New Deal for Business Group: final progress report

Outcomes and Progress

Outcome 1

An improved regulatory environment that better aligns with business competitiveness by understanding the impact of policy and regulatory decisions on businesses of all sizes, locations, and sectors through:

• the work of the independent Regulatory Review Group (RRG) which scrutinises forthcoming policy and regulations and provides advice to Ministers.
• developing and implementing an improved Business and Regulatory Impact Assessment (BRIA) process with associated guidance.
• developing an internal process for understanding cumulative impact of policy and regulatory decisions on businesses of all sizes.

What did we do?

Given the importance of regulatory issues to business it was important to make quick and meaningful progress on delivering Outcome 1. Therefore, we focused on key activities which would support the change required. We:

• Reinstated and reinvigorated the independent Regulatory Review Group (RRG)
• Refreshed Business and Regulatory Impact Assessment (BRIA) and guidance
• Reviewed BRIA governance and delivered a pilot quality assurance process

How does this help business?

• The RRG provides independent advice to Ministers and officials on work that will impact on business. Members from business, such as the Scottish Retail Consortium and Association of Chartered Certified Accountants, provide insight on challenges and impacts from an industry expert point of view and not just specific to their own sector, enabling improvements to be made.
• The refreshed BRIA and guidance, developed in partnership with business experts, supports early engagement with business and proposed regulators to deliver more robust impact assessments for decision making, leading to better decisions.
• The BRIA pilot and quality assurance activities provide better governance and oversight of BRIAs in development, to allow officials to better support policy areas with engagement and data gathering on impacts. The work of the Sharing Key Metrics group has also supported officials with data sources.

What next?

We will build upon the progress achieved, with a focus on driving the organisational and cultural change required to meet the expectations of the Group through:

• Ongoing work with the RRG to support development of the group, it’s Membership and its remit to ensure officials and ministers receive timely expert advice from industry and regulators in line with the new policy cycle and development of key measures such as the Scottish Budget and Programme for Government
• Evaluation of the pilot and steps to ensure the quality of BRIAs in development
• Ongoing support to officials on BRIAs, including maintaining and updating the tools available.
• Further strengthening of the Scottish Government’s system of impact assessments to ensure statutory duties are met and Impact Assessments are high quality, proportionate, accessible, timely and influential on decision making and strategic processes such as Programme for Government.

Success Looks Like

• Improved confidence from business and regulatory partners in scrutiny activities
• Demonstrable evidence of advice consideration and impact
• Better implementation of policy and regulations with early identification and mitigation of challenges
• Improved awareness of business impacts and a reduction in unintended policy consequences

The Regulatory Review Group

Officials were developing the next steps for Minimum Unit Pricing policy. A consultation on continuation and price level took place in 2023 ahead of the ‘sunset clause’ in the 2018 legislation.

Public Health Officials attended the RRG on 10 January 2024

RRG advised*:

• Any increase in price per unit (ppu) required a six-month implementation period (30 September 2024).
• A Business and Regulatory Impact Assessment (BRIA) be published, including small business brought into scope and Local Authority enforcement expectations
• A communications programme be produced, with effective monitoring of awareness for producers, retailers and consumers

This advice fed into the decision by Scottish Ministers on 8 February 2024 to raise to 65p per unit from 30 September 2024, allowing supply chains and any new operators in scope a lead in period.

Text extracted from Letter from the Regulatory Review Group to Minister for Drugs and Alcohol Policy

“The Regulatory Review Group has been a part of the Scottish Government’s legislative and regulatory process since the early noughties and has contributed to many such issues over the years but because of Covid it had rightly been ‘stood down’ for the time of the pandemic.

The New Deal for Business initiative put regulation and legislation back at the heart of its relationship with business. This allowed RRG not just to be restored but also reinvigorated, refocussed and resourced adequately to have a real impact on ensuring that better regulation is what we are all seeking.

Already the group has had its advice taken on a number of policy areas including Heat in Buildings, Minimum Unit Pricing, Single Use Cups and Non-Surgical Cosmetic Legislation. The positive relationship that Scottish Government had with business pre Covid is being restored and that is totally due to the New Deal for Business initiative and working groups.

Professor Russel Griggs OBE, Chair Regulatory Review Group

Outcome 2

An effective mechanism that allows Ministers to scrutinise cross-portfolio policy and regulatory decisions through the lens of impact on business and the economy. This will ensure improved corporate and Ministerial knowledge of all policies that affect business, enabling a ‘helicopter view,’ and offer an escalation route where timing and related issues can be highlighted ahead of consideration by Cabinet.

What did we do?

• Improved knowledge of activity across government with an impact on business, to support cross-portfolio and Ministerial understanding of cumulative impact concerns.
• Worked with Scottish Government colleagues through Programme for Government and Budget development processes
• Ensured Ministers were advised on cumulative impact concerns particularly for key decision points in the Programme for Government and Budget development process
• Engaged with the new Cabinet Sub-Committee for Investment and Economy to establish a process to provide across-portfolio forum to discuss possible barriers to investment and economic growth, including advice on the cumulative impact of the policies in development.

How does this help business?

• Ministers and officials now have a clearer understanding of the activities across government which have an impact on business. This more comprehensive strategic view and closer engagement with business has allowed Ministers to consider impacts and make decisions.

What next?

• The newly established Cabinet Sub-Committee on Investment and the Economy (CSC-IE) provides the opportunity to take a strategic approach to horizon scanning across the Scottish Government’s proposed policies, legislation and regulation to identify potential issues of cumulative impact on businesses.
• The CSC-IE will be able to consider the advice provided by the RRG to policy teams across the Scottish Government, to providing assurance that key business impacts are understood, considered and presented to Ministers to allow them to make decisions with the best available evidence.
• Officials are engaging with the UK Government and Devolved Nations on their Regulatory agenda. As part of ongoing consideration of cumulative impact, officials plan to explore any appropriate reform of the existing stock of regulation.

Success looks like

• A clear understanding at Scottish Government and Ministerial level of the cumulative impact of cross Government activities on business
• Decisions taken to mitigate identified burdens through the governance structure in place
• Businesses feel heard, their concerns considered and action taken where possible to mitigate adverse impacts.

“IoD Scotland welcomes and commends the Scottish Government’s approach in encouraging cross-directorate dialogue. This commitment marks an important step toward fostering greater collaboration across different sectors, ensuring that a wider range of perspectives is considered in policy development and decision-making.

Through open communication between directorates, we will break down silos, encourage innovation, and ultimately create more cohesive, efficient solutions to the challenges facing Scotland today.”

Catherine McWilliam, Nations Director – IOD Scotland

Outcome 3

A new culture within government that better understands how business interests intersect with policy. This will be delivered through provision of a suite of guidance, tools, and training to support improved policy and decision-making, ensuring improved capacity across Scottish Government officials to understand the business impact of policy and drive a consistent approach across the organisation.

This includes development and implementation of the updated policy cycle tool for cross-organisation use, supported by internal communications and a training plan to educate and drive culture change in the approach to policy development.

What did we do?

• A much-improved engagement process for key strategic activities.
• Co-produced with business, New Deal for Business refreshed Principles^[7] that highlight values such as meaningful communication, evidence-based policy and consistency
• Co-developed and refreshed a suite of internal policy development tools for Scottish Government officials with a focus on business stakeholders. These include best practice, ensuring business community stakeholders are engaged at all stages of the design, development, implementation, and review of policy.
• Created a Best Practice Policy Cycle model via a deep dive with both the Partnership and the Regulation Subgroups. Now working with the ‘Policy Profession Standards’ to embed this cycle as part of the refreshed curriculum for all policymakers with the Scottish Government.
• Officials delivered a series of learning and development sessions to colleagues from across Scottish Government on the co-developed tools and on the Regulatory Review Group as an advisory group to support policy colleagues.
• Officials continue to push the tools and best practice, through ongoing learning and development activities and are providing ongoing daily advice and support to colleagues across government who are engaging with business.

How does this help business?

• When officials engage early with business on policy objectives in which government see business playing a role, it will lead to better outcomes with officials able to understand business impacts, mitigate challenges and identify innovative solutions to achieving policy outcomes.

What next?

• On-going improvement of policy development tools and support to officials when engaging with business
• Early engagement and partnership working where appropriate is key to achieving our four priorities. Therefore, we will be looking at more effective strategic engagement, aligned with the activity of the RRG and explore how the Cabinet Sub-Committee can provide a cross-portfolio forum for discussion of key policy activities which impact on business.
• Continue work with Policy Profession Standards officials to embed the business engagement tools within curriculum, and promote the tools, Best Practice Policy Cycle, and Principles across Scottish Government. This will continue the cultural shift to improve the policymaking experience for the business community and enhance policy outcomes for all.
• Explore innovative learning to further develop official understanding of the business environment such as via seminars or opportunities for learning activities that will facilitate shared understanding of business and government.

Success looks like

• Effective strategic engagement between Business stakeholders and Ministers
• Businesses are engaged at the right time in the policy cycle.
• BRIAs are robust and developed with early input from business.
• Policy officials have the tools skills and guidance to engage with business.

Best Practice Policy Cycle

Building on the existing model of policy development, officials worked with Members of both Subgroup 1 Regulation and Subgroup 2 Partnership to develop in partnership what Best Practice looks like from a business point of view when Ministers decide that an issue requires action and any proposals to address the issue, could have an impact on business.

The model is clear, accessible and step by step and includes advice developed for officials across government on timing of engagement and Impact Assessment and evaluation.

The RRG has been embedded in the cycle to ensure implementation and enforcement of any requirements are considered at the appropriate time to support policy leads with effective implementation.

The Best Practice Policy is now part of the Scottish Government Pathways Curriculum for Policy leads, with further activity and learning planned.

“There are definitely some tangible achievements to which we can point. For example, the revised Best Practice Policy Cycle that was developed by the Subgroup and subsequently approved by the main New Deal for Business Group, has the potential – if embedded across the organisation – to make real improvements to policymaking and avoid the sorts of missteps that unsettle business.

Further, part of the new toolkit to “ensure that the business voice can input appropriately and in a timely way to policy decisions” is an updated Business and Regulation Impact Assessment (BRIA). Developed by a working group of Subgroup Members, the new BRIA is more comprehensive and thorough in specifically examining the impact on small businesses. Whereas before it was more of a general “business” assessment, the new assessment recognises that the impacts on small businesses are different, so need to be specifically taken into account.

It’s also important to put on record how open officials were to working with us in developing the small business impact assessment aspects. They took our input and feedback on board at every stage, ensuring it was reflected in the final document.”

Colin Borland, Director of Devolved Nations, Federation of Small Business Scotland

Outcome 4

A Non-Domestic Rates system which offers the best environment for business growth, investment, and competitiveness. This will focus on

• identifying, and implementing, any further reforms for the non-domestic rates (NDR) systems.
• exploring appropriate use of NDR as an incentive for property improvements, investment, and global competitiveness.
• further improving the transparency of valuations; and
• levering technology for efficient digital administration, evaluation, and analytical systems.

What did we do?

• The consultative Subgroup on Non-Domestic Rates (NDR) was established, chaired by the Minister for Public Finance to advise on further enhancements to the NDR system, following the implementation of the final recommendations of the independent Barclay Review of Non-Domestic Rates on 1 April 2023.
• The Subgroup has facilitated ongoing dialogue meeting eleven times during 2023 and 2024. Three meetings of the Subgroup provided Members with a specific opportunity to share their priorities and asks in advance of Scottish Budgets (2024-25 and 2025-26). Five short-life task teams were established to consider specific issues and report back to the NDR Subgroup. These teams included external participants where appropriate and covered: Valuation Transparency and Information Flows; Reliefs and Property Improvement; Promotion of Reliefs; Impact of Reliefs and the Initial Review of Devolution of Empty Property Relief. The matters under consideration within task teams were later extended to include the potential for fees on rating appeals and how and whether NDR levers could better support the Scottish Government’s climate change ambitions and transition to net zero.
• Scottish Government has improved communication on NDR issues in response to Members highlighting the importance of effective communication.

How does this help business?

• The consultative Subgroup has allowed close regular engagement and discussion on NDR a key priority for business stakeholders.
• Successive Scottish Budgets have taken into consideration the points raised by Members at Subgroup meetings and maintained a competitive NDR regime to support business and communities, while recognising the key role NDR plays in helping fund the delivery of local public services.
• Improved awareness and understanding of the NDR system.

What next?

• Going forward, the NDR Subgroup will be retained and continue to provide a forum for regular dialogue and engagement to explore how the NDR system can best support business growth, investment, and competitiveness, whilst acknowledging the vital role non-domestic rates income plays in funding public services.
• Task Team work will continue as appropriate. Ongoing workstreams include the initial review of the devolution of empty property relief, this relief having been devolved on 1 April 2023, the potential for fees on rating appeals and the exploration of how NDR levers support Scottish Government climate change and net zero ambitions.
• The Scottish Government's Digital Planning Services commissioned the Local Government Digital Office in 2023-24 to conduct a landscaping review of the systems within local government supporting the provision of NDR services, including a survey of local authorities. This reported the significant complexity of the overall technology landscape for NDR systems in local authorities. The delivery of any changes to NDR digital systems would require a joint view from all councils on the strategic direction that further work should take and substantial financial resource to progress.
• The NDR Subgroup recommended that Scottish Government keep recently implemented NDR reforms under review, and business representatives felt that consideration should be given to moving towards annual revaluations or annual self-assessment. The current three-year revaluation cycle with a one-year tone date, and two-stage appeals process were implemented with effect from 1 April 2023. Assessors have made clear that at least cycle should be completed before these reforms, including the timescales which apply, can be robustly reviewed.

Success looks like

Success will be achieved if businesses across Scotland:

• The NDR system is viewed as a fair and transparent system that supports business growth, investment, and competitiveness.
• The key role NDR plays in helping fund the delivery of local public services is recognised, success also means maintaining a stable source of income via NDR revenue that is considered fair by businesses and communities.

“The commitment to continue to engage and listen on business rates through the continuation of the NDR Consultative Group is positive and welcome. The focus to date has chiefly been on operational and administrative aspects of the rates system however there have also been multiple opportunities to contribute to Ministerial thinking ahead of the Scottish Budget and on strategic aspects of the rates system.

We saw the fruits of that in some of the encouraging decisions to emerge from the most recent Scottish Budget.”

David Lonsdale, Director, Scottish Retail Consortium

Outcome 5

A shared understanding of the role and contribution of business in Scotland’s transition to a Wellbeing Economy. This will consider how government and business can work together to better establish and communicate the business case for purpose-led activity, drawing on input from the Wellbeing Economy Expert Advisory Group.

What did we do?

• The Wellbeing Economy Subgroup was tasked with considering how business and government can better work together to support our transition to a fair, green, growing wellbeing economy.
• The Subgroup produced a description of what ‘Wellbeing Economy’ means for business; and specifically how private enterprises can contribute by being fairer and greener as they grow their business, recognising the importance of promoting the interests of employees, suppliers, communities, society and the environment, as well as customers and investors. Building on the work of the Business Purpose Commission, it contains examples of practical actions that businesses can take, such as
  • transparency in finances, social and environmental impacts
  • paying the real Living Wage and offering Living Hours
  • attracting, supporting, and retaining under-represented groups
  • supporting employees’ health and wellbeing
  • using resources sustainably
  • being actively involved in their communities
• The description signposts to further resources and frameworks that businesses can use to measure their progress.
• Engagement with organisations, enterprise agencies and employers has informed policy development of Just Transition planning – including draft Just Transition Plans for key sectors.
• On 29 April 2024, an SME and Third Sector Action Plan was published^[8] setting out actions for 2024-26 to collaborate with, engage and reduce barriers for small businesses when engaging with public procurement processes.
• Industry feedback helped us consider the accessibility of guidance and the importance of signposting. To support suppliers’ engagement with Public Procurement in Scotland, a two-page reference guide has been published in the Document Library section of the Supplier Journey website^[9].
• Guidance has also been published to help small businesses, and third sector organisations better engage with – and bid for - public procurement. This was collaboratively developed with industry and includes sources of support, FAQs, and case studies. Procurement officials have supported several industry events in the North, South, East and West of Scotland to promote this guidance and to listen to lived experience, to help inform further opportunities for improvement.
• In Autumn 2024, the Subgroup led work to reflect the contribution businesses can make to improving people’s health in the Population Health Framework. A Business Community Summary identifies the role businesses can play as employers, as providers of products and services and as community anchors and sets out where business fits into the wider health system. The summary reflects contributions from Members of The Group and was shared for comment with the Members of all Subgroups to ensure it is representative of a wide range of views from business. This, and other engagement activity, has supported Programme for Government commitments to improve access to health and work support for employers and people.
• A new Community Wealth Building (Scotland) Bill was introduced in March 2025. The Bill aims to address economic and wealth inequality by supporting the generation, circulation, and retention of more wealth in local and regional economies. By ensuring consistent implementation of the CWB model of economic development across Scotland, we will create and sustain jobs, and help local businesses grow.
• Officials developing the overarching Environment Strategy also sought early pre-consultation engagement with business stakeholders to discuss shared ambitions and challenges.

How does this help business?

• Business views have informed the shaping of policy in relation to flexible working, health & work, and Just Transition Plans, as reflected in Programme for Government commitments.
• The description of what wellbeing economy means for business complements the work of the Business Purpose Commission and can support continuing business-led initiatives to encourage more widespread adoption of purposeful business activity.
• New support and guidance are available to help SMEs bid for public contracts.

What next?

• Engagement with business will continue to inform the development of policy and support cross-government delivery towards the Scottish Government’s four priorities, including to help define and deliver actions to address economic inactivity in Scotland. Responding to this challenge requires a cross-portfolio approach and partnership working with public, private and voluntary sectors, and meaningful impact cannot be achieved without the involvement of employers.
• Engagement with business will be particularly important in informing the development of Scotland’s Climate Change Plan. The plan will set out the policies and proposals through which we will reduce greenhouse gas emissions to meet Scotland’s carbon budget targets. It will also set out our analysis of the impacts for businesses in different sectors, and our approach to ensuring a just transition for employers, workers, and businesses.
• The description of what ‘Wellbeing Economy’ means for business will be promoted as a tool for Scottish Government and partners to use to highlight the benefits of contributing to building a Wellbeing Economy in Scotland through purposeful, responsible business practices. For example, the description will be included in a Fair Work Resource being developed in fulfilment of an action in the Fair Work Action Plan. Through both government-led and business-to-business engagement, the description will support the sharing of good practice more widely among Scotland’s business communities.
• We will continue to promote the SME and Third Sector Procurement Action Plan, tracking its progress and impact to ensure the actions are progressed.

Success looks like

• Many businesses in Scotland already embed fair work, environmental sustainability and positive community impact in their strategic objectives and day-to-day operations. Such businesses are seeing the benefits, for example through customer loyalty and public trust, improved recruitment, and retention, and in the innovation and productivity of their workforce.
• These examples are the basis of partnership work between government and business to reach organisations not currently engaged so that more businesses in Scotland implement responsible, purposeful practices and seek to be successful enterprises that operate in ways that support good jobs, inclusive workplaces, a healthy population, environmental sustainability and vibrant communities.

Population Health Framework Business Community Summary

In September 2024, the Co-Chairs welcomed Public Health officials to the Quarterly meeting of the Group alongside Linda Bauld, Chief Social Policy Advisor to lead a session as part of development of the Population Health Strategy, a critical strategy to improve the health of the nation. The aim was to work together at this early development stage to discuss the aims of the strategy and to hear directly from Members. Members noted the significant and welcome shift in the relationship between public health and business, with business now being considered early in the development of policy.

There will always be areas where business and government disagree but both parties can work towards solutions that minimise harm to business – whilst continuing to focus on areas of shared priorities for best outcomes. The Framework should lead to a welcome whole-of-society approach to authentic dialogue on these critical issues.

The group had two breakout sessions on:

• Working together: how business and health can work jointly toward shared goals around population health and the economy.
• Engagement priorities: Scottish Government and business partnership on population health – how can we deliver action in partnership, including reducing economic activity due to ill health?

The Group committed to help co-produce a ‘Population Health and Business Document.’

“Business in the Community welcomes the progress made by the New Deal for Business Group in making the Wellbeing Economy more accessible and actionable for businesses. It is encouraging to see growing support for businesses to embrace their role as a force for good. A deeper understanding of how business decisions impact society and the environment reinforces the case that purpose and profit can go hand in hand.

Through our work supporting businesses to be a driving force for positive change, BITC is committed to helping companies embed purpose at the heart of their strategy. We look forward to continued collaboration between government and business to drive meaningful change in Scotland’s economy.”

Louisa Macdonell, Director Scotland, Business in the Community

Outcome 6

An effective mechanism for gathering and sharing intelligence on the business climate. This will improve understanding of business conditions, sentiments and needs as well as reporting on key metrics.

What did we do?

• Refreshed the Scottish Government monthly Scottish economic bulletin^[10] to include new intelligence on the business climate. This now reports on changes in business activity, concerns, costs, investment, and sentiment on a monthly basis.
• Shared our understanding of the business via the monthly Scottish Government Economy bulletin, which goes to around 1000 subscribers from across the business sector, third sector and academia.
• Produced a set of business resilience metrics to inform Business Regulation Impact Assessments. These metrics can be used to show how different sectors of the economy are performing in terms of metrics such as cash flow and debt.
• Used intelligence from findbusinesssupport.gov.scot^[11], to show key issues that businesses are searching for information about (see Annex 1).
• Created a visual factsheet on Scotland’s economy to highlight its strengths and opportunities (see Annex 1).
• Identified a set of core metrics and questions that business and industry can use to enhance in data collection in business and industry surveys (see Annex 1).

How does this help business?

• Intelligence on business climate is now widely shared and this improved understanding of business conditions and sentiment.
• The metrics work has led to better access to intelligence on business conditions and performance for policy officials in Government, linked to a new BRIA template and guidance.
• New guidance on business survey questions will enable greater consistency and reporting on business conditions and performance in the future.
• More comprehensive business metrics and data enables more robust impact assessment and evidenced policy making.

What next?

• We will continue to share intelligence on the business climate and will monitor use of intelligence and the best channels of communication to share intelligence with business.
• We will continue to explore opportunities to share data using the latest (developing) digital platforms.
• We will report on measures of success so that we can assess progress made beyond the 18-month New Deal for Business period.

Success looks like

• Better metrics will inform the Scottish Government of business conditions and concerns, and the Scottish Government will consider policy decisions in the light of this.
• The metrics work will enable businesses to demonstrate and contribute to key economic measures.

“The new deal for business process has proved a useful re-set of business’s relationship with Scottish government and we welcome efforts by the initiative to put in place the building blocks of a systemic change which is necessary to unlock economic growth and prosperity.

We were happy to collaborate on how to align the government’s objectives for a wellbeing economy with the goals of purpose-led businesses building on the thinking set out by the Business Purpose Commission.

Prosper’s - the Scottish Council for Development and Industry - recognises that it takes all of us – business, government and civic society – to create lasting prosperity for all of Scotland’s people and places. We look forward to continued collaboration with partners on this important mission.”

Sara Thiam, Chief Executive Officer, Prosper