Better Nation

Continuing my look at recent data on unemployment in Scotland, you can catch part one over at the ither place. And the briefing covering a wide range of employment-related issues is available at the Scottish Government’s website.

So which areas of Scotland are suffering the most?  And what is being done to stem the jobless flow?

Unsurprisingly, areas with traditionally high unemployment continue to experience high levels of joblessness.  This table shows the local authority areas in Scotland with above average numbers of people claiming Jobseekers’ Allowance (JSA):

So far so predictable.  But what about the areas experiencing increased unemployment – which local authority areas in Scotland are losing jobs the fastest?

The table shows that as well as some of the usual suspects, like Dundee, Clackmannashire, Inverclyde and West Dunbartonshire,  other parts of Scotland are struggling to hold on to jobs.  Those “enjoying” the double whammy of high unemployment and also rapidly increasing unemployment are highlighted in yellow.  We will return to them in a moment.

Orkney has shown the biggest increase in numbers out of work in the last year, and while those numbers are relatively small compared to the numbers of jobless in Glasgow, the impact on the local economy and communities will be huge.  Other areas experiencing fast growing unemployment are predominantly rural and only two local authority areas in Scotland have seen the numbers claiming JSA come down in the last year.

But why are some areas of high unemployment appearing to fare better than others.  Why, for example, has the claimant count in Glasgow grown by only 2% compared to 15% in Falkirk?  Why lower numbers coming onto the dole in both Lanarkshires than in West Dunbartonshire?

The answer may lie – partly – in where new jobs are being created and existing jobs safeguarded.  Regional Selective Assistance (RSA) is the main national scheme providing financial assistance to industry.  Managed by Scottish Enterprise, grants are awarded to investment projects that will create and safeguard employment in designated Assisted Areas.  These are the areas which qualify for regional aid under European Community law.  Other grants are available under “Tier 3” which can be made in other designated areas to small and medium sized enterprises.

Looking at grants offered and accepted throughout 2010-11 and in the first quarter of 2011-12, there is some evidence of intervention working to limit the impact of the recession in areas where unemployment is high.  The table below sets out how many new jobs were created and the number of existing jobs safeguarded through the award of RSA grants and in which local authority areas these jobs were located.

All the areas highlighted in green are local authorities with above average JSA claimant count but which did not experience rapid growth in unemployment (relatively speaking) in the past twelve months.  From this perspective, the approach being taken by Scottish Enterprise can be seen to be working in at least slowing down the growth in unemployment in traditional blight areas.  Moreover, the inclusion of two areas just below the national average for claimant count in this exercise – South Ayrshire and West Lothian – has a point.  Both areas have benefitted from jobs growth and safeguarding since April 2010, even though other areas have higher unemployment.  Yet, they can be seen as hub areas – investment in South Ayrshire is just as likely to benefit the jobless in East and North Ayrshire due to the good transport links and relatively short travelling distances.  Investment here then has a potential ripple effect on other unemployment blackspots.  The same can be said to apply to West Lothian, with North and South Lanarkshire, Falkirk, Clackmannanshire and Fife all within easy commuting distance.

Despite this, there are clearly areas that are struggling – all those highlighted in red are managing to gain some new and safeguard other jobs with grant aid, but it is not enough to offset the loss of still more in their areas.  Unemployment remains high and is still growing in West Dunbartonshire, Renfrewshire, Fife, Inverclyde, Renfrewshire and Clackmannanshire.  And here’s a thought – given that everything we have done since 1999 has failed to “solve” endemic unemployment in these local authorities, isn’t it time we tried something new?  These communities have been blighted by inter-generational joblessness and deprivation since the 1980s and still they suffer the most when we experience economic downturn.

That said, this is nothing these local authorities ain’t seen before:  their resilience at coping will be being tested but it will be there.  What might be more worrying for the Scottish Government in the short term, is that they are being joined by a whole new group of rural local authorities with rapidly growing unemployment.  The ability of their public sector agencies to lead and to cope – to know what to do and how to apply it to weather the storm – is more questionable.  Having been in this situation less recently and intensely, with some of these areas like Stirling, Aberdeenshire and Perth and Kinross, having enjoyed very low levels of unemployment throughout the noughties, how resilient are these communities and populations?

Recovery too might be more difficult, given that some of these areas have historically found it hard to attract investment due to sparsity of population and poor infrastructure.  Also they are heavily reliant on public sector employment – councils and health boards are probably the biggest employers – and job losses are only just starting from this source.  Moreover, a glance at the RSA table shows that few of these local authorities have featured in awards in the last twelve months, mainly because they are not Assisted Areas.  Thus, we have considerable increases in people losing their jobs but no state mechanism to help safeguard existing or create new jobs.  What will the Scottish Government be able to do to stem the jobless flow here?

There are patterns here to be concerned about.   The areas traditionally blighted by unemployment are not being spared this time round and some of them are suffering fast rising unemployment even with state intervention to create jobs.  It is not good in either the short or long term.

And there is a whole new group of local authorities struggling to weather the storm where traditional job-creating methods are largely unavailable because of their relative affluence in the 90s and noughties.  As yet, there seems little that can be done at national level to slow the impact of job losses or foster new employment.   Will these areas manage to bounce back without help from the state?

At the very least, these sorts of statistics should prompt the need for some fresh thinking by the Scottish Government on how to create and safeguard jobs in communities in the future.  What we have in place works but not nearly enough.