Transcript Open - The Scottish Government

The use of the Scottish InputOutput framework for policy
evaluation
Sandy Stewart
Scottish Government
Scottish Input-Output Analysis Overview
 History
of I-O in Scotland
 Recent developments
 Future developments
 Recent uses of I-O
 Environmental Extensions
 Suggestions?
History of Input-Output in Scotland
 First
tables 1973 (FAI, IBM, SCRI) and
1979 (FAI, SCDI and SO)
 1989 (first official SO publication)
 1992-1996 (ESA79)
 1998-2004 (ESA95)
 1998 – 2004 (consistent time-series tables
– published March 2009)
Recent developments







I-O constrained to Regional Accounts headline
GVA figures (2002 onwards)
Weights from I-O incorporated into GDP(O)
system
Construction of Tourism Satellite Account
Scottish Labour Market Intelligence Project
Global Connections Survey 2002-2007
Systematic quality improvements in data
sources and methodologies
Scottish National Accounts Project (launched
October 2008)
Scottish National Accounts Project
(SNAP)






Estimating quarterly GDP (production, income and
expenditure approaches)
Use of I-O framework to ‘balance’ and benchmark short
term estimates
I-O tables from 1998 to be dynamic, reflecting
methodology and definitional chages over time
Constructing artificial SU matrices quarterly – for
modelling and impact studies
Creating experimental national accounts for Scotland
(household, industry, trade and environmental accounts)
CGE modelling
UK NATIONAL ACCOUNTS
UK ENV ACCOUNTS
SNAP
UK GDP(E)
Family Spending
HHFCE
Global Connections
Investment
Stock change
Scot GDP(E)
AEA Inventories by product
AEA by Scottish industry
LFS
UK INPUT-OUTPUT
Environmental
Extensions
UK GDP(I)
Regional Accounts
STES, ASHE
ABI1, ABI2
PAYE
Property Prices
Taxes & Subsidies
Scot GDP(I)
Impact Assessments
SCOT INPUT-OUTPUT
UK GDP(P)
MPI
MIDDS
FSI
ONS
HMT
BERR
Scot GDP(P)
CGE Models
HMT: COINS, PESA, CRA
Scot IME
Scot Global
Connections Survey
Symmetric tables, IxI PxP,
Leontief Inverses
Scot : Government
Expenditure and
Revenues Scotland
ONS : PSA, QNA
HMRC
SPI
FRS
BERR
Labour Market
Extensions
Example 1
UK Government Efficiency Savings

UK Government planned budget cuts for 201011 and 2011-12
 Reduction in Scottish budget of £500m in each
year - £250m current expenditure, £250m capital
expenditure
 Current expenditure spread using Central &
Local Government columns in I-O tables
 Capital expenditure spread using public sector
element of Gross Fixed Capital Formation
column in I-O tables
Impact on Scottish Economy
Direct effects
Output
(£m)
Industry
Agriculture, forestry and fishing
Mining
Manufacturing
Energy and water
Construction
Distribution and catering
Transport and communication
Finance and business
Public admin etc
Other services
Total
 £500m
-0.01
0.00
-61.25
0.00
-148.66
-0.02
-2.39
-21.07
-266.58
-0.01
-500.00
Employment
(FTE)
0
0
-565
0
-1,506
-1
-16
-256
-4,140
0
-6,483
Income
(£m)
0.00
0.00
-16.78
0.00
-40.29
-0.01
-0.85
-8.50
-121.92
0.00
-188.35
Indirect effects
GDP(I)
Gross
Value
Added
0.00
0.00
-26.20
0.00
-64.18
-0.01
-1.59
-13.54
-145.66
-0.01
-251.19
Output
(£m)
-0.95
-4.51
-25.53
-5.91
-45.75
-10.94
-15.58
-60.36
-25.68
-0.93
-196.13
Employment
(FTE)
-9
-24
-209
-14
-463
-175
-179
-635
-454
-19
-2,181
Income
(£m)
-0.18
-1.16
-7.06
-0.55
-12.40
-4.04
-5.94
-19.03
-11.25
-0.50
-62.11
GDP(I)
Gross
Value
Added
-0.33
-1.51
-9.72
-1.65
-19.75
-6.59
-8.55
-34.75
-14.40
-0.76
-98.00
Total Direct + Indirect effects
GDP(I)
EmployOutput
Income
Gross
ment
(£m)
(£m)
Value
(FTE)
Added
-0.96
-10
-0.18
-0.33
-4.51
-24
-1.16
-1.51
-86.78
-774
-23.84
-35.92
-5.91
-14
-0.55
-1.65
-194.40
-1,969
-52.68
-83.93
-10.96
-175
-4.05
-6.60
-17.97
-195
-6.79
-10.14
-81.43
-891
-27.53
-48.29
-292.26
-4,594
-133.17
-160.06
-0.94
-20
-0.51
-0.77
-696.13
-8,664
-250.47
-349.19
cut to Scottish budget each year
leads to:
- £700m reduction in output
- 8,700 job loses (4,500 in public admin
and 2,000 in construction)
Press

“Brown's £1bn cuts 'will cost 8,700 Scots jobs' –
Salmond” – The Scotsman, Feb ’09
Gordon Brown was accused yesterday of placing 8,700
Scottish jobs at risk under the UK government's plans for £1
billion of cuts north of the Border.

“PM sticks to his medicine for poorly Scotland” –
The Glasgow Herald, Feb ’09
The loss of £500m for 2010 to the Scottish Budget would
"destroy" 8700 jobs right across the economy, said Mr
Salmond, who produced a table of where the axe would fall.
Public administration, i.e. the Scottish Government and
councils, would be hit the worst with more than 4500 jobs
being lost while construction would lose around 2000.
Example 2a
Skykon project in Campbeltown

Skykon take-over of Vestas wind turbine plant in
Campbeltown
 Redevelopment of plant funded by £35m from
Skykon and £9.8m from Scottish Government
 Project aims to:
- Safeguard current jobs
- Construct new facilities for larger
capacity turbines
- Expand production
Impact on Scottish economy of
safeguarding jobs
Direct effects
Output
(£m)
Employment (FTE)
Indirect + induced effects
Income
(£m)
Industry
Agriculture, forestry and fishing
Mining
Manufacturing
Energy and water
Construction
Distribution and catering
Transport and communication
Finance and business
Public admin etc
Other services
Total
0.00
0.00
9.36
0.00
0.00
0.00
0.00
0.00
0.00
0.00
9.36
0
0
85
0
0
0
0
0
0
0
85
0.00
0.00
3.02
0.00
0.00
0.00
0.00
0.00
0.00
0.00
3.02
GDP(I)
Gross
Value
Added
0.00
0.00
5.50
0.00
0.00
0.00
0.00
0.00
0.00
0.00
5.50
Output
(£m)
0.06
0.05
0.86
0.20
0.11
0.98
0.40
1.10
0.28
0.04
4.08
Employment (FTE)
1
0
7
0
1
19
4
8
4
1
45
Income
(£m)
0.01
0.01
0.24
0.02
0.03
0.37
0.14
0.22
0.11
0.03
1.18
Total Direct + Indirect + Induced effects
GDP(I)
Gross
Value
Added
0.02
0.01
0.35
0.06
0.05
0.59
0.21
0.66
0.14
0.04
2.13
Output
(£m)
0.06
0.05
10.22
0.20
0.11
0.98
0.40
1.10
0.28
0.04
13.44
Employment (FTE)
1
0
92
0
1
19
4
8
4
1
130
Income
(£m)
0.01
0.01
3.26
0.02
0.03
0.37
0.14
0.22
0.11
0.03
4.20
Directly safeguards 85 jobs at Vestas in 2009 –
plant likely to have closed without funding
 Supports 45 jobs in wider economy through
supplier industries and increases in household
spend due to increased employment

GDP(I)
Gross
Value
Added
0.02
0.01
5.85
0.06
0.05
0.59
0.21
0.66
0.14
0.04
7.63
Example 2b
Impact on Scottish economy of
construction of new facilities
Direct effects
Output
(£m)
Employment (FTE)
Indirect + induced effects
Income
(£m)
Industry
Agriculture, forestry and fishing
Mining
Manufacturing
Energy and water
Construction
Distribution and catering
Transport and communication
Finance and business
Public admin etc
Other services
Total

0.00
0.00
0.00
0.00
20.00
0.00
0.00
0.00
0.00
0.00
20.00
0
0
0
0
203
0
0
0
0
0
203
0.00
0.00
0.00
0.00
5.42
0.00
0.00
0.00
0.00
0.00
5.42
GDP(I)
Gross
Value
Added
0.00
0.00
0.00
0.00
8.63
0.00
0.00
0.00
0.00
0.00
8.63
Output
(£m)
0.23
0.52
2.10
0.40
5.25
2.18
1.06
4.98
0.85
0.12
17.68
Employment (FTE)
2
3
18
1
53
44
12
40
11
4
187
Income
(£m)
0.04
0.13
0.58
0.04
1.42
0.84
0.39
1.23
0.31
0.08
5.06
GDP(I)
Gross
Value
Added
0.08
0.18
0.79
0.11
2.27
1.33
0.57
2.97
0.42
0.11
8.82
Total Direct + Indirect + Induced effects
GDP(I)
Output
EmployIncome
Gross
(£m)
ment (FTE)
(£m)
Value
Added
0.23
2
0.04
0.08
0.52
3
0.13
0.18
2.10
18
0.58
0.79
0.40
1
0.04
0.11
25.25
256
6.84
10.90
2.18
44
0.84
1.33
1.06
12
0.39
0.57
4.98
40
1.23
2.97
0.85
11
0.31
0.42
0.12
4
0.08
0.11
37.68
390
10.48
17.45
£20m spend on construction of larger capacity
wind turbines in 2010
 Directly supports 203 jobs in construction
industry
 Supports a further 187 jobs in whole economy
through indirect and induced effects
Example 2c
Impact on Scottish economy of
production expansion
Direct effects
Output
(£m)
Employment (FTE)
Income
(£m)
Industry
Agriculture, forestry and fishing
Mining
Manufacturing
Energy and water
Construction
Distribution and catering
Transport and communication
Finance and business
Public admin etc
Other services
Total

0.00
0.00
33.04
0.00
0.00
0.00
0.00
0.00
0.00
0.00
33.04
0
0
300
0
0
0
0
0
0
0
300
0.00
0.00
10.65
0.00
0.00
0.00
0.00
0.00
0.00
0.00
10.65
Indirect + induced effects
GDP(I)
Gross
Value
Added
0.00
0.00
19.41
0.00
0.00
0.00
0.00
0.00
0.00
0.00
19.41
Output
(£m)
0.22
0.16
3.04
0.69
0.40
3.46
1.41
3.88
1.00
0.16
14.40
Employment (FTE)
2
1
24
2
4
66
15
27
13
5
158
Income
(£m)
0.03
0.04
0.84
0.06
0.11
1.31
0.51
0.79
0.37
0.10
4.16
GDP(I)
Gross
Value
Added
0.08
0.04
1.23
0.19
0.17
2.08
0.74
2.34
0.50
0.14
7.51
Total Direct + Indirect + Induced effects
GDP(I)
Output
EmployIncome
Gross
(£m)
ment (FTE)
(£m)
Value
Added
0.22
2
0.03
0.08
0.16
1
0.04
0.04
36.07
324
11.50
20.64
0.69
2
0.06
0.19
0.40
4
0.11
0.17
3.46
66
1.31
2.08
1.41
15
0.51
0.74
3.88
27
0.79
2.34
1.00
13
0.37
0.50
0.16
5
0.10
0.14
47.44
458
14.82
26.92
Supports a further 158 jobs in whole economy
through indirect and induced effects
 Production expansion expected to create 300
additional jobs in 2011
Press

“Huge expansion for turbine plant” – BBC News,
March ’09
Mr Salmond said: "The impact of this investment will be truly
transformational, not just for the Kintyre peninsula but for all of
Scotland. It creates high quality and skilled employment in
the local area and gives Scotland a lead in the development
of clean, green energy technology - putting our nation at the
forefront of global developments.”

“Argyll will see economic benefits of wind farm
revamp – Salmond” – The Scotsman, March ‘09
One of Scotland's most remote areas will be transformed by a
£45 million investment which will create hundreds of jobs,
Alex Salmond said today.
Other uses of I-O
 Marine
industry
 Carbon Accounting
 100+
ad hocs in 2008, 50 in 2009 so far
Marine Industry



IO analysis used to
inform the Marine Bill in
2008.
Estimates of ‘productive’
status of the seas and
marine economic activity
In 2004, value of marinerelated sector in Scotland
was £2.2 billion
supporting 50,000 FTE
employees
Carbon Accounting

SG commissioned work by FAI to use CGE
modelling to forecast CO2 emissions 2010 to
2050 under various scenarios
 Model involved further disaggregation of the
electricity production sector
 Uses AMOSENVI (environmental CGE model)
 Model considers impact on economy and
environment of efficiency savings in electricity
production
Ad-hoc requests
100 requests in 2008 – 51 days
 Customers include: Shetland Island
Council, SPICE, Council of Economic
Advisers, Fraser of Allander Institute,
Scotch Whisky Association, Scottish
Enterprise, BBC
 Increasing interest in I-O and in ad-hoc
analyses
 Over
Environmental input-output
economics and policy

Environmental items



Policies addressing environmental problems:




Natural resources
Pollutants
Impose quantity limits on destructive activities
Discourage harmful activities by taxation
Specify property rights
Models need to focus directly on the implications
of different policy interventions
 More work required on a “whole systems”
approach
Components of an environmental
model

1. Establish product inputs for output goods
 2. Environment coefficients associated with unit
production
 3. Information on technology or abatement activity
associated with unit production
 4. Labour input coefficients associated with production
and abatement
 5. Policy description – how much should be abated, who
pays?
 6. Need sophisticated assumptions about both
production and consumption over time and space.
Finally
 Thoughts
welcome
 Links



SNAP - www.scotland.gov.uk/SNAP
ScotStat – www.scotland.gov.uk/Topics/Statistics/scotstat
Scottish Input-Output Analysis www.scotland.gov.uk/Topics/Statistics/Browse/Economy/Input-Output