 We welcome to the 25th meeting of 2023 of the Economy and Fair Work Committee. Our first item of business is a decision to take items 3 and 5 in private. Is that agree? Our next item of business is an evidence session with the Enterprise agencies. The purpose of this session is to inform the committee's pre-budget scrutiny work. I welcome Adrian Gillespie, chief executive, and Alan Maitland, head of finance, management accounting, Scottish Enterprise. Stuart Black, chief executive, Nick Kenton, director of finance and corporate services, Highlands and Islands Enterprise. Jane Morrison Ross, chief executive, and Anthony Day, director of finance and corporate resources, South of Scotland Enterprise. With six witnesses this morning, if members and witnesses could keep their questions and answers as concise as possible, that would be helpful. If I may first come to Scottish Enterprise with some questions about the proposed budget for next year, all the enterprise agencies are facing a real terms decrease in their suggested income. The biggest decrease is in the financial transactions, we are looking at 23 per cent, but across the board it comes to about 4.3 per cent. Just when we were set for the committee, the challenges will be in delivering that, but as I say that, I also recognise that in the last year's financial transactions budget there was an underspend, and so you can be a talk through the committee what the impact of the 4.3 per cent cut will be or what you anticipate it be. Sure. Good morning, everyone. Thanks for the opportunity to talk to you today. The year that we are in, the forthcoming years, but the pattern over the next few years is clearly a decrease in budget. I encourage us to really take stock over where we focus in future years. The situation is very challenging, that is for sure. In a number of ways, if I break the budgets down a little bit, a resource budget, which funds our salaries, our fixed costs, a lot of our international trade work, our entrepreneurial work, that is under particular pressure. Given that many of those costs are fixed, we are in a situation now where, over the next couple of years, we are going to see our income dip below our fixed costs in terms of our resource income. We are going to have to take some measures in order to refocus and reshape the organisation in order to accommodate that change in budget. We have started that already. There are the efficiencies that we look at through the normal course of business, but last year we took the decision to close some of our regional offices with a saving of £1.4 million a year, which reflected the way that we are working now and the demand on those premises. We have also taken some other measures in terms of recognising some of our losses as promptly as possible and taking steps to capture any of them as early as we possibly can in preparation for the challenging years that are ahead. However, it is also at a strategic level with our boards. We are looking at where we invest our funds in order to get the most benefit. We are going to be a smaller organisation over the next few years. That is something that is clear from the budget. We are going to have to focus our resources on those areas in which we feel that we make the biggest difference. We are also moving towards projects that are not just helpful and that are facing into changes in the economy and that are going to change the economy for the better. When we talk about economic transformation, that is what I am talking about. It is a project that will have a fundamental impact on the company or sectoral level. That is what we are moving to, where a new corporate plan will be launched in November. That will reflect three main areas of focus—the energy transition, a very clear area where there is opportunity and threat in terms of capturing the economic benefit of that transition in Scotland. That will be one of our missions, if you like. The second area is scaling up levels of innovation in the country. We have some excellent innovation in Scotland, but we need to get it to levels of scale that are going to impact our major measures of the economy at a macro level. Thirdly, we are facing into the issue of low levels of investment and the impact that that has on productivity in focusing more of our people and resources on encouraging more investment into the country but also working with those companies that have a big impact on their productivity levels. As a result of that, there are going to be things that we are going to have to do less of. We will not have to move to doing things differently, so a lot of the support that we deliver will have to do that in different ways. For example, we are working with cohorts of companies, whereas in the past we may have worked with individual companies. We will still do that, but there will be more of a cohort approach. We will also move to more of a digital approach in terms of how we deliver our services. These days, it is possible for companies to access information that we have to handle a lot easier than they could in the past when we saw that through Covid. There is some fairly fundamental thinking that we have been doing about how we focus in the future. We have more flexibility around our capital budget in that we generate significant amounts of capital income and that we have capital assets that we can, over time, realise that we can help to plug some of the gaps. In the five targets from last year, you did exceed the capital investment. That was quite a—from £382 million to £380 million as a target and it was £620 million. Can you say a bit about how that came around? I cannot come in here. Our annual budget can be very much impacted by one or two very large projects that come in, which were not in our pipeline at the beginning of the year. We can sometimes substantially exceed our annual target. Capital investment would be one of those. There is not always a direct correlation between budgets and the achievement of the targets. Capital investment is one of those. As you said, there are a few chunky things that came through in that year, which saw us exceed the target quite substantially. Partly off the back of that, we will be increasing our targets for that measure this financial year. I want to conclude on the fact that a lot of other members have come in. I was going to ask if you are having to do more with less, but what you are saying is that you are going to have less, but you are trying to change the way in which you are doing things. What are the timescales that you are working towards? Is this budget being allocated to what we are seeing at real terms reduction and inflationary pressures that are still across the whole sector, is it sufficient to make the cultural and structural change that you are looking to do? Yes. We have already started down that path. I mentioned some of the measures that we have taken around efficiency so far. We have secured buy-in from our board, from our ministers, from the key business contacts that we have in terms of the rationale around having a national economic development agency that is really focused on economic transformation. That is where we should be. That corporate plan will launch and that is the signal for us to be often running on that approach in November. I just mentioned the financial transactions, because that is really critically important. Our financial transactions funding is uncertain and that funds almost all of our early stage investment work, so that is an uncertainty at the moment that is clearly something on our radar. If there were to not be levels of financial transactions funding available, we would eat into our capital budget, but given the levels of investment that we currently undertake in the early stage market, we would not be able to absorb that into our capital budget. If we come to south of Scotland enterprise, who uses the more significant reduction in the budget at 8.9 per cent with a more significant reduction in financial transactions, do you want to say a bit about what impact that is having on the organisation or how you anticipate managing that reduction? We have been expecting some of those cuts from early indications, so we took some direct action in preparation for this year's budget and the coming year's budgets. We froze headcount, we started to look at organisational structure, we have done a lot of work on our culture, we have been focussing on processes and trying to make those as lean and effective as possible. The majority of our staff are front-line facing, either stakeholders, clients, communities or organisations, so we are directly outworking to provide the support and expertise. Further reductions in budget will have an impact on what we are able to deliver. Currently we have staff on the ground working directly to increase the number of start-ups from women, from young people across the south of Scotland. We cover from iMouth to Stranraer, so it is a significant territory. That is why the majority of our staff are front-line facing. We have been working to develop how we can use our financial transactions more effectively and efficiently. In years 1 and 2 we struggled because we were not set up in a way that made that as effective as possible. We are very focused on the productivity piece. The OECD report that was published last week showed that 80 per cent of the productivity increase in Scotland is coming from remote and rural areas. We think that there is huge economic benefit and opportunity from harnessing the SMEs that we have across the more rural areas. If we suffer further cuts, we will have to look at how we are able to deliver. We have been doing that to a certain extent. That is why we have partnerships with Zero Waste Scotland, SFC, SRUC, CivTech, Census and a number of other organisations, because it means that we can deliver more with less effectively. However, it gets difficult to do that after a certain point. I do not know, Anthony, if you want to come in on FTs, if that is okay, convener? Just on the FTs, because of the challenges that we had, which was pretty much in the demand side in terms of organisations coming to us, we have really publicised that. We have just launched in the last few days a business loan fund for the south of Scotland. It is not dramatically different from what we have had in the last two years, but we are really pushing it out to our customers and trying to get them to see that there is money there. Alongside that, we have emphasised the other finance that is available. British Business Bank and X, Y and Z are other funds that we can bring into play in the south of Scotland. That is the market that you have available in terms of pushing financial transactions. The other thing that I would add is that the resource challenge that we have had is always at a low baseline to start with, but we have not let it stop us. As Jane has mentioned, we have tried to take proactive measures in terms of leaning our headcounts straight away and very much focus on how we can work in partnership to bring other funds in to supplement what we have. Gordon MacDonald, did you wish a supplementary question? A very quick question for the Scottish Enterprise. You spoke about your grant and aid funding, but what about the funds that you raise from business income? If my understanding is correct, you brought in £75 million in the last financial year, which is about 25 per cent of your total funding, and you brought in £600 million over the last five years. Two points. How was that generated and what is your forecast for this year? In terms of how that is generated, there are a number of sources. One of the main sources is exits that we make from companies that we have invested in, often 10 or 15 years ago. When that investment is realised, it is out with our control because it depends on the company either going public or being purchased. That can happen with a week's notice, so it is very hard to plan for that. I would make the point that that income is not factored into our grant and aid forecast, so it is not a windfall, if you like. As we did in the last financial year, we had a year in which we had more than 106 million impact from income from companies that we had invested in. That was way more than we forecasted, and that was principally two exits that we had that we were not foreseen. That money has returned to Government. Other sources of income are through property transactions that we make. We have a property portfolio, we sell that property, and we realise income from that. There are other sources of income, such as EU funding, which is resource funding. That is another pressure on the resource income, as we do not have EU funding coming in any more, which is a big funder of our innovation activity. There is also some resource funding income from some of our exits, but a clarification of treasury rules means that that is much lower now than it could be in the past. The pressure on the resource budget is coming from a number of areas. The £75 million that you quoted will include our subsidiaries, the main one being Glasgow Science Centre. The forecast for this year is £77 million, but that will exclude our subsidiaries. It is not perfectly, but the subsidiary income is relatively small in the overall scale of things, so it is a broadly static picture. Sir, do you wish a supplementary? It is one brief supplementary to Mr Gillespie, given your answers to the convener. He talked about measures to reduce costs. Are you also looking at your staff complement? I might include redundancies, for example. The major fixed cost is our salary cost. Yes, we will have to. I said about reshaping and refocusing the organisation. That is absolutely where we are. It will not involve redundancies. It will be through natural retirements or people leaving the organisation. The age profiler organisation is such that we will have a substantial number of people retiring over the next few years, which will allow us to reshape, but it is also a challenge in terms of retaining a lot of those skills and experience in the organisation. Before I introduce Ash Regan for questions, I will give Helen's and Ile's an opportunity to comment on the budget reduction. I think that it is 4.8 per cent is the proposal that, as an organisation, you will have to manage. Do you want to tell us how you... Yes, thank you, convener, and thanks also for the opportunity to come along today. Yes, in terms of our resource budget, that is the one that takes the biggest impact, and I think that many of the same things that Adrian and Jane have talked about will affect us. A lot of our work is driven through local level community engagement, so one of the things that is going to be affected is our ability to work with communities at local level through things like development officers. That is the sort of project support that many communities want, that we are going to have to try and bring in other funding to supplement what we do, for example, through community benefit from windy energy projects in some areas. Another area that we are going to have to reduce is our management and leadership training, and that is actually a very effective way of supporting businesses. Often, that can be as effective as giving grants for capital equipment, for example, so often we run those in a complementary way. We also provide quite a bit of advisory support both directly through our own team, but we buy in advisory support through the private sector, and that, unfortunately, is something that we are looking at as well. Graduate placement programmes are another thing that has been very successful. We obviously want to support the recruitment of young people into our region, so we have used graduate placement programmes, and that is unfortunately something that we are looking at. Although, in that case, we have been able to use some funding through Argyll and Bute Council, for example, through shared prosperity fund to supplement our resource, so a bit like what Sosie was saying, we are trying to supplement our resource as much as possible. On the staffing side, as Adrian has mentioned, it has been more a question of vacancy management, and looking at every vacancy that we have, we generally try and hold vacancies for up to six months to make a saving on the post. We are also recruiting a younger cohort of staff, bringing in graduates and bringing in less experienced people to replace more experienced people. Generally, that is lower cost, but it also brings new life and enthusiasm and new ideas into the organisation, so those are some of the things that we are doing. On the capital side, probably a bit like the others, there is less concern about that. Again, on capital, we try and generate our own income from sale of assets and sale of property, but we also generate income from, sometimes from, share sales in companies, as Adrian was mentioning. We are also trying to bring in other sources of funding, principally things like private sector funding but also other Government funding, for example, through green free ports. There is some funding available through those, so we are trying to supplement our budget as much as possible. On FTs, we are using FTs much less than the Scottish Enterprise, but it has become a part of our portfolio. The issue with FTs is that, if there are losses, that scores against our revenue budget, so that will make us quite cautious about FTs in future, because if they go bad, they have to be paid for from a declining resource budget, so that is a summary from our side. I do not know if Nick wants to add anything. You have talked about the pressures, and Ms Morrison Ross talked about partnership. Can I ask you, and briefly from you all, how do you share resources with yourselves? What do you do to co-operate and collaborate with one another to ensure that costs are lowered? One of the main ways that we collaborate is through our enterprise information services, such as our back office systems and IT systems. We share that service with Skills Development Scotland, and we are looking at how we can share that more broadly across the public sector. That makes significant savings, but we are looking at how we can make savings across that shared service, and how we can do more shared services in terms of potential HR systems. We collaborate on all sorts of projects. Stewart will probably talk about Sumitomo. We invest in companies together, so there are high companies, such as Orbital Marine, for example, where we have taken an equity position. We try to share our resources on the ground, where that makes sense. Clearly, SDI is a national service, one of our national services, so we undertake that activity on behalf of all the enterprise agencies, similarly manufacturing, advisory services and some of our other services, such as investment funds. There is a number of operational and back office areas where we collaborate. As well as our teams working directly together and meeting regularly, Adrian and Stewart and I meet regularly all together and individually as well, to make sure that, strategically, we can be sharing as much information as possible. We do not always necessarily agree, but we always get to a consensus and try to look at what is most effective nationally by working together. One of the most important things that we are doing is a business support partnership. That is where the agencies are collaborating with other parts of government to provide a joined-up service for businesses so that it is not a confusing landscape for them. It is a one-door approach, and we are doing a lot of innovation in that space. There is quite a lot of collaboration between the agencies. In my experience, I have been working on this a long time. Collaboration between our three agencies is probably the strongest that has ever been. I wonder if the witnesses could supply us with some more detail about the shared back-room costs. It would be my expectation that many of the things that you are doing could be done on a shared basis, rather than each organisation doing something separately. It would be good if we could get further detail on that shared agenda in terms of the back-room costs. The committee would be happy to receive that in writing after the session. Good morning to the panel. I want to pick up on something that Adrian Neum mentioned earlier. It was about how we support companies to scale up, because we know that that is an issue. The recent programme for government was suggesting that—there was an expectation, I think—that there is a greater role for the enterprise agencies in trying to reduce barriers to companies, so that we can get more successful companies scaling up. I think that this is a really interesting area. When we are sharing lots of knowledge, for us, the focus is on scaling up and scaling deep. Both of those are not mutually exclusive. For us, in the south of Scotland, 87 per cent of our companies are SMEs and micro-businesses. They are entrepreneurs, so we are working with them to increase the start-up. We have a team looking at pre-start-up, to scale up absolutely, to scale deep, and then to scale out and that is scaling out internationally. That is the entrepreneurial pathway that we have set up and endorsed by Mark Logan, which we were very pleased with. However, there is a huge amount of work focused on getting companies to that stage. That is why we have specialist teams who are working with women, young people and underrepresented founders and non-euro-typical founders, etc. We are looking at specific opportunities that fit into national innovation strategy, space strategy, etc., so that we can harness those and see the increase as much as possible. We also run business gateway in-house in Scottish borders, and we have seen the numbers increase significantly since we have taken on that service, because we have been able to wrap our added value services around that. However, the OECD report highlights the really strong potential of rural areas in that space as well. This is the core to what we do. Our purpose is to help companies to innovate and scale. In terms of scale-up companies, they are of various sizes, so we have very early-stage high-growth scale-up companies. Many of them are coming out of our universities, but they had a record year in terms of spin-outs from universities. Through our investment funds, we are the second-most active investor in the UK in terms of early-stage investment markets, so there is a lot of investment activity that goes on that creates an investment ecosystem that is very, very helpful. One of the biggest barriers to scale-up is attracting the right investment funds. We do not only supply the funds, we advise companies on the best way to structure their funding and where they might find those sources of funding as well as being a source of the funding. The second area is just their technology and product development. We support technology and product development as companies evolve and their products evolve and move markets. We help them in terms of international markets. Where might their products land best? How might they be best supported in those new markets? Global Scots, for example. We also help them with talent for all companies, but for high-growth companies in particular, the attraction of talent is absolutely critical. We can help and advise companies in terms of the culture that they create within the organisation, the sorts of structures that they might put in that would attract talent, the sorts of fair working practices that would attract a more diverse range of talent. We also have the Talent Scotland service that can find talent internationally. We also help to scale-ups in terms of some of the real challenges around scaling up, such as what governance processes they might need to put in place, what system pressures they might have in terms of, again, back-office support, that kind of thing that we would be important for them to have as they take their companies internationally as well. There is a whole range of support available and a big, big focus for us. Stuart McMillan, did you want to add anything? It's always a danger, everyone has said everything already. For us, access to finance is a key thing here to enable companies to scale up. A bit like Adrian and Jane, we have internal expertise on that. We have people who have worked in finance. Another thing that is increasingly important is our work with SNP. For example, there have been a couple of investments in our region. One has been Orbex, the space company in Forrest, where we have put in initial funding, but then SNP has come in with quite a big chunk of funding—about £18 million—and they acted as a leader for a £40 million raise on that company. Similarly, in tourism sector, SNP were active with Highland Coast hotels—again, a group of hotels around the North Coast 500 and they invested £4.5 million. Again, we work closely with SNP to introduce those companies and to make sure that they are part of the ecosystem that will support them. A bit like Adrian has mentioned, there is also lots of advice and support from people like SMAS, from MNAS. Another thing that we have done that is quite successful is technology, graduate placements. For small companies, we have been able to support that. The third area is really around the management and leadership. We have had a couple of very successful programmes. One is called Impact 30, which is aimed for younger entrepreneurs. We have had very high take-up of women on that course, so Impact 30 has been very good. We have also had one called Pathfinder. Kevin was making the point about partnership. Those are funded as part of growth deals in our region, part of the Highland growth deal, but they have been successful, so we have rolled it out to all of the other geography. We have got seven local authorities in our area. Those are some of the things that we are doing, but I agree with both my colleagues in terms of the importance of scale-up, because we need to grow the Scottish economy by creating more successful mid and larger companies. I was going to ask about the relationship with the Scottish National Investment Bank anyway, so you have covered that for me, but I will ask the other two agencies if they have a similar relationship. Is that relationship working well? Do you find that that is giving you the opportunity to direct companies to the right support at the right time? We found it quite challenging initially, partly because of the level of maturity and the scale of the companies that we are supporting across the south of Scotland. The ceiling for investment is one that we sometimes struggle with. We have had one major investment with indie nature, which has involved Scottish Enterprise at points and so say two. We have a number that we are looking at with them just now, but it is trying to get them to a point where they are ready for the level of investment that SNP will provide. We have also struggled with the equity versus debt investment model quite significantly, which is why we have been looking at the British Business Bank and a number of other, perhaps slightly more flexible routes to finance. We are very keen to continue working with SNP. We have a very positive relationship with SNP. There are some great expertise in there that we draw on, but it is getting to that tipping point. I think that it is absolutely maturity for us at the moment, but we have a number with SNP and the Scottish Enterprise financial readiness team. We are referring and we are seeing referrals, it is just getting them over that hurdle and getting them ready to be able to receive investment. That is something that we have seen more of this year than the first couple of years for society, as you would imagine, in Covid-19. A very strong close working relationship with SNP. We meet every two weeks. We share our portfolio of companies that are coming through. We have a joint pipeline that we work together on, a number of companies that we have jointly invested in. Around half of their investment portfolio have been companies that we have invested in early stage. There are 12 companies in our portfolio that have attracted SNP investment in areas such as energy transition, North East Company for Loom, Trojan Energy, Space Sector, Crucial and Glasgow, where they are getting significant scale-up funding from SNIB. After one, two, and maybe sometimes three investment rounds that we have done at the early stage. I have a couple of supplementaries from Colin Smyth, Brian Whittle and then it will be Colin Beattie. Can I just follow up on the point about partnership working? I am keen to get the panel's feedback on how effective regional economic partnerships have been so far. I will start with changes, because my observation is in the south of Scotland that there is a very strong strategy and it is a very cluttered landscape. However, when you look at the delivery, it is not always clear to me who takes the lead. The one example is the very first action in the south of Scotland when it is developing deliver interventions to address immediate long-term labour-skill shortages. It then says that there are key partners. There are one, two, three, four, five, six, seven, eight, nine, ten, eleven partners involved in that. How do I assess whether it has been delivered when there are so many partners? It does not seem to me that it is very clear who is taking the lead on each of those interventions. To answer the top part of the question first, our regional economic partnership has been very strong. It is very strong and it is very active. We recognise that we have two councils in our region that I think make it easier. We meet and work with both of them individually and collectively now regularly outside of the regional economic partnership as well to plan intervention and collaboration with the REP itself. It was the first to publish the first regional economic strategy in Scotland. It is a very clear one and it is very direct. There is a lot of work going on behind the scenes. Earlier this year—I am struggling to remember what month—there was a streamlining activity that went on to focus key priorities for the pathway ahead and housing transport and skills where the three main areas that a lot of the other activities come under. There are subgroups now with smaller membership that are working individually and directly to take those forward. There is a REP secretariat that manages the process and we are seeing real progress particularly around housing and skills. In fact, there was a meeting with a group yesterday with chief executives of colleges as well to look at pathways for skills from school right through to tertiary education and employment across the south of Scotland, the first direct intervention planning one as well. It is one of those things. I think that the model is maturing as it evolves. We are learning. We are adjusting. It is a very interactive and iterative process. It did not come fully formed, but we are certainly seeing significant value and significant value from the partnership and the agreement right across the south of Scotland of the priorities that we collectively focus on as well. It allows separation. It allows diversity and it allows us to focus on specific opportunities or challenges within the regions as well, but coming together right across the south is quite a powerful thing. I do not know if any other panel has got any observations on regional partnerships. I think that just to say that there are some very strong regional partnerships. First of all, everything that we do is in partnership. In many of our projects, there will be a number of partners. Mibin, for example, is the Glasgow Innovation Accelerator where the economic partnership is developed across the region, mainly in the back of the city deal. The city and regional deals have forged quite a lot of very strong partnerships now, and that has attracted a significant amount of funding from DSIT through Innovate UK. There is a very strong partnership going across the university's Scottish Enterprise, Innovate UK and the local authorities that are establishing a very strong model for developing a strong innovation system. We will be looking with Innovate UK to take around the country and see where we can replicate that elsewhere. Those regional partnerships are critical and, when they work well, they can really deliver very strong results. No issues at all with them. Is there a challenge around the fact that it is a cluttered landscape, you have duplication, you have two partners sometimes doing the same thing or you are happy with the processes that you have in place to make sure that that does not happen? I am happy with the partnerships. Stewart has mentioned the business support partnership and the work that we have done to channel our support in a very coherent way and to remove duplication where that exists. There is some work going on at the moment, because we feel that there are a number of funds that can be confusing. It is not so much the organisations. I think that there is a funding landscape where there is an awful lot of funds which actually often do quite a lot of the same things, and that is what we are really looking to consolidate. I think that the other side of that is making sure that the funds are focused in the right places where we really are going to make the biggest economic impact. That is a piece of on-going work. From our perspective, Highlands and Islands is a vast area. We cover 51 per cent of the landmass of Scotland from Unston, Shetland and down to Arran. We have a single regional economic partnership and it reflects strong working, particularly between HIE and local government. Our regional partnership was very important in putting to our new strategy, and we are now producing a regional economic strategy through the partnership. Just like James mentioned, we have been focusing on quite a few common areas, particularly around housing, transport, digital connectivity and also skills and labour availability, because that is the number one issue that businesses are talking to us about in terms of their ability to grow. I am chairing a group that has been set up under the regional economic partnership to try and accelerate housing provision in the Highlands and Islands, because that is one of the main things that is holding back the great opportunities that we have, particularly around renewables and activity around some of our new sectors. Our regional economic partnership is very strong. The question about duplication and the landscape in the Highlands and Islands is pretty simple. If you want to get business support, your first point of call is either HIE or business gateway. Between the two of us, we are often co-located, so the business will come into our office in Stornoway, and the council staff are sitting right next to the enterprise agency staff. The same thing happens in Lorwick and Kirkwall. I do not think that duplication is so much around activities, but I do think that the funding landscape has got much more complicated, just as Adrienne has said. That is why you need things such as business support partnership to navigate the confusing landscape, but that is also what my team does. We are there to help businesses and we engage. There are around 500 businesses and community groups that we are engaged with a client relationship. Our job is to de-plutter and make it simple for businesses and communities to get to the right support. Good morning to the pantheists. Adrienne, you mentioned the role that the Scottish Enterprise has around scalops and the importance of scalops. Obviously, we are a very SME-orientated country. The SNP would say that its role is also in scalops, and you talked about working partnership with SNP. Where are the lines of demarcation? How do we make sure that there is no duplication of effort? Is there a great area there, but who should lead in that? There is a clear demarcation around funding. SNP is obviously a bank. It supports funding. We do much more than that. We provide funding in the early stage investment, but all the support that I talked about is internationalisation, about culture, workplace innovation, product development and innovation. That is really us with SNP providing the scale-up finance for that. Clearly, we have both an interest in the scale-up agenda, but in terms of who provides the funding, we have a very clear agreement about the stages that we will come in in the early stages and the scale-up funding that SNP supports. I have a couple of areas that I would like to have a little look at. The first one concerns the recent review by James Withers into the future of the skills landscape in Scotland. One of the recommendations in the review obviously affects the enterprise agencies, and that is that the enterprise agencies should take on responsibility for supporting businesses with skills and workforce planning. It is noted in the review that this would require that the agencies broaden their approach, and therefore would probably need additional resources. Maybe starting with Scottish Enterprise, two questions. How would you approach this new responsibility if it was implemented, and what changes would be needed within your organisation in order to effectively deliver that? It is quite early to be really specific about how we would deliver on that, because I think that there would be a whole process to go through working very closely with Government to understand how we would design that. We would absolutely need additional resources and skillsets in order to undertake that piece of work. We obviously have strong reach into companies, so it is feasible for us to do that. We would have to do that again in partnership with Business Gateway, for example, who would have a reach that we would not have in terms of the numbers of companies involved. We are in discussion with Government about how we might take that forward, but there is no certainty that that will be coming to us. I think that if that were to be the decision, we would get into detailed planning then about what that would mean, but we would absolutely need additional resources and skillsets to undertake that important piece of work. Do you think that it is a logical recommendation? I think that there are a number of options about how that could be done and who could deliver it. As I say, I think that it is feasible for us to undertake that work. I am not sure that it is absolutely core to our skillset, to be perfectly honest. That is why we would have to bring in additional resources. I think that it is sensible, having had those recommendations, that there is a look at what the options are and to evaluate those options and see what the best way forward is. Of course, skills used to sit within the enterprise agencies before Skills Development Scotland was created. Many of my colleagues have experience of working in a skills environment. Some of my senior colleagues came in as skills development advisers, so there are some people in the organisation who have had a skills background. However, as Adrienne has said, if the activity was to come to us, we would have to look at what resource came alongside it. It makes some sense to have the business development agencies and community development agencies also leading on skills planning. As I mentioned, many of the issues that businesses and community groups are facing—community, social and economy businesses—are relating to skills availability. Some of it is to do with whether there are sufficient people in a region, whether there is sufficient housing, but also some of it is about the skills that are being produced in the colleges and universities and whether they meet the needs of industry. Through our work with companies and community groups, we have a good handle on the types of skills that are needed. In terms of how we would approach it, we work quite regionally. We have eight offices around the Highlands and Islands, so that is a good way of engaging. For example, in Shetland, the Shetland office will be interacting with businesses in Shetland. It knows the sorts of skills demand that is coming through, so it makes sense to do it that way. Changes would be needed within the organisation, as Adrienne has mentioned, to be able to take on additional work. However, I think that there is a logic to it, and that is why James Withers had that recommendation in his report. Leaving aside the mention of having some people with residual skills from the previous iteration of the enterprise agencies, I seem to get the impression from both responses that I have had so far that this would be a completely new bolt-on effectively to the enterprise agencies as opposed to an extension of what is already being done. It is a question of degree. Often, when we are dealing with a number of investors, Adrienne has mentioned Sumitomo. One of the things that she is concerned about is skills availability. In the past, Highlands and Islands Enterprise was able to provide financial support for skills training. I can remember doing that 15 or 20 years ago. That is the sort of thing that we could be able to do quite readily, but having people with the skills in terms of delivering directly to businesses around skills is probably something that we would not have in-house and would need to bring in. There are elements of it that we could do quite readily, but there are other elements that I think would need some additional skills. I think that we are doing parts of this already. It is so interconnected with the work that we are doing across the south of Scotland directly with companies. We bring companies together regularly to round tables with investors and other partners. The skills gaps and the skills needs are something that we hear constantly. We have just carried out one of our road shows right across the south. I am out a lot directly meeting businesses as my senior team. Skills come up again and again. If I could get welders today, I could fill so many gaps right across the south of Scotland, but right across the sectors, from technology through to hospitality, we have a lot of direct conversations and research going on. At the moment, we then get together with partners, whether it is colleges or universities or other providers, to look at how those gaps can be filled. We spend a lot of time talking to educational providers about additional needs across the sectors that we work with. We have seen new courses set up on the back of them. Some innovative courses such as the Scottish Borders College SRUC regenerative agriculture courses come directly out of industry need. We would absolutely welcome the opportunity to have a more formal role in that. It allows us to target interventions and target resources in a very effective way. Again, capacity is always a challenge, so we would need a little additional capacity around that, but it would be enormously helpful to try to accelerate some of the things that we are doing already. It seems that you are saying that you are already handling an element of workforce planning in terms of working with the companies and so on, and maybe giving them input on that. It is probably less formal than that, because at the moment we do not have a formal role to do that, but we get a lot of information, data and intelligence directly from companies and sectors, which we then feed back to the partners who are currently involved in providing those services. I do not think that we are stepping too far out of our remit. We are sharing knowledge, we are sharing intelligence, but sometimes it would allow us to accelerate developing solutions that are needed on the ground now. I think that anything that short-circuits that process would be welcomed. The national strategy for economic transformation notes the importance of increasing the number of Scottish firms exporting in order to drive productivity gains. It also reiterates the target from the 2019 trading nation strategy to grow exports to the equivalent of 25 per cent of GDP. However, the target that was set has been changes since then, and generally there has been an increase in trade barriers, but several key markets are obviously impacted. How are Scottish exporters faring in that context? Maybe I will start with Stuart this time. I think that you are right that the export environment is certainly much more challenging than it was three or four years ago, partly related to Brexit, but the war in Ukraine as well as impacted on the ability to export and the confidence in markets. We are seeing exports come back, which is encouraging. Particularly for smaller companies in our region, we are noticing a growth in exports to the United States, for example, and to the Far East. A lot of that is supported back to Adrian's point about joint working. A lot of that is supported through SDI and advisory support that they provide to businesses, both locally and in Scotland, but also in the different markets around the world. I think that the relationship with SDI has been very important for that, but there is no question that exports to Europe were significantly affected by the Brexit trading arrangements. However, companies are now getting used to those and working with them, and that is why we are finding quite a strong rebound in exports. I am pretty optimistic about the market opportunities for Scottish exports and the support and advice that is there. Increasingly, as well, we are working with the Department for Business and Trade, the UK Government, and they are putting in some advisory support. The trading nation tends to focus on the top exporters who are already exporting, and what we want to do is encourage a pipeline of exporters, a bit like the point about scale-ups. We need to have more scale-ups, we need to have more exporters, and that is where the Department for Business and Trade is putting some advisory support on the ground, hopefully quite soon in Highlands and Islands. We just were involved in some consultation with them, and again, that is designed to support exporters. I completely agree with you that the figures show that export-oriented companies are more productive, pay higher wages are more innovative, so those are things that we want to encourage. Early in what you said there, you mentioned about the fact that it was smaller companies that were exporting in your area. Does that mean that there are no big companies exporting? I was focusing on the smaller companies. I think that, to an extent—we have huge companies exporting, such as Walkers, for example. Walkers Shortbread is famous throughout the world. We have whisky companies as well. UK's two-top food and drink exports are whisky and salmon, all of which salmon is all produced in the Highlands and Islands, and whisky, the bulk of the value added to the high-end whisky, comes from our region. There are bigger companies exporting, but I think that the focus of our support has tended to be and needs to be on the SMEs to encourage them to grow their exports and become bigger companies, as we have been discussing. By and large, you feel that that is successful. I think that it is an improving picture. I think that Stewart has said a lot of what I would have said. We have been ramping up the work that we are doing. I had really good engagement, I have to say, with SDI colleagues who have been working with us directly on things such as the launch of our natural capital investment guide, which we launched a couple of weeks ago with, luckily, one of the CAPS-X joined us for that. We also had both SDI and DBT come to meet a number of the senior colleagues across SOSA this week, last week, to discuss exactly how the support landscape will work and how the two things can dovetail and where the direct interventions are available. Again, we have a number of larger companies. We also have salmon and whisky in the south exporting now, but, like Stewart, we are working to look at how we support the smaller companies to develop, export strategies and get to new markets. We are seeing, as Stewart said, signs of recovery and also signs of new organisations coming through with products, like some of the established ones, that are explicitly for the export market, which is interesting to me. Signs of recovery and some really good support coming through. A similar experience to the other two agencies. Exports rebounded quickly after Covid. We returned to pre-COVID levels the following year, and we are seeing increases now to £41 billion last year. We have seen a healthy rebound. We have been really pleased with the results that we have seen in terms of our export targets, so £1.8 billion of additional sales supported last year that was ahead of our targets. We have a strong pipeline of company opportunities that we are working in. I mentioned earlier that focusing on the big areas of opportunity. We have already implemented much of that, and we do see in our pipeline that the number of exporters is not increasing as much as we want. The average kind of company export value is increasing, so there is more work to be done. Although the results are pleasing, there is much further that we need to go in terms of exports, and they are important linked to productivity. As I said, things have settled down. There is still additional resource required for some markets, particularly in Europe and for some sectors, such as food for example, where labelling is important. A lot of companies have adjusted to that, but there is still more work required in order for it to be undertaken. As I said, things have settled down and there is an improving picture, and the latest results that we have seen indicate that we are growing our exports faster than the rest of the UK, so there are encouraging signs there. Brian Whittle is followed by Gordon MacDonald. I want to have a look at the differences in remit and focus between the different enterprise agencies. I am going to come to you, James, since the south west is something that I have probably more of an understanding of. We get real regional challenges, low-wage structure, economic connectivity, in particular around migration of rural to urban, and Adrian alluded to earlier on that the squeeze on the budget will narrow that focus on which businesses will support, but geographically it will put a bigger squeeze and create a greater inequality between the agencies. It will not help with some of the challenges that we are facing just now, but we are absolutely determined not to have parts of the region that do not have that focus, the south west. Stranraer is a great example. I work out of Stranraer now every couple of weeks. Members of the team work out of a small office there. We are very engaged with the council's plans for regeneration of the waterfront and things that were secured partly through levelling up funding. We are working with a number of potential inward investors and working on a new opportunity, hopefully that we will be coming just outside Stranraer and bring a new sector and new jobs directly to that area, but building on the sort of heritage and the industrial engineering heritage from having the shipping there. It is not always easy to have the geographic coverage, geographic spread. We need a lot of the value that we deliver through the expertise of people in our team. Some of our community representatives, enterprise and community team members, work with communities for 10 months to get them to a stage where they have a place plan or a funding bid or a concrete strategy for community-owned energy transition. It can take months, not just weeks. The businesses that we work with, sometimes the intellectual capital, that expertise, is as valuable as the direct funding. As far as I am concerned, we have to protect that front-line delivery. If we have to make additional cuts, we will have to look at where they come, but I do not want to decrease the service that we provide for companies and communities across the south of Scotland. That has to be sacrosanct. In terms of our remit and focus, we are very geographically oriented, so we have, as I mentioned, our eight area teams from Shetland down to Argyll. What we do with our budget is that we have a resource allocation model that puts about four times the per capita spend into the outer hebrides, for example, than the Inner Murray Firth area around Inverness. We are conscious of deliberately supporting the more fragile parts of our region. We have our area teams as well on the ground who are delivering locally both to communities and to businesses, and we would certainly want to protect those. How does our remit differ? We are definitely focused on the different areas of our region, making sure that they are all contributing towards a successful outcome, because we do not want to have a booming Inverness and a declining outer hebrides or declining Orkney. What we try to do is to make sure that the resources are spread around the region. That is not to say that there are big opportunities around the Inner Murray Firth that we do not take them, but our remit has to focus, and it has done, ever since the Highlands and Islands Development Board was set up on the more fragile and remote parts of our region. Those are the ones that we put in extra resource. We try to have more boots on the ground in those areas, and we try to make sure that we retain that support in the communities. That area, a bit like Jane was saying, is something that we will continue to do. I do not want us to retrench and become a very centralised organisation. That would be the wrong thing to do. We have to support our more remote and fragile communities, because those are the ones that are suffering quite significant. Economic disadvantage is a recent census figure that shows some big declines in population. However, we have also got huge opportunities in those areas, particularly around renewable energy, tourism and other sectors, food and drink. We want to make sure that there is a balance between focusing on opportunity and supporting fragility. How are you going to ensure that, as the budgets are squeezed, you do not pull in towards the central belt? Again, we have a very strong regional focus. Each of our leadership team has a regional responsibility in terms of partnerships, senior engagement, engagement with local authority partners, for example. However, we are very different organisations, and that is why there are three of us, because we have different remits and we were established for different reasons in the first place. We have a much more international focus in terms of our operations. We are all across the world. We have a different funding model. I mentioned the income that we generate, for example the activities that we undertake around internationalisation, around investment, for example. We are ahead of the population and business that we are not funded as well as the other organisations. We cannot deliver the same kind of service, because they have been put there for a reason, and that funding model has been implemented for a reason. We have to make the best use of the funding that is made available to us. If you look at what has been delivered in terms of the £85,000 jobs over the past five years, the £600 million of income that we have returned, the £2.5 billion capital investment that has been encouraged, the £8 billion of export sales, we have delivered good value for money, but we have a different focus. Where we have common aims, we work very, very closely together as well. I think that the system works. I would absolutely be protecting our international colleague base in terms of numbers and in terms of reach. We deliver a huge amount of value for that investment, and I would be again looking to protect our front-line services, whether that be internationally or the engagement that we do across the country. We are different, but we are different for a reason. Colin Smyth, do you want a supplementary question? The committee carried out an inquiry into the future of our town centres, which is a hugely important issue for our communities. We were in Dumfries and looked at a project partly funded by South of Scotland Enterprise, including the element of housing that I have to say, because of that social element, although I argue that housing is probably a big economic factor now. If I went to Ayr, Lanark or all those other places that are covered by Scottish Enterprise rather than South of Scotland Enterprise, I could not see the same types of projects supported by Scottish Enterprise. That is a fair observation. You do not have that remit, so you do not invest in those projects. Is that not a gap when it comes to your remit? It is a gap because local authorities have that remit in terms of town centre investment. We do not invest in town centre streetscaping or public infrastructure. That is not what we are for. The retail project, which had an element of housing to bring people in, to boost the economy of the town centre, is very much an economic project, but it is clearly outwith your remit. If we take the Ayr example, for example, the amount of jobs that we have created in the area—575 in Prestwick for Mangata, DSM in Del Rai, 300 jobs secured, the Aerospace Innovation Centre—we are very active in those regions, but we are active in the areas where it is our remit. We were funded to do that. I mentioned the funding model. We do not have the funding that is available to us to make those kinds of investments that you are talking about. We would not get the same kind of returns in terms of our remit scaling companies creating jobs that we would have if we put our money in that direction. However, there are local authorities who have that remit. In terms of cities, we invest heavily in the innovation remit. Again, that is our remit, which is the innovation ecosystem, and that spreads out. I mentioned the jobs that we have created locally in that area. We are very active, but we are focused on where we feel that we can add. I will give a brief follow-up on the revenue side of things. I know that my colleagues have a question on losses for companies. Given the challenges that you have talked about, the finance is probably a question for Jane, one of the observations that businesses and social enterprises and other third sector organisations make at the moment is when they approach South Scotland Enterprise. They do not have any revenue left as a phrase I hear all the time. Maybe it is a question for Anthony, maybe he keeps him awake at night. Is that a fair observation that your budget is such that your commitments are pretty much there that you will not be able to directly support as many businesses over the next couple of years, because your revenue is effectively already significantly committed? Definitely, budgets keep me awake pretty much every night with the challenges that we have, so I would have a degree there. In terms of the resource or revenue, that is a position that we have. That is something that we started with. We mentioned earlier in the committee about how we have had to go into quite a rapid prioritisation exercise of February last year. We started with quite a low baseline, and we remained that way. The organisations that you mentioned generally look for staffing, and that generally is resource. It is something that we are quite tight on in terms of our staff and then our fixed costs and then some of the strategic projects that we have invested in initially. What we have done to try and counter that and mitigate that is use staff in complement to go in and work with them. It is not a one-for-one substitution, and it is not exactly what they want, but to show them how they can progress on with the skills that our staff have. The companies do come to us looking for resource, and it is like the other agencies. It is incredibly tight. If we can do anything to move capital to resource, that would be really helpful for us as an agency, and I am sure for the other agencies. Brian Whittle, do you wish to address the question of losses just now? Can I ask all members to be brief, as I have other members who wish to come in following the question? I think that one of the questions that I was going to ask is about the risk of investment and how you manage that risk. In any investment, there is obviously a risk in your risk in public funds here. You fall between a stool of being risk averse and that over-committing, because if something goes wrong, we are going to jump all over you, even though it is part of the deal. How do you manage that risk, and how will the impact of squeezing the budget make you more risk averse if that was less funding? I will come to you, Adrian. If I could touch on one of the points from the last question raised, which is relevant to that as well, because one of the challenges around budget planning is the multi-year element of it as well. It can be difficult in this climate. Companies do not work within the annual budget system that we have, so committing over a number of years can be challenging for us in this environment. However, I am also aware that many of those companies may be watching this, and many of our colleagues will be watching this as well. I think that it is really important that we get a really clear message that our ambition for the economy has not changed and that we will always find the resources for good projects that stimulate economic growth. I would not want our people or the companies that we work with to think that they do not come and speak to us or do not develop new ambitious projects because we will find the funding somehow. On risk, because it is relevant, if we write off our resource budget, we are very focused on that in terms of what might come out of the other end of some of the investments that we are making at the moment. If they fail, that will come off a very scarce resource budget. Having said that, the area of the market that we operate in is at the risky end of the market is very early stage. We would not expect all those investments to go well if they were all going well. Our appetite for risk would not be high enough. I think that we have got it right at the moment. Many of the losses that will feature in our accounts this year were investments that were made many, many years ago. They will have delivered significant economic impacts over that period. It is not as if the money was not well spent. In some of those losses, those can be write-offs that we have made for a reason that we are to stimulate economic growth and ensure continuity of employment. For example, where a company may be owes us a debt and they are in difficulties, we are never going to get that debt back. But another company might come in and take over their people and their operations, and their debt might be written off in those circumstances. It can be a reshaping of our impact, but that will show us a loss. I think that we have got it right at the moment in terms of the investments that we make. I also bear in mind that we invest alongside the private sector. We do not make those decisions on our own, so we are matching the risk appetite, but allowing them to go further and to be a bit riskier in how they spread their investments. We can see that the investment funding that has been leveraged in over the past 20 years—£2.3 billion—has been leveraged into the system over the last 20 years. I think that we are about right. Good morning, panel. I have an open question for everybody. Scottish Government established a new deal for business group earlier this year, and it has once examined four key areas—economic conditions, economic performance, business environment and transition to a wellbeing economy. Given each of your agencies as close work in relationship with the business community, how are you going to support the Government's aims and improve the work in relationship between industry and the public service? It is a nice general question to throw out there, so who wants to go first? Happy to take that first jet. We have regular conversations with the Scottish Government team that is taking forward the new deal discussions. We can play a bigger role here and we have offered that role, which is to say, can we be more of a sounding board when policies are being considered at an early stage? Can we use the trust in relationships that we have with businesses to get trusted and frank feedback in terms of how that might play out? I would like to turn it around as well. How can we use our relationships to develop supportive policies that might help businesses to grow rather than just be a kind of guard for policies that might cause friction? I think that there is much more that we can do. Given that the Scottish Government is increasing its resource in this area, what we have said is that some training for our people in terms of how to have these conversations around policy development would be something that we could add to the mix. We have already had Dr Puno Malik down to a round table with local businesses a couple of months ago now. We have a close working relationship across the sectors that we work with in the south of Scotland. We frequently hold round table meetings where we bring together public and private sector and investors. We have done it in natural capital, regenerative agriculture, space and supply chain innovation and a number of other areas. It is an on-going iterative model for us. We are keen to be a facilitating organisation to take messaging directly to the companies that we work with and to take messaging from those sectors back to representatives from New Deal and other Scottish Government colleagues to feed directly in when we are hearing things of import. We also hold regular community and business engagement sessions. We hold them throughout our geography at least once a year. Those are attended by anything between 30 and 50 business and social enterprises. We also have quite good sector groupings, particularly around tourism and food and drink in other sectors. However, I agree with Adrian that it should not just be about what Governments are thinking and what they think of that. We should also be able to feed up ideas about how to improve the economy from the grass roots. I want to comment on the risk one as well. We have a formal approach to risk. We take risk appetite statements every year to our risk and audit committee. We get those agreed and we then make sure that all our team is aware of it. As Adrian said, we are in the risk business, but it is about being risk aware and not being risk averse, so I hope that that one helps. However, in terms of engagement, we are engaging with businesses. As I mentioned, we have between 500 and 600 client-engaged businesses and communities in our geography. That is a big wealth of businesses that we can work with in terms of the New Deal for Business group, so we are keen to engage. I have three specific questions, one for each of you. Jane First, South of Scotland Enterprise, you highlighted in your submission that you have invested over £10 million in 139 enterprises, which is about £75,000 on average per business. Can you tell me the importance of those investments into SMEs and the impact they have? It is massive. It is probably the simplest way of putting it. Sometimes some of the smaller investments are absolutely transformational and they are the catalyst for real growth, real product development, real exploration of new markets. Some of the smaller companies that we are working with have really transformed through those investments. An oft-repeated example would be Carbon Capture Scotland, which is one that we have provided expertise to as well in the form of Dr Martin Valenti, as well as a company-like acquisition in Scottish Borders that we are working with just now, who have an international marketplace currently but are on the cusp of developing a complete new product that will completely revolutionise the hydrogen supply chain. Those small interventions are just so important. They really are transformational. It is really inspiring to see a call one just after Covid that we invested in, which was basically making t-shirts to start with. We ended up giving them two extra lines and their business went from £1,000 to £40,000 to £50,000, but that is in a really small community. It had three or four jobs and that made a massive difference to the other end of some of the scales, such as at the Scottish Enterprise, where we leverage up and we might put £1 million or £2 million in against maybe £18 million or £20 million projects, but the ones that I suppose it gives us as a rural agency and a place-based agency are really inspiring stories, as those small ones, because you know the difference that it makes when you meet with the people and that personalisation you get from them in the story back really shows that the impact has been made. That is our client, so they are telling us its work. My second question is to Adrian in Scottish Enterprise. In your submission, you say that the way we work with companies will change and will be moving away from offering high volume of small grants to businesses. Given what we have heard about the importance of investing in SMEs and identifying those that can be scaled up, why are we cutting grants to small businesses? That is not really a change. That is a direction of travel that we have had for a number of years. It has been the small amounts of funding that we are evaluating. It just does not make the same kind of impact as those more transformative elements. It is about making the best use of the funding that we have in terms of economic impact. Quite often, the feedback that we have is that people make the biggest difference in terms of a smaller company. If you are an SME, for example, the ability to have somebody in Japan who can advise you on market entry in Japan, an investment adviser who can advise you how to structure your finances best, an innovation adviser that can be helping you with your product, that is an extended part of your team really. That can be worth a lot more than maybe a £25,000 grant for marketing development if you see what I mean, which might have been the kind of thing that we did in the past. I think that it is just about understanding when we make the biggest difference in channel funding in that direction. There was a UGov survey earlier this year, and I accept that its numbers are UK-wide, but it found that 40 per cent of SMEs had to stop or pause any area of their business duty. I lack of funding and they were struggling to get funding from banks. If Scottish Enterprise are not investing in SMEs or reducing their investment in the SMEs, where is the alternative funding to be fought? I would make the point that all the investment funding that I have mentioned has all been into SMEs, but SMEs are growing quickly. That has not been grant funding, but investment funding, and we have managed to leverage that through additional sources of finance. That is a piece of work that we would always be looking to do. We should not just be the funder of first resort, but the funder of last resort. We are, but we will work through the options in funding for companies that have a growth project. For companies that have strong growth projects, we find a way in the end, but we will not be the funder of first resort in those circumstances, we should not be. Stewart Highlands and Highlands Enterprise and the Air Submission Committee suggested that over a 10-year horizon, their activities will increase tax revenue by two and a half times. Can you tell us how you arrived at those numbers? Yes, I might get Nick to come in on that as well. We took three years of our budget and we then looked at what that generates. You will see from the figures in the report that we are generating around 1,400 jobs. We then use an average wage for those jobs. We can then work out the tax from each of those jobs. We multiply that over a 10-year period. We also include some corporation tax, albeit that is relatively modest. The main impact is the jobs that we create. You will have read that we are a fair work compliant organisation as well. We are looking to drive up wages. Low wages were mentioned as an issue in the south of Scotland that is similar in Highlands and Islands. Largely, it is a wage-driven equation, but Nick White wants to add to that. Yes, thank you. That was a piece of work that we did in response to a request in the Government, so it was done in fairly short order. We would not pretend that it is correct to the penny, but we think that it gives a sense of scale. The reason why the return is so positive is because most of our interventions with a third party or one-off spend can be a grant for 500,000. If it creates or retains, say, 10 jobs, those jobs are then in place for 10 years. You get a really good leverage effect. When we did the calculation, we were keen to include our total budget, not just the budget for the grants, but all our overheads and legal fees, because you cannot deliver the grant without all the supporting costs around it. We took our total budget to try to give a fair reflection of the return. As Stuart said, the figure is around 2.4 multiplier. Most of the return is based on the third party jobs, which is 90 per cent. There are other bits and pieces, but that is the key bit that generated the return for us. It is a fairly high-level piece of work, but we are confident that it gives an idea of a sense of scale. Given the importance of that reflection, South of Scotland enterprise agency would be considered? We took on board some of the work that Highlands and Islands has done, but we also had that return to do. I would say our level of maturity in terms of the calculations much earlier, given our age, but it is not a dissimilar approach. We have some of our insights people looking at that in terms of going forward and how we would look to calculate it and work with it quite closely on those kinds of things whenever we can make sure that there is a commonality, given the commonality between the agencies. I would say that we are just much earlier. Obviously, in terms of looking out over the piece, we do not have that historical trend that Highlands might be able to look at and then compare, so again, just an earlier stage for us, but a similar feeling and approach. Just to add to that, in addition to that work, and it is a good example of knowledge share and working together, we also have a small team internally looking at how we capture and measure the harder to quantify impacts, so looking at the wellbeing interventions, the social return and actually the generational return with some of our longer term investments with communities like Langham or Newcastleton, for instance. We are trying to find ways of quantifying the traditionally unquantifiable impacts that we make as an agency as well, because we absolutely have that tripartite focus on people's prosperity and place. Finally, Adrian, is that a metric that you guys will use? Our teams collaborate on pieces of work like this and their methodologies are similar, and our impacts are similar as well. I mentioned that figure earlier, of your five-year impacts on £900 million of income tax rates over five years, but we are following the same methodology here. It is imperfect. There are some assumptions that are always in those situations and that model will develop, but it is firming up as a pretty strong model now. Thank you, convener. Good morning to the panel. I just want to follow up the line of questioning from Gordon MacDonald and look at the whole question of the multiplier effect of investment in the enterprise agency. Maybe I could start with Stuart Black saying that you highlighted this issue in your submission, which is very interesting. We are about to enter a very challenging budget phase. We know that there are issues with the budget. The finance secretary has a lot of challenges to try to address. If the finance secretary has money to spend to support business, that could be spent in a number of ways. It could be spent, for example, reducing the tax burden, reducing business rates. It could be spent on the skills agenda through Skills Development Scotland. It could be spent on infrastructure improvements such as dualling the A9 or on ferries, or it could be given to the Scottish National Investment Bank, or it could be given to the enterprise agencies. What is your pitch as to why the money should go to you as opposed to any of those other worthy causes? It relates back to the question that came earlier, in that money into our organisation and the enterprise agencies as a whole does have a stimulus and a multiplier effect on the wider economy, which is quite measurable. Just as colleagues were mentioning about the direct benefits, when we go out and visit companies, they tell us the impact that our assistance has had on them in terms of their ability to grow. That is not to say that infrastructure does not feature, and it features heavily in discussions, particularly in island communities. Infrastructure is key. Road infrastructure is fundamental to getting goods to market and bringing visitors into the region. The direct investment into businesses has that multiplier effect. In fact, our tax take does not allow for them. We have not done as much multiplier impact as we could. If you look over time, we have done some work around strategic investments that we have made in different places. The impact is significant at a community level, particularly in island communities. Often, an investment in the central belt will have a huge ripple effect right through the area, and the impact can dissipate. However, if you invest in a big project as we are at the moment at Stornoway Harbour, putting in a brand new port facility, that is already having a huge confidence boost for that community. Cruise ships are booked in for next year. We have also supported the development of tourism businesses to support that sector coming in—a whole new sector coming into the Hebrides. I think that the impact that we have in terms of direct support to businesses is really significant on the economy. In franchise places, the support to communities in Shetland recently has a huge impact. A community now owns its own business park, it has a wind farm, it has a small port with fishing, and it is just transformational, that is in Yell, by the way, in Shetland. Those sort of impacts are tangible and noticeable, and in other spend areas it is not quite so direct. I think that it is not just the payback over time, it is the range of impacts that we get. I mentioned the five years of investment, a return of 85,000 jobs, a £900 million tax, £2.5 billion capital investment and £8 billion of export. That is a good return, and we return £600 million of that funding through income. That is an investment, it is not a cost line, it is an investment line. An example I would use would be Aberdeen Harbour, just opened their new South Harbour. We have been involved in that since the very early days of planning and through some fairly challenging times. I am confident that it would not be where it is at the moment without the funding interventions that we have made, and that will pay back over decades. We constantly have to make this case about the fact that this is an investment that we are making into the economy and we have to be really clear about our returns, but we are much better at that now in terms of expressing how that benefit flows through. Ultimately, what we are here to do is to drive up wages and deliver a more productive, better economy for people. We just have to be always on the case in terms of making that investment and always trying to improve our returns as well. That is a difficult one for me to answer because some of the investments that we make as Colin Highlighted are in projects such as Mid-Steeple Quarter, which are about regeneration, housing and retail. We are working closely with organisations such as South of Scotland to community housing and Homes for Good, which are currently Glasgow-based, but we are about to pilot the first outside of Glasgow social enterprise to tackle the private rented gaps in the South of Scotland. We have fundamental infrastructure challenges that make our effectiveness as a development agency not as good as it could be because we are looking at housing right across the South of Scotland. As you know, we are looking at infrastructure. We have significant public transport infrastructure challenges across the South of Scotland. It is very difficult. If you are a young person in the Borders who lives in Imouth, it is a six-hour round trip to get a bus to the Borders College. We have to find a way of tackling those things and we have to find a way through. Having said that, we continue to work with partners to invest in those things. We continue to work with the Rep to lead on the transport skills and housing groups. We are looking at how we can directly intervene in some of those areas. As colleagues have said, the interventions that we make are financial and intellectual. The expertise of our team is also transformational. We are working with, I think, 679 businesses across the South of Scotland at the moment. Some of the investments are of more significance as well, Anthony. Do you want to? Just in terms of bringing money in, a couple is an example that we were very much the last funder but also to get the deal over the line. Forest Holidays, a £4 million investment for us, £18 million from the company. Tweed Forum was £4.5 million from us but £22 million. Sometimes just to get that, if there was a pitch, that brings a huge amount in on the basis of a smaller investment for us. Similarly, we have not quite as impressive as Adrian's figures but 590 jobs created in 562 safeguards. Again, we are, like Adrian's talking about, the longer-term transformation or generational returns. We are very focused on what other colleagues are talking about in terms of the hearing now and what we need to do to bring money in, leverage and get the traditional metrics as well. We tried to balance both. I have Maggie Chapman to come in with some questions but Kevin Stewart, if you have a supplementary if it is brief, I can let you in. I have a number of quickfire ones. I will go after Maggie, if that is okay with me. Thanks very much, Claire. Good morning to the panel. I am sorry that I cannot be with you in person today. I just want to pick up on a couple of points and explore a couple of things in a little bit more detail. Adrian, in some earlier comments, you talked about the energy transition being one of the key priorities and that you were taking a mission-based approach to that. I was wondering, could you just outline a little bit about where you see the challenges particularly as far as supply chain issues go? We have heard conversation this morning already about skills gaps and that kind of thing. I am just wondering around the readiness of Scotland's supply chain and the work that you are doing across the area with that particular mission-based approach for dress transition. Critical elements of the mission-based approach will be led in terms of bringing all the support across our international operations and our people across Scotland to bear in a systematic way. Looking at issues such as the provision of commercial infrastructure and business property, do we have the fabrication properties? Do we have the space? Do we have the funding models in place that are going to ensure that we can land all of that investment here? It is going to be one of the areas. Skills are a critical factor as well, so that regional skills planning around the free ports, for example, is absolutely critical. We have a very strong inward investment pipeline in this area, but it is a pipeline at the moment. That pipeline needs to be converted and we are seeing some of that come forward. Stewart mentioned Sumitomo. We have a huntist in the prospect of XLCC's investment, 900 jobs and a huntist in a very big investment. That will be very dependent on a very supportive landscape in terms of renewable energy investment. We have seen recent developments in terms of the lack of awards in the recent allocations for offshore wind investments, for example. Those are factors that will play in terms of how quickly that pipeline gets converted into real jobs landing here. The other dependencies are things such as grids and consents. We need a very co-ordinated approach in terms of understanding. Is there a very clear build-out programme for offshore wind or hydrogen infrastructure? Is that going to deliver on what we want as a country in terms of not just the security of supply but economic impact? We have a greater challenge around the domestic supply chain, and that is what we are gearing up for. We are aiming to support 1,000 companies over the next three years to be prepared and investing in offshore wind and hydrogen supply chains. The quicker we can reach certainty over when the projects are going to land, the quicker companies can know when they are going to get a purchase order and who their customer is going to be. That is where we can, in the middle, work with the developers, with the tier 1 suppliers and the supply chain to make sure that that is a very co-ordinated approach. The numbers here are big, which means that the challenge is quite big. That is what we are gearing up for. Our response has to be big, too. That is helpful. One of the challenges is that, with the interim targets of emissions reductions, it is not only about energy generation but about other aspects of the energy economy. I suppose that, again, specifically with the focus on supply chains, how do you rate the readiness of areas such as construction, transport and elsewhere to reduce energy use in the first place, heating buildings and so on? Where are the challenges and what do you need to see from Government to help to support all of that work? I would say that there are some very good examples of companies that have taken very big steps in terms of their carbon footprint. We work with me. We have supported many of those companies to do that. There are a lot—mainly—smaller companies who have found this much more challenging in terms of identifying a kind of route forward for them, how they will reduce their footprint. We have introduced, for example, the online diagnostic, which is available across the country. Companies can take their first steps in terms of understanding how they might reduce their footprint. There is a follow-up support that we can bring around that through specialist advice or funding in order to make some of those improvements. We have things such as the Scottish Manufacturing Advisory Service, which are advising companies on how they can lower their emissions. There is a range of things going on, but I think that the figures would indicate that many, many more SMEs in particular need to have a clear way forward in terms of how they are reducing their carbon footprint. There is more to be done. I think that the resources are there. It is not just Government, and it is not just us who are involved in this. The banks are very much involved in advising customers, so there has to be a really strong collective effort here. There is much more to be done, which would be my summary. I would also add that this is opening up very strong market opportunities for companies. Many of the companies that we are investing in now are facing directly into global markets that have been opened up around low-carbon, so we are, through a Scottish company, Emergency 1. In Ayrshire, we are exporting electric fire engines across the world and intelligent growth solutions. We are exporting vertical farming equipment across the world, so there are some very exciting opportunities here, as well as no shortage of challenges. Jane, if I could come to you. It is a similar question, I suppose, but you talked earlier also about that challenge of scaling deep. It is not only about scaling up, it is about scaling deep. Quite often, a genuine community benefit and sustainability can be built in as part of that scaling deep. Thinking about the organisations of companies and businesses that you work with and support, are there supply change challenges that would support those kinds of approaches that are deep-rooting and embedding for companies? Would that focus on the eye on the climate emissions reductions targets by 2030? As Adrian said, we are seeing companies pivot to fill some of the gaps in those supply chains and the supply chain challenges. We have a net zero nature and entrepreneurship director and team within SOCI. Within that team, we have people who do nothing but advise, support and help businesses, identify opportunities and face some of the challenges. We have a shared resource with Zero Waste Scotland, who is wonderful and is completely dedicated to helping companies to identify entrepreneurial opportunities in the circular economy and the circular economy supply chain. We have a community wealth building lead who does nothing but focus on the community wealth building opportunities that we can leverage from commercial opportunities and from community-based ones. That team has also commissioned recently the bigger report into community benefits and how we can take a more strategic approach to leveraging community benefits across the south of Scotland from renewable energy, not just wind but looking further ahead at forestry and other areas like that. There are challenges, but, like water, we have companies flowing in to take up that space and to look at how we can address those challenges. Are there barriers? Are there some of the challenges that the Scottish Government has a role in alleviating and are they doing what they should be doing in that sense? We have a very transparent communication with our sponsor team and a number of Scottish Government colleagues. When we come across specific areas where we need additional insight, support or expertise, we use those channels very quickly to see where things can be done to help to alleviate some of those pressures. Sometimes there is little that can be done at a Government level. Adrienne mentioned energy before. We were working with Gretna Green Group when the energy crisis hit and they saw their energy bills 400 per cent increase. We had team members and partners working with them and they managed to reduce their energy consumption by 30 per cent within weeks. Again, there was nothing that could be directly done, but by leveraging support from partners and other organisations and getting teams in there directly, we managed to make some direct interventions. Stuart, if I could come to you earlier, I spoke about the regional economic partnership and the different areas of work within that. You mentioned housing as one of the key challenges. It is well known that housing challenges are in highlands lines in other rural areas, too. Where are the supply chain challenges for you in that? I suppose that, particularly thinking about the targets that we have not only for climate emissions reduction but also for improving homes, the standard and quality of homes, the energy efficiency of homes, the heat retention of homes, those kinds of things. Where are the supply challenges and where are the barriers to getting better at that? I think that a lot of it relates back to questions around skills and also the construction sector is affected quite significantly by labour shortages. There are a number of issues for rural homes delivery. One of the challenges is that the bigger volume builders will look at towns and cities but do not go to rural areas because they do not get the economies of scale. The similar things apply with greening and achieving the just transition in more rural places. It is easier to do a whole housing scheme in a city location than to do multiple small individual homes in a rural area. I would say that we have done some very practical things. We put in place this year a £2 million green grant fund that is designed to help companies reduce their emissions but also designed to help companies to look at opportunities. As Adrian has said, there are huge opportunities there. The offshore wind sector, the floating offshore wind sector, £28 billion of investment coming to Scotland being spent in Scottish waters. We are already working, for example, in Shetland and Orkney with the supply chain so that the main contractors are attending events that we are helping to facilitate, often with the local authority, to show the opportunities that are there for businesses. Huge opportunities here but challenges around the capacity of the construction sector, particularly because of labour supply, but also skills and the need for colleges in particular to look at training more plumbers, training more heating engineers and getting more and more of those people into the market. I think that the Government question really has to be one around certainty. If Government can make it clear that these targets are coming and here's how they'll be delivered, then I think that the activity will happen. It's uncertainty that creates the challenge of, even if it's an apprentice thinking, will I go in for that or not? If there's certainty about this is definitely happening and funding streams there, then the investment should flow. One final question, and back to you, Jane, if that's okay. I'm sorry if I missed this earlier. SoC don't currently set measurable targets on certain things, like jobs created, investment drawn into businesses and carbon saved. Can you just give us a little bit of context for that and whether you've got any plans to change that in the future? Yes, that's the short answer. We have, I mentioned earlier, set up a performance measurement team small, perfectly focused. They'll work with our insights team, so it will not just be internally focused, it's helping. We had a shortage of South of Scotland specific data right across the region. Extrapolating it from national data wasn't giving us what we needed at all, so we're trying to make sure that we've got the data that we need externally as well as internally. So yes, we are looking at all of those as well as those targets that I mentioned earlier, which are non-traditional. So we're developing both now. I don't know if you want to add anything. No, I think it's just a maturity thing. So we've, in terms of talking with Audit Scotland, we've recognised that and the measures that Jane's talked about that we've put in place should see those targets coming through quickly. And sorry, I should have said that Stuart reminded me. One of the other things that we also did was set up a net zero innovation fund, as well as a community ambition fund and a number of others, but to address some of the challenges, Stuart, that you highlighted in that just transition space as well. Sorry, just in terms of the challenge, just to answer your question as well, I think there was an Audit Scotland report and it goes to Stuart's points directly. I think the construction sector in terms of labour and skills shortages, so that is a big barrier in challenging and it can spiral from there. So I think if we're one to recognise Audit Scotland's pointed that out quite strongly already. Okay, thanks very much. Thanks, Clare. Okay, thank you. Convener, and a few quick questions. There has been an emphasis on supply chain and one of the things which we can do is to change supply chains and stop imports. And let me give you an example of where that can be done and where we can take real opportunity from academic research that has been done here in Scotland at the moment. So I think it was Adrian that mentioned vertical farming. Obviously that is a growing area. Berry farming is already huge in Scotland. We import a huge amount of coir, coconut product, to deal with vertical farming and berry farming. Meanwhile, there's academic research going on here at the Rowett Institute in particular around about the use of hemp. How do we make sure that that academic research becomes a reality and what can you do to influence those changes in supply chains to ensure that we're importing less, which is much better from a net zero point of view? And it gives the opportunity for growth here in Scotland. So maybe Adrian first, please. Sure. I spoke earlier about the commercialisation work that we do with universities that takes these ideas out of universities and creates strong high growth companies from them. And intelligent growth solutions, I mentioned vertical farming would be an example of that. We've used our photonics expertise, our data science expertise and our knowledge of crops and crop research and combined that and come up with something that's really, really special. So the work that we do in partnership with universities and research institutes to make that happen is really critical. There are other ways that we can do it as well. So, for example, we work really closely with the James Hutton Institute around their crop research work, in terms of creating the infrastructure around that that can spin out more companies that can release more of that into the economy and that's going very well, actually. Another area would be around medicines manufacture as well, the funding that we and others, mainly the private sector, but with our funding to support it, has created the Medicines Manufacturing Innovation Centre at Inchinnon. The work that they are doing is about new ways of manufacturing that will be much more local and will bring manufacturing of pharmaceuticals-related medicines back into Scotland. So a lot of that work is going on and I think that that's an important role that we play in terms of fare and port substitution. I think that it's really exciting to hear about some of those things. We're doing a lot of work. We've mentioned dairy with SRUC around the dairy innovation centre and dairy nex as partly supported by Borderlands and Scottish Government. We produced two thirds of dairy for Scotland in the south of Scotland, so this is a hugely key area for us to look at how we make that sustainable and regenerative. We support the different types of dairy farms that we have across the south of Scotland. We've been doing that in conjunction with international experts, with people who are farming and with Scottish Government colleagues to make sure that we have that in the round. Hemp is a really interesting one and we've been investing in a number of companies. In the nature, we mentioned earlier, who take hemp and produce carbon zero insulation that has a huge part to play in the retrofitting and future building processes, but we also have Medjikan and Hilltop Leaf, who are two medicinal cannabis farms in the south of Scotland, one using a traditional method and one using a vertical farming method. We are also looking at how hemp production can be developed in the south of Scotland. There are a consortium of farmers who are actually leading that one at the moment and I hope to be licensed to produce hemp locally, because apparently our climate is rather good for it by next year. I was going to a huge degree in the Middle Ages, as is my understanding, and it seeks up carbon dioxide. It doesn't have to be the hemp example. I was going to give examples of how we work with universities, particularly the University of Highlands and Islands. We've got life sciences focus around Inverness, where we've got life scan, who actually make a third of the world's diabetes test kits in Inverness, so one of the big export successes for Scotland. Around that, we've built quite a lot of incubator space, so Adrian was mentioning spin-outs, so that they need somewhere to be. We've got spin-out space in Inverness, which is associated with life sciences. Down at SAMS in Obann, we've got a focus on the blue marine economy. A lot of expertise is coming out of there, and we're thinking about another second phase of our European marine science part down there. The last point that I was wanting to make was about ORIC in Orkney, which is a joint venture with the Orkney Islands Council. That's designed to get the expertise from the marine sector into new businesses and create new economic opportunities there. Those are three examples that fit very well with Scotland's innovation strategy, which is about linking business, academia and the enterprise agencies to create a virtuous circle of investment opportunity. Import substitution, the last point. Sumitomo is a really great example of that. There is a danger that all of the cables for the offshore wind sector in the UK are going to be imported. Sumitomo, Japanese company, working with SDI, is coming to Scotland to make those cables here so that they're not having to be imported. More of that, please. You all mentioned hydrogen, which obviously has huge opportunities for us here in Scotland, particularly in the export market to the likes of Germany. We have our hydrogen strategy. We also have some expertise already in Scotland in terms of transport in my neck of the woods in Aberdeen. What are you doing? Does it fit in with the hydrogen strategy? Are you speaking to the other experts in terms of the formulation of your future investments and what needs to be done differently in terms of making things easier in terms of those future investments? We have a head of energy transition, Paul Healhouse, who some of you may know from his former job. He's been leading this work for us. It started with a report done probably three years ago on powering change and has transformed into our energy transition strategy. We've got our second hydrogen brokerage event on 10 October in Newton, St Boswell, if anybody would like to join. The first one was a revelation. People were not sure that the south of Scotland would attract many interested parties. We had 150 delegates at the first one, and we are on track to have many more. There are a number of very active companies from Cochran's boilers who are testing hydrogen boilers in the south. They supply both the houses of Parliament and most of the whisky distilleries right across Scotland. They are trying very hard to make that leap. The biggest challenge for a lot of the innovation that we have in the south is the hydrogen supply chain, which has been recognised previously. We are working, as I mentioned, with companies that can bring a part of the jigsaw puzzle to unlock that hydrogen supply chain. I think that there are great examples, such as David Amos' company, which has gone completely blank on the name of the company. That's terrible, but they are producing renewable energy in the Highlands and Islands using that to power hydrogen boilers. Storago is the company? No, plus zero. It's fascinating, and we can tell us later. Instrumental in Edinburgh festival and events across Scotland are now bringing the hydrogen generators to play there. I'm sure that it's plus zero. The work that we're doing is very much aligned with the overarching national strategy, as you would expect, given who we have leading it. For us, it's absolutely critical. We have 28 per cent, I think, of renewable energy being produced in the south of Scotland now. That is a major area for growth for us. The redevelopment of the former nuclear site at Chapel Cross, CX, is going to be one of the key areas where we build this energy transition model. Maybe, Adrian, before you come in, you said that Aberdeen Harbour, the south harbour, should do us a turn for decades. I hope that it's centuries. After all, Aberdeen Harbour is the oldest company in these islands, founded in 1136. Anyway, hydrogen. Yes, absolutely. Hydrogen is a critically important, huge opportunity. I mentioned offshore wind and hydrogen, and there are two big areas of opportunity for us. We have done a lot of work in mapping the supply chain as well. Hundreds of companies in Scotland map on to that supply chain that could be. There are 100 projects happening. What we need to do next is to start generating hydrogen at scale. We need a clear plan about what the energy sources of that are going to be the green energy sources. Internasily, we are very much viewed, and this is from investors that I have spoken to, utilities in Germany and investors in the US. We are very much seen as having a very strong advantage here. There is competition in this area, but we have a strong advantage and a proximity to Europe is absolutely one of those. Generating at scale, getting the first scale hydrogen generation projects up and running, the infrastructure to get that hydrogen, we will use it for our own uses, but we will have the ability to generate significant amounts of hydrogen that we could be exported. How that reaches mainland Europe, the pipeline development is again something that is very much on our radar working with partners. The next zero technology centre has done some feasibility work here in terms of how that might happen. And again, import substitution, making sure that we are manufacturing the equipment for hydrogen here. So, electrolyzers principally, we have a number of electrolyzer manufacturers in our investment pipeline at the moment that we are encouraging to come and establish their operations here. It would be interesting to hear more about that. You can maybe send me the detail. That would be wonderful. Stuart, please. Yes, particularly green hydrogen is a huge opportunity right across the highlands and islands. There are projects from Shetland down to Argyll. A lot of it is associated with the transition for places like Sulunvo into a greener future and the similar thing in Flota. There are projects in Shetland and Orkney. The outer hebrides, because of the cable that is going to the outer hebrides, is already pretty full with wind energy development. That is an area that has been looked at for green hydrogen production, particularly the offshore wind farms to the west of the hebrides. The Inverness and Cromarty Green Freeport, company Storega, I mentioned, is involved in that. That is particularly green hydrogen production. The whisky industry has a huge issue around decarbonisation, and the whisky industry could be a huge source of demand for green hydrogen from our region. Like Adrian Smith mentioned, the net zero technology centre, we have been collaborating with them, but we see green hydrogen production as one of the three big economic opportunities for the islands and islands. We are very strongly focused on that. There is something like £25 billion of potential investment, so it is a massive opportunity. That is again a good example of an area that we are collaborating across the three agencies. The question for Jane and for Stuart, because you have both mentioned it and others have mentioned it during the course of the day. That is housing stopping growth, or the lack of housing stopping growth. As a former housing minister, it annoyed me greatly that some of the areas that you currently cover in terms of Sosia and the Islands and Islands Enterprise are council areas that did not spend their resource planning assumptions and that I had to take away and give elsewhere. In terms of those discussions with local authorities around about the housing needs to boost the economy in certain places and to boost sustainable growth, how do you feel? Do they listen to you in terms of those things, or are you largely ignored? Yes, they definitely are listening, and they recognise that it is a huge challenge. I think that some of the delivery questions are back to the issue around construction supply chain and the ability of them to let contracts and have contractors available to do the work, but they are listening. It is not just about affordable housing, by the way. It is also about mid-market rent housing. It is about the whole range of housing that is needed to fuel economic growth. Those opportunities that we have, particularly in our region, will not be fully realised if we do not have the people there to do the work, so that is why it is so fundamental, but they are definitely listening. I agree with what Stuart McMillan said. We are working in partnership with both of our councils exactly on that. Our chair has taken responsibility and was given some direct responsibility by the former Deputy First Minister at the Convention of the South of Scotland, not the last one, but the one previously, which was entirely focused on housing. We are working directly with both councils to look at what can be done collectively. We are working with all seven registered social landlords in the south of Scotland to look at aggregated power to tackle some of those supply chain challenges. We are also looking at the building of new homes. We are looking at modular construction. We are looking at the private rented sector, as I mentioned, with the first homes for good pilots. As Stuart McMillan said, it is every type of housing that is needed, but we are very much tackling it together. The final one, which would just be yes or no, is around about, obviously, we realise the constraints that there are in your budgets. We have growing inequalities in society. I take it so that you will be doing all that you can do to ensure that there is growth in the more deprived areas of our country and a focus on getting rid of those social inequalities. We have heard some examples today, but I say yes or no, Jane. Thank you very much, convener. Just one final question. The Annas Stuart review was reported earlier this year. We are still waiting on the Government's official response. The committee often hears that, in terms of women's entrepreneurship, the current investment and support landscape does not meet the needs of women entrepreneurs or women who are looking to grow their businesses. Do you want to come to Adrian first, but the response of the Annas Stuart report and what Scottish Enterprise is doing to support women in business and to encourage the growth in that area? Sure. We have been doing a number of things over a number of years to try and increase the participation in some of our programmes around entrepreneurship, but we are developing a new programme that directly responds to the Stuart review, which addresses some of the findings such that there are enough role models, mentoring support, that the pathways into investment are not clear and sometimes do not favour women who are wanting to invest, and there are going to increase links between the cohort that we are bringing on to this programme and not just investors, but the whole support that wraps around it in terms of internationalisation support, so we will be launching that soon. That is a direct response to the review. Stuart Jonathan. It is quite interesting. We did a bit of work on our customer base. A round about a third of the businesses and community organisations are women chief executives or led by women, which is, I think, quite encouraging. We obviously want to get that higher, but in terms of our management and leadership training, more than half the participants over the past year have been women on those courses, so we are definitely doing some work. I have got several of my directors, four of them are female directors in the organisation. I think that, by making sure that we use case studies from our courses and things that promote the diversity of people in the region, I think that that also helps to encourage more people along. However, our recent management and leadership has been in the majority of women on those courses, but it is about 60 to 40 per cent. There is definitely more to do, and I think that a lot of it is about confidence building. There are also some practical things around not just affecting women, but child care in rural areas is a big challenge. I think that there are some practical things to do, but we are very firmly focused on making sure that women entrepreneurs are supported properly in our region. Back when Mark Lugan was doing the stair consultation, Dr Poonam Malik, Wendy Laban and I fed directly into Mark about the need to focus on underrepresented founders. Women were one of the groups, but not the only one. I think that we still need to broaden that focus into all underrepresented founders. However, because it is a priority for us in South of Scotland Enterprise, we have got a team out delivering that now. If you look on social media, you will see that we have live women enterprise events. We have specialist coaches to work with women entrepreneurs, and the feedback that we are getting is exceptionally strong. We are seeing an increase in attendees, and we are seeing an increase in contact coming through both the core team and our business gateway. The team is there as well. SoC is over 60 per cent female at the moment. We are putting our money where our mouth is on that one, and we will continue to look at other underrepresented groups and the support that we need to deliver to them next as well. Do you think that, in some ways, it is easier for Howards and Islands in South of Scotland to direct support more towards women entrepreneurs? I know that you all work in partnership, but you tend to be working with smaller enterprises while you are working on a more international global stage. Is it more challenging and how do you do to overcome those challenges to see women in areas that are higher growth and bigger export in businesses? I do not think that it is more challenging in the entrepreneurship area, because our figures would not suggest that. I mentioned recent entrepreneurship programmes that we have been running that we have had at least 50 per cent representation from women in those programmes. We have worked with over 750 women in entrepreneurship since 2019, so our reach into the community is very strong. We do that through our own company connections, but mainly through our connections through the investor network and the wider ecosystem, and that is very well developed. Accessing potential entrepreneurs is something that we can do. Thank you very much to the witnesses this morning for your evidence that will help to inform our budget, pre-budget discussions. I now suspend the meeting and move to private session.