Scottish economy 'will need £6billion funding boost after Covid-19 crisis'
A report from the Advisory Group on Economic Recovery warns the pandemic could leave 'a scar across young people's working lives'
The Scottish economy will need a funding boost of at least £6 billion to recover from the coronavirus pandemic.
A report from the Advisory Group on Economic Recovery found investment will need to be equal to at least 4% of financial output to be effective.
Benny Higgins, who is chairman of the group, published its latest report for the Scottish Government on Monday with 25 recommendations.
Mr Higgins also said there will need to be urgent renegotiation of the fiscal framework to allow Scotland the powers to borrow more than the £450 million in capital spending currently allowed.
Addressing the First Minister's daily briefing on coronavirus, Mr Higgins pointed to stimulus funding announced by Germany.
He said: “If Germany needs 4% of its economic output to stimulate the economy, then you'd think that we'd need at least that.
“That's £6 billion and the current limit through the fiscal framework is £450 million so there's a long way to go from where we are to where we need to be.”
The report said: “There is a strong case for the Scottish Government to have greater autonomy to use targeted fiscal measures to stimulate demand or incentivise behavioural change in the recovery period.”
Mr Higgins said the Scottish Government must be prepared to “have a repayment of debt approach that takes a very long time”.
He added: “We've got to adopt that approach but it makes it all the more important that we focus our energy on the systemically important parts of Scotland that will form the basis of a stronger, better Scotland in future.”
Among the other recommendations in the report is a programme for those aged between 16 and 25, guaranteeing two years of work paid at the real living wage.
It said the programme could be a partnership between the private sector, local authorities and the Scottish Government, giving those employed access to apprenticeships and training.
The report described the Covid-19 pandemic as “a scar across young people's working lives if there is no urgent, ambitious and focused intervention to address it'”.
Further recommendations include prioritising a green recovery, strengthening the relationship between business and government and investing in digital infrastructure.
First Minister Nicola Sturgeon welcomed the recommendations of the report and committed to respond to the group by the end of July.
She said: “The Scottish Government sees this report as a serious and substantive piece of work and we agree with its basic principles.
“Many of its themes - for example the importance of education, employment and tackling inequalities - are clearly going to be critical to our economic recovery.”
The First Minister also described the recommendations as “significant and constructive”.
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