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Forbes challenged

Higgins: business and Holyrood bond ‘isn’t working’

Benny Higgins at Reset conference

Benny Higgins: relationship not strong enough

Government adviser and former banker Benny Higgins today told Finance Secretary Kate Forbes that the relationship between government and business “isn’t working”.

Mr Higgins, who delivered a key paper for the government last year advising on post-Covid recovery, said there was a view in the private sector that engagement with ministers “hasn’t been strong enough”.

During a webinar on the future of the Scottish economy, he said: “Notwithstanding that collaboration is so important, why is that the relationship between the Scottish government and business, perhaps more than anything smaller businesses, isn’t working?”

Ms Forbes replied: “The relationship has quite obviously been strained during Covid. There is no question about that.

“I am the frontline of that engagement and I hear the challenges and issues.

“Any government that shuts down vast swathes of the economy is going to have a rocky and a challenging relationship, and unfortunately we are still in the throes of the pandemic.

“Cases are rising slowly… and we are trying to grapple with whether to take action or not.”

She told the Scotland Reset webinar that “on the flip side” there are huge opportunities. The tech sector had a “reasonably okay experience during the pandemic” as a lot of businesses have been digitising.

Kate Forbes

Kate Forbes: offering reassurance

“We have a very constructive relationship with the tech sector,” she said.

“Where we have got representatives of the business community actively engaged in government policy I think that gives reassurance to the private sector that we hear them and that we listen to them.”

She said this could also apply to the renewables and the food and drink sectors.

“I always take issue with any broad or blanket statements as I don’t think they are always true if you unpack them further.”

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Mr Higgins conceded that there were nuances in the situation, but added: “In any relationship, whether personal or business, when one party thinks it isn’t working then it isn’t working.

“I’m not suggesting it’s across the board, but there is a strong body of opinion in the private sector preceding and during the pandemic that the relationship with the Scottish government hasn’t been strong enough.”

Under further questions from Mr Higgins about the enterprise agencies, Ms Forbes said they needed to “refocus on the economic strategy” and on “the areas that matter”.

In what appeared to be a veiled criticism of the performance of Scottish Enterprise and Highlands and Island Enterprise, Ms Forbes said there was a “tendency to try doing everything moderately well, rather than a few things exceptionally well.”

She said: “What we need right now is a renewed focus. We have two new chief executives (Adrian Gillespie at SE and Stuart Black at HIE) who are absolutely brilliant, South of Scotland has always been more nimble because it is new.

“We have good leadership and we need to refocus our efforts on the areas that matter. If we do that it will increase effectiveness.”

She said: “Substantial sums of money are being spread too thinly over too many areas and that is an example of where we have to stop doing multiple things and invest in one significant catalytic initiative.”

But she said government intervention should be in those areas where it was most needed and that government “should not pick winners.”

Murdo Fraser, Conservative spokesman on Covid recovery, told the same event that there had been a major reduction in the budgets of the enterprise networks and confusion over who is responsible for parts of the growth agenda.

He said it was worth noting the discussion in England around the regional agenda.

“In Manchester, for example, there is an elected mayor leading a city region with widespread powers over economic growth, over planning and enterprise.

“In Scotland everything runs from Edinburgh when we could have much stronger, enhanced local devolved power in Aberdeen, for example.”

He said that there were still too many barriers facing businesses, but generally the Scottish economy is performing a lot better than had been expected.

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