Macpherson out as Scottish Enterprise takes charge of ITI

In a move to cut spending, the Intermediate Technology Institute (ITI) will become part of the publicly funded enterprise quango.

The surprise decision means that Shonaig Macpherson, the ITI chairman, will step down and the organisation's non-executive board will be disbanded at the end of the month.

In November, Macpherson told The Scotsman that the organisation – set up in 2003 to commercialise intellectual property – faced a shortfall in its budget, allocated annually from Scottish Enterprise. Last year the group had a budget of 38.1 million.

The same month, Scottish Enterprise said "in future the two organisations will be working more closely together", but the merger surprised business groups and politicians.

Alex Neil, MSP and convener of the Scottish Parliament's enterprise committee that backed the launch of ITI in 2003, said Scottish Enterprise "should have consulted parliament" before reversing the decision to keep the ITI as an arm's length organisation. He said the move "begs the question why Scottish Enterprise set it up as a separate company in the first place".

Neil said: "The work of the ITI should carry on as well-funded as was planned. They play a vital role in creating the industries of tomorrow."

Scottish Enterprise yesterday said there would be no compulsory redundancies among the organisation's 80 staff but promised there would be a review of its funding. A spokesman denied the merger was a failure of strategy on behalf of Scottish Enterprise and said it would knock out duplication between the two organisations.

Last year, Scottish Enterprise undertook a major restructuring as more than half of its employees moved out to a new organisation, Careers Scotland, and its annual budget was slashed from 329m to 283m.

Jack Perry, Scottish Enterprise chief executive, said yesterday: "Following our own reorganisation last year, SE's remit is much more focused than when we launched the ITI initiative five years ago. Now the largest area of our activity is a range of investments to stimulate growth in Scotland's key industry sectors."

Paul Lewis, managing director of industries and policy at Scottish Enterprise, will head an integration committee that will decide the group's 2009 budget as well as look into rationalising the group's three offices in Glasgow, Dundee and Aberdeen. The managing directors of the ITI's three main divisions – energy, life sciences and techmedia – are expected to stay on.

BACKGROUND

THE Intermediate Technology Institutes (ITI) were set up by Scottish Enterprise in 2003 to commercialise technology based research and intellectual property in a ten-year programme with an overall budget of 450 million.

ITI Scotland oversees divisions in three main research areas: energy in Aberdeen, life sciences in Dundee and techmedia in Glasgow.

In its latest annual report, ITI Scotland said it had so far spent 134 million on 25 commercialisation projects and filed 132 patents.

ITI-backed projects, which involve research institutes and businesses, have included the development of a battery management systems with Dundee battery supplier, Axeon. ITI also licensed technology to Scottish security software company Metaforic.

ITI chief executive David Creed resigned in August but will stay on until February.