C redit where credit is due: economy minister Keith Brown has announced an about-turn on his plans to dismantle the board of Highlands and Islands Enterprise, together with proposals to replace Scotland’s enterprise and training agencies with one national board.
These proposals were widely criticised, the scrapping of the HIE board in particular. It is never easy for a government minister to ditch plans announced only some five months ago – and at a time when stewardship of Scotland’s ailing economy has been lamentable.
But Brown here has done the right thing. When the plans were initially announced they appeared thin, poorly thought out and weakly presented. And without a compelling rationale and clear programme of improvement, they came under fire from the start.
So there is progress – but only of sorts. For there is little sign that the administration has any clearer idea of how the labyrinth of enterprise, skills and training bodies will be any better able to undertake their remit – all the more so when the budget of the once dominant Scottish Enterprise has been cut – again.
Let’s just recall that we have at present four enterprise quangos: Scottish Enterprise, Highlands and Islands Enterprise, Skills Development Scotland and the Scottish Funding Council – all with different staffs, budgets, mission statements, visions and strategic plans. Skills Development Scotland alone has 1,200 staff, five goals and four “value” statements.
On top of all this is the Scottish Government’s own economic department – its credibility bruised by the misleading so-called “White Paper” produced ahead of the 2014 Scottish independence referendum.
Then there is the First Minister’s Council of Economic Advisers – an echo chamber of somnambulant, sympathetic grandees; the Scottish Fiscal Commission which will undertake economic forecasting from later on this year; and now a “Growth Commission”, headed by Andrew Wilson, the former SNP MSP.
Running parallel to all these is the new network of City Deals where questions have already arisen on purpose, function and funding.
So what is the bright new idea? Simple: when unsure of how to create an impression of dynamism and certainty as to how all these different agencies can be improved, just create new ones.
First, the economy minister has announced that a new enterprise agency will be set up to cover “the south of Scotland” – though borders are still to be clarified. What a bunfight now looms as to which areas will, or will not, be included. Might it embrace, for example, struggling East Ayrshire? And if that area is to secure more attention and resource, how might the envious North Lanarkshire react?
Second, there will be a new “national strategic board” to “align the work” of all the separate agencies. Another regional promotion agency – and a new strategic board. How long, one wonders, before there is an enterprise body for every one of Scotland’s 32 councils?
So to the four existing bodies another quango is added – and yet another national strategic supervisory board to do what Scottish Enterprise was initially intended to do. Not so much a ministry of headless chickens as a barnyard of multi-headed hens that show every sign of running round in circles.
What a way we have come from the original Scottish Development Agency, set up in 1975 and charged with – guess what – galvanising Scotland’s economy. Even back then its first chief executive, Lewis Robertson, carried a mammoth A4-sized Filofax bulging with sections, supplements and annexes. So commodious will be Brown’s equivalent today, it threatens to rival Jimmy Shand’s accordion.
Is the SNP administration really much different from its Labour predecessors? When it comes to “economic strategy” we are back to doing what the government sector always does when tasked with economic promotion: strenuous monitoring, evaluating, liaising and assessing. Simply creating another agency tripping over the toes of the existing ones doesn’t necessarily mean a more efficient response, still less a speed-up on the dial of economic growth.
The administration is now sensitive to charges of relentless centralisation. But it needs to slim down the ranks of competing agencies and have one arm’s length body to do strategic planning and resource allocation.
And a sorting out is now urgent. Scotland’s economy last year grew by just 1.1 per cent compared with 2015 – half the historical average for the economy and, as economist Tony Mackay reminds us in his latest monthly assessment, “a very disappointing performance and well below the two per cent average for the UK economy as a whole… The First Minister and her colleagues need to give much more attention to the state of the Scottish economy. That has not been the case during the last two years and I fear will not be during the next two.”
His consultancy is forecasting growth of just 1.2 per cent in Scottish GDP this year, 1.5 per cent in 2018 and 1.7 per cent in 2019 – all these below the long-term average of around two per cent.
For this, Westminster continues to be routinely blamed. But Holyrood is responsible for most of the public expenditure in Scotland and public spending per person here is much higher than the UK average.
Moreover, the latest official statistics show that Scotland has a net fiscal deficit of about 9.5 per cent of GDP, compared with four per cent for the UK as a whole – the highest deficit in Europe and even worse than Greece. “Reducing the deficit should be a high priority for the Scottish Government,” says Mackay, “but is not at the present time.”
The “high priority” at the top of the administration remains the relentless agitation for a second Scottish independence referendum. But as long as that remains the case it is hard to see how future inward investment to Scotland can be accelerated. Business has enough on its hands adjusting to the new world of Brexit without having to factor in another bruising referendum campaign and the prospect of higher taxes and lower spending in an independent Scotland.
At least Keith Brown shows some concern about our lacklustre growth rate and recognises that changes need to be made to make our enterprise network more effective. Sadly, there seems little sign that this concern is much shared among colleagues – and even more saddening, little sign of new ideas.