Hansard

I add my thanks to the clerks and others for their hard work in preparing a valuable report, and I acknowledge the hard work of everyone who is involved in the business gateway network.

Three years ago, the Scottish Government embarked on its enterprise and skills review with the objectives of delivering a more coherent enterprise support system, achieving strategic alignment between the various enterprise support bodies, and delivering higher growth to the economy. Three years on—and following the Economy, Energy and Fair Work Committee’s report on business support—it is difficult to avoid the conclusion that those objectives are not being met.

Before I turn to the detailed recommendations that the report sets out, it is important that I remind members of the broader context of the Scottish Government’s enterprise policy. In Scotland, we spend more than £2 billion a year to support enterprise and skills, which is about £100 more per head of population than the rate in the rest of the UK. However, we still lag behind in many areas, including business formation and research and development. The latest numbers show that economic growth in Scotland continues to trail behind growth in the rest of the UK. That background information highlights the importance of having an enterprise system, including business gateway, that is fit for purpose.

The committee heard evidence from a wide range of witnesses and stakeholders that there is a lot to commend the business gateway network, and the minister quite rightly highlighted a number of successful examples. However, the report highlights real concerns, across a number of areas, that business gateway is not delivering the support that start-ups and SMEs across Scotland require.

The first concern that the report highlights relates to the Scottish Government’s cluttered approach to economic policy, which is holding back economic growth. Pamela Stevenson, from the Scottish local authorities economic development group, said:

“we continue to be faced with clutter on a daily basis.”—[Official Report, Economy, Energy and Fair Work Committee, 13 November 2018; c 36.]

She referred to the Scottish Government launching a number of new initiatives, none of which involved consultation with business gateway. That view was echoed by Andrew Dickson from Business Loans Scotland, who said:

“I am not sure whether we are totally aware of what one another is doing, and that is certainly the case for the understanding by small and medium-sized businesses about what”

support

“is available.”—[Official Report, Economy, Energy and Fair Work Committee, 27 November 2018; c 2.]

Other witnesses agreed. Scottish Chambers of Commerce said that

“finding the right route to”

business

“support can be frustrating for firms in need of advice.”

The report found that there is a lack of alignment and accountability. In its submission, the FSB called for business support to be

“designed from the user’s perspective”,

in order to take into account the needs of business, but it also highlighted that

“duplication, or failure to join-up with other services make this difficult to achieve.”

Many other witnesses identified that issue, which led to the committee concluding that

“the lack of clarity on the strategic alignment between Business Gateway and the enterprise ... agencies”

is

“disappointing.”

As the convener outlined, another problem that the committee identified is the lack of transparency, particularly in relation to business gateway budgets. To the committee’s surprise, it is not possible to determine how much money is being spent on business gateway services at the local government level. During much of the inquiry, we had to rely on budget information that was obtained by a Scottish Conservative freedom of information request, which found that the business gateway budget has not increased in the past decade and that there is wide variance in spending across local government. Based on that, the committee rightly concluded that it is unacceptable that financial information on business gateway is not recorded and published in a consistent manner across local authorities. The committee recommended that budgets should be published annually in a consistent format to ensure full transparency.

Strongly linked to concerns about transparency and accountability are the challenges that were identified in relation to targets and performance measurement. Local authorities are responsible for setting their own targets, but there is no reporting on what such targets are, on performance against targets or on spend on business gateway services. In response to the committee’s survey, one person noted that

“where there is poor performance, it’s accepted and targets simply get reduced.”

Not surprisingly, the committee found that unacceptable.

We looked at practice in Ireland, where each local enterprise office publishes information about local targets—and performance against them—priorities and spend, which ensures full transparency. Therefore, the committee calls on the Scottish Government to examine whether such a model can be applied in Scotland.

The final concern that I have time to highlight is the inconsistent quality of service delivery across Scotland, with some businesses calling the delivery of services a “postcode lottery”. The Scottish Council for Development and Industry expressed concerns and said that evidence from its members

“suggests that there is a very mixed bag in terms of the support that they receive.”—[Official Report, Economy, Energy and Fair Work Committee, 13 November 2018; c 3.]

That divergence can be seen in the limited data that is available, showing that Elevator, which runs business accelerator services in Aberdeen and Dundee, delivers 25 per cent of all business gateway start-ups in Scotland.

Business gateway was reformed by the Scottish National Party in 2008 to support start-up businesses across Scotland. The report clearly shows that the Scottish Government has neglected that vital part of the enterprise landscape over the past decade. Although there are examples of good practice, which we should highlight and promote, business gateway under the SNP is not delivering the support that Scottish SMEs require.

I have to say that the cabinet secretary’s response to the committee’s recommendations is disappointing. It shows that there is a lack of understanding of how much reform is required in this area, and that the Government is not willing to engage properly in the debate about how we encourage and expand Scotland’s start-up sector.

As the committee’s report makes very clear, business gateway needs to be reformed, and I look forward to hearing the minister’s closing remarks and finding out how that will be done.