Hansard

Words, concepts, arguments—are those not the tools of our trade, Presiding Officer? We speak, therefore we are. It was P G Wodehouse who said:

“One of the drawbacks to life is that it contains moments when one is compelled to tell the truth”.

That is a caricature, of course—and yet?

I will focus on the content of the response to our report by the Convention of Scottish Local Authorities and try to overlook the grievous tone. The letter from the Scottish Government was, by contrast, a ray of sunshine; I will focus on the tone and try to overlook the content, which—I am sorry to say—was somewhat scant.

I will address four areas of the committee’s report—transparency, accountability, alignment and engagement—with, first, some context. Business gateway was envisaged as a one-stop shop for business start-up and support and the Scottish Government’s flagship for small and medium-sized enterprise. A decade has passed since the service transferred to local authority control, so it is a perfect time, perhaps, to assess where we are and where we want to be.

It is also a chance to follow up on a narrower piece of work by our predecessor, the Economy, Energy and Tourism Committee, which advised in 2011 that business gateway should be operating at peak effectiveness and suggested that we might want to take a future look at the performance of business support services, the “future” being now.

This inquiry could have been this committee’s first, in 2016, before what members of the House of Lords refer to as “the other matter” came along—is there an election tomorrow? I will say nothing further on that point—so we began with an inquiry into the economic consequences of leaving the European Union.

However, I digress. The remit of the inquiry that we are concerned with today is:

“To understand the range of support services available to new and existing small and medium sized businesses at a local level across Scotland, with a particular focus on Business Gateway.”

To do that, we wanted to engage with businesses directly. We received 355 responses to an online survey and 41 submissions to our call for views; we visited companies in Lanarkshire, Inverness, Aberdeen and Edinburgh; and we studied the Enterprise Ireland approach during a visit to Dublin. We took evidence from support providers, representative bodies, financial lenders, local government and others. We heard that the variety of support, advice and products that is available to businesses is a strength—“no wrong door” is the phrase.

However, opportunities to align local and national economic priorities had been missed. Business gateway was not included in the enterprise and skills review, although it has been involved since. We recommended a number of ways to improve transparency and accountability, including publication of regional budget and performance information.

The inquiry also led us to look at how others provide business support. We found the approach in Ireland to be a mix of tailored local delivery and national strategic direction and recommended a review to see which aspects of that model could work in the Scottish context.

How was our report received? The cabinet secretary wrote to say:

“I recognise that many of the points you raise about Business Gateway do need to be addressed.”

He told us that he and his COSLA counterpart agreed that we can do things better, and that they would work to co-produce solutions as part of a single-system approach. So far, so encouraging, although I suppose that Mr Hepburn could provide us with a few more clues today, particularly on the work with COSLA to improve transparency around performance, and his officials’ review of the Irish model.

The Scottish Government’s response referenced the “Scotland CAN DO: Boosting Scotland’s Innovation Performance” innovation action plan several times. The committee heard little about that initiative during the inquiry. Doubtless, the minister can elaborate later in his usual can-do manner. We do not want to invoke the cynical rebuke of satire but, of course, Jim Hacker’s first rule of politics was:

“Never believe anything until it’s officially denied.”

The committee was deeply concerned about the lack of transparency around business gateway. There is no regularly published information on local targets, performance or budget allocation. We were looking not for a league-table approach but for an approach that encouraged more openness. COSLA rejected our findings, citing the availability of economic indicators and a benchmark framework, both of which we had considered during the inquiry and found wanting. The local government benchmarking framework includes only one element for business gateway and provides nothing on business gateway other than spend. The Scottish local authorities economic development group’s economic indicators report covers three strands but does not contain enough detail on any strand to enable us to scrutinise performance. There is nothing on performance against targets—in fact, targets are not mentioned at all—and there is no reference to the budget that is allocated across different council areas. COSLA said that it was

“moving towards output and outcome-based measures of performance”.

That sounds encouraging, but the problem is that it did not say how it was going to do that. We recommended that an independent body monitor performance against targets. COSLA rejected that, defending its position on the basis of local democratic accountability. That is an important point of principle but, in this context, I doubt that it will satisfy the Federation of Small Businesses Scotland.

Susan Love pointed out that business gateway is a national service and said that inconsistency in delivery was, for her, “the ultimate question”. She asked:

“Who do I speak to in COSLA? What will it do? What is the Scottish Government going to do? Is the local authority going to do something? The sanctions for failure to meet contract are completely unclear to me.”—[Official Report, Economy, Energy and Fair Work Committee, 13 November 2018; c 26.]

The expertise of bodies such as the FSB and Scottish Chambers of Commerce should not be overlooked. They are well placed to provide feedback in the interests of continuous improvement.

The committee called for the business gateway stakeholder group to be re-established in order to encourage collaboration and better alignment with other services. Confusingly, COSLA said that consideration would be given to a forum for public sector partners. It had previously told us that it could see no advantage in a

“formal relationship at the national level”.—[Official Report, Economy, Energy and Fair Work Committee, 18 December 2018; c 8.]

I have no wish to be unduly negative. We all know that the relationship between central Government and local government can be difficult—perilous, even. There are sensitivities and there are balances to be struck, but there are also times when an inadequate response is just that, and we should call it out. As an American Secretary of State once observed,

“A memorandum is written not to inform the reader but to protect the writer.”

Let me be clear: there is a good story to be told with business gateway. Our report welcomed the monitoring of client satisfaction and the systematic way in which that is being done. We heard praise for online services, the level of understanding of local needs and the provision of early stage support. We saw examples of innovation and best practice, and there is cause to be upbeat about how we birth, nurture and grow businesses in Scotland. We should celebrate those areas where the service is seeking to replace vanilla spaces with go-to places. However, there is also ample room for improvement. In the words of Bill Gates,

“Your most unhappy customers are your greatest source of learning.”

We applaud local authorities for what business gateway does well and where they strive to be the best in class. However, COSLA cannot afford to be complacent; Scottish businesses cannot afford for COSLA to be complacent; and, indeed, the Scottish Government, the cabinet secretary and others cannot afford for COSLA to be complacent. Our report recommends where it can do better in balancing local needs with the single-system approach because, to borrow from the Scottish Government’s response, we want businesses to have the right support in the right place at the right time.

I move,

That the Parliament notes the conclusions and recommendations in the Economy, Energy and Fair Work Committee’s 2nd Report, 2019 (Session 5), Business Support (SP Paper 470).