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Business Support Published in Scotland by the Scottish Parliamentary Corporate Body Published 20 February 2019 SP Paper 470 2nd Report 2019 (Session 5) Economy, Energy and Fair Work Committee Comataidh Eaconamaidh, Lùth is Obair Chothromach Business Support Published in Scotland by the Scottish Parliamentary Corporate Body. All documents are available on the Scottish For information on the Scottish Parliament contact Parliament website at: Public Information on: http://www.parliament.scot/abouttheparliament/ Telephone: 0131 348 5000 91279.aspx Textphone: 0800 092 7100 Email: [email protected] © Parliamentary copyright. Scottish Parliament Corporate Body The Scottish Parliament's copyright policy can be found on the website — www.parliament.scot Economy, Energy and Fair Work Committee Business Support, 2nd Report 2019 (Session 5) Contents Executive summary______________________________________________________1 Introduction ____________________________________________________________9 Context and background _________________________________________________9 Characteristics of business base ___________________________________________9 Inquiry engagement ___________________________________________________ 11 Complexity or clutter? The broader business support landscape _______________13 Background, roles and responsibilities of Business Gateway __________________16 Background __________________________________________________________16 Roles and responsibilities _______________________________________________18 Strategic alignment and accountability ____________________________________21 Original remit and policy drift _____________________________________________21 Absence of alignment with the Enterprise and Skills Review ____________________22 The Irish model _______________________________________________________25 Targets and performance ________________________________________________28 Setting and monitoring targets____________________________________________28 Incentives ___________________________________________________________30 Types of targets _______________________________________________________30 Team approach _______________________________________________________31 Performance against targets _____________________________________________31 Role of the analytical unit________________________________________________33 Feedback and quality assurance __________________________________________34 Business Gateway budget _______________________________________________36 European Regional Development Fund (ERDF) ______________________________38 Local specialism or inconsistency? Regional variation in Business Gateway services ______________________________________________________________40 Advisers _____________________________________________________________43 The enterprise culture___________________________________________________45 Diversity ______________________________________________________________47 Collaborators or competitors? The wider business support eco-system _________52 Stakeholder engagement and relationships__________________________________53 Role of regional hubs __________________________________________________56 SME access to finance __________________________________________________59 Overall conclusion _____________________________________________________62 Annex A - Core Business Gateway funding _________________________________63 Annex B - Minutes of Meetings ___________________________________________65 Economy, Energy and Fair Work Committee Business Support, 2nd Report 2019 (Session 5) Annex C - Written Evidence ______________________________________________67 Annex D - Visits and Events ______________________________________________70 Bibliography___________________________________________________________71 Economy, Energy and Fair Work Committee Business Support, 2nd Report 2019 (Session 5) Economy, Energy and Fair Work Committee Remit: To consider and report on economy and fair work matters falling within the responsibilities of the Cabinet Secretary for Finance, Economy and Fair Work; matters relating to the digital economy within the responsibilities of the Minister for Public Finance and Digital Economy, and matters relating to energy falling within the responsibilities of the Minister for Energy, Connectivity and the Islands. (As agreed by resolution of Parliament on 6 September 2018) http://www.parliament.scot/parliamentarybusiness/CurrentCommittees/ economy-committee.aspx [email protected] 0131 348 5403 Economy, Energy and Fair Work Committee Business Support, 2nd Report 2019 (Session 5) Committee Membership Convener Deputy Convener Gordon Lindhurst John Mason Scottish Conservative Scottish National Party and Unionist Party Jackie Baillie Colin Beattie Scottish Labour Scottish National Party Angela Constance Jamie Halcro Johnston Scottish National Party Scottish Conservative and Unionist Party Dean Lockhart Gordon MacDonald Scottish Conservative Scottish National Party and Unionist Party Andy Wightman Scottish Green Party Economy, Energy and Fair Work Committee Business Support, 2nd Report 2019 (Session 5) Executive summary 1. In 2008 the Scottish Government transferred Business Gateway and local regeneration activities to Scotland’s local authorities. With ten years having passed since reforms were introduced, this inquiry sought to explore the effectiveness and efficiency of Business Gateway and hear from businesses about their experiences of accessing support. 2. The Committee wanted to understand the range of support services available to new and existing small and medium sized businesses at a local level across Scotland and we heard that the variety of business support, advice and products available to businesses is a strength of the Scottish system. 3. There is much to be commended in current business support provision, but the Committee has found that opportunities have also been missed to align local and national economic priorities and improve ease of access to services by businesses. 4. Business Gateway has evolved organically and does not perform the function that was initially intended. A decade on from its inception, revisiting this role and purpose of Business Gateway is necessary to improve alignment. 5. The Committee is also concerned about the lack of transparency and accountability in relation to Business Gateway services. In this report we have recommended a number of ways in which this can be addressed, including the publication of regional budget and performance information. 6. As part of this inquiry, we also looked to see if there are lessons to be learned from other countries, where business support is seen to be working well. The approach in Ireland provides a mix of tailored local delivery and national strategic direction, which seems to be more cohesive. In this report we ask the Scottish Government to review the Irish model and consider whether this model, or elements of it, are applicable in the Scottish context to overcome the current accountability and alignment challenges. The Committee believes that such a review is necessary to improve the offer to businesses across Scotland. The Committee’s summary of conclusions and recommendations is as follows: Complexity or Clutter? The broader business support landscape Having a support ecosystem with a variety of tailored products and services is positive, but signposting and co-ordination between multiple stakeholders and partners remains an ongoing challenge. The recent Enterprise and Skills Review warned of duplication and clutter in the business support landscape. The Review did not include Business Gateway. The Committee considers this to be a missed opportunity. Strategic alignment and accountability The Committee finds it regrettable that there has been a drift away from the original intended purpose of Business Gateway without any strategic plan or review of Business 1 Economy, Energy and Fair Work Committee Business Support, 2nd Report 2019 (Session 5) Gateway's role. The policy intention for Business Gateway to act as the entry point for businesses seeking business support has not been fulfilled. Given the policy drift from the original rationale for Business Gateway, the Committee seeks clarification, from the Scottish Government and relevant partners, on Business Gateway's role and remit within Scotland's business support landscape and where accountability for determining Business Gateway's remit sits. The Enterprise and Skills Review’s objective was to drive alignment between the Scottish Government’s enterprise and skills agencies. It recommended that a single digital access point should be developed to address some of the concerns about businesses being passed to and fro between the respective agencies, and to streamline the service. This single digital access point is currently being developed and the beta system is due to be introduced in Spring 2019. However, given that the intention for this portal is to act as the access point to business support services, which was originally one of Business Gateway's key roles, it leads us once again to highlight the need for a review of Business Gateway's role within the support ecosystem. The Committee finds the lack of clarity on the strategic alignment between Business Gateway and the enterprise and skills agencies disappointing. Particularly as a key deliverable action of the 'Enterprise and Business Support' strand of the Enterprise and Skills Review was to 'deliver a joint improvement programme to create a much more coherent and joined up system of support that is focused on business need;
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