Agency blasted for underspend
MSPs attack Scottish Enterprise for failing to back businesses
Despite having £10 million to spend in the first year of a new programme, the agency did no deals and in the second concluded a deal worth just £1m, including private funding.
The agency’s management is now facing calls for action to be taken for what is described by MSPs as an “unacceptable” underspend.
The Economy, Energy and Fair Work Committee was also alarmed that the country’s 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.
Concerns were raised at the beginning of this month that Glasgow-based Scottish Enterprise was struggling to spend the budget allocated for growth businesses under an initiative managed by the European Investment Fund (EIF).
Iain Scott, the chief financial officer at the agency, told the Scottish parliament’s economy committee that just one deal worth £1m had been concluded since the Scottish-European Growth Co-Investment Programme was launched in June last year.
Daily Business reported Scottish Enterprise’s admission earlier this month
He admitted there was a pipeline of companies, but the agency was “under a bit of pressure” and may not spend the budget.
In a report published today, convener of the Economy, Energy and Fair Work Committee, Gordon Lindhurst says: “With only £500,000 invested by Scottish Enterprise out of a pot of £10m, 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.’
The committee said Audit Scotland should carry out a further performance audit report to examine the claim that Scottish Enterprise generates between £6 and £9 GVA for every pound it spends.