Scottish Parliament bails out business exchange with £30,000 gift

Published on Thursday 31 December 2009 10:00

A BODY run by top business brains and politicians has fallen into the red and is having to be bailed out by the Scottish Parliament.

The Scottish Parliament & Business Exchange was set up in 2001 to promote links between the business community and politicians.

It includes people from some of Scotland's biggest companies on the board, including RBS, but it has ran up deficits totalling 61,000 in the past two years.

Parliament bosses have now agreed to a 30,000 "exceptional one-off payment" to tide it over until a new business plan is implemented.

The exchange, which operates as an independent charitable company, is funded by membership fees and an annual contribution from the parliament.

It employs a chief executive and one administrator.

Over the years, the parliament's funding has been reduced and now represents less than 25 per cent of running costs.

But the exchange's expenditure exceeded income for two years running, resulting in a deficit of 45,266 in 2007/08 and 15,791 in 2008/09.

A report to the parliament's cross-party corporate body said the exchange's board was working hard to reduce costs and increase membership income.

As a result, it is expected to generate a surplus of around 6,000 this year.

But the report adds: "The deficits have impacted heavily on the exchange's reserves, and there is a risk that renewed membership income cannot be guaranteed in the current climate.

"Cost-cutting measures have resulted in a very much reduced staff structure which is not capable of sustaining the level of activity required to support the increased membership."

The corporate body agreed to a one-off injection of 30,000 to restore reserves to a "workable level" and allow the admin post, which had been cut to part-time, to become full-time again.

Lothians Tory MSP Gavin Brown, who took over as board chairman in June last year, said the parliament's funding for the exchange had been cut over the years from 50,000 to 20,000.

"When we got to 20,000 a year, it was more difficult to run it with the staff we needed," he said.

The corporate body has already agreed to increase funding to 25,000 next year.

Mr Brown said between 30 and 40 MSPs had been involved in exchanges with businesses in the past 18 months.

A parliament spokesman said: "Despite the economic climate, the exchange has been able to buck the trend and grow its membership. The corporate body's backing will enable the exchange to continue its development."