SCOTTISH annual economic output would be £25 billion higher than otherwise by 2024 if the vast bulk of local authority areas were to achieve the improvement in productivity recorded by the Granite City and Aberdeenshire, a report concludes.

The Confederation of British Industry (CBI) notes this would be equivalent to a 15 per cent increase in the size of the Scottish economy.

It also highlights the fact that Scotland’s productivity has improved by far more than that in the UK as a whole in recent times.

The CBI says: “Productivity in Scotland has fared better than the UK as a whole over the last decade. Figures from the Scottish Government indicate that real output per hour grew by 9.4 per cent between 2007 and 2015, while UK real output per hour grew by 0.1 per cent over the same period.

“The historical gap between productivity levels in Scotland and the UK as a whole has closed, with productivity in Scotland increasing from 94.5 per cent of the UK average in 2007 to around the same as the UK average in 2015.”

However, the CBI emphasises productivity in Scotland and the UK “remains around 16 per cent lower” than the rest of the Group of Seven leading industrialised nations.

Addressing threats to productivity from Brexit, the CBI declares the UK Government must “ensure the post-Brexit immigration system allows Scottish businesses access to the skills and labour they need to grow”.

The CBI flags the key role of migration from other European Union countries in reversing population decline in Scotland, and increasing the working-age population.

It says: “EU migration has been of significant net economic benefit to Scotland. Since 2004, it has contributed to reversing the decline in the Scottish population and increasing the number of people of working age in Scotland.”

The business organisation also supports devolving “greater freedoms and controls to schools across Scotland to enable innovation and help drive positive change”.

The CBI has calculated the boost to annual Scottish economic output, if all local authority areas other than those in the UK top 20 per cent for being most productive improve productivity in the ten years to 2024 at the same rate as Aberdeen City and Aberdeenshire did between 2004 and 2014.

This scenario assumes areas in the top 20 per cent, which are Aberdeen City and Aberdeenshire, Edinburgh and South Ayrshire, match the UK trend rate of growth of productivity over the period from 2004 to 2014. The CBI notes this methodology reflects “the likely limited scope for already high-performing areas to continue to improve at the same pace” as in the previous 10 years.

It calculates Scotland’s nominal annual economic output on the gross value added (GVA) measure would, on this basis, climb 53 per cent to £188.55bn by 2024.

On its baseline scenario, under which productivity for each local authority area other than those in the top 20 per cent continues to grow over the ten years to 2024 at the same pace as it did between 2004 and 2014, the CBI calculates Scotland’s nominal GVA would rise by 32 per cent to £163.62bn by 2024. This also assumes productivity in local authority areas in the top 20 per cent grows in line with the UK trend rate.

The CBI declares: Our analysis finds increasing productivity within Scotland could add £25bn to its nominal gross value added over the next decade.”

It cites educational attainment, transport inks, management practices, and the proportion of firms that export and innovate as key drivers of productivity. The CBI is calling for research and development spending targets for the private and public sectors.

On education, it claims survey results “have refocused attention on the need to improve performance in our schools”.

The CBI adds: “The latest Scottish Survey of Literacy and Numeracy showed less than half of 13 and 14 year-olds are performing well in writing, while the Programme for International Student Assessment (PISA) found scores for maths, reading and science had all declined.”