Scottish Parliament
European Committee
Official Report

Meeting 3, 1999

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Scottish Parliament

European Committee

Tuesday 31 August 1999

(Afternoon)

[THE CONVENER opened the meeting at 14:00]

 
Col 63 The Convener (Hugh Henry): Welcome. I have had a number of requests from members of other committees to attend this meeting for the discussion on the special programme for the Highlands and Islands. Those members are Lewis Macdonald, Rhoda Grant, George Lyon and Fergus Ewing. I am agreeable to their participation in the meeting and in any discussion; they will not have a vote, should a vote be required.

Structural Funds (Highlands and Islands)

The Convener: The first document before us is the special programme for the Highlands and Islands for 2000 to 2006. As you see, it is a consultative draft plan; the Rural Affairs Committee will also consider it and there will be a separate document on some of the issues in its remit. I know that there is interest from members of that committee and I welcome them here today. Stephen, are there any introductory remarks that you wish to make?

Stephen Imrie (Committee Clerk): I have been advised by the Scottish Executive that, as the paper is a draft plan, a more formal and complete consultation document will be coming to the committee at a later date. This document has been sent to us for our initial thoughts. The second, more formal document will be not a draft but the actual plan. I have been advised also by officials from the rural affairs department that the agriculture and fisheries components that should be in this document are, as the convener said, part of a separate consultation exercise. They are writing to you to explain what stage that is at.

Ms Margo MacDonald (Lothians) (SNP): As, later in this meeting, we will be discussing the dates on which we need to meet to complete the regional map and so on, it is surely quite important to know when the Executive will have the final plan and not just the draft.

Stephen Imrie: It is not for me to comment but, in terms of scheduling business, it would help to know the end date. We are taking consultation on this document now, as we have to reply by 13 September. I am not yet aware of the final date for the more formal consultation, but it would help in scheduling business if I knew it.

Col 64 The Convener: We should write to the Executive.

I have been asked by Maureen Macmillan if I will take an intervention because she is leaving to go to the Justice and Home Affairs Committee.

Maureen Macmillan (Highlands and Islands) (Lab): I begin with some general remarks about the draft plan. I hope that everybody appreciates the size of the Highlands and Islands—it is as big as Belgium, something that is often said but really must be appreciated. It is not a homogeneous region—we need only think of the tremendous contrast between the Inverness and inner Moray firth area and the north and west of the region. The economic base is narrow and even in Easter Ross and in the Inverness area there are long-term unemployment and social problems more often associated with urban deprivation. The other areas, in the north and west, suffer from underemployment and depopulation caused by their remoteness; their economies are usually based on primary products with little value added and on unpredictable and cyclical industries such as oil rig fabrication and tourism.

The Highlands and Islands have tremendous potential, however—perhaps more so than any other area in Europe. We have a storehouse of raw materials to which we need to add value; we have excellent engineering skills, particularly in Caithness; we have enormous tourism potential; and we are in the forefront of communications technology. We must invest in the next technological evolution.

I am disappointed in this document because I do not think that it focuses on the next step. The special funding is much more than we would have had as the usual transitional funding following objective 1 funding, but we must analyse what was achieved in the objective 1 programme and build on it; the document does not do that sufficiently. We must prioritise, think strategically and justify our choices.

As has been said, we must take account of other funds such as those in the rural development programme, which have not yet been announced. We need joined-up thinking. For example, development cannot happen without proper infrastructure. A new pier at Mallaig was built with objective 1 money but we still have a single-track road leading to it. How can we extract the timber crop that is due to come to maturity in the next 20 years if the bridges are on the point of collapse?

We must give priority to infrastructure that will facilitate economic growth, including information and communications technology infrastructure. We must also give priority to the most fragile areas. This is the last chance of large scale funding that could make a real and lasting difference. I suggest 

Col 65 that it is used to establish a venture capital fund that could then sustain a rolling programme of development.

We must get it right this time. We cannot fritter the money away or spread the jam too thinly; we must make the effects of funding permanent. We must make sure that what we do is properly monitored and I suggest that elected representatives, and not only officials, have an input into that.

Dr Winnie Ewing (Highlands and Islands) (SNP): How are we going to approach this matter—bit by bit, subject by subject, or by that kind of general statement?

The Convener: I am in the hands of the committee. Shall we go through the document section by section?

Dr Ewing: It think that would be useful because there are points in every section as well as general issues. It would be easier to discuss things if we knew where we were.

Allan Wilson (Cunninghame North) (Lab): That is an important point but there are clear omissions in the draft plan—most noticeably of a financial table—which mean that our consideration will have to be generally based. If the financial implications are not defined, the specifics are of little value in developing an understanding of the potential impact on the communities that we are talking about.

My view is that we should concentrate on the second part of the strategic aim in the document. Of course our objective is to increase the prosperity of the Highlands and Islands generally through sustainable economic development, but the second part of the strategic aim—the reduction of social and economic disparities within the region, to which Maureen referred—is equally important. At this stage, we need to base our comments more generally.

The Convener: This is our first discussion; we will, at a later date, consider some of the detail that, as has been said, has been omitted from this document. As Margo indicated, we need to know our timetable. I propose that we take general points from members at this stage.

Ms MacDonald: This is a general point about the management of information. We should determine priorities, because if the committee has a view on the priorities we can indicate to the Executive a spending pattern rather than tell it exactly where to spend the money. I think that that was implicit in what Maureen was saying. If what Allan outlined is the numero uno objective—I am being European—I will go along with it.

The Convener: There were at least three languages in that sentence.

Col 66 Ms MacDonald: Nae problem. That was Glaswegian.

The Convener: A number of broad objectives have been articulated. Allan spoke about giving the reduction of social and economic disparity equal importance with increasing the prosperity of the Highlands and Islands. Maureen made some general suggestions and some specific ones, for example monitoring the input from elected representatives and not just from officials. A number of points were made well. I propose to continue the discussion in that vein. If members have points to make on particular sections, they should make it known.

Dr Sylvia Jackson (Stirling) (Lab): On a point of information, you said that the fisheries and agriculture issues are being examined elsewhere. We gave the comments from our last meeting to the Rural Affairs Committee. Can the committee clerk go over again how the full proposal will come together?

Stephen Imrie: It is my understanding that we will receive a document from the Executive containing the agriculture, fish and financial material that Mr Wilson mentioned. If that document follows the same process as the document that is before us, which I expect it shall, either Mr Henry or I will receive the document to circulate to all committee members and to copy to other subject committees—such as the Rural Affairs Committee or the Enterprise and Lifelong Learning Committee—for their considered opinion.

Dr Jackson: The reason I ask the question is that it follows on from Maureen's point about trying to see the whole picture, in terms of those areas that need an on-going appraisal of what has happened and those that need continuing funding to reap benefits. I agree with Margo's point about the need for a realistic time scale to view the whole picture and to examine the issue again.

The Convener: I will ensure that the committee clerk and I speak to other conveners to bring some of those points together. We will be able to give you a better idea of how quickly we can do that once we know the answer to Margo's question about timetables. You are correct that we need to know certain information so that we can make progress on the matters before us.

Ms Irene Oldfather (Cunninghame South) (Lab): The plan talks throughout about building on the good work of the previous programme. That is important, but we have not examined the previous plan, which may contain some omissions. We must ensure that there is a geographic and equitable distribution of funds with regard to the outlined priorities. That will be difficult to achieve without the financial perspective that we spoke about, but at some early stage we must gain an 

Col 67 idea of the financial allocation to the priority subject areas and to the geographical areas. We must build on the work that has been done but also redress any imbalances in what happened.

The Convener: There are a number of ways in which we could do that. The first is to circulate the whole of the previous plan. The second is to produce a synopsis of the key points that have been raised. The third is, in addition to the second point, to invite someone from the Executive to talk to us about the matter. What would be the preference?

Ms MacDonald: A synopsis taken in conjunction with the some of the first charts in the report—those on population changes, for example—would be sufficient. We would hardly need anything else. If we examine the demographics, we begin to see an indication of where we want to channel funds. I agree with Irene that the new structure arrangement is another country, but we must concentrate on the future. We have it here in front of us.

The Convener: I will ask for a synopsis to be circulated to the committee.

14:15

Dr Ewing: What will be the time scale for receiving the document on agriculture, fishing, aquaculture and forestry?

Stephen Imrie: I am not aware of what the time scale will be.

Dr Ewing: Does that mean that we cannot make any comment on agriculture and fishing with regard to the documentation that we have?

Stephen Imrie: I understand that separate material will arrive.

Dr Ewing: We currently have a crisis in agriculture, a crisis in fishing, a crisis in aquaculture and a crisis in forestry relating to the amount of mature timber. The Highlands also faces a general crisis above all the others in transport and the cost of fuel. If we do not get that right, frankly, these are just nice words under various headings. The problems with transport and fuel affect infrastructure, entrepreneurs and tourism, which is also facing a crisis. Transport problems should be a priority. The Mallaig road has been mentioned; Mallaig is a place of thriving new industry but the road is as bad as ever. It is not the only road of its kind but what is sad is that it serves a lot of growing businesses. Those are the crises that we will have to deal with. These are nice documents with nice graphs but we seem to be no nearer to solving the problems.

At the previous meeting, I asked one of the officials a question to which I did not receive an 

Col 68 answer. I may ask it when Mr McConnell comes, although I may have to go before that. My first question is what sum the Highlands and Islands is getting—it has been described as 210 million and 300 million. Secondly, how much extra money was secured as transitional aid? I would have thought that that was a simple question, but I have never been able to get an answer to it.

The Convener: If you wish to pursue that matter you will have to use other avenues. Jack McConnell is coming here today specifically to discuss objective 2.

Dr Ewing: He is coming at 3.30 pm?

The Convener: Yes, but the discussion will not venture into the allocation of funds for the Highlands and Islands because that is a separate matter. The Rural Affairs Committee is well placed to examine some of your other points about the specific problems facing different sectors of industry. Its role is to take the lead on those matters. We have been asked to make general comments on the consultative draft plan. When we have received more details and the sections that have not been included, we can examine the overall analysis of the plan, but it would not be proper for us to stray into some of the areas that the Rural Affairs Committee will be examining—that would be duplication.

Rhoda Grant (Highlands and Islands) (Lab): The plan lacks strategic thinking and, as parts of it are missing, I do not see how we can consider it. Some of the missing parts—for example those dealing with agriculture and fisheries—also have an impact on infrastructure. Until we get the whole plan we cannot examine it as an overall strategy. The plan lacks the joined-up thinking that Maureen spoke about. There is crossover between different sections and we should ask for consideration of that to be given more prominence.

George Lyon (Argyll and Bute) (LD): The section of the document dealing with the impact of the previous programme states:

"In order to establish the final impact of the Programme, however, there will need to be a detailed formal evaluation undertaken."

Is that evaluation in progress? It would give us an insight into whether the previous plan delivered what we would view as a success in meeting the targets that were set—they appear to have been met—but we must strip out a lot of other factors that may also have influenced the economic growth of the area, such as the growth of the economy as a whole.

We heard about the problems facing various sectors. What impact did they have on objective 1 investment in the Highlands and Islands? To ensure that this time we spend the money correctly, a proper evaluation is crucial, so that we 

Col 69 can be sure that the money that was invested last time delivered the significant benefits that seem to be shown in some of the document's tables. That information would allow us to make some kind of value judgment about the spending of objective 1 money in the Highlands and Islands in the past six years.

Dennis Canavan (Falkirk West): It is important to base whatever conclusions we reach on information that is as current as possible. The document contains much valuable information. Table 5 on page 14 alarmingly reveals the decline in certain sectors of employment in the Highlands and Islands. Employment in energy and water services is down 21.1 per cent and down 20.4 per cent in manufacturing. Employment in transport and communications is down by 16.8 per cent.

Those figures are for the period 1991-96. I wonder whether the clerk or the Executive could be asked to give us more current statistics on employment trends and other subjects mentioned in the document. If we are to make a critical analysis or come to any conclusions and make recommendations based on the document, it would help if our information was more current than that which the European Commission and the Council of Ministers had at their disposal when this document was drawn up.

The Convener: We can certainly write to the Executive and ask for that information.

Ben Wallace (North-East Scotland) (Con): I want to go back to the point that Dr Ewing and Maureen raised. Chapter 8 of the document is important; it indicates the priorities of the Executive and where it is looking to channel its money. There is scope for rebuilding infrastructure and, although there is no mention of measures on high fuel prices, the document talks about assistance for improving roads with European regional development funding.

The document—particularly on issues such as competitiveness and the funding of enterprise—does not mention the length of time for which funding would be available. I am keen to see more mention of whether money is for core funding. One often finds that many small groups in the Highlands and Islands and in Aberdeenshire are desperate for core funding over a period of time. Tourist boards are crying out for more than just an annual budget. That is not mentioned. The document states that they will get money, but does not state whether the establishment of long-term planning is a priority.

On Dennis's point, I am also worried about the assisted areas map. It is drawn up according to information on council wards from 1991. I know that that is the last available census information, but I am concerned that, in going into such detail 

Col 70 on council wards for assisted areas, we are dealing with information that is eight years old.

The Convener: Your point about the need for core funding over a period of time is slightly different from Maureen's, but we may have to make some decisions about where the emphasis should be placed. If we have limited funds, do we put the money into core grant funding or do we start to look at venture capital as Maureen has suggested? I do not know how much flexibility there would be to do both and I do not know whether we should try today to form a view on the idea of venture capital or wait for more information. I understand that you are saying that, beyond the six-year or seven-year period, money would continue to be circulated to get some longer-term benefit. We should, as a committee, form a view on that; I do not want to lose sight of that point.

Allan Wilson: My point is supplementary to what Dennis said about the table on page 14. Irrespective of the currency of particular figures—although that is important—the preceding paragraph refers to the importance of construction and transport in the economy of the area. However, the sectoral overview of the current position of the main economic sectors in the Highlands and Islands makes no reference to transport or construction. That seems to be an omission; we should ask the Rural Affairs Committee to look at that. I want a sectoral overview of transport and construction to be incorporated into the final report. It is also important to incorporate sectors such as retailing and perhaps self-employment into the final report and I would like reference to that to be made to the Rural Affairs Committee or to the Executive.

Cathy Jamieson (Carrick, Cumnock and Doon Valley) (Lab): I just wanted to make a couple of points about references in the document to the social economy. The voluntary sector and the wider social economy are clearly identified as having particular value in terms of community development and so on.

Ben and Maureen have said that if the social economy is—as the document outlines—a key component of the overall economy, it is important that funding for the voluntary sector and community businesses and organisations is not short term. I want more information about how that funding will be sustained The document mentions that it should be sustained over a period of time, but—this links into Maureen's point—I would like more commitment to establishing how that might be done.

The Convener: We can see from table 17 that nearly 9,000 people are employed in the social economy. Many of the employers will be in small communities and their relative impact on those 

Col 71 small communities will be very significant. I share Cathy's view. How do we sustain the funding?

Dr Ewing: The document contains some useful information on small businesses. Page 28 illustrates the area's dependence on small businesses and shows how many of those businesses are really small. Employers of one to 10 employees make up by far the greatest percentage.

In my years in Europe, the issue of small employers fell into a kind of vacuum because the really small businesses—which are the lifeline of the Highlands and Islands—are not so common in Europe. The good funding schemes that were made in Europe were designed for employers of 100 and more. We managed to get that figure down to 50 employees and more but, in the Highlands, that would be quite a big business.

I wonder whether we could focus on the need of really small businesses for access to the schemes that are available—the European Investment Bank had some attractive schemes. Such businesses could not access the schemes because of the cut-off lines. If those small companies had access to the sort of funding that is available to larger employers, even more businesses would be set up. It is in the nature of the Highlands and Islands to have many small businesses and many of them have traded very successfully—the impact of having 10 employees in an area of low population can be very significant.

Ms MacDonald: That is an important point. I agree with what Cathy said about the voluntary sector—which we should call the third sector. It provides employment and tries to keep people in some of the areas that are losing their population. The demographics show—Maureen will know this better than I do—that some areas are struggling to retain a skills base that will give any hope for employment in manufacturing or in anything other than third sector employment.

What Winnie says is important. Can we, through this committee, tweak the rules so that we reduce the number that must be employed by a business before it can tap into the investment fund?

George Lyon: I would like to highlight communications, which brings us back to infrastructure. We know about some of the physical problems—relating to piers, roads and ferry services, for example—and about the necessity for targeting specific areas of need. Highlands and Islands Enterprise and British Telecom invested substantially in improving the communications infrastructure over the last period of the plan. Already they are starting to lag too far behind—in terms of bandwidths and so on—to attract the inward investment in telecommunications that is vital to many of the 

Col 72 remote areas of Scotland.

A lesson that is always learnt in setting up businesses in the Highlands and Islands is that the distance from markets is one of the great barriers and one that is always difficult to overcome. If a business's product can go down the telephone line, that barrier vanishes. There is the potential to attract industries that are based on telecommunications.

However, it should be taken into consideration over the next six years that, if the infrastructure is not kept up to date, the Highlands and Islands will start to lose ground again. The existing good network needs continually to be upgraded because the technology is moving on.

14:30

Lewis Macdonald (Aberdeen Central) (Lab): The Rural Affairs Committee has not yet considered this document, although it asked Rhoda and me to attend this meeting. The Rural Affairs Committee has a broad rural development remit. It is interesting for us to see what there is in this document that may be applicable to other rural areas of Scotland. I know that there are members on this committee who will take the same view.

One of the useful things in this document is the stress that it put on the distinction in the Highlands and Islands between those areas that are doing reasonably well in Scottish terms and those that are on the edge and need extra assistance.

This document contains good background information, and very good evidence of the difficulties facing particular rural areas that are still suffering large-scale depopulation and so on. I am not so sure that the document contains the strategic pointers that we require to address those difficulties. This committee should do anything it can to encourage more attention to the strategy for the more remote and less populous areas that is needed to correct that imbalance.

David Mundell (South of Scotland) (Con): I agree with that point. I raised that general point at our previous meeting. One of the slight difficulties that there has been with the separation of Highlands and Islands Enterprise from Scottish Enterprise is that a lot of very good work under the previous programme has not always been promulgated to rural parts of Scotland that are within the Scottish Enterprise network. In considering the implementation of objective 2 funding for the other parts of Scotland, we have to build on the experience of the Highlands.

Ms MacDonald: I refer to pages 28 and 29. My point is about business closures and the inability to meet the targets that were identified under the structural funds and other Government strategies. 

Col 73 I want to know more about this. Why is there such a high rate of business closure in comparison to the Scottish average? Are the rates of business closure and small business closure in the Highlands and Islands very different from those in other rural areas in Scotland? Why does there not appear to have been such a dramatic contraction in that sort of business in the islands? How important is it that petrol prices are so high in the mainland areas that show a higher rate of business closure? I would like to have a bit more detail; I believe the figures but I want to understand the reasons behind them.

The Convener: If we were to consider those reasons, we would need to contrast the figures for business closure with those for new business formation in the same period. Although the rate of business closure per 1,000 is 3.8, the rate of business formation for 1998 is 4.3 per 1,000. Ms Macdonald mentioned the islands; some communities, such as the Western Isles, have a relatively low rate of business closure but have an average rate of new business formation compared to the rest of the Highlands and Islands. The Highlands and Islands do better than the Scottish average in the creation of new businesses. There is maybe something to be explored, but if we do so, we must consider the positive as well as the negative aspects.

Ms MacDonald: Returning to what Cathy and Winnie were talking about, we need to know the size of the enterprises and whether they are self-employed or in the third sector if we are to direct funds and prioritise. I was not involved in a knocking exercise, Hugh, I was just trying to find out.

The Convener: No, but the message according to these statistics could be that the Highlands and Islands has been more successful than the rest of Scotland in creating and developing new businesses. We must find out what has been going on. The key for the European Committee is to find out what influence European funding had on that process, what influence such funding had on assisting the creation of new businesses, and how—by shifting in the way that Winnie is suggesting, and targeting smaller businesses—it could have helped some of those businesses to stay in existence which otherwise would have gone out of business.

Ms MacDonald: That should be set against the bigger background of the changing population pattern. I suspect that, if we examined it more closely, we would find that where there have been closures people have moved from rural areas to areas adjacent to towns. I do not know the answers, Maureen, I am just trying to make sense of it.

Lewis Macdonald: All that I can suggest, in 

Col 74 response to that, is that the areas that appear to have the highest rates of business closure are Inverness, Lochaber and Orkney, areas which by many other criteria would be the most economically successful parts of the region.

Maureen Macmillan: I think that is generally because of the type of activity in those areas. In other areas the economy is fairly static.

The Convener: There are two slants on the matter. The first is this: has European funding been of assistance in developing and sustaining businesses in the Highlands and Islands? The second is this: could some of the businesses that went out of business have been helped to continue had European funding been available, taking into account the point that was made earlier?

George Lyon: I would like to elaborate on Margo's question. I live in an island community, and I know that many island communities—certainly in Argyllshire and further north—are dominated by small one-man businesses. That is just the nature of the beast. One of the challenges in trying to develop projects in areas such as that in which I live—if any project is going ahead—is to find a firm big enough to take those projects on. That is one of the barriers that sometimes prevent firms from benefiting from some of the infrastructure projects that go ahead: there are no firms with big enough critical mass to take on that type of project on their own. In Bute and Argyllshire that type of problem has been experienced quite often. Mainland firms come to those areas to take on the bigger projects. That is an issue that concerns the use of the investment money and how it benefits the local community.

In terms of start-up rates and failures, a lot of businesses stay for a year or 18 months, then suddenly go. Those tend to be one-man businesses that do all the small jobs that are required around the community. During my lifetime that has been the situation in many of the island communities. They tend to be dominated by small businesses that are out to earn only enough money for their own livelihood; there are very few big businesses that can take on construction projects of the type which sometimes come as a result of grant moneys and infrastructure projects.

There is a considerable difference between the gross domestic product of some less well-off areas in the Highlands and Islands and that of places such as Inverness. This time, funding needs to be targeted geographically. I come from an area where the GDP per head stands at 70 per cent of the Scottish average. We are the second poorest area in Scotland; only Skye and Lochalsh has a lower GDP per head. There is a feeling that the Inverness area benefited substantially from the previous investment programme. Depopulation is 

Col 75 an issue in areas out on the edge, such as the one in which I live, because of the lack of economic activity there. Geographical targeting should underpin the setting of priorities; we should start with the areas that need help most and set up strategies for them. That is how the plan should be delivered.

The Convener: Is that a general view?

Ms Oldfather: That is partly what I was saying earlier. We need to examine how we can redress some of the historic imbalances and problems that were associated with previous programmes. Table 35 on page 66 of the draft plan begins to address some of those problems by focusing on a much lower level. Much of the information and analysis presented in the plan is at the level of large geographical areas of the Highlands and Islands, but this table targets much better the smaller areas where action needs to be concentrated. To that extent, it represents a step forward. However, we will be working in something of a vacuum until figures are attached to the plan and it is put in the wider strategic context.

Dr Winnie Ewing: Last time the problem in many areas was that projects were not brought forward. Will we now look at who is responsible for doing that? Is it the local enterprise companies, is it a crowd of people with good ideas who happen to live in an area that needs funding, or is there an overall plan? We must decide, as that was one of the difficulties. I received complaints from people in Caithness who claimed that they did not get a fair share. That was probably true, but the reason for that was that no one came forward with projects. Who is to do the homework for projects? That is the question. From the beginning, Europe made it plain that it would not do the homework, but that people on the ground and the committees that they set up would have to do it. I was told that one reason for the disparity was that people on the ground did not come forward with projects. If we want to reduce disparities, we need to consider who should do what.

The Convener: That touches on a point that David made about a different area and a different programme. The remit of this committee is not to analyse the economy of the Highlands and Islands—that is for another committee—but to consider how European funding and assistance can help that economy. We have to ensure that we concentrate on that. Dr Ewing's point is very pertinent—there is no point in people getting funding if they are not able to take advantage of it. If we are concerned that people are not being assisted to submit projects, we should comment on that. We need to ask whether that is the case and, if so, why. We must also identify the people who can move things forward.

Ms MacDonald: Convener, how would we get 

Col 76 that information? Nobody is likely to put up their hand and say that they screwed up and did not provide assistance. From personal experience, Maureen, Winnie, George and other folk sitting around this table must be in a position to comment on whether people in their areas have found the system for accessing funds flawed.

The Convener: Certainly people can be asked to provide anecdotal evidence, but there should also be statistical evidence available, not only from the Scottish Executive but from other quarters. If the statistics show that fewer projects have been submitted in one area than in others, we will want to know why. By all means, let us take anecdotal evidence, but we also need hard evidence. We can ask the Scottish Executive to obtain that from Highlands and Islands Enterprise, local authorities and others.

Ben Wallace: That ties into the bigger picture to which David and I alluded. In Aberdeenshire, there is very often a feeling about the enterprise companies and the need for feedback from them and scrutiny of what they have been doing. We would see that as a system set up by another part of the Executive to scrutinise the value for money of the enterprise companies and to see how they would work for the Highlands and Islands. It is perhaps not our position as the European committee to back the enterprise scheme, but I would have thought that our role is to prioritise that money and to look at the way in which the schemes are funded—by venture capital, for example.

14:45

Maureen Macmillan: I agree with David Mundell. I do not want there to be a dogfight between the various enterprise companies. That would be a disaster. We must have a view of the Highlands and Islands as a whole, and what will be good for it, including the peripheral areas. We must not have a competition which results in people feeling that they have been hard done by.

George Lyon: I have been involved in this process before, because I was chairman of one of the working groups in Argyllshire that was involved in drawing up the bids for the first plan. The enterprise companies have a role, but so does the local council. It is about partnership—they have to get together to ensure that they identify the key priorities for their area. An important layer below that is the enterprise company working groups. They are local groups that represent the community, and they have an important role to play in identifying projects that they believe should be submitted. The voluntary sector is also important. Where I come from many of the voluntary organisations have already put forward schemes, whether they are environmental 

Col 77 programmes, or just good ideas for projects, which are feeding into the system. The way in which it is done is clearly identified: up through the enterprise network and the council working side by side. One of the big dangers is that if the enterprise company and the council do not work in partnership, two different sets of priorities are identified. There is nothing like a civil servant for exploiting two different sets of priorities—nobody gets anything. The onus is on us to ensure that we get partnership between the enterprise companies and the councils, and that the voluntary organisations come forward with some good ideas.

The Convener: That is how we would expect the process to work. Questions were asked earlier on—is it working, are people getting the help that they need, and if not, what should be happening—and I think that we can legitimately explore that. If there is a gap, not just in the plan, but in the process—and this goes back to something that David Mundell mentioned at a previous meeting—then we should be commenting on that process.

Allan Wilson: I agree. It is very important that local authorities and local enterprise companies work together to promote the strategic objectives of the plan. Even where they are working together, however, there are still areas where the level of preparedness of different communities varies within the local authority area. Our role should be to encourage those communities with the lowest level of preparedness to make themselves available so that they can take advantage of the strategic aim of redistributing money within the overall area of the Highlands and Islands.

Dr Sylvia Jackson: We talked about the detailed analysis that we think needs to be undertaken, and Margo MacDonald made a point about the various businesses that ceased trading. We will need to look at that analysis in terms of the time scale that we have for examining this draft and for the report. It will be important to build in what is possible. I would also like to support David Mundell's point. We must not lose the importance of the end of this process, and of the basic principles that we can draw from it and apply usefully, if not totally, to other rural areas.

The Convener: What I propose to do—bearing in mind that there is a time problem and that we are unsure of the timetable—is produce a holding document that reflects some of the views that have been expressed. There is a general degree of consensus. We may wish to revisit issues such as whether we should set up a venture capital fund or how we approach core funding, as those issues are worthy of further comment, and at least we have flagged them up. The document should be circulated to the committee and considered further at the next meeting, if the committee 


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Scottish Parliament 1999
Prepared 31 August 1999