Scotland's enterprise agencies must do better

28/02/2011

Much more needs to be done by Scotland’s enterprise agencies to support sustainable economic recovery and tackle the chronic lack of access to finance which is hindering business growth, warns a report published today.

The Parliament’s Economy, Energy and Tourism Committee’s fundamental review of the purpose of an enterprise agency and the success of recent reforms found a number of issues with the structure. The work of Scottish Enterprise (SE), Highlands and Island Enterprise (HIE), Scottish Development International (SDI) and Skills Development Scotland was scrutinised by the committee as part of its in-depth review.

Committee Convener Iain Smith MSP said:

“We found failings and problems with the enterprise network, and sticking with the status quo carries the risk that businesses with potential for growth will be left out in the cold. However, we have not recommended significant structural reform of the network and the disruption that may bring, particularly in light of major changes in recent years.

“While there could be efficiencies made from replacing HIE and SE with a single agency, the issues facing the Highlands and Islands are substantial enough to merit a dedicated regional agency.”

The committee is urging the Scottish Government to address issues it has uncovered, such as patchy provision of agency services across the country. The government should consider what more it can do to help businesses access investment capital, without further reducing the resources available to the enterprise agencies to meet their existing responsibilities.

The report said it is of major concern that there is a lack of clarity on who is delivering the country’s skills strategy, three and a half years after the inception of Skills Development Scotland. The committee calls on the government to provide clarity to SDS on its expectations regarding the agency’s leadership and co-ordination role.

Also, the transfer of Business Gateway to local authorities has led to complaints that some companies may be missing out on support. HIE and SE must engage with the likes of Scottish Chambers of Commerce to address any gaps in service, according to the committee

Other findings of the report include:

  • Businesses are experiencing a removal of expertise and local engagement due to the scrapping of the Local Enterprise Companies;
  • Concerns over accountability of Regional Advisory Boards;
  • HIE’s local presence has been diluted since the 2007 reforms and its “strengthening communities” role weakened;
  • Concern over whether the Scottish Investment Bank and Scottish Loans Fund reflect substantial “new money” rather than a re-branding of existing schemes;
  • A call for reassurance that resources allocated to support economic development are not further eroded.