Scotland has the highest rates of long-term sickness in the UK, according to statistics which suggest it is “lagging” economically.
The annual report by the Allander Scottish Productivity Index, published ahead of the spring Budget, showed the percentage of economic inactivity between October 2022 and September 2023 due to long-term sickness is 31.7% in Scotland.
The percentage of hours lost to sickness absence rose from 2.1% to 3% in 2022 in Scotland, indicating a significant rise in the short-term, above pre-pandemic levels of 2% in 2019.
Scotland lagged in 10 of the 13 productivity indicators compared with the rest of the UK, despite having the highest percentage of the working-age population with higher education certificates or above (50%), surpassing the UK average of 43.5%, and compared to 43.2% in England, 41/6% in Northern Ireland and 38.6% in Wales.
The report suggested “cautious optimism” of recovery from supply chain disruption caused by the coronavirus pandemic and Brexit.
Mairi Spowage, director at the Fraser of Allander Institute at the University of Strathclyde, warned of a “worsening of the situation with regard to sickness absence and inactivity” in the past year.
She said there had also been an increase in people claiming disability-related benefits.
Ms Spowage said: “Despite improvements in the openness of the economy over the last two years as it shrugs off the supply chain and trade jolts of Covid-19 and Brexit, the latest index highlights that Scotland’s productivity is still lagging the rest of the UK, mainly down to the strength of London and the South East.
“There’s still plenty of work needed to improve workforce health with the indicators suggesting a worsening of the situation with regard to sickness absence and inactivity in the last year. This is supported by wider evidence, such as the increases in the numbers of people claiming disability-related benefits.
“There is an urgent need to get on top of pandemic legacy issues around long Covid and mental health, and to tackle the long waits for NHS treatment.
“A key plank of the National Strategy for Economic Transformation (NSET) is on getting people back into the jobs market via investment in employability programmes.
“However, despite a 10-year strategy, NSET is already being reviewed and refreshed. Some of the investment needed to support people back into work has often been subject to in-year budget cuts in the last two years.”
Scotland was also said to be facing a “shortage of skills and an ageing population”, putting renewed focus on technology.
Tracy Black, CBI chief strategy officer and devolved nations and regions ambassador, said: “The Scottish Government has a renewed focus on economic growth. Discussions around our country’s potential have gone on for far too long – now is the time to take decisive action as the window narrows on Scotland’s target of achieving net zero by 2045.
“All Scotland’s sectors and regions, and the devolved and UK governments – regardless of their political differences – must work closely together for the benefit of business to achieve sustainable growth. With the spring Budget tomorrow and a general election looming, it is right to move beyond talking about ambitious goals and to take swift action before time runs out.
“The CBI-Fraser of Allander Productivity Index shows a decrease in business R&D spending as a percentage of Scottish GDP. Scottish firms must look at how they can embrace productivity through innovation and technology.
“Our shortage of skills and an ageing population means businesses have to look at other options such as new technology and innovation to make processes more efficient and improve productivity.
“Scotland has a highly educated workforce. We need to make sure they are contributing to sustainable economic growth by cultivating leadership skills, enhancing digital proficiency and integrating new technology.
“We must also provide chances for Scotland’s workforce to upskill and retrain for new industries as we make the switch to net zero, which will improve wages, job security and enhance productivity.”
The Scottish Government has been contacted for comment.