends and overarching economic conditions), so impacts are difficult to forecast and measure.

For example, following a policy intervention, property developers may choose to increase/decrease their prices and pass on additional costs/savings or risk to consumers. A negative scenario for consumers could create an increased barrier to low-income households purchasing a newbuild property.

The same is true of the potential to increase rental costs: people on low incomes or who are unemployed and seeking work are more likely to live in the social rented sector.

According to the 2019 Scottish Household Survey^[35], 21% of households in the social rented sector did not manage well financially. This was significantly higher than among owner occupier households (3%) and households in the private rented sector (14%). People on lower incomes are more likely to live in deprived areas.

Differences in housing costs between areas can limit the neighbourhoods that

people on lower incomes can live in. For example, the Scottish Household Survey 2019 found that 47% of socially rented households were in the most deprived areas compared to 17% of privately rented households and 12% of owner-occupied households. This has been increasing since 2013.

As such any future interventions that could lead to a positive or negative impact on housing costs should be assessed as and when appropriate.

Other activity likely to result from the Strategy

This FSDA acknowledges and assesses some generic activities that may result from pursuing interventions linked to stated priorities. This will enable an element of impact assessment at this stage and highlight areas for attention for fuller assessment in future. These generic activities are:

• Research activity
• Policy development activity
• Communications activity

Future research activity may impact on socio-economic groups at two stages. Firstly, via impact during research due to methodology, and secondly the potential impact of policy implementation following research.

For the former, it is not possible to assess at this stage where and how this impact may occur. As such, this research activity must encourage inclusivity and diversity to avoid bias and generalisations. It should be accessible and ensure perspectives and experiences represent the breadth of Scottish society, including organisations and individuals that represent different socio-economic groups.

It is also not possible to assess where and how this impact may occur for the latter at this stage. As such, future research related to the Strategy priorities should require a methodology that includes perspectives, and experiences of different socio-economic groups.

Similarly, future policy development activity must encourage inclusivity and diversity to avoid bias and generalisations. It should include voices from organisations that represent all socio-economic groups.

Finally, future communications activity must be inclusive, suitable and accessible to all socio-economic groups. There is a need for socio-economic disadvantaged groups to access the same level of information and understanding as their peers - regarding future changes or opportunities as a result of interventions resulting from the Strategy priorities.