SE warns of £35m funding gap

Published on Wednesday 21 April 2010 20:34

INVESTMENT in new technology, infrastructure and industry support programmes will be hit this year as economic development agency Scottish Enterprise faces a £35 million funding gap in its budget.

Grant aid to the agency from the Scottish Government has been cut as a result of "accelerating" spending on infrastructure projects to beat the recession.

The money was brought forward last year to invest in Scottish Enterprise projects including the Fife Energy Park, the Edinburgh Bioquarter and the SECC in Glasgow. But the funding cut in 2010-11 will cause a "shift away in emphasis on developing new intellectual property and research", according to government sources.

Crawford Gillies, chairman of SE, told MSPs in evidence to Holyrood's economy, energy and tourism committee yesterday that the agency faced "key difficult choices" in its spending plans. SE will reveal its spending plans today when it launches its business plan for 2010 to 2013.

A Scottish Government spokesman said the country's emergence from recession – revealed in official data yesterday – "vindicates" its cuts to SE's budget.

"News that Scotland's economy is growing again and the recession is at an end vindicates the decisive and comprehensive action taken by the Scottish Government.

"A key part of our economic recovery plan has been the acceleration of capital spending to support employment and bring forward key infrastructure projects."