Scotland experienced the joint biggest fall (along with Wales) in the Index of Social and Economic Wellbeing – down five places from 16th to joint 21st.
How to measure Scotland’s success? People’s quality of life should be as important as economic growth, according to Scotland’s first minister.
‘Collective wellbeing’, not GDP, will be the new defining feature of the Scottish economy, Nicola Sturgeon announced this week.
With a reverberating clash of rhetoric and reality, the FM’s speech coincides with Scotland’s sharp fall in the latest analysis of the Index of Social and Economic Wellbeing. The index – across 32 OECD countries – incorporates four of the most essential elements of wellbeing: income, education, longevity and inclusivity.
While England’s ranking has not changed between 2006 and 2018, Scotland’s fell to the lowest quartile due to a decline in education and income. However, poor life expectancy remains its ‘weakest area of performance’, according to Scottish Trends. And this poses policy decisions for the Scottish Government so all eyes will be on next month’s Scottish Budget to see how radical it really is.
“At present, the willingness across the Scottish Parliament to be radical enough to seriously reorient current spending patterns seems thin on the ground but without such profound changes then improvements in key aspects of the quality of life may fail to emerge over the next twenty years of devolution.” (John McLaren)
While it was good to see the First Minister confirming the Scottish Government’s commitment to wellbeing the day after the Index was published, the overall reaction to Scotland’s relatively poor result was less welcome.
First, the Finance Secretary (Derek Mackay) – who will craft and present next month’s Budget and plans a “pro-independence” alternative GERS Report – took the opportunity to blame UK austerity for on-going problems. However, an advantage of the Index is that it looks at shifts in performance relative to other countries. In many countries the degree of austerity has been as much as or more than seen in the UK. Furthermore, in England it has obviously been as great. However, the performance of these countries, for example in education, has been notably better than in Scotland. This must, to some degree, come down to policy choices made by governments.
Second, there was no acknowledgement that the problems discussed in the paper, relating to: a weak Committee system in the Scottish Parliament; a lack of academic involvement; a dearth of think tanks; poorly funded political parties and a declining and underfunded media presence, did in fact exist. Without changes in these areas then the issue of too little scrutiny and proper evaluation will continue to disadvantage Scottish policy decision making.
Third, the First Minister did not recognise and address the problems over the education and health performances. While these basic needs remain unaddressed then it seems a bit presumptuous to move on to some of the more esoteric and hard to define areas of well-being.
Fourth, there was no recognition that what New Zealand did in its Wellbeing Budget of 2019, with large boosts to budgets for mental health and child poverty alleviation, should be replicated in the upcoming Scottish Budget.
All in all, while the rhetoric around well-being remains first class the practice still falls far short in terms of making real progress.
Moving the dial
The Index of Social and Economic Wellbeing (ISEW) is an interesting guide to how devolved UK governments are performing across a wider range of economic and social goals. In the case of Scotland the results are worrying, in particular the decline in educational standing and the lack of improvement in life expectancy.
While the overall results shown should not be interpreted as an argument against devolution, it does highlight that greater political devolution alone does not necessarily equate to improvement in key policy areas. More informed, and better evaluated, policy choices are more likely to bring about such improvement.
Currently, this does not appear to be happening.
Improving matters will involve strengthening the political and supporting landscape. This might include: overhauling the current Scottish Parliament committee system; encouraging greater private sector support for a range of independent think tanks; and undertaking a review of public funding for political parties in order to improve policy dynamism.
It will be interesting to see if next month’s Scottish Budget, with its greater emphasis on well-being, is more radical than past efforts in redirecting money towards preventative rather than treatment based measures, especially in relation to health and education.
The budget provides another opportunity to start to better address issues such as poverty, social care, mental health, equality and climate change. This will be challenging given the pressure to, once again, divert most of the funding increase into boosting the NHS budget.
Will the Scottish Government follow the example of New Zealand, probably the world leader in this new type of budget prioritising, by significantly increasing funding for the likes of mental health and child well-being? Or will it delay again in the hope of greater certainty to come, with the real risk that it never actually arrives?
An Index of Social and Economic Well-being (ISEW) across 32 OECD countries – 2006 to 2018 (including England, Scotland, Wales and Northern Ireland)
– The Index of Social and Economic Well-being (ISEW) incorporates four of the most essential elements of well being: income; education; longevity; and inclusivity.
– The Index allows for a comparison of the relative progress of 32 OECD countries (including the four constituent countries of the UK) to be made between 2006 and 2018, i.e. how they have coped post the economic crisis and during a period of public sector funding restraint.
– Results show that over this period 3 of the top 5 performing countries stayed the same (Switzerland, Norway, Iceland) while Canada and the Netherlands were replaced by Japan and Sweden.
– Similarly, 4 of the bottom 5 performing countries stayed the same (Greece, Hungary, the Slovak Republic and Poland) while Estonia was replaced by Italy.
– Estonia experienced the biggest rise in its Index ranking, moving up nine places from 29th to 20th. Scotland experienced the joint biggest fall (along with Wales) in its Index ranking, moving down five places from 16th to joint 21st.
– The biggest rises in overall Index scores were seen in Eastern European countries (Poland and Estonia), although in most cases starting from a low base and so having little impact on their overall ranking. Other countries doing well include Germany, the Czech Republic and Japan.
– 3 countries experienced falls in their overall Index scores: Greece, Scotland and Finland.
– Within the UK, the ranking of: • England did not change, remaining a little above mid-table (i.e second quartile); • Scotland fell into the third quartile of countries, due to a decline in its education and income performances, the latter associated with the decline in North Sea related activity. Despite this, Scotland’s very poor life expectancy performance remains its weakest area of performance; • Wales and Northern Ireland both fell into the bottom quartile of countries, principally due to poor GDP performances.
– The relatively poor Scottish performance, in terms of education and health, suggests that changes may be needed to the, still young, devolved political system. Such changes should involve strengthening the challenge and scrutiny roles both within and out-with the Parliament.
– Looking across the UK as a whole, the results highlight the fact that greater political devolution alone does not easily lead to an improving performance in key areas of well- being. In fact, unless proper supporting bodies are also cultivated, it can lead to a weakening in some important aspects of policy development.
Via (Press Release – 21st January 2020)
Update: The author’s Index and commentary (above) prompted a rebuttal/critique from The National’s self-styled “Unionist” Fact-Check Service.
It summarised its “findings” as follows:
“THIS so-called “index of well-being” is not an official publication but is the work of a self-employed and self-styled “political economist” called John McLaren. McLaren previously was a special adviser to both Donald Dewar and Henry McLeish and is a staunch Unionist.
McLaren’s index is poorly constructed, uses too narrow a range of only four benchmarks and draws unwarranted conclusions from tiny movements in the data. In fact, the SNP Government has been pursuing a national well-being strategy which benchmarks 81 national indicators.”
You can read the entire analysis/commentary here
John McLaren in turn has responded and his full riposte is available here
He says: “There are two problems with these (Fact-Check) claims. The first is that it omits to provide any evidence, in terms of things I have written or said, that suggest that I am either a ‘staunch unionist’ or an ‘impartial observer’. If this is a FACT-CHECK then facts need to be provided, not just assertion or hearsay.
“The second is that it omits any evidence that I may be capable of independent analysis or even of analysis sympathetic to the cause of independence. I would suggest that my work for both the Centre for Public Policy for the Regions (CPPR) at the University of Glasgow and for Fiscal Affairs Scotland (FAS), in both cases with independent checks in place, was neutral. There was never, to my knowledge, any accusation of bias from the Scottish Government or from the SNP with regards to anything published by CPPR or FAS.
“Furthermore, the FACT-CHECK omits any mention of my contribution to the SNP’s Growth Commission Report. My work is referenced in the report (see para B1.12, where the Scottish Trends work is described as “independent analysis”) and I was also commissioned to do a background paper for the Commission, which is acknowledged in the opening chapter of the report (para 1.7). It is difficult to see why a “staunch unionist” would either be asked to do such a piece of work or, if they were, why they would agree to do it.”
Just been looking at your report ‘An Index of Social and Economic Well-being (ISEW) across 32 OECD countries – 2006 to 2018’.
Apologies if I’ve missed seeing it, but a genuine question, if I may: how is inclusivity measured?
john mclaren says
Inclusivity is approximated via the employment rate. This is clearly not a perfect measure but it has the merits of being: a decent approximation for economic inclusivity; reasonably accurately measured; and available for all countries.