Enterprise Networks and VisitScotland (Reform)
Item 2 is the reform of the enterprise network and VisitScotland. I am pleased to welcome the Cabinet Secretary for Finance and Sustainable Growth, John Swinney. Please excuse me for stumbling over your title, Mr Swinney. I am still struggling a bit with all the new titles, including my own. In addition, we welcome the cabinet secretary's officials, whom I am sure he will want to introduce. I recognise one or two of them.
I will ask the cabinet secretary to begin by making a statement, and then we will ask questions.
I am glad that your eyesight is so proficient that you can read the title on my name-plate from that distance. I am joined this morning by Graeme Dickson, director of our enterprise, energy and tourism directorate, and by Wilson Malone and Suzanne Henderson.
I am grateful for the opportunity to appear before the committee to discuss the enterprise networks reforms and to explain the thinking behind the Government's proposals. As I said in my statement to Parliament, both Scottish Enterprise and Highlands and Islands Enterprise have the Government's continuing support, but change to make those bodies as effective as they should be was required and, in my view, long overdue. The enterprise networks themselves recognise that. The Government's aim is to create an efficient, effective and accountable mechanism for delivery that will make a clear and attributable contribution to improving Scotland's sustainable economic growth rate. I believe that the proposals will achieve that objective. I welcome the positive endorsement of the proposals by a number of organisations, including the Scottish Chambers of Commerce, the Federation of Small Businesses and the Confederation of British Industry Scotland.
The aim of our proposals is to enable the enterprise networks to focus their efforts and resources where they can have the greatest impact on the economy. In future, they will be focused on supporting innovation and investment in key sectors and companies that are regionally or nationally significant and which have growth potential.
I am aware of a number of questions from parliamentary colleagues concerning the proposals for the removal of local enterprise companies and the arrangements for regional business advisory boards. I understand that members are keen to ensure that economic development continues in their areas and that it responds to local priorities. The Government shares that objective, but I do not believe that the response to those concerns from members is the status quo; nor, indeed, was that the view of many of the local enterprise company chairs whom I met prior to the announcement of our reforms.
The enterprise networks will continue to operate their existing local offices, which will still respond to the economic development needs of their areas. I have made it clear that, where there are strong and effective local partnerships, they should remain, and that business engagement must continue to drive economic development activity. I will return to that point shortly.
Far from diminishing local input, I want to encourage greater cohesion between local, regional and national economic delivery. Greater cohesion is one of the objectives behind the creation of the strategic forum for the enterprise and VisitScotland networks. It is vital that the activities of both networks are aligned in pursuit of economic growth. That will be my clear message to chairs and chief executives of the organisations at the first meeting of the forum on 20 November.
On local delivery, discussions are taking place between the enterprise networks, local authorities and the Convention of Scottish Local Authorities on the transfer of the management of business gateway contracts to local authorities. Work has also begun on the task of determining which projects are local and which should remain with the enterprise networks. I assure members that funding commitments for existing projects will be met and that a commonsense approach will be taken to deciding where lead responsibility should lie.
I mentioned the importance of securing business engagement in economic development activity. Business engagement will take place through two channels: regional advisory boards and the industry sectors. As members are aware, there are successful examples of such engagement, particularly with financial services—the First Minister, the Minister for Enterprise, Energy and Tourism and I are engaged in detailed and focused discussion with key companies in that respect. It is important to remember that our priority must be to respond to the needs of businesses in Scotland, providing them with the support that they require and enabling them to achieve their potential. Our reforms are about providing high-quality, effective and efficient services to business, which will ultimately make the kind of improvement in Scotland's economic growth rate that the Government seeks.
The reforms are coherent and sensible and will have a significant impact on the enterprise networks' ability to deliver for the Scottish economy. They have been developed with the needs of business in mind and will allow the enterprise networks to focus on their strengths. They will enable Scottish Enterprise and Highlands and Islands Enterprise to make a greater impact. The reforms will also bring greater integration and cohesion between local, regional and national economic development and will draw together the work of the enterprise networks and tourism organisations. I am determined that our reforms will make a significant contribution to improving Scotland's economic growth rate. I am sure that we all share that goal. I look forward to answering the committee's questions.
Thank you. During recent weeks I have been reading a number of management tomes—as your deputy is keen to instruct members to do. An important consideration that emerges from such work is the need to sort out strategy before structure. The Government has not yet published its economic strategy but has decided what the structure should be. Are you doing things the right way round?
There is a tremendous amount of academic debate on whether strategy or structure should come first—you are right about that, convener. My judgment on the issue was twofold. I wanted to provide an adequate opportunity for a wide variety of players to discuss and consider the formulation of the Government's economic strategy. Discussions took place during the summer and subsequently—indeed, there were extensive discussions about all the issues in advance of the election campaign. I was particularly anxious to ensure that there was meaningful input into the formulation of the Government's economic strategy from the Council of Economic Advisers, which was scheduled to meet for the first time in late September.
The strategy will be published next week. I do not know whether I have written to the committee yet to advise you of that—I am aware that I am advising you now—
Thank you for that.
I might have told you a bit earlier than I was supposed to do.
Next week is the earliest time at which we could publish the strategy. My judgment was that to prolong beyond the end of September uncertainty in the enterprise networks about restructuring would be to prolong uncertainty for too long. I had a timescale in mind and judged that it was important to provide clarity for staff in the organisations. The economic strategy will inform the strategy that will be pursued by the organisations.
You mentioned the Council of Economic Advisers. The committee took evidence from Sir George Mathewson at its most recent meeting. He made it clear that he was not consulted on the structure of the enterprise networks before you made your announcement.
That is correct.
You established the CEA. Did you consider asking it for its view?
The CEA has a proper and full role at the level of considering the economic strategy—that is the most appropriate focus of the council's work and expertise. Some of the detailed organisational alignment of organisations is more properly the business of ministers, taking guidance from those who are involved in the running of the enterprise networks and those who use those services.
We have to be careful. If I were to take the view that the Council of Economic Advisers should be consulted about the composition and the structure of the enterprise networks, I could make an argument for it to be consulted about everything else in government. We have to be careful that we use the talents and resources of the council in a focused way to enhance the formulation of strategy by the Government.
I acknowledge what you say, but I think that we also heard some interesting views from Sir George Mathewson on the role of local government.
The tenor of what you are about to do, cabinet secretary, is about refocusing activity. Undoubtedly, when that happens, some costs will be incurred to achieve the change. Some of those costs will be one-off costs and, hopefully, there will be some reduced long-term running costs. Can you give us an idea of what the one-off costs might be in relation to changes in personnel or facilities and what the long-term implications for budget lines might be? If not, can you tell us when you might be able to give us those figures and suggest when the changes might begin to contribute to efficiency savings?
The strategic spending review will be announced next Wednesday and I cannot yet discuss its implications for the on-going budgets of various organisations and elements of the public sector.
There will be realignments of the budgets of Scottish Enterprise and Highlands and Islands Enterprise as a consequence of the transfer of responsibilities that we have announced, although those realignments have yet to be determined. Discussions are already under way—some are taking place today, in fact—between Scottish Enterprise, Highlands and Islands Enterprise and COSLA about those issues. The Government is facilitating those discussions to ensure that the proper reallocations of resources are carried out.
On the wider perspective of the cost of the Government's proposals, I do not think that the proposed realignment in itself will bring about any significant costs. However, costs will be associated with our decision to ensure that Scottish Enterprise and Highlands and Islands Enterprise are slimmer and leaner. Members will have seen press commentary at the weekend about the fact that Scottish Enterprise has embarked on a consultation exercise with the relevant trade unions about a voluntary severance programme. I expect the costs associated with that to be made up for by efficiency savings in a two to three-year period.
You have addressed the costs arising from staff changes. However, in one or two famous recent cases, the cost to the public purse was a large number of hundreds of thousands of pounds. Can you give us an assurance that the changes that you have in mind will not have cost implications on that scale? If you cannot, we might well assume that the figures that appeared in the newspapers at the weekend are accurate.
In relation to co-locations and relocations of staff away from the centre, what might be the implications for budget lines of the fact that Scottish Enterprise has a long-term lease on the prestigious property at Atlantic Quay?
The severance issues are, properly, the preserve of a consultation exercise between the management of Scottish Enterprise and the relevant trade unions. Obviously, it would be inappropriate of me to speculate at this stage on the cost of individual severance arrangements. I assure you, however, that proper consideration will be given to the circumstances of individuals and their rights of employment. That would be a prerequisite in any similar circumstance.
On property costs, we are encouraging a process of co-location of local services. For example, we envisage that, where there is an existing local enterprise office in a particular location, there will continue to be a Scottish Enterprise or Highlands and Islands Enterprise presence in that location. However, we intend to encourage the co-location of those enterprise personnel with local authority personnel in order to create a more cohesive service at the local level. That is a process of development that must take place over time, given the issues such as office leases. The impetus will be behind that process, which is the direction that Scottish Enterprise and Highlands and Islands Enterprise are travelling in.
You are correct to say that there is a long-term lease on the building at Atlantic Quay—I think that it goes on until 2024. Obviously, there are wider questions that the Government can consider about the occupancy of that building, particularly in the context of the asset management review that the Government is undertaking at my request. The chief planner, Mr Mackinnon, is conducting that review as we speak, with the purpose of ensuring that the Government's asset base and its estate are effectively managed to ensure that we have the right personnel in the right places. Obviously, there will be opportunities for us to factor the Atlantic Quay building into that process.
It was clear in your statement to Parliament that there would be movement away from Atlantic Quay and Cowan house and into the six regional offices. Is there a target for that?
You are right to say that there will be a move of staff away from Atlantic Quay and Cowan house and into the localities. That is the direction of the Government's reforms. I cannot give you a numeric target in that regard—obviously, there is a process for the severance programme, which we talked about earlier. Of course, as Mr Adam suggested, the process is likely to mean that Atlantic Quay will become a building that has too much space in it for the number of people who are required. The Government will respond to that as part of its asset management approach.
In your opening statement, you said that you are looking for greater cohesion. In that regard, who is going to have control of the business gateway? Will it be COSLA or Scottish Enterprise?
The business gateway contract will be managed by local authorities, which is what I said in my statement to Parliament.
And are you quite sure that you have got an agreement between Scottish Enterprise and local authorities about the management of that?
That is part of the discussions that are going on at the moment between Scottish Enterprise, Highlands and Islands Enterprise and the local authorities about the detailed implementation of the Government's proposals. I am sure that you will tell me what lies behind your question, Mr Whitton, but that is what the Government wants to happen, so that is what will happen—if I can put it as delicately as that.
That is very fairly put. However, having asked questions in Parliament about the reorganisation of the business gateway and how it applies to my constituency, I can say that there does not seem to be much cohesion. There were five business gateway offices in my area, but now there is only one and it is not in my constituency. You are going to open a sort of virtual office somewhere in Kirkintilloch. That does not seem to me to provide greater cohesion.
The pattern of use of business gateway services is that, to put it bluntly, people are more readily using web-based services, rather than offices. The pattern has not emerged just in the past couple of months; for a considerable time, businesses have been accessing more of the business advisory services through the web, rather than by going into business gateway premises. The delineation of the offices is a product of that change in the pattern of use of the services. The arrangements are an appropriate response to the change in the pattern. We do not want to have offices in places where people are not using them. However, we must be absolutely assured that people can access the services that they require.
I do not want to interrupt you, but you say that you do not want to have offices where people are not using them, whereas people were using the Kirkintilloch office. It was the most heavily used of the five in the area, but it has closed down.
About three years ago, there were 54 business gateway outlets but, in May, when the Government came to office, there were 39. The new contract that has been arranged will reduce the number of outlets to 36. A pattern is emerging of the use of the offices. I will certainly explore the issues to do with the Kirkintilloch office. I am being advised by an official that it has not closed, but—
I suggest that you send an official to have a look, because there is a "To Let" sign outside the office and it is closed.
I will investigate that specific point. As you are aware, I am very familiar with Kirkintilloch—
I know.
I will certainly investigate the matter and write to you. However, my point is that our approach is about ensuring that services are available in such a fashion, structure and style that people want to access them. There is a transfer of activity from the use of local offices to the use of web-based services. We are all increasingly using web-based services to obtain advice on a multiplicity of issues, so it is not a surprise that the public sector should respond to that. I will consider the point about Kirkintilloch and get back to you.
Thank you.
I have one final point. The business gateway offices exist not only to allow people to access information on how to set up a business but to help small businesses to develop and grow. How will that work if you have cut the number of offices?
A key element of the business gateway contract is providing advice to people who are starting up in business or developing their business. The next step beyond that is an obligation in the business gateway contract to identify for Scottish Enterprise companies that have significant growth potential so that we have a seamless route. To take one scenario, if an emerging start-up company does well and begins to grow, the key point about the business gateway process is that it should identify where the growth potential is and how the range of added-value services that Scottish Enterprise can deliver can apply to that company. In my experience, one good example of those services is the Scottish manufacturing advisory service that Scottish Enterprise provides, which is extremely focused on individual company development. The service would not be available to a single-person start-up company but, as such a company grew, the service could certainly make a contribution to its development. That is how we ensure that the right people get the right advice. That is a key characteristic in the delineation of services.
I hope that, when you respond to Mr Whitton, you ensure that the committee sees the response. In fairness, David Whitton has raised the issue with every witness we have had in the past few months—it has been a consistent theme that he has raised directly with Scottish Enterprise and with witnesses. The business gateway in his patch is an important case study in our consideration of how the process will work, so it is important that we understand the issue.
I am sorry if I have got the proprieties wrong in any way. I will happily write to you, convener.
No—write to Mr Whitton. My point is that we would all be interested in seeing the answer.
We will send a copy to the clerk.
Will you expand a wee bit on how the business gateways will develop in the Highlands and Islands?
You will know that social enterprises are a growing part of our economy. Will local authorities be encouraged to support and promote social enterprises and to use them to provide some services that local authorities currently provide, such as grounds maintenance and grass cutting? Social enterprises provide a good way of getting people who might not otherwise be employed into employment. They have huge potential.
As you know, the business gateway service has not previously operated in the Highlands and Islands, but the Government wants it to be available there. HIE and the relevant local authorities are discussing the development of business gateway accessibility in the Highlands and Islands. Meetings will take place today and on 20 November to discuss that, and other discussions are progressing. I also discussed the subject informally with local authority conveners and representatives of HIE at the convention of the Highlands and Islands in Fort William last Monday. The roll-out of that service will take place and a good opportunity exists to expand the service to businesses in the Highlands and Islands on an accessible basis.
Social enterprises are rather dear to my heart and I agree very much with your view. Social enterprises have a formidable track record of making it practical and possible for people who are economically inactive to become economically active. When I was out and about in the summer, I had the privilege to see numerous case studies of that. In Twechar in Mr Whitton's constituency, I saw an extremely good example of a social enterprise that was making a formidable impact on hard-to-reach individuals in the economy. Social enterprises have an opportunity to develop in that fashion. Some weeks ago, I announced an expansion of financial support for business advice for the social enterprise sector, because I detected a gap in the availability of that service. That is now contributing significantly to the process.
Local authority involvement will be part of a general message that we must get across, which is not just about the enterprise network but about the public sector in general. Public sector organisations must let go of some of the services that they provide and rely on the social enterprise and voluntary sector to deliver them. Sometimes, public sector organisations are very protective and possessive of the services that they deliver and do not think that voluntary sector organisations or social enterprises are equipped to handle them. The Government and I do not take that view. I exhort local authorities to consider how the social enterprise sector can contribute meaningfully in the way that you described.
Can Scottish Development International's offices throughout the world become a real resource for Scotland? Can SDI link in with VisitScotland to promote Scotland in the broadest sense—for trade, investment, leisure and tourism and as a conference destination? How could we make Scotland's international offices around the world more visible and expand the network cost effectively?
I had some experience of the issue in a previous life as the convener of one of the Parliament's committees.
We are going to quote you here.
Heaven forfend! Perhaps the convener can advise me on when in ministerial life a politician stops getting quoted on what they said in opposition.
It takes a long time.
I look forward to the long period ahead. The inquiry that I chaired on the promotion of Scotland overseas made a number of remarks about drawing together some of Scotland's overseas representation, and the Government is now very much engaged in pursuing that. Our overseas representation is made up of different components. We want to ensure that it is effective in promoting Scotland generally, and specifically, in the identification of business opportunities, particularly through Scottish Development International. The process of establishing cohesion in our international representation is being developed by the Government.
My colleague the Minister for Europe, External Affairs and Culture gave some evidence to the European and External Relations Committee last week on the arrangements for Scottish Development International in the United States, which are intended to ensure that we draw together effectively the work of Scottish Development International and the Government in one of the critical markets. Scottish Development International is a joint venture between the Government, Scottish Enterprise and Highlands and Islands Enterprise and we are keen to ensure that we deliver a coherent and cohesive approach to its work as part of the overall promotion of Scotland overseas.
Martin Tognieri has been out of post since April. When will we hear about a replacement for Mr Tognieri?
I understand that Mr Tognieri has been out of post since August actually—
I apologise.
The process of filling the vacancy will be considered by the Government and Scottish Enterprise in early course. Mr Tognieri's responsibilities have been undertaken for the time being by Lena Wilson, the chief operating officer of Scottish Enterprise.
But the post will be filled.
Yes.
The cabinet secretary will have to hope that I—as a former colleague during his committee convenership—do not have too long a memory of some of his comments. I have some of them with me, but I will not use them.
I feared that you might say that.
I thought you might.
I will concentrate on two areas: local economic development and—you will not be surprised to hear—skills. I would support you on a move away from a centralist agenda towards more local economic development by staff in my local enterprise office in Fife. It would be helpful for me and the committee to see how and when that takes place and I am sure that you would support that, as an ex-convener. That would let us see that what the Government says will happen does happen.
One of Fife's big strengths is its coterminous boundaries, as the cabinet secretary is aware. As a Fife member, I am very concerned that we are disengaging with business. You spoke about the chambers of commerce welcoming the proposed changes, but that does not apply in Fife where we are concerned about what is happening centrally versus locally.
As the changes pan out, I will be interested to see how the proposed regional business boards will work, as well as what locus local partnerships—you mentioned Fife in your statement—will have. When Fife and Tayside were together, for every £8 that were spent, only £1 was spent in Fife—that is why Fife MSPs are now very concerned about what will happen to Fife's strengths. How will that split between central and local take place, and how can we all see that it is taking shape?
I am acutely aware of, and take seriously, the representations, letters and parliamentary questions about Fife in particular. Detailed workstreams are under way in Scottish Enterprise to implement the Government's agenda, which I set out to the Parliament in September. Work will go forward for a significant period—into the start of next year—to implement the reforms. If the committee would appreciate having further detail on the steps that are planned, I would be happy to follow up my appearance before the committee with a letter. In essence, my statement to the Parliament has been taken forward as a series of workstreams to be delivered locally.
I acknowledge what Marilyn Livingstone said about the strong message that is coming from Fife. On the comparison between Fife and Tayside, I gently suggest that if she spoke to any of my constituents, she would probably find that they have an even worse perception of the proportion of money that goes to their area—I leave that as a bit of local indulgence.
On how I envisage that relationships will emerge, regional advisory boards will gather together perspectives from different areas, so there will be a combination of opinion from businesses and local authorities and there will be representation from the higher and further education sectors. We are working on the composition of boards and I can say with absolute certainty that the interests of Fife will be properly considered and reflected in the composition of the regional advisory board. From my experience of how different bodies of opinion in Fife marshalled their views on our proposals and put them to me, it is clear to me that views in Fife will be marshalled and put to the regional advisory board into the bargain.
I think that the process will work on two levels. In my statement to the Parliament, I mentioned the Fife energy park proposal. The park is a fantastic economic development opportunity for east Fife, which will engage people who are economically inactive, through the super outreach facility of Lauder College. The level of financial commitment for the proposal was such that the site has been developed with the consent and authority of the Scottish Enterprise board nationally. However, the origins of the idea—the thinking, the inspiration and the encouragement—came from people in Fife. People from Fife Council, local Scottish Enterprise personnel and people from different walks of business life got together to create the proposal, which was cleared by the board of Scottish Enterprise. There are big, strategic projects and we must ensure that different opportunities for economic development throughout Scotland are properly taken into account.
None of the reforms that I propose would have affected the ability of the Fife energy park proposal to emerge, because the scale of the project was such that it required authority from the Scottish Enterprise board. What I want in place locally is effective collaboration between the people who get their hands dirty in the process of economic development. For example, Scottish Enterprise personnel work very effectively in Fife and are well led by Joe Noble and his colleagues. They work closely with local authority partners and the business community to ensure that there is cohesion locally.
If Marilyn Livingstone's question was prompted by a concern that such a cohesive approach will not be taken, I can say only that members will be welcome to make representations to me if they think that the process is not being rolled out in the fashion that I described to the Parliament. I will always listen to such representations and take them seriously, as I take seriously the points that Marilyn Livingstone made.
Thank you. I will take you up on that.
Please do.
Convener, I did not talk about the skills agenda—
I am going to ask about skills. As you know, I have a significant interest in the issue.
Tourism, which we will consider in a committee inquiry, is raised time and again in our evidence taking. For that sector, the issue of skills is probably at the top of the list; that is certainly the case for employers in my constituency. The entire skills agenda, including skills development, workplace development and the role of the trade unions, is important for Scotland. I am passionately committed to it. My concern is that the skills agenda is divorced from your portfolio. How will you ensure that it continues to have the importance that it deserves? How will you link it to the economy? That is crucial.
Without in any way being flippant, I must say that even I could take the view that I cannot handle any more in my portfolio than I am handling at present. The subject has already been one of great debate.
The problem in the skills area, which Marilyn Livingstone probably recognises, is the lack of cohesion in the gathering together of the organisations with responsibility for skills activity in Scotland. The Government recognises that—indeed, my cabinet colleague Fiona Hyslop will appear before the committee later this morning to discuss the issue. The Government has drawn together the different components of the skills agenda into the successor skills body. A key part of the body's work will be to engage with the business community to properly identify the skill requirements of the economy in the period ahead. If it does not do that, it will fail in its purpose.
At the heart of what the Government is doing in the skills area is the drawing together of a disparate set of arrangements and putting them into one body. Fiona Hyslop and I share the ambition that the body should look properly at the development of each and every skill. In that way, we will be able to support people on their journey back into employment. That is especially the case for people who are economically inactive. A number of different routes and interventions will be taken, but it is clear that, in drawing all that together on behalf of individuals, greater cohesion will result.
I have a more general point to raise, which results from our visit to Inverness last week. To some extent, we are speaking in generalities and we may have failed to notice the elephant at the doorstep. The point struck me during our visit to Inverness, in particular at Wavegen, where we saw the technology that can be used to harness the Atlantic; it was quite a revelation to see that it works by compressing air and not by hydraulics. Two projects are going ahead with the backing of Voith Siemens, which is an organisation that knows what it is doing. It looks as if the projects could become very big, very quickly.
I speak as an historian of North Sea oil, where the impact of the initial, successful borings was felt in about four years. I also speak as a staff member of the Open University, which produced a university from scratch in 18 months. We may have to cope with such developments by way of dramatic, interventionist and collaborative action between Scottish Enterprise—which is probably the necessary body—and, let us say, big German concerns or big Norwegian concerns such as Statoil. We should not leave such action out of our planning.
The point on where further economic opportunities lie is substantial and absolutely fascinating. Over the summer, Graeme Dickson and I had the privilege of visiting the European Marine Energy Centre in Orkney, where the First Minister inaugurated the tidal development plant on the island of Eday the other week. I have always been an enthusiast of renewable energy, including tidal and wave power. I was overwhelmed by what I saw at EMEC—it spoke of global leadership in a particular science.
I have no doubt that we have the research and development capability to develop that type of process, but the key issue is whether we can capture it and retain global leadership of the development of the technology. In that respect, I pay tribute to the previous Administration, because the developments in Orkney have come about in no small measure as a result of big decisions that the previous Administration took to support renewable energy. That is a great opportunity for us to develop a new stream of activity. It is a major economic opportunity for Scotland.
Professor Harvie mentioned his visit to Inverness. During my visit there in the summer, I was struck by the example of Lifescan Scotland. When I probed into why the company is in Inverness, I stumbled across the reason, which is that HIE had managed to get its footwork in place quickly enough to make that happen. As a result of Lifescan being in Inverness, not only is there formidable employment in the life sciences sector—I cannot recall the exact number—but we have the development of a diabetes institute there. Inverness is beginning to look like a place with a life sciences perspective, which, 10 years ago, it did not really have.
We can apply that to the wave and tidal energy sector. We have developed the life sciences sector in Glasgow, Edinburgh, Dundee and Inverness so that Scotland has a great story to tell on that. We must now ensure that we have a great story to tell about the renewable energy developments in Aberdeen, Orkney and other parts of the north of Scotland and in our great cities. We want to develop energy science in Scotland as a formidable global asset, which would have economic implications and, I hope, would provide manufacturing opportunities that would keep the Fife energy park pretty busy.
I draw the cabinet secretary's attention to the recent exciting developments in life sciences in Aberdeen, of which I am sure he is aware. The First Minister attended a recent event in my constituency that marked the arrival of Wyeth Pharmaceuticals as an entrepreneur in Scotland, which is to be welcomed.
You mentioned the structural changes that you are keen to introduce to remove uncertainty. I have a question on the new business gateway contracts that have recently been let. The Enterprise North East Trust has the business gateway contract in Grampian and, I believe, Tayside. In circumstances in which companies have been dealing with two local enterprise companies, will they now be expected to deal with several local authorities or with a consortium of local authorities? When local authorities take over the management of the contracts, will they be able retrospectively to amend or break them and allocate them elsewhere? I am interested in the practicalities of how that will work.
I acknowledge the formidable work on life sciences in Aberdeen and I welcome the Wyeth development. The other week, I had a meeting with a Wyeth official to discuss the progress that is being made.
You are right that, in parts of Scotland, several local authorities will be involved in supervising the implementation of the business gateway contracts. It is not an uncommon arrangement for local authorities to come together to reach a joint position on the delivery of services—an example of that is the experience of joint boards. I do not want to make the arrangements any more cumbersome than they have to be, but joint supervision arrangements are pretty commonplace in local authorities and can be implemented.
You asked about opening up the contracts. A contract is a contract, so whatever its terms say must be followed. If a contract specifies an opportunity to revisit its terms, that will be provided for; if it does not, the contract must be implemented as agreed. The business gateway contracts that have recently been let are three-year contracts with the possibility of extension for a further two years. Obviously, it is for the local authorities to determine how to deal with that matter. However, as part of the wider enterprise network reform agenda, a vast number of sensible and pragmatic arrangements can be made to ensure that individuals can access services cohesively and conveniently. I encourage those who are involved in monitoring the contracts to ensure that that is the case.
You talked about the pipeline of support for businesses. The gateway clearly deals with businesses as they are set up, whether they are the web-based businesses that you talked about, hairdressers, joiners or others. Because of how the contracts are currently managed, a key transition can be made in Scottish Enterprise from that initial phase to the point at which the potential for growth becomes clear. Do you foresee new arrangements to ensure that, when local authorities take responsibility for the business gateway contracts, they can still articulate with the enterprise networks in identifying and developing companies with the potential for growth?
That will continue to be a key component of the contracts. The obligation on those who operate the business gateway contract is to hand over business ventures that they think have growth potential to Scottish Enterprise and, in the future, to Highlands and Islands Enterprise. In no way do I want to disrupt that relationship. You make a fair point. There are numerous examples of organisations that have emerged through the business gateway and gone on to receive more significant and detailed support from Scottish Enterprise. In no way do I wish to disrupt those arrangements.
My other question is about the engagement of local businesses with local outlets of the enterprise networks. The model that you have chosen to set aside, which you made clear in advance that you would do, is of local enterprise boards that give people from local businesses a corporate responsibility for developing a local enterprise company and delivering its objectives. Do you recognise the concern that removing that corporate responsibility from people who are active in local businesses might change their relationship with an enterprise network's wider objectives? The risk is that advisory board members will simply articulate the interests of their own companies or sectors and that collective responsibility for growth of the local economy will be lost.
If our concern is that people would join regional advisory boards to pursue their own company interests, that would also have been a concern about local enterprise companies, but I do not think that people behave in that way. I had a constructive discussion with local enterprise company chairs before I made my announcement. My experience is that those individuals share the Government's determination to make the economy more successful and want to do their bit to make that happen. I welcome that and in no way do I want to give the signal that I am not interested in continuing with that.
However, it is important that we simplify some of the structures to make that happen. In the area with which you are familiar—the north-east—various complex arrangements are in place between Scottish Enterprise Grampian, local authorities and local economic forums. The reforms will simplify that and make the system much more cohesive and focused. A key challenge—not in Aberdeen and Aberdeenshire, but in other parts of the country—is for local authorities to engage more with the business community on formulating their priorities and their direction. There are good examples of local authorities that are steeped in connections with the business community, whereas others are a bit distant from it.
The reforms will bring all that together. Local authorities take key decisions on planning, transport infrastructure and all sorts of other issues that have an impact on businesses. The Government is keen to bring local authorities into the fold of seeing part of their purpose to be to support the Government's determination to increase economic growth.
In essence, my point is about the distinction between the accountability and responsibility of a person serving on an advisory board, whose responsibility is clearly to give advice, and the responsibility of somebody serving as a director of the board of a local enterprise company, who has a corporate responsibility. I am concerned that some of that commitment to the wider local economy might be lost. Have you thought about how you might replace that or compensate for it? Connected to that, in the Scottish Enterprise area, corporate responsibility in that sense will now lie with a single board at the centre. In that context, do you intend to review the composition of that board to ensure that it is as broadly based as it ought to be?
In my experience, the individuals who take part in the boards are motivated to do their bit for the local economy. I do not think that the people who will join regional advisory boards will have a different perspective. Indeed, as I said in my comments about the balance of the regional advisory boards, there will be a combination of businesspeople, local authority representatives and further and higher education representatives. Those people have the same outlook and ethos as the people who are on the boards of local enterprise companies; it is just that we are simplifying the structure to make it a great deal more coherent. That good will can be captured without much difficulty.
The members of the board of Scottish Enterprise have terms of office, and the Government will consider appointments to the board in the proper fashion through the public appointments process. Obviously, the Government will be keen to ensure that the boards of Scottish Enterprise and Highlands and Islands Enterprise are appropriately representative of the geography of, and the different interests in, Scotland.
In relation to the capturing of business input, there are good examples of our engagement with the business community at an industry sectoral level; I referred earlier to the Financial Services Advisory Board. We are engaging with business on renewables through the Forum for Renewable Energy Development in Scotland. There is also a life sciences group. Where we have key areas of focus for economic activity, that type of channel is a good one for Government to use.
Thank you. I would like to finish with two questions, the first of which is very brief. Two current senior members of staff at Scottish Enterprise are suspended. Are ministers taking an interest in that? I would have thought that it must be of concern to Government.
Yes. You will appreciate that I cannot say much about the matter, but we are aware of the situation. It is an operational issue for Scottish Enterprise, but ministers are aware of it.
Thank you. My second question is somewhat parochial. We have not really touched on VisitScotland today and I am conscious that you have to go. My concern about VisitScotland in the Highlands and Islands is that, although the model that will replace the area structure, which underwent reform several years ago at a cost of £7 million in reorganisational funds, may suit the rest of the country, in the Highlands and Islands it could mean that everything ends up being directed from Inverness. I assure you that for people in Lerwick, Wick, Stornoway and Oban that is not necessarily a desirable outcome. Can you assure me that that will not happen?
It is important that our public services are effective and representative and serve every part of Scotland; therefore, the Government would not want to pursue reform that somehow led to the diminution of activity in the Shetland Isles. We want to ensure, through our engagement with the relevant organisations, that that does not happen.
I referred briefly to the strategic forum that we intend to convene, which will involve Scottish Enterprise, Highlands and Islands Enterprise and VisitScotland, and which will be chaired by ministers. The purpose of the forum is to provide the same assurance that I gave to Marilyn Livingstone. That is the forum in which the Government will ask organisations whether they are delivering services in the fashion in which we want them to be delivered.
Some of the concerns that have been expressed are also relevant to the community that I represent. Our tourism organisations are extremely good at marketing Scotland and encouraging people to visit it. However, one of the key challenges to Scottish tourism is to ensure that, once people have arrived in Scotland, they visit Shetland or, in my case, Perthshire and Angus. We must ensure that we have in place effective means of promotion and marketing activity that encourage people to come to those areas, so that we have a vibrant tourism sector in all parts of Scotland. If we think that the structures that are in place are not delivering that, the Minister for Enterprise, Energy and Tourism, Jim Mather, and I can exert influence through the strategic forum to ensure that we get out of the arrangement exactly what we want. The concerns of members of Parliament, as representatives of communities, are significant in my consideration of the issue.
Thank you. You may get a letter from me at some point.
I thank the cabinet secretary and his officials for coming along; their evidence has been helpful. We look forward to seeing the cabinet secretary, wearing his finance hat, in a couple of weeks' time, when we will discuss how he will afford to put into practice all the measures that we have discussed. I suspend the meeting for a minute, while we reshuffle the deckchairs.
Meeting suspended.
On resuming—