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Council of Economic Advisers
05/12/2008
The First Minister's Council of Economic Advisers (CEA), chaired by Sir George Mathewson, published their First Annual Report earlier today.
The report sets out the Council's analysis and discussion of the challenges ahead and the action required by the Scottish Government to make practical progress in delivering its overarching Purpose, as set out in the Government Economic Strategy to increase sustainable economic growth.
The Council has set out 22 recommendations and a number of additional considerations for the Scottish Government. These include:
- Taking a more proactive approach to planning including financially incentivising councils to promote and facilitate sustainable development projects
- Raising the overall level of infrastructure spending in Scotland
- Pursue with the UK Government, revisions to the current fiscal arrangements to meet Scotland's overall infrastructure needs and explore new means of borrowing, outside PFI
- Reaching agreement with Universities Scotland on the future scale of the Scottish university system and the balance between various activities
- Improving the quality of Scottish economic statistics in several specific areas so that they meet the needs of government.
Sir George Mathewson said:
"Since the Council first met in September 2007, events in the global economy have unfolded at unprecedented speed. The financial crisis in September has, and will continue to have, a real impact on Scotland. However, Scotland is a country with tremendous assets and clear areas of comparative advantage in the global economy. We have recovered from economic downturns before and will do so again.
"While action is being taken in the immediate term to accelerate capital spending and reflate the real economy, the Scottish Government must remain focussed on the longer term thinking set out in the Government Economic Strategy; this remains as relevant as ever in achieving increased sustainable economic growth.
"Our Annual Report sets out 22 recommendations and a number of additional considerations which we believe will act as significant drivers for increasing and sustaining economic growth.
"A more proactive approach to planning is needed which takes into account the economic potential and opportunity around planning. This should include financially incentivising local authorities to facilitate sustainable development projects and changing the culture of planning so that planners see themselves as facilitators- enabling high quality developments in the right places and making a positive contribution to economic growth - rather than regulators.
"Infrastructure too must be a priority and the current economic conditions create a favourable environment for funding the renewal of Scotland's infrastructure. We would also strongly urge the Scottish Government to pursue, with the UK Government, revisions to the current fiscal arrangements to meet Scotland's overall infrastructure needs and explore new means of borrowing, outside PFI, to help finance an increased infrastructure spending.
"Education is clearly central to the delivery of the Government Economic Strategy. It is of course a high cost area which requires a long term perspective and we believe that the Scottish Government needs to consider whether it is appropriate to focus on developing world class universities or world class university departments and if so how this will be funded. The Council is willing to explore this at future meetings should the Scottish Government find this helpful. In the meantime, we have suggested quite radical actions to develop the higher education system as a real competitive strength for Scotland.
"The Council is concerned by the high levels of economic inactivity that exist in some parts of Scotland and hence in the failure of some areas to play an integral part in Scotland's economic progress. We believe that the functions of Jobcentre Plus should be devolved to the Scottish Government and that local and partnership-based approach to service delivery should be strengthened through a radical change in the use of funding to drive better outcomes.
"These are just a few of a total of 22 recommendations we have made to the Scottish Government. Our remit is clear: to advise the First Minister on what we believe will help deliver increased sustainable economic growth in Scotland. This report sets out this advice and we look forward to receiving the Scottish Government's response in the New Year."