South Scotland MSP and Scottish Labour’s Rural Economy Spokesperson Colin Smyth has slammed the Scottish Government for proposing a cut of £4 million from the planned budget for the new South of Scotland Enterprise Agency (SOSEA) – before the new Agency has even been established.
In the draft Scottish Government budget published today (6 February 2020) the budget for the new Agency, which will be up and running on 1 April is set at £28.1 million for 2020/21.
However, in the financial memorandum that accompanied the legislation setting up the new Agency the promised budget from the Government for its first year was almost £4 million higher at £32 million.
The Government pledged that the funding for the new Agency would be same per head of population as the Highlands and Islands Enterprise (HIE). As a result of the proposal in today’s Scottish Government budget to slash funding for HIE from £61.1m to £58.2m for 2020/21 (on top of the cut from £71.7m to £61.1m for 2019/20) the funding per head of population will fall, resulting in a cut in the planned budget for South of Scotland Enterprise Agency
When the SNP came into Government the budget for HIE was £103m for 2007/8 but next year in 2020/21 it will fall to just £58.2 m. Had it kept pace with inflation the budget would have been more than double that level at £130m. That would have meant the new South of Scotland Enterprise Agency having almost double the planned budget in its first year.
South of Scotland MSP Colin Smyth said, “This is a real kick in the teeth for the new South of Scotland Enterprise Agency even before it has started its work. When the legislation was passing through Parliament the Scottish Government were at pains to claim it would have a projected budget of £32m in its first year but it turns out it will be nearly £4m less. That will mean less money to support local businesses and create jobs at a time the local economy continues to fall behind much of the rest of Scotland”.
“The budget for the new Agency is linked to that of Highlands and Islands Enterprise Agency who are suffering massive cuts. Had their budget risen by inflation in the last decade it would have been double the level it is now. That would have meant our new South of Scotland Enterprise Agency would have a budget of nearly £60 m when it is set up not the cuts it is facing now.”
Projected budget: As contained in South of Scotland Enterprise Agency Bill Financial Memorandum
| 2020/2021 £000 |
2021/2022 £000 |
2022/2023 £000 |
|
| South of Scotland Enterprise potential allocation | 32,000 | 37,000 | 42,000 |
Source: South of Scotland Enterprise Agency Bill Financial Memorandum, Table 4 https://www.parliament.scot/S5_Bills/South%20of%20Scotland%20Enterprise%20Bill/SPBill41FMS052018_new_FM_with_bookmarks.pdf
Actual budget: As contained in today’s Scottish Government budget document.
| Level 3 | 2018-19 £m |
2019-20 £m |
2020-21 £m |
| Highlands and Islands Enterprise | 71.7 | 61.1 | 58.2 |
| South of Scotland Enterprise | 10 | 13.3 | 28.1 |
Source: Scottish Government Budget 2020-21, Table 12.07 https://www.gov.scot/binaries/content/documents/govscot/publications/publication/2020/02/scottish-budget-2020-21/documents/scottish-budget-2020-21/scottish-budget-2020-21/govscot%3Adocument/scottish-budget-2020-21.pdf
