Is there still a role for Scottish Enterprise?
Does Scottish Enterprise do enough to justify is enormous budget, this year totalling £250 million? It’s a question that’s been asked many times since it emerged as a successor organisation to the Scottish Development Agency in 1992.
Figures out today show it having to write-off £13m in bad loans etc. It makes a good headline. Nobody loves a public sector agency seen to be squandering our hard-earned cash.
But another figure that is buried at the bottom of one newspaper article shows a profit for the taxpayer of £17m through the returns it made on the good investments. So it would appear SE is actually benefiting the taxpayer.
Selectively use of statistics is the privilege of those who possess them and we all know about the reputation of statistics.
No one can promise that every investment will produce a positive return. Not even the best and most heavily-bonused fund manager. It is inherent in taking a risk that some risks simply won’t work out.
The bigger question is whether SE exists to take a risk at all. Should it play safe with its – our – money and resists all risk by not taking a punt on anything that could possibly produce a negative return?
Even if it ploughed all its money into providing routine advice or supporting infrastructure it could not guarantee that it was being spent wisely, or should I say, with a guarantee that those receiving the funds would put them to good use.
SE in fact has good record on risk. Its original venture capital operation was eventually carved out of the quango by Calum Paterson who created Scottish Equity Partners, one of the most successful privatisations ever in Scotland. It has raised hundreds of millions of pounds to be invested in growing companies, expanded into England and Europe and has won a number of awards. The pity is that Scotland does not have more SEPs.
However, it is fair to day SE has gone a little quiet of late, so much so that many of the younger generation might not even have heard of it. This low profile, compared to the noisy headline-grabbing days when it was led by Crawford Beveridge, Robert Crawford and Jack Perry, should not be mistaken for irrelevance.
It has certainly undergone change over the last 22 years. Mainly known for the work of its inward investment arm Locate in Scotland during the years when the Asian and US electronics firms were arriving in the UK, it is now less easy to detect what it does or stands for. Beveridge at least set out a series of policy statements in such areas as growing the business birthrate and commercialising university research. Crawford wanted it to pioneer the “knowledge economy” while Perry went for supporting growth firms.
It cast off its role in skills development and when the SNP came to power some wondered if it would change SE’s remit again or even scrap it altogether. Scottish Development International, a joint SE-Scottish government body, is now the focus of its work. It more or less replicates Locate in Scotland with the addition of promoting Scotland overseas.
Sadly for Lena Wilson some the biggest headlines of recent years have been in relation to her salary which exceeds that of the Prime Minister. Questions are still asked about how that can be justified, though she might earn a similar salary in the private sector where those of many business leaders dwarf those of cabinet ministers. It is more to do with her value to the organisation and the country that matters and unfortunately Scotland still suffers from a bitter resentment towards anyone who earns a lot of money.
It seems SE’s future is in no immediate danger and in spite of this latest “setback” it will continue. The agency is still backing business growth, still encouraging investors to put their money and jobs into Scotland and still flying the flag overseas.
But perhaps it is time for it once again to fly above the radar. It is one thing to claim that it justifies its annual budget, quite another to prove that it does so and simply shout a little louder about its achievements.
Its managers will be called to appear before a parliamentary committee at Holyrood. It will be an opportunity to bring us up to date with what it has been doing and whether it is still making a contribution worth supporting.