Committee
Enterprise and Culture Committee, 16 May 2006
16 May 2006 · S2 · Enterprise and Culture Committee
Item of business
Scottish Enterprise
I am conscious that our discussions have repeatedly focused on budgets and restructuring. By necessity, much of the emphasis has been on budgets. I will return to the subject of structure, although I will perhaps also draw out the link with your budget in the light of recent announcements. I will start with the issue of the proposed future decision-making structure. I have asked you about that previously, and I asked the Minister for Enterprise and Lifelong Learning about it when he appeared before the committee. I think that I have finally pieced certain things together, although I am sure that you will correct me if I am wrong. There seems to have been general agreement throughout on the need to retain the local involvement of businesses and 12 local enterprise organisations. Indeed, the minister made great play of that, saying that it was evidence of strong support for Scottish Enterprise. He backed your "proposal to retain the 12 local enterprise companies as well as establish the metropolitan regions."—Official Report, Enterprise and Culture Committee, 2 May 2006; c 3027. He also made it clear that he "asked Scottish Enterprise to retain local decision making".—Official Report, 30 March 2006; c 24610.I think that it was Sir John who clarified the situation:"What was under debate was whether the LECs should retain statutory limited company status, with all the corporate governance issues that that entails."—Official Report, Enterprise and Culture Committee, 25 April 2006; c 2959.Given that that is where we have ended up, could you please clarify the cost implications of that decision? In particular, can you comment on—I am loth to use such material, but this comes from yet another attributed comment somewhere in the press—the recent suggestion that there could have been a reduction in posts of as many as 200, or that those posts could have been directed elsewhere, had the decision to retain the full statutory limited company status at LEC level not been taken?
In the same item of business
The Convener:
SNP
The next agenda item is consideration of Scottish Enterprise's budget and restructuring plans. I once again welcome John Ward, chairman of Scottish Enterpris...
Sir John Ward (Scottish Enterprise):
Convener, I thought that we might make some quick introductory remarks to position the presentation. However, I must admit that I am a little disconcerted by...
Jack Perry (Scottish Enterprise):
We accept and believe that our mission is to help tackle some of the profound challenges that the Scottish economy faces in achieving higher and more sustain...
Charlie Woods (Scottish Enterprise):
The points that I will cover this afternoon are set out on the first slide. I will give you a quick recap of the underlying strategy and the economic analysi...
The Convener:
SNP
Thank you. We want to finish the session by about 4.30, but I will make sure that every member gets a fair crack of the whip.I ask for three points of clarif...
Sir John Ward:
If you remember, that is the gap in our non-cash spending. I cannot remember the exact wording—I look to Douglas Baird here—but an indication was given that ...
The Convener:
SNP
Secondly, the figures for global connections, growing business and learning and skills on your slide headed "Overall Investment" differ from the figures on t...
Charlie Woods:
The second of the two slides shows project examples. I did not include the costs of the staff who will actually deliver the projects—for example, the busines...
The Convener:
SNP
So the second set of figures excludes management and administration.
Charlie Woods:
No, they exclude the operational costs of delivering the services—not the management and administration costs, but the costs of the people. With many service...
The Convener:
SNP
So the operational cost for growing business would be £23 million.
Charlie Woods:
Yes. It is of that order.
The Convener:
SNP
For global connections it would be £12 million.
Charlie Woods:
Yes.
The Convener:
SNP
And for the other one it would be £14 million.
Charlie Woods:
Yes.
Jack Perry:
It is important to remember that, in our more detailed plans, we are looking for a 2.4 per cent reduction in operational staffing costs. That is on top of th...
The Convener:
SNP
Thirdly, you referred several times to your legal commitments and the amount that you are legally obliged to dole out this year from the £516 million cash. C...
Jack Perry:
Our total legal commitments come out pretty much at our budget for the entire year, at this time. There is little free spend left after our commitments. We s...
The Convener:
SNP
And there is no spare capacity. If someone comes along with a big inward investment proposal that requires some assistance from Scottish Enterprise, you will...
Jack Perry:
Yes, or we will free it up through on-going prioritisation. Our programme changes significantly during the year. That has always happened, for the reasons th...
Sir John Ward:
In previous years, the pipeline at the beginning of the year has been of the order of £600 million or £650 million, which is way beyond our budget. Usually, ...
Christine May:
Lab
I do not dispute the difficulty of prioritisation or the task that Government has set you in relation to the management of those priorities. However, I would...
Jack Perry:
There is a good reason why you have received lobbying of that nature. I think that the Deputy First Minister made it clear that we issued interim budgets to ...
Christine May:
Lab
Thank you. I will pursue that theme and let my colleagues talk about other areas. The Scottish Training Federation is talking about approximately 400 redunda...
Jack Perry:
I suspect that that figure might have been based on the Scottish Training Federation's understanding of what the budget might have been before some more fund...
Murdo Fraser:
Con
I want to pick up on the point about learning and skills. The headline figure shows a 7 per cent reduction in spend. The table on the overall investment slid...
Jack Perry:
We would be very happy to provide that. We can give you some indication of how that table works and show that some growth has taken place in some of programmes.
Charlie Woods:
This year, £50 million will be spent on modern apprenticeships, and next year approximately the same amount will be spent. Skillseekers and get ready for wor...
Jack Perry:
That is a flat rate for just about all those programmes.