Scotland’s Wellbeing: The Impact of COVID-19 - What COVID-19 may mean for Scotland’s Wellbeing in the Future

This final section considers what the implications of the impacts described in the report are for the National Outcomes in the medium term – over the next one to five years.

The evidence presented suggests that COVID-19 has had, and is likely to continue to have, significant impacts across all of Scotland’s National Outcomes. Progress across the NPF has largely been hindered and in some cases deeply set back. However, the depth and longevity of these impacts varies across the outcomes, and how the impacts play out in the future will depend on a number of factors including the trajectory of the pandemic and the measures put in place to control its spread; the response of businesses, public services, communities and individuals; other changes in the external environment, such as EU exit; and the policy choices that are made by governments in response.

The key medium term impacts are likely to be seen on health, economy, fair work and business, education and poverty outcomes. As described below, these are all closely related impacts, with interacting effects across these outcomes and others.

Health

The direct and indirect health impacts of the pandemic so far are significant and this is likely to have a negative impact on health outcomes in the medium term. In particular, the impacts of reduced or paused services during the pandemic and delays in seeking health care, as well as longer waiting times in the near term future due to backlogs, is likely to mean poorer outcomes in terms of premature mortality and healthy life expectancy for some people. This will impact disproportionately on older people and people in lower socio-economic groups as they are higher uses of healthcare services.

The economic impacts of the crisis in terms of unemployment will also likely impact negatively on future health, as evidence from previous recessions shows an economic downturn to have large and persistent negative effects on health and mortality, especially on mental health outcomes. Groups disproportionately at risk of job loss and in lower income households that may be less financially resilient or with pre-existing health conditions are likely to be disproportionately affected. The overall impact of these trends could be to widen unequal health outcomes.

The quality of the care experience for users of healthcare is also likely to change in the future as a result of the pandemic. The impact on healthcare staff has been enormous and it is likely that additional support will be necessary to help staff with health and wellbeing challenges.

The acceleration of digital delivery of healthcare during the pandemic has been another significant change. The volume of remote consultations using the Near Me service increased hugely during the pandemic and there is likely to be a shift to more of a “digital first” model of healthcare delivery in many areas. Evaluation of the Near Me service suggests a variety of positive effects, e.g. in terms of access, convenience and reduced infection risk, especially for people managing stable long-term conditions. There is also some, more limited, evidence of greater use of online health information during the pandemic, which could signal a greater use of self-care. Both of these trends could potentially free up in-person appointments for people who are less able to use digital services. The impacts of these changes on access to and quality of care for different people and places will be a key area to monitor in the future.

Economy and Fair Work and Business

Measures to restrict the virus spread have also had a huge impact on the economy, with economic activity and output falling sharply as a result of lockdown. How quickly the economy can recover remains uncertain; recent projections suggest that output will only gradually recover back to its pre-COVID level by 2023-24.[i] There are also signs that the recovery will be “K-shaped” – meaning some parts of the economy recovering relatively quickly and others taking much longer. The latter include the sectors that were most exposed to the lockdown and subsequent restrictions, such as hospitality, non-food retail, leisure, tourism, the arts and air travel. Many businesses in these sectors will continue operating at reduced levels of capacity and with reduced staffing for some time to come and it seems likely that some businesses will not survive.

While the impacts in terms of unemployment have not yet shown through in official statistics, there are clear signs of negative impacts to come. Scottish Government projections suggest that unemployment could peak at 8.2% in Q4 of 2020 and remain elevated for several years, only falling back to pre-pandemic levels in 2025. Thus, in the medium term, there is likely to be unemployment and/or underemployment on a larger scale than we have seen in recent years and a depressed volume of vacancies as businesses in some sectors continue to experience subdued demand. Impacts on skills gaps are also likely, with potential skills mismatches resulting from a shift in sectoral growth patterns due to uneven sectoral and regional impacts.

Job losses and earnings reductions will be borne unevenly, with disproportionate impacts for both younger and older workers, women, ethnic minorities and people in low paid or insecure work. Some of these impacts may be long lasting, particularly for the cohort entering the labour market in 2020 and 2021. Previous evidence shows that entering a labour market during a recession has significant impacts on participation and pay for several years, more so for lower qualified young people. Over the medium term, these impacts could increase earnings inequality and impact negatively on ethnic minority and disability employment gaps and the gender pay gap.

These challenges brought about by COVID-19 will also compound a number of existing structural labour market challenges in Scotland, such as slow productivity growth; poor quality work; inequalities in participation and earnings between regions and groups; and skill shortages and gaps. They will also combine with a number of emergent challenges shaping the future of work, including:

advances in automation resulting in reduced demand for some types of jobs
the demographic challenges caused by an ageing population and reduced migration
additional economic uncertainty caused by EU Exit
the need for economic restructuring to address the global climate emergency

The acceleration of digital technologies that we have seen as a result of the pandemic will also interplay with these trends. While future trajectories are uncertain, there could be an acceleration of digital adoption across a wider range of businesses in Scotland, including Small and Medium Enterprises (SMEs), and a much greater use of home or remote working in the medium term future. The extent and direction of the impacts on outcomes is currently unclear and much depends on policy responses, but there could be wide ranging impacts across many of the National Outcomes. For example, there could be effects on:

business growth and productivity
patterns of participation in the labour market and employment outcomes for different groups and regions
changes to the relative fortunes of city centre versus small town economies
shifts in the floorplate of businesses with much greater use of online channels
changes to commuting and business travel patterns – with implications for transport related emissions
changes in housing markets

Household incomes, poverty and attainment

Given the disproportionate employment impacts for particular groups of workers, the weight of evidence suggests that income inequality is likely to increase – although this is also dependent upon other sources of income at the household level. Lower income households were to some extent protected from falls in income during the pandemic due to the uplift in benefit rates – but if these are reduced as planned in April 2021, analysis suggests that this will increase relative poverty UK-wide.

Increases in debt and the use of high cost consumer credit among lower income households during the crisis could also trap some households in unmanageable debt.

It is known that poverty has a range of negative consequences over the short and longer term, including on social and cultural participation, on health, on housing, on crime victimisation, on drug or alcohol use, on homelessness, on children’s wellbeing and development, on educational achievement, and on future employment outcomes and hence future poverty.

The closure of educational institutions during the first lockdown in April and May affected children and young people of all ages. While some of the impacts of this on young people’s mental health and wellbeing are already apparent, the potential longer term impacts on educational attainment are not yet evident. There is concern that, due to the differential experience of education during the lockdown among young people from different socio-economic backgrounds, this could increase the educational attainment gap, reducing the progress that has been made in recent years. The negative impact on household incomes in the medium term could also potentially close down higher education options for some young people. These trends could flow through into more limited employment opportunities and other life chances for the young people concerned.

Cross-cutting impacts

In addition to these interacting effects of the pandemic on health, the economy, work, education and poverty, it is also possible to identify a number of cross-cutting impacts that do not relate to a specific National Outcome but have wide-ranging effects across the NPF. In some cases, the impacts are more uncertain and it is not yet clear how they will unfold in the future. These include:

An entrenchment of inequalities
Digital acceleration
Changes to Scotland’s international profile and outlook
Enhanced community organising capacity and greater trust in local public bodies
Increased uncertainty and the need for greater resilience

Inequality

A key impact of the pandemic has been to exacerbate or entrench existing inequalities. Those groups that were already experiencing disadvantage have been disproportionately impacted, often in multiple ways, compounding the effects. This suggests that unequal outcomes for different groups could increase across a number of the National Indicators in the future – in particular inequalities relating to income or socio-economic status, gender, age, ethnicity and disability.

There is also the potential for inequalities to be re-shaped or for new inequalities to come to the fore, as a result of the wider changes wrought by the pandemic in the future. For example:

There is likely to be a greater reliance on digital technologies in the future, across a range of societal areas, which will shine a greater spotlight on digital exclusion – whether from limited confidence in using technologies or from limited access to devices, connectivity or data for some groups of people or geographical areas in Scotland – and the ways that this can shape inequalities in access to employment, services and other aspects of social and cultural participation
The impact on young people’s labour market prospects as a result of the pandemic may reinforce concerns about inequality across the generations and re-signal the importance of using a generational lens to understand some aspects of inequality
The pandemic has seen greater prominence in public discourse of concerns about the low pay of some essential workers (such as social care workers) and limitations in access to employment rights, such as sick pay. This could potentially alter public attitudes towards these issues in the future and re-shape the opportunities for action

Technology

Technologies have played a key role during the pandemic in helping to reduce the spread of COVID-19 and in keeping businesses and services operational during the lockdown and ongoing restrictions. As such, it is suggested that the pandemic has accelerated existing trends towards automation and the digitisation of services, systems and solutions. This can be seen across a range of different areas – from greater use of 3D printing technology in manufacturing, to new mobile and biometric applications to aid virus surveillance and control, to everyday use of digital technologies during lockdown to facilitate contact with family and friends, to work, study and learn and access services.[ii]

The extent to which these changes are maintained and further accelerated in the future is not yet clear. This is likely to vary across different domains and will be shaped by Scotland’s policy choices. However, the effects and implications across the National Outcomes in the medium and longer term are potentially wide-ranging and multi-directional. For example:

Accelerated digital adoption by businesses is likely to have positive impacts on business growth, productivity and resilience. This could either exacerbate or ameliorate the current divide between high and low tech businesses, depending upon how trends in take-up are supported and spread across the business base
The shift to digital could result in higher relative growth among online businesses and those providing digital services, and could further expand the prevalence of platform business models. This may open up new employment opportunities and could also raise new issues to consider and monitor in terms of fair work
A greater adoption of remote working across businesses and the public sector could open up more job opportunities to people who are less able to travel for work (either due to cost or time limitations). This trend could also alter the structure of regional employment opportunities in the longer run. Increased remote working could also alter commuting patterns, with potentially positive impacts on emissions from less travel
Greater use of digital delivery of services in health and care could increase access and convenience and reduce travel time and cost for individuals. It could also reduce the amount of time needed away from work or education to attend appointments, so reducing loss of earnings for individuals and impacting positively on efficiency. A greater use of remote monitoring for people with stable long term conditions could also potentially free up in-person appointments for people less able to use digital services, and longer term could help effect a shift towards more preventative and self-care approaches, which could enhance health outcomes
Overall, the digital shift is likely to intensify the importance placed on addressing digital connectivity and digital inclusion in policy. It will be important to understand how digital exclusion interacts with other existing inequalities. The digital shift may also spur development and innovation in digital service delivery across a range of public services and in online and blended learning, and may give rise to greater public debate about data use and ethics

International profile and outlook

As a small, outward-facing nation, Scotland’s international profile is important for its economic resilience and its policy ambitions. It is possible that the pandemic will have an impact on Scotland’s international outlook and connections over the medium term, although the nature of this is as yet very unclear. At the outset of the pandemic, international travel fell dramatically due to widespread restrictions, including a sharp fall in seasonal migrants, international students, business travellers and overseas visitors. It is not possible to know at the moment how long this will last and whether there will be any significant medium to long term impacts. Much will depend on the control of the pandemic, both in Scotland and globally, as well as its economic effects.

Some external commentators have suggested that one potential future scenario as a result of the pandemic could be increased isolationism globally, resulting in more restricted international trade, stricter border controls and more limited global co-operation.[iii] There is evidence that previous recessions have seen some countries subsequently developing protectionist policies and discouraging inward migration. If such a scenario were to play out, this could have implications for progress against a range of Scotland’s National Outcomes. For example:

More restricted international trade could slow Scotland’s economic growth, stifle innovation, and hamper economic resilience through reduced diversity in business supply chains
Reduced international travel could impact on Scotland’s cultural sector and creative industries, which rely on international collaboration and exchange, and which in turn drive international visitor flows to Scotland
Reduced numbers of international students would impact on Scottish higher education institutions – particularly in Edinburgh and Glasgow where overseas students are predominantly located
Reduced global co-operation could also impact detrimentally on progress towards Scotland’s net zero ambitions, which rely strongly on using international influence to drive greater global ambition in tackling climate change

Public trust, communities and empowerment

During the pandemic, there have been many examples of communities taking action to help people in need, including neighbours reaching out to one another to provide informal support, communities self-organising and an overwhelming response to requests for volunteers. This picture will likely vary across different communities in Scotland. Nonetheless, in community listening events across the country, a compelling story has emerged of strong community spirit and community empowerment in the face of adversity.

This has been matched by different ways of working – with Scotland’s public sector, businesses, the third sector and communities, working together at pace and across boundaries, resulting in swift, flexible responses to support people at risk. Examples include the NHS Supply Chain Programme, which coordinated activity across public agencies and businesses to support the demand for personal protective equipment in the health and care sectors, and the emergence of innovative and person-centred support for rough sleepers, Gypsy/Traveller communities and for the shielding and at risk populations. Local authorities and community planning partners have been at the centre of responsive local approaches, working with partners to understand the needs of communities at risk and using community hubs to provide rounded support, focused on the wellbeing of individuals, households and neighbourhoods.

These changes have been characterised by:

More concern over outcomes and less concern with organisational boundaries or policy silos
Public, private and third sectors and citizens coming together to work collaboratively to provide a person-centred response to need
Building trusting relationships with communities and empowering the people on the ground who are in closest touch with local needs
Rapidly implementing and transforming services

The pandemic has thrown a spotlight on different ways of working and shown what has been possible in the face of overwhelming need. It is possible that, going forward, some of these changes will become embedded, as government and public services seek to apply the lessons that have been learnt in the wake of the pandemic. This could be part of a wider reshaping of the relationship between government and public services, with potentially far-reaching implications for the National Outcomes.

National Indicators relating to human rights, such as people’s experiences of public services and citizens’ perception of their influence over local decisions, could be impacted. More widely, if there is increased trust in public sector bodies, greater responsiveness to local needs, more holistic person-centred approaches to service delivery, and greater collaborative working across organisational or policy silos, this could also herald a greater ability to make progress across all of the National Outcomes.

Uncertainty and building resilience

The COVID-19 crisis is leading to profound changes across Scotland and elsewhere but the impacts on the National Outcomes are not yet settled, and it will be important to monitor these changes to understand which will be temporary and which will become permanent structural shifts and what this means for our ability to achieve the National Outcomes. This understanding will only become possible over time.

The COVID-19 pandemic has layered additional uncertainty, on top of a range of existing uncertainties about the future. In the medium term, this may place a greater emphasis, when making policy choices, on the need to future-proof actions against a range of possible futures and to build enhanced resilience across all of the National Outcomes. This ranges from building resilience in business supply chains to withstand future global shocks to supply, to building community resilience to a range of possible future shocks by investing in civic capital and third sector capability. Over all of the National Outcomes, enhanced resilience is likely to become increasingly important.

[i] https://www.gov.scot/binaries/content/documents/govscot/publications/research-and-analysis/2020/09/state-economy/documents/state-economy/state-economy/govscot%3Adocument/state-economy.pdf?forceDownload=true

[ii] https://www.weforum.org/agenda/2020/04/10-technology-trends-coronavirus-covid19-pandemic-robotics-telehealth/

[iii] https://www.nesta.org.uk/blog/four-coronavirus-futures/ https://www2.deloitte.com/global/en/pages/about-deloitte/articles/covid-19/covid-19-planning-scenarios-for-business-leaders-resilient-world-remade.html