McConnell defends Scottish Enterprise finances

JACK McConnell, the First Minister, yesterday gave a carefully-worded defence of Scottish Enterprise from accusations of financial mismanagement, denying the organisation faced a "cash crisis" that prevented payments to clients.

The accusations by SNP MSP Alex Neil, convener of the parliament's enterprise committee, come at a sensitive time for the network, which yesterday convened a board meeting to finalise details of its local enterprise company (LEC) network overhaul, to be announced in March. The timing of leaked reports of a potential 100 million overspend within the organisation, leading to a 15 per cent cut in LEC budgets, has provoked speculation about high-level internal dissent over the proposed changes.

Neil asked in the Parliament: "What will the impact be of the cut in LEC budgets on businesses in Scotland?" McConnell replied: "The financial year is not yet over. We should ensure that Scottish Enterprise knows its budgets and implements its decisions within that budget. They are properly audited for that purpose and I expect them to meet their targets."

A spokeswoman for SE emphasised the budget cuts "will not affect payments to suppliers or anyone else for work carried out".