enterprise and lifelong learning committee · 2011. 12. 20. · ec/s2/06/24/a enterprise and...

EC/S2/06/24/A

ENTERPRISE AND CULTURE COMMITTEE

AGENDA

24th Meeting, 2006 (Session 2)

Tuesday 24 October 2006

The Committee will meet at 2.00 pm in Committee Room 4.

1. Budget process 2007-08 (Stage 2): The Committee will take evidence from—

Patricia Ferguson MSP, Minister for Tourism, Culture and Sport, Leslie Evans, Head of Tourism, Culture and Sport Group and Gavin Barrie, Head of Lottery and Sponsorship Branch, Cultural Policy Division, Education Department, Scottish Executive;

and then from—

Sandy Brady, Director of Strategy, and Forbes Duthie, Director of Corporate Services, Highlands and Islands Enterprise;

and then from—

Jack Perry, Chief Executive, Sir John Ward, Chairman, Charlie Woods, Senior Director Strategy and Chief Economist, and Andrew Downie, Director, National Finance Business Support, Scottish Enterprise.

2. Bankruptcy and Diligence etc. (Scotland) Bill: The Committee will consider the Bill at Stage 2 (Day 7).

Stephen Imrie Clerk to the Committee

Tel. 0131 348 5207 [email protected]

* * * * * * * * * *

mailto:[email protected]

EC/S2/06/24/A

The following meeting papers are enclosed: Agenda Item 1 SPICe briefing paper: Draft Budget 2007-08 – Enterprise and Culture Committee (previously issued for the meeting of 3 October 2006) Highland and Islands Enterprise and Scottish Enterprise budget submissions (previously issued for the meeting of 3 October 2006 as part of paper EC/S2/06/23/1) Highlands and Islands Enterprise – additional budget submission Scottish Enterprise - additional budget submission Agenda Item 2 Members should bring with them copies of the Bankruptcy and Diligence etc. (Scotland) Bill, available from the Document Supply Centre or on the Scottish Parliament website: http://www.scottish.parliament.uk/business/bills/50-bankruptcyDiligence/index.htm Members should also bring with them copies of the marshalled list and of the groupings of amendments, available from the Document Supply Centre. Copies of the marshalled list have been emailed to members and copies of the groupings have also been sent. Papers circulated for information only Clerk’s Bulletin, No 24 (2006)

EC/S2/06/23/2 EC/S2/06/23/1A & H EC/S2/06/24/1 EC/S2/06/24/2

http://www.scottish.parliament.uk/business/bills/50-bankruptcyDiligence/index.htmhttp://www.scottish.parliament.uk/business/bills/50-bankruptcyDiligence/index.htm

EC/S2/06/23/2

1

DRAFT BUDGET 2007-08 – ENTERPRISE AND CULTURE COMMITTEE

SPICe briefing 27 September 2006 06/66

ROSS BURNSIDE

This briefing has been prepared to assist the Scottish Parliament’s Enterprise and Culture Committee in looking at the Draft Budget 2007-08. It presents trends in the budget, outlines the Objectives and Targets in the Enterprise and Culture related portfolios and considers the latest developments in the Scottish Executive’s Efficient Government Initiative.

Scottish Parliament Information Centre (SPICe) Briefings are compiled for the benefit of the Members of the Parliament and their personal staff. Authors are available to discuss the contents of these papers with MSPs and their staff who should contact Ross Burnside on extension 86231 or email [email protected]. Members of the public or external organisations may comment on this briefing by emailing us at [email protected]. However, researchers are unable to enter into personal discussion in relation to SPICe Briefing Papers. If you have any general questions about the work of the Parliament you can email the Parliament’s Public Information Service at [email protected]. Every effort is made to ensure that the information contained in SPICe briefings is correct at the time of publication. Readers should be aware however that briefings are not necessarily updated or otherwise amended to reflect subsequent changes.

www.scottish.parliament.uk

mailto:[email protected]:[email protected]:[email protected]://www.scottish.parliament.uk/

EC/S2/06/23/2

providing research and information services to the Scottish Parliament 2

CONTENTS KEY POINTS OF THIS BRIEFING...............................................................................................................................3

INTRODUCTION ..........................................................................................................................................................4

TRENDS IN THE BUDGET ..........................................................................................................................................4 ENTERPRISE AND LIFELONG LEARNING..........................................................................................................................4 TOURISM, CULTURE AND SPORT BUDGET ....................................................................................................................6

OBJECTIVES AND TARGETS....................................................................................................................................8

THE EFFICIENT GOVERNMENT INITIATIVE.............................................................................................................9 ELL AND TCS RELATED EFFICIENCY SAVINGS ...........................................................................................................12

GUIDANCE FROM BUDGET ADVISER....................................................................................................................13

SOURCES ..................................................................................................................................................................14

EC/S2/06/23/2


KEY POINTS OF THIS BRIEFING

• This year's Draft Budget makes only minor changes to last year's spending plans

• Next year's Draft Budget will incorporate the outcome of the 2007 spending review and provide Executive spending plans to 2011

• Scottish Executive Total Managed Expenditure is set to increase in real terms by £725m

in 2007-08 on 2006-07, an increase of 2.4%

• The Enterprise and Lifelong Learning (ELL) portfolio is set to increase in real terms by 1.1% in 2007-08 on the previous year. In cash terms, it is set to increase over the period by 3.8% (an increase of £106.8m)

• ELL spending has increased at a slower rate than the budget overall in the course of this

Parliament (2003-07), namely 10.1% in real terms compared with real terms growth in the budget overall of 17.1%, despite “growing the economy” being the top priority of the Executive

• ELL spending in 2007-08 makes up 9.4% of the total Scottish budget in 2007-08, down

from 10.8% in 2002-03

• The Scottish Further and Higher Education Funding Council accounts for the largest proportion of Executive ELL spending, at 55.8% of the portfolio in 2007-08

• The Tourism, Culture and Sport (TCS) portfolio will see its budget increase in real terms

by 4.2% in 2007-08 on the previous year

• During the course of this Parliament, TCS spend will have increased in real terms by 31.3% compared with the Scottish budget overall, which will increase by 17.1%

• VisitScotland (-10.3%), National Institutions (-12.9%), Scottish Arts Council (-9.7%) and

sportscotland (-0.9%) will all see their budgets fall in real terms in 2007-08 on 2006-07

• Only “Other arts and culture” (which will increase by 99.9% in real terms, or £30.6m) and Historic Scotland (+4.6%) will have increasing real terms budgets in 2007-08 compared with 2006-07

• There has been problems in measuring the claimed efficiency savings of the Scottish

Executive due to a lack of adequate output data for government expenditure

• The ELL portfolio has achieved greater efficiency savings than originally targeted

• The TCS portfolio has achieved greater efficiency savings than originally targeted

EC/S2/06/23/2


INTRODUCTION Spending Review 2004 (Scottish Executive 2004) set out the Executive’s spending plans for the three financial years to 2007-08. ‘Draft Budget 2007-08’ (Scottish Executive 2006a) published on 8 September 2006, updates the Executive’s spending plans for 2007-08, based largely on the new money coming to Scotland as a result of the UK Budget of 22 March 2006 (HM Treasury 2006). The figures in ‘Draft Budget 2007-08’ “are largely the same as those published in ‘Draft Budget 2006-07’, with explanations given for any significant changes” (Scottish Executive 2006a, p7). Total Managed Expenditure (TME) in 2007-08 is set to increase on 2006-07 in real terms by £725m, or 2.4%. The big winner in the budget is the Health portfolio which increases in real terms by £483m or 5.1%, representing two-thirds of the growth monies. Education and Young People increases above trend, with its budget going up by 7.8% in real terms.1 The only other budget line to increase above the overall rate of budget growth (2.4%) is Tourism, Culture and Sport (TCS), which will increase by 4.2% in real terms. The Environment and Rural (+2.0%); Communities (+0.8%); ELL (+1.1%); Transport (+1.2%); Finance and Public Service Reform (+0.8%) and Justice (+2.1%) portfolios are all set to increase by less than the overall budget growth rate of 2.4% in real terms. The Administration (-2.5%) and Crown Office and Procurator Fiscal Service (COPFS) (-1.1%) portfolios are set to see their budgets shrink in real terms over the next financial year. As members will be aware, the UK Chancellor has postponed the next UK Spending Review until 2007. As a result, this year’s Draft Budget makes only minor changes to last year’s spending plans. Next year’s Draft Budget will incorporate the outcome of the spending review and roll forward spending plans to March 2011. The Executive’s Efficient Government Plan ‘Building a Better Scotland – Efficient Government – Securing Efficiency, Effectiveness and Productivity’ (Scottish Executive 2004b) was launched in November 2004. Planned and actual efficiency savings relating to the Enterprise and Culture Committee’s budget portfolios are presented.

TRENDS IN THE BUDGET The Enterprise and Culture Committee’s remit covers the budgets for ELL and TCS.

ENTERPRISE AND LIFELONG LEARNING The ‘Draft Budget 2007-08’ plans TME for ELL to be £2,950.5m in 2007-08 an increase of £106.8m on the 2006-07 allocation of £2,843.7m, representing a cash increase of 3.8% and a real terms increase of 1.1%. Table 1 presents the Draft Budget for ELL ‘at Level 2’, in cash terms, between 2002 and 2008. Table 2 reproduces the same figures in real terms (at 2006-07 prices). 1 It’s important to point out that the Education and Young People budget line is relatively small and made up of specific grants. The vast majority of education spend comes out of the Lifelong Learning and Local Government Budget lines.

http://www.hm-treasury.gov.uk/budget/budget_06/bud_bud06_index.cfm

EC/S2/06/23/2


Table 1: Enterprise and Lifelong Learning Level 2 Spending, Cash Terms (2002-2008)

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08£000s Budget Budget Budget Budget Budget PlansStudent Awards Agency for Scotland

346,246 360,340 370,336 368,639 362,639 364,639

Scottish Further Education Funding Council

419,272 428,442 474,270 534,708 - -

Scottish Higher Education Funding Council

699,348 737,521 787,399 852,993 - -

Scottish Further and Higher Education Funding Council

- - - - 1,560,201 1,647,201

Scottish Enterprise 428,678 461,201 448,902 441,103 456,163 466,163Highlands & Islands Enterprise 87,995 91,549 92,502 99,471 94,971 102,971Regional Selective Assistance 69,709 43,209 40,209 48,209 45,209 43,209

European Structural Funds Support to Local Authorities 51,604 51,604 64,404 57,204 0 0

Central Government 146,872 121,891 82,145 104,095 0 0Other Enterprise and Lifelong Learning

65,628 90,493 119,484 153,077 143,187 145,017

Student Loans - - - - 181,346 181,346

Total 2,315,352 2,386,250 2,479,651 2,659,499 2,843,716 2,950,546

Student Loans net new lending and Student Loans subsidy to banks (outside TME)

204,251 166,823 184,786

181,346

- - Table 2: Enterprise and Lifelong Learning: Level 2 Spending, Real Terms (at 2006-07 prices) (2002-2008)

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08£000s Budget Budget Budget Budget Budget PlansStudent Awards Agency for Scotland

383,150 387,235 387,422 377,645 362,639 355,198

Scottish Further Education Funding Council

773,886 792,567 823,728 873,832 - -

Scottish Higher Education Funding Council

463,959 460,420 496,152 547,771 - -

EC/S2/06/23/2


Scottish Further and Higher Education Funding Council

- - - - 1,560,201 1,604,551

Scottish Enterprise 474,368 495,624 469,613 451,879 456,163 454,093Highlands & Islands Enterprise

97,374 98,382 96,770 101,901 94,971 100,305

Regional Selective Assistance

77,139 46,434 42,064 49,387 45,209 42,090

European Structural Funds Support to Local Authorities

57,104 55,456 67,375 58,601 0 0

Central Government 162,526 130,989 85,935 106,638 0 0Other Enterprise and Lifelong Learning

72,623 97,247 124,997 156,817 143,187 141,262

Student Loans - - - - 181,346 176,651Total 2,562,128 2,564,353 2,594,056 2,724,471 2,843,716 2,874,149

Student Loans net new lending and Student Loans subsidy to banks (outside TME)

226,021 179,274 193,312

185,776

- -

• The ELL Budget will increase in real terms by £30.4m or 1.1% between the current

financial year and 2007-08 • Between 2002 and 2008, the ELL budget will increase in real terms by £312.0m, or

12.2%, compared with a real terms growth in the budget as a whole of 28.2% • During the course of this Parliament (2003-2007), spending on ELL will increase in real

terms by £279.4m or 10.1%, compared with the overall Scottish budget increase of 17.1%

• Between 2003-04 and 2007-08 TME for ELL will increase by 12.1%, in real terms, or an average of 2.4% per annum since 2003-04

• ELL’s share of total Scottish Executive expenditure will decline, in real terms, from 9.6% in 2006-07 to 9.4% in 2007-08

• In 2002-03 ELL accounted for 10.8% of Scottish expenditure and for 10.1% in 2003-04 • The Scottish Further and Higher Education Funding Council (which is a merger of the

former Scottish Further Education and Scottish Higher Education Funding Councils) accounts for 55.8% of ELL spend. The proposed budget of the funding council is to increase by 2.8% in real terms in 2007-08 compared to the 2006-07 allocation

• Scottish Enterprise’s budget will account for 15.8% of ELL spend in 2007-08. The budget of Scottish Enterprise is planned to decline, in real terms, by 0.5% in 2007-08 compared to the 2006-07 allocation to the agency

• The Student Awards Agency for Scotland (SAAS) budget is forecast to decline in real terms by 2.1% in 2007-08, compared to 2006-07

• The budget for Highlands and Islands Enterprise is forecast to increase by 5.6% in 2007-08, in real terms, compared to 2006-07

Members will note that the ELL budget has declined as a share of the total Scottish budget in recent years despite “growing the economy” being the stated top priority of the Executive.

TOURISM, CULTURE AND SPORT BUDGET

EC/S2/06/23/2


TME for the TCS shows a cash increase of £20.2m or 6.9% from £290.7m in 2006-07 to 310.9m in 2007-08. In real terms the Draft Budget TME for TCS provides an increase of £12.2m or 4.2% from £290.7m in 2006-07 to 302.8m in 2007-08. Between 2003 and 2008, TME for TCS increased by £81.4m in real terms or 36.8%. This represents an average annual real terms increase of 7.4% between 2003-04 and 2007-08. Table 3 presents the Draft Budget for TCS ‘at Level 3’, in cash terms, between 2002-03 to 2007-08. Table 4 reproduces the same figures in real terms (at 2006-07 prices). Table 3: Tourism, Culture and Sport Level 3 Spending Plans, 2002-08 (level 3)

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 £000s Budget Budget Budget Budget Budget Plans VisitScotland 28,474 31,765 33,765 42,265 47,515 43,765National Institutions 57,361 58,861 59,752 62,526 73,926 66,126Scottish Arts Council 35,410 36,419 47,469 54,344 60,469 56,069Other arts and culture 21,545 26,336 23,240 27,651 30,651 62,901sportscotland 13,687 15,387 29,005 25,878 33,705 34,305Historic Scotland 36,787 37,287 39,644 42,575 44,415 47,715Total 193,264 206,055 232,875 255,239 290,681 310,881

Table 4: Tourism, Culture and Sport Spending Plans, 2002-08 in Real Terms (at 2006-07)

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 £000s Budget Budget Budget Budget Budget Plans VisitScotland 31,509 34,136 35,323 43,298 47,515 42,632National Institutions 63,475 63,254 62,509 64,054 73,926 64,414Scottish Arts Council 39,184 39,137 49,659 55,672 60,469 54,617Other arts and culture 23,841 28,302 24,312 28,327 30,651 61,272sportscotland 15,146 16,535 30,343 26,510 33,705 33,417Historic Scotland 40,708 40,070 41,473 43,615 44,415 46,480Total 213,863 221,434 243,619 261,474 290,681 302,832

• The TCS portfolio will increase in real terms by £12.2m, or 4.2% between 2006-07 and

2007-08 • Between 2002 and 2008, spending in TCS will have increased by 41.6% in real terms,

compared with the budget overall which will have increased by 28.2% • During the course of this Parliament (2003-07), spending in TCS will increase in real

terms by 31.3%, compared with an increase in the overall budget of 17.1% • In 2002-03, spending in TCS was 0.9% of the total budget, and in 2007-08 is projected to

be 1.0% • VisitScotland (-10.3%), National Institutions (-12.9%), Scottish Arts Council (-9.7%) and

Sportscotland (-0.9%) will all see their budgets fall in real terms in 2007-08 on 2006-07 • Only “Other arts and culture” (which will increase by 99.9% in real terms, or £30.6m) and

Historic Scotland (+4.6%) will have increasing real terms budgets in 2007-08 compared with 2006-07

EC/S2/06/23/2


NB. Most of the increases in “other arts and culture” can be accounted for by £20m being allocated in 2007-08 to a budget line entitled “Cultural Review”. This was announced as part of the Scottish Executive’s response to the Cultural Review (Scottish Executive 2006d). Another big increase in the “other arts and culture” budget line goes to the Royal Commission on the Ancient and Historical Monuments of Scotland (RCAHMS), which will increase from £5.9m in 2006-07 to £14.0m in 2007-08. The Draft Budget (Scottish Executive 2006, p59) states that

“In 2007-08, we shall provide capital funding to all RCAHMS to develop urgently needed additional accommodation for its archive collection.”

OBJECTIVES AND TARGETS The objectives and targets presented for the Enterprise and Lifelong Learning portfolio are presented below. They are identical to the objectives and targets presented in last year’s Draft Budget. Members may wish to consider whether, particularly with next year’s Spending Review in mind, they are satisfied with these objectives and targets for Enteprise and Lifelong Learning. Objective 1 Raise the long-term sustainable growth rate of the Scottish economy. Target 1 Increase business investment in research and development compared to OECD

competitors. Target 2 Improve productivity levels in Scottish industry compared to OECD competitors. Target 3 Increase entrepreneurial activity in Scotland over time. Objective 2 Influence Scotland’s industry towards more sustainable patterns of development. Target 4 Work towards our 2020 target for 40% of Scottish electricity generation to be from

renewable sources by achieving 18% by 2010. Target 5 Improve public sector energy efficiency and continue to encourage greater resource

efficiency in the private sector. Objective 3 Improve the skill base of Scotland to be better prepared to meet the demands of the

knowledge economy. Target 6 Increase the number of people in employment undertaking training. Objective 4 Closing the opportunity gap in employment and learning. Target 7 Close the gap in unemployment rates between the worst 10% of areas and the

Scottish average by 2008. Target 8 Reduce the proportion of 16-19 year olds not in education, training and employment

by 2008. Objective 5 Maintain and improve the competitive position of the Scottish higher and further

education system in Scotland in order to ensure continued access, high quality teaching and effective research

Target 9 (i): Higher education in higher education institutions (HEIs) – Make better use of publicly funded undergraduate capacity in Scottish HEIs. (ii): Higher education in further education colleges (FECs) – Maintain and build on the high percentage of all higher education student enrolments at further education colleges who complete their programme of study. (iii): Further education in FECs – Maintain and build on the high percentage of all further education student enrolments at further education colleges who complete their programme of study

Target 10 Maintain and build on the existing high quality research undertaken by higher education institutions in Scotland by ensuring Scotland’s relative performance in Research Assessment Exercise (RAE) 2008 is maintained.

The objectives and targets for the Tourism, Culture and Sport portfolio are presented below. They are identical to the objectives and targets presented in last year’s Draft Budget. Members

EC/S2/06/23/2


may wish to consider whether, particularly with next year’s Spending Review in mind, they are satisfied with these objectives and targets for Tourism, Culture and Sport. Objective 1 To ensure that people of all ages have the opportunity to take part in a variety of

cultural and sporting activities. Objective 2 To support social inclusion by ensuring the widest possible involvement in cultural,

social and sporting opportunities. Target 1 Increase numbers taking part in cultural activities funded by the Scottish Executive

by 3% by end March 2008, maintaining the balance of participation across the population.

Target 2 Increase numbers taking part in sport by 3% by end March 2008, maintaining the balance of participation across the population.

Objective 3 To promote a high standard of conservation of historic buildings and to promote the highest standards of contemporary buildings.

Target 3 By 2007-08, Historic Scotland will target investment in the 6 City Heritage Trusts, attracting additional investment at a rate of £2.50 for each £1 from Historic Scotland; and expand the programme of conservation training to train 66 craftsmen in total.

Target 4 Maintain or increase by end March 2008 the number of nominations secured by Scottish practices for prestigious architectural awards

Objective 4 To generate jobs and wealth for Scotland by promoting and developing the creative industries.

Target 5 Year on year real terms increase of Scottish Creative Industries Gross Value Added (GVA) to end 2007.

Objective 5 To develop Scotland's tourism potential through VisitScotland and Historic Scotland and in partnership with all relevant bodies

Target 6 Year on year real terms increase of Scottish tourism Gross Value Added (GVA) to end 2007.

Target 7 Year on year real terms increase in gross tourism revenues in areas outside Glasgow and Edinburgh to end 2007

Target 8 Year on year increase in average Quality Assurance rating of all Scottish tourism products by working closely with the industry

Objective 6 To promote excellence in sport and culture. Target 9 Increase the number of Scottish sportsmen and women performing at the highest

level by 3% by end March 2008. Target 10 Increase the number of cultural successes by 3% by end March 2008.

THE EFFICIENT GOVERNMENT INITIATIVE The Minister for Finance and Public Services launched the Executive’s Efficient Government Plan – ‘Building a Better Scotland – Efficient Government – Securing Efficiency, Effectiveness and Productivity’ (Scottish Executive 2004b) – in November 2004. This document outlined a total of £405m savings in 2005-06, rising to £745m recurring cash savings and £300m recurring time savings by 2007-08. On 5 September 2006, the Executive reported on progress made on Efficiency savings in the financial year 2005-06, in its ‘Efficient Government – Efficiency Outturn Report for 2005-06’. This document claimed that in 2005-06, the Executive had saved a total of £441.8m in cash and time efficiency savings (£36.8m more than targeted), which are reproduced at departmental level in table 5 below.

http://www.scotland.gov.uk/Publications/2004/11/20318/47372http://www.scotland.gov.uk/Publications/2004/11/20318/47372http://www.scotland.gov.uk/Publications/2006/09/efficientgovernmenthttp://www.scotland.gov.uk/Publications/2006/09/efficientgovernment

EC/S2/06/23/2


Table 5: Progress in meeting Efficiency Savings (2005-06) Portfolio Target £m Outturn £m 2005-06

CASH 2005-06

TIME 2005-06 TOTAL

2005-06 CASH

2005-06 TIME

2005-06 TOTAL

Administration 1 - 1 1.5 0 1.5Communities 0 - 0 25.0 0.1 25.1

COPFS 3 - 3 2.8 0 2.8Ed & Young

People 0 - 0 0.5 11.7 12.2

Ent & LL 5 - 5 7.6 18.0 25.6Env & Rural 2 - 2 3.6 2.7 6.3

Finance & Public

Services

89 - 89 130.6 0 130.6

Health 166 - 166 165.5 11.3 176.8Justice 7 - 7 7.6 10.9 18.5

Tourism, Culture &

Sport

0 - 0 0.3 0 0.3

Transport 7 - 7 16.9 0 16.9Other – non

NHS procurement

50 - 50 24.6 0 24.6

Scottish Water (non

DEL)

75 - 75 - - -

Registers of Scotland

0 - 0 0 0.6 0.6

TOTAL 405 - 405 55.3 441.8

Source: Scottish Executive 2006c The Executive (Scottish Executive 2006b, paras 1.6-1.7) has produced the following definition of efficiency improvements:

“An ‘efficiency improvement’ is any activity which improves the ratio of outputs to resource inputs. Such improvements may therefore arise in two ways: i. by producing the same outputs with fewer inputs. For the purposes of the Efficient Government Plan these are termed cash releasing savings, ii. by producing more or better outputs for the same inputs. For the purposes of the Efficient Government Plan these are termed time releasing savings. For the saving to be included in the Efficient Government Plan it must be recurrent.”

EC/S2/06/23/2


Thus, to measure efficiency it is necessary to measure both input and output. To measure improvements in efficiency it is necessary to measure input and output both at a baseline date and at a subsequent date, usually the following year. To demonstrate an efficiency gain between one year and the following year, 4 items of data are required

• input (expenditure) in the base year • output in the base year • input in the following year • output in the following year

Data on government expenditure is readily available and comparisons can easily be made of how expenditure changes between years. However the outputs of government expenditure are very diverse, are not always measured or measurable on a consistent basis from year to year and, as yet, there is no agreed set of weights which would allow the outputs to be converted to a common unit of measurement. This makes it difficult to demonstrate how efficiency changes from year to year over the totality of government activities. For this reason, there has been debate as to the measurability of the efficiency savings, with claims that the lack of clear output measures for some public expenditure make the process difficult to quantify. On 5 September, the Budget adviser to the Finance Committee stated in a committee meeting:

“Efficient government….is a means of transferring resources from support to front-line services. Despite its title, it is a savings exercise and does not measure efficiency in any rigorous way. The new annual report that has come out simply lists savings but, as Caroline Gardner said in an earlier Audit Scotland report, "efficiency savings cannot be measured through changes in expenditure alone."”

Source: Scottish Parliament Finance Committee 2006, col 3849 The Executive has recognised the difficulty in measuring public sector outputs. In the ‘Efficient Government – Efficiency Outturn Report for 2005-06’, it is stated:

“Measuring and validating efficiency gains has been and will continue to prove a difficult challenge because the information systems that support public sector organisations were not always designed for this purpose. Improvement in management information systems has to be achieved without diverting resources away from the primary objective of delivering improved and more efficient public services. These same challenges arise in the context of identifying appropriate baselines for the scope of the efficiency project in question, and also in connection with the ever-changing landscape against which the project has to be monitored (e.g. re-organisations which are unrelated to the Efficient Government programme). We do not believe that it would be sensible to abandon those projects where it is not entirely possible to measure the efficiency contribution. Often the efficiency gains are a by-product of a wider service transformation and even if the gains cannot be fully measured the contribution to improved service delivery is no less important.

http://www.scotland.gov.uk/Publications/2006/09/efficientgovernmenthttp://www.scotland.gov.uk/Publications/2006/09/efficientgovernment

EC/S2/06/23/2


We recognise that various limitations in public sector data systems and the robustness of management information systems need to be addressed. This is a challenge for senior service managers. Nevertheless it is important to press ahead with the programme and not stall the gains to be made while waiting for systems to catch up. So while more focus is needed on unit costs as part of performance management, we should not suppose that highly detailed activity-based costing will always be justified.”

ELL AND TCS RELATED EFFICIENCY SAVINGS The most recent ELL and TCS related efficiency savings are outlined in some detail in the Scottish Executive’s recently published ‘Efficiency Technical Notes March 2006’ (Scottish Executive 2006b). These notes update similar notes published by the Executive in 2005. The Executive plans to periodically update the technical notes to reflect the latest information on the programmes involved. The technical notes identify 5 programmes in the ELL portfolio and 2 programmes in the TCS portfolio. Table 6: Targets for ELL and TCS related efficiencies (cash and time) Portfolio £m

2005-06

2006-07

2007-08

Enterprise & LL Scottish Enterprise Savings (Cash releasing) 2.328 2.328 2.328Scottish Enterprise Savings (BT Programme) (Time releasing)

7.332 7.332 7.332

Scottish Science Centres Programme (Cash-releasing)

0.47 0.47 0.47

Scottish Further Education Colleges and Higher Education Institutions (Cash releasing)

1 5 15

Scottish Further Education Colleges and Higher Education Institutions (Time releasing)

5 11 35

Total Savings 16.13 26.13 60.13Savings as % of ELL budget 0.6% 0.9% 2.0%

Tourism, Culture and Sport Efficiency savings from cultural and sport NDPBs (Cash releasing)

0 0 0.75

Efficiency Savings in the tourism network (Cash-releasing)

0 1 1

Total Savings 0 1 1.75Savings as % of TCS budget 0% 0.3% 0.6%

Source: Adapted from Scottish Executive 2006b

The targets for efficiency savings set out in the table above include some changes to the figures presented to the Enterprise and Culture Committee during last year’s consideration of the Draft

http://www.scotland.gov.uk/Publications/2006/03/31095821/0

EC/S2/06/23/2


Budget. There has been a change to the Scottish Enterprise cash-releasing savings from £5.3m in each year to £2.3m in each year, which is explained as being due to:

“ - the delay in fully implementing some BT solutions e.g. CRM, Web Platform and the impact on the latter Web Content, - the increase in resources required to manage the increased demands of the business and the cost thereof e.g. business support costs re integration of Careers Scotland.

The Scottish Enterprise BT Programme time-releasing saving has increased from £4m per year (presented in last year’s Efficiency Technical Notes) to £7.3m per year. No explanation has been given in the technical notes for this change. The Scottish Further Education Colleges and Higher Education Institutions cash-releasing savings have increased from £1m/£3m/£10m to £1m/£5m/£15m, with no explanation for the change provided. The Scottish Further Education Colleges and Higher Education Institutions time releasing savings have decreased from £5m/£13m/£40m to £5m/£11m/£35m. No explanation is given for this change. The aggregate of the cash and time releasing savings in the Scottish Further Education Colleges and Higher Education Institutions over the 3 financial years, however, remains at £72m. In relation to the savings achieved during 2005-06, it may be noted that the figures set out in table 5 above indicate that: (a) the ELL portfolio achieved more cash and time efficiency savings than originally targeted; and (b) the TCS portfolio achieved more cash releasing efficiencies than originally targeted. In considering efficiency targets and reported savings, one should keep in mind the possible problems associated with measuring efficiency which were highlighted earlier in this briefing.

GUIDANCE FROM BUDGET ADVISER The Finance Committee’s Budget adviser (Arthur Midwinter) has produced guidance for the subject committees, in terms of their scrutiny of this year’s Draft Budget. This guidance can be summarised into the following points and members are invited to keep these in mind when considering their approach to the budget:

• Is the Committee satisfied with the response to its recommendations for the 2006-07 budget?

• Does the Committee wish to make any comment on the budgetary changes reported in the “new resources and transfers” section?

• Does the Committee wish to recommend transfers of funding between programmes within its budgetary portfolio(s)?

• Does the Committee have any proposal for improving the quality and relevance of the financial and performance information contained in the Draft Budget?

• Does the Committee have any recommendations on budget proposals for its successor Committee? For instance, is there any programme which the Committee believes requires additional or less expenditure?

EC/S2/06/23/2


SOURCES HM Treasury. (2006) Budget 2006: A Strong and Strengthening Economy: Investing in Britain’s Future. London: HM Treasury. Available at: http://www.hm-treasury.gov.uk/budget/budget_06/bud_bud06_index.cfm Scottish Executive. (2004a) Building a Better Scotland – Spending Proposals 2005-2008: Enterprise, Opportunity, Fairness. Edinburgh: Scottish Executive. Available at: http://www.scotland.gov.uk/Publications/2004/09/19984/43685 Scottish Executive. (2004b) Building a Better Scotland – Efficient Government – Securing Efficiency, Effectiveness and Productivity. Edinburgh: Scottish Executive. Available at: http://www.scotland.gov.uk/Publications/2004/11/20318/47372 Scottish Executive. (2006a) Draft Budget 2007-08. Edinburgh: Scottish Executive. Available at: http://www.scotland.gov.uk/Publications/2006/09/05131713/0 Scottish Executive. (2006b) Efficiency Technical Notes March 2006. Edinburgh: Scottish Executive. Available at: http://www.scotland.gov.uk/Publications/2006/03/31095821/0 Scottish Executive. (2006c) Efficient Government: Efficiency Outturn Report for 2005-06. Edinburgh: Scottish Executive. Available at: http://www.scotland.gov.uk/Publications/2006/09/efficientgovernment Scottish Executive. (2006d) Scotland’s Culture: Scottish Executive Response on the Cultural Review. Edinburgh: Scottish Executive. Available at: http://www.scotland.gov.uk/Publications/2006/01/18091052/0 Scottish Parliament Finance Committee. (2006) Official Report 5 September 2006. Col 3849. Edinburgh: Scottish Parliament. Available at: http://www.scottish.parliament.uk/business/committees/finance/or-06/fi06-2002.htm

http://www.hm-treasury.gov.uk/budget/budget_06/bud_bud06_index.cfmhttp://www.scotland.gov.uk/Publications/2004/09/19984/43685http://www.scotland.gov.uk/Publications/2004/11/20318/47372http://www.scotland.gov.uk/Publications/2006/09/05131713/0http://www.scotland.gov.uk/Publications/2006/03/31095821/0http://www.scotland.gov.uk/Publications/2006/09/efficientgovernmenthttp://www.scotland.gov.uk/Publications/2006/01/18091052/0http://www.scottish.parliament.uk/business/committees/finance/or-06/fi06-2002.htm

EC/S2/06/23/1A

Submission to the Enterprise and Culture Committee from Highlands and Islands Enterprise

This submission details the financial information requested by the Committee via the Scottish Executive regarding the breakdown of Highlands and Islands Enterprise (HIE) expenditure and budgets in the period 2005/06, 2006/07 and 2007/08. The four key areas where information has been requested relate to:

1. Forecast and actual management and administration costs for 2005/06, and forecast costs for 2006/07 and 2007/08

2. Forecast and actual expenditure by strategic objective for the financial year 2005/06 3. Forecast expenditure by strategic objective for the financial year 2006/07

4. Forecast expenditure by strategic objective for the financial year 2007/08 The following points should be taken into consideration when reviewing the attached figures:

• HIE is still very early in the planning process for next year, therefore the figures are best estimates at this point in time - and may be subject to change

• All figures include both cash and resource allocations, with the resource amounts

being applied on a pro-rata basis across the four strategic objectives

• Forecast investment may vary from the figures published in HIE’s Operating Plan for a number of reasons, including the receipt of any additional funding from the Scottish Executive or other bodies (such as the national lottery)

• HIE’s budget management process is designed to make the organisation responsive to

local circumstance and need I trust this information meets with your requirements, but if you need any additional information, or more detailed briefing on our activities, please let me know. Alastair Nicolson Highlands and Islands Enterprise August 2006

EC/S2/06/23/1A

HIGHLANDS AND ISLANDS ENTERPRISE

BUDGET SUBMISSION

EC/S2/06/23/1A

s

o

Highlands & Islands Enterprise: Summary Operating Plan 2007-2008

What we want to Achieve What we will focus on What we will invest

SSH&I Strategic Themes

SSS Priorities (and measures of Scotland's economic performance against OECD)

Highlands and Islands Enterprise Priorities 2007-10

Key Operational Activities 2007-08 with forecast investment

In-year measures of progress by theme 2007/08 Forecast

Investment Growing BusinessesTarget 07/08

07-08 Trend

A Culture of Enterprise and more businesses of scale Increase the capacity of existing businesses to grow and encourage more people to be enterprising. Develop those businesses with growth potential from start ups to businesses of scale

Business Starts £1.3m New Business Starts 550 +High Growth Firms (Business Starts) Business Growth £12m - by young people 60 +

3rd Quartile

Business Advice £2.4m - by women 200 +

Growing Business

Encouraging External Investment £60k - of scale 20 +- involving research/innovation 15 +- in emerging sectors 60 +

Increased innovation and commercialisation of research Stimulate businesses to increase innovation and R&D that will significantly impact on growth. Develop research infrastructure and increase knowledge transfer from the research base

UHI Research Strategy £1.3mBusiness Investment as a proportion of GDP MediaLab £200k Distance Lab £600k Business Growth Projects 300 +

Chairs of Business Schools £150k - of scale 20 + £26mHI Links £75k BPO Reseach Centre £70k - in emerging sectors 15 +Business Transformation Programme £180k - through research/commercialisation 15 +

3rd Quartile Encouraging Entrepreneurship & Creativity £250k - through productivity 110 +

sful

Hig

hlan

ds &

Isla

nds

- through technology 50 +

Success in Key Sectors Develop strong industries which can be internationally competitive, focussing on those with growth potential and/major regional impacts.

BSW Site Expansion & Relocation £1.5 - through international trade 50 +Productivity Levels in Scottish Industry Industry Leadership/Competitiveness £1m - through knowledge transfer 5 +

- through quality 15 +- through mergers and acquisitions 5 +

3rd Quartile - through environmental initiatives 15 +

Use of e:business to create business advantage Encourage businesses and organisations to make greater use of advanced e-business activities to realise business transformation and integrating activities within the other Growing Business priorities

e-BaTT (e:business technology transfer) £170k

% of firms trading online

3rd quartileSkills and Learning

Improving the Operation of the Labour MarketProvide and facilitate access to high quality information, advice and guidance for all customer groups; promote career planning and increase participation in learning by individuals and businesses; and support the development

All Age Careers Planning & Support £500k No of people supported to move towards and into sustainable employment 2,405 =The proportion of the working age populaton in employment Develop Learning Infrastructure £760k

Skills & Learning

2nd Quartile

othe learning infrastructure

No of businesses supported to engage in developing the skills of those in work 655 =The best start for all our young people Provide young people with excellent preparation for the

world of work; enhance provision and delivery of vocational training; and increase positive outcomes for school leavers and reduce the number of young people not in education, employment or training

Modern Apprenticeships and Skillseekers £8m

Proportion of 16-19 year olds not in education, training or employment3rd Quartile

Get Ready for Work £1.5m £27m

Developing people who are in work Improve productivity of businesses through increasing investment in in-work training and developing management capability within SMEs

Workforce Development £1.2mThe proprtion of those in employment undertaking training1st Quartile

Narrowing the gap in employment and reducing economic inactivity Increase the working age population by assisting those currently inactive to participate within the labour market; increase the engagement of individuals further from the labour market by developing employability skills

Training for Work £500kAverage Mainstreaming New Futures £250k

2nd Quartile

EC/S2/06/23/1A

Smar

t Suc

ces Global Connections

Increased Involvement in Global Markets Increase the number of businesses internationally involved and develop their engagement; assist targeted market programmes; support sectoral market access activity; promote supply chain development across key sectors for market competitiveness.

Scottish Development International eg Exports, Joint Ventures, Business Support to internationalise by LECs £500k

No of businesses engaging in international business development 200 +

Global Connections

Companies exporting

1st Quartile Private sector earnings index for Network assisted jobs 110 +

Ensuring Scotland is a Globally Attractive Location Ensure that high quality business infrastructure is available throughout the Highlands & Islands

Centre for Health Science Phase 2 & 3 £11.6mGraduates as a proportion of the Workforce Inverness Airport Business Park £2m2nd Quartile £29m

Connecting to the rest of the world Stimulate demand for and access to Broadband telecoms infrastructure and improve physical connectivity to help companies do business in a global environment

Basic Broadband Infill £400kCost and Geographic Coverage of Broadband3rd Quartile

Linkspan Improvements Dunoon £400k

More people choosing to live, study and work in ScotlandContinue efforts to create conditions which draw more people to live, work and study in the Highlands & Islands

Inward investment - £250kNet Migration (working age) as a proportion of the population Eden Court Theatre £1m

Fas Centre for Creative & Cultural Industry £500k3rd Quartile Population Growth £100k Housing Solutions £250k

Strengthening CommunitiesCreating community assets Assist communities to acquire and manage assets which

will generate income for re-investment in their longer term sustainable development

Community Land Unit £2m No of new/enhanced community assets 450Community Energy Company £500k

Growing Community Assets £20m (Lottery)

Strengthening Communities

Scottish Community & Household Renewables Initiative £1.5m No of community groups with increased capacity 120

Building Capacity and leadership Assist communities to recognise their strengths, to acquire leadership skills and to grasp economic opportunities

Highlands & Islands Social Economy Zone £90k £17mHighlands & Islands Community Capacity Partnership £80k

Initiative at the Edge £100k

Enhancing natural and cultural heritage Promote the mainstreaming of good sustainable practice in community development work and maximise community benefits arising from the natural heritage assets of the area

Deliver contracts with Hi-Arts, Commun na Gaidhlig, Proiseact nan Ealan & SRDG Gaelic Research Structure Bid

Scottish Year of Highland Culture 2007 £1.1m

£99m

EC/S2/06/23/1H

Scottish Enterprise Table 4

Management and Administration Costs

Operating OperatingPlan Plan Estimated Latest Estimated

Budget Outturn Costs Forecast Costs2005/06 2005/06 2006/07 2006/07 2007/08

£m £m £m £m £m1 Full Analysis of Network Costs

Staff CostsGrowing Businesses 22 22 25 25 25Global Connections 15 14 16 16 16Skills and Learning, of which 39 40 43 43 47Scottish Enterprise 8 10 11 11 13Careers Scotland 31 30 32 32 34Network Development 6 4 5 5 5 Operational Staff Costs * 81 80 89 89 93Network Support, of which 16 17 16 16 14Scottish Enterprise 14 15 14 14 12Careers Scotland 2 2 2 2 2 Total Staff Costs 97 97 105 105 107

Other CostsICT, of which * 16 15 13 13 13Careers Scotland 4 3 4 4 4Premises, of which 20 15 15 15 15Careers Scotland 9 7 9 9 9Utilities, travel & consumables, etc, of which 13 15 9 9 9Careers Scotland 7 3 3 3 3 Total Other Costs 49 45 37 37 37

Total Management and Administration 146 142 142 142 144

Scottish Enterprise & Careers Scotland Cost AnalysisStaff CostsScottish Enterprise 64 65 71 71 71Careers Scotland 33 32 34 34 36Total Staff Costs 97 97 105 105 107

Other CostsScottish Enterprise 30 32 21 21 21Careers Scotland 19 13 16 16 16Total Other Costs 49 45 37 37 37

Total CostsScottish Enterprise 94 96 92 92 92Careers Scotland 52 46 50 50 52Total Management & Adminstration 146 142 142 142 144

Notes:The Careers Scotland premises costs for 2005/06 include property refurbishment costs arising from the Disabled Discrimination Act and general one-offproperty improvements.

Operational vs Support Costs £m £m £m £m £m

Operations Costs * 97 95 102 102 106Support Costs 49 47 40 40 38

146 142 142 142 144

* Operational Costs are Operational Staff Costs plus ICT costs

Staff Numbers (FTE) FTE FTE FTE FTE FTESE * 1,506 1,452 1,363 1,363 1,363Careers Scotland 1,020 1,054 1,030 1,030 1,030

2,526 2,506 2,393 2,393 2,393

2 Scottish Executive Planning Figures £m £m £m £m £m

SE 76 76 76 76 76Careers Scotland 16 16 16 16 16

92 92 92 92 92

EC/S2/06/23/1H

SCOTTISH ENTERPRISE

BUDGET SUBMISSION

EC/S2/06/23/1H

Scottish Enterprise

Submission to Enterprise and Culture Committee (September 2006)

Introduction This submission details the additional financial information requested by the Committee from Scottish Enterprise to assist the Committee in their consideration of the Scottish budget proposals for 2007-08. Please find the following attachments: Operating Plan 2005/06 Table 1 gives a summary of the Operating Plan for 2005-08 with specific detail for 2005/06. It details: • The Smart, Successful Scotland priorities and Scotland’s economic performance

compared to other OECD countries, e.g. for the priority ‘a culture of enterprise and more businesses of scale’ Scotland, as measured by entrepreneurship, was in the third quartile (Q3) when the plan was published.

• For each priority, Scottish Enterprise’s objectives and focus for the three years of the plan

(2004-07). • For each priority the key operational activities, forecast investment and forecast delivery

of measures of progress • For each priority the key operational activities, actual investment and actual measures of

progress achieved. • Overall investment in the priority both forecast and actual. Operating Plan 2006/07 Table 2 gives a summary of the Operating Plan for 2006/07. The layout is similar to table 1 (except there are obviously no actual figures). • The Scottish Executive draft budget for 06/07 of £456m is based on the spending review

outcome (SR2004). It does not consider other income from the Scottish Executive, business income or EU income. The total income for the Operating Plan is forecast to be £550m. The table overleaf details the difference between the draft budget compared to the forecast income for the Operating Plan. The total difference is £94m.

EC/S2/06/23/1H

£m Scottish Executive budget document 456 Scottish Executive advance -34 Scottish Executive additions 5 additional resource cover 25 Use of reserves 20 business income 51 other income 7 EU income 10 Co-investment Fund 10 Income forecast in Scottish Enterprise Operating Plan 550

We will be more than happy to discuss progress against this plan with the Committee. Draft Operating Plan 2007/08 Table 3 gives a summary of the Draft Operating Plan for 2007-08. The layout is similar to table 1, except there are obviously no actual figures. Please note: • The business is presently in the process of generating a detailed project forecast for

2007/08. Therefore the figures presented are based on best estimates and have not been agreed by the SE Board or Minister. The intention is to consult on a draft of this plan in December 2006 along with an environmental assessment of the plan (a requirement under SEA legislation).

• The Scottish Executive draft budget of £466m is based on the spending review outcome

(SR2004). It does not consider other income from the Scottish Executive, business income or EU income. The total income for the Operating Plan is forecast to be £526m. The table below details the difference between the draft budget compared to the forecast income for the Operating Plan. The total difference is £98m

£m Scottish Executive budget document 466 Scottish Executive additions 16 additional resource cover 25 business income 30 other income 9 EU income 8 Co-investment Fund 10 Estimate income in draft Scottish Enterprise Operating Plan 564

• Careers Scotland has been included however it should be noted the intention is for

Careers to transfer out of Scottish Enterprise. • An additional column has been added to summarise potential known opportunities which

could be realised in support of economic growth. These are based on the needs of a growing economy and reflect the specific demands from customers, in particular the demands of Scotland’s growth industries. Through planning at a metropolitan level we are seeing larger scale projects emerge which will have greater economic impact. Our own profile of investment through the year is now much flatter reflecting this increased demand and improved efficiency in delivery.

EC/S2/06/23/1H

Management and Administration Table 4 provides an analysis of Network management & administration costs. It details: • The planned expenditure for the three years of the plan (2005-08). The actual figures for

2005/06 are also provided. • The analysis provides details of Network staff costs (analysed between operational and

service & support staff costs) and other management & administration costs. • The costs associated with Careers Scotland are included in the total position but are

separately identified.

Please note: • The projections for 2007/08 are based on best estimates.

EC.S2.06.24.1

Enterprise and Culture Committee

24th October 2006

Consideration of the 2006-07 budget

Submission from Highlands and Islands Enterprise Introduction This submission details the additional information Highlands and Islands Enterprise (HIE) would like to offer the Committee for consideration regarding the strategic direction HIE is following and the methodology adopted for the allocation of resources. The three key areas HIE wishes to emphasise with the committee are as follows:

1. Strategy review 2. Management and administration costs 3. Budget setting process

Each of these is addressed in turn below: 1. Strategy review HIE launched its refreshed strategy A Smart, Successful Highlands and Islands in June 2005. Following that launch an extensive internal review was undertaken to determine what rebalancing of effort would be required to deliver the aspirations expressed within the strategy. That exercise identified seven top priority areas where new (or extended) effort by HIE would be necessary to take the region forward. These areas are:

• Engagement with businesses and communities • Population growth • University of the Highlands & Islands • International business development • Housing solutions • Development infrastructure • Policy influence

In order to ensure that resources were refocused in these priority areas, HIE then undertook an Organisational Review which considered the appropriateness of the current Network architecture and balance of resources available to the various business units. The key changes enacted as a result of this review were:

• Simplified structures • Improved delivery – 2 new LECs replacing 3 • Greater integration of Careers Scotland • Unified HIE Network branding • Greater openness and accountability – HIE Board meetings in public

1

EC.S2.06.24.1

These changes have now been implemented and the next HIE Operating Plan, a draft of which will be completed by early December, will reflect the organisation’s new shape and new priorities. 2. Management and administration (M&A) costs The overall M&A costs for HIE were highlighted in the financial tables presented by HIE, and run to approximately £24.5m per annum. HIE is going through a considerable period of change at present, developing and implementing a new computer system, integrating Careers Scotland and rationalising its office base through a programme of co-location of services. In addition (as highlighted above), total staff numbers are set to reduce over time as more resources are devoted to a smaller number of large scale interventions – fewer people overall, but focusing on those with more specialist skill sets in areas such as programme and project management, influencers and strategic thinkers. A more detailed examination of the M&A costs also reveals that around 80% of the cost relates to front line staff delivering services. Delivering functions such as Careers Scotland in a sparsely populated rural area are very staff resource intensive, and this is reflected in the overall cost of running the organisation. 3. Budget setting process The following is a summary of the process adopted by HIE Income assessment HIE assess the overall level of income likely to be received through Grant in Aid and other sources. The other income is derived from Europe (structural funds), property rent, dividends and capital receipts. This provides the overall basis for our expenditure plans. Budgets are prepared on a gross basis and therefore will differ from the Scottish Executive budgets which reflect only the Grant in Aid element of the overall allocation. Budget allocation This is a four stage process. The first stage is to provide for M&A costs (as detailed above) – with the remainder of the available funds being allocated to investment expenditure based on our A Smart Successful Highlands and Islands strategy. At the second stage the remaining allocation is ‘top sliced’ to ensure adequate resources are provided for strategic projects, currently these include the University of the Highlands and Islands project, Centre for Health Science, Highlands and Islands Community Energy Company, Eden Court Theatre redevelopment etc The third stage is the allocation of the remaining budget across the Local Enterprise Companies and the HIE Core Groups based on a formula share which recognises the different economic conditions which exist in different parts of the region. Given the number of variables that affect the total income HIE has at its disposal, and the responsive way in which HIE reacts to opportunities and changes in local circumstance (and need) it is not unusual for funds to be vired from one objective to another or from one LEC area to another during the course of a year. Alteration of

2

EC.S2.06.24.1

the timescale to a single, large, high priority project can have a considerable impact on budget allocation across the Network. As a result of these variables, the figures presented by HIE should be regarded as indicative rather than prescriptive. Highlands and Islands Enterprise October 2006

3

EC.S2.06.24.2

e

's

Scottish Enterprise: Summary Operating Plan with 2006/07 forecast investment and estimated measures of progress Table 2 (with forecast Outturn figures)

What we want to achieve What we will prioritise What we will deliver Our InvestmentSSS

Strategic Themes

Smart, Successful Scotland Priorities (and how Scotland ranks against its competitors) Focus for 2006-09 Key Operational Activities and annual measures of progress

2006/07 forecast

investment £m

forecast outturn at period 5

A Culture of enterprise and more businesses of scale

Help existing business grow, individuals start new businesses, and encourage more peopto be enterprising. Develop those businesses with growth potential, from start ups to businesses of scale

le

Business Gateway, business starts ups, enterprise culture, PSYBT (£23m), developing high potential companies (£14m) , Co-Investment Fund and Scottish seed Fund (£13m), Scottish Manufacturing Advisory Service (£1m), Co-operative Development Agency (£1m), specific priority industry proje(£7m)

cts

60 - 65 61Entrepreneurship: 3rd Quartile

9,000 to 10,000 start ups assisted, 10 to 15 major high growth start ups supported, 1,000 to 1,200 business with significant growth potential assisted, a leverage ration of private funds of between 1:2 to 1:2.5 through the Co-investment Fund

Increased innovation and commercialisation of researchEncourage businesses to increase growth through being innovative and investing in research & development, increase knowledge transfer from the research base into businesses

Intermediary Technology Institutes (£46m), Company innovation projects including R&D Plus (£19m), Proof of Concept Fund (£5m), specific priority industry initiatives (£19m) 80 - 90 84

Business Investment in R&D as a proportion of GDP: 3rd Quartile 120 to 160 knowledge transfers supported by the Network, 15 to 20 research projects being progrssed through the ITIs.

Growing Business

Success in key sectorsDevelop strong gowth industries which can be internationally competitive

National priority industries: life sciences, financial services, tourism, food & drink, energy, electronic markets, enabling technologies, advanced engineering. Regional priority industries: forest industries, textiles, aerospace, chemicals, shipbuilding & marine, textiles, construction. (industry specprojects total over £100m)

ific covered under other prioritiesProductivity Levels in Scottish Industry: 2rd Quartile

Use of e:business to create business advantage Encourage more and smarter use of advanced e-business activities to realise real businebenefits by integrating activities across Growing Business priorities

ss These activities have been integrated within the 3 prorities above covered under other priorities% of firms trading online: 1st quartile

Growing Business Staff 20 - 25 25Improving the operation of the Scottish labour market

Help more people make well informed and realistic career choices. Help employers and educators better understand the labour market.

Careers Scotland - all age careers planning & support projects (£5m), Futureskills Scotland and local labour market information (£1m)

5 - 10 5Employment rate: 1st Quartile175,000 to 195,000 individuals within working age population engaged in career planning

Smart Successful Scotland

Skills & Learning

The best start for all our young people Target young people at risk of not being in employment, education or training develop corand vocational skills, work-based learning,life skills and provide focussed careers support and advice

e Modern Apprenticeships for young people (£41m), Skillseekers and Get Ready for Work (£34m)

70 - 80 76Proportion of 15-24 year olds unemployed:3rd Quartile 36,000 to 42,000 individuals participating in occupational training programmes. 15,000 to 18,000 individuals achieving positive outcomes from

occupational training programmesDomestic

Product per Head (2nd

Quartile)

Developing people who are in workEncourage more employers to invest in training to increase productivity and help employeenhance their abilities by supporting them to make effective career choices

es Adult Modern Apprenticeships (£9m), Construction skills (£4m), Workforce development including Investors in People (£6m),

20 - 25 21Proportion of adults undertaking training: 1st Quartile400 to 450 companies supported to implement workforce development to support growth

Narrowing the gap in employment and reducing economic inactivityHelp people of all ages who are not in work find and keep employment through delivering career planning support and work-based training & development

Training for Work (£13m), Local regeneration activities (£2m), Construction skills (£2m)

15 - 20 19Ratio of unemployment rates between the worst 10% of areas and ScottishAverage (no international comparisons)

Skills & Learning Staff 40 - 45 43

Increased involvement in global markets Help Scotland do more and better international business by supporting Scottish businessto become more global and attracting more high value (e.g. Research & Development) activities to Scotland

Scottish Development International e.g. overseas offices, international ventures, inward and outward investment, Business Support to internationalise LECs, inward investment support

by

15 - 20 17Proportion on employers exporting: 1st Quartile500 to 600 high potential organisations assisted to participate internationally (80% in key industries), 1,200 to 1,500 planned high value jobs secured through inward investment

Global Connections

Ensuring Scotland is a globally attractive locationDeliver business infrastructure and strategic area regeneration to support key industries and help attract investment and people to Scotland

Competitive Place Strategic Investment Plan (industry focus) (£24m): indicative projects Pacific Quay, Glasgow Science and Technology, Edinburgh Science, Prestwick Aerospace, Aberdeen Energy Park, Centre for Biomedical Research, TMRC Dundee, Eurocentral.

65 - 75 70Graduates as a proportion of the Workforce: 2nd Quartile

Regeneration and local initiatives (£33m) indicative projects: Clydebank rebuilt, Clyde Waterfront, Clyde Gateway, Irvine Bay, Inverclyde, Kilmarnock

Network property portfolio (£11m)A leverge ratio of at least 1:2 achieved (from additonal public and private sector investment) on site in high impact proje

Connecting to the rest of the worldStimulate demand for and access to Broadband telecoms infrastructure and improve physical connectivity to help companies do business in a global environment

Digitial Connectivity (£2m), Air Routes Development and Transport initiatives (£4m)0 - 6 6Cost and Geographic Coverage of Broadband: 2nd Quartile

5 to 8 new direct international air links

More people choosing to live, study and work in ScotlandMake it easier for organisations to attract and retain talented people and improve Scotlandimage as a place to live, work and do business

Talent attraction initiatives (£2m)

0 - 5 2Net Migration (working age) as a proportion of the population: 3rd Quartileexpansion of Talent Scotland to include specialist occupations in Financial Services

Global Connections Staff 15 - 20 18Notes: 1. Contribution to the Scottish Executive's wider sustainable development policy aims e.g. closing the opportunity gap, environment and equal opportunities are integrated into the work we do.

Network Development 31 312. The Outturn figures include an additional £2m for export development counsellors whose salary costs are mainly funded by the DTI (and do not form part of M&A or the original operating plan).

Network Support 42 40

sub-total cash 516 518non-cash 34 34

TOTAL 550 552 see note 2

EC.S2.06.24.A - Agenda.pdfSB 06-66 EC.S2.06.23.2 Draft Budget 2007-08 - Enterprise and Culture Committee.pdfKEY POINTS OF THIS BRIEFING INTRODUCTIONTRENDS IN THE BUDGETENTERPRISE AND LIFELONG LEARNINGTOURISM, CULTURE AND SPORT BUDGET

OBJECTIVES AND TARGETSTHE EFFICIENT GOVERNMENT INITIATIVEELL AND TCS RELATED EFFICIENCY SAVINGS

GUIDANCE FROM BUDGET ADVISER SOURCES

EC.S2.06.23.1A HIE briefing note.pdfEC.S2.06.23.1A HIE CS.pdfEC.S2.06.23.1A HIE.pdfSummary Op Plan Chart 2007-08

EC.S2.06.23.1H S Ent budget submission 07-08.pdfTable 4

EC.S2.06.23.1H SCOTTISH ENTERPRISE CS.pdfEC.S2.06.23.1H Scottish Enterprise submission to EC committee Sep '06 (final).pdfEC.S2.06.24.1 HIE extra submission.pdfEC.S2.06.24.2 Scottish Enterprise budget additional submission.pdfSheet1

enterprise and lifelong learning committee · 2011. 12. 20. · ec/s2/06/24/a enterprise and...

Documents