Local Economic Forums (National Guidelines)
Given the time, I ask Wendy Alexander to start with her introduction, please.
I will be quick. As local economic forums were the committee's idea, not mine, I will not go over the case for them. I will just share with you a flavour of the responses that we received and invite you to offer us guidance on the few outstanding issues.
More than 100 responses to the draft guidelines have been submitted. I am told that more than a quarter came from the business community. We do not usually have such a high response rate from it, so that is encouraging. We slightly toughened up our previous position by saying that we should be more prescriptive about the core membership and that we should set the boundaries for local forums at local enterprise company level. We must recognise that time is money for the business community and that we must therefore make for smarter business engagement. We cannot afford the luxury of large talking shops, so membership should be small and tight, with preferably no more than 10 members. Clear tasks should be set, the first of which should relate to the streamlining of business support services.
Those who responded basically endorsed the proposed approach, which they said was realistic and achievable. On balance, they wanted us not to be too prescriptive about the degree of local flexibility. There is a desire for some local flexibility, but people also think that there is a role for the proposed ministerial task force and for Audit Scotland.
There is consensus that the forums should have small, tight memberships; even so, a large number of organisations said that they wanted to have members on the forum. We asked whether organisations should have executive or non-executive members. People mostly said that, as long as we chose the right individual who spoke for their organisation, they were unperturbed about whether the member was executive or non-executive.
Setting business support services as the first priority task was generally welcomed. However, there was a desire for forums to consider skills, trade and tourism once we get the careers Scotland structure sorted out.
The interface with community planning attracted a fair amount of comment from local authorities. We look to the committee for guidance on that. The Convention of Scottish Local Authorities and several local authorities think that LEFs should be nested in the community planning framework and that community planning should retain the primary responsibility for local authority economic strategy. It is unsurprising that other respondents said that greater clarity was needed, but that LEFs should own the economic component of the community plan, given the role of the enterprise networks and of LECs. Some guidance on that would help, as views differ.
On engagement with the business community, there was consensus that chambers of commerce have broad representation and that, typically, one person from every area's chamber of commerce should be a member. That proposal was broadly accepted, but people asked for some local flexibility too.
If local economic forums are to have credibility, they must be seen to be business led. Otherwise, business organisations will consider them part of the problem, not the solution. Any further advice that the committee wants to offer on ensuring that business organisations feel that they have a central role would be welcome.
The principle of monitoring and evaluation was generally welcomed, as was the idea that we should start by mapping what works.
There was broad support for integrating tourism in the forums, but there was concern about the practicalities of the relationship with area tourist boards. The committee might want to comment on that issue now, or might want to return to ATBs, which, as members know, feature prominently in the strategic review of tourism.
We continue to stick to the timetable. Depending on receipt of the committee's views, we plan to issue final guidelines by the end of this month. We will set up a central resource for the forums in the Executive, to be shared with the enterprise network. We will hold the first meeting of the ministerial task force towards the end of March, and have the first seminar for the forums in April, which will focus on how they set targets. If we stick to the timetable, we will see the first output of the mapping exercise of what works for each geographical area and how forums intend to co-ordinate and streamline by the end of October.
I was recently introduced to the concept of the camelephantelopelican, which was a legendary cross of a camel, an elephant, an antelope and a pelican. I am a little worried that the forums may end up like that hybrid. The committee welcomes the fact that many of the conclusions in its report have been adopted, but there are some doubts.
I will dwell on the business aspect. The evidence that the committee took strongly suggested that there was much scepticism among local businesses. My clear impression is that, if we are serious about trying to drive local business development strategies, with the accompanying fruits for local communities, the forums must be credible. More important, there must be a reason that will persuade business—particularly busy people in business—to have anything to do with the forum.
I was pleased that the draft national guidelines acknowledged that businesses are the key drivers of wealth creation. However, I question whether we are getting the membership right. Are we in danger of getting it seriously wrong? I was interested in your comments about the responses that have been received, which seemed to some extent to reflect my concern. The business component in the forum will have to be beefed up. If that does not happen, there is a fear that businesses will vote with their feet and walk away from the forums.
At the risk of offending the committee, I must say that one of the dilemmas that it left me with when I inherited my portfolio was that there was something of a disconnection between what you said about frustration on the ground about duplication and your recommendations that local forums should be established with a membership that could be in excess of 30 organisations. There is no doubt that it is a step forward to establish small focused forums that do not have budgets, must prove their worth in the first year and are nationally evaluated. I would be more than happy to receive further suggestions about taking forums to the next stage, to make businesses feel that they could interface with the structure with some ease. There is no doubt that we have moved the issue to the next level. We would be happy to have further observations on doing that.
However, it is not possible to change the core membership more. It includes two representatives from the LEC, two from the local authority, two from the business community, one from the learning industry and one other. The prospect of 50 per cent for business and 50 per cent for all other organisations is not on the table. The broad membership has been decided on. It is now important to decide on structures that allow the business community to influence the forum's deliberations quickly and easily.
The other critical step is not to give the forums a statutory status or budget. We must require them to prove their worth in the next 18 months. That is a critical component of the way forward.
I will follow up that question then hand over to George Lyon. When the forums were envisaged, 10 or 12 people were expected to be members. However, if one person represents the further education sector, they represent the whole education sector, not their institution. It might be an idea to build into the guidelines a requirement for the board of 10 or 12, or whatever the number is, to report to the wider bodies. For example, all the FE institutions, all the higher education institutions and all representative organisations from the business community could meet every three or six months. That would give the LEF a duty to report and consult locally and it would prevent the forum from becoming a dialogue between the 10 or 12 members and the ministerial task force.
Annabel Goldie talked about membership. That is not the issue. As I recall, the discussions were not necessarily about who sits on the forums. We were offered more radical options, but we saw LEFs as a middle way. The other options are not ruled out—we might need to come back to them.
We opted for LEFs as the way to try to get the appropriate people round the table to discuss who does what, how they might deliver the strategy that is agreed at community planning level, which organisations' staff are doing virtually the same thing and to agree on how to strip out the duplication and overlap. The hope is that if two organisations are not competing against each other—which is a complete waste of public money—we will deliver more action on the ground.
There are some key issues here. First, it is important that the organisations involved do not turn up at the table and defend their interests. If that is their attitude, the LEFs will fail on day one. Secondly, we hope that they will have a constructive discussion and identify action to strip out the overlaps. Thirdly, it is important that they agree on action to deliver the strategy. The key issue for me is how we monitor whether the LEFs work. We have not ruled out going for more radical action if they fail. We need to indicate that there is a time scale here and that there will be proper evaluation of what is done at the local economic forums. If they fail, we will not allow them to continue; we will take action to ensure that we have a streamlined, effective service that delivers action on the ground for the community.
I agree whole-heartedly. Emerging from the consultation is a sense that local authorities have greater strength in those aspects of economic development that are closer to the inclusion and community development agenda, whereas the LECs have more specialism in the areas of direct support services to business. That is not true throughout Scotland, but a general pattern is emerging from the responses that we have received so far. There are different areas of expertise—it is a matter for the committee whether we want to write that clarity in or simply to say, "Assess independently what works in your area and we will see where you are in a year's time."
How will the Executive scrutinise and judge whether the LEFs are working? What action do you propose to take if they are not working? If the executives turn up at the table, defend the status quo and nothing changes, it would be a complete and utter waste of time. How will you monitor that and what action will the Scottish Government take to address it?
We have said that we will set up a national forum to monitor what the LEFs are doing. However—and this is hard for the committee—LEFs do not have a statutory basis and they do not have a budget, so ultimately the only sanction is name and shame. A LEF does not have corporate status, it does not have a budget and it does not have any authority over all the various statutory players, be they local authorities, LECs, or higher education institutions. In the guidelines, we have gone as far as we can in the absence of any budget or statutory framework, which is to say, "We will require you to report within a year on whether you have managed to get rid of the clutter in your area."
The naming and shaming part of the exercise—of which the committee is a part—is where we say, "Here are the 22 LEFs in Scotland. These are the ones that have risen to the challenge and these are the ones that have not." Audit Scotland then has the opportunity to consider what has been achieved. That is the point at which the committee—a year from now, having considered the 13 plans that are coming in—can decide whether to move the organisations to a more formal basis, which would allow action on those that did not rise to the challenge.
The Executive has endorsed the committee's recommendation. Until the organisations have proved their worth and utility, it would be wrong to go either to a statutory basis or to an independent budget. They would have been encroaching on functions of existing bodies, which would have required legislation and delayed us for another two years. The case still has to be made that they can rise to the challenge that we are collectively setting them.
So what you are saying is that we are giving them a chance, on a voluntary basis, to demonstrate that they can sort out the clutter and the overlap themselves?
There can be no form of sanction unless there is a budget and a statutory responsibility. The responses show that the right to sanction a body depends upon its having a corporate existence, a budget and a responsibility. We are not in a position to sanction LEFs when those statutory responsibilities remain with LECs, local authorities, higher and further education institutions and other players. That is one of the dilemmas that lie ahead.
I agree with George Lyon. The issue for us is partnership and whether the organisations will work together so that they can provide the best business support, area by area. The issue is indeed whether they will work together. I am glad to hear what the minister says about what will happen if they do not.
I have a couple of questions on representation. How will the so-called social economy and the trade unions be able to contribute? We talk a lot about MSPs getting more involved in their local economy. Do you see any role for this committee or for local MSPs?
We have said that we consider that participation by the Enterprise and Lifelong Learning Committee on the national forums would be helpful. That could perhaps involve a member on the task force for the Scottish Enterprise area and a member on the task force for the Highlands and Islands Enterprise area.
On the wider issue of whether there is a role for MSPs on local economic forums, "Over to you" is the answer. Alex Neil was previously a member of the former Social Inclusion, Housing and Voluntary Sector Committee, at which I testified, and we had lengthy discussions about whether it was appropriate for MSPs to sit on social inclusion partnership boards and in what circumstances they could do so. Those are intractable issues, but the Parliament is better placed than the Executive to judge them, at least in the first instance. I will be interested in what it says.
Perhaps I may take Renfrewshire, which is in Annabel Goldie's and my area, as an example. If we said that all the constituency MSPs and all the list MSPs for the area should have places as of right when only 10 were available, I do not imagine that we would increase the area's business community's optimism that local economic forums will deliver. I take Marilyn Livingstone's point; a number of people want to contribute and advice on that would be welcome.
You will know that when we published "A Smart, Successful Scotland: Ambitions for the Enterprise Networks", we indicated that Jackie Baillie and I intend to make a statement shortly on how we see the social economy agenda being driven forward in Scotland, partly because we want to pick up on the work of the UK social economy investment task force, which was published in draft form as part of the pre-budget report, and partly because everybody involved in this area concedes that there is a rather messy boundary between Scottish Enterprise and Scottish Homes about who does what. We would benefit from clarity on the role of both organisations—Jackie and I are awaiting an opportunity to talk with one voice on the way forward in that area.
You mentioned the trade unions.
There are a couple of places that we have left unfilled—the trade unions may wish to take them. We are saying to the trade unions, "Please see careers Scotland as the focus of your activity. Your involvement in that area will provide the link to lifelong learning." There will be a statutory place for local authorities on the local boards of careers Scotland. For the trade unions, that is optional, depending on the geography and whether there is an appropriate participant.
As I am not a member of the committee, I hope that I can be a bit more cynical about the process. At the moment, I am not convinced that the forums will not just be additional clutter, rather than a solution to the problem. We must wait and see.
However, I make a plea for flexibility in relation to the guidelines. I am already concerned that there are some people in the organisations involved who see guidelines as prescriptive and who think that, if guidelines are issued, they must be followed to the letter. The evidence that the committee has taken suggests that there are some very different situations across Scotland. In the south of Scotland, there are some council and LEC areas that have coterminous organisations and some that do not. I therefore make a plea for flexibility rather than prescription.
The candid answer is probably that I am not sure that I completely agree. The way I read the mood of the committee was that there is a desire to make it possible for the business community to participate, which would mean some prescription on boundaries, membership and work plans. That would mean not having to spend five years debating what a local framework for economic development might look like in every community in Scotland. Instead, we would ask organisations to sort out the streamlining of their business support services with a fixed horizon of a year. There should be flexibility within a defined set of parameters, which are those that we have issued.
Who runs the forums? Will they be run by LECs or by local authorities? Who will send out the letters and where will they meet?
We suggested that the chair could rotate, but we have also suggested that local economic forums should be serviced by LECs, given their lead responsibility for local economic development. However, there could be a collaborative secretariat. Indeed, the secretariat for the national economic forum is intended to comprise the Executive, COSLA and the enterprise networks.