Enterprise and Skills Review: report on Phase 1

Outlines Scottish Ministers' decisions to achieve stronger governance across a coherent enterprise and skills system.


Scotland's Enterprise and Skills Agencies - Factual Background

Scottish Funding Council ( SFC) was established under section 1 of the Further and Higher Education (Scotland) Act 2005 and is given various statutory functions in that Act, e.g. the undertaking of research. The Act also sets out the number of board members and details their appointment arrangements. The SFC Board is accountable to Ministers for the funding it is given, under terms of conditions of grant and a Ministerial letter or guidance, and the Chief Executive is an Accountable Officer. Ministers have statutory powers of direction. A Framework Document governs the relationship between Ministers and the Agency.

Scottish Enterprise and Highlands and Islands Enterprise ( SE and HIE) are set up under Part 1 of the Enterprise and New Towns (Scotland) Act 1990 and have various functions under that Act. HIE has some additional social development responsibilities to SE. The legislation sets out the number of board members and details their appointment arrangements. Framework documents govern the relationship between Ministers and the Agencies. Chief Executives are Accountable Officers. Ministers issue strategic guidance letters and budget allocations. Ministerial agreement is required for certain decisions, e.g. relating to new leases, and Ministers have the power to issue Letters of Direction.

Scottish Development International ( SDI) brings together the Scottish Government, Scottish Enterprise and Highlands and Islands Enterprise. It is the lead body for driving forward international trade and investment support in Scotland.

Skills Development Scotland ( SDS) has no statutory governance structure, although it has a number of statutory functions. It is a company limited by guarantee with Scottish Ministers the sole member of the company. Its powers and functions are determined by Memorandum and Articles of Association, which may be adjusted by special resolution to Companies House. Ministers set out their priorities in annual budget allocation letters and in strategic guidance letters.

SE , HIE, SDS and the SFC all collect and analyse data to help them to carry out their functions as effectively as possible. Some also carry out evaluation functions to help to identify the most effective interventions. The Agencies undertake strategic analysis both in relation to national priorities and to support their specific delivery functions.

Local government - Local authorities can promote economic development under the power to advance wellbeing (The Local Government in Scotland Act 2003 - Guidance on the Power to Advance Wellbeing). The Business Gateway service is one element of economic development services offered by local authorities. It is delivered locally through Councils, either by in-house provision or externally by a contractor. Its funding forms part of the local government funding block. Beyond local authorities there is significant existing regional activity ( e.g. ONE, City Regions). There are three City Deals in Scotland (Glasgow, Aberdeen and Inverness). Together, these commit Scottish Government funding of £760 million over the next 10-20 years. There is a commitment to tripartite discussions on a City Region Deal for Edinburgh and South East Scotland.


Back to top