Council calls for fairer funds distribution

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Scottish Borders Council wants a major shift in the way economic development investment funds from the public purse are distributed in Scotland.

In a submission to the Scottish Government, the local authority highlights the longstanding iniquity between what is received to support enterprise in the south of Scotland and that enjoyed in the Highlands and Islands.

That view will now be conveyed to Scottish jobs minister Keith Brown MSP who is reviewing the national set-up – nine years after the last overhaul when local enterprise companies, including Scottish Enterprise Borders (SEB), were dissolved.

Responsibility for economic development has since been transferred to councils, while the remit of SEB’s parent Scottish Enterprise (SE) and Highlands and Islands Enterprise (HIE), which survived the cull, was refocused on “national and regional economic development, prioritising key growth sectors and businesses with high growth potential.”

Meanwhile, the skills and training functions of the former enterprise companies were transferred to another national body, Skills Development Scotland.

In its submission, the council cites “fundamental weaknesses” in the current approach.

“The first weakness is that the organisations (SE and SDS) do not have a strong approach to regional equity,” states the response.

“This manifests itself in a clear lack of investment for rural areas like the south of Scotland.

“A powerful example of this is the disparity between the resources and broader remit that HIE delivers and the level of intervention delivered by SE in the south of Scotland.

“It is noted that SE’s budget in 2015/16 of around £280m is used to deliver economic development across a population of about 4.8m people; whereas HIE deliver for 450,000 people with a budget of £96m.

“This equates to an approximate spend per head of £58 in the SE area and £213 in the HIE area.

“This highlights the issue of regional equity. The south of Scotland has a rurality comparable to the large areas of the Highlands and Islands. It has equivalent challenges of low wages and access to employment and a lower GDP per head.

“But crucially, SE does not have the remit, resources or strategic focus to address these economic challenges in the south.”

In its last year of operation (2007/08), SEB had an annual budget of £10.4m, of which £8.9m went to support businesses and training in the Borders.

In 2015 SBC spent £1.48m on economic development – less than 15% of SEB’s valedictory budget.