Scottish Enterprise
SCOTTISH ENTERPRISE
ANNUAL REPORT AND ACCOUNTS
31 March 2008
Enterprise and New Towns (Scotland) Act 1990
Annual Report and Accounts of Scottish Enterprise prepared pursuant to section 30(1) of the Enterprise and New Towns (Scotland) Act 1990: together with the Independent Auditors’ Report to the Members of Scottish Enterprise, the Auditor General for Scotland and the Scottish Parliament.
Page Management Commentary 2 Remuneration Report 15 Statement of Accountable Officer’s Responsibilities 19 Statement on Internal Control 20 Independent Auditors’ Report to the Members of Scottish Enterprise, the Auditor General for Scotland and the Scottish Parliament 23 Group Operating Cost Statement 25 Statement of Group Recognised Gains and Losses 26 Group Balance Sheet 27 Scottish Enterprise Balance Sheet 28 Group Cash Flow Statement 29 Statement of Accounting Policies 30 Notes to the Accounts 35 Accounts Direction 66
Authorised for issue: 23 July 2008
1 Scottish Enterprise
MANAGEMENT COMMENTARY for the year ended 31 March 2008
BUSINESS OBJECTIVES AND STRATEGY
Scottish Enterprise (SE) was established in terms of the Enterprise and New Towns (Scotland) Act 1990 for the purposes of furthering the development of Scotland's economy, enhancing skills and establishing self-employment, promoting Scotland's industrial efficiency and international competitiveness and furthering the improvement of the environment.
Scottish Enterprise’s overall objective is to make a significant contribution to achieving the Scottish Government’s purpose of increasing Scotland’s sustainable economic growth.
During the year under review, Scottish Enterprise was made up of a national function, twelve Local Enterprise Companies (LECs) and a number of subsidiaries. The national function directly undertook national and strategic projects, and was also responsible for leadership, support and control of the Scottish Enterprise Group. Scottish Enterprise contracted with the Local Enterprise Companies for the implementation of strategy at local level, through the delivery of a wide range of business development and training services, along with environmental and regeneration programmes.
In September 2007, the Cabinet Secretary for Finance and Sustainable Growth announced major reforms to Scottish Enterprise, following a Review of the Enterprise Networks. This included the transfer of Careers Scotland and lead responsibility for skills activities to Skills Development Scotland and the transfer of Business Gateway and local regeneration activities to local authorities. The resulting focus for Scottish Enterprise is on:
• Supporting high growth businesses and improving the business environment in Scotland • Industries with the potential to thrive in the global economy • Infrastructure activity and projects of regional or national importance
In November 2007, the approach to achieving the Scottish Government’s purpose was set out in the Government Economic Strategy (GES). The Strategy is the route map for all of the public sector in Scotland to meet the challenge of increasing economic growth, through increasing productivity, participation and population, while ensuring growth is socially and regionally equitable and environmentally sustainable. To meet these challenges, the Strategy identifies five Strategic Priorities:
1. Learning, Skills and Well-being: Scottish Enterprises contribution includes promoting skills utilisation, stimulating demand for skills and attracting and retaining talented individuals in Scotland’s key sectors.
2. Supportive Business Environment: Scottish Enterprise’s contribution includes supporting growth companies, including their access to risk capital, leadership skills and international markets; attracting high value inward investment; supporting business innovation in products, processes and business models and ensuring research and i