Enterprise Agencies (Performance Evaluation)

Portfolio Question Time – in the Scottish Parliament at 3:03 pm on 30 October 2024.

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Photo of Daniel Johnson Daniel Johnson Labour 3:03, 30 October 2024

To ask the Scottish Government how it evaluates the performance of the enterprise agencies in directly investing in businesses. (S6O-03847)

Photo of Richard Lochhead Richard Lochhead Scottish National Party

Our enterprise agencies have a critical role in helping businesses to start and scale, be more productive, access finance and attract investment, develop new products and services, enter new markets and have a positive impact on communities. The agencies evaluate the support that they provide to businesses in order to assess the effectiveness and impact of their activity. They report on their performance throughout the year and publish their results in their annual reports and accounts. Scottish Enterprise also monitors investment activity in Scotland and publishes an annual overview of trends and performance.

Photo of Daniel Johnson Daniel Johnson Labour

According to those published numbers, in 2023-24, Scottish Enterprise invested just 15 per cent of its budget, or some £53.4 million, whereas South of Scotland Enterprise invested 55 per cent of its budget, or some £35 million, and Highlands and Islands Enterprise invested 72 per cent of its budget, or £63 million, despite very different levels of funding. Given that funding for the enterprise agencies has fallen by £46 million in real terms since 2016, what steps will the Government take to ensure that it maximises the outcomes and the impact of investment that is undertaken by the enterprise agencies?

Photo of Richard Lochhead Richard Lochhead Scottish National Party

Each enterprise agency takes its own decisions in line with the priorities for its region. Scottish Enterprise’s co-investment in Scottish venture funds has been highly successful, with £158 million invested in 229 companies between mid-2015 and spring 2020. That investment leveraged almost £500 million from the private sector, achieving a 3:1 ratio. Over the past 21 years, Scottish Enterprise has invested £921 million, which has leveraged £2.45 billion of private sector investment. Clearly, Scottish Enterprise is of a different scale to the other enterprise bodies and it deals with different issues, just as Highlands and Islands Enterprise has its own remit, for example. The Scottish Government is very content with the results of Scottish Enterprise’s co-investment.

Photo of Audrey Nicoll Audrey Nicoll Scottish National Party

Scottish Enterprise has delivered its strongest-ever performance on jobs and capital investment during a record year. Can the minister say any more about how we can build on the strong track record and continue to support businesses and drive innovation?

Photo of Richard Lochhead Richard Lochhead Scottish National Party

The ambition in the current action plan that is being developed by industry is to better tailor existing and new support to specific requirements in the sector in order to grow Scotland’s ambitious ecosystem, which includes strategies in relation to the national strategy for economic transformation. A number of policies are in place to build on existing innovation and successes.

Photo of Pam Gosal Pam Gosal Conservative

Young Enterprise Scotland plays an important role in offering enterprise education to schools, and it has done so for more than 30 years. Recently, it was reported that the organisation was at risk of closure as the Scottish Government had initially decided to discontinue its funding. Although I was pleased to hear that funding has now been allocated by the Scottish Government, such organisations should not have to wait for last-minute solutions. What action is the Scottish Government taking to ensure that such organisations are properly funded so that pupils receive education on enterprise?

Photo of Richard Lochhead Richard Lochhead Scottish National Party

As the member will be aware, and as she referenced, the Deputy First Minister announced yesterday £285,000 for Young Enterprise Scotland, which is doing a grand job. The funding was never withdrawn; discussions were on-going. The Scottish Government values the work of Young Enterprise Scotland, which is evidenced by the support that we have delivered, as announced yesterday.