“As governments, we see the promotion of sustainable and inclusive growth as a vital way of raising living standards for all. But we also understand that growth is only of any real value if it makes people’s lives better, it is not, and never should be seen, as an end in itself. We have to test whether we are creating a fairer, healthier, happier nation in the process.” Nicola Sturgeon May 1st, 2019.
If I asked an average person on the street what a wellbeing economy was, I think they would look at me strangely and walk away looking bemused. The term wellbeing economy means different things to different people or nothing much at all to the average person. The term is really what I would call ‘management speak’ although to be fair most people would
determine that ‘wellbeing’ has something to do with health and thus grant it a fair level of importance. Indeed in a survey of OECD countries health came out top of 73,761 on people’s list of priorities.
Health and the wellbeing economy
So, let’s focus on health then since it is inextricably linked to every other aspect of leading a better life.
Unlike the administration in Westminster, whose government disbanded Public Health England (PHE) in March 2021Scotland established Public Health Scotland the year before Despite its issues, we are privileged to have a devolved Health Service in Scotland. Our lives can sometimes literally depend on it.
Public Health Scotland established has 2 main goals: to support efforts to attain a wellbeing economy and to address issues arising from the Covid pandemic.
Democracies such as ours are having to deal with a range of increasingly complex issues such as the COVID pandemic which has resulted in unexpected / premature death for some and Long Covid for others. Unemployment, financial / economic crises and the race to combat climate change and reach net zero targets all require innovative policy solutions which have to ensure inclusivity, equality and addres the root causes of social and financial deprivation. They need to have solid foundations and the costs of their implementation must carefully be considered so that budget targets can also be met.
What does a Wellbeing Economy mean for Scotland?
A wellbeing economy is the desired outcome of the SNP-led Scottish Government and a major part of their vision for an Independent Scotland. The Public Health Covid Recovery Plan will play an important role. Obtaining the best possible advice from scientists and healthcare professionals e.g., Informing optimum treatment to be made available to thoseaffected by COVID in the short and long term and ensuring accurate public messaging is important, but the economic impact of Public Health policies has also to be very carefully considered if a wellbeing economy is to be achieved.
It is particularly appropriate for Scotland to adopt wellbeing economic policies since Scotland has an abundance of natural resources and productive activities e.g., oil & gas, which impact on the environment and health.
Scotland is in a very fortunate position to promote a wellbeing economy as gains in wellbeing are dependent on available sustainable resources. This is not the case in some other countries where natural, human and socioeconomic conditions are not as favourable.
Climate change impact measurement
It’s important to appreciate that measuring wellbeing is not simply about the welfare of human beings, albeit that is vitally important. It is also crucial in tackling climate change and the eco-emergency we face globally. Wellbeing economic policies need to be developed and implemented with the impacts on the environment carefully monitored &/ measured to assess how effective and sustainable they are.
The establishment of a wellbeing economy is reliant on collaboration between public, private and third sector organisations. This is challenging despite the overwhelming evidence that climate change is an existential threat to health and wellbeing. It was
reported in March this year that U.S. greenhouse gas emissions were 5,981 million metric tons of carbon dioxide alone. Yet, surveys in the US indicate that only 40% of the public is concerned about climate change. People are still not aware of the dangers we face and there is a real need for more public support, if politicians are to be able to implement effective policies.
Thankfully technology has been developed to monitor carbon emissions and the effects of climate change can now be readily measured and modelled, which has allowed for carbon mitigation policies to be implemented, in spite of a lack of concern amongst the populace. As regards wellbeing measurement, Scotland already collects data which has been used to formulate economic policy.
Why is it important that we measure wellbeing in tandem with climate change monitoring & measurement?
It is pointless being in receipt of a wellbeing pension if nothing is being done to address the issues of climate change such as carbon emissions, which are affecting the quality of our lives particularly our health. A wellbeing economy is the only credible way of moving us in the right direction. We need to get there by design and therein lies the difficulty. It’s clear that developing economic policy which moves the focus of economic activity away from the current neoliberal paradigm of economic policies that only benefit a minority, is a priority.
In her book Doughnut Economics, economist Kate Rayworth, outlines how in meeting the challenges of the 21st century and designing an economy that “allows humans and the environment to thrive”, economic mindsets and policies cannot be based on the economic textbooks of the 1950s. Fair distribution of wealth, replenishment of resources used and providing the conditions for people to prosper are the central tenets of her heterodox economic proposal. She states none of this is reliant on economic growth.
Economic growth from exports for example should not be top of the list for a wellbeing economic policy for Scotland. In a wellbeing economy, the needs of the Scottish people should be met before any surplus is exported.
How do we measure wellbeing economy? GDP or GINI?
What about GDP as a measure? In a recent article renowned economist Richard Murphy stated that “any data based on GDP is almost meaningless when that figure for GDP is overstated by almost exactly 10%.”GDP measures UK national income, which is of little value as a measure for wellbeing because it does not take into account income distribution.
Other methods of measuring the success or failure of a wellbeing economy are now needed.
Let’s start by looking at a measure which does take into account income distribution. In the absence of a clear definition of what a wellbeing economy actually is, a number of proposals have been suggested, including the GINI index and the GINI coefficient.
It’s worthwhile distinguishing between the two. The Gini Index is a summary measure of income inequality. The Gini coefficient incorporates the detailed data into a single statistic, which summarises the dispersion of income across the entire income distribution.
In 2021, the United Kingdom’s Gini coefficient score was 34.4 percent, a slight decrease when compared with the previous year (https://www.statista.com/statistics/872472/gini- index-of-the-united-kingdom/). GINI coefficient scores for individual UK countries are available by clicking here.
How do we measure wellbeing progress in Scotland: the SIMD
In Scotland, the Scottish Index of Multiple Deprivation (SIMD) is used as a measure of deprivation across 6,976 small areas in Scotland. The data collected on income, health, housing, crime, education, employment and access to services is used to determine the extent of deprivation in these ‘data zones’ This measure is only used for those areas designated as deprived and does not cover the whole of Scotland.
The SIMD is used to identify areas where policy and funding could be targeted. It should be borne in mind that not everyone living in a ‘data zone’ i.e.deprived area, will be experiencing a high level of deprivation. Similarly different levels of deprivation have been recorded in rural and urban areas and the downside of SIMD is that the data does not readily allow the identification of smaller areas of rural deprivation when compared to larger pockets of deprivation in cities. For this reason, rural and urban data is analysed separately, and an all-encompassing country wide view cannot be determined.
So, the SIMD is not a suitable measure for determining wellbeing. However, it is a useful tool to facilitate the targeting of policy and funding in sectors which do contribute to wellbeing e.g., health initiatives such as the Deep End work in 100 general practices serving the most socio-economically deprived populations in Scotland.
The SIMD does however, as part of a wider range of parameters, provide data for a much more comprehensive means of measuring wellbeing in Scotland.
The National Performance Framework.
The introduction of the Community Empowerment (Scotland) Act in 2015 has meant Scottish Ministers had to seek expert advice to inform, develop and publish a set of National Outcomes for Scotland, aligned with those of the UN Sustainable Development Goals. Since these 11 National Outcomes are included in a National Performance Framework approved in 2018, the data collected across a range of economic, social and environmental factors, can be used as a measure of national wellbeing in Scotland.
Data obtained from Public Health Scotland and other agencies on a wide range of issues such as deprivation, income inequality, wellbeing & happiness of children, satisfaction with services and access to green space etc. is fed into the National Framework providing a comprehensive measure of wellbeing. The five yearly reviews of the National Outcomes
ensure the Framework is updated to reflect changes in economic and social climates and that wellbeing policy can be tailored to achieve the ultimate goal of a wellbeing economy.
In summary, a wellbeing economy cannot be truly defined because it is dynamic; a process characterised by constant change, activity, and progress. Fingers crossed that our vision of Scotlands wellbeing economy WILL however be defined by the latter…Progress!
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