Plenary, 06 Jul 2000

Meeting date: Thursday, July 6, 2000

Official Report 762KB pdf

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Enterprise Networks

Good morning. The first item of business this morning is a statement by Henry McLeish on a review of the enterprise networks. The minister will take questions at the end of the statement, so there should be no interventions during it.

I announce this morning the interim conclusions from my review of the enterprise networks. Following on from the framework for economic development published last week, the review is another important step towards the most comprehensive assessment of economic development policy in a generation.

The assessment takes place against a positive background. The economy is in good shape. The economic fundamentals are sound. However, we face major challenges. The e-revolution requires a step change in the way we deliver economic development. Even more important, we must ensure that our business community seizes the opportunities. All of us need to recognise in a real and significant way that the e-revolution is here. It is vitally important therefore that our economic development system is capable of meeting the challenge.

The review was built on extensive consultation, analysis and evidence. There is a shared vision about the need for effective and focused economic development. That vision is of economic development bodies that have a clear sense of direction and a clear task to perform; that have milestones and targets to ensure that they are on course to deliver the vision; that have 21st century Government approaches to 21st century problems; that are customer focused, responsive and relevant to the business, trainees and communities they serve; and that are accountable to the Executive and to the Parliament.

There is consensus about what is wrong at the moment. We need a better and more focused strategy. Previous Governments were unwilling and ideologically opposed to making economic development policy. There should no longer be a policy vacuum for the enterprise networks.

We need more comprehensive targets and milestones. We need to marshal our public sector agencies behind clear and challenging targets. However, we need to go much further. No one should be in any doubt about how serious I am about that. The outcome-led approach has to be a top priority. We should be adding value to the economy and getting value for the taxpayer.

We need more flexible enterprise networks that can adapt and evolve—1980s systems are trying to tackle 21st century problems. The enterprise networks need to be more streamlined and more focused on delivering the strategy set to them. They need to be more customer focused, responsive and relevant. They should be more business orientated, not less. They should be more focused on jobs, skills and new company growth to deliver employment opportunity for all.

We need more effective partnerships between the enterprise networks and the range of other players in economic development. There is duplication and overlap. Organisations pull against each other, rather than together to achieve a shared vision. Enterprise networks must be more accountable, with effective mechanisms for dealing with appointments and ensuring the highest standards of propriety.

There is consensus about the vision and the problems. It is for the Executive to provide the solutions and the prescriptions. The solution is a better strategy. We will accept the responsibility to set the lead on economic development. The framework for economic development provides the high level. A new strategy for enterprise is urgently required to turn that into action.

The strategy will set out the Government's action plan for economic development. It will establish clearly what the enterprise networks will do to create economic opportunity for all, to foster the knowledge economy and a culture of enterprise and to promote the learning revolution, sustainable development and social inclusion.

I want to see a clear thread running from our framework at national level through all economic development activity at national and local level. The enterprise networks will stimulate the dynamic competitiveness of enterprise, by promoting new markets, inward investment, indigenous enterprise, innovation and commercialisation.

The enterprise networks will help deliver a fairer Scotland, focusing on employability and employment—developing, advocating and implementing work-based solutions to social problems. They will help build the organisational effectiveness of our social economy and tackle the digital divide.

The strategy will set clear, well thought-out but tough targets for those agencies and will ensure that they pull together and in the same direction, so that we can make the most of the available resources. It will be a strategy for enterprise, to build a sustainable, successful economy, and to play an important role in building a fairer society and achieving employment opportunity for people in every part of Scotland.

I want the strategy to be in place by the end of the year, and to that effect I am establishing a high level expert group to achieve that. It will report to me and will bring together the expertise of the Executive, Scottish Enterprise, Highlands and Islands Enterprise, the tourist boards and the funding councils in higher and further education.

The key challenges for the enterprise networks are to reduce the productivity gap, the skills gap, the e-commerce gap, the entrepreneurship gap and, as part of that, the business start-up gap. No one should be in any doubt as to the priorities of the Executive and of the Parliament. Ultimately, we must try to close the jobs gap across the country. We will bring together the major agencies to ensure that all of them are absolutely clear about their role.

To deliver the strategy, there was an option to set up new organisations and shift responsibilities between agencies. I do not share that view. Structural change will be a distraction of management effort from delivery of our vision and strategy. Structural change misses the point. The focus is on customers, not on structures, and Scotland cannot afford to lose that focus even for a year. That is why the interim conclusions that I am announcing today are about evolution. Let no one be in any doubt that I expect the strategy to lead to significant change. Some of that change is already under way.

The solution is to develop more effective ways of working. That means new management approaches, new people, better development of existing staff and a radical shake-up in our style, approach and attitude. In a sense, we need a wake-up call to everyone involved in economic delivery. The enterprise networks need to adapt. I have backed and encouraged the change in the Scottish enterprise networks that is being driven through by Sir Ian Wood and Robert Crawford. They are delivering greater coherence, effectiveness and customer focus.

At national level, Robert Crawford has undertaken a thorough review of operations at Bothwell Street. He has eliminated duplication and overlap and has created seven key directorates that report directly to him, bringing together network operations, international operations, e-commerce, knowledge management, finance, customer relations and human resources. He has also taken advantage of the greater coherence of the network to develop sharing of support services such as finance and human resources. That allows significant improvements in efficiency, but I want to push them further. I want to see real improvements in appraisal and evaluation, and we must have more transparency.

Local enterprise companies are burdened by the last vestiges of the failed internal market introduced a decade ago, which creates unnecessary red tape and transaction costs. As Crawford Beveridge said in response to our consultation, we

"need to decide whether the economic development strategy for Scotland is simply the aggregate of all the local development strategies, or whether you start with a National Strategy and manage it locally".

He goes on to say that if

"the second is the intent . . . then the notion of independent companies, limited by guarantee is nonsense."

The second is my intent, and I agree with him. I will remove the anomaly of the LECs' status as companies limited by guarantee. That will allow greater efficiency and streamlining, switching resources from the back office to the front line. It will also create the opportunity for a significant increase in real local responsibility.

I want to take this opportunity to thank all the LEC board members for their contribution over the years to developing their local economies. They give their time for nothing. I want to remove unnecessary barriers to help them make an even more effective contribution.

The Highlands and Islands Enterprise network had a different starting point and chose different ways of working. Overall, it has stood the test of time better. That message has come through very clearly from people in the Highland community and I respect their wishes. I applaud the work of Jim Hunter and Iain Robertson. We will encourage them to play a bigger part in the debate on national issues.

The Scottish Tourist Board also needs to meet the challenges in the new strategy for Scottish tourism. I expect a report from the board by December on how that will be achieved. Tourism will take its proper place in national economic development, and it must also play a full part locally. Area tourist boards must enthusiastically implement our new strategy for tourism, and I expect them to tighten the effectiveness of their visitor services and local marketing functions.

In the autumn, we will respond in full to the conclusion of the Enterprise and Lifelong Learning Committee's report into local economic development. There is much in the report to support, but it says that there is duplication and confusion at local level and we need to sort that.

Part of the solution is the small business gateway, which was launched yesterday. It will bring consistent and improved standards to the delivery of small business advice and it will ensure that the various agencies that deliver advice do so in partnership with one another. It is a first and important step.

However, we must go further. I want to see coherence and clarity at local level and I will charge local economic forums with achieving that. We will work up our vision for the forums over the summer and will issue guidelines in the autumn, when I intend to discuss this and other important issues flowing from our framework in a major conference. I invite the Enterprise and Lifelong Learning Committee, led by John Swinney, to get involved in that process.

Local economic forums will not be talking shops, they will not be another layer of bureaucracy and they will not be replacements for the LECs. We will look to the LECs to take the lead in setting up the local economic forums. The LECs have a key role in addressing the dynamic competitiveness of Scottish business, but our ambition, which is set out in the framework, is much wider than that.

I want the forums to focus on what they can do to remove the barriers to regional and social development for all individuals, promote opportunities for economic activity to prosper and help people to access those opportunities and take full advantage of them. I intend to set challenging targets on those matters for the forums, such as ensuring employment opportunity for all, improving adult basic education and widening access to further and higher education. We will therefore implement local economic forums, which will work to address overlap and duplication amongst partners. I will set a clear time scale for the forums to deliver to me what they can do to address this issue.

Forums will ensure that all the relevant local agencies pull together, including the ATBs, and will share best practice across the country. Again taking a lead from the Enterprise and Lifelong Learning Committee, I will look at incentives for good performance. We must demand value for money in the use of public funds—that is an imperative, which underpins the statement this morning. Forums will be locally driven and provide local solutions within a national framework.

In conclusion, we will: produce a strategy for enterprise by December; improve national co-ordination; streamline the enterprise networks; require better appraisal and evaluation; and cut unnecessary red tape in the networks by changing the LECs' legal status. Local economic forums will bring more coherence in local economic development.

I commend this statement to the Parliament.

I thank Henry McLeish for his statement and the courtesy of giving advance notice of its contents.

I take issue with one point that the minister made at the beginning of his speech, which was that the economic fundamentals are sound. He may not have picked up on this morning's report from the Fraser of Allander Institute, which highlighted the fact that the Scottish economy went into reverse in the last quarter of 1999. We must be realistic about the economic conditions that we face.

I welcome the minister's comments on e-commerce and its application to business, but it is important that, in responding to that challenge, we do not ignore the requirements of our traditional economic base and its transformation.

I also welcome the minister's announcement yesterday of the small business gateway, which reflects concern across the country that when an individual wants to start a business, they want to go to one clearly defined contact point to get the answers that they require.

The minister has announced a fairly fundamental change to Government thinking about the responsibilities of the Scottish Executive in relation to economic policy. He has said that the solution to the problems, on which we all agree, is better strategy. I suggest that we must see a national strategy for Scotland that is implemented, which would make a pleasant change.

I welcome the fact that the Executive is prepared to accept responsibility and I welcome the minister's comments about how serious he is about implementing this. However, the minister must tell Parliament today how he intends to enforce this strategy and change the nature of the relationships between the Executive and the enterprise agencies to guarantee that they follow the strategy that the Executive and Parliament dictate. Parliament would also benefit from further information about the content and the remit of the high level expert group that he intends to announce to take this task forward.

Much in this statement is to be welcomed, but I am surprised that it is only the interim conclusions of the minister's review and that it does not go into more detail about what will change in the arrangements for economic development in Scotland. Our business community and the many agencies that have a stake in economic development want the talking to come to an end and the action to begin.

I hope that the minister will tell us exactly what is going to happen, and give us an absolute guarantee that the implementation mechanisms will have begun by the autumn and that by then agencies will be doing the work that they should be doing instead of reflecting on the issues yet again.

Finally, when will the minister tell Parliament about the format and structures of the targets and milestones for the agencies, and how those targets will be enforced if agencies cannot perform against them?

Sir David, you would not expect me to agree with John Swinney's analysis of the state of the Scottish economy. I am always impressed by unemployment figures that are at a 24-year low, employment rates that are at a 34-year high, low interest rates, low inflation rates, and a Chancellor of the Exchequer who wants to underpin our science and technology base by investing an extra £1 billion, from which Scotland will derive significant benefits. In essence, John Swinney has highlighted what we want to avoid. We know that there will be differences in emphasis over macro-economic policy, but today we seek unity and consensus on how local economic delivery should progress in Scotland.

I am grateful for John Swinney's comments on several issues. I certainly agree with him about e-commerce. I also agree that we must seek to move traditional industry into e-business while acknowledging what it contributes from, in some cases, a non-technological point of view. I welcome his comments about the gateway. It is intended to provide a single focus and I think that it will be successful.

In December, we committed ourselves to an enterprise review and, a few weeks ago, we announced the economic framework. Sir Ian Wood and Robert Crawford are introducing major structural changes in Scottish Enterprise. Today we are holding a review. The time scale is not long, as by the end of the year the talking will have stopped. As I have told John Swinney, we intend to hold a conference in the autumn. We will ensure that the high level expert group will work out the strategy for enterprise, which will provide the targets and the milestones. They will be tough, as Scotland cannot afford the luxury of talking up targets and not delivering in added value and value for the taxpayer. I agree entirely with the urgency that John Swinney is injecting into this matter.

A supplementary paper on the changes that we have announced today will be available this morning. I think that John Swinney already has a copy. We will detail more information over the coming weeks. Today's statement is constrained by time. I hope to progress matters in consultation with the business community, John Swinney and other members of the Enterprise and Lifelong Learning Committee.

We are introducing some fairly significant changes. This is a wake-up call. Scotland will not prosper in the future if it continues to talk a good game without implementing change. Every LEC and forum, and every member of the Enterprise and Lifelong Learning Committee, the Parliament and the Executive, should be aware that the Scottish economy is vital for prosperity and that we now need to register our interest in making it a real success.

I welcome the minister's certainty of pronouncement that the talking will stop. Although that is a worthy aspiration, I fear that, as long as we have politicians in Scotland, it is one that will never be implemented in practice.

I join John Swinney in thanking the minister for the early copy of his statement. There is much in the statement that is helpful and positive. However, I will share a reservation. The statement is entitled "Statement for launch of the enterprise networks review interim conclusions". I looked for something meaty; something I could grasp. I thought that nuts would be cracked, and kernels would appear. However, the statement falls slightly short of what I had hoped for in identifying the objectives of the announcement. I will draw attention to certain features of the statement and ask three specific questions.

The minister said:

"The outcome-led approach has to be a top priority. We should be adding value to the economy and getting value for the taxpayer."

I support that priority, as it is very important. Will the minister confirm that an outcome-led approach is synonymous with customer-driven requirements? In this case, the customer is the enterprise sector of Scotland—our businesses need to know where they are. Will the minister also confirm that there is not a danger of the whole brave new world of review of the enterprise networks being a mere systematic substitution of one form of bureaucracy for another? It is important that the minister can reassure the business community about that.

I listened carefully to what the minister said about structural change. Page 7 of his statement states:

"Structural change will be a distraction of management effort from delivery of our vision and strategy. Structural change misses the point. The focus is on customers, not on structures."

I agree with that conclusion, but I am slightly less easy with the definition.

Later on in the statement, the minister says that he is engaging in structural change of the local enterprise companies. Is it appropriate to have an unacceptable level of the enterprise budget being spent on administration? Of itself, that may not merit structural change, but it does merit careful examination of what is happening in the provision of enterprise services through our enterprise network.

Page 9 mentions the minister's intended treatment of the LECs. The statement says:

"I will remove the anomaly of the LECs' status as companies limited by guarantee."

I am, however, unclear what will replace the LECs' structure. There is a need to reassure not only the people employed in our LECs, who in many cases do a very good job at local level, but also local business communities that they are not losing out on an essential point of contact with like minds, and that they will not be confronted with some massive bureaucracy emanating from Bothwell Street.

Finally, I am reassured that the minister welcomes certain aspects of the report of the Enterprise and Lifelong Learning Committee on business development at local level. The minister embraces, in particular, the concept of local economic forums. However, is it not the case that the whole process would make a lot more sense if we waited until the autumn, so that the minister could give his full response to the report? Then, not only the Enterprise and Lifelong Learning Committee, but the business people of Scotland would know how all the bits of the jigsaw fit together. There is a distinct danger that this fragmented approach will lead to a dislocation of effort and, I suspect, an incoherent perception among the business community of what the minister is trying to do, however worthy it may be.

I thought things were going well until the end.

It is difficult at times, but we must look at the bigger picture. Within a year, we have had the first-ever framework for economic development in Scotland and huge changes are taking place in Scottish Enterprise. To be fair to Annabel Goldie, it may be important for me to invite either the chairman of Scottish Enterprise or Robert Crawford to give a presentation, first to the Enterprise and Lifelong Learning Committee and then perhaps to the Parliament, on the huge changes that are taking place. That would go some way to explaining some of the general concerns.

This will be a year of consultation and of change, but from January 2001 we will get on with the action. In that sense, I do not think that the approach is fragmented. Indeed, I believe that it is fairly coherent, because we are dealing with not only an enormous amount of expenditure—nearly £1 billion—but with the future of jobs, prosperity and the business community.

Annabel Goldie raised the issue of the new status of the LECs. I met the chairmen of most of the local enterprise companies yesterday in Lanarkshire to talk through some of the changes that we are outlining. I reassured them that the system would be more business led and more hard-headed, because the LECs will now have to be the tough edge of business implementation of the national strategy, through Scottish Enterprise and Highlands and Islands Enterprise. I told them that removing the status was something that I wanted to do, which would mean, at the end of the day, that they would have more flexibility at local level to implement the strategy. I made it quite clear to them that there is a national strategy, going downwards, which they will be asked to implement at local level. They were also reassured by the fact that they will be involved, as part of the consultation, in working out what the new model for and status of the LECs and their activities will be. I hope that they were reassured by that.

I entirely agree with Annabel Goldie that far too much is being spent on administration and not enough on front-line services. However, Robert Crawford has introduced far-reaching changes, one of which is to streamline the structure, which means that 150 fewer employees will be involved in the next few months in delivering that strategy.

Annabel Goldie asked whether the strategy would be customer focused. The customer is king; the customer is the business community. If we want more business start-ups, more skills in the workplace, more e-commerce, we must involve business. The customer focus will be resurrected to ensure that no one is in any doubt as to the way forward.

Annabel Goldie suggested that the document had no meat. We have a framework for economic development—something that we have never had before. There are fundamental internal reviews of Scottish Enterprise. There are new economic forums at local level with an ambitious agenda, embracing the Enterprise and Lifelong Learning Committee's desire to tackle duplication. We have the business gateway to which John Swinney referred. We will identify a new range of outcomes and we will set tough targets. That is a tough, radical programme. However, at the end of the day, that programme must work. When the strategy is implemented, we will ensure that we have the means to measure progress.

On behalf of the Scottish Liberal Democrats, I welcome the minister's statement. I want to consider more closely the Executive's announcement that it is to set up economic forums across the country. The conclusions that the Enterprise and Lifelong Learning Committee reached, which underpinned our recommendation for the establishment of economic forums, were based on evidence that was gathered from around the country. In Aberdeenshire and North Ayrshire in particular, we saw evidence of best practice working. The forums in those areas showed real partnership between the agencies. However, when we took evidence, it was generally recognised that we cannot legislate for good will. Agencies must come to the table in a spirit of willingness, co-operation and a desire to strip out duplication and overlap.

The Enterprise and Lifelong Learning Committee recognised the importance of real sanctions, evaluations and monitoring of the economic forums once they have been established. Will the minister clarify what action the Executive proposes to take to ensure that the forums deliver the elimination of overlap, duplication and competition between agencies? What action will he take if he finds that major agencies treat the forum as no more than a talking shop and use it as an excuse to defend their own territory? That is the crucial issue; it is the nut that we must crack. We must ensure that partnership works.

I agree with much of what George Lyon has said. First, I want to work out the guidance that we provide for the creation of the economic forums. There are examples of good practice, such as those in Grampian, Ayrshire and the Borders. We must build on that. Secondly, we must detail what the forums will be doing. I make no apology for that. We have a national framework and we must ensure that the local forums are part of that. We will outline the outcomes that we expect from the forums. Thirdly, we will specifically charge the forums with the Enterprise and Lifelong Learning Committee's main concerns about duplication, confusion and waste of public funds.

Fourthly, I have used the phrase "financial incentives", which has both a positive and negative element. If we want to encourage rather than criticise, we should try to find some way of challenge funding local developments, so that those who are enterprising, interested, coherent and committed will benefit, while those who simply pay lip service will not. Let me send a strong message to any potential player in the economic forums. I want to disabuse them of the idea that such forums are talking shops. Scotland cannot afford any more talking shops at national or local level. I assure George Lyon that that is the spirit in which I will pursue this agenda.

In theory, we have only just over a minute for back-bench questions, but as it is an important statement, I will let the discussion run on a bit. I urge members to keep questions and answers short.

I welcome the minister's statement and the changes to the structure of Scottish Enterprise. I was going to ask a very similar question to that asked by George Lyon about the local economic forums, and the minister's comments about more effective partnerships being welcome. How will the local economic forums interface with the small business gateway, and how will the minister ensure effective delivery at that level?

I was absolutely determined to ensure that, with these changes, we did not lose the business focus. That is why I told Annabel Goldie that, although we have the framework with the two agencies—Highlands and Islands Enterprise and Scottish Enterprise—a key business focus must run straight through to the LECs. However, we acknowledge that key players put hard finance and commitment into the delivery of business support services. Although the gateway is focused on the LECs, certain players in the local community have a business role and should be tied into the process. That said, the main point was to keep things tidy to avoid confusion between what the players in the forum were trying to achieve and Scottish Enterprise's delivery of hard-edged business aspects, which will be a function of the LECs. The small business gateway is an acknowledgement of that concern, and I hope that it will be supported throughout Scotland.

By what date will the forums be established and who will serve on them? Will the business and voluntary organisation voice be in the majority? If not, how will the minister ensure that the forums deliver their intended purpose, which is to remove duplication and overlap? What, precisely, are the mechanisms for ensuring that rationalisation takes place? Having read the statement and the supplementary statement, and speaking as a confirmed carnivore, I am left feeling that the question today is, "Where's the beef?"

With the greatest respect I can muster, I have to say that nothing Fergus Ewing ever says in this Parliament surprises me. When we talk about raising the economic game in Scotland, it is high time Fergus Ewing faced up to some of the changes and acknowledged in a tiny, tiny way that some progress has been made. Although I do not think that I will live long enough to see that happen, I will nevertheless leave the thought with Fergus Ewing for him to savour for the rest of the day. I hope that it might make some difference.

I covered the points about guidance and tough targets in my response to George Lyon, because he asked a question—

The same question?

Yes, indeed; the same question, which I answered.

Slightly more.

John Swinney says, "Slightly more" but he did not finish the sentence—and I know why.

Slightly more tough.

Slightly more irrelevant. If one answers a question, one expects some people to absorb the answer.

That said, I will try to keep consensual.

Why?

I refer Fergus Ewing to my answer to George Lyon.

We want to discuss with key players and partners the issues that Fergus Ewing has raised. My target is to get the forums up and running by 1 January 2001. The guidance will be available in the autumn. We want the work to start. As I have said, Scotland does not have the time to stand around when there is so much good work to be done—which is a major reason for establishing the forums. We will examine the composition, targets and outcomes of the forums. As this Parliament is about participation and inclusivity, I am offering the Enterprise and Lifelong Learning Committee and the business world an opportunity to shape that kind of destiny with the local authorities, the area tourist boards and other key social and economic partners.

I welcome the minister's statement this morning, particularly its reference to changing the legal status of LECs. I saw a ripple of pleasure among my Labour colleagues when that was mentioned.

I want to ask the minister about the working group and the strategy that he is hoping to implement by the end of this year. Given the members' business debate on Standard Life's mutuality and the development of co-operatives, can we perhaps speak to universities and colleges in Scotland to cascade that message of co-operative development? I think that that way forward provides real hope for the people of Scotland.

I have been in correspondence with Helen Eadie on the co-operative idea. I hope that it is taken further as a developmental idea at a local level. One of the key issues for the forum is employment opportunities for all. What Helen Eadie talks about is a good model of how they can be created.

As part of the exercise, we considered other countries. Israel, Finland, Ireland, Bavaria, Catalonia and other places have a range of good models, including the co-operative development models. I hope that, as well as having a firm national strategy, we will have creative diversity at a local level that is in tune with the national strategy and includes a flavour of certain areas of Scotland that have enormously differing economic difficulties—which is demonstrated by the approaches of Highlands and Islands Enterprise and Scottish Enterprise.

I ask the minister to set realistic expectations of what the enterprise network can do. He says that it will be charged with closing the productivity gap, the skills gap, the e-commerce gap, the business start-up gap—everything but the Watford gap. We must bear in mind the fact that the total budget for the enterprise network is less that 1 per cent of Scottish gross domestic product. We should focus on the things the enterprise network can do best and not give it so wide a remit that it is unable to achieve anything.

Regarding the strategy, where will the jobs come from? That is the key question. Scotland relies on three or four sectors for around three quarters of its exports. We need to diversify the Scottish economy and move into growth areas. Will the minister give a guarantee that the strategy will seriously address that?

Will the minister clarify the new status of LECs? I applaud his decision to remove their current status, but I ask him to clarify what the relationship will now be between local enterprise companies—which are no longer to be companies—and Scottish Enterprise.

I have partly answered Alex Neil's last point already. We have changed the name to local economic bodies. As a matter of urgency, we will have a discussion about the new status, the new constitution and the new description of those bodies.

I could not agree more with Alex Neil's point about widening our employment base. Our success is concentrated on a small number of companies in a few narrow sectors, especially in relation to exports. As part of the Scottish Enterprise review that Robert Crawford is conducting, we want to sharpen up the Locate in Scotland export drive. We are also preparing an export strategy for the five years from 2001. That will address the issue.

Alex Neil asked about employment opportunities for all in each of the areas. Given that unemployment in Scotland is at 4.9 per cent and falling, I do not want unemployment to be at 10.6 per cent in Dunbartonshire, 9 per cent in North Lanarkshire and at a similarly high level in Ayrshire and so on. The Executive and every economic forum must think creatively of ways of remedying that situation.

Alex Neil's first point was about focus. Our business advisers said that the framework for national economic development concentrates on productivity. Alex Neil knows that productivity is the product of a number of other things. Productivity is crucial and we have decided to give the hard-edged business focus to the LECs. Alex Neil is right to say that we can facilitate some improvement, but the bulk of the changes will come from the private sector.

In terms of skills, e-commerce, entrepreneurship and business start-ups, we do not compare favourably with other countries or other parts of the UK. That is part of the focus, but the overwhelming objective is productivity. I am sure that Alex Neil will agree that we should unite around that issue.

I welcome the minister's statement. Does he agree that to foster the dynamic enterprise environment that he has spoken about, we must do two things: foster entrepreneurship in primary schools and encourage responsible risk taking in the small and medium enterprise sector. Does the minister agree that, too often, this country—unlike the United States—does not give entrepreneurs a second chance?

I agree entirely with Irene Oldfather's comments. We are developing new ideas for taking entrepreneurship into primary schools and right through to the university sector. We want to engage the best entrepreneurs in Scotland to give that lead. That issue will be addressed.

Part of the focus of LECs will be to step up their activities to ensure that small and medium enterprises are entrepreneurial. As part of yesterday's announcement on the small business gateway, we announced grants of £500 for e-commerce activities. Bigger aspirations are part of entrepreneurship. Why should not Scotland be a nation in which we take considered risks? Why should not we be a nation that wants to invest for the future? Entrepreneurship is crucial, not only in terms of substance but in changing the culture of Scotland, which really needs to be changed quickly.

The minister made no specific mention of our local enterprise trusts. Kincardine and Deeside Enterprise Trust, which is in my constituency, is concerned about its future. Could he comment on how he envisages the future of the trusts, as there is some uncertainty about that? It would be beneficial if he were able to make a statement about them.

I will make two points about Mike Rumbles's comments on trusts. Yesterday, we considered the partners who will contribute to the business gateway. The trusts are involved in that partnership.

The economic forum will be a key way in which the trusts will further involve themselves. I say this to Mike Rumbles and to every organisation that is participating in the gateway: "If you can add value, provide value for money, avoid duplication and confusion and be part of the new surge at a local level to get the kind of success that I want, we are with you, but we will be tough on any organisation that receives public sector funding and simply does not deliver." Our approach will be as tough and as clinical as that, so the challenge to every organisation is to respond to that.

We thought, when we came to the chamber this morning, that we might cross the rubicon, but we are actually on a stepping stone in the middle. It would be churlish of me, however, not to acknowledge that at least we are half way across the divide, if not the whole way.

I want to ask the minister a specific question about the high-level expert group. While we welcome the establishment of that group—it is a move forward—one or two key players seem to be missing. I am thinking of the role of the transport infrastructure in economic development. Will the transport authorities be involved in that group—or local authorities, which are often responsible for quite a lot of the duplication and confusion that the Enterprise and Lifelong Learning Committee found during its deliberations? There should also be input into the high-level expert group from business organisations.

I will take that half way, half-hearted welcome from the Conservative group as a slight compliment.

The high-level group is being established to get the strategy for the enterprise network in place as quickly as possible. We have identified core groups but, to be fair, I want the strategy largely to be driven by the head of Scottish Enterprise, Robert Crawford. Scottish Enterprise has already done a lot of work on setting some powerful targets. That work will be enriched by other organisations.

The electronic, physical and transport infrastructure will be a crucial part of the Executive's role, and of the Parliament's role. I imagine that infrastructure will become a key specialism in the local economic forums in different parts of the country.

I am not sure that the high-level expert group will be able to make a contribution to the targets for LECs, but we want to involve it as much as possible in the work of the forums and in the Executive's—and the Parliament's—further work on this issue.

I apologise to those members whom I have not called. I allowed the time to run on beyond the usual half hour, but I must protect the time available for the main debate of the day.