The economic context of the South of Scotland
Respondents were asked which strengths of the South of Scotland they would like to see the agency to build on and, in turn, which economic challenges they would like the agency to address. This chapter outlines responses both from online respondents and consultation events.
4.1 Economic challenges to be addressed
A large majority of respondents to the online consultation and 24 out of 26 consultation events outlined one or more of the economic challenges below that they would like the Agency to address:
- Low productivity
- Brexit and the replacement of European Union funding
- Reduction in bureaucracy
- Demographic challenges
- Deprived communities
- Lack of affordable housing
- Lack of further and higher education opportunities
- Lack of a skilled workforce
- A low wage economy
- Infrastructure challenges
- Restrictive planning processes
Each of these points are discussed in more detail below.
4.1.1 Low productivity
In line with the ambition for inclusive growth and increased productivity (see Section 2.1), respondents highlighted the low levels of productivity, e.g. the Gross Value Added, as a challenge facing the South of Scotland.
4.1.2 Brexit and European Union funding
Some respondents, and 6 out of 26 consultation events, felt that Brexit - both the loss of EU funding (particularly for land-based industries) and/or the potential loss of access to the wider European labour market - could have a negative effect on the South of Scotland. This was seen as a challenge that the Agency could help to address.
4.1.3 Reduction in bureaucracy
Respondents felt that both individuals and organisations are often faced with excessive bureaucracy – a challenge respondents would like to see the Agency address, particularly in terms of seeking funding support.
4.1.4 Demographic challenges
Many respondents drew attention to a variety of interlinked demographic challenges facing the South of Scotland, i.e. a declining and ageing population, which is further exacerbated by many young and economically active people leaving the area, creating a "brain drain" from the South of Scotland. The primary means through which this demographic challenge could be addressed by the Agency is by ensuring that young people are provided with opportunities – a point further explored in Chapter 8. With respect to the ageing population in the South of Scotland, respondents suggested that the support and care provision for the older population should be considered by the Agency, both as a local need and as an economic sector with growth potential.
4.1.5 Deprived communities
Some respondents emphasised the high levels of inequality, deprivation, fuel poverty and social isolation of many communities in the South of Scotland, which they regarded as the results of a low wage economy, high living costs and cuts to public sector services. It was felt that the Agency should be have a role in tackling deprivation in the South of Scotland.
4.1.6 Lack of affordable housing
Some respondents felt that there was currently a lack of affordable and social housing and that locals were usually not in a position to afford their own home. Regarding this, it was suggested that the Agency should support a regeneration process which is focused on enhancing the housing options for local people.
4.1.7 Lack of further and higher education opportunities
Respondents felt that there was currently a lack of further and higher education opportunities across the South of Scotland. Respondents suggested that there should be a wider range of training opportunities available, both in terms of a more substantial college presence and more subjects being offered, particularly in terms of tourism, hospitality and agricultural training pathways.
The provision of more training opportunities was seen as the key to keeping young people in the area.
4.1.8 Lack of a skilled workforce
Some respondents emphasised that employers currently find it difficult to recruit a skilled workforce and that the Agency should address skills shortages across different industries.
4.1.9 A low-wage economy
Some respondents felt that there was currently a low-wage economy operating in the South of Scotland and that the local economy was characterised by a shortage of well-paid employment opportunities. Respondents highlighted that many of the South of Scotland's major sectors, such as tourism and agriculture only offer seasonal work. The perceived high levels of unemployment were also highlighted.
4.1.10 Infrastructure challenges
Similar to the infrastructural ambitions outlined in Chapter 2, many respondents to the online consultation, and 17 out of 26 consultation events, noted a number of infrastructural challenges that they would like the Agency to address, including:
- Poor digital infrastructure, e.g. mobile and broadband delivery.
- Insufficient transport infrastructure, in terms of both the road and rail networks. In addition, respondents pointed out the cost of transport as a challenge for the people of the South of Scotland.
- Some respondents raised the issue of town centres decaying with high street shops closing down, derelict and empty properties, and a lack of leisure facilities.
4.1.11 Restrictive planning processes
A few respondents suggested that current planning processes were too slow and restrictive, and that there is a need to better involve communities in local planning processes. For respondents' opinions on the role of the Agency in planning processes, see Section 9.4.
4.2 Economic strengths for the Agency to build upon
A large majority of respondents to the online consultation, and 23 out of 26 consultation events, outlined a number of economic strengths they would like the Agency to build upon:
- Community spirit
- Quality of life
- History and cultural heritage
- Natural capital
- Strategic location
- Micro and small businesses
- Sectors important to the South of Scotland
- Educational provision
Each of these points will be explored in further detail below.
4.2.1 Community spirit
Respondents highlighted that the South of Scotland is characterised by a strong community sector and communities that are characterised by a high degree of cohesion, resilience and commitment to the local area. It was suggested that the agency should involve communities closely in its activities, a point further explored in Section 5.3.
4.2.2 Quality of life
Some respondents to the online consultation highlighted that the South of Scotland's natural environment provides a high quality of life. They identified this as the "unique selling point" of the South of Scotland. The South of Scotland was described as an area which was a good place to raise a family and provides opportunities for healthy living. It was suggested that the Agency could capitalise on this strength both in terms of boosting tourism and attracting skilled professionals and businesses to the area.
4.2.3 History and cultural heritage
The South of Scotland's rich cultural heritage and historical significance, including the area's links with Robert Burns and Walter Scott, were identified as a strength of the area that the Agency should build upon, particularly in terms of further developing the tourism industry.
4.2.4 Natural capital
A majority of respondents to the online consultation, and 15 out of 26 consultation events, identified the South of Scotland's natural capital as a major strength that the Agency should build upon. This included in particular:
- Land-based industries such as agriculture and forestry, but also fishery, food processing and land management.
- Renewable energies, ranging from on and off-shore wind farms to hydropower. The renewable energy sector was seen as providing the potential to increase employment and business opportunities in the South of Scotland but also make the area more self-sufficient. It was felt that there should be a coordinated approach to further developing the renewable energy sector across the South of Scotland.
- Lastly, the area's landscape, scenery, and wildlife was seen as a major strength, particularly in terms of further developing the tourism industry. Respondents drew attention to the wide-range of outdoor tourism that the South of Scotland provides, including mountain biking, canoeing and walking.
4.2.5 Strategic location
Respondents emphasised that the South of Scotland has a good strategic location, being relatively close to Newcastle, The Central Belt of Scotland, and Northern Ireland. It was felt that an improved transport infrastructure was needed to capitalise on this strategic location.
4.2.6 Micro and small businesses
Some respondents regarded the presence of a wide range of micro and small businesses, and the entrepreneurial spirit of communities in the South of Scotland as a major strength. It was felt that the importance of small businesses to the South of Scotland should be taken into account by the Agency, and that support should be provided to help small businesses grow (see Section 5.2).
4.2.7 Sectors important to the South of Scotland
A majority of respondents to the online consultation, and 14 out of 26 consultation events, pointed out a range of sectors which they considered strengths of the South of Scotland which the Agency should build on. These sectors included:
- Primary industries: Respondents highlighted the importance of agriculture, forestry and fishing for the South of Scotland. While respondents pointed out the high quality of these sectors in the area, it was felt that there was a need to modernise them. Related to this, land management was identified as a sector of importance to the South of Scotland that the Agency could further develop.
- Tourism: Respondents suggested that tourism should play a major role in the economic development of the South of Scotland and that there is significant scope to increase the number of tourists visiting the area. It was felt that more could be done to capitalise on opportunities provided by this sector – a point further explored in Section 5.2.
- Food and drinks industry: It was suggested that the local food and drink industry, including food processing, was a major strength of the South of Scotland. The high quality of the local produce was highlighted.
- Creative sector: Respondents emphasised the creative sector as a strength of the South of Scotland, ranging from local crafts ( e.g. knitwear) to arts. It was felt that this sector has the potential to make the South of Scotland more attractive to young people, professionals and tourists. As such, it was felt that the Agency should pay due attention to the role and importance of the creative sector.
4.2.8 Educational provision
Besides the challenges associated with the education sector outlined above, respondents also highlighted aspects of the educational provision that they considered a strength. These included, amongst others, the Crichton Campus in Dumfries, Borders College, Dumfries and Galloway College and the Scottish Borders Campus. Respondents also pointed out that there is good secondary education in the South of Scotland and that attainment levels are relatively high.
4.3 Regional differences
Besides strengths and challenges, some respondents pointed out a range of differences between the South of Scotland and the rest of Scotland, as well as regional differences within the South of Scotland.
- Some respondents felt that the South of Scotland was distinct from the rest of Scotland in terms of its social economic challenges - and that this distinctiveness should be taken into account by the Agency in line with the Scottish Government's emphasis on "place". It was felt that the South of Scotland was the neglected area of Scotland, a situation that they hoped the Agency would rectify.
- Respondents to the online consultation, and 4 out of 26 of the consultation events (all of these four events took place in Dumfries and Galloway), also highlighted a range of differences within the South of Scotland. It was felt that previous economic development investments were focused on the larger towns at the expense of more rural areas and small villages. A few respondents also noted that there are a range of differences between the Scottish Borders on the one hand, and Dumfries and Galloway on the other. In particular, it was felt that the Scottish Borders has received greater investment in the last few years, particularly through the development of the Borders Railway. As such, the South-West of Scotland was seen as the neglected region in the South of Scotland. It was suggested that regional parity should be one of the guiding principles of the Agency.
- As we point out elsewhere, despite these perceptions of differences in patterns of investment, there were no significant differences identified in the focus of responses from both individual respondents and events in the Scottish Borders and Dumfries and Galloway – in other words, the assessment of issues and opportunities was similar across the area.