Economy, Energy and Fair Work Committee Tuesday 22 September 2020 Session 5 © Parliamentary copyright. Scottish Parliamentary Corporate Body Information on the Scottish Parliament’s copyright policy can be found on the website - www.parliament.scot or by contacting Public Information on 0131 348 5000 Tuesday 22 September 2020 CONTENTS Col. DECISION ON TAKING BUSINESS IN PRIVATE ....................................................................................................... 1 PRE-BUDGET SCRUTINY 2021-22 ....................................................................................................................... 2 ECONOMY, ENERGY AND FAIR WORK COMMITTEE 29th Meeting 2020, Session 5 CONVENER *Gordon Lindhurst (Lothian) (Con) DEPUTY CONVENER *Willie Coffey (Kilmarnock and Irvine Valley) (SNP) COMMITTEE MEMBERS *Colin Beattie (Midlothian North and Musselburgh) (SNP) *Maurice Golden (West Scotland) (Con) *Rhoda Grant (Highlands and Islands) (Lab) *Alison Harris (Central Scotland) (Con) *Richard Lyle (Uddingston and Bellshill) (SNP) Gordon MacDonald (Edinburgh Pentlands) (SNP) *Andy Wightman (Lothian) (Green) *attended THE FOLLOWING ALSO PARTICIPATED: Douglas Colquhoun (Scottish Enterprise) Anthony Daye (South of Scotland Enterprise) Nick Halfhide (South of Scotland Enterprise) Fiona Hyslop (Cabinet Secretary for Economy, Fair Work and Culture) Nick Kenton (Highlands and Islands Enterprise) Hugh Lightbody (Convention of Scottish Local Authorities) Jane Martin (Scottish Enterprise) John Mason (Glasgow Shettleston) (SNP) (Committee Substitute) Kevin Quinlan (Scottish Government) Richard Rollison (Scottish Government) Sarah Watters (Convention of Scottish Local Authorities) Charlotte Wright (Highlands and Islands Enterprise) CLERK TO THE COMMITTEE Alison Walker LOCATION The Mary Fairfax Somerville Room (CR2) 1 22 SEPTEMBER 2020 2 Scottish Parliament Pre-budget Scrutiny 2021-22 Economy, Energy and Fair Work 09:30 Committee The Convener: Agenda item 2 is pre-budget scrutiny for 2021-22 and consideration of the Tuesday 22 September 2020 impact of Covid-19 on businesses, workers and the economy. For our first session, we have eight [The Convener opened the meeting at 09:30] witnesses. From Scottish Enterprise, we have Jane Martin, who is the managing director of Decision on Taking Business in business services and advice—Jane might join us via a sound link, rather than a videolink—and Private Douglas Colquhoun, who is the chief financial officer; from Highlands and Islands Enterprise, we The Convener (Gordon Lindhurst): Good have Charlotte Wright, who is the chief executive, morning and welcome to the 29th meeting in 2020 and Nick Kenton, who is the director of finance of the Economy, Energy and Fair Work and corporate services; from South of Scotland Committee. I have received apologies from Enterprise, we have Nick Halfhide, who is the Gordon MacDonald, and I welcome John Mason, interim chief executive officer, and Anthony Daye, who is attending as his substitute. who is the financial director; and from the Under agenda item 1, the committee is invited to Convention of Scottish Local Authorities, we have decide whether to take items 4 and 5 in private. Hugh Lightbody, who is the chief officer of the Does the committee agree to do so? Business Gateway national unit, and Sarah Watters, who is the chief officer for local Members indicated agreement. government finance. We will start with brief opening statements from the four bodies represented, beginning with Jane Martin. Jane Martin (Scottish Enterprise): The key thing that I want to say is that, countless times over the years, the economic development system has come together to react to crises. It is often said that that is when we are at our very best. However, we have been used to doing that for individual businesses or for a specific sector. What we have faced over the past six months has been constant and relentless, and has had an impact across the whole economy. Although there is loads that we can learn and a lot that we can improve on, I think that the system as a whole has shown that it can deliver. The pandemic has tested us all and it has not been easy for any of us, not least for a lot of our staff, because of the sheer quantum of work that has had to be delivered to a very short timescale. The level of distress among—[Inaudible.]—from the very difficult conversations that people have had to have regularly. However, we have been able to deliver. Within a few months, we have been able to put out more than double the grant moneys that we would normally put out in a year, and that has all been done remotely. We have assessed probably four times as many applications as we would do in a year within a few weeks, and we have been dealing with 20 times— [Inaudible.]—inquiry from businesses across the whole landscape, in light of—[Inaudible.]—the public sector. 3 22 SEPTEMBER 2020 4 It is good to see everybody here today. The to support the business community across the partnerships that we have been building over region. A great example of that is XpoNorth, recent years have really helped. We have a very Scotland’s largest creative industries conference. strong element of trust and established It is usually held in Inverness over two days in relationships—[Inaudible.]—development sector, July. Rather than cancel that, we made it a virtual which has allowed us to move—[Inaudible.]— event. Between the live participation on the days quickly. We have definitely—[Inaudible.]—as an of the conference and further streaming, the organisation in—[Inaudible.] The work that we number of participants was 6,000, which is more have done around data sharing—[Inaudible.]— than three times the number that we would have grunt work at the moment. We have—[Inaudible.] got in person. We had excellent feedback, and participants expressed a desire for us to use the We want to take what we have done to date and same sort of approach in future. build on that momentum, because it is clear that the situation is going to continue to require us to Jane Martin touched on the pivotal enterprise flex and adapt to deliver over the coming months. I resilience fund and the hardship fund for creative, look forward to—[Inaudible.] Thanks very much. tourism and hospitality industry businesses. It was a significant task to distribute more than £25 The Convener: Thank you. We are working on million to more than 800 businesses in our region. the sound quality as we go. I now ask Charlotte At the same time, we were managing the Wright to make a brief statement. Government’s supporting communities fund, Charlotte Wright (Highlands and Islands working with local anchor organisations to award Enterprise): I want to give a flavour of the impact 205 grants amounting to more than £4 million to of Covid in the Highlands and Islands. Compared support resilience and tackle hardship in with the country as a whole, we have a greater communities throughout the region. I want to share of employment in the sectors that have been emphasise how important it was that we used our most affected by the pandemic, including tourism existing powers as a safety net for those who were and the creative industries, and a higher unable to access any of the specific Covid- proportion of self-employment and targeted grants, to ensure that viable businesses microbusinesses. Unfortunately, that means that got support through any means possible. the economic impact of Covid on our region has In collaboration with local and national partners, been disproportionately severe. Figures for up to our focus now is to move from the response phase the end of June show that around 72,000 people into the recovery phase. We are mindful that we had been furloughed, regional unemployment had will be living with Covid for some time, as was more than doubled to 5.7 per cent, and of clear from this morning’s news. particular concern is that youth unemployment was higher still at just under 10 per cent—those Brexit is also a significant change for most of are numbers that we have not seen for a our clients. Therefore, our top priorities are considerable time. Overall gross domestic product retaining and creating jobs, and we will be in the region is estimated to have decreased organising all our resources to support the key during the year by between £1.5 billion and £2.6 sectors in the region’s economy, which depend on billion, which is obviously severe in a region of just those jobs. Those sectors, which include tourism under 500,000 people. and food and drink, have been among the hardest hit. We also continue to focus on the key Our staff have been fully engaged in responding geographical areas where there has been a to the challenge, using digital communication, severe impact, including the islands and remote which allowed us to switch from office space to mainland areas. However, we are looking at new home working overnight. As soon as lockdown opportunities, such as growing a space sector, life came into force, we prioritised engagement with sciences, renewable energy and the marine businesses and communities to better understand economy. Those are fields where our region has a their challenges, offer our support and signpost natural place-based advantage and which can people. That engagement has continued to be a contribute to our regional growth and make a key activity over the summer, in the form of a significant contribution to Scotland. series of in-depth discussions with key clients, business organisations and sectoral groups. We To conclude, it is vital that we continue to work also gather real-time intelligence through our in partnership, locally and nationally, and that we online business panel, which has provided us with remain proactive in identifying opportunities and really important information—[Inaudible.]— maintaining our strong place-based approach, regularly over 1,000 members. where investments are focused on sustainable growth.