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Economist questions data on Scottish economy

Tony Mackay
Tony Mackay: shares Daily Business’s concerns over data

A Scottish economist has shared concerns raised by Daily Business over inconsistencies in data on the Scottish economy.

Independent operator Tony Mackay has written to EY over its research on foreign direct investment, stating that he believes it “seriously misrepresented” the situation in Scotland.

His intervention came after Daily Business highlighted the wide differences in reported data.

More discrepancies emerged today after new research on equity investment revealed a huge difference on an earlier survey.

Data from Scottish Enterprise showed it rose by 36% to £690 million last year against £509m in 2020.

Research published by the British Business Bank just three weeks ago showed a sharply steeper increase,(74%) but to a significantly smaller level £549m.

Scottish Enterprise says its data is based on research by Beauhurst and is compared with the other nations and regions of the UK. It said the figures showed “Scotland’s vibrant investment market is amongst the best performing across the nations and regions of the UK”.

According to this data Scotland is placed in the next best performing quartile outside of the ‘Golden Triangle’ of London, the South-East and East of England, for both deal numbers and amount raised.

However, the British Business Bank research, published on 22 June, shows that the number of equity investment deals in Scotland fell by 19%.

Daily Business last month highlighted the discrepancies in data around foreign direct investment after the Department for International Trade said 4,408 jobs were created in Scotland in 2021/22, while Scottish Development International put the figure at 7,500 and Big Four accountant EY said more than 10,000 jobs were created via FDI projects in Scotland, including 33 digital projects.

Mr Mackay told Daily Business he had been in contact with EY to challenge its report and methodology.

In an email to Ally Scott, managing partner for EY Scotland and head of the strategy and transactions team, he said: “I was very surprised to read your estimate of the number of new FDI projects in Scotland and the employment created. I do not believe your estimate is accurate.”

He added that “having now read the EY report three times”, he believed it “seriously misrepresented the FDI situation in Scotland.”

In particular, he states: “I just do not believe EY’s claim that there were 33 new digital technology FDI projects in Scotland in 2021.

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“The report also states that there were 18 new utility supply FDI projects in 2021. Again, I find that very hard to believe.”

He adds: “The estimated 10,136 jobs is also more than double the annual average in the previous decade.

“Again, I just do not believe this job estimate. I have seen no evidence to support such a high figure.”

EY says its data, compiled by independent consultants, is based on a number of factors including media announcements.

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