Today, Humza Yousaf lays out his first Programme for Government since taking over as leader of the SNP and First Minister. Yousaf, who ran for leadership on a platform of continuity and synergy with the previous administration, has stated that he hopes to reset his government’s relationship with the business community. Business for Scotland has defined the Scottish Government relationship with business after years of strained and lackluster engagement as desperately in need of a complete root and branch overhaul.
This is reflected in a recent report by the Fraser of Allander Institute which found that only 9% of businesses surveyed agreed that the Scottish Government understands the business environment in Scotland and only 8% agreed that the Scottish Government engages effectively with their sector. It must be said that this cannot be laid fully at the feet of Yousaf and his government, as they have not been given sufficient time to rally the business community to their side, but it puts into perspective just how important today’s announcement should have been for bringing business and the Yousaf government back into harmony.
So, here are four main takeaways from today’s Programme for Government announcement:
How the Scottish Government will reset its business relationships
The Scottish Government will aim to reconnect with businesses mainly through implementing the recommendations made by the New Deal for Business Group. In addition to this, the government aims to bring business representatives together to advise on regulations through the Regulation Review Group.
For small businesses, which make up the vast majority of business in Scotland, there is a commitment to building on the work of the New Deal for Business Group in relation to Non-Domestic Rates, as well as a new Small Business Unit within the Scottish Government to work more closely with small businesses. There will also be a focus on increasing the density of start-ups in Scotland, with £15 million of funding and support for the high GVA sectors of life-sciences and green energy.
Increased help for families
Increasing access to childcare has been a flagship policy for the First Minister since his leadership campaign, so it is no surprise to see it take centre stage in his first Programme for Government. The childcare initiatives take the form of a number of policies which aim to help low income families and provide an avenue for mothers to return to work.
Firstly, Yousaf wants to expand free childcare to children as young as nine months (available in a pilot of six council areas) up to the end of primary school (the current system only offers it to three and four-year-olds). Free school meals will be rolled out to P6 and P7 students by 2026, starting with those who are in receipt of the Scottish Child Payment. The goal of these policies is to help struggling families. The majority of women are still considered the primary caregivers in their family and so with childcare taking up an ever increasing percentage of families expenditure, extending the free childcare programme will mean mothers can return to work – increasing household income and economic growth.
For businesses this means that thousands of additional participants will join the labour force, even if just on a part time basis. This will remove some of the tightness from the labour market and allow them to fill much needed vacancies across the economy.
Wellbeing in the workplace – 4-day work week
The Programme for Government also boasted a proposal for trialling a four-day working week among the public sector. The policy aims to promote a healthier work-life balance and relieve worker ‘burnout’ which is on the rise in many developed economies post-pandemic. A Censuswide survey found that in Scotland, 58% of ‘white-collar’ workers are currently suffering from low morale in the workplace which is linked to poor work-life balance.
The effects of poor work-life balance on employees is filtering through to their performance at work, which is being recorded in higher job vacancies, more sick days and lower overall productivity.
The implementation of a four-day workweek solidifies the Scottish Government’s commitment to creating a wellbeing economy. The effects on business output of ignoring employee wellbeing are well documented. By implementing policies aimed at combating employee burnout and increasing wellbeing, Scotland can place itself on a path to increased economic growth and increased societal wellbeing.
Housing and rents
During the pandemic, the Scottish Government announced rent freezes in order to ensure that tenants were not left on the street during lockdown. Since then, the Scottish Government has maintained the policy through the cost-of-living crisis. Today, the First Minister announced the policy would continue into March of 2024. The government plans to take this time to work on a new bill of rights for tenants and implement rent controls on private rental properties.
In addition to this, the Scottish Government will invest £750 million in new ‘affordable’ housing – 10% of which will be built in rural and island areas. The aim will be to build 110,000 affordable homes by 2032.
In reaction to today’s Programme for Government, Business for Scotland’s CEO, Gordon MacIntyre-Kemp said
“There really isn’t much in here that will provide that vital relationship reset with the business community.” “The recent creation of the new position of Cabinet Secretary for Wellbeing Economy, led us to hope for far more detail on how the Scottish Government planned to develop the range of policies that will drive renewal in Scotland’s economy to create fairer and more sustainable growth”.
“This has to change and that change can only happen with a full-scale engagement programme that will explain how the Wellbeing Economic Approach is the only way to deliver sustainable growth and that requires a more radical plan than we can see here. For a start, the Scottish Government could replace the tax credits for R&D which were recently cut by the UK Government.”
Tackling poverty is the central theme of Humza Yousaf’s first Programme for Government. This can be seen in the generous offerings made to struggling families and the increased support for children. In continuing Nicola Sturgeon’s fight to reduce poverty and inequality, he has done well. However, his commitment to a wellbeing economy (which aims to harmonise the needs of society and the needs of business) is missing a vital component – business.
Short of setting up advisory groups and holding consultations with members of the business community, there is little in this programme to promote business, innovation or research and development. Many in the business community will be hoping that this programme will represent the start of a much more comprehensive plan in the future, or they will begin to worry that history is repeating itself.