CBI Scottish Budget 2023/24 submission
Together with members, we’ve made recommendations to drive sustainable growth as the key to Scotland’s economic success.
Against a backdrop of high costs, low demand, and sluggish productivity, CBI Scotland has urged the Scottish Government to use the forthcoming Scottish Budget to ramp-up business confidence and investment in a bid to get Scotland growing again.
While Scotland remains an excellent place to do business, it's clear that access to skills, restrictive planning processes and uncompetitive aspects of the tax environment are holding Scotland's economy back from fulfilling its potential.
We submitted several recommendations on what actions the government can take to alleviate these challenges and set Scotland on the path to economic success, early in November. These asks were carefully formulated through extensive consultations with our members and trade associations. And they fall within six critical areas where the Scottish Government can take steps on 19 December to drive collaboration with industry to enhance economic performance.
Realising Scotland’s net zero growth opportunities
The Scottish Government must harness the nation's strengths in the energy sector to foster the growth of sustainable industries essential for achieving a net-zero transition. We’ve long-discussed Scotland's potential, but failing to expedite our efforts risks eroding our ambition to attain net-zero emissions by 2045, particularly as global competition for green markets intensifies.
Recommendations include:
- Expediting the construction of electricity transmission infrastructure and streamline the grid connection process.
- Guaranteeing that the Green Industrial Strategy places a primary emphasis on executing projects in Scotland that will bolster our economy.
- Reforming the planning system for local and major green infrastructure projects and creating a collaborative 'overarching strategy' for planning with industry input and swiftly release it to unlock dormant investments and reassure potential investors.
- Establishing a government-supported, industry-led ‘floating’ team of planning experts, operating as a dynamic and responsive unit, to accelerate the consenting process for major net-zero infrastructure projects throughout the country.
Evolving infrastructure and seamless connectivity
Scotland's infrastructure shouldn’t only strengthen the ongoing needs of delivery and connectivity but also pave the way for an ever-evolving economy. Collaborating with business and the UK Government, the Scottish Government has a unique opportunity to guarantee that our nation's infrastructure is primed for the challenges ahead.
Recommendations include:
- Leveraging NPF (4) as a catalyst to expedite the implementation of vital infrastructure projects, fostering economic growth and facilitating a Just Transition. Collaborating with businesses, local authorities, and City Deals, the government should integrate their strategies into a comprehensive, nationwide approach, ensuring alignment and unity in vision and execution.
- Working closely with the UK Government and local business to accelerate the creation and development of Investment Zones.
- Acknowledging the economic importance of the built environment, and the critical roles that both new construction and the improvement of existing buildings can fulfil as we advance toward a net-zero future.
Transforming Scotland's transport
In collaboration with Logistics UK and in consultation with logistics sector members, we’ve delved into the specific transportation needs of Scotland. The economic advancement of Scotland is intrinsically linked to enhanced connectivity with the rest of the UK. An efficient and comprehensive transportation network crucial. And we need collaboration between Transport Scotland and Transport for the North to ensure seamless mobility of goods and people across various transportation modes, including road, rail, ports, and airports.
Recommendations include:
- Allocating dedicated funding to enhance critical road routes, including the A9, A77, and A75 upgrade projects.
- Taking a comprehensive approach to improving rail connectivity, considering not only passenger movements but also freight movements and the potential environmental benefits.
- Publishing the updated aviation strategy, as a priority.
Leveraging technology and skills enhancement for future growth
Technology and skills play a pivotal role in addressing labour shortages, as revealed by the CBI/Pertemps Employment Trends Survey. With 68% of respondents advocating for government incentives to promote technology and automation investments and 65% emphasising flexibility in the Apprenticeship Levy to bridge skills gaps, the Scottish Government must prioritise these aspects in shaping Scotland's future.
Recommendations include:
- Investing more in innovation and build on the appetite for tech adoption
- Increasing funding for universities’ knowledge exchange activities to strengthen applied research in Scotland and leverage greater industry R&D investment.
Enhancing workforce skills and employability for long-term prosperity
According to the Scottish Fiscal Commission, Scotland’s population is not only shrinking but also growing older. This demographic shift results in a shortage of individuals of working age in Scotland, adding significant pressure on businesses across the nation to recruit and expand their workforce.
Recommendations include:
- Underscoring evidence-based policymaking as a fundamental principle at the heart of the reformed skills system and provide a crystal-clear definition of the primary objectives for any proposed reforms.
- Producing a consolidated skills strategy and action plan, outlining the role business would play working with government and education authorities to implement changes.
- Imbedding net-zero skills and digital skills into our Education system in Scotland. The skills gap analysis work, completed by enterprise agencies, demonstrates the size of the challenge that lies ahead.
- Publishing annual data on the distribution and outcomes of Apprenticeship Levy funds.
- Exploring how to grow the graduate apprenticeship offering in Scotland and ensure that funding levels cover the cost of delivery. Any expansion should include and ensure a distinct funding source from the Scottish Funding Council.
Fostering a competitive business environment
Crucial to Scotland's economic recovery is a collaborative effort between the Scottish Government and the business community. The 'New Deal for Business,' unveiled by the First Minister earlier this year, represents a promising initial step. Policy decisions must be made with foresight, without hindering investment, or other inadvertent repercussions.
Our most effective course of action is to create an environment that encourages business investment, supporting sustainable growth and elevating Scotland and the UK on the global stage. To achieve this vision, we must provide businesses with the certainty and confidence they need to increase their investments and enhance our economy's capacity.
Recommendations include:
- Publishing a long-term tax strategy that will attract people to live and work in Scotland.
- Freezing the business rate multiplier for another year while inflation is still significantly above target.
The CBI Business Manifesto: Delivering Sustainable Growth