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It is my pleasure to introduce the report of the Enterprise and Lifelong Learning Committee on local economic development services, and to speak in my capacity as that committee's convener.
Our report was published on 10 May, and I welcome this early opportunity to debate the issues that were raised in it. The Executive is entitled to an eight-week period to respond to committee reports, and we appreciate the fact that ministers are prepared to take part in an earlier-than-anticipated debate, outwith that time scale.
The committee has proposed substantial changes to the existing arrangements for economic development; I will come to those changes later. Before that, I will explain what led the committee down its route of inquiry. We had all experienced dealings with local economic development and, from members' constituency experience, the committee was aware of fairly widespread unease over the effectiveness of existing services. There was a concern that, if the agencies involved were not actually out of control, they were potentially out of touch with those whom they were established to serve.
The committee embarked on its inquiry unanimously, and agreed its report unanimously. We were determined to listen to the case that was put in front of us, to test the evidence from a wide base and to formulate conclusions with all that in mind. Our report fits into a welcome debate about the future of economic development, which has been developed by the minister. As important as the debate is the recognition that the talking must, at some point, stop and the delivery of services must begin in earnest under any revised model.
I am glad that the Minister for Enterprise and Lifelong Learning was able to give a commitment, during his appearance at the committee in March, that the debate over the future of the enterprise networks, the framework for economic development and the delivery of local services would be complete in time to ensure implementation of the proposals in the autumn and towards the end of the year.
In its deliberations, the committee took substantial evidence over an eight-month period. That involved consideration of more than 100 written submissions, and hearing 41 witnesses who came to speak to the committee. We visited the Highlands and Islands to appreciate the differences between the lowland and Highland perspectives, and we were the first committee to move its proceedings out of metropolitan Edinburgh, if I can so describe it.
In December, the committee published an interim report. To ensure that our conclusions had some resonance in reality, and reflected the debate among those who needed to use the services, we held the business in the chamber event, in which 129 business people were invited into the parliamentary chamber to debate our key interim conclusions. That event provided a valuable opportunity for us to test the effectiveness of the direction of our thinking, and to find out whether we were touching the issues that were of concern to the wider community.
We also commissioned independent academic research from the University of Paisley in an attempt to capture the nature of the map of services, and to provide a schematic of how those services are delivered. To say that the University of Paisley produced a rather complex schematic would be an understatement of all proportions, but it was certainly a useful example of the benefits of independent academic advice. It gave us useful information about the problems with which we were wrestling. We also recruited input from academic, business and media circles to judge the conclusions that we were adopting.
Before going on to discuss those conclusions, I express the committee's thanks to our clerks, Simon Watkins, David McLaren and Mark MacPherson, for their work on the inquiry. I also record my thanks to Enterprise and Lifelong Learning Committee members for their involvement. I record our appreciation to those people who gave evidence to the committee, in writing and orally, and to the Presiding Officer and his deputies for agreeing to and chairing the business in the chamber event on the committee's behalf.
I want to cover three main areas: first, the principal conclusion that congestion exists in service provision and that there is a need for rationalisation; secondly, the nature, quality and effectiveness of business advice; and thirdly, the integration of tourism into local economic development.
Before I make my remarks, which in many respects will be quite critical of existing practice, I want to place on record the committee's acknowledgement of the fact that, in a range of areas, in different parts of Scotland, many good
On the first of those three main areas, the committee concluded that there is congestion in the field of economic development in Scotland. There is confusion, overlap, duplication and even active competition between the many agencies that are involved. There are numerous circumstances in which the same services are provided by different organisations, all of them publicly funded, in the same part of the country.
In reaching that conclusion, the committee made two clear points. First, the existing provision of services is failing adequately to meet the needs of consumers. Those who seek to use the services are not best served by the existing arrangements. The agencies have lost their focus on the consumer; they have become too insular and are not delivering the flexibility and responsiveness that is required to help aspiring and dynamic businesses. Secondly, if that principal conclusion is correct, there is an inherent failure to deliver maximum value to the public purse for the substantial sums of public money that are invested in those services. It is difficult to capture absolutely and definitively the sums of money that are spent on this area of policy, but it must be between £800 million and £1 billion per annum in Scotland. If we are prepared to spend 5 to 6 per cent of the total Scottish block on economic development, we must be sure that we receive optimum value for that investment.
The committee recognised that there has been significant progress on co-operation and partnership working between local economic development providers over the past three years. Examples of good practice at local level have been examined and can be recommended as models to influence developments elsewhere in Scotland. Nevertheless, however welcome that process may be, the committee took the view that intensified partnership working alone would be unlikely to deliver the level of rationalisation of services, cost-effectiveness and consumer focus that is desired. Local economic development services should be restructured to achieve that.
The committee came to the conclusion that a new structure for local economic development in Scotland should be established, and set out how that would impact on key players. At a strategic level, we believe that the Executive should withdraw from operational programmes and concentrate on giving strategic guidance, setting targets and measurable outcomes, ensuring value
A key tool in assisting the Executive to fulfil its strategic role should be the development of an economic framework for Scotland, and the committee supports the Executive's desire to do that. The framework should specify outcomes that reflect the need for Scotland to be globally competitive and should draw together, for the first time, the Executive's aims and ambitions for the Scottish economy. The framework should also outline the contribution that is expected from local economic development organisations towards achieving those aims—I make that point strongly. In acting on behalf of the Scottish Executive, Scottish Enterprise and Highlands and Islands Enterprise should concentrate on managing the enterprise network and ensuring that there is effective, focused provision of services by local enterprise companies, acting with the principles of transparency, accountability and clarity at the core of their thinking.
The committee's key recommendation is to establish local economic forums, working with the Executive, to drive forward the process of simplifying, focusing and rationalising local economic development structures in Scotland. Each economic forum should create for its area an economic strategy that is capable of achieving the contribution that is expected of that area to the economic framework for Scotland, and that has at its core the delivery of support services with clarity in each local area.
In aiming to rationalise services, the committee could have identified one or more players that could have been taken out of the process; we could have removed local authorities, local enterprise companies or area tourist boards—everyone could have picked their favoured target. However, in reality, the issues are not so simple. A local authority is essential to the planning process, which is an integral part of the system of economic development. Local enterprise companies have built up different ranges of experience that should not be lost. An area tourist board offers contact with tourism, businesses and a range of expertise. Chambers of commerce offer contact with the business community. The transport infrastructure is essential to economic development and involves considerable local authority input.
The committee took the view that the delivery of services at local level should be decided locally, but within clearly defined and understood parameters. The committee did not wish to stifle local discretion by setting a prescriptive national model. However, I stress that the creation of local economic forums as a means of eradicating duplication is not a soft option. Rather, local economic forums are a serious attempt to force agencies into dialogue and to kick-start the process of eradicating duplication in service provision, which is a key first step in improving the effectiveness of the services that are provided to the consumer. The forums must not become an extra layer of bureaucracy, or talking shops. They must decide how better services can be delivered and how more value and effectiveness can be released from the process.
We argue that the Executive must be prepared to penalise publicly funded organisations that pay lip service to the process and do not participate effectively. We have given further force to our recommendations by requesting that, in two years' time, the Auditor General for Scotland and the Accounts Commission undertake a joint study to determine whether the process of rationalisation has taken place.
The second key question is business advice. Some improvements in that area are under way and the committee supports the establishment of a new business support service in Scotland that merges the services of all publicly funded authorities and markets them clearly to consumers through a nationally branded service. The Executive should initiate the introduction of that service, which at local level should be delivered through the strategy agreed by the economic forum.
However, we also need to re-examine the nature, quality and effectiveness of the business advice that is given to customers. The committee set out its views on the improvements that are required. Advice must be targeted more effectively to the consumer. Account management support to specific companies, which is available in some parts of the country, is essential to building relationships between companies and agencies and supporting them in the process. The quality of business advice through referral must also be strengthened.
At the business in the chamber event, I was struck by the contribution of Kevin Dorren, a young man who has established a successful software development company in Scotland. In a 90-second contribution—a model for the rest of us—he made a clear point on the nature of the advice that was given to him when he started his business. His adviser was a retired bank manager. I do not want to besmirch the reputations of retired bank
The third main issue that I want to cover is the need to ensure that tourism is firmly integrated in the mainstream of local economic development. We propose to do that by including area tourist boards as mandatory members of local economic forums. Each forum's strategy should include a tourism element that must set out the strategy and delivery mechanisms at local level. That must be linked to a national tourism strategy and should identify every area's contribution to realising that strategy. The strategy should also indicate the resources that are dedicated by each partner—particularly by local authorities or local enterprise companies—to tourism development.
In some parts of Scotland, we have the ludicrous situation in which area tourist boards, which have no money, agree tourism strategies with local authorities, which have some money, and local enterprise companies, which have loads of money. Those strategies are then usurped by unilateral announcements and initiatives by local enterprise companies, which have the money to fund such activities, disregarding the partnership agreements that they have signed. The committee finds that practice unacceptable, and our report is designed to bring it to a halt.
On tourism, the committee will monitor the effectiveness of its proposed method of operation, and if that method does not guarantee the effective delivery of tourism support services or investment in the development of the tourism sector, we will consider proposing further structural changes.
I want to make a few comments on where the process goes from here. The minister has sparked an enterprise networks review to achieve sharper focus in those agencies. There is the imminent production of the framework for economic development, and the implementation of the tourism strategy and any structural changes that may be required. The Enterprise and Lifelong Learning Committee has completed its inquiry, and all those documents and initiatives now require ministerial action. I hope that ministers will be able to stick to their commitment to come to conclusions over the summer and the autumn, and to set out to all the parties in this complex process a clarity that will enable them to serve their consumers.
This is the moment when we must listen to consumers and not be driven by an agency
That the Parliament notes the 1st Report 2000 of the Enterprise and Lifelong Learning Committee on local economic development services (SP Paper 109) and commends the conclusions to the Scottish Executive in the context of its current review of economic development structures.
It is a bit of a surprise to be called to speak, because I did not realise the running order, but there you go. Life is full of surprises.
I considered how to construct my speech for today's debate, which comes in the wake of John Swinney's fair and honest assessment of the committee's deliberations, in the early hours of this morning. I had been in the company of a number of Labour colleagues, none of whom I see with me today. We were guests of the Federation of Small Businesses; members of that organisation are consumers of local economic services and business support services, key drivers in the Scottish economy and major players in our efforts to build a knowledge-based economy and to tackle some of the endemic structural problems that John Swinney referred to. I was reminded that many of our social inclusion targets demand a functional and responsive small business sector and the rebirth of an entrepreneurial culture, which used to characterise our nation. As John Swinney mentioned, the creation of 100,000 new businesses and the generation of wealth and employment, which flow from entrepreneurial activity, are at the centre of what the Parliament and the Executive hope to achieve.
Scottish Labour's 1999 manifesto emphasised the creation of a strong and dynamic economy and the role of Government—in our case principally on the supply side—in fostering enterprise at all levels in Scotland. The manifesto proclaimed Scottish Labour's duty to equip our people and businesses for the challenges of the 21st century. It recognised that knowledge, skills and innovation are the keys to future prosperity. It committed
The effective delivery of local economic services and business support services, therefore, is not an end in itself, but a means to an end. For Scottish Labour, that end is the delivery of our social justice agenda. The committee's report must be seen in that context; not as an end in itself, because manifestly it is not, but as a means. It is not the only means—criticisms of the report have made that clear—but it is the best bet for an end to the problems of duplication, replication and confusion that have plagued our system of business support and the delivery of local economic services, to which John Swinney referred.
It does not matter that the report does not represent the purist agenda of the Federation of Small Businesses, the Scottish Trades Union Congress, the Confederation of British Industry, the Convention of Scottish Local Authorities, the enterprise network or—dare I say it—the Scottish Executive. In fact, it is a strength and a bonus that the report does not represent any other agenda apart from, perhaps, Scottish Labour's vision that the
"future business support regime should have a range of more flexible financial and other tools . . . essential to ensure that indigenous businesses have the . . . support they deserve . . . to attract the new types of inward investment we most want."
We are committed to the principle of arm's-length, long-term, business-led enterprise and lifelong learning strategies. The Labour manifesto for the Scottish Parliament elections proclaimed:
"The Scottish Parliament must get the one stop approach to business development right at the local level."
I trust that at the end of today's debate, and in ensuing debates on the national economic framework and the enterprise network itself, the Parliament and the Scottish people will conclude that we have delivered on that pledge.
The Enterprise and Lifelong Learning Committee has sometimes been held up as a good example of the new politics, and there has been widespread praise for the conduct of both the committee members and the ministers for their constructive approach to the inquiry. Much of the credit undoubtedly goes to John Swinney and Annabel Goldie and, more generally, to the other committee members for the creditable transformation of their party political swords for their economic ploughshares. That does not make any one of us less of a political animal, but it makes the sum of our efforts more of an economic
As a result, I was disappointed—though not necessarily surprised—at some of the criticism that came our way, muted though some of it was. Despite the suggestion by the FSB or COSLA that only its agenda can provide the knowledge economy that we seek to build, I do not accept that either organisation, the Enterprise and Lifelong Learning Committee, Scottish Enterprise or the Scottish Executive has the monopoly of wisdom in that regard. That lends weight to the committee's findings.
As John Swinney pointed out, partnership is not an end in itself, and partnership as a means to an end provides the best perspective for the way forward. If partners of equal esteem in the forums cannot, or will not, co-operate for the common good, the committee's message in the report is quite clear: the Executive must act to protect that common good and the future of our local economic services and business support. For example, there were fairly substantial differences between our respective manifestos in many areas of the enterprise and lifelong learning agenda, such as individual learning accounts, business support or interest rates. However, if committee members can submerge their political differences for the common good, it is perfectly possible and eminently desirable that all the partners to the proposed local economic forums—whether local enterprise companies or local authorities—can submerge their far less fundamental differences to work towards a common objective of building a more effective, efficient and inclusive economy in which all can participate and from which all, not the few, can benefit.
The SNP very much welcomes the report. I wish to echo the remarks of my two colleagues on the committee: the way in which the committee worked to produce the report perhaps provides a model of how the Scottish Parliament can work well in taking on a very serious topic. Our report is considered and detailed, and suggests a workable approach to solving a widely acknowledged problem.
The committee considered evidence from a great many witnesses, as can be seen from the substantial tome of evidence that was produced. The evidence volume does not include the written submissions, which were even more substantial. We listened to all the voices in Scotland: the business organisations; the trade unions; the higher education institutes and further education bodies; and the consumers, who—as has been pointed out—are the most important people. The
Every committee member took the trouble to consider the issues on their merits, not in a party political sense; that was the keynote of the committee's work. I will depart from that spirit of consensus for a moment to say that the workings of the committee go to prove that if a little home rule is good, it follows that full home rule would be much better. That is a fairly simple example of impeccable logic. I see, from the reactions of members, that I have struck a controversial note.
The business in the chamber event was another objective indicator of the success of the committee's proceedings. I believe that 77 per cent of the 129 people from a wide range of businesses who attended the event said that they found the experience useful. They became involved in the process, which serves as a marker for how any serious piece of work can be dealt with by putting interim conclusions to the test. Perhaps the event was only a straw poll, but it created a structured way for business people to report back. We secured their support for the interim conclusions before we went on to consider whether to make those conclusions final. I imagine that we would have had a harder time if the women's institute had formed the audience.
My comment was not an attack on Miss Goldie's sex, but a compliment. I have been told that I must watch my back as I am speaking, but I am sure that robust argument is always welcomed, no matter who the speaker might be.
The committee's conclusion was that there is a great degree of overlap, duplication and congestion in local economic development. I will explain the approach that the committee decided to adopt. As was stated in an SNP Saltire paper, we must use public money to best effect and yield savings from administration and bureaucracy that we can use for the benefit of the public. We must create more entrepreneurs and achieve the target of creating 100,000 new small businesses. We all subscribe to the desirability of those aims and we must devise structures that allow us to deliver them; we cannot waste money on duplication, overlap and bureaucracy.
Yes. I will turn to that later, although we are debating structures, not red tape. I have said many times that red tape is a serious problem. Michael Forsyth made a notable speech about that problem many years ago, at a Tory conference, subsequent to which the Conservative Government produced reams and reams of more red tape, thereby exacerbating, rather than solving, the problem that it had identified.
No. We have had a good innings so far.
The committee could have suggested that one layer or more be scrapped. We could have taken a crude approach and said that the LECs should be taken out of the system, or that the local authorities have no place in it. We could have said that the various additional bodies should be removed, so that one body would fit all. However, we reached the correct conclusion that such a crude analysis was inappropriate for several reasons.
The circumstances throughout Scotland vary considerably. In fact, there is hardly commonality between any areas of Scotland—Western Isles, Lanarkshire, Lothian, Fife and the Highlands have extremely different mechanisms for the delivery of local economic development. In the Highlands, there is one council and six enterprise companies, whereas in Fife there is one enterprise company and one council. There is no single model; one size does not fit all.
The committee became increasingly aware of the diversity of the delivery of economic development as its inquiry proceeded, so we concluded that it would be wrong to wield an axe. Instead, we should hand a scalpel to the local business community and allow it to decide whether that scalpel needs to be used to make minor incisions. That is the correct conclusion. Surely, if we believed in any devolution of power, we would not want to impose on Scotland a centralised solution that would apply everywhere.
I was delighted that the Scottish Council for Development and Industry's recommendation, for an ombudsman for economic development, was included among the committee's recommendations. On page 482 of the Enterprise and Lifelong Learning Committee's report, the specific recommendation is:
"The ombudsman would investigate client complaints including perceived duplication of services or inconsistencies in approach or delivery."
That means that ordinary people in business will have the opportunity, if that particular form of
One area of controversy is the composition of the forums that are to be set up. We have heard from the convener of the Enterprise and Lifelong Learning Committee that they should include all the agencies. Nevertheless, it is essential for the consumer voice to be heard, perhaps in the majority. By consumer voice, I mean business people and the voluntary sector, which is highly reliant on assistance from local enterprise companies. Their voice and place in the enterprise of Scotland must never be neglected.
The committee recommended that the chambers of commerce should be the prime movers, but we should also listen to other representative bodies. We should be willing to include business people who are not members of any specific business organisation, and should be mindful of the danger, in some small areas, of the big fish in the pool being seen to influence the result in an inappropriate way. That is a difficult practical problem, but if we adopt the principle that the consumer should be in the majority, we will deliver the correct result. It is difficult to conceive that, if the agencies are in the majority, there will be any exercise of the scalpel at all. I hope, therefore, that the Executive will take that recommendation on board.
I am pleased that several policies from the SNP manifesto have been adopted in the report. However, I did not point out to the committee that, in its deliberations and work, it was incorporating and implementing SNP policy. I chose not to mention that fact, in case it diverted the committee from reaching its conclusions. I am also pleased to associate the SNP with the findings of this report. Today we are more concerned with the structures than the substance. When implementing the conclusions, we should always be mindful that we are dealing with people's lives and livelihoods.
I believe that we have produced an historic report. It has not hit the front pages of the tabloid newspapers, but it is an example of the solid work of the Parliament. It goes to show that Hubert Humphrey's comment of many years ago is not always right. He said that to forgive is human, to blame someone else is politics. On this occasion, we have eschewed the politics of blame, and struggled to grasp the politics of responsibility. In running our own affairs, we have found a workable solution for the business community that will ultimately be for the good of Scotland and for the good of business.
I add my thanks to the clerks and the parliamentary staff for their work in producing this report and especially for arranging the fact-finding visit to Renfrewshire, where so much of the theory that the committee heard in evidence was tested in practice. I endorse John Swinney's remarks on the special advisers, who were extremely helpful. As the committee convener said, the inquiry was chosen by the committee to be its first major piece of work as a result of the experience of us all of confusion and duplication and of complaints from the business community of congestion in local economic development.
Conservative members were pleased to do the work, because we recognised that the structures that our party had set up 10 years ago were probably ripe for some examination. Those structures have done their jobs extremely well over the 10 years, but now there is a new Scotland. Our inquiry took place within a shifting framework. During the eight months of the inquiry, we saw an internal review of Scottish Enterprise being carried out by the new chief executive, we heard the announcement of the establishment of a group to produce a national economic strategy and we heard the announcement by the minister of a total review of the enterprise network, which we very much welcome. Add in the tourism strategy and the advent of individual learning accounts, and it will be appreciated that the whole effort was akin to eating an elephant with a teaspoon.
On a more serious note, the inquiry took place, as has been said, with certain grim facts firmly in evidence: Scotland's low gross domestic product as measured against the rest of the United Kingdom; a low business birth rate; a service sector that was weaker than that of the rest of the United Kingdom; and one of the lowest levels of research and development and innovation in the United Kingdom. However, the most worrying factor of all in the background to this report was probably the technological revolution that is sweeping not only Scotland and not only Europe, but the whole world. That revolution will involve goods, services, traditional industries, new industries, different ways of working, home workers, part-time workers and flexible working, with all the challenges of reskilling and retraining that that implies.
I hope that the report has gone some way towards helping to clear away the confusion and towards equipping Scotland for the new economy. We reached our main conclusions after hearing evidence from many organisations. Two things in particular stuck in my mind. First, we elicited the information that the enterprise network touches
The second thing that stuck in my mind came from the evidence that Allan Wilson and I took during our visit to Renfrewshire. It epitomised some of the problems that are arising in the new Scotland. It concerned a traditional industry, operating from two sites and crossing LEC boundaries, that was hammered by a tough export regime and that was a soft target for cheap imports. Despite those difficulties, the industry was restructuring and positive, but it was unable to get any meaningful help from the enterprise network.
A study that was carried out in Renfrewshire about three years ago showed that, over a period, the 80 per cent of start-ups that had not come through the enterprise network had survival and growth rates significantly higher than those of the 20 per cent of start-ups that had. The reasons for that need to be addressed. It seems that the enterprise network is missing a substantial proportion of start-ups. The rate of start-ups in Scotland is again in decline, and the enterprise network appears to be missing the boat with a lot of top-quality start-ups.
That is interesting and will be most helpful to Mr McLeish.
In an earlier debate, I asked the Deputy Minister for Enterprise and Lifelong Learning, who is not here today, whether his advice to the company would be different from mine, which was to close down, sell their sites to developers, wait for a fortnight and then pick up the phone to Mr McLeish and say, "I want to start a manufacturing business in an area of high unemployment. What help will I get? How much will I be paid and what will my rent-free period be?" Needless to say, I did not get an answer from the deputy minister and I do not see one today, but the issue of displacement will not go away.
In our view, the key recommendations of the report are in three areas. First, the Executive should take the lead in guaranteeing a simpler, more cohesive structure in Scotland for the delivery of local economic development services. Secondly, it must be prepared to penalise publicly funded bodies that will not co-operate in that. Thirdly, the Executive must concentrate on strategic guidance, setting targets and measurable outcomes. That has been widely requested by the business community and is the least that we can accept.
We welcome the apparent acceptance by the
As John Swinney said, each economic forum should create an economic strategy for its area. We welcome that but, as a minimum, the strategy should set out the forum's goals for the next three years in the areas of new business starts, support for existing small businesses, key local industries and skills training. The setting of targets will be crucial. As has been said, the new business support service should merge the existing services of LECs, local authorities and so on. Area tourist boards must be integrated into the new strategy. There is scope for providing greater general advisory support to start-up companies and for giving advice to more of them.
On Alex Neil's point, support to start-up companies should be longer term and more based on enhancing the company's aspirations for export, e-commerce and product development. Accreditation of business advisers must be a priority and must be rigorous. Moreover, a new breed of super-adviser for new technology, e-commerce and biotech businesses should be developed.
I was pleased to listen to the Minister for Enterprise and Lifelong Learning at the Federation of Small Businesses and Royal Bank of Scotland seminar last Friday. His speech went to the heart of the problems facing Scotland's economy today. Promoting entrepreneurship, removing competition between agencies, encouraging social inclusion, getting people into work by sweeping away the barriers to learning, and meeting the challenges of low aspiration and fear of change are all policies initiated by the Conservative Government. We initiated the spirit of enterprise, and progress was gained through our determination to sweep away the dead hand of nationalised industries and to produce a climate where business could flourish.
I was wondering whether Nick Johnston was taking credit for all that having been done under the Conservative Administration 10 years ago—he was using the word "we". However, many times in response to my interventions, the Conservative group has wanted to put some distance between it and the previous Conservative Administration. Will he confirm that he takes responsibility for the 18 years of action and inaction by the previous Conservative Administration?
I would rather address the minister than Mike Rumbles. I urge the minister to take the chance to sweep away the confusion and to cut across ministries and colleagues if necessary. If he makes the targets challenging, relevant and real, we will co-operate. We will not seek to make political capital of the stumbles along the way, of which there will be some. The Conservatives feel strongly about the importance of robust testing of performance in all these areas.
I believe that the minister wants change, but behind that desire there must be will and behind that will must be determination. The minister has spoken in the past about feathers being ruffled, but the debate will be about what ruffling feathers means. If the minister's definition is the same as ours, he will hear no arguments from the Conservative benches. I commend the motion to the chamber.
I would like to begin by congratulating Fergus Ewing on his speech. Oh! He is leaving. I ask him please not to—I am about to congratulate him. [Laughter.] We in the Liberal Democrats had a small wager on whether Fergus Ewing would complete his speech without mentioning fuel tax. It must be a first for the Parliament—he made a speech in which the price of fuel was not a major component.
No, no. I have faith in Fergus—he is very non-partisan.
John Swinney touched on most of the issues and recommendations that came forward from the
A fundamental part of the framework must be a critical analysis of the strengths and weaknesses of the Scottish economy. If we are serious about developing a proper economic strategy for Scotland, we must examine our current position.
I could not agree more about the need for strategy, but Scottish Enterprise produced three economic strategies during the 1990s, plus strategies on skills, tourism and a range of other matters. The problem has been that we have had strategies coming out of our ears, but they just gather dust on the shelf. Nothing ever happens—they are never implemented. If there is to be a strategy, there must also be a commitment to implement it.
I agree. Most witnesses at the committee said that we need a coherent economic strategy that brings everything together so that everybody understands where the Scottish economy is going in the long term. A strengths-and-weaknesses analysis is a crucial part of that. We need to assess Scotland's economic and competitive position in relation to other countries because that is fundamental to trying to develop our economy.
The Executive will be tempted to present a document that pretends that all is well in our economy and that all we need to do is to build on all our current successes. That would be a major mistake and would be seen by most commentators as a failure to face some of the fundamental challenges to the economy.
The Scottish economy is performing reasonably well but, in the overall picture, major difficulties are faced by some sectors of our industry. I refer to the manufacturing industry, the primary sector—I know a lot about the agricultural problems that must be faced—and the timber industry. There are immense difficulties in trying to remain competitive. The reason for that is the strength of the pound—or the weakness of the euro—which, however we look at it, causes considerable damage to primary industry and, for example, the textiles industry. My colleague Euan Robson will expand on that in his speech. We must address the fundamental problem of developing a longer-term economic strategy for Scotland.
The Scottish Executive must, as part of its development of policy, be prepared to take a clear and unambiguous position on Scotland's attitude to joining the single European currency. At a presentation on the euro by the Confederation of British Industry two weeks ago—I know that the meeting was attended by several members—Jeremy Peat of the Royal Bank of Scotland made it clear that the single currency matters much more to Scotland than it does to the rest of the UK. As he pointed out, Scotland exports a greater proportion of its output than the rest of the UK does, and a greater proportion per head. Although the rest of the UK is our dominant market, a relatively high share of Scotland's exports is destined for Europe—
Although I in no way wish to impugn the opinion of Mr Peat, will Mr Lyon concede there are widely varying opinions about the single currency? Does he accept, as I have to do in my meetings with the business community, that there are profound reservations within the exporting business community about being part of the single currency?
I accept that there are various strands of opinion. Indeed, Murray Tosh expressed a very strong opinion at that meeting, demonstrating that he is very much in favour of examining entry into the single currency. There are many strands of opinion in all organisations and, indeed, parties.
Jeremy Peat also said that our lack of involvement in the single currency meant that our inward investment programmes were put at risk; that the euro interest rate was already more appropriate for Scotland than our current rate; and that, most important, as we had a small, open economy, a stable exchange rate mattered much more to Scotland than it did to the rest of the UK. Jeremy Peat's opinion is shared by many other commentators. If we are serious about developing a proper economic strategy, the Scottish Executive must develop a clear position on joining the euro. I ask the minister to give an assurance today that the Executive will take a clear and unambiguous view on the euro.
I have taken a number of interventions. I will push on and deal with other issues.
The fundamental issue that the Enterprise and Lifelong Learning Committee dealt with related to the duplication, overlap and outright competition in the provision of economic services in Scotland. It is recognised at the highest level that that takes place. Mr Alan Sim, the managing director of local enterprise company operations at Scottish Enterprise, told the committee that there was
"a perception that there seems to be some sort of internal competition in the economic development network as a whole, which includes economic development providers such as local authorities, chambers of commerce and many other organisations.
There is a strong view that the service available across Scotland is inconsistent and that there is a real requirement for us to simplify access . . . we will seek to remove duplication by working with local authorities to identify who does what best. I suspect that that will lead to the formation of joint-venture organisations."—[Official Report, Enterprise and Lifelong Learning Committee, 29 September 1999; c 95 and 106.]
That was recognition by a senior individual in Scottish Enterprise that the current system was failing consumers.
The study that was carried out by Professor Danson, which was the first of its kind in Scotland, clearly demonstrated that literally hundreds of organisations are involved in serving the business community across the spectrum of economic development, business support and education and business training. The consumers' message was quite clear: the system needs to be simplified.
The committee recognised that that was a fundamental issue that had to be addressed. I believe that we have come up with some sensible recommendations, the most important of which is that local economic forums should be set up. At the Federation of Small Businesses conference that I attended on Friday, a number of people from various organisations were critical of that recommendation. They believed that it would add a further level of bureaucracy.
I do not believe that that is the case. The forums will develop economic strategy, delineate who does what, rationalise, and define clearly which organisations will deliver services after the strategy is developed. I tell those organisations that we have asked the Executive to set up economic forums and we will find out whether we can make partnership work. Clearly, we cannot legislate for good will. If executives come to the table determined to defend their territory and their own organisations, the strategy will not work. If the Executive is to implement the forums, it must give a commitment that Audit Scotland will be required to assess their progress after two years to ensure that they are working. I hope that we are given that commitment today.
I feel like a bit of an interloper today, as I am not a member of the Enterprise and Lifelong Learning Committee. However, the debate gives me the opportunity to congratulate that committee on its report and on the work that it has undertaken. It is widely felt that the debate, which the inquiry and the report have stimulated in interested
Although I am not a member of the committee, I have an interest in its work, since my membership of the European Committee of the Regions includes membership of the key committee on employment, small and medium enterprises and the internal market. That committee is, more or less, the equivalent of the Scottish Parliament's Enterprise and Lifelong Learning Committee.
I welcome the fact that the report is focused on and driven by the customer or consumer. In my view, that approach led the committee to arrive at the right conclusion. Although agencies felt that there was some merit in competition in the provision of services, the committee recognised that there was confusion and duplication in, for example, the delivery of a single support business service.
From my discussions with business people, particularly those from the small business sector, I am aware how confusing the different points of entry can be. As well as providing advice and support, on which I agree with the comments made by John Swinney, something else is needed. Somewhere in the system, someone must speak up for the individual. To my mind, business start-ups need advocates as well as advisers.
I am aware of at least half a dozen cases in my area where businessmen and businesswomen have become frustrated with the system. In one case, a doctor wanted to set up a single doctor practice in my constituency, providing both an enhanced health service in the town centre and local employment for ancillary staff. She leased a building and applied for planning permission for internal structural alterations, only to discover that she also required planning permission for change of use. That permission was about to be denied to her, on the basis of lack of parking facilities. Previously, the building had been a bar and restaurant and I am sure that members will be as confused as I was by the planning officials' approach.
Suffice to say that, after weeks of negotiations, common sense broke out. My constituent now operates a successful business from the town centre and has no parking problems whatever. That case arose in an area where, I am given to understand, there is a one-stop business shop. However, despite the fact that my constituent contacted a number of agencies, no one felt able to assist her with those problems.
A proactive approach is required, both within and between organisations. I hope that, when the committee's recommendations are put into practice, they will resolve those issues, which are clearly barriers to self-employment. Changing
I will draw on my local and European experience in order to say a few words about partnership working.
I was pleased that the Enterprise and Lifelong Learning Committee recognised the good practice established by the Ayrshire economic forum, which has been established for some time and which provides an opportunity for co-ordination that, otherwise, would be lacking. It is backed up at officer level with additional and added-value liaisons between formal meetings of the forum. That is important to the development of the partnership principle—economic forums must not merely be talking shops, as that would be a missed opportunity. True partnership working is about more than biannual meetings of economic actors.
There are some excellent examples of successful partnership working. The Strathclyde European Partnership springs to mind and, in the Netherlands, there are good examples of partnership development plans that have had the effect of energising and unifying populations.
The Presiding Officer is calling on me to wind up. I am very disappointed, because I have many other things to say.
There is much to be commended in the report. Economic development is one area in which consensus seems to have broken out in the Parliament. I welcome that, and I think that the people of Scotland will, too. I thank the committee for its inquiry and look forward to the Executive's acting on it.
I, too, very much welcome the report. At election time, we all speak to various business organisations, such as the Federation of Small Businesses, or at business breakfasts organised by local chambers of commerce. The No 1 item on the agenda is always the local economic development networks and the changes that the business organisations want to see. I congratulate the Enterprise and Lifelong Learning Committee on this report, which we can hold up as something that the Scottish Parliament is doing for business in Scotland.
As someone who, before I was elected to Parliament, spent a year and a half working in local economic development for one of Scotland's local authorities, I can tell members that I am not surprised by the findings of this committee report. I have come across every problem that it has identified and many of the tensions that exist between the various agencies that are at work in Scotland. Indeed, it was about a year before I understood what each of those agencies does. If I found it confusing, heaven knows how people outside the system find it.
I worked at the inward investment department, which used to host lunches for potential investors in the area, perhaps from overseas. I like lunches as much as the next man, but there were quite a number of them. At the lunches, there might be one person who was visiting the area from overseas, two representatives from Locate in Scotland who had come through with them, two people from the local enterprise company, people from the inward investment section of the local authority, and other people from local initiatives. That was quite confusing, not only for people at the table like me, but for the inward investor. He or she did not know what people were doing there and where the joined-up strategy was. That duplication is wasteful—we must bear in mind the fact that such events may be taking place every week, in every area of the country.
The report identifies many of those problems. One of the recommendations that I welcome is for the establishment of a national business service. I am glad that the report refers to the possibility of delivering that service at a sub-LEC level. In my constituency, Enterprise North East and the Gordon Enterprise Trust provide a very good service and have a good relationship with local businesses. I am pleased that such organisations will be able to continue to deliver that service. When I worked at Dundee City Council, we had a small scheme to encourage exports from the city whereby financial assistance was offered for companies to exhibit at overseas trade exhibitions. That was a worthwhile service. I understand that it will be transferred from local authorities to the new business service. On the face of it, that sounds good, but we must remember that local authorities introduced those services to fill a gap, rather than to keep themselves busy. If we are to transfer the services to a bigger national authority, we must fill the gap at local level, where there is a clear need for such schemes.
I am glad that local authorities are at the centre of many of the recommendations made by the committee, particularly those concerning the local economic development forums. Local authorities can always make small local economic development budgets go a long way, unlike some of the local enterprise companies. Those
It is imperative that we have a clear-cut system. We must end confusion and simplify matters. If people want a policeman, they can go to a police station. If they want to buy groceries, they can go to the supermarket. However, people in many parts of the country who want to start a business do not know where to go. Parliament can be proud of this report and hold it up as a shining example of the way forward for the delivery of local economic development in Scotland.
I apologise to members whose speeches I missed. I was meeting a party of schoolchildren from my constituency, whose arrival was delayed by congestion of another sort.
The creation of a dynamic, thriving economy must be a priority for the Scottish Parliament. That priority was recognised by the committee and by ministers very early in the first term of the Parliament. We embarked on the inquiry with the impression—which I think we all had—that local economic development and business support were neither as effective nor as streamlined as they might be. That impression was confirmed when we took evidence from national and local organisations. In some respects, we came to the end of the inquiry feeling even more confused about the structures that are in place in Scotland. Out of that confusion arose a set of conclusions which we believe will help to clear the congestion of the current situation.
One of the committee's conclusions was, as we have heard, that services should be streamlined by the creation of local economic forums, which would be charged with forming the economic strategy of the region in the context of the overall economic strategy for Scotland. Some areas already have experience of such forums. A joint economic forum was inaugurated in Dumfries and Galloway this year by the Minister for Enterprise and Lifelong Learning in response to concerns regarding the loss of employment in manufacturing and agriculture in the area. Those concerns were
Inward investment by major employers is desirable, but in rural areas, the bulk of employment is created by small and medium enterprises, which is why representation of the chambers of commerce and the area tourist boards on the economic forum is essential.
Late on in our inquiry, the committee took evidence on tourism in particular, at the request of ministers, at the time when the Parliament held a debate on tourism strategy. Possible restructuring of the current system was suggested in evidence to the committee, achieved by reducing the number of area tourist boards by merger or incorporating the tourist boards within the local enterprise companies. There was general agreement, however, that as tourism is so important to local economic development, the area tourist boards must be an integral part of the economic forum. That is particularly true in rural areas such as Dumfries and Galloway, which do not at the moment realise their full potential. I was surprised to learn that some of the economic forums in Scotland do not involve their area tourist board.
There was not time to debate radical options and considerably more investigation would be needed before we could come to conclusions about changing the structures of tourism. Nevertheless, the manner in which local tourism strategies cohere with the wider economic development of local enterprise company areas and with the national tourism strategy must be monitored, and the arguments will have to be revisited if the current approach does not work. I know that the minister and the committee will be monitoring closely both the funding and the performance of the current structures that support the tourism industry in Scotland, and I know that action will be taken if it is deemed necessary.
I heard George Lyon's remarks, and if it had not been George, I would not have believed my ears. He said that Scotland needed a stable exchange rate and then he referred to the euro. It seems to have escaped his notice that the euro's value has plummeted some 15 per cent since its introduction.
I think that the Labour party speaks better for us. It seems to have latched on to our key policies of privatisation and management of the economy in a way that vindicates our 18 years and shows that we put Scotland and the United Kingdom back on track.
I have no time.
I declare an interest, in that I worked for a short time with Enterprise Ayrshire. I also operated a company called PG Business Advice. I take no commissions and all advice that I offer is now free and under parliamentary service arrangements.
As far as the local enterprise companies go, I recognise that there are many good people within the enterprise movement who are very experienced. However, they face constraints. The committee's report identified many of the constraints that local enterprise companies come up against. They can offer training support and an abundance of business consultancies, and they give good market research knowledge. Given the amount of red tape that is heaped on them by the Government, perhaps there is potential for advice on new legislation and on the way in which businesses can be maintained within the law.
Local enterprise companies are constrained in the way in which small businesses in particular look to them for support. On many occasions, the needs of small businesses come back to short-term cash aid and development funding for projects or schemes that they feel can bring benefit and create employment. It comes down to other aspects of capital investment in small businesses that will allow them to grow. However, it is the incoming companies that seem to be able to pick up the funding. Enterprise companies are saddled by Government constraints in those areas.
I recognise the recommendations of the committee, but unless those issues are addressed, the enterprise companies cannot do the recommendations justice. Final conclusion 4 of the report, on a new structure, suggests lifting constraints in the current system and directing effort towards meeting business needs. What is needed is a one-door approach, but that approach must be based on Fergus Ewing's comments, when he pointed out that we must recognise the needs of the various local areas throughout Scotland.
With respect to final conclusion 6, that strategic targets should be set by the Executive and that otherwise it should back off, I suggest that it would
The committee has put much effort into the report. It is not an answer to all the problems faced by business and industry, but it is a good starting block and something that the Parliament can develop into the future.
One of the biggest problems of the past 20 years has been the balkanisation of economic development services in Scotland. We are getting to the point in this small country where almost every hamlet has its own tourism strategy, food strategy, technology strategy and so on.
There is a need at area and at regional level to consider the needs of the economy, but let us not detract from the need for a national economic development strategy in Scotland. We cannot compete effectively in the key technologies of tomorrow—nanotechnology, optoelectronics, biotechnology and so on—on the basis of an Ayrshire strategy, a Fife strategy or a Highland strategy. There has to be a Scottish strategy with an element of local economic delivery.
Let us distinguish between economic development and part of economic development: business development. Economic development covers business development, but it also covers transport, education, skills, housing, health and a range of other services. The local economic forums should include people from the transport and education sectors, as well as the business development, training and other sectors, so that everybody is talking the same language and is committed to the economic development strategy at local level.
There is a need for a national economic development forum, bringing everybody together, so that they can agree on the national strategy, which should be bottom up, as well as having an element of top down. I welcome some of the changes that Bob Crawford has already made at national level to the structure of Scottish Enterprise. However, two or three other changes are required. First, there is a strong case for transferring responsibility for volume training and elements of area regeneration to other bodies; in particular, volume training could be transferred to the lifelong learning section of the enterprise and lifelong learning department and the responsible agencies therein.
Secondly, there is a need to look at the external organisation furth of Scotland. I welcome Bob
Surely the logical thing to do is to integrate our operations furth of Scotland so that there can be a one-door approach. When someone walks into the Scotland shop in Cologne, Boston or Chicago, they should be able to get information on trading with Scotland, visiting Scotland and investing in Scotland. That would help to raise the international image of Scotland. One of the problems that we face, in Europe and elsewhere, is that too many people still see us as being part of a heather-and-haggis culture, rather than a modern industrial nation. It is as important to get it right furth of Scotland as it is to get it right inside Scotland.
Most of the companies, be they start-ups or indigenous companies, come to the enterprise network primarily for assistance with funding. However, services are wholly inadequate in the area of risk funding and venture capital for different sizes of business. We must address that urgently.
My final point—in this ridiculous system of four-minute speeches—relates to the one small area in which I disagree with the committee. Local enterprise companies should not be made into membership-based organisations. That was one of the fatal flaws with the area tourist boards and one of the reasons why many of them fell apart. We must keep the local enterprise company as a funded organisation independent of any local vested interest.
I was pleased to read the report's conclusion about congestion in local economic development. Simpler and more cohesive structures would obviously be welcome, but it was also important that the committee clearly stated that it did not want to stifle local discretion by setting up prescriptive national models. With local discretion and working from the national economic strategy, we should have the best of both worlds.
In the Scottish Borders, local development bodies have developed much of what the committee recommends. There is an economic forum that encompasses all the local agencies.
The enterprise company strives to be transparent; it briefs the press after every board meeting and holds a lively annual public meeting. Because of coterminous boundaries, and because different areas of the Borders have common experiences of economic difficulties, there was no option but to work in partnership—the type of partnership that is commended in the committee's report.
In that context, people involved in economic development in the Borders were able to give a general welcome to the Department of Trade and Industry's statement on the textile industry. We were able to say with a united voice that what the industry needs is a major exporting initiative, a drive to maintain and develop skills, support for high-quality products, such as cashmere made in Scotland, delivering to the top end of the market, and assistance with capital expenditure to help the area to compete.
There is another important point that the committee might not have covered. The minister agrees that there is considerable merit in an individual local enterprise company leading for the network if it has particular expertise or if it represents a significant proportion of an industry in the area. To take another example from the textile industry, 90 per cent of the cashmere knitwear sector is in the Borders. Textiles and knitwear still provide 50 per cent of the area's manufacturing employment. In such circumstances, the expertise and knowledge in the local enterprise company should lead for the whole of the enterprise network. We can see the advantages of such leadership in the revived spectre of the banana war, as a result of the US Trade Carousel Bill, which has recently been passed.
The LEC, the Borders Knitters Forum and the Scottish Cashmere Club have already written to the Prime Minister to ask for his support.
My colleagues Archy Kirkwood and Michael Moore have been to Brussels and will visit the American embassy next week. Ian Jenkins and I will work on the problem, but the point is that the LEC, in partnership with the local authority, is providing the resources and back-up to inform the lobbying activity to get cashmere off the list of goods for tariffs, to pressure the EU to reach a settlement and—if the worst happens—to get the UK Government to underwrite the tariff. If a LEC is to take on such a role, it must have the resources to do so.
If in future LECs are to lead for the Scottish Enterprise network and resources are to remain constant, some redistribution of the overall budget to LECs will be necessary to achieve the best results.
In summing up for the Liberal Democrats, I take the opportunity to recognise the comprehensive nature of the report.
As the report says, there is no doubt that there is congestion in local economic development in Scotland. There is confusion, overlap, duplication and competition among the many agencies involved. The central recommendation that local economic development services should be restructured to achieve cost-effectiveness and customer focus is most welcome.
John Swinney, as convener, and all the members of the Enterprise and Lifelong Learning Committee are to be congratulated on their approach to the inquiry. In his speech, John Swinney recognised that there was much good practice throughout Scotland, but that it was by no means the norm. Therefore, a new structure is required.
Fergus Ewing, if I may say so, commented on how successful the inquiry was in a devolved Parliament and suggested how much better it would be in an independent one. I disagree; it shows how well our home rule Parliament is working, and that should be recognised.
I will answer that in a moment, when I come to Phil Gallie's comments.
Nick Johnston talked about reforming the system. He said that it was like eating or beating—I could not quite work it out—an elephant with a teaspoon, which caused some consternation and confusion among the Liberal Democrats, but I assume that he meant that reforming the system would take some time.
George Lyon rightly talked about the long-term national economic strategy. He made the essential point that we need a clear and unambiguous attitude in favour of our joining the euro. The Scottish view must be given to the UK Parliament. Phil Gallie commented on this—a grasp of economics is not one of his strong points. I want to find out what are his strong points, but economics obviously is not one of them. We need entry to the euro as soon as practicable. Our main competitors are without doubt European—
At the most advantageous rate possible. We need to join as soon as that advantageous rate is achieved, because our main competitors are there. A stable currency is essential for our businesses in Scotland. I am surprised that the Conservatives do not appreciate that.
Richard Lochhead mentioned Enterprise North East as a good model. He also highlighted the effect of Gordon Enterprise Trust in his regional constituency. The danger of doing that is that he misses other good trusts in his area, such as KADET—the Kincardine and Deeside Enterprise Trust—where I had the pleasure recently of congratulating the finalists for the Alick Buchanan-Smith spirit of enterprise awards.
I will make three main points for the Liberal Democrats. First, there is a need for a national economic strategy, as George Lyon outlined. Secondly, with the local economic forums, we must have a partnership approach, and it must be pursued. The committee's proposals are not set in stone. If no significant progress can be identified by 2002, we should have no hesitation in reducing the number of agencies. Audit Scotland should have a fundamental role.
Thirdly, I will highlight the tourist industry. We welcome the review of the area tourist boards that the Executive undertook, and we look forward to ATBs becoming key players in the local forums. The Liberal Democrats argued in favour of centralised Scottish Tourist Board funding. Henry McLeish has promised to revisit the issue of funding in a year's time.
We should also press for a review of the performance of ATBs, of the level of local authorities' support for tourism and of the integration of tourism into local enterprise activity. Essentially, we need fundamental reform of tourist boards' funding.
The Enterprise and Lifelong Learning Committee's report is first class and exemplary. I emphasise that John Swinney and his team should be warmly congratulated. The report, as John Swinney himself said, is a start of a process; it is not the end of it.
I congratulate the committee and I thank its convener, John Swinney, for allowing me to participate in so many of the open meetings, which were dealt with in a sensible manner. People whom I talked to and who visited the committee as witnesses were also encouraged by the committee's support and approach.
That said, I was going to criticise the Minister for
We have spent a long time dealing with overlap, over-provision and confusion. One of the committee's comments, that we must have best practice uniformly throughout Scotland, not the lowest common denominator, was one of the committee's critical statements. We have to eliminate inconsistency of delivery, but we do not want over-prescription. Other members have mentioned the fact that we need local models and local solutions, based on a national strategy.
Everybody but everybody mentioned the need for a national economic development strategy. The question is who delivers that, and that is what the committee is trying to address. I wanted to add—Phil Gallie and Fergus Ewing also referred to this—that the recognition of risk has been a weak consideration when dealing with the Scottish economy. I have told the banks time and again that they have to change their risk-taking approach. There has to be a better understanding of risk and better recognition of what it means when people take risk.
The 80 per cent of businesses that start up without going through the local enterprise company support system have been mentioned. Those are the people who have taken the risk. When they want help, it is not always there. That is an area of need which we should consider when we decide how to proceed.
The Conservatives called for a root-and-branch review of the Scottish Enterprise network, and the report is the first step, but I do not think that it goes quite far enough. We are encouraged by the idea of setting up economic forums, but it has to go further—it cannot stop there. Consideration of who takes part in those forums must include consideration of the local authorities' role. That has not been defined and that is, I think, the next step.
John Swinney's comment about the talking needing to stop and delivery needing to commence encapsulates the Conservatives' position. One or two comments from other members were quite unusual. Mr Lyon apparently wants to take Scotland into the euro on its own. Does he envisage a devolved Scotland having its own economic framework? I, too, was at the Jeremy Peat lecture, and I am afraid that Mr Lyon was very selective about how he used what Jeremy Peat said. He was absolutely wrong in his reporting of the comments made on interest rate divergence.
I appreciate that the only organisation which Fergus Ewing cannot join is the women's institute, but I am sure that he will try to do something about that.
If separation is an outcome of all this, I would advise the minister to do nothing. I agreed, however, with some of Fergus Ewing's comments. I agree that one size does not fit all, and we support the role of the enterprise ombudsman. The most important thing relates to the comment made by the Confederation of British Industry, on the role of business in the new structure. We must have a business-led, business-owned system. If we do not have that, the businesses of Scotland will fail to turn to the system, and will be out of step with the Government.
We turn to the Executive, and expect leadership from the top. We expect a clear definition from the Minister for Enterprise and Lifelong Learning of who does what in the system—of who does the local strategy and of who delivers. That will eliminate the present unnecessary waste and confusion.
I begin by clarifying my party's position on a key issue in the debate. Our view is that the women's institute is an outstanding institution in our society, which shows a great degree of judgment and personal character. As an audience, its members are to be commended.
There is much talk about new politics and consensus politics in the Parliament and in the Enterprise and Lifelong Learning Committee. It is an aspect of political life that is little understood. Consensus politics does not mean at all that everyone agrees; it means that people listen to each other's arguments and act on them. The Minister for Enterprise and Lifelong Learning and all the members of the committee chaired by John Swinney are to be commended as models in the Parliament for that approach. It does no one any—or too much—damage to say that. All actors are to be commended on the consensus that has been brokered, if not entirely reached.
We are lucky in this area of policy that it is not an area of massive political or ideological discord. We do not see too many people taking to the streets over the structure of enterprise companies—we have the same goals. In the long term, it would be nice to agree more of our goals for Scotland and to argue about the best route to get there. The success stories around Europe—Ireland, Scandinavia and elsewhere—have achieved national cohesion around set goals, which is something that small countries can do well.
The Scottish Parliament is showing its worth in the business case for a Scottish Parliament, home rule, devolution or even the greater powers of normality and independence that I want. The Parliament is showing that it is responding to the business community. Given many organisations' opposition to the existence of the Parliament, it is ironic that, with the Standard Life debate last night and today's discussions on improved structures, the business community should be getting a good deal from the Scottish Parliament's first year of work. I am sure that if we were to poll the business community now, we would find almost unanimous support for the institution and all that it is doing.
The report reaches many conclusions—there are 37 final conclusions. We cannot discuss all of them today, but the themes have been brought out by members from all parts of the chamber. The key point is that we do not want crude streamlining, but we want considered rationalisation. We need to recognise that devolution does not stop at Edinburgh or Bothwell Street, but must be carried down to local level. That is a lesson that could be learned in other areas of policy. By definition, supply side measures need to be focused and local, but must also fit into the wider national economic framework. On my party's behalf, therefore, I welcome conclusion 7, on the economic strategy framework.
Scotland exists in a global context—everyone in all parties recognises that. Even within the constraints of the Parliament, we need to understand global trends and UK policies, so that we can use the tools at our disposal as accurately and as efficiently as possible. That applies to interest rates, to fuel tax—which I am sure I heard Fergus Ewing mention in his speech—and to the wider question of the euro, on which I welcome George Lyon's comments. The UK interest does not always converge with Scotland's interest. It is important that the Executive and the Parliament make their views known. It would help a great deal if UK ministers had the good grace to give evidence and send officials to the Parliament when invited, as the Minister for Communities was good enough to do at a Westminster committee in the past couple of months. Good will on both sides would prove that the two Parliaments can have something to teach each other.
We are all clear that there are challenges. The structure suggested in the report points to the way forward. We know that unemployment is too high and that 47,000 jobs in the manufacturing sector have been lost since the Government came to power at Westminster. We know that development of the entrepreneurial spirit is not strong enough. The report points the way to how the public sector can play a collective role in improving the situation.
We must all agree that Scotland has the potential. Scotland is a small country operating in a big world, but we can become a centre of excellence. It is not well recognised, but in the 19th century, Scotland was, bar none, the most enterprising and most successful economy on earth. Between the Napoleonic war and the first world war, there was more capital mobilisation in this country than in any other. We must aim to get back there. We have the opportunities and the tools at our disposal. We must look forward. I am sure that if the committee report is taken on board by a listening minister—which I am sure he is—we can look forward to success in the long term. I commend the report's results.
This is an excellent committee report that illustrates the benefits of working together. It brings the best out of the aspirations that we had for the new Parliament and its committee system. It is a model of dialogue that other committees are replicating, although there is still much that they can learn from the Enterprise and Lifelong Learning Committee.
The convener of the Enterprise and Lifelong Learning Committee laid down a challenge on the time scale. We intend to stick to the time scale. On 28 June, we want to be in a position to publish the framework for economic development. Today, we have heard some powerful messages about the need for a national economic strategy. Everyone agrees on that and we are getting on with it.
On 28 June, subject to time pressures in the Parliament, I hope to make a brief statement on the consultation and the framework. We will develop the strategy over the coming months. A week after that, I hope to be in a position to launch my response—by now it is more than an initial response—to the work of the committee and to outline the network review that I have undertaken over the past two or three months.
In the spirit of consensus and inclusion, in the autumn I would like the Enterprise and Lifelong Learning Committee and the Executive to take part in a Scotland-wide conference to allow Scotland to be involved in our deliberations and findings. Finally, we need to stop the talking—another challenge from the convener. The national issues are so important that there is an immediacy and urgency to getting on with the task ahead. We must ensure that, by the end of the year, changes are being made and we are carrying out our economic policy.
I hope that the Parliament will embrace that as a token of our sincerity and our desire to get on with the hard action. If one thing is clear, it is that there
We have received more than 160 responses to the enterprise network review. There has been a clear and overarching message: where we are is not where we want to be. That is a clear indication that we need to push forward. We need more strategic clarity in our policy framework. That was reflected in the work of the committee. We also need greater clarity in the roles and responsibilities of the key players. Again, that has come out strongly from the committee inquiry and the consultation responses.
We also need better partnership working, because one agency alone cannot cover all our objectives and agencies should not be balkanised to the extent that there is no overlap. The Enterprise and Lifelong Learning Committee has recognised that there has been progress over the past few years, although not enough. Ten years into the LEC network, we must move forward and modernise.
I want to emphasise some other issues on which the Enterprise and Lifelong Learning Committee has commented and that have come out of the consultation. We must consider a value-for-money and added-value approach. Do the LECs, Scottish Enterprise and the Executive know the return on every pound that is spent? More important, we need to know what is the added value to the Scottish economy—nationally and locally—in relation to the money we spend. We want every pound of public money that is spent to give a positive return. We are at a point where we are not quite sure—this is virtually post-war government—whether we are in a position to assess all that. The Enterprise and Lifelong Learning Committee and the consultation have sent the message that we need to take the matter very seriously.
There is another message, which is about embracing technology. Our country, business community and public sector are very complacent. We do not appreciate how all embracing the technological impact will be on what we do as a nation. We can talk about Finland, Ireland, Israel or some regional governments in Europe, but there is a real urgency for action. The message from the Parliament is that we need to do more. Let us issue a challenge to the business community—to every company. The technological revolution is happening and we are in danger of being left behind, unless there is a quantum leap in how we approach that development. I believe that the delivery mechanism that we are talking
The other issue that I want to stress is learning. Learning is crucial to selling Scotland worldwide. It is also crucial to the internal success of Scotland. The learning revolution must move forward. The review of the enterprise network will help to push that along.
I will keep my comments brief, because I am aware of the time constraints. I have said that the framework for economic development will be published on 28 June. For the first time, it will provide at national level a strategic framework within which we can get on with the business of delivering locally. However, the key to that is to ensure that the national aspirations, national strategy and national policy feed in to what we do locally.
I accept that there are debates about bottom-up and top-down. There are always arguments, but we cannot have firm conclusions and aspirations as a nation and then have 57 varieties on the ground delivering different things. That is not good enough. The situation demands a more focused, disciplined and professional approach. I hope that the first step will be the framework for economic development. That will send a powerful message down the line to local enterprise companies and to the proposed new forums.
Secondly, I will come out with a whole lot more on the enterprise networks review very soon. I have already put some of it into the public arena at conferences. There is no doubt in my mind that after 10 years the LECs need to be modernised. There has been debate in the consultation about the constitutional structure of LECs. While the Ethical Standards in Public Life etc (Scotland) Bill is looking at one dimension of that, it is not the most crucial dimension. Public accountability has to go much further. If we want to have a debate about changing the constitution of LECs, we have to be very clear about what we are trying to achieve, and therefore what the form of the LECs should be. It is important that we reform LECs and make them more accountable, but we should do so with an agenda that is firm, focused and business-like in approach. I will leave that issue for now. There will be further public discussions.
Thirdly, on local economic development, I want to praise the Enterprise and Lifelong Learning Committee because local economic forums provide a significant way forward. I will briefly say why. It is suggested that forums can be a solution to address overlap and public money not being used properly and most effectively. There will be no easy solutions to those problems. If we go down the road of the economic forums, which I want to do, there will be huge consequences locally, because they will not be talking shops. I am sick and tired of people sitting round the nation
We also need to say, "Right, the forums have to be opportunity based." There are many issues in our public life that we are not tackling locally. Why should not literacy be a key issue locally? Why should not widening access be a key issue locally? Why should not employment opportunities for all be a key issue locally? Why should not the e-revolution be taken on board locally? Why should not the role of women in modern apprenticeships, in science and in start-up businesses be debated locally? We have heard about exports. If we have a national exporting strategy, why then do we not diversify our export base locally by getting more companies involved?
The committee will welcome the language the minister is using about ending the talking and getting on with the action. Does he recognise that there is a huge challenge for the Executive in creating the climate and the attitude that involves the agencies that have been referred to, to focus on the outputs that are required and to deliver the objectives that we are debating this morning?
I endorse the sentiments and the substance of that intervention. We are at the point when the talking has to stop. I choose my words carefully; we have to be absolutely ruthless in the application of our national economic framework at local level. The nation requires that in a global market and when embracing the technological revolution that I have talked about.
I have mentioned some of the measures that we have to take at local level. I have talked about exports. There is a vital role in starting to integrate the tourism network into the main stream of economic policy. That has been my aim, and it will be a significant step forward. It is also a wake-up call to the tourism industry. If we are asking it to be mainstream, it will have to make sure that it gets involved with mainstream issues. If area tourist boards and the Scottish Tourist Board want to be treated as serious, big economic players, I hope that we will give them the chance to do so in the autumn.
I appreciate the time constraints on me, Presiding Officer. I hope that I have given a flavour of some of the issues that I want to develop in a few weeks' time. Furthermore, I want to ensure that my sentiments match the committee's sentiments. Ultimately, in Scotland, the new politics must mean that we have a chance to focus the economy and make it successful. Such success can be measured by prosperity for the people whom we represent and by how we achieve our historic ambition of employment opportunities for all—which means, in old Labour
I acknowledge that, to some of my colleagues on the Enterprise and Lifelong Learning Committee who are not in my party, I might seem an unlikely ambassador to represent the committee's views. Indeed, I can see the unease almost rising in their gorges as I speak. However, at the risk of being fulsome, I want to echo John Swinney's comments that it was a pleasure to serve on the committee during the inquiry and to realise that all members were willing to focus on issues that were presented to us in evidence.
Evidence is a very compelling influence and we all found it refreshing to find out that committee members were prepared to be independently minded. In short, that is the report's strength. It is not so much that there was an unexpected cross-party consensus in identifying the problems as that all committee members were willing to examine the evidence and not dodge the issues raised by it.
By way of general background, I should say that the committee's early decision to inquire into the delivery of economic development, post-school vocational education and training and business support services at local level in Scotland, was sound and that the subject was an interesting first choice.
Scotland's gross domestic product lags behind the rest of the UK. Scotland has one of the lowest business birth rates in the UK; the service sector is weaker than in the rest of the UK, especially for business services; unemployment levels are still higher in Scotland than in the rest of Britain; and it has one of the lowest levels of research and development and innovation in western Europe. I do not think that any of us can dodge those issues. The essence of the inquiry and the report was not to lose sight of what we need to do in Scotland to improve employment opportunities and, as a result, the quality of life here.
There were more specific reasons for our desire to undertake the inquiry. First, we suspected that there was congestion in economic development in Scotland. It was known that there was cynicism in the business community about existing facilities and providers. Furthermore, it was apparent that although significant sums of public money were being expended on provision, there was a widely varying and fluctuating pattern of achievement and performance.
The inquiry was therefore timely. It is to the committee's credit that it made its decision and to the Parliament's credit that time has been made
Timely is not a word that I use lightly because—to use that venerable phrase of contract law—time is of the essence in this debate. The challenges that I have described—or, as some might say, the problems that dog Scotland in global competitiveness—are with us and will aggravate and compound difficulties unless they are positively and urgently addressed. I hope that the minister recognises that the report offers a substantive and sensible framework of solution and feels impelled to encourage and promote early implementation of the framework.
The minister should feel at ease in doing so because of the committee's impressive modus operandi, which included a reliance on extensive and painstaking evidence; a variety of evidence sources; and the significant contribution of our advisers in assisting with the assessment of evidence and tempering some of the wilder flights of fancy on which the committee might have been disposed to set off. As a result, the report is an authoritative and logical series of conclusions. Although it is voluminous and broad in application, that should not be confused with generalisation and lack of specification.
John Swinney was right to say that any attempt to over-prescribe detailed solutions would create rigidity and inflexibility and place a restriction on the autonomy of legitimate local activity. Final conclusion 1 is the pivotal conclusion of the report.
"There is congestion within the field of local economic development in Scotland. There is confusion, overlap, duplication and active competition between the many agencies involved."
From that conclusion, all else flows. The Scottish Executive must not shirk its responsibility. It must take the lead to simplify the structure and eliminate duplication by penalising publicly funded bodies that do not co-operate in this process.
I mention in passing that the Scottish Executive's review of the enterprise network was somewhat premature and would have been more useful if it had followed this report rather than pre-empted it. None the less, I am sure that we all agree that the review of the enterprise network is welcome and I was pleased to hear the minister's comments.
The report expands on the obligations of the Executive in final conclusion 6, which says that the Executive should
"withdraw from operational programmes and concentrate on strategic guidance, setting targets and measurable outcomes, ensuring value for money in service provision, promoting good practice, reporting and evaluation."
With devolution, the role of the Executive in this
The sting in the tail of the report comes in final conclusion 10, which says that the forums must devise a strategy that must include
"the definition of lead agencies and the unambiguous delineation of their areas of responsibility."
It goes on to say that the forums
"must also identify the process of eradicating duplication in the provision of services" and that their strategy should
"set out clearly the division of labour proposed by the forum, which should aim to ensure value for money and transparency."
The final sting is that the report suggests strongly that all of that should be assessed by a joint study by the Auditor General for Scotland and the Accounts Commission via Audit Scotland in 2002. The report has teeth and should not be taken lightly. For that reason, we urge the minister to consider the recommendations it makes.
The other conclusions in the report, which deal with small businesses, LECs and tourism, are positive and constructive, as are the Executive's forthcoming document on an economic framework for Scotland—I welcome the minister's comments in that regard—and proposals for lifelong learning.
I draw members' attention to the sections of the report that deal with business support services and performance management. They demonstrate that the inquiry produced startling and disturbing evidence of where we were failing to provide the counselling, mentorship and the vital support service that any new business needs. As John Swinney stated, there is profound concern about the calibre of some advisers that are provided to business.
The report identifies problems and provides solutions and is about making partnership work not for a supply-driven agenda but for a customer-driven one. That is the feature that came through time and again in the evidence that we took. If we are to deal with the problems that I have outlined, we have to consider the concerns of the business community that were clearly articulated in the business in the chamber event. There is an unhealthy cynicism among business people about the existing structures, which are felt not to work for them but to work for people with a predetermined agenda on the supply side. They are felt to be of varying levels of relevance to the business community.
I suggest that there can be no other impetus or approach to providing business development services locally than what will be good for business, our communities, job creation and a wealthier and more fully employed society.
Although the report may be voluminous, and although some may think it generalised, it has a carefully crafted structure. It has drive, clarity, focus and teeth. It is the way forward for business in Scotland and I commend it to the Parliament and the minister. I reiterate the committee's desire for the minister to consider and promote implementation of the recommendations in the report, and I support the motion.