Blow for ministers
Scots government ‘fails to understand business’
Another study has criticised the Scottish Government’s standing with the business community, adding to a growing mistrust with ministerial policy making.
The Fraser of Allander Institute found that fewer than one in ten (9%) of Scottish firms agree that the Scottish Government understands the business environment in Scotland
An overwhelming 64% of businesses felt ministers failed to recognise the needs of the business community.
The findings come in the same week that research by Survation for communications firm True North, showed that 51% were unimpressed by Scottish government attempts to build a competitive location for business. Less than a third (29.5%) were happy with the level of support for businesses, while the remaining 19.5% said they did not know.
The latest Scottish Business Monitor, produced in partnership with Addleshaw Goddard,surveyed more than 400 firms from across country in July and August.
Against the backdrop of the Scottish Government’s ‘New Deal for Business’, the Institute asked a series of questions relating to firms’ views of their relationship with the Scottish Government.
The report found that just 8% of businesses agreed that the Scottish Government engages effectively with their sector, with 67% of firms disagreeing.
A slightly better 19% of surveyed firms agreed that they knew an effective route to influence Scottish Government policy, while 39% of firms did not.
The latest analysis also finds that larger firms typically disagree more strongly than smaller firms when it comes to whether the Scottish Government understands the business environment in Scotland or engages effectively with their sector.
Professor Mairi Spowage, director of the Fraser of Allander Institute, said: “These results are obviously pretty disappointing for the Government, with the vast majority of businesses not feeling that the government understands business or that they engage effectively.
“However, they underline the importance of the Scottish Government resetting their relationship with business. It is therefore more important than ever that the New Deal for Business leads to changes in approach in the future.
“These indicators can help us track progress over time – and hopefully see improvements in the relationship.”
David Anderson, head of corporate at Addleshaw Goddard in Scotland, said: “Developing the best environment to do business is essential for the economy to thrive so it’s important for policymakers to be aware of the sentiment among business leaders in this regard, the good and the not-so good. These results are very timely and speak to the frustrations that businesses are clearly feeling.
“More than anything, however, the findings emphasise the need for business and government to come together and engage more effectively – working in partnership with the business community is what the New Deal of Business is about and these figures provide a benchmark as we move forward.”
Other key findings:
- 80% of hospitality firms and 92% of other service activities businesses disagreed with the statement that the Scottish Government understands the business environment, the highest disapprovals of any sector.
- 86% of firms with more than 100 employees and 73% of firms with under 100 employees felt that the Scottish Government did not understand the business environment.
- 92% of other service activities, 77% of construction, and 72% of retail firms disagreed that the Scottish Government engages effectively with their sector.
- Larger firms had a higher rate of firms feeling that government engages ineffectively, with 90% of firms with 250+ employees and 72% of firms with 1-10 employees disagreeing with the statement that the Scottish Government engages effectively.
- 50% of other service activities and 48% of professional services responded that they did not know an effective route to influence Scottish Government policy, the highest of any sectors.
- Unlike previous questions, smaller businesses were more likely to not know an effective route to influence policy.