Enterprise network faces inquiry grilling

SCOTLAND'S enterprise network has come under fire ahead of this week's inquiry in the Scottish Parliament for failing to support more businesses during the recession.

The Federation of Small Businesses in Scotland (FSB) will be among the first to give evidence when the Economy, Energy and Tourism Committee's (EET) begins its review of Scottish Enterprise and the small firms support body Business Gateway (BG) on Wednesday.

A number of organisations have submitted evidence that is critical of the current state of the network, including the FSB which claims that the current structure has left a gap in the support of businesses that are struggling in the current economic climate.

Michael Dixon, the FSB's Edinburgh branch chairman, said: "The vast majority of businesses who are not start-ups or are left outside the elite Scottish Enterprise stable of 2,000 account-managed companies feel that there is no place for them in this set up.

"Now more than ever, the jobs, services and revenue these businesses provide are crucial to our economic growth and should not be excluded from support on the basis of arbitrary targets," he added.

But the FSB says it does not want to see "another two years of shake-up". Stuart Mackinnon, head of press and parliamentary affairs for FSB Scotland said: "What we are not trying to do is say this is all rubbish and start again. We want to see that businesses no matter what their sector, size and growth potential get support."

The FSB's public affairs manager Colin Borland will call for local authorities, which were handed responsibility for running Business Gateway in 2007, to be given a statutory mandate for economic development. The organisation will also advocate that central government provides cash incentives for local authorities that can prove they have been successful in supporting businesses.

"The whole reform of the enterprise network has given more power to local authorities to take an interest in enterprise and economic development," said Mackinnon. "What we need to see is even more integration between local economic development functions."

The remit of the EET committee is to consider whether the transfer of responsibilities that took place in 2007 has worked and whether it provides value for the public purse. It will also explore what, if any, should be the fundamental role of a publicly-funded enterprise network and what alternative models exist.

But Gavin Brown, Tory MSP and a member of the committee is concerned it won't be "in-depth" enough to address "first principles". He added the committee will complete its report in February, well after the coalition government's comprehensive spending review next month when it is expected the Scottish Government will be forced to cut funding for Scottish Enterprise and BG.

Brown said: "We need to ask if it is working or do we need to change things. Our start up rate and our growth as a country is way behind where we ought to be. We know that spending is going to be down quite substantially. Most budgets are going to be cut to some extent. If we can't start doing things better with less we will have a real problem in the medium to long term."

Brown also said he was "astonished" only five of the 32 local authorities had submitted evidence to the committee which he claimed was a "poor show".