Enterprise bodies performing well but government's economic strategy needs more development

Scotland’s enterprise agencies are performing well and having a positive impact on businesses and communities but the Scottish Government needs to do more to link their work to its economic strategy and to set out in detail how that strategy will be achieved.

Scotland's economy is worth around £142 billion. A new report by Audit Scotland reviews the work of Scottish Enterprise and Highlands and Islands Enterprise, which have a specific remit to support economic growth, and how they aid delivery of the Scottish Government's economic strategy.

Despite spending reductions in recent years, Audit Scotland found that both agencies have been successful in their respective roles, with clear strategies and good governance arrangements in place. They collectively work with or assist around 11,200 businesses each year and there are good examples of the agencies working with partners to achieve a positive impact, such as creating jobs.

The report recognises that economic growth is complex, and concludes that the Scottish Government needs to be clearer on how its strategy will be implemented. A stronger approach is also needed to measure progress towards achieving the government's economic priorities. For example, though the enterprise bodies perform well against their individual targets, it's not possible to measure how they contribute to delivery of the government's strategy.

The report notes that a lack of information on the full range of support for businesses creates a risk of duplication. Building a clear picture of the support available, clarifying roles and responsibilities, and raising awareness of what's on offer will make it easier for businesses to understand and access these services.

Caroline Gardner, Auditor General for Scotland, said:

"The advent of new financial powers means that the Scottish Government now has a direct stake in the performance of the Scottish economy. Scottish Enterprise, and Highlands and Islands Enterprise have a positive impact on businesses and communities but their work is only part of the activity that contributes to the Scottish Government's ambition for sustainable and inclusive economic growth.

"New powers, continuing pressure on public finances, and uncertainty following the recent EU referendum mean that the Scottish Government needs to target public sector activity and funding where they will have the biggest impact on achieving its economic strategy. It also needs to be able to measure progress so its plans remain on track."