Enterprise and Lifelong Learning Committee, 09 Feb 2000

Meeting date: Wednesday, February 9, 2000

Official Report 271KB pdf

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Local Economic Development (Grampian)

We now move to a case study in a different format from those that we have already carried out in Tayside, Fife, Ayrshire and Renfrewshire, as we take evidence from representatives from the Grampian area. I welcome the delegation, from a variety of different organisations, that has come to us. I invite Ed Gillespie of Grampian Enterprise to introduce his team and to make some opening remarks.

Thank you. On my left is Amanda Harvie, chief executive of Aberdeen chambers of commerce. Bill Ferguson is chief executive of Aberdeen Enterprise Trust. Gordon McIntosh is director of economic development for Aberdeen City Council. Bruce Armitage, who is a member of my staff at Grampian Enterprise, specifically asked to come along to talk about individual learning accounts. My name is Ed Gillespie, and I am chief executive for Grampian Enterprise.

Thank you, Mr Gillespie. I understand that you will make some opening remarks, following which we will move on to questions. I ask you to keep your remarks brief, as there will be a number of questions.

That is what I wanted to do.

We were very pleased to respond to a request from Elaine Thomson for us to hear evidence from the Grampian area.

Thank you. We have come along as a partnership to talk about how we are organised in the Grampian region with respect to economic development in general and new business start-ups in particular.

The north-east of Scotland economic development partnership has been on-going for some two and a half years. It was launched after wide consultation and we have adopted a joint economic framework that was published in February 1999. That framework dovetails completely with the strategic vision of the member organisations. The member organisations of the partnership are the two councils—City of Aberdeen Council and Aberdeenshire Council—the local enterprise company and the chamber of commerce: those are the four main partners in the economic partnership.

Out of that economic framework, a vision for the north-east was published in February 1999—which is in the documentation that the committee has received from the various partnership members. The senior board of the partnership meets bi-monthly and typically comprises leaders of the councils and chairmen and chief executives of the organisations. The chief executives of the four members meet monthly, the executive team from each of the partners meets weekly, and we have divided our strategic framework into 10 major action areas.

The 10 action areas are reported on at our bi-monthly meetings and the responsibility for each is designated to a lead partner from one of the four partners. Those designations were decided at an away-day that we held, involving the staff of all the organisations working together, trying to employ the individual expertise of the individual members. The 10 areas of operational focus are: exporting, land and premises, transport, information and communications technology and e-commerce, communications, lifelong learning, business start-up, on-going business support, communications and lobbying, and branding of the north-east of Scotland.

That is what the partnership is about. Within the partnership we have set up those cross-functional teams. Amanda Harvie, as the chief executive of the local chamber of commerce, is leading on the branding of the north-east—that is an example of the way in which we work. The model for business start-up that is being used in the Grampian area provides another example of the co-operation that we have. Of the partner organisations, the local enterprise company, the chamber of commerce, Aberdeen Enterprise Trust and Aberdeen and Grampian Tourist Board are located in the same office. We also share a front-of-office business shop: the reception and business shop are at the front of the building and we share those facilities.

Business start-up in the Grampian area is delivered through four enterprise trusts. We have one representative of those four trusts with us this morning, as part of our partnership team—Bill Ferguson, the chief executive of the Aberdeen Enterprise Trust.

That is how the partnership works, and that is what we try to do. We believe that we are a good example of working in co-operation towards business start-up and strategic economic development in the north-east of Scotland. I shall stop there and open the debate to questions.

Thanks very much, Mr Gillespie. I shall begin by asking a question on the delivery of service. I appreciate what you said about splitting the strategic framework into 10 action areas, and about the allocation of leadership to particular partners within your partnership. Are any services provided by more than one organisation in your area? For example, do two organisations provide business start-up advice, or are two organisations involved in the development of visitor attractions?

Exporting, perhaps, provides an example. Both the chamber of commerce and Aberdeen City Council organise trade missions, but that work is split into individual target sectors.

So you might cover Aberdeen city, whereas the chamber of commerce might cover the county?

No, I mean the targeted sector. That is done on the basis of an export survey that we carry out every two years. That identifies the markets that businesses would like us to target and support them in.

So you would not knock on the door of the same company more than once, unless you were to do so regarding different geographical areas that you might want to target?

Absolutely.

Business start-ups are primarily delivered by the four trusts in a geographic split. There is one city trust, two regional trusts and a trust that covers the city and regions.

On the export partnership, there is a co-ordinator who links the organisations together so that duplication can be avoided. Although we serve the same market, that is done in a co-ordinated way.

You mentioned that the local enterprise company, the chamber of commerce and the tourist board are located in the same premises with a single front-of-house reception, but that the tourist board is not part of the partnership.

That is correct. At the moment it is an economic development partnership. Although the partnership has been going for two years, we guard the partnership jealously in the sense that we have not opened it to too many members. We have had representations from a number of bodies who, in time, ought to be in the partnership. We are conscious that we should get the partnership functioning properly before we broaden its membership.

Are you in a position to say which other organisations have made representations?

Yes. Scottish Homes and the North East Housing Planning Alliance have both indicated that they would like to join. We review the membership of the partnership annually and then attempt to broaden it. We expect to do that this year.

On tourism, how is the dialogue with the tourist board structured? Is there an agreed tourism strategy? Please excuse my ignorance of north-east Scotland, but is there a Grampian tourist board?

It is called Aberdeen and Grampian Tourist Board. It has a published strategy, which we attempt to support when we can. There are, however, issues with the tourist board that need to be addressed outwith the partnership.

Perhaps I can expand on that. A business plan is developed annually with all the partners and the tourist board.

You promote lifelong learning. What contact or partnerships do you have with the local colleges, the universities and the Employment Service? They are vital and I want to know how they link in with your strategy.

Lifelong learning is one of the key elements of our strategy. Two colleges and three higher education institutions are involved in a number of local learning partnerships that support the north-east Scotland economic development partnership's strategy. In addition, there is a recently created forum that examines skills in Aberdeen and Aberdeenshire. We try to bring in institutions at operational level. Co-operation is good and there is a high level of joint planning.

The private sector is also involved in that process through the chamber of commerce, particularly in relation to on-line learning. We work closely with our NESDEP partners and in particular with the enterprise company and the universities and colleges. That is another example of the joined-up approach that NESDEP exemplifies.

We have made good use of European social funding to promote the use of on-line learning. We have put particular emphasis on some areas of Aberdeenshire where remote learning is a requirement rather than a luxury.

Do you see the colleges and universities joining NESDEP?

In time, they will be considered as candidates. They have not made a formal approach to us. The only formal approaches that we have received are the two I mentioned.

It is important that the NESDEP model does not replace the individual organisations. It was decided at the start that we would take an integrated approach and share ideas.

What is NESDEP?

It is north-east Scotland economic development partnership.

We wanted to develop a shared strategy and vision so it was important to have a coherent partnership framework in place from the start. Once that is established—which I believe has been done—we can examine the possibility of bringing other partners on board to make us even more effective.

Margo.

Who, me?

Yes—you still answer to Margo, do you not?

Aye, but you can call me madam.

I could call you all sorts of things. Until 12.30, I can call you anything.

I would like to return to tourism. I can see the logic of starting in Aberdeen and of saying that the partnership is an instrument for economic development. I caught the vibe that the partnership is about making and selling things, because you immediately went on to talk about exports.

In this part of the world—in Edinburgh—we see tourism as an instrument of economic growth, so we would not consider having a partnership such as yours without incorporating tourism. Why are you not incorporating it from the outset?

The tourist board covers an area that is slightly different from that of the other partners—it covers Moray as well.

What is wrong with the folk in Moray?

As I was born and brought up there, I must say that there is nothing wrong with them. As Mr Gillespie said, the intention was to get the partnership working well from the start. There is every intention to include other parties, including the tourist board, as time goes on and as we develop. Tourism is seen as being very important to the north-east of Scotland.

The chamber has been leading on the development of a strong regional identity for the area, as part of our economic framework. The tourist board is part of our steering group, at executive level. It is very involved in the consultation and in the strategy process.

But did you not say that the tourist board is producing a separate business plan? Will you not be considering that, to see whether it comes up to the mark?

That is not our role—we try to support the tourist board in every way we can. We are not in conflict with it.

To return to the first question, are your organisations involved in any kind of tourism promotion or tourism activities, in addition to what the area tourist board is doing?

We are involved in supporting tourism because, as Margo would say, it is a key part of economic development.

But are you doing that distinctively—

No, we are doing it together. We agree on which part we will each play in that process. To answer honestly, the tourist board is not a member of the partnership at this point in time.

We are just trying to find out why.

We work together. We share the same offices, the same telephone number and we work to the same plan, but the tourist board is not part of the partnership.

But you have a shared strategy?

Yes.

As I understand it, the tourist board participates at an executive level, if not at a board level.

There is close communication at that level.

I am trying to get the structure clear in my head, and to understand who does what and how the various organisations fit under the NESDEP heading. Four trusts, the local enterprise companies and the local authorities are all involved. Who does what? What is the relationship between them? What do the trusts do and what is their relationship with the local enterprise company and the local authority? What does the LEC do? Where do the local authorities fit into it? How do they all report back to the strategic bit at the top?

A nice easy one—how much money does each partner bring to the partnership? Who owns the trusts—is it the LEC and the local authority? We need more clarity on how it all works.

I can cover the relationship of the LEC to the trusts. There are four trusts in Grampian: Aberdeen Enterprise Trust; Enterprise North East, based in Peterhead; Gordon Enterprise Trust, based in Inverurie; and Kincardine and Deeside Enterprise Trust, based in Aboyne and Stonehaven, which is the southern part of Grampian. Those trusts reflect the old council structure. Originally, there were four councils.

Is that where the trusts came from, historically?

Yes. Aberdeen Enterprise Trust has been in existence for about 16 years. During that time, our sole focus has been business start-ups. Like the other three trusts, we have a contract to deliver business support in Grampian, to encourage entrepreneurship and to support businesses that are starting up. The four trusts are the only providers of that support in Grampian. We work closely together, with meetings every three months between our staff and at chief executive level. We have a common task force, which tries to raise awareness on marketing, and we have integrated training programmes in place.

Who is your contract with?

Our contract is with Grampian Enterprise, which is the local enterprise company.

Does it have a stake in the trust?

It has no stake in it, but about 80 per cent of our income comes from the contract with Grampian Enterprise. The other 20 per cent comes from the private sector. The other enterprise trusts' funding will be slightly different, depending on the areas of activity in which they are involved. The major focus for all four trusts is business start-ups. We have the same contract as the other three trusts.

The chamber of commerce is the only private sector organisation in the north-east Scotland economic development partnership, representing the business view. We believe firmly that the buy-in and representation of the private sector is key to effective economic development. The chamber is committed to the NESDEP model and to our role in the partnership.

We take the lead in areas where our expertise is more appropriate. That is the model that we have expanded across the partnership. As Ed Gillepsie explained, the chief executives meet monthly; we have a NESDEP board—comprising the chief executives and the key members of the individual organisations—and executive working teams, with different lead organisations pursuing the most effective means of reaching our end goals as quickly as possible. That avoids duplication and encourages efficiency and a more coherent approach.

What does the chamber do? Does it deliver services? If so, which? What is the contractual relationship?

The chamber's core services cover a wide range of business support activities. Within the north-east Scotland economic development partnership, we lead the development of a coherent regional identity to bring economic value to the area. We are also heavily involved in the development of a strong skills base, contributing to lifelong learning and the knowledge economy. We are involved in international trade development, and particularly in information and communications technology training and skills. We also have a key role in influencing difficult policy areas, such as the development of an integrated transport strategy for the area. We are happy to play a central role in economic development and are committed to our partnership activity.

We are not an equal partner in terms of the funding that we are able to bring, because we do not have a public purse. There might be an argument in future about how the partnership is resourced. For example, the chamber could have responsibility for regional identity management.

How do you carry out all those functions if you do not bring any resources to the table?

We input personnel, expertise and, to a small degree, funding—for example, we undertake market research into external perceptions of the area. We make a small financial contribution, but our main contribution is to represent the voice of the business community and to communicate the private sector view.

The north-east Scotland economic development partnership is still at an early stage, but we have made a good start. At the moment, the enterprise trusts are not members. I should also clarify that until nine months ago the chamber of commerce was not a member. It is now on board and we are expanding gradually.

One important thing that we do is to audit what we do. Two of the main areas of work are business start-up and business development. Our teams are examining ways in which we can work together more effectively. We do not have all the answers yet—we do not claim to—but our teams at the coalface are working effectively together to ensure that we deliver a better service to our customers, which, at the end of the day, is why we are there. We want to ensure that our part of the country is in a better position to compete than it would be otherwise.

Which economic development services does the council provide?

That is what I was going to ask.

I thought that that was what you were going to ask. I thought that I would ask it for you.

I want to get to the bottom of this.

We provide a wide range of economic development services. We have two functions. We have an economic development department, which delivers specific services across the four areas of economic development. We also have a wider role in economic development across the council. As one of the strategic development departments, it is our responsibility to co-ordinate economic development for our 10,000 employees. We have a wide-ranging role, from providing direct support on exporting and providing industrial property and land, to our broader role in environmental health and education/business partnerships. The local authority is involved in a wide range of services.

How does that sit with the LECs' role?

It sits very well. We identified that NESDEP had to play an important, co-ordinating role. If strategic issues arise at any time, NESDEP is able to meet quickly—as we have done in the past few weeks—and come up with solutions on how, as a partnership, we can respond to those problems.

How much money does each player bring to the table?

The total budget for Grampian Enterprise in the current year is £20 million, which is the lowest per capita amount in the Scottish Enterprise network.

I assume that the partners' budgets are held independently.

Correct.

So there is project funding as appropriate.

Yes. If a project comes up and is progressed under the NESDEP banner, the organisations come together to fund it—we have done that on a number of occasions.

What is the council's contribution?

The contribution to NESDEP is minimal—I think that we all put in £10,000.

What is the total economic development contribution?

The direct contribution from the economic development department's budget is £2 million.

Have we covered all the questions?

You must cover all my questions, or no one else will be allowed to ask any.

I am interested in whether NESDEP differs from economic forums in other parts of the country. Some of you operate out of the same building—is that different from models of economic forums that exist elsewhere? Although I do not want to labour the point, I am a little surprised that some of those forums do not include tourist boards.

How does that overall strategic planning translate into the experience of a small business going to the enterprise trust for assistance with the start-up process? Is the enterprise trust able to guide the applicant through the entire procedure—dealing with planning and so on—or does it act as a signpost to the other partners within the development partnership?

I noted that the council appears to have a role in relation to exports, which might be unusual in comparison to other areas where exports might not be seen as the council's responsibility. Do the witnesses have any comments about the strengths of the council's involvement?

I will ask Bill Ferguson to talk about the role of the trust and new business start-ups first and then I will touch on how the partners come together. We will come back to exporting at the end.

One of the benefits of the trust structure in Aberdeen and of operating collectively is that the partners are in the same building. We have a good relationship with the LEC and are able to signpost people to the resources that they require. We have our own in-house funding capability and an equity relationship with LINC Scotland. We have a property relationship with the city council and local private providers of property.

The partnership is strong—that is where we bring value to business start-ups. We clarify the confusion that exists and tend to be the first port of call, if not directly, then through the business shop. The business shop is through the wall from our operation. We can progress issues and introduce the business to the next stage of development.

What is the difference between the enterprise trust and the business shop, in terms of service provision?

The business shop provides business information. Businesses that require specific hands-on advice for start-up are then signposted to the enterprise trust. However, the two organisations are in the same building and work closely together, so there is an interrelationship.

The membership of the chamber is made up of existing businesses, which are fed into the system as appropriate. The fact that we have a close partnership means that we can work effectively—it avoids duplication and injects clarity, so that businesses are not passed from pillar to post.

I will deal with the question on local authorities' involvement in exporting. It is fairly extensive throughout Scotland. A major sub-group of the Scottish local authority economic development group—a trade development sub-group—deals with that throughout Scotland. The missions and exhibitions that it organises throughout Scotland form a major part of the Scottish programme for exporting.

You do that as part of a central organisation?

Absolutely. It ties in closely with what Scottish Trade International does in its national programme. I sit on the Scottish export forum, as co-ordinator for all the Scottish local authorities. Local authorities in Scotland have a major impact in exporting. In Aberdeen and the north-east, Aberdeen City Council is involved in the promotional aspects, whereas Grampian Enterprise and the chamber of commerce are involved in business development in relation to exporting.

We have an export partnership, in which we all participate. That partnership has recently been considering benchmarking the role model that operates in Fife, where all those involved are together in a single building, with staff provided by the partnership organisations. We are moving towards that, but we are not there yet. The partnership is saying, "Let us bring the resources together and focus them to get a bigger bang for our buck."

The key issues are how we can communicate and provide easier access to the market that we want to serve and how we can engage with the business community more effectively, to provide it with a better service. Those are the issues that drive the initiative that we are considering at the moment.

I understand the strategic force of the partnership. I am interested in delivery. There are four enterprise trusts; I understand that those are the deliverers.

There is only one business shop for new business start-ups.

There is only one business shop: is it in Aberdeen?

Yes.

What happens in the peripheral areas if a business needs help? Who would they contact?

If it was a small business start-up, it would contact one of the rural trusts.

One of the four.

The chamber of commerce also has membership throughout Aberdeenshire and the north-east. We are able to support businesses outwith the Aberdeen city area as well.

The contract for business start-ups is held by the rural trusts.

If I had a company based in Fraserburgh that had 200 employees, who would help me if I had been in business for 10 years?

In that instance, you would come to Grampian Enterprise, the LEC.

Do you have an account manager system?

Absolutely.

We could all add services to the facilities that Grampian Enterprise could provide. For example, if that business wished international assistance, it might be appropriate for it to come to the chamber of commerce. Our signposting facilities are such that we are able to signpost businesses effectively to avoid duplication; we hope that we are a clear point of access.

What measures are in place to determine whether the business community in your area is satisfied with the quality of your output?

One of the unique features of Grampian Enterprise is that it has a membership scheme. We have in excess of 1,000 members of the LEC. We have biannual meetings with the business community. We have meetings to seek out that knowledge. I recommend the membership scheme to the committee, because it means that companies in the area have some ownership of what the LEC does.

Is that membership greater than the chamber of commerce membership? Does it create a conflict with the chamber of commerce?

No, because we have arranged with the chamber of commerce that it is one and the same membership. If a company joins the chamber, it has automatic membership of the LEC, so we share the membership.

Has feedback through that admirable scheme suggested difficulties in the system and possible improvements?

There are always points of debate at our annual general meetings and half-yearly membership meetings. On most occasions, most of the feedback is positive.

Chamber of commerce members welcome the reciprocal membership. It gives them more bang for their buck and enhances the service that we give to them.

Typically, we would have 600 people at our membership evenings.

Chamber of commerce membership in the area extends to 1,300 companies and is growing all the time. It ranges from sole traders through to public limited companies.

Is chamber of commerce membership concentrated principally in Aberdeen? How many of your members come from the outlying areas?

Our membership covers the whole of north-east Scotland. Our core membership is in Aberdeen, but we have members in Aberdeenshire and through a network of five affiliated chambers of commerce extending from Aberdeenshire up to the Highlands and Islands. They will shortly be joined by another affiliated chamber in the Moray area. We are able to offer services using the Aberdeen chamber of commerce as the hub.

Does that extend the benefit of membership of the LEC?

Grampian Enterprise membership is not extended to the Highlands and Islands areas.

The LEC membership scheme is available to anybody in the geographical area that the LEC covers, which is the old Grampian region in all but name.

I intended to ask about exporting, but as we have already discussed that, I will move on.

Grampian is one of the areas that is doing a pilot study of individual learning accounts. Recently, the committee carried out a case study in Fife, which is the other pilot area. How are individual learning accounts working out in Grampian? What would ensure the success of the roll-out of individual learning accounts?

We have been running the pilot for nine months. It is due to run until the end of June this year. We started out with a very tight client group, following the priorities set by the original papers on individual learning accounts and targeting individuals in employment who had low skills and low earnings. That proved extremely difficult—I will come back to some of the lessons that were learned from those early days. I have some comments about the roll-out that I hope will be helpful.

Following changes to the client group that were made by the Department for Education and Employment, we had to revisit the structure of our pilot. We now have 355 active accounts, and the vast majority of the holders are in training. By the end of March, we believe that we will have about 900 accounts in place, rising to 1,200 by the end of the pilot in June.

Some of our experiences provide a useful insight into the relationship between individuals—particularly individuals who have not engaged in learning for some time—and training. Based on the experience of the pilot, it is our firm belief that, although this is unashamedly an individual account and an individual entitlement, targeting the individual solely is not as effective as targeting individuals via their employers or other intermediaries such as learning providers. We conducted an extensive marketing campaign, which included television advertising, and had very little response from people who were current non-learners. We had some response from those who would have taken part anyway and were confident learners, but we did not reach those whom individual learning accounts can help most—people who are in employment but have relatively low skills and have not engaged in learning for some time.

The key lesson that we learned from our early experiences—it took us four months to learn it, because we needed to give the original scheme a proper try—was that working effectively with employers and intermediaries, as well as targeting individuals, is needed to make the 100,000 target for Scotland achievable by 2002. It also encourages and enhances partnership between learning providers, employers and the individuals. Effective relationships are beginning to be built with the trade unions in some larger employers. The trade unions are oiling the wheels of individual learning account applications—particularly in Aberdeen City Council, where Unison is heavily involved—and marketing them effectively to their memberships. Of course, that can happen only with the full and effective co-operation of the employer.

Do members have any other questions on individual learning accounts?

I am very interested in ILAs. Like Margo MacDonald and Elaine Thomson, I visited the other pilot scheme in Fife. I am particularly interested in how you link the training to the aims of the businesses. If we are to use the ILAs effectively, they must further the aims of the businesses for which people work.

I agree with that to some extent. There are two effective means of using individual learning accounts. ILAs must be run in conjunction with businesses. If all businesses were fully co-operative and committed to lifelong learning, that would be the model that I would choose. That approach is proving to be highly effective with businesses in Grampian. We have put together work force development plans for those businesses. However, some businesses are not co-operative or committed to lifelong learning and it would be foolish of us not to consider ways in which individuals can learn, regardless of the attitudes of such employers.

Although we encourage a strong element of partnership between the business and the employee—a right and effective way to deliver individual learning accounts—we must also preserve the right of the individual to learn independently of their current employment, to further their career. That is important for the low-skilled and those who are non-learners—they might be afraid of learning. It is estimated that 35 per cent of the Scottish working population does not engage in any structured learning after leaving full-time education. Those are the clients whom individual learning accounts need to reach if the initiative is to be effective. If we can make effective information and support systems available to that client group, we can further the aims of the businesses that currently employ them as well as providing them with the opportunity to expand their career horizons outwith the context of their current employers.

For the benefit of Nick Johnston, I want to clarify the point that, although ILAs are designed to support business, they are also designed to support individuals, assisting them in their personal development.

Take that, Nick.

That was a reprimand. We will save that debate for later. Are there any more questions on individual learning accounts?

You say that the target group is the 35 per cent of the working population that has had no engagement with learning or training after leaving school, yet your marketing campaign failed to elicit any response. That poses the question of how you will engage that group. If those people are involved with employers that are unwilling to engage in lifelong learning and they are unwilling to respond to a big marketing campaign—you said that it was advertised on television—how will you persuade them to come forward?

To be fair to our marketing campaign, the experience of the first nine pilot schemes in England and Wales was exactly the same. It is a difficult client base to reach. The Department for Education and Employment has now made it a universal programme that is open to all. However, I still believe that we need to make every effort to reach the 35 per cent to which I referred.

We need people on the ground. Grampian Enterprise is currently running the pilot scheme with no additional staffing. We are trying our best to work with the current infrastructure. However, I firmly believe that the guidance and support required for that 35 per cent of the work force is labour intensive and demands professional people on the ground. Marketing and information campaigns are valuable, but they must be backed up by people who can deliver the support to individuals.

Can the employers you have found to be disinterested in individual learning accounts be divided by sector, or are they simply bad employers? Perhaps they see themselves as hard-up employers.

Employers who do not encourage their employees to learn are well known to us. There is some sectoral concentration—small retailers, for example. I am not pointing the finger at anyone, but the small retail sector has great difficulty with staff replacement. It cannot respond to traditional modes of learning. We need to flex up the mode of learning. Backfilling in a small retail environment is extremely difficult, so attendance modes of learning are almost out of reach for small retail businesses, even before the issue of financing is addressed.

We need to work with the learning industry. We are working closely with the Scottish university for industry to flex up the way in which learning is accessed, particularly by using information and communications technology, and we are involved in a number of projects.

Some sectors are known to be problematic. There are also employers who do not believe that lifelong learning is the way for them. They have not rejected individual learning accounts, but remain averse to major investment in lifelong learning. Whether or not the mechanism is individual learning accounts, what is important is getting across the message about lifelong learning.

When you talk about having people on the ground to stimulate the climate of approval for lifelong learning, are you referring to something like the opportunities centre that has just been established in Fife?

More than that. In July 1992, in Union Street in Aberdeen, Grampian Enterprise opened Stepahead, which was the first high street training shop in Scotland. That shop remains open, there is another in Peterhead, and we recently opened a learning centre in Huntly, which is fronted by a Stepahead information shop. I strongly believe that we need to encourage adults to get information and access to learning through a friendly retail environment. We have almost 50,000 customers a year across the three shops.

People then need to have their hands held and to be taken to the education provider, although we do not have the infrastructure do that. We can identify learning opportunities for people and contact the learning provider. We have designated people at Aberdeen College, for example, who will meet people, but a number of people drop out somewhere between us and the education provider. We need to strengthen the link between information and guidance, and participation in learning. Something is missing in the infrastructure.

It is good to welcome my local troops down here. Grampian Regional Council had a strong unit for economic development, which appears not to have died away but to have split between Aberdeen City Council and Aberdeenshire Council.

You have all robustly defended the position that you can work intimately together, but you have also agreed that there is tremendous overlap. I am also aware of perceptions of overlap in different areas. Do you believe that NESDEP will eventually evolve into a more unified publicly funded unit, particularly as the two councils appear to have economic difficulties? Is that on your agenda?

Before reorganisation, we considered setting up a joint economic development delivery unit. Part of that proposal was for a secretariat for the information and research side, which was also an issue in the split caused by local government reorganisation. In effect, NESDEP is that secretariat, but without a fully staffed unit. We have considered establishing such a unit, and that might happen eventually. You are quite right that there are budgetary problems. We do not deliver the levels that we did before reorganisation. There has been a clear movement from delivery to co-ordination of the councils' broader economic development function, although we still deliver in certain areas.

In other words, you do not envisage NESDEP taking on the development activities of the two councils. Presumably you still enjoy the benefit of staff and other resources, but you expect that development activities will run along parallel lines for some time.

Despite the fact that I was the author of the original proposal, I see difficulties now that reorganisation has taken place. We still could deliver some of our services more effectively, but it is important that there is a link to broader council services as well, because, as I started to explain earlier, local authorities deliver a wide range of services. If you took it right out of local authorities, you risk that connection with the other services that are provided by them. It is a bit of a quandary.

Surely community planning addresses that?

Community planning has worked effectively, and is working effectively in the north-east in Aberdeenshire Council and in Aberdeen City Council. We are at an early stage, but we will deliver our community plan.

Given that local authorities—rightly, in my view—are providing strategic leadership for the development of community plans, does that encourage the combination of services, or a rationalisation of the partners involved, to guarantee that while there is strategic focus, operational delivery is clear to those who are using the service? That is this committee's primary interest in this inquiry.

Yes, convener, but you have to look at community planning and how it relates to NESDEP, which co-ordinates the economic side of community planning. That is where NESDEP fits in, and it has yet to evolve.

I understand that your organisation is at an early stage, and that community planning is at an early stage, but I am interested to know whether you are thinking about the consequences of a seamless, community planning mode of operation, which will result in changes to the configuration of services for consumers, and about how far away those changes are.

The logical outcome is that there will be change, although it is difficult for us to say when that change will happen, given that individual organisations have yet to consider the details of what is happening. However, the logical extension of what you said is that there should be change, and the indication from the work that we are doing, in terms of the broader audit within NESDEP, is that there will be change.

We await the findings of this committee. We are here this morning to obtain a benchmark. We are saying: "We have a situation and are making the best of it. Here is an example of a group of people working in partnership. Try to maximise their deliverables." Logic dictates that the partnership should continue to exist, and that it should have a different structure in future.

Sorry, David, I interrupted you.

You got me, convener. You are good at asking my supplementaries. The relationship in the north-east is a unique one.

I think so.

It is important that the committee understands the outcome of that relationship, and its future perspectives.

The key principle is that we work together towards a common aim. Yes, there are times when we have separate agendas, but there are 10 strategic issues on which we work together. There is no tension there. We co-operate fully.

I understand your point that you do not have all the answers, and neither do we, but you come here with a prospective model for the delivery of local economic services that can be applied elsewhere. Two issues arise from that.

The first concerns the relationship between enterprise trusts and the partnership. It seems that the trusts have no role in strategic economic development, because they are not represented on your board, but they are the agents chosen by the partnership to deliver business support. That gives you a rural dimension that otherwise you would not have, but at the same time, the trusts are, if not wholly owned subsidiaries of the partnership, 80 per cent subsidiaries, because 80 per cent of their equity comes from LEC and partnership contracts.

Secondly, how does the partnership address what seems to me, a west central Scotland guy, to be the disparate economic sectoral interests in your region? Are those interests addressed via the 10-point strategic programme for lead areas, or is there an additional designation within those lead areas to address those sectoral interests in your part of the world?

The trusts have contracts to deliver business start-up. The model is worthy of note as they deliver that in an impartial, non-profit-making way under contract to the local enterprise company. That system has been successful, when judged by the number of start-ups that we have had relative to our population.

If you were dissatisfied with the delivery of service of the trust, would you withdraw the contract?

Indeed, but we have not had to do that. We have 9 per cent of the population and 10 per cent of the business start-ups.

In the past two years, we have used the trusts to introduce Investors in People support to small businesses that we in Grampian Enterprise do not have the staff to deal with. We fund the trusts to deliver Investors in People recognition for us in that small business sector.

You asked about the economic area in which we work. The city of Aberdeen has, historically, been in a fortunate situation, with lower unemployment and higher average earnings than the rest of Scotland. However, our studies indicate that that is unlikely to continue. We anticipate 1,000 to 1,500 job losses from the oil and gas industry every year from now to 2003. We have a fishing industry that nobody needs me to comment on and a rural hinterland that is in serious difficulty.

We are increasingly focusing on the issues of that hinterland. We need to find a way of developing a community capability. As farms fail—and up to 20 per cent of the farms in the north-east might not be there in two years—the communities and businesses that form around those farms become vulnerable. We have to tackle that issue. We do not have the answers, but we will focus on those issues and use our partnerships to help us do something about the problems.

Grampian Enterprise is looking to sustain a high quality of life for the people of its area. We do not want to have to deal with crises only when they arise. We have had some good times but the future looks a little bleak.

Aberdeenshire Council is not here today. It has five area offices with economic development representation that act as points of contact for businesses. It works closely with the enterprise trusts, is involved in the funding of the enterprise trusts and is part of the partnership.

We have other substantial items to deal with today, so I will draw this part of the meeting to a close. I thank the witnesses for their attendance.