The interconnected challenges of economic inactivity, ill health, and underfunded public services continue to trouble Scotland. With over 786,000 working-age individuals economically inactive, the country faces a crisis that risks deepening societal inequalities and stunting economic growth.
A Snapshot of Scotland’s Economic Inactivity
Recent data highlights that 23.7% of Scotland’s working-age population is economically inactive—a figure notably higher than the UK average of 21.7%. This statistic includes individuals not seeking employment due to various reasons, with long-term sickness being a significant factor. Across the UK, long-term sickness accounts for nearly three million out-of-work individuals, a trend that surged during the COVID-19 pandemic and has since persisted.
In Scotland, troubling patterns emerge among young adults. Workers in their 20s are increasingly citing ill health, especially mental health issues, as barriers to employment—more so than older workers in their 40s.
The Role of Mental Health in Economic Inactivity
Mental health challenges have become a defining characteristic of Scotland’s workforce struggles. A report from Fedcap, a not-for-profit organisation dedicated to helping people re-enter the workforce, underscores this issue. It reveals that half of the individuals seeking their support identify health problems—predominantly mental health conditions—as obstacles to employment.
Addressing this crisis requires more than medical interventions. It demands an integrated approach that combines mental health support, job training, and flexible employment opportunities tailored to individual needs.
The Economic Consequences of Inactivity
The ripple effects of economic inactivity extend beyond personal hardship. Reduced workforce participation limits productivity and economic growth, which, in turn, constrains government revenue. This creates a feedback loop: fewer resources for public services like healthcare and education lead to worsening health and skill deficits, which further depress economic potential.
This vicious cycle disproportionately affects vulnerable communities, exacerbating regional inequalities across Scotland. Towns and cities already grappling with “anaemic growth” face compounded challenges as local economies struggle to absorb inactive workers.
Breaking the Cycle: Policy Interventions
Both the UK and Scottish governments have proposed initiatives to address these systemic issues. In November, UK Prime Minister Keir Starmer announced plans to tackle drivers of unemployment and economic inactivity. However, Scotland requires tailored solutions to address its unique demographic and health challenges.
Potential interventions include:
- Targeted Mental Health Support: Expanding access to mental health services, particularly for younger adults, could alleviate one of the most significant barriers to employment.
- Workforce Re-Entry Programs: Organisations like Fedcap have demonstrated success by providing bespoke support for individuals furthest from the labor market. Over the past five years, they have helped over 100,000 people transition to education, training, or employment.
- Incentives for Employers: Encouraging businesses to hire individuals with health conditions through subsidies or tax incentives could create opportunities for those currently excluded.
- Flexible Work Models: Emphasising remote work or flexible hours can accommodate individuals with chronic health conditions, enabling them to contribute without exacerbating their illnesses.
The Road Ahead
Addressing Scotland’s economic inactivity and health challenges will require sustained investment and collaboration between governments, communities, and private organisations. By breaking the cycle of poor health, unemployment, and strained public services, Scotland has the opportunity to revitalise its workforce and create a more inclusive and resilient economy.
