A magnet for international students, UK universities rely heavily on international tuition fees to maintain financial stability. However, the COVID-19 pandemic is putting this stability at risk, with the number of students coming to the UK set to drop. Britain has the second highest number of international students in the world yet it is unclear how many will matriculate come Autumn 2020 (Johnson, 2020). This essay aims to explain how reliant UK universities are on tuition fees and what the potential impact going forward may be if universities suffer drops in student numbers and fee income - mainly from international students - as a result of the pandemic. This will be explained by identifying universities’ income sources and identifying which countries the majority of international students come from.
This paper highlights the impact of the Covid-19 pandemic crisis on Scottish small and medium-sized enterprises (SMEs). Covid-19 has created an enormous systemic economic shock, potentially surpassing the one created by the global financial crisis (GFC) in 2007/08 (Baker et al, 2020; Brown and Rocha, 2020). Such is the uniqueness of the current crisis some label it a metaphorical “black swan event” for entrepreneurship, as it encompasses virtually every sector, every type of business and every country spanning the global economy (Kuckertz et al, 2020). Indeed, empirical work from around the world shows that as many as half of all small firms have temporarily ceased trading since the lockdown and as many as 60% of SMEs are at risk of running out of their cash reserves (Bartik et al, 2020; Cowling et al, 2020; Giupponi and Landais, 2020).
Twenty years on from the creation of Audit Scotland, outgoing Auditor General Caroline Gardner reflects on what she has learned during her time in the role. She lays out the challenges that remain for the NHS in a time of pandemic; the realities of managing the fiscal framework to protect public services from the financial effects of Covid-19; and how the government’s planning needs to match its vision for Scotland’s future.
The size of Scotland's economy is frequently used as an indicator of how well Scotland does compared to the rest of the UK. GDP often features in the news, for example in the current climate, where both the UK and Scotland have officially entered a recession following two consecutive quarters of negative GDP growth. But GDP isn't just one simple figure. This guide will discuss the difference between real GDP and nominal GDP, total GDP and GDP per head. It will discuss things like how much of the oil and gas extraction in the North Sea to include in any measurement of the size of the Scottish economy. The guide will show how the Scottish economy compares in the UK and the world. In addition, when asking whether Scotland is a wealthy, or successful, country, we consider the debate on wider measures of success and wellbeing, i.e. looking beyond GDP. In this guide we consider several other complimentary measures.
This study estimates the elasticity of substitution between capital and labour as well as rates of factor-augmenting technical progress across both the aggregate economy and individual industries in the UK and Scotland. Both single equation and system estimation frameworks are used and the finding is that elasticity estimates are highly sensitive to the choice of method. Using system estimation techniques previously not applied to the UK, the finding is that aggregate elasticity is 0.94, which is significantly higher than previous results for the UK. Also, sectoral elasticities are characterised by high variability. Technological progress is also found to be overall net labour-augmenting which supports the neoclassical steady-state growth theorem. With augmentation directed at labour, and under complementarity between factors of production, the conclusion is that technical change is capital-biased, which is consistent with the declining labour share of income observed in UK data. Aggregate elasticity in Scotland is 1.3, however, this result should be interpreted with caution as it suffers from small sample bias and may reflect poorer quality of data.
Necessary responses to the COVID-19 pandemic raise potentially harmful consequences for children’s development that can exacerbate inequality gaps and have long-reaching implications. This commentary will focus on what research can tell us about the key features of skill development and how the situations driving parental choices bear a significant role in development and inequality that are likely affected by the consequences of the pandemic. Further, effective support for parents and child development must also include intersecting factors from homes, neighbourhoods, and schools in both the research and development of policy. The primary message from the evidence base is that where inequality is high there is a much greater risk from shocks, such as the pandemic, to deepen inequality in skill development through factors in the home, neighbourhoods, and schools. It suggests that policy will not be effective through only a focus on what happens in schools but will require balancing multiple, and potentially competing, channels. Moreover, it suggests a renewed focus on reducing the prevalence of children living in low income households in order to improve attainment.
In spite of being the most foreshadowed global catastrophe in recent history, the COVID-19 pandemic has managed to catch all of us by surprise. Comparisons with the 7 December 1941 attacks on Pearl Harbor, and with the destruction of the World Trade Center by terrorists on 11 September 2001, are instructive. Following those attacks, and after a careful, investigative study of a broad range of signals and human intelligence, it was possible to reach the conclusion that they were foreseeable but that the pertinent signs had not been recognized, and that a sufficiently recognizable pattern therefore did not emerge in time to allow for mitigating action. This is different than the present case in important respects, but, as we shall see, it is also the same. History repeats itself in a different form.
The outlook for the Scottish budget in 2020/21 has changed substantially since it was published in March. Higher spending and lower revenues will largely be offset by increased grant from the UK Government. The pandemic also accentuates the scale of several fiscal risks that the Scottish budget was already exposed to, leading to calls for the Scottish Government to have access to additional fiscal flexibilities to manage these risks. The Covid-19 health crisis and its aftermath poses a range of substantial fiscal challenges for the Scottish budget in 2021/22 and beyond. But the outlook for the Scottish budget is extremely uncertain beyond 2020/21, creating challenges for the Scottish parties as they begin preparing their manifestos for next May’s Holyrood elections. This paper assesses the risks to the Scottish budget this year; appraises the scope for additional budget flexibilities to manage these risks; and considers the longer term outlook for the budget in the next parliament, both in terms of the key fiscal issues to be addressed and the likely level of resources available.
This note offers a few thoughts at an early stage of this COVID-19 crisis, largely with the objective of stimulating further reflection and analysis, and generating much better thoughts. The primary concern now should, unambiguously, be heavily skewed to this phase of the crisis - which may not necessarily be very short term. It is a critical, humanitarian phase in which the health imperatives and the medical needs and food supply take on an unprecedented importance for each person – and especially the most vulnerable in our societies - and for us collectively. But it is already urgent, too, to understand the future and how we rapidly design and build a future that is sustainable.
In this latest Commentary, we reached out to a number of Scotland's leading economists, business leaders and poverty experts to get their views on the outlook for the Scottish economy and policy priorities. We are grateful for their time and insights. We explored 3 questions: i. How do you view the immediate outlook for the economy over the next 12 months? ii. What permanent changes to our economy do you see emerging from the crisis? iii. What should be the key area for policymakers to focus on at this time?
The COVID-19 pandemic is not only a global health emergency but an economic one. UK Gross Domestic Product (GDP) shrank by 10.4% in quarter two of 2020 with an unprecedented fall of 20.4% in April (ONS, 2020b). Undoubtably this will have a lasting impact on the labour market and exacerbate income inequalities particularly for women and minorities (Fasih et al., 2020). Emerging projections show that the current global recession will “result in a prolonged dip in women’s incomes and labour force participation” (United Nations, 2020). This could be compared to the fallout of the 2008 financial crisis, however, there are stark differences which will have a greater negative impact on women (Alon et al., 2020 and Queisser et al., 2020) such as the sectorial differences in the impact on the labour market and the closure of all childcare facilities and schools. Although some argue that there are emerging signs of optimistic outcomes, such as the shift of household gender norms, the evidence is limited (Schulte and Swenson, 2020; Carlson et al., 2020). This essay explores these factors from a feminist economic perspective and argues that the COVID-19 emergency will have a damaging impact on gender equality, potentially setting back progress by decades. It argues that government interventions that move beyond the traditional economic stimulus packages are required to ensure that the recovery is one that rectifies rather than entrenches gender inequality.
Covid-19 pandemic has hit transport sector severely as due to lockdown measures most population stayed at home. By comparing levels of NO2 across various UK cities and number of flights leaving UK, I was able to confirm the short-term decline in emissions. Then I try to explain the importance of improving air quality. Finally, I describe possible long-run effects the pandemic can have on environment.
Inequality is pervasive in British society, and has been for as long as Britain has been an economic superpower1. These inequalities are evident in various different aspects of modern life, and include health, employment, regional and educational inequalities. The Covid-19 crisis highlights these pre-existing areas of societal divide and shows how these inequalities have placed the burden of the Covid-19 crisis on the most vulnerable members of society.
This paper is based on the analysis of the financial projections for three of the Scottish Futures Trust hub schemes. The paper develops a range of financial indicators, designed in particular to throw light on the following questions. Namely, what is the opportunity cost to the public sector of the hub approach: and what are the potential profits to private sector investors in the risk capital of hub projects. The paper concludes that the existing availability of information to the public and Scottish Parliament on hub schemes is inadequate, and that a standard set of indicators should be specified, and produced as a required by-product of the financial models for all hub projects. More broadly, the evidence suggests that there should now be a wider consideration as to whether the advantages of the hub approach justify the costs to the public sector, and the potentially large profits for private sector investors.
This article uses a range of measures, including the measurement framework of the Scottish Government’s National Performance Framework (NPF), to assess Scotland’s economic performance as a sustainable and inclusive economy. The NPF measurement framework seeks to measure the progress and nature of inclusive growth in Scotland as well as to place it in an international context. The performance measures summarised include those for GDP and GDP growth, employment and inequality (income and regional) as well as for exports, innovation, business start-ups and growth, inward investment and fair work. All measures are set within a relevant comparative context, often that of other OECD economies. The article concludes with a ‘balanced scorecard’ of Scotland’s inclusive economic performance across the relevant measures.
Can I welcome to everyone for coming along this evening. I must confess to only knowing of Sir Alexander Stone as the name on the building at the University of Glasgow where my economics lectures used to be held. For those of you who don’t know, he was a banker and philanthropist helping to support a number of notable causes across the country. He was also the son of Jewish parents who fled Russia in the early 20th century to escape persecution. In these current times, it does no harm to be reminded of our shared history and the importance of human values, respect, tolerance and solidarity. Tonight I want to talk about Brexit. Now I’m sure many of you – including me – are sick of the very word. And trust me, I’m now on version 53 of this lecture tonight. But what I want to do is to look forward; to reflect upon where the UK and Scotland might go next; and to raise some of the big economic questions that still need to be resolved.
Eleven social security payments associated with spending of around £3.5bn per annum are being devolved to the Scottish Parliament. Financial responsibility will largely be transferred in 2020, although the full roll-out of Scottish specific payments will take longer. This paper reviews the financial and budgetary implications of this transfer of fiscal responsibility. It considers how the Scottish block grant is being adjusted to reflect the transfer of responsibility, the risks associated with forecasting spending on ‘demand-led’ social security payments and how forecast error can be addressed; and issues around the concept of ‘policy spillovers’.
It is a great pleasure to speak with you this evening. What I would like to do is to build upon some of the historical issues that Michael Anderson has outlined and to look forward to the implications of Scotland’s demographic transition for the Scottish economy, Scotland’s Budget and – briefly – policy implications and opportunities.
This article describes research conducted by University of Strathclyde academics that has successfully impacted upon policy implementation. Specifically, we describe the innovative application of Discrete Event Simulation (DES) in an action research framework to develop bottom-up micro costing models to determine the cost effectiveness of a radically new ‘virtual clinic’ pathway for orthopaedic trauma patients. The use of DES allowed stakeholders to compare the costs of the new approach (virtual fracture clinic) against the baseline (traditional fracture clinic) in sufficient detail. The insights generated from this research enabled health policy stakeholders to build a convincing case for the diffusion and reliable implementation of virtual pathways for orthopaedic trauma patients in other hospitals in Scotland and well beyond. Wider dissemination of this work has seen continued government funding for the use of DES for cost effectiveness studies in other healthcare settings, as well as training and capacity building in DES-supported service redesign amongst healthcare professionals throughout NHS Scotland.
