Business Gateway under fire as start-ups fall 8%

BUSINESS Gateway, which provides support to small firms, has been branded "awful" and in need of reform.

Raymond O'Hare, chairman of the Institute of Directors Scotland, accused it of providing an inconsistent level of service.

O'Hare - the former head of Microsoft in Scotland, who set up his own consultancy this year - said that business advice for start-ups was often too slow to be helpful.

His comments follow the publication last week of figures from the Committee of Scottish Clearing Bankers which showed an 8 per cent year-on-year fall in the number of firms launched in the second quarter of the year.

The SNP government controversially transferred responsibility for the Business Gateway service from Scottish Enterprise to local councils in 2008.

O'Hare said: "The business start-up figures are a sore point. Starting a business - and I've been through this myself this year - isn't as easy as it should be.

"I worry about Business Gateway. Some councils do a good job, like Edinburgh. But there are also some shocking examples where it's not good and it's not helpful."

O'Hare's comments came ahead of a debate at Edinburgh Napier University on Thursday, which will question if business leaders can be trusted following the economic crisis.

Councillor Alison Hay, regeneration and sustainable development spokeswoman for the Convention of Scottish Local Authorities, leapt to Business Gateway's defence. She said: "I'm fed up with people knocking the Business Gateway, particularly in this ill-informed way.

"Very little changed when it transferred to local government - it's the same contracts and individuals as when Scottish Enterprise ran it - and gratifyingly in these difficult times, the start-up figures are holding up very well."

The figures from the clearers, based on newly-opened accounts at the four Scottish based banks, prompted concerns that Scotland was still failing to show any improvement in its ability to produce start-up firms.

But Business Gateway challenged the figures, producing its own data to show that there was an 8 per cent rise in the number of firms it helped to set up in 2009-10.

Chairman David Valentine added that criticism of the service was misplaced, He said: "Our recent independent customer feedback survey indicated that 91 per cent of respondents were satisfied with the service they received."

Colin Borland, from the Federation of Small Businesses in Scotland, said any inconsistencies often arose because councils outsourced the basic support and then "topped-up" with additional services.

But he highlighted the gap in support for established companies that don't fit Scottish Enterprise's "high-growth" strategy.

He added: "If we're going to spend public money then we should support existing businesses that may now be ready to grow again rather than start-ups that can vary in quality and success."