Enterprise agencies under fire from Holyrood Committee

31.10.2018

Scottish Enterprise has been criticised by a Holyrood Committee for underspending on their budget.

Scottish Enterprise has been criticised by a Holyrood Committee for underspending on their budget.

The Economy, Energy and Fair Work Committee has released its pre-budget scrutiny report and is now calling for action to be taken on Scottish Enterprise's 'unacceptable' underspend. The committee also criticised the fact that the enterprise agencies 'set and mark their own homework' and called for ambitious and stretching targets.

The Committee's pre-budget scrutiny report this year focused on the roles of Scottish Enterprise and Highlands and Islands Enterprise, along with employability programmes including Fair Start Scotland.

The report scrutinised these employability programmes with recommendations on how to help more people in Scotland get into work. The Committee highlighted the need for more funds to be directed into interventions such as those integrating mental health and employability support.

The Convener of the Economy, Energy and Fair Works Committee, Gordon Lindhurst MSP said:

'With only £500,000 invested by Scottish Enterprise out of a pot of £10 million, the Committee is concerned that there has been a lack of progress in committing the money for the Scottish-European Growth Co-Investment Programme. We urge Scottish Enterprise to take action to ensure this money is used to benefit the Scottish economy.

'More funds should also be put into employability programmes focusing on mental health. It is vital for the economy that we can promote and support employment and encourage fair work, and we will continue to scrutinise these issues in future inquiries.'

In the report, the Committee also recommends: 

• That Scottish Enterprise take urgent action to ensure their £10 million Scottish-European Growth Co-Investment Programme budget is spent and that they provide an update every six months. 

• Scottish Enterprise and Highland and Islands Enterprise should set targets that are sufficiently challenging and ambitious.

• That enterprise agencies produce more explicit, measurable inclusive growth targets in future business plans.

• Audit Scotland should carry out a further performance audit report to examine the detail behind the claim that Scottish Enterprise generates between £6 and £9 GVA for every pound it spends.

• The Committee welcomes the voluntary nature of Fair Start Scotland, but recommends a review into the policy that people are excluded if they start the programme and drop out early.

• Fair Start Scotland's payment by result model must be monitored carefully as it may not sufficiently recognise the complex nature of the people engaging with the services.

Notes to editors

The Committee will take evidence from the Strategic Board in early 2019 as part of its ongoing budget scrutiny. The Committee will also gather evidence from businesses on the enterprise agencies' targets and how they are achieved and measured. 

The Committee sought written views over the summer. The Committee took oral evidence from Skills Development Scotland (SDS), Scottish Council for Voluntary Organisations (SCVO), Scottish Council for Development and Industry (SCDI), Scottish Trades Union Congress (STUC) and Employment Related Services Association (ERSA). They also heard from Scottish Enterprise and Highlands and Islands Enterprise (HIE) following publication of their annual reports and the Cabinet Secretary for Finance, Economy and Fair Work (the Cabinet Secretary), along with the Minister for Business, Fair Work and Skills (the Minister).

 

 

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