In July 2015, the BBC reported that unemployment in Scotland had fallen by 150 000 between March and May this year. This was a 39 000 drop in employment compared to the same quarter in 2014. These statistics presented an encouraging overview of economic recovery and even put Scotland at a lower rate of employment than the rest of the UK, with 74.3% of Scots employed, compared to 73.3% in the rest of the UK. Figures released on the 13th of August 2015 by Gov.uk, reported that the unemployment was 5.6%, the same as the rest of the UK.
The recent statistics released show a worrying picture, suggesting Scotland’s economic recovery has halted and started to take a downward turn. On the 14th of October, the BBC reported that unemployment has risen by 18 000 in Scotland, which puts the unemployment rate higher than the rest of the UK, (6.1% compared to 5.4%).
It been suggested that cutbacks in the oil and gas industries are the reason for the decline. This theory is supported by the trends developing in debt advice and insolvency sectors.
Clare Greechan, senior manager at Trust Deed Scotland stated,
“We have noticed an increase in enquires from the North of Scotland. This is mainly due to the downturn in the oil and gas sectors. Reduced earnings are impacting on people’s ability to maintain payments to their creditors and they are forced to look at other options.”
There has been a 55% decline in crude oil prices since June 15 which has affected an industry that was already operating under harsh constraints with UK oil production at the lowest it has ever been due to oil fields running out of resources. Andy Samuel, chief executive of the Oil and Gas Authority commented,
“Regrettably, this has led to the loss of around 5 500 jobs since late 2014.”
It is not just workers in the oil and gas industry who have been affected by these cutbacks. The knock on effect on other areas of industry in the north has left them also feeling the negative impacts. The hotel sector in Aberdeen has reported lower occupancy levels and a very significant decrease in revenue per available room.
Partner in the Property, Leisure and Hospitality sector at BDO, Alistair Rae, reportedly commented,
‘There are clear signs that the oil and gas sector is dramatically reducing its costs in the city with hospitality among the first expenses to be cut.’
He went on to add, ‘I believe that this situation will not improve in the immediate future so would caution the hotel sector in Aberdeen to ensure it is managing its costs to cope with the reduced demand in income.’
If you are affected by the issues discussed in this article, you could contact a qualified debt advisor or the Citizens Advice Bureau for help. There are several options available if you are struggling financially.
A Trust Deed may be the right solution for you if you are looking for one affordable monthly payment, with a term of typically 48 months which allows you to write off a percentage of your debt.