Meeting of the Parliament 22 May 2019
I am pleased to take part in today’s Economy, Energy and Fair Work Committee debate on support for the business community.
As someone who served on Perth and Kinross Council for 18 years, I have first-hand experience of how local authorities deal with business support services and I admit that I find the conclusions of the report all too unsurprising.
The decision back in 2008 to pass the then still relatively new business gateway services to local councils was the right one, and that is still the case. Although the vast majority of Scottish businesses employ fewer than 50 people, there are significant differences in our local economies around Scotland, particularly in more rural areas, which require local flexibility and discretion to suit their needs. Having more localised services ensures that there is understanding of the local economy, which provides an ability to ensure that areas are supported.
That is not to say that there should not be high expectations nationally for what should be achieved at a local level. Unfortunately, the Scottish Government’s current national economic strategy is confused and muddled. The Fraser of Allander institute warned that the “cluttered landscape” of a
“myriad of different strategies, advisory groups and bodies”
has not achieved the Scottish Government’s stated aim of a single economic strategy that all public sector initiatives should align behind.
To be fair to the Scottish Government, 10 years after setting out the approach, its enterprise and skills review admitted that the current situation was entirely the opposite of the stated ambition. The review failed to consider business gateway, and the committee report describes that as “a missed opportunity”. I call it a glaring omission.
The SNP’s muddled approach to supporting the economy is particularly evident when it comes to business gateway, which, as the committee report identified, has been unsuccessful in achieving entry levels that we might have seen in other sectors.
At the start of the report, the committee talks about trying to ensure that Scotland has a good business base. A number of good things are taking place in business communities, but they are not all singing from the same hymn sheet and they do not all get the same support. While the business base around the UK expanded by 26 per cent between 2010 and 2018, the same measure for Scotland was only 16 per cent. The rate of Scottish business growth since 2016 has also slowed significantly to 1.6 per cent, whereas the rate for the rest of the UK was 4.5 per cent.
We are also slipping behind the rest of the UK when it comes to retail sales. Although there are undoubtedly other factors at play, the lack of sufficient support being provided to businesses by business gateway is a factor.
From my experience in Perth and Kinross, I can say that next to no scrutiny of business gateway took place, which is not how we should run that sector.