‘Poor’ Higgins report ‘written by civil servants’
Tony Mackay: ‘no new or radical thinking’
Another analyst in Scotland has heavily criticised the Higgins report on reviving Scotland’s economy, describing it as “very poor and very disappointing”.
Tony Mackay, who has worked as an independent economist for many years, says it contributes little to the development of the economy, and accuses the government of choosing “a strange group of people” to produce it.
In a written response to the report published last Monday by a group chaired by former banker Benny Higgins, Mr Mackay states: “It was a great opportunity to come up with radical proposals to revitalise the Scottish economy after the damage caused by the coronavirus pandemic. Unfortunately there is little in the report to do that.”
He is says it is not clear who wrote the report, but suggests that a few pages may have been written by Benny Higgins and other members of the advisory group on economic recovery (AGER) “but most of the report seems to have been written by Scottish Government civil servants, probably from the Office of the Chief Economic Adviser.”
He adds that there are many references and footnotes to previous Scottish Government reports.
“The report shows surprisingly little new or radical thinking on how to revitalise the Scottish economy. AGER had only three months to do its work but I expected more original proposals and recommendations, even if some of those had not been fully thought out.”
Mr Mackay says the group invited submissions from representative groups and members of the public, “but seems to have paid little attention to those”.
In his own recommendations and observations, Mr Mackay says one factor in Scotland’s chronic under performance has been “the poor management of the Scottish economy by the Scottish Government and its subsidiary bodies such as Scottish Enterprise (SE), Highlands and Islands Enterprise(HIE) and the Scottish Futures Trust (SFT).”
He adds: “SE and HIE used to have very good reputations for their work but their contributions have declined significantly in recent years.
“I have long argued that there need to be radical changes to and improvements in these bodies. However, the Advisory Group on Economic Recovery (AGER) report glosses over or ignores these problems.”
Mr Mackay’s comments follow criticisms from other analysts and commentators unimpressed with the report’s content and recommendations.
The report shows surprisingly little new or radical thinking on how to revitalise the Scottish economy.– Tony Mackay
Mr Mackay notes the negative comments reported by Daily Business last Monday from Prof Graeme Roy of the Fraser of Allander Institute, the entrepreneur Sir Tom Hunter, and Prof Ross Brown of St Andrews University School of Management, including Prof Brown’s observation that the report mentions SMEs only once and that it offers only “vague proposals”.
Mr Mackay shares concerns expressed by those such as Prof Roy that the government should take stakes in struggling companies.
“Various people have expressed their concerns about this recommendation because of the Scottish Government’s recent poor record in this regard, with investments in companies such as Prestwick Airport, Burntisland Fabrications (BiFab) and Ferguson Marine,” says Mr Mackay.
“This is not the place to discuss the problems with these and other companies, but there was surely an obligation on AGER to state how such problems could be avoided or at least reduced in the future. They have not done that.”
He adds that the section on the fiscal framework “seems more concerned with arguing the case for Scottish independence than addressing the problems caused by the coronavirus pandemic.”
He criticises the closure of Scottish Enterprise’s network of local offices and says the performance of Highlands and Islands Enterprise (HIE) has “also deteriorated substantially in the last few years.”
Mr Mackay points to appointments of senior people for their “political support for the SNP rather than for their business and other expertise.”
Benny Higgins: chaired the advisory group (pic: Terry Murden)
An obvious solution is to reform both SE and HIE in the hope that they could make the excellent contributions to economic development which they did in the past, he says.
“However, I can understand why AGER might want to take a more radical approach, given that these development agencies have been in existence for about 50 years. Unfortunately, the AGER recommendations are badly explained and I believe very poor.
“They are obsessed with the Scottish National Investment Bank (SNIB). How is this Bank going to replace the local contacts with local businesses which Scottish Enterprise and HIE used to have?
“A few new bodies have been set up recently, such as the Scottish Futures Trust and the Scottish Fiscal Commission, but their contributions to economic growth in Scotland have also been disappointing.”
As for the government’s relationship with the business community, Mr Mackay takes issue the recommendation that a Council of Business Advisers is set up alongside the current Council of Economic Advisers.
“The current Council of Economic Advisers has a dreadful reputation in Scotland, including among many professional economists.” he says. “Its recommendations have rarely been accepted or implemented and it seems to meet even more rarely.”
Mr Mackay concludes that The AGER report “is very poor and very disappointing. It was a great opportunity to come up with radical proposals to revitalise the Scottish economy after the damage caused by the coronavirus pandemic. Unfortunately there is little in the report to do that.
“The Scottish economy has performed poorly in recent years and significantly worse than the UK economy as a whole. One of the reasons for that has been a substantial deterioration in the quality of the work of the development agencies such as Scottish Enterprise (SE), Highlands and Islands Enterprise (HIE) and the Scottish Futures Trust (SFT).
“The AGER report asks for substantial additional financial assistance for these and other bodies. However, it makes no recommendations about improvements in the operations of these bodies, so the obvious implication is that much of any additional money will also be poorly used in the near future.”
In her daily briefing today, the First Minister described the Higgins report as a “very good report” and dismissed suggestions that it had been compiled by civil servants.
However, she said she welcomed “all voices” to make their views known.