Scotland's enterprise agencies to keep boards following government u-turn

Economy Secretary Keith Brown confirmed to MSPs that Scotland's enterprise agencies would retain their boards

Plans to replace Scotland's enterprise and training agencies with one national board have been abandoned.

Minister Keith Brown said Highlands and Islands Enterprise, Scottish Enterprise and Skills Development Scotland would continue with their own boards.

He also announced that a national strategic board would be set up, to "align the work" of the agencies.

Opposition parties welcomed the news but said the minister had been forced to make the u-turn.

The process had been the source of a political row with Labour, Lib Dem and Conservative MSPs accusing the Scottish government of centralisation.

• Look back on Keith Brown's statement

In his statement, Mr Brown said that a new enterprise agency would be set up to cover the South of Scotland and the shape of this organisation would become clearer following local authority elections in May.

He said he had listened to the debates on the future shape of enterprise and skills services, and recognised the value of Scotland's agencies but changes were needed to better support Scotland's economy.

Mr Brown added that the individual boards would continue to have the "powers and functions" and would "collaborate and align" to increasing productivity and exports.

Analysis by Douglas Fraser, Scotland business and economy editor

Anyone who knows about the politics of the Highlands and Islands could guess that centralising the region's enterprise body was going to provoke a ferocious backlash.

The economic development agency is a rare case of a quango to which people have a real attachment.

The other puzzling element was that the policy seemed to be soft launched in half-baked form last October. Members of the boards facing abolition weren't consulted or even told in advance.

And without a clear plan, the HIE suggestion was only the most obvious of those that would set mountain hares running.

Read more from Douglas

The minister said Brexit was among the reasons for the changes.

But opposition parties said they still had concerns the new strategic board would make big decisions currently made at local level by HIE, Scottish Funding Council, Scottish Enterprise and Skills Development Scotland.

Labour's Jackie Baillie said Mr Brown appeared to have made a series of u-turns on the setting up of the new board.

She asked Mr Brown to confirm that the planned strategic board would not be statutory and said she was surprised that he would not be chairing the new group.

The minister said he believed it was important that a minister did not chair the board and these feelings had been shared by the review group.

Liberal Democrat MSP Tavish Scott also said Mr Brown's statement represented a "u-turn" away from previous plans to wind up the individual boards.

Conservative MSP Liz Smith welcomed the retention of the boards of the enterprise and skills agencies.

She asked if it would still be for parliament to allocate the funding to the Scottish Funding Council, which allocates public money to colleges and universities.

Mr Brown said there was no intention to change the functions or the structures of the council.

Green MSP John Finnie thanked Mr Brown for listening to the board of HIE and also asked for a meeting to discuss some remaining concerns about the agency.

HIE supports businesses in the Highlands and Islands, Western Isles, Northern Isles, Argyll and Moray

HIE supports businesses in the islands, Highlands, Argyll and Moray.

It began as the Highlands and Islands Development Board 50 years ago, becoming HIE in 1990.

The first phase of the Enterprise and Skills Review was published in October last year and recommended that a new national board co-ordinate the activities of HIE, Scottish Enterprise and other bodies.

In January, MSPs voted to demand the Scottish government allow HIE to retain its own board.

In his response, Mr Brown said HIE would "continue to be locally based, managed and directed" under his plans.

What is HIE?

• It began as the Highlands and Islands Development Board 50 years ago, becoming HIE in 1990

• The agency is the Scottish government's economic and community development agency for the north and west of Scotland

• Its purpose is to "generate sustainable economic growth"

• The agency's headquarters are in Inverness, but it has staff in offices across its region

• The assets it owns include the CairnGorm Mountain snowsports centre and its funicular railway

A report was recently published on the scope, structures and functions for a new board.

Prof Lorne Crerar's publication recommended HIE and the others retain their independent boards.

HIE's work in recent years has included providing funding to upgrade a fabrication yard at Arnish, near Stornoway on Lewis, and helping to secure the future of jobs at a call centre in Forres.

It is involved in the roll-out of superfast broadband to rural areas and initiatives to encourage young people to live and work in the Highlands and Islands.

HIE has also flagged up the need to better tackle gender imbalance in the workplace.

'Booming Inverness'

In 2015, it officially opened its Inverness Campus, a large area of land at Beechwood in Inverness which HIE has made available for businesses and research organisations.

Inverness College UHI built a new college on part of the campus.

However, during the early stages of planning the campus, HIE was criticised by Western Isles Council - Comhairle nan Eilean Siar.

It said the agency should be investing in fragile areas of the region and not "booming" Inverness.