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Introduction: taking stock, looking ahead, moving forward
These are difficult times for businesses and families across Scotland. It is clear that Scotland is now officially in recession and we face the prospect of negative or below trend growth lasting into 2010. 1 Nevertheless, the Scottish Government remains focused on recovery, pressing ahead with our commitments to protecting jobs, supporting communities and investing to ensure Scotland is well placed to take advantage of the recovery when it comes.
These are commitments that have consistently been at the heart of this Government. In our Government Economic Strategy, 2 published in November 2007, we set out a central Purpose of creating a more successful country through increasing sustainable economic growth. That Strategy is even more relevant in a period of economic difficulty than it has been in better times. Our Economic Recovery Programme builds on the Government Economic Strategy.
The Economic Recovery Programme is a constantly-evolving framework for action, undertaken collectively by the Scottish Government, local government, public bodies and our social partners working together. From the start of the downturn, we have been reviewing all aspects of Government and taking forward measures designed to have the maximum impact on helping households and businesses through the recession. As public sector finances face tougher pressures in the coming years, we will continue to focus on the critical actions to prepare Scotland for recovery. As our initiatives begin to have an impact, we will monitor their effectiveness and use the evidence to inform the continuing development of the Programme.
The Programme takes forward the Government Economic Strategy by developing the underlying sources of our competitive strength. Using the levers currently available to the Scottish Government, our Strategy identified five strategic priorities that are essential for economic growth: infrastructure and place; learning, skills and well-being; a supportive business environment; effective government; and equity. The Economic Recovery Programme sets out how these priorities will drive economic growth during the downturn. They provide the foundation for recovery, a foundation that will adapt to changing needs.
This is a good point to review the Programme - looking back at the impact that some of the existing measures have already had, looking ahead to the longer-term challenges of the Scottish economy and the opportunities that continue to exist even in the recession. This update focuses on what we are doing and what we intend to do to: support jobs and our communities; strengthen education and skills; and invest in innovation and the industries of the future. It looks at how our actions to date are delivering important benefits to Scotland in these areas, work that we will continue to refine.
A continuing focus on our long-term ambitions is essential. Despite the recession, there are positive signs throughout the economy. For example, Welcon Towers announced in March that it would take over the Vestas wind turbine manufacturing plant near Campbeltown, safeguarding 100 jobs with plans for a further 300 people to be taken on over the next two years. Tesco has set out plans to make Edinburgh the headquarters for its personal finance branch, which should result in an extra 200 people being recruited over the next year. Virgin Bank is also locating many key parts of its operations in Edinburgh with the creation of 100 jobs. There are many examples of businesses growing through the downturn, but we are not complacent about the hardships that many businesses and individuals will face in the coming months. It is essential that we maintain momentum in doing all we can to build the competitive advantages of our economy.
In particular, there are opportunities for growth that may be the basis for the key industries of the future. In renewables and green energy, Scotland continues to enjoy high levels of investment and an increasing recognition that we can become a world leader in the industry. Only a month ago, the first comprehensive study of carbon capture and storage in the UK highlighted Scotland's competitive advantage in this area. Only a few weeks ago, our record investment in renewables infrastructure was marked by the opening of Europe's largest operating onshore wind farm in East Renfrewshire. In tourism, Homecoming 2009 is providing a unique stimulus to our tourism industry. Across all the industries emerging as the drivers of future economic growth - life sciences, food and drink, creative industries and others - we are continuing to target our investment, support for skills and efforts to work with business in preparation for recovery.
Our approach is founded on co-operation across the public, private and third sectors - at local as well as national level. The determination to work collectively is as visible in what we and our partners are doing together at national level as it is in what Local Authorities and Community Planning Partnerships are doing in every part of the country. The Concordat with local government, signed in 2007, sets out a commitment to a consensus approach to government. We see across the country Local Authorities formulating their strategy for economic recovery in their own areas. Our ability to respond to the current challenges together - national and local goverment acting with each other for a common purpose - makes the strength of our partnership with local government even more vital.
Similarly, our effective engagement with Scottish businesses and social partners continues to push ahead: in the National Economic Forum in March; in the Rural Economic Summit in June; in the programme of business breakfasts where Ministers have heard directly from businesses about their experiences and their aspirations; and in the series of meetings held by Cabinet with social partners - trade unions, business organisations, the third sector, the lifelong learning community, faith groups and local government - on what more needs to be done to support recovery. We are also working in co-operation with the UK Government on many initiatives. We are responding with a Programme that draws on the best ideas for action from across the nation - but as always, we are looking to do more.
Our Programme is designed to have an immediate and a longer-term impact. In the short term, the Programme has the capacity to support up to 15,000 jobs by: accelerating capital spend to provide a direct and timely stimulus to our construction and manufacturing sectors; taking forward our Homecoming initiative to help employment in our tourism industry; and bringing forward spending in our European Structural Funds programmes to support new projects and assist people back into employment. Over the longer term, the investments we are making now in key sectors and new technologies will create the foundations for continued employment and growth in these areas.
We have no doubt Scotland has the ambition and talent to take full advantage of the recovery. As our Programme demonstrates, we know that if government works closely with public, private and social partners and responds swiftly to new challenges, opportunities and ideas, our economy will not only recover, but our goal of a thriving, prosperous Scotland will be achieved.
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