Wellbeing at the centre of Scotland’s progress

April 14, 2020

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by Kate Forbes, Cabinet Secretary for Finance, Scottish Government

To coincide with the 10 year anniversary of the publication of the Report by the Commission on the Measurement of Economic Performance and Social Progress, the Carnegie UK Trust is publishing a series of blogs which outline the approach taken to measuring and improving wellbeing by different governments, organisations and initiatives around the world.

Delivering wellbeing to the people of Scotland is embedded at the centre of Scotland’s National Performance Framework (NPF) and is key to the Scottish Government’s approach to the economy, which seeks to deliver wellbeing through sustainable and inclusive economic growth.

The goal and objective of all economic policy should be collective wellbeing. This broader approach is at the very heart of our Economic Strategy, published in 2015, which gives equal importance to tackling inequality as economic competitiveness.

A key limitation of traditional measures of the economy, most notably GDP, is that they are limited in what they can tell us about the distribution of income and wealth across society, the components of economic growth and whether that growth is sustainable for future generations.  Traditional measures of economic performance do not capture many of the drivers of wellbeing and the things that matter to people – for example health, living standards, quality of environment, security of employment, civic engagement and so on.

Sustainable and inclusive economic growth enables us to look beyond simple headline measures to consider outcomes across a broader range of performance criteria to allow for a more rounded assessment of the quality of our economic system and the distribution of economic opportunities across Scotland’s people and places.

Scotland, by putting wellbeing at the heart of everything we do, is on a journey and we have significant roads still to travel. There are other countries taking a similar approach to tackling some of the big defining challenges that the world currently faces. We know we can learn from international organisations and countries across the world, and share with them our experiences, which is why in 2018 Scotland and partners established the Wellbeing Economy Governments group, or WEGo as it is known.

In WEGo, the Scottish Government is working alongside Iceland and New Zealand – and in the coming year we expect to be joined by one or two new members – to promote sharing of expertise and transferable policy practices among governments who have a shared ambition of deepening their understanding of delivering wellbeing through their economic approach. Our countries have a lot of similarities but also face lots of different challenges. WEGo provides a forum to exchange ideas on our shared priorities and aims to move the idea of wellbeing economy from theory into practice.

A key activity of the group is the Economic Policy Labs, and the first of these were held in Edinburgh in May 2019. One of the areas discussed there was wellbeing budgeting. New Zealand published their first wellbeing budget in that month and their experience, and what we have learnt through our group, has informed activities both here in Scotland and in Iceland. Prime Minister Katrín Jakobsdóttir has set out that a wellbeing budget is being developed in Iceland. Here in Scotland, the budget that I presented to Parliament in February 2020 put wellbeing and fairness at its heart, prioritising actions that have the greatest impact on improving lives across Scotland now, and creating the conditions that are required to ensure wellbeing for future generations.

As Cabinet Secretary for Finance, I am keen to continue, both to collaborate with like-minded countries and to develop our own wellbeing budgeting approach for Scotland. Delivering the outcomes set out in the NPF should be at the centre of how we allocate and spend resources.

But building a wellbeing economy is not the role of government alone. Whilst governments should show leadership – and I believe the Scottish Government is already doing that, see the TED talk given by First Minister Nicola Sturgeon in July 2019 – individuals, businesses and organisations across our society have a big role to play. We are committed to working with all those seeking to advance the concept and the reality of a wellbeing economy, both now and in the years ahead.

Finally, as we see the impact of the COVID-19 pandemic globally and how it is changing people’s lives, what they value, how they work and interact with each other, a wellbeing economy framing with strong public services seems so obvious. Out of this crisis we will hopefully see a greater emergence of this approach in economies across the world.