'Hugely disappointing' as £36m SNP digital fund pays out just £6m

A fund designed to provide funding to businesses to develop their digital skills has paid out just over £6m since it was announced in 2017, it has emerged.

The Scottish Government's Digital Growth Fund has paid out just a sixth of the total available when it was announced.

In an answer to a written question by Scottish Conservative MSP Maurice Golden, the finance minister Kate Forbes said just over £6m had been distributed to businesses Digital Growth Fund .

When the fund was announced in 2017, Nicola Sturgeon said it would see £36m spent over three years in loans to businesses to improve digital skills in cyber security, data analytics and software engineering.

However, just over a sixth of the total fund has been paid out, with almost £30m unspent by the Scottish Government.

Applications for the fund have risen year-on-year since it was opened in 2018/19 but only 121 businesses have benefited from the fund.

In its first year the fund paid out £854,229 to 21 businesses, with that rising to £1,806,984 to 43 businesses in 2019/20, and £3,452,995 to 57 businesses so far in 2020/21.

In total, £6,114,208 has been distributed to businesses through the fund.

Responding to the figures, Maurice Golden, the Scottish Conservative’s economy spokesperson said more needed to be done to support businesses.

He said: “It is hugely disappointing that just a sixth of the digital growth fund has been paid out by the SNP Government in nearly three years.

“If it has taken the SNP so long to distribute so little of this fund, what hope can we have in them to rebuild our economy after the current pandemic crisis?”

Announcing the fund in March 2017, Nicola Sturgeon said it was crucial to help provide the Scottish economy with the skills required in an economy that is becoming more and more digitally focused.

She said: “Recent studies estimate that the economy needs 12,800 new workers with digital skills each year. Despite this, our last digital economy survey found that only around a quarter of businesses were doing anything to develop current employees’ digital technology skills.

“We need to change that. Scotland cannot afford to ignore this prize. That’s why we will now boost our support for digital skills.

“We will develop a new £36 million, three-year support fund to meet the upfront business costs of digital skills training.

"This will see up to 6,000 people per year able to access the training they need in key areas like software development, web design and digital marketing. It will also allow firms to use government funding to pay for the training their staff need, repaying the funding in later years.”

Ahead of the announcement in 2017, the lack of digital skills in the country was described as a “critical gap” for Scotland’s economy which the Scottish Government claimed held back productivity and company profitability.

A Scottish Government spokesperson said: “The Digital Development Loan (DDL) is demand led and remains open for eligible businesses to apply.

“As part of our commitment to ensuring Scottish businesses benefit from digital technologies, we have doubled the funding for the DigitalBoost support programme and introduced the £10 million DigitalBoost Development Grant which builds on the learning from the delivery of the Loan and is not repayable.

“The grant scheme opened to applications last week and after a fantastic response we are exploring options to expand it.”

A message from the Editor:

Thank you for reading this article. We're more reliant on your support than ever as the shift in consumer habits brought about by coronavirus impacts our advertisers.

If you haven't already, please consider supporting our trusted, fact-checked journalism by taking out a digital subscription.