Our main business development body must be radically improved. But how? Business Editor Ken Symon reveals
a range of controversial proposals competing
for the future of Scottish Enterprise
IT COULD be the culmination of a long - and some might say obsessive - campaign by the SNP MSP Alex Neil. When representatives of Scotland's six main business organisations, along with finance minister John Swinney and enterprise minister Jim Mather, meet on August 17 it will be the first step towards a radical change in how Scottish Enterprise works.
For Neil, the former Scottish-parliament enterprise-committee convener, that would be a great success. His campaign for a "radical overhaul" of Scottish Enterprise (SE) has seen a remarkable flurry of Freedom of Information requests, verbal attacks and, infamously, his call for the resignation of the chairman and chief executive of SE before his committee carried out an inquiry into the economic development body's performance.
Last week he launched another salvo, in the shape of a new five-point plan for Scotland's leading economic development agency.
Meanwhile there have been a series of meetings among leaders of business organisations in a bid to formulate an all-business common approach to creating the future shape of SE.
Liz Cameron, executive director of the Scottish Chambers of Commerce, is co-ordinating the business organisations' response to ensure that there is one voice from business to the Scottish Executive.
Involved in these discussions are six main business organisations: CBI Scotland, the Institute of Directors (IoD), the Federation of Small Businesses (FSB) in Scotland, the Scottish Council for Development and Industry, Scottish Financial Enterprise and the chambers themselves. The discussions will culminate in a face-to-face meeting between representatives of the "big six", and Swinney and Mather.
As Niall Stuart of the FSB says: "Often a period of consultation is just window dressing, but I think there is now a genuine attempt to get a better solution."
Others in the business community are also heartened by the way the consultation is being done. What is also being commented upon is that there seem to be some areas on which there is a lot of agreement among most business groups.
Business leaders have also praised the SNP administration on the centrality of its approach to the issues; namely, that there should be a "decluttering" and that changes should be made quicker rather than being "in progress" for a long time before things happen.
But some business leaders are concerned measures may be rushed through that are not the right solution. Stuart says: "It is very important to get all this right. I hope they take as long as necessary to get the correct solutions."
There does appear to be broad agreement that what should emerge from the SE's moves is a "slimmed down" organisation.
This is in line with some of the reforms that SE chief executive Jack Perry has himself sought to introduce, although some such moves did founder because of a lack of political support from the previous Executive administration.
The most radical approach to slimming down comes in Neil's five-point plan. He argues for SE to be stripped of its training function and responsibility for community regeneration. In his view, VisitScotland should be kept as a separate body in charge of tourism.
Transferred in to SE, on the other hand, would be all the operational enterprise programmes currently run by the Executive - including Regional Selective Assistance. This would effectively create a one-stop shop for businesses to access government support in Scotland.
The idea that the regeneration function should be allocated to local councils does seem to be gaining broad support both among some senior enterprise development players and at a political level.
Another area around which consensus seems to be emerging is skills.
David Watt, director of the IoD in Scotland says: "What I would like to see is a bit more clarity on skills. There are so many players dealing with skills - and you have to ask how effective they are.
"We would also question how relevant some of the proposals that are being made on skills are to the situation in Scotland."
Bodies which currently have responsibility for dealing with skills in Scotland include Careers Scotland, Future Skills Scotland, the Sector Skills Development Agency, Learn Direct Scotland, Scottish Enterprise, the Fresh Talent initiative and the Determined to Succeed initiative, which works in schools.
Some skills are dealt with directly by SE, some by Careers Scotland (which has at various times been part of SE) and some administered directly by the Executive (Determined to Succeed).
As one former senior economic development executive puts it: "There has been a lot of public money spent on skills and you would have to ask, how effective has it been? There is real room for improvement in this area."
Watt says: "This may be very anecdotal but you hear time and time again people saying that they just cannot get a plumber. And yet I heard of someone recently who trained as plumber but couldn't get a job as a plumber, and now works in a bank. There are mismatches like this far too often in Scotland."
So, a consensus is emerging that there needs to be greater clarity in this area - with many people calling for a single agency to have responsibility for skills in Scotland. But who should that be?
Proposals include combining all the skills into a new specialist Scottish Skills Agency, bringing it all together under SE or even the Executive running it directly in its enterprise department.
Another key issue, and one of the most controversial, is the local delivery of SE services. Currently there are 12 local enterprise companies (LECs), which deliver services throughout the SE area.
Neil is calling to replace these with a small network of no more than six regional Business Advisory Centres to "provide easy and non-bureaucratic access to all of Scottish Enterprise's service.
Neil argues: "In a small country like Scotland, to have 12 LECs operating as semi-independent local fiefdoms is absurd, leading to duplication, waste and unnecessary overheads; and resulting in very variable levels and quality of service in different parts of Scotland."
A proposal to reconfigure SE into a smaller number of bigger areas could tie in with the announcement nine days ago of the proposed creation of four new planning authorities for four city regions in Scotland.
The four are Glasgow city region, Edinburgh city region, Aberdeen city region and Dundee city region.
Dividing the current LEC functions among those four regions along with planning would, some people suggest, give a much clearer and more streamlined approach to economic development.
Such a slimming down option is in line with proposals put forward by Perry and SE chief operations officer Lena Wilson last year. Their proposal was to split the network into metropolitan regions - east and west based round Glasgow and Edinburgh with a further region based in the Borders and possibly a separate one for Aberdeen.
The proposals were criticised (including by this writer) for having Glasgow and Edinburgh in separate regions when there is increasing co-operation moves between Scotland's capital and its biggest city.
Would such proposals make sense if they did not treat the central belt of Scotland as one economic unit?
As pointed out by leading academic Edward Glaeser, professor of economics at Harvard University and one of the visiting lecturers in the 2002 Allander series, Glasgow and Edinburgh and the immediate surrounding districts are "sufficiently interconnected that it is reasonable to treat them as a single metropolitan region".
It might be politically unpopular, particularly with other parts of Scotland, but if Glaeser is right then the way to build Scotland is to increase the co-operation within this "Glasburgh" area as the economic powerhouse of Scotland.
Watt says: "Local delivery is a key issue for us as well." Business is interested in consistency of quality and consistency of programmes across Scotland and, arguably, some distance has been travelled towards this under changes introduced since Perry took over as SE chief executive.
One of the most controversial suggestions, particularly with business leaders, is the idea that current LEC functions could be transferred to local councils.
Watt says: "Any suggestion of 32 LECs and not 12 just doesn't make any sense to us all.
"We are not sure about the current Executive's ideas seeking to "democratise" things. As with health minister Nicola Sturgeon's idea of electing people to health boards, we are not sure how that would make for the efficient running of things."
And Stuart at the FSB argues that Business Gateway has been built up to be an efficient and effective national service. He says: "I am not sure if the economies of scale would be there to deliver a similar quality of service at the local level.
"Business Gateway now has a very good and useful website and there is a business enquiry service, which far too few business people know about, which you can phone up and ask questions on the value of a market, say, or get a list of all the oil services companies in Scotland."
He argues that such services would be diluted if they were devolved to a local level. Others have questioned the level of skills in some of economic development council departments.
Another question raised about changing the current structure is whether you would lose the input of local business people with real knowledge of local markets and business conditions.
Some say this has been diluted by Perry's moves to centralise SE functions. The plan was for SE to be one company rather than every local enterprise company being a company in its own right, with directors having duties to the company and not to Scottish economic development as a whole.
However some, like Stuart at the FSB, argue that engagement with the local business community is vital.
But he adds: "Is the involvement of six business people on an LEC board really representative of a local business community? It may be, but it may well not be."
He says that a better way might be to have meetings on specific issues between the local economic forum and the business community. "They could seek the views of the business community on a specific proposal. That might be a more effective way of achieving consultation and accountability in local areas."
Other specific proposals from Neil include hiving off SE's business start-up remit to a self-standing, not-for-profit New Ventures Trust similar to the widely respected Prince's Scottish Youth Business Trust.
Neil also suggests "revamping the Scottish Enterprise board and senior management team to improve the quality of SE's leadership."
Others counter that some of the recent compositions of the SE board have been of the highest quality in the organisation's history.
Alex Neil's fifth and final proposal is: "As a quid pro quo for Scottish Enterprise getting its act together the politicians and civil servants should undertake a self-denying ordinance to stay out of the day-to-day operations and let it get on with the job of helping to create new wealth and jobs in Scotland."
The suggestion has brought wry smiles to some senior officials at SE given that the MSP who intervenes most frequently in SE's operations through constant questions is none other than one Alex Neil.