Portfolio Question Time – in the Scottish Parliament at on 15 January 2025.
To ask the Scottish Government what assessment it has made of the performance of enterprise agencies in supporting business growth and inward investment. (S6O-04186)
In the past financial year, Scottish Enterprise secured or safeguarded more than 16,700 jobs. It helped businesses to unlock £1.9 billion of planned capital investment spend and £449 million of planned innovation spend. In the same period, Highlands and Islands Enterprise supported 1,248 jobs and helped businesses to unlock £412.8 million of capital investment, and South of Scotland Enterprise supported 1,706 jobs across its region. All of that happened while Scotland maintained its position as top-performing place in the United Kingdom outside London for foreign direct investment projects for the ninth year in a row.
It is encouraging to note Scottish Enterprise’s recent successes in supporting indigenous business growth for larger companies and the continuing strong performance as regards foreign direct investment. However, has the Deputy First Minister reflected on what more could be done to help smaller businesses that are looking to scale up, and whether the Scottish Government’s current approach is the best fit in that regard?
The member makes an important point, because small and medium-sized businesses are the backbone of the Scottish economy and they are often anchors in their local economies. I know that that will be the case in Annabelle Ewing’s constituency.
The enterprise agencies are not the only source of support for businesses. Businesses of all sizes and types can access support from a wide range of public sector organisations. One of those is Business Gateway, and more support is listed on the Find Business Support website. I am happy to hear from Annabelle Ewing about any specific businesses that are struggling to get support, and which we could help.
There is a lot of interest in this issue. I will try to get in as many supplementary questions as I can, but they will need to be brief.
The Scottish Government’s budget for the coming financial year delivers a real-terms cut in the funding of the enterprise networks compared with the previous financial year. Indeed, if we look over the past decade, we see that the funding for the enterprise networks is a fraction of what it was a decade ago. If the enterprise networks are as important as the cabinet secretary says they are, can she say how continually cutting their budgets helps to grow the economy?
That would be a good question for the Conservatives in relation to the overall size of their budget settlements to the Scottish Government.
I have to pick up Murdo Fraser on a number of points. We have had exchanges on these matters in committee as well as in writing. Adjustments that are required for the implementation of international financial reporting standard 16 have to be taken into account when comparing the two budgets. The bottom line is that we have increased Scottish Enterprise’s total budget by 5 per cent, we have maintained Highlands and Islands Enterprise’s resource budget and increased its capital budget by 9 per cent, and we have maintained South of Scotland Enterprise’s resource budget and increased its capital budget by 8 per cent. It is the capital budget that is distributable and is of most interest to businesses.
The cabinet secretary referenced her appearance at the Economy and Fair Work Committee last week. At that meeting, she said:
“I want distributable funding in the economy portfolio. I do not want just to create public service jobs”.
She added:
“the fact is that a public sector organisation might need to change and adapt”.—[Official Report, Economy and Fair Work Committee, 8 January 2025; c 12.]
She seemed to be suggesting that the focus and configuration of the enterprise agencies need to change. Is that an area of work that the Scottish Government is undertaking? Will she outline what steps she is taking to reform the enterprise agencies?
On that point, the enterprise agencies have been at the front of the queue to adapt and make sure that their focus is far more targeted and streamlined.
The performance figures that I outlined in my first answer to Annabelle Ewing, on the numbers of jobs that have been safeguarded or protected and the amount of capital that can be invested as a result of the agencies’ work, have not come about by chance. Because Scottish Enterprise, Highlands and Islands Enterprise and South of Scotland Enterprise have been so targeted and focused on what they are trying to do, they have excelled, and they have never been in a stronger position.
I absolutely stand by the point that, from a business support perspective, business cares about what is coming to it in support, and not how many jobs we are creating in the public sector.
I call Willie Rennie. Please be very brief, Mr Rennie.
Liberty Steel, which is owned by Sanjeev Gupta, has failed to submit audited accounts for the past four years. Given her discussions with Scottish Enterprise, is the cabinet secretary aware of whether that company has breached the loan agreement with the Scottish Government?
I am happy to ask one of my colleagues to pick that up. I am, rightly, entirely and completely recused from the issue because of the constituency interest that I hold in it. I will ask a colleague to pick the matter up with the member.
I apologise to those members whom I could not call to ask supplementaries.