Labour highlights SNP “dereliction of duty” over government contracts

Richard Leonard has accused Nicola Sturgeon of a “dereliction of duty” after new analysis found that billions of pounds of government contracts supported just 100,000 jobs and were almost exclusively with large corporations.

Responding to reports released today, Scottish Labour found that £1.2bn of private procurement contracts supported a relatively low number of full-time jobs despite them generating around £10bn of economic activity for Scotland.

The Scottish Labour leader described it as a “gross failure” by the Holyrood administration as the party also revealed that just 0.29% of Small and Medium Enterprises (SMEs) benefited from the Scottish government’s procurement spend.

Commenting on the data, Leonard said: “With Scotland facing its worst unemployment crisis since the height of Thatcherism in the 1980s, this is a gross failure by Nicola Sturgeon and the SNP.

“At the very moment when the future of hundreds of Scottish businesses hangs in the balance, we discover that less than 1% of SMEs benefitted from the Scottish government’s procurement spend.

“Scottish Labour has been calling for further support for local businesses during the pandemic and has demanded a proper jobs guarantee scheme to protect livelihoods and stimulate growth.

“In stark contrast, Nicola Sturgeon and her SNP government have handed billions of pounds of public money over to contracts, with little job creation and SME support in return. Scotland can ill afford this dereliction of duty by the SNP.”

The information obtained by the Scottish Labour Party found that the country’s private contract expenditure contributing £6bn to the country’s GDP as well as generating overall around £10bn of economic activity.

The party analysis, based on Holyrood’s annual report into its procurement practice, found that just 1,034 SMEs in Scotland benefited from the contracts out of a total of 354,125 SMEs operating in the country as of March 2019.

Of the total £1.2bn spent by the Scottish government on private procurement contracts, just £103m was spent on SMEs. That means just 8% of total expenditure on procurement benefited Scottish small businesses.

Leonard has previously called on the SNP to commit to a ‘jobs guarantee scheme’, which would provide well-paid, green jobs for workers across Scotland and help combat the risk of mass unemployment in the devolved nation.

The Scottish Labour leader’s criticism follows the release of Scotland’s benefit claimant statistics. In September, there were 224,200 people claiming Jobseeker’s Allowance and Universal Credit, a 101.2% rise on the start of the year.

Coronavirus has badly hit the UK jobs market. It was reported last month that the UK unemployment rate had surged to its highest level in over three years – 4.5% of people were without work compared to 4.1% in the previous quarter.

It was previously predicted by the Scottish government, in advance of the Chancellor’s decision to extend the furlough scheme this week, that the nation’s unemployment rate could rise as high as 8.2% by the end of the year.

Anneliese Dodds has criticised Rishi Sunak’s decision to make the U-turn on extending the furlough scheme at such a late hour and warned that many jobs may have already been lost due to government inaction.

Reacting to a statement from Sunak this week in parliament on support for businesses impacted by restrictions, the Shadow Chancellor told MPs that “the Chancellor can change his mind at the last minute, but businesses can’t”.