Call for quicker action
Hunter blasts ‘prevaricating’ public sector on Covid crisis
Quick response: Sir Tom Hunter says speed is of the essence
Sir Tom Hunter has questioned the government’s urgency in tackling the economic crisis after revealing that his investment business is awaiting a response to a proposal made last month.
He also raised the concern of one firm which went through a government scheme during lockdown for a 12-week pilot, but waited six weeks for a contract to be signed.
The entrepreneur said his Hunter Foundation supports a close public-private sector relationship which was a focus of the review chaired by former banker Benny Higgins.
“However speed is of the essence and we in Scotland cannot afford to delay or prevaricate on obvious actions that we could take now,” said Sir Tom in a commentary on the advisory group’s report published yesterday.
“In May we proposed co-investing with the Scottish Government in scaling up our Scale-Up Scotland programme, digitising it and quadrupling Scottish Edge to drive SME development – we even offered to pay the Government back if those investments didn’t work. We are still waiting on a decision.”
Sir Tom said the Hunter Foundation remains willing and able to help, adding that “with all of Scotland working together we can again lead the world.”
He added his voice to those questioning why there were so few references to small businesses in the Higgins’ report.
Ross Brown professor of entrepreneurship and small business finance in the St Andrews University School of Management, noted in a paper of his own that there was just one mention of SMEs in the Higgins’ report’s 77 pages.
“The current Advisory Group on Economic Recovery has largely (and surprisingly) neglected the crucial issues facing SMEs at the present time,” said Prof Brown.
Sir Tom added: “Evidence from the Kauffman Foundation indicates over the next five years more or less all net new job creation will come from the SME sector, an extraordinary and important point when we focus on rebuilding Scotland and largely missing from this report.”
He said the Hunter Foundation has consulted widely with the entrepreneurial community – over 50 scale-up businesses and 300+ potential high growth businesses – on what needs to be done to kickstart the economy, and based on that consultation it submitted a paper to Government and Lord Smith.
“In essence the message is that investment has fallen off a cliff, the angel market has all but disappeared and the VCs are largely acting in an entirely predatory manner. Growth funding is more or less impossible,” said Sir Tom.
He said he agreed with comments in the Higgins report that the Scottish Government does not understand or engages enough with business and he welcomed the First Minister’s reaction “if that is the view and a perception, then we have to recognise it as real and address it”.
The Foundation called for the government to drop the need for the new Scottish National Investment Bank to be a co-investor; and suggested a dramatic increase in the availability of loans.
As well as quadrupling support for the Scottish EDGE programme of support for early stage growth firms it called for speedier public sector decision making.
On the latter point Sir Tom highlighted the case of a firm which went through the ‘Civtech’ programme but has waited six weeks to get a pre-commercial contract drafted for a pilot that lasts 12 weeks.
The company said that the Government teams “really don’t understand commercial realities of timing and opportunity cost.”