Baseline
This section sets out a summary of Scotland’s characteristics which play an important role when considering the impact of the proposed actions for the Scottish Government as set out in the draft VIP.
Demographics and equality
As stated in The Registrar General's Annual Review of Demographic Trends Report 2022, our population is approximately 5.5 million people, and we have an aging population, with the fastest growing age groups being those over 65 years. We have substantial variations in age ranges between the more densely populated regions, such as the Central Belt, versus more remote and rural areas like the Highlands, where there are fewer young people and greater outward migration. This is a particular issue in the Scottish islands which along with demographic and socio-economic particularities, make the 96 inhabited islands in Scotland at greater risk of being impacted by some changes in strategy and policy.
The equality impact assessment results in preparation for delivering Scotland's census 2022 provides the key findings below with respect to Scotland’s protected characteristics and a high-level summary of the status quo as reported in this document follows. Scotland’s population is ageing, with one in five people in Scotland over 65 in 2018. It also mentions that 53% of those over 65 years have difficulties in carrying out daily activities due to health conditions or disabilities compared to only 20% for the overall population (based on 2011 census data).
The assessment mentions that disability and long-term conditions affect 20% of the population, according to the 2011 Census, which is the same rate as in 2001, despite the increasing ageing of the population.
Socioeconomics and child poverty
The Poverty and Income Inequality in Scotland 2020-23 release, states that relative poverty levels of Scotland’s population stand at approximately 21% for working age adults after housing costs. It also states that poverty and income inequality rates are continuing to rise while the median household income is rising slowly.
The child and parental wellbeing: measuring outcomes and understanding their relation with poverty report from March 2024 affirms that whole family wellbeing is crucial to creating the conditions for families to be able to navigate their way out of poverty and to enable families to thrive. However, overall, there are lower levels of health and wellbeing amongst children, young people and families living in higher areas of deprivation.
The Scottish Index of Multiple Deprivation (SIMD), indicates that the most deprived areas in Scotland are predominantly in urban areas. However, on page 10 of the Strategic Transport Projects Review (STPR2) Island Communities Impact Assessment Report 2022, evidence suggests that people living in rural areas experience deprivation differently from their urban counterparts, such as through higher costs for fuel, heating and transportation as well as less accessibility to key services such as healthcare, childcare and broadband. There can also be limited opportunities to earn an adequate income compared to those living in towns and cities. This is reflected in the Office for National Statistics data on earnings and hours worked by local authority. The 2020 average gross annual pay for the local authority areas that contain islands, versus the average for Scotland shows a difference of just over 10% (£24,002 versus £30,097 respectively).
Rural and Island Communities
Based upon the Scottish Government 2011 census, the population in the Scottish Islands stood at 103,690 (Supporting documents - Scottish islands: data overview 2023 - tables and figures, table 1.2, Scotland’s island figures from the most recent census are not yet available). Scottish Islands 2023 data overview by the Scottish Government states that in the past 20 years the population has grown overall, however there is considerable geographical variation, with some islands losing numbers. Strongest growth has been seen in mainland Orkney and connected islands as well as the Highland islands (20% and 13% respectively), while Arran, Bute and Cumbraes and the Outer Isles of Shetland have seen losses over the same period (13% and 9% respectively).
The largest population losses moving forward are forecast to occur in Island Sparsely Populated Areas (SPAs), which present direct challenges for the viability of communities, business and services supporting these areas. In addition, future loss of working age population in the islands is forecast to be disproportionately higher than the total population loss, whilst the numbers of children are also forecast to decline.
The Scottish Government’s Rural Scotland Data Dashboard shows that in 2021, the Scottish population was estimated to be around 5.48 million, of which approximately 12% lived in accessible rural areas and 5% in remote rural areas. Between 2011 and 2021 the population in accessible rural areas grew by 11%, outperforming urban areas, while remote rural areas and remote small towns have both declined (-1% and -4% respectively). As with the islands, the working population in rural areas is markedly lower than in urban areas. In remote rural areas, 27% of the total population is 65 years old or over, compared to only 16% in large urban areas (based upon 2011 data).
The rural population is forecast to decline over the next 20 years, reflecting what is already happening in the islands, while larger city and urban with substantial rural areas will see population growth. Overall, it is predicted that between 2018 and 2043, there will be a drop of 19,000 people (a 12% change) living in island and remote rural areas, while the numbers of people living in large cities is forecast to increase by 109,000 (7%).
Business and economy
All the detail in this section comes from the Evidence paper for Scotland's National Strategy for Economic Transformation (2022). This paper describes Scotland as having a small open economy with an onshore GDP of approximately £160 billion (not including oil) which is 8% of the UK economy. Due to challenges such as the 2008/9 financial crisis, austerity and the UK leaving the EU and the single market, Scotland’s economic growth has improved in the medium term, but declined when compared to other OECD countries. More recently, COVID led to the economy contracting, however the economy has now returned to pre-COVID levels of output, although leaving behind it a legacy of damage to business resilience in certain sectors.
In 2020, there were approximately 364,000 registered and unregistered businesses operating in Scotland, an increase of 22% from 10 years previously. There is a diverse business base, with construction and professional, scientific and technical services accounting for the largest sectors. Over 93% of business in Scotland are ‘micro business’, meaning that they employ fewer than 10 people and represent just over 28% of the private sector employment and nearly 17% of private sector turnover (in 2020). In contrast, the largest businesses, those with more than 250 employees, represent nearly 45% of all jobs and nearly 59% of turnover. Business growth between 2010 – 2020 has largely been powered by micro businesses (a 22.7% increase versus a 7.7% increase for large businesses).
Scotland does have challenges with respect to skills and general labour shortages, and one in five of the working age population is inactive, the most common reason cited for this being temporary or long-term health issues. Scotland has a higher level of skills gaps (employees not having the correct skills for their roles) amongst its workforce in comparison to overall UK figures (16% versus 13% based upon 2017 data). Post pandemic and EU exit, over 40% of businesses reported difficulties filling vacancies, particularly in the accommodation and food services and transport and storage areas.
The proportion of people who use public transport and active travel to get to work has remained relatively stable in the ten years to 2019, although bus journeys have decreased while rail journeys increased. COVID negatively affected demand for public transport and it is expected that it will take quite some time before pre-pandemic demand levels are realised.
Scotland has trade links with over 100 countries and Scotland’s trunk road network is critical for national and local delivery of goods. Scotland has eight major port areas that handle over a million tonnes of cargo annually, with the Forth group handling the most cargo by weight. In addition, Scotland receives goods via English ports, especially through the Channel, much of which uses road transportation to reach Scotland.
Environment
As described in the Scottish biodiversity strategy to 2045, ‘Tackling the Nature Emergency’, Scotland has a rich natural environment and cultural heritage which support high levels of recreation and tourism. We have a network of European protected sites which support rare plants, birds and animals; however, it is acknowledged that further efforts are required to reverse biodiversity loss. It is also acknowledged in the Scottish Government’s ‘Environment Strategy for Scotland: vision and outcomes’, that there are concentrations of pollution within Scotland’s air, soils and water in some parts of the country. Some is historic, however there are also continuing challenges, including pollution for urban and rural areas.
Transport inequality
As reported in Transport and Travel in Scotland 2022 , in 2022, forty-six per cent of households whose net annual income was up to £10,000 had one or more cars available for private use, compared with 79% of households whose annual net income was between £25,000 and £30,000. Household access to cars increases with income, with 96% of households earning over £50,000 having access to at least one car. Sixty-four per cent of households in large urban areas had access to at least one car, compared with 89% in accessible rural areas and 89% in remote rural areas. Motor vehicles, traffic and driving statistics from Transport Scotland in 2022 show that lower income households are less likely to use cars than those on higher incomes, but a significant number of lower income households nevertheless remain dependent on car use to access employment. Scottish Household Survey data over the period 2015-2019 indicates that people from households in the top 1% of incomes tend to drive further (median 8.3km travelled per car journey per individual) than those from households in the lowest 50% of incomes (median 5.3km).
Access to off-street parking, and therefore the ability to charge a vehicle at home, can be a crucial factor in adopting EVs over internal combustion engine (ICE) vehicles. A recent survey conducted by Consumer Scotland on page 15 showed that 54% of EV drivers use a public charge point less than once a fortnight, with 74% "mostly" charging their vehicle at home. Consumer Scotland's research suggests that access to home charging is a key factor supporting EV adoption.
Figures from the Scottish Household Survey show that 42.4% of consumers do not have access to off-street parking. Consumer Scotland data from their survey found that 60% of drivers has household incomes of over £60,000, significantly higher than the median Scottish household income of £35,048, and that at least 74% are able to charge their vehicles at home. For consumers with no access to off-street parking there is less opportunity to benefit from lower overnight tariffs and lower VAT on domestic electricity, increasing the financial cost of EV ownership. Poor air quality and road casualties are recognised as disproportionately affecting those living in more deprived areas, therefore any reduction in road traffic pollution will also provide disproportionate benefits (NTS2 Delivery Plan - Health Inequalities Impact Assessment 2022).
According to the Transport and Travel in Scotland 2022 findings a higher proportion of those in remote rural (14%) and accessible rural areas (15%) say their transport costs are difficult to afford compared to large urban areas (9%). Currently, the cost of transport on islands is much higher, relative to income, than in the rest of Scotland. Public transport services in rural areas, as stated in the Scottish Government's Rural Scotland Key Facts 2018 report often involve long journeys, and expensive tickets, in comparison to urban areas. Owning a car can be seen as the solution in these instances, however, for low-income families, the cost of car ownership may push them into poverty, due to maintenance costs and higher fuel prices (Rural Scotland in focus, 2014 page 71).