Scottish Enterprise '˜wasted £100m on failed businesses'

Almost £100 million of taxpayers' cash has been lost on businesses which have failed over the past decade, new figures indicate.

The Glasgow headquarters of Scottish Enterprise. Picture: Donald MacLeod

The SNP is now being accused of “wasting” cash through poor investments made by the national economic development quango Scottish Enterprise, which distributes the cash.

Edinburgh-based renewable energy firms Aquamarine and Pelamis are among the high-profile casualties after receiving millions of pounds in public support.

Over the past decade Scottish Enterprise has provided £94.9m to help firms which subsequently ceased trading.

The failure of wave power company Pelamis proved costly to the taxpayer.

Although the bulk of the money was in investments, Scottish Enterprise also provides grant support.

“The SNP is meant to use taxpayers’ money responsibly to support enterprise development and fledgling businesses, providing a general boost to the economy in the process,” Tory finance spokesman Murdo Fraser said.

“But too often these investments have come to nothing, and the public purse has been seriously dented as a consequence.

“If the SNP is serious about running a tight financial ship, it should do more to ensure future investments are made more wisely.”

The failure of wave power company Pelamis proved costly to the taxpayer.

Over the past ten years, there have been 698 instances where Scottish Enterprise supported a firm, only to subsequently waive or abandon the cash. Last year alone, a total of £11.1m was written off across 37 different businesses.

Wave power firm Aquamarine received £15m in taxpayers’ cash before it ceased trading in 2015.

And £16m was lost the previous year in Pelamis, another wave power firm which also went out of business.

Fraser added: “We are now seeing the real reason why the SNP is introducing the “Nat tax”in Scotland, and this is just the latest example of its financial mismanagement.

“With enterprise policy, there will always be a risk of investments going wrong – that’s the very nature of the business – but for nearly £100m to have been squandered in this way is simply wasteful.”

Scottish Enterprise did not respond to the claims when approached yesterday.

But its website states that more investment in Scotland’s growth companies and business infrastructure is central to the task of increasing sustainable economic growth.

“We invest to stimulate increased competitiveness, as well as looking at how we best leverage private sector investment and attract new investment into Scotland,” it states.

“We’ll also seek to create more opportunities to ensure all parts of Scotland benefit from increased growth.”

The organisation says that in the three years to 2018 it has been aiming for between £240m and £300m of “leveraged private investment” from the provision of growth finance via the Scottish Investment Bank.

It says that it is also aiming to support up to 300 firms with secure growth funding as part of its drive to see between 1,200 and 1,500 businesses with growth and export potential improve their financial readiness.

It also points to between £450m and £600m of planned capital investment by supported companies.