Scotland’s supply chain

Local Authority in the South East of Scotland, part of the City Region Deal.

The skills gap has been magnified due to the net zero transition, we are starting to see significant shifts in our local business base with new businesses developing sustainable models however, there is significant support required to ensure job seekers can access these opportunities. The recently launched SDS Green Jobs Scotland portal is an excellent guide for new job seekers and also for those looking to move into a green role however the challenge will be financing the learning opportunities as an individual, therefore clear and easily accessible financial support could accelerate the transition through having knowledgeable and qualified staff ready to move into these roles.

The persistent skills gap we are seeing locally tend to be primarily for entry level roles, there is already a coordinated approach between partners to provide supported employment pathways, as this work has been continuous for the last decade we need to look at developing the necessary skills while still in education, in Midlothian we would like to see skills development for pupils at an early age through social enterprise projects, employers continually cite entrepreneurial skills as highly valued, further investment in programmes such as The Social Enterprise Academy’s Schools Programme and embedding these skills in the curriculum would achieve this as a long term preventative action whilst deriving the added benefits of highlighting the model to parents and communities and providing a route for young people to recognise and support their local community and environment.

We continue to support employment pathways for adults through an employability and learning partnership, linking skills to demand by raising qualification levels in the adult population and supporting pupils to progress to further and higher learning qualification levels, reducing the learning inequality gap.

An extract from the Regional Skills Assessment for Edinburgh, East and Midlothian indicates that there are significant labour supply gaps based on the job postings for the period June 2020 – May 2021. A significant proportion of these are within digital and IT sector. Midlothian has established the Newbattle Community High School as a Digital Centre of Excellence to address this issue on a long term ongoing basis. More support in the longer term for these industries will be required.

The RDA also forecasts the following labour supply requirements for the 2021 – 2024 period. This includes significant labour market expansion (blue) and replacement (green) requirements. A significant proportion of this labour market supply (61% - 35,000) are within the qualification band SCQF 7 – 12. This indicates that clear vocational pathways are needed for these sectors.

Brexit has also had an impact on labour market supply for sectors such as tourism, hospitality and the care sector, between migrant workers returning home and less students taking on these roles due to the better pay and conditions in other sectors, such as retail.

In order to meet current and future demand we need to make working much more attractive than living on benefits, for many families that need childcare in order to work it is just not viable, they are left with very little after their childcare costs therefore increased support to working parents with young children is essential.

A place based approach is very important, post pandemic Midlothian has been focussed on connecting our business base to encourage B2B trading at a local level. Midlothian has also developed a partnership approach between procurement and economic development to identify opportunities for local SME’s to access tenders with support from partner SDP. SME’s tend to avoid public sector procurement mainly due to perception that it is complex and time-consuming and they lack the knowledge required, it is these barriers that we are trying to address at a local level .

Increased investment in developing these skills within smaller businesses could accelerate SME's access to procurement, strengthening local economies across the country which in turn supports our net zero ambitions too. These businesses can then access opportunities across neighbouring authorities where the supply is not available.

As stated above, increasing local SMEs ability to access local (and wider) procurement opportunities will aid future proofing whilst increasing their business stability and growth and the transition to net zero. Increased awareness of the Circular Economy approach to reuse materials needs to be recognised as the sustainable way to do business in Scotland.

Scotland’s future is still uncertain following Brexit, the ability to source goods made in the UK in has the potential to stimulate manufacturing, safeguarding existing jobs and creating new jobs.

Midlothian Council is a member of the lobbying group the Industrial Communities Alliance (ICA) and their recent briefing paper ‘Buy British? The post-Brexit opportunities for using public procurement to support British industry’ identifies a number of sectors where there may be scope for local economic development and where Midlothian has currently strong representation or could develop this e.g. railway stock manufacture (the Spanish company Talgo has plans to establish a factory in Fife, which is in the Regional economy); motor industry (Alex Noble); renewables; healthcare, shipbuilding and defence (Mactaggart Scott).

Major public sector buyers like the NHS, and also educational institutions such as the University of Edinburgh should be encouraged to develop local supply chains where possible, this is an area we plan to work on through our Community Planning Partnership.

Tourism is a key sector and emerging markets should be targeted through marketing and promotional campaigns, post pandemic it is not clear whether international travel will return to the previous volume of visitors therefore it is essential that we look to serve our domestic market first and foremost with an eye on international changes in 2022 onwards. A challenge for the domestic market to access the domestic market, as we focus on net zero, is ensuring adequate public transport for both visitors and workers.

In terms of product, we are fortunate to have SDI as part of the business support eco-system in Scotland, the challenge is often that businesses do not have an awareness of this service however Business Gateway services across Scotland do refer clients into the service but not all businesses are engaged with Business Gateway therefore a marketing campaign on the SDI service could raise awareness of this support.

As Scotland strives to lead the way in the green transition, looking forward there should be further opportunities to export both knowledge and product for the renewable sector.

The farming industry has been particularly hard hit in terms of food waste due to lack of staff related to Brexit with migrant workers returning to their home country, it does not make sense for our citizens to import food if it can be grown and harvested locally.

In Midlothian we have instigated support for farmers and F&D producers to generate a local food supply market, as distribution is also a challenge at present this will allow for the surplus to be sold at a local level reducing waste.

We do need to be aware that locally grown food must be affordable as many still suffer from food poverty and increasing food and fuel costs means that more families can be pushed into poverty even if in work.

Identifying domestic demand and incentivising farmers to meet said demand could make a difference however we would still need to address the labour market challenges.

This is a significant challenge for businesses. Already we are seeing the impact of increasing fuel and energy costs, PPE requirements and the additional staffing requirements to manage Covid safety.

Increased demand (and legislation) to implement fair work principles in order to remain competitive in the employment and supply market, will add pressure to businesses and it is likely that fair work conditions will be limited or delayed while businesses remain in recovery mode and continue to direct any profits to clear the borrowings that aided survival during the restriction periods.

There are several funds open at present to incentivise employers to take on apprentices and there is the Kickstart programme but an incentive that would cover the cost of embedding the fair work principles into the business for existing employers could level this up across Scotland.