Scottish-European growth co-investment programme has provided £12 million of investment so far—the £3.2 million to which the member referred is the Scottish Enterprise contribution and includes deals that are currently being finalised. There have been challenges with take-up of the scheme, including on-going uncertainty around Brexit. Scottish Enterprise is continuing to work with investors and companies to secure investment decisions and maximise the number of businesses that benefit from the scheme.
The Government is committed to supporting small businesses. The co-investment programme is just one part of the Scottish growth scheme, which is funding a range of financial interventions that are aimed at helping small and medium-sized enterprises to realise their growth and exports ambitions. Overall, the growth scheme has supported 158 companies, with £125 million of investment so far.
I have to say that £12 million out of £200 million is not much better, at a time when the economy appears to be contracting, manufacturing is declining and, according to the Clydesdale Bank SME health check index, small business confidence is at its lowest since the bank started recording it.
When the fund was announced in the programme for government in 2016, it was welcomed across the Parliament. It was designed to help businesses to grow, in the face of Brexit. This week, the Cabinet Secretary for Finance, Economy and Fair Work claimed that the very fund whose aim was to help to prepare for Brexit has been affected by Brexit.
Will the First Minister tell me whether the Scottish Government completely misread the market, given that there is so little demand, and whether the co-investment programme, which is largely financial transaction money, will be revised to ensure that the right help is available for businesses in these difficult times?
I say in response to the last part of the question that we will always look at how we ensure that we provide the kind of help that businesses need, and if we need to make changes to the design of programmes we will certainly do that.
However, I think that most people understand and appreciate that Brexit has had and is having an impact on investment decisions, which is having a knock-on impact on the number of companies that are coming forward to take part in such schemes. That is a reality that I would have thought that Labour, at least, if not the Tories, would have been able to understand.
Overall, the growth scheme is helping a number of companies—as I said, so far, £125 million of investment has been provided to 158 companies. We will continue to do everything that we can to make sure that that very helpful funding gets to companies, but we require companies to come forward with investment propositions, and we will keep encouraging them to do so.
In the 2016 programme for government, the First Minister announced that the Scottish growth scheme would provide £500 million of loans and guarantees to business, but support under the scheme is now largely provided in the form of equity finance. Why do Scottish firms now have to sell part of their business, often to foreign fund managers, in order to get support under the Scottish growth scheme?
A range of financial interventions is available, and discussions will take place with companies about what best suits their business needs, whether that is loan funding or other forms of funding.
I would have hoped that Mr Lockhart, as a Conservative member, would have recognised that such schemes are being affected by companies’ reluctance to invest because of the Brexit uncertainty. That a Tory in particular can ask such a question when he seems to be oblivious to that situation just underlines the fact that the Tories have no regard whatsoever for the damage that their policies are doing to the economy of the United Kingdom right now.