How Will Public Sector Cuts Affect Scotland?

14th May 2011

'Vulnerability index' ranking the 32 local authority areas shows great variation among rural districts

Rural Scotland will share the pain of public sector funding cuts with the rest of the country - but some rural areas are much more vulnerable than others, according to new research from SAC's Rural Policy Centre (RPC).

In a new RPC report on the implications of changing public sector budgets, each of Scotland's local authority areas is ranked according to its vulnerability to further economic downturn following reduced public spending. This has prompted the RPC to warn policymakers that that a 'one size fits all' approach to supporting rural Scotland would be ineffective, since each rural area faces its own variety of challenges.

The 'vulnerability index' ranks the urban areas of Dundee and West Dunbartonshire as most vulnerable but highlights significant variation among rural areas' ability to withstand the pressures.

According to the index - which was produced and analysed in conjunction with Rose Regeneration and the Rural Services Network - the Western Isles, Argyll and Bute, Dumfries and Galloway, Moray and the Orkney Islands are the rural areas that are likely to be hardest hit. At the other end of the spectrum, Shetland and Aberdeenshire are Scotland's least vulnerable rural areas.

RPC Researcher Dr Jane Atterton, author of the report, said: "The index highlights that rural areas face a range of challenges relating to low pay, high proportions of public sector jobs and an imbalanced age structure - there are high numbers of older residents and lower proportions of people of working age."

"For some rural local authorities, such as the Western Isles, their vulnerability relates to the proportion of workforce in the public sector and the low proportion of the population of working age. In Dumfries and Galloway, the vulnerability relates to low levels of weekly pay and the low proportion of the population of working age. This emphasises the importance of shaping local policies to suit local circumstances as far as possible. So, as these issues are debated in the run-up to the election, our key message to policymakers is that a 'one size fits all' approach will not work."

The public sector is a key employer in rural Scotland, accounting for approximately one in five jobs. The RPC report highlights that public sector job losses and pay freezes will result in reduced local spending in rural economies.

Challenges will also be faced by low income rural households, with cuts to their benefits at a time when the cost of basic commodities, such as food and fuel - for both transport and heating - has been rising.

In addition, the report highlights fears of strong pressures to cut service provision in rural areas, where the costs of delivery are high, even for the most essential services.

Dr Atterton believes that greater demands will be placed on the voluntary sector to help plug the gap created by reductions in public sector spending. The rural private sector may also come under greater pressure if demand for its products and services dwindles.

Dr Atterton said: "The greater demands on voluntary and community organisations should not be under-estimated and these organisations need to be supported in taking on these new roles. Innovative thinking is needed in the public sector in terms of the co-delivery of services with different groups in the private and third sectors, or the joint delivery of services across local authority boundaries.

"The private sector in rural areas may struggle to take up the slack in terms of the jobs lost in the public sector so it is important that adequate support is in place for existing businesses and for those who may wish to set up new businesses. Good infrastructure is also important, not least in terms of high quality, next generation broadband provision."

he 'vulnerability index' contained in the report measures the vulnerability of each of Scotland's 32 local authority areas to further economic downturn associated with public expenditure cuts using four indicators:

· The proportion of public sector jobs in the area
· The proportion of the population which is of working age
· Average earnings of local residents
· The proportion of people receiving Jobseeker's Allowance

The rankings of all 32 local authority areas are shown below - (where 1 is most vulnerable and 32 is least vulnerable).

Local authority area

Dundee City - 1
West Dunbartonshire - 2
Western Isles - 3
Inverclyde - 4
Argyll and Bute - 5
Dumfries and Galloway -6
Moray - 6
Glasgow City - 8
Orkney Islands - 9
Clackmannanshire - 10
Highland - 11
Scottish Borders - 12
North Lanarkshire - 13
East Ayrshire - 14
Fife - 14
Angus - 16
North Ayrshire - 16
Midlothian - 18
South Ayrshire - 19
Falkirk - 20
Stirling - 21
East Renfrewshire - 22
East Lothian - 23
West Lothian - 24
Renfrewshire - 25
South Lanarkshire - 26
Perth and Kinross - 27
Edinburgh City - 28
East Dunbartonshire - 29
Shetland Islands - 30
Aberdeen City - 31
Aberdeenshire - 32