 Godlike, sector judge introduction gentlemen, Welcome to this, the 28th meeting in 2015 of the economy energy and tourism committee Can I welcome members? We're witnesses and they're in the gallery and can I remind everyone please to turn off or at least turn to silent on mobile phones in other electronic devices so they don't interfere with the sound equipment? We have apologies this morning from Johan Lamont and Chick Baroddie and we have two opponents running late Patrick Harvie and Jonathan McArthur are Ihave time to say quickly. In Baroness noble, we are continuing to take over evidence in relation to Scotland's budget and are conducting pre-budget scrutiny. We are hearing today from to enterprise agencies. I would like to welcome to the first panel Alex Paterson, the chief executive of Henlach leader of finance and corporate services. We have about an hour for this but we need to suspend at around 10.45 for the remembrance commemoration. I think that members want to cover a number of issues at that time. If I can remind members to keep their questions as short and to the point as possible and answer them as short and to the point as possible, that would be helpful in terms of covering the topics in the time available. Rwy'n fawr i'w d leverage m ничего o'r byd i ddefnyddio'r byd, ond mae'n ddig parti gwahanol i ddefnyddio'r byd. Rwy'n ddigardsio'u byd i ddefnyddio'r byd, gydych Fanisgrifolol y mae anodd amariad. Felly, mae'n ddigardsio diwrnod i ddefnyddio'r byd. A fyddwch yn feddlist i ddefnyddio'r byd i ddefnyddio'r byd i ddefnyddio'r byd i ddefnyddio'r byd. Rwy'n ddigardsio'u byd i ddefnyddio'r byd i ddefnyddio'r byd, gyda'r byd i ddefnyddio We will thank you for the invitation to meet you again. Good to be here. You are right that we are in a slightly different, unusual situation this time of the year in the sense that we do not yet have a budget for next year. I guess that there are a number of things that we are doing to prepare for whatever budget might come our way. Then there is the process that you outlined, which I will mention. In terms of the budget, we do not know what our budget for next year will be. gan y ddychoedd o'r plan ffordd yn cael eu bodd panneu i ddyn nhw i 16, 17, 17, 18, y dywedig y celf o'r gweithio. Felly, rydyn ni'n rhoi dweud i ddweithio'r bobl sydd i'r agosod am gyd yn ei wneud i ddodd a chyflodd yn cyffredinol. Rydyn ni'n gweithio'r plan a'r diolch o ddim yn gweithio'r gweithio. O'r proses, rydyn ni'n gweithio'r ddweithio'r sponsor team over the coming weeks, leading up to the budget announcement to get clarity on what our 16-17 budget will be. That will then form an integral part of our business planning process for 2016-17, which the High Board will consider in the new year and leading up to the publication of our operating plan for the year, hopefully by the end of March next year. We are in a high-atis position of not being clear. Clearly we have quite a number of commitments because in the business that we are in, you make commitments that are multi-year, so we are carefully managing those at the moment to make sure that whatever scenario emerges from the budget discussions then we are well placed to handle. Before we want to say a wee bit more detail on that from the finance point of view. I think really where we are in terms of, as Alex said, we have run some scenarios in terms of budget alterations which we came our way. The reality is that over the past ten years HIE's budget has had a degree of volatility in it, so we are used to both budget increases and budget reductions, so we will adapt and manage to the process as we can. As Alex said, we have a number of large projects and we have numerous small projects, and we work closely with our clients, particularly the large ones, in terms of the phasen of those projects, the phasen of expenditure, so we can build some flexibility into our budget as required. The committee will also be aware of issues at the strategic forum savings, which are a regular feature in our discussions. We have delivered those over the past three years, and indeed a number of those savings are re-carrying. In expectation of a new budget that it will not have strategic for the savings perhaps, there is a re-carrying element already built into our budget that we would hope to use for expansion and development, which could be used to cover some cuts. We have a number of plans and thoughts in our minds, which may be required if the budgets are reduced in any way. Thank you. Just looking at your financial overview, there are four key strands of spending, supporting businesses and social enterprises, strengthening communities of fragile areas, developing growth sectors and a competitive and low-carbon region. If there were a substantial change in the budget, either up or down, are there any of those areas likely to be more or less affected by that? There are two thoughts on that. There are certain things that are easier for us to flex, so large projects, particularly those at our own hand, ones that we are delivering, there is more scope to flex or to phase than those projects led by the private sector that we have already committed to. Of those categories, probably the bottom two are the ones where we have got more scope to tweak things ourselves. Having said that, however, one of the things that I remember saying to this committee many years ago, one of the things that we are trying to do is find alternative sources of funds as well. We have new structural funds and programmes coming through, which we will be using to invest in a number of activities. We are investing in new ways of delivering some of our services, so one of the things that we have done over recent years is to make a very significant investment in digital technology. That is having a big impact on how we deliver our business and how we effect savings in terms of our operating costs. However, in terms of your general question, the ability for us to tweak or to adjust budgets will be largely around large projects that we control the delivery of. I wonder if I can ask another question on a slightly different topic. The committee has been doing an inquiry into fair work, looking at quality work issues, wages, terms and conditions and so on. We have just concluded taking evidence on that, but one of the interesting issues that has come up in relation to that whole inquiry is, to what extent enterprise agencies look at those issues when they are agreeing to support projects, for example, from foreign direct investors. Is it something that you have come up against as an agency? Is there any particular view that you have in terms of when you are looking at a potential foreign direct investment, or not even a foreign direct investment investment from anyone in the area? Do you look at those quality of work issues? Does that affect your judgment on whether or not such projects will get support? Yes, we do. It is not just about creating jobs, it is about creating quality of jobs. One of the indicators that we monitor is the salary levels associated with jobs that we support the creation of. We know from our analysis of that that the jobs that we support are at a higher level than the average salaries for jobs across the region or in the localities in which they are based. There are some industries where clearly the wages are lower than they might be, but as an organisation, we are definitely focused on creating jobs that are good quality jobs. I guess that the increased focus on fair work with the business pledge and the whole inclusive growth agenda has even more focus now than arguably had in the past. It is very much part of what we do. All our account managers, dealing with all their account managed companies, are active in bringing to the attention of their business aces and social enterprises and communities the fair work agenda, the business pledge and its obligations. It is absolutely the heart of what we do. Thank you. That is helpful. I want to bring in the information. Good morning. Maybe just to follow up before I go into one more question here. When the convener was asking about the areas that you look at before entering into contracts, do you look at companies that would be possibly trying to ensure that there is no one using zero-hour contracts? Again, do you look at some of the ethical questions around support, especially within the foreign investment? Yes. In terms of the zero-hour contracts as an employer, we have no zero-hour contracts and, as part of the business pledge roll-out, zero-hour contracts are an important part of that. The whole fair work agenda and its various dimensions are an important part of what we do. In terms of the ethical, I cannot think of a situation that we have had in recent times where the ethical issue has arisen, in the sense that there has been potentially activity that we would think would be questionable to support. I am not sure if the force can think of one either, but certainly it would be a factor if it arose. I am going to ask you. You have ambitions to still be a leader with regard to marine technology, both offshore and wind-wave tidal. Perhaps you can maybe explain it just a little further in terms of what your ambition is in meeting your targets, especially in the low-carbon area in your statements and the evidence that you have submitted. I might outline any of the challenges that you have, because it is an area that is still subject to a lot of challenges at the moment. We have had to view for a long time that Scotland and the north of Scotland is incredibly well positioned in the whole marine renewable energy sector. We have seen in recent times that the speed of development, the speed with which things come through, has probably taken longer than perhaps we all anticipated. However, we are still hugely committed and hugely positive about the marine renewables opportunity. For example, the investment that has been made by us and others on ports and harbours and infrastructure across the region makes it incredibly well placed to handle the offshore wind projects as they build out. Many others have invested over many years in wave and tidal developments. You can see the major in-project building out in the Pentland 1, the first commercial tidal array, which is fantastic news. We have had some bumps on the road with wave, but we have created Wave Energy Scotland, which is now supporting innovative investment in wave technology, which, in turn, or in time, we hope will lead to commercially deployable devices. We remain committed to and optimistic about the prospects for marine renewables. The challenge is just now—maybe there are two—one is a timescale that is taking for all of us to move forward, but there are some reasons for that. The second challenge is the regulatory environment, in which all of this has been taken forward with renewable obligations and the lack of certainty of when the options for contracts for difference and feed-in tariffs might come in. That uncertainty is undoubtedly affecting some of the thinking at the moment. On that side, we remain optimistic and committed to offshore wind opportunities, which are imminent. We can see that the tidal device is being deployed. Wave Energy Scotland will have to take a step back to move forward over the coming years. That sounds very challenging. You mentioned the renewable obligation here. Has the announcements from the Westminster had discussions with any potential investors that have made a decision not to invest because of the uncertainty or because of the announcements with regard to the renewable obligations? I cannot say that I personally had discussions with people who have decided not to invest. I have had conversations with businesses who would just like there to be certainty. Even if the regime or the environment that we end up with is not one that we particularly want or like, at least we are clear what the framework actually is. It is the uncertainty that is the issue. The sooner we can get clarity on that, the better. I am not aware of people deciding not to invest. It is more a case of sitting still a wee bit until we are clear on what the environment might look like. What can you do to attract investors at the moment, given that the recent announcement from Amber Rudd that there is a possibility that there may be supporting renewables outside the UK but withdrawing the obligations within the UK? Clearly, we would want there to be some certainty around what the UK situation is. What are we doing? There are many organisations. Some in the Beatrice field will be built out. There are others looking at the moral project that would benefit from a contract for difference auction. We are continuing to work with these businesses. We are doing a lot of work on supply chain and helping local companies to be ready. We have invested, as I said a minute ago, with others in significant infrastructure projects. When decisions are taken, we are ready to go. Nothing else really needs to be done in terms of major investments. The facilities are there, such as at NIG, such as at Invergordon, to take advantage of these opportunities. Clarity in the regulatory regime would be helpful, but that is a wee bit out of our control but, clearly, my energy team and other Scottish Government ministers are picking that up with the UK Government. We continue to work on the basis that good projects of their dispositive decisions will be taken. We want to make sure that Scottish companies and Highlands and Islands companies and facilities are as well placed as they possibly can be to pick up that business. Excellent. Just with regard to the budget, how much have you currently invested within the last budget year and how much have you prepared to invest in the forthcoming 2016-17? In energy. We have that figure. Through Wave Energy Scotland, the figure that we are talking about next year would be £13 million. There are a number of other projects in renewables as well, which I do not have exact figure, but it is probably in the region of £5 million, £7 million, which is quite significant within the scale of budget that we have. Within that renewable area, in terms of the spend, are you looking at onshore and offshore investment? Our investment in energy is going into either businesses in the sector through our business support, or it is going into infrastructure, whether it is ports and harbours and things like that. We are not investing in wind farms or that type of facility. It is into the businesses and infrastructure in the Highlands and Islands that will support the energy sector. The figure this year is around £3 million from memory, which is a bit less than last year and the year before. That probably reflects that, over the past couple of years, we have made significant investments in ports and harbours, such as at Niggs, such as at Scrabst or such as that to Invergordon. My argument is that you do not necessarily have to have the same level of spend every year, because some of the major investments have been made. On the way of energy in Scotland, on the major project up in the Pentland Firth investment continues. The other energy at the moment is with the Dunturn and Oil and Gas. We are spending a lot of time working with our businesses, which are being affected to some extent by the oil and gas downturn. We have about 80 account managed businesses that derive at least some of their income from that sector. We are doing a lot of work understanding their situation, how we can help them to diversify into new areas of opportunities. Those sort of activities do not necessarily carry the £1 million price tags that ports and harbours might have. The £1 million price tags in terms of ensuring that you are looking at low-carbon targets and trying to encourage more renewables. When you are doing new build, whether that be school campuses etc, are you deploying the renewables into those sectors as well, within your new builds, within the area? Would you be using solar or would you be looking at any form of wind generation at any new builds? Yes, we are. If every new build that we undertake, we want to get brilliant standards, if I took you to the new Inverness campus, the renewable energy-driven campus. We have suds for the drainage system and everything else there. I do not think that we have installed a turbine on any of our buildings, but certainly where possible, maximising the use of renewable sources of energy is a fundamental part of what we do. We do have a number of buildings where we do have some solar panels and such, but it is not widespread as yet. Our priority has been to fund the industry and infrastructure. Last but not least, the charged regime to the grid, is that something that you find still very challenging? I would like to see redressed to take forward some of the projects in the future. I might offer to come back to you with a specific view on the charging mechanism. The charging regime for energy generated in the periphery has been an issue, and grid connections and grid capacity continue to be an issue. The more we can facilitate access to the grid for some of the developments in the islands, the better we will be. It is about meeting the costs, the extortionate, unfair regime that is in place. It is not always an expression of opinions or anything. You can be there on the matter. I think that that is a statement rather than a fiction. I think that it is a statement of fact, actually. As we know, this committee has considered these issues on many occasions. I will bring in Lewis MacDonald to follow up. Thank you very much just to follow up the energy questions a little bit. You mentioned the impact of the downturn in oil and gas, and the current managed businesses across the Highlands and Islands. There are some obvious risk areas. Have you done, as an agency, an assessment of the impact of the downturn on the economy of the Highlands and Islands? We are doing it currently. We know from data from Skills Development Scotland that there are about 2,300 redundancy notices that have been issued to workers in this sector in the Highlands and Islands. Close to 900 of those we understand are associated with construction projects that may be coming to an end, but there is still a significant number there. We know from our own monitoring of businesses that there are probably another 190 jobs that we think are at risk, so it is not, in any way, insignificant. We are doing a particular bit of work on the impact in Shetland, because most of those redundancy notices have been in Shetland. We have commissioned an economic impact assessment, which is subject to all the information and all the key players that have been able to get information to us. We hope to have concluded close to the end of this month, but that is under way at the moment. That is helpful in Shetland. That was one of the things that I was going to ask you about, because clearly there has been some very disappointing developments in regard to decisions that are made by major oil companies in relation to landfall for hydrocarbons and so on. The other island issue that I was interested in, you view on fabrication at Arnish and Stornary, which I know well. I know that fabrication sector is under significant pressure, but there are also presumably significant opportunities on the renewable side for some of those jobs and skills to be redeployed. Would you comment on that, both in relation to Arnish and Shetland, and how you are looking ahead as to how you can promote that kind of skills transfer in the next 12 months? Arnish is quite a terrific site in relation to the investment that has been made in preparing it. It has been challenging in terms of its marketing and, if you like, populating it. We have one anchor tenant there, and I think that there is more than one in the energy sector who has got a presence there. I think that Arnish at the moment is suffering from the wider issues or ails in the sector. We see Arnish as an important location for certainly energy and marine opportunities, but perhaps wider than that, so we are actively promoting it. We have some current interest in it. Arnish is well-placed, partly for renewables, but also partly for west of Shetland oil and gas developments, which perhaps play to west coast ports going forward. On the issue of the skills, what has happened as a side effect of the oil industry is that many people have become available. We know that some companies, up in Cathness and elsewhere, where recruitment has traditionally been quite difficult and are now able to recruit. The unseen effect of the oil and gas is that it is not just a number of people. Many of the people who work offshore come from across the Highlands and Islands, so it is the effect back into local communities of people who have lost their jobs or that income is not coming back as much as it might have been. We have seen quite a number of jobs created by working with skills development in Scotland, and many of our situations arise to look at opportunities. It is undoubtedly having an effect. The economic impact assessment of Shetland, where it is particularly focused, will give us a good handle on what more we need to do. In terms of the budget priorities that you have identified, would it be fair to assume that the energy budget, if you like, the work that you are doing on renewables, is side-by-side with work on oil and gas and dealing with the impact of that? A work on oil and gas will primarily be working with businesses in the sector. We are doing some work with SDI just now, looking at international opportunities for oil and gas companies and so on. That will largely come from our work in the renewables sector. It is partly based on what we have done today in terms of infrastructure development. It is partly based on things such as wave energy Scotland and so on, taking forward new, innovative ideas that will hopefully underpin the sector going forward. Thank you very much. Government on has got a follow-up on energy, and I will come back to you. It was just a comment that was in the article this week by the BBC on the new highlands at 50. Referring to energy, it had two comments. One was, bear in mind that there is more and more focus in renewables. It refers to the HIE sunk boreholes near Brora in search of coal seams. I am just wondering what that was about. Secondly, it refers to the possible energy from the North Sea. There was some study about the Murray-Forth Industrial Credibility study. Can you say something about possible energy from the North Sea and why you were sinking boreholes for coal in Brora? The convener asked me to be brief in my responses. I would like to know what we are doing with boreholes in Brora as well. I suspect that it was way back in the earlier days of HIDB. I can assure you that it is not featured in our business plans of recent times. If you are doing any more information, you could write it. If you strike coal in Brora, you are the first to know. I want to follow up on one point. Yesterday, in the chamber, I came up to do with the Saltaire prize. Fergus Ewing told us yesterday that the Saltaire prize cannot now be won because there will be no company and we will meet the qualifying criteria for it to be awarded by the day of 2017. He was talking about the Scottish Government and its advisers looking at reshaping the prize. There was some discussion about whether, instead of spending £10 million on that prize, the money might be better spent in other ways to try to support marine energy. Is there something that HIE has any particular view on? To be honest, it is not something that I have been close to. I would hesitate to offer a view. I think that all I would say is that clearly we have seen the Government supporting new initiatives like WebEnergy Scotland in recent times. It is important to review things that are perhaps not working as maybe invidaged and directed in the money elsewhere, but on the specifics of the Saltaire prize, I am not sufficiently briefed to offer more than that. I will go back to Lewis MacDonald. Gordon MacDonald mentioned the new Highlands at 50. I thought, as you referred to in your submission, that it might be appropriate to comment on 50 years since the creation of the Highlands and Islands Development Board. Your submission says that there has been a transformation in those 50 years, which I think is absolutely right, but I wonder if you would summarise that and also say, looking forward, what HIE sees as the future development of economic and social change in the Highlands and Islands. Yes, it was on 1 November 1965 that the HIDB was formed. To describe the transformation, we might just characterise how things were in 1965. There was summed up in the phrase called the Highland problem, but it was largely huge and never-ending depopulation. Economic indicators such as unemployment and employment rates were well below Scottish figures. The industrial base was very narrow, and there had been a lack of investment in infrastructure over many preceding decades. Over the last 50 years, through the work of HIDB and the local government and huge investment from government and infrastructure, a number of things have changed. If you take population, it has increased by 22 per cent over that period, and a large percentage of Scotland's population growth over that period of time has come through the Highlands and Islands. We are sitting today at just under £470,000, which is not our budget for next year, I hope. Population has grown. The industrial base has broadened out. Agriculture, tourism and food and drink are vital and important, but we now have an energy sector, a renewable sector, a life sciences sector and more than 4,000 employed in business services. In many of the economic indicators, whether it is unemployment or employment rates or youth unemployment, the Highlands and Islands performance is better than the national average. All of which are good. I was asked by a journalist last week what the biggest change has been and I offer two. One is population because that was the big issue. The second one is perception. The perception back then was if you wanted to get on and life out of the Highlands. The perception now is different. We have done some research among young people and they are much more positive about opportunities and careers in living in the Highlands and Islands. There has been a significant transformation and an infrastructure. We did not have any of the causeways or the bridges back then that we have now. We have been helped by not only oil but it has been helpful. In terms of going forward, what do I think the priorities are? I offer you three thoughts. One is that not every part of the Highlands and Islands has enjoyed the same level of economic growth. I am acutely aware that there are areas, particularly in some of our more remote areas, that the benefits of development have not been equally shared. I think that the second thing is not just about the population but the aspect of population, which is the demographic challenges. We held a workshop this week attended by local authorities and many national and local agencies looking at our youth research. I am basically saying how can we make the region more of a region for young people because we still have an imbalance in the demographic of the population. The third thing that I would simply say is that I do not think that we are any longer trying to solve the Highlands problem. I think that what we are about is making sure that we seize Highlands and Islands opportunities. That, whether it is digital, whether it is some of the new industry sector that is coming through, needs to be our focus. Thank you very much. Can I pursue one particular aspect of that? I guess that it affects at least two, if not all three of the things that you have highlighted there in looking forward. The proposition of inclusive growth. I wonder if you could tell us your understanding of that, how that applies to Highlands and Islands and whether that involves simply a change in label or a change in title or does it involve a change in the fundamentals of what you are seeking to do? In one sense, I think that a lot of the work that we have done over many years has probably been around inclusive growth, but there are new things as well. You will see in our submission that we probably define inclusive growth in a number of ways. There is geographic inclusion. My comment a minute ago about some of the areas, particularly the more remote areas, not having the same rate of growth as other areas, we need to try to address that. There are things around fair work and social issues, but I see an awful lot of what we are doing around digital connectivity as part of inclusive growth, reducing the effect of distance and geography. I see the work that we are doing around young people as part of the inclusive growth agenda as well. I can talk about our graduate programme, but we have run an accelerator programme for creative industries where we have helped 200 youngsters to move out of not having an opportunity and moving into career opportunities. The work that we are doing around our strength and communities work generally. Working with communities in many of our most remote and fragile areas is all around inclusive growth. Some of the stuff that is mainstream is also inclusive growth as well. The work that we do in businesses, investing in businesses to create jobs in some of our remote areas is all part of the inclusive growth agenda. I was out in Barra a few weeks ago. We were supporting a new business out there creating about four or five new jobs, which you do something similar in Vernester and Glasgow where we equate to many more new jobs. That is inclusive growth in terms of helping those communities to come together. We define it quite broadly in terms of what we do, whether it is geographic or social or digital and so on. Clearly, some of the new aspects are the promotion of the business pledge and the fair work agenda more overtly than perhaps were there before. Thank you very much. Finally, part of that is the proposition of account managed communities. You set an ambitious target for that, of engaging 40 to 60 communities. You reached the 40. I wonder if you would comment on the success of that and the challenges you face in extending it further and how you see it rolling out in the future. Of today, we account managed 51 communities across the Highlands and Islands, so the number has increased. What we have done in account management generally, including communities and social enterprises and businesses, has just refocused our account management approach. Last time, we spoke about the very positive valuation that we had on account management so we have extended that. The challenges, I think, are largely around capacity building with communities. There are some fantastic examples from communities who are building houses and putting in leisure facilities in their harvours and a whole range of things, but we are investing considerably in community capacity building, helping these projects to get off the ground and supplementing the skills and expertise that communities have. We have grown our community account management from the 40 last year and it is currently 51. Thank you very much. You mentioned the demographic imbalance and, while it is fantastic that the population of the last 50 years in the Highlands has grown by about 90,000, in relation to the population itself. The BBC article said that the population is tilted towards the old and on course to becoming more so. I was just wondering what your views were on that. What effect of the population of the young is having on economic growth in the area and being able to attract companies and encourage those companies to grow? I just missed your first point. The attracting companies I have got, what was your first point again? In relation to the article by the BBC, it said that the population is tilted towards the old and on course to becoming more so. Is that your view? What effect is that having on economic growth in the area? In relation to that point, the demographics of the Highlands and Islands are not similar to those of Scotland that are towards an elderly population. The demographic profile for the Highlands and Islands suggests a larger number of older. Hence my comment about an increased focus on young people and attracting young people. I have to say that the youth issue is improving. If you look over the last census period, the number of youngsters who are leaving or think they have to leave is actually slowing down. Things that the University of the Highlands and Islands and the roll-out of broadband and all these things will help. In terms of the attractiveness of companies, my sense is that companies recognise that it may take a bit longer to recruit the high-skilled jobs that you want, but once you get them, your retention levels will be extremely good. I could take you around the number of businesses where that has been their experience. We do not have a labour pool the size of Edinburgh and it does take a bit longer, but our experience with some of the big companies in the life sciences sector and the business services and other sectors is that people are there. They are attracted to the Highlands and Islands if you just give a bit more time. The company created an office in Inverness creating 17 software engineering jobs recently who thought they could get that expertise in Inverness and they managed to do it. It just takes a bit longer, but you will be rewarded with retention and commitment. That is good to hear. You mentioned the importance of digital roll-out in superfast broadband in order to retain young people in the area. In your report, you mentioned that 135,000 premises now have access to superfast broadband. What sort of proportion is that of the total premises in the Highlands and Islands? Just over half, between 15 and 60 per cent. Right. It is closer to 140,000 premises now have access to superfast broadband. Close to 100 through the programme that we are running in the balance through BT's commercial roll-out. It is moving quickly. At the start of last year, 4 per cent of premises in the Highlands and Islands had access to superfast broadband. Today, it is 54 per cent. By the end of next year, it will be at least 84 per cent. The growth and the coverage is massive, but to answer to your question, I found the exact number. It is 54 per cent today. Again, your submission highlighted community broadband and the importance of it. I think that it was a giga plus that was mentioned. How important is community broadband in filling the gaps that BT is not prepared to meet? What is the timeframe for rolling out community broadband across the other remote regions of the Highlands? The current arrangements of the BT will not get everywhere. There are discussions about how that might be extended so that the fibre can go further. Community broadband Scotland's critical role is to work with communities who want to develop solutions in areas that the fibre will not necessarily get to. Community broadband Scotland is up and running. It is open for business that is already provided or has projects in the pipeline that will cover about 3,500 premises. The giga plus or guile project is important because one of the things that we think that CBS can effectively do is to do hundreds of small projects. CBS is happy to work with individual communities, but can you aggregate them? It makes it more attractive to a provider to come in with a technical and a viable business solution. The giga plus or guile covers parts of seven islands in the Agile and Islands area. That is the first of that type of project to go forward. Community broadband Scotland is open for business today. It is working across Scotland dealing with 89 different communities. The challenge is knowing exactly where the fibre will finish and where CBS is easy to operate, but that is becoming clearer as modelling has been done. The next aggregated project will be in Fife where we have just gone out to do the formal consultation with a view to developing a similar project. My final question is you have mentioned the Pan-Scotland digital tourism programme. Can you say a wee bit more about what that hopes to achieve? It is focused on the tourism industry. I cannot remember the figure, but some very high percentage of tourism bookings and so on happen online. There is an expectation when you get there that things are going to happen online. It is an expansion of the pilot. The pilot had two components. One was for tourism businesses advising them on how they might develop a digital strategy. There was a digital grant available to a number of businesses to implement significant step changes in their digital functioning. That is the model that we have piloted with about 60 businesses in Highlands and Ireland and has now been taking forward nationally ourselves, Scottish Enterprise, Visit of Scotland, all closely working together on rolling that out. Joan McAlpine, is it full-up on this point? I apologise for my late arrival to our witnesses. On the aspects of digital, I have been noting the advance that you have been making in relation to broadband. What about mobile connectivity in relation to mobile phones? Is there something about the challenges that you have in that area? My view is that I know that this is a view of the Scottish Government as well that we should have as good coverage on mobile as we are going to have on fixed. But we haven't quite had the same narrative or interventions to support mobile. From a Highlands and Islands point of view let me just comment. It is the single biggest issue across all of the agencies in the Highlands and Islands. At the convention of the Highlands and Islands held in Elgin last month we had all the mobile operators in the room with all the local authorities and all the agencies and so on. Out of that, we have been asked by Deputy First Minister to try and pull together a coherent way forward for mobile connectivity across the Highlands and Islands and the Scottish Government digital team working closely with them for the rest of Scotland too. All I would say to you at the moment is understanding their coverage plans and what the challenges are enrolling them out and also working with all the local authority chief executives in the Highlands and Islands to say that we have a role to play here as well because there are issues to do with site locations and mast heights and other sort of things as well. Within a matter of weeks I will have met them all and I hope that we can be able to pull together a plan that will give some sort of clarity as to how mobile connectivity can be rolled out on a similar basis to be able to describe it in the way that we are able to describe the fibre roll-out at the moment, so it is very live and active. Right, and do you have a budget for that piece of work? No, I am doing it myself. Right. I come very cheap. No, myself and my digital team are having at the moment I do not want me to be flippant at the moment it is having the conversations of what is possible what is going to be required to make the delivery happen. I suspect there is probably some interventions that will be required to actually make the thing happen but at the moment it is let's stop complaining that the mobile operators are not covering the Highlands and Islands because we are always the 5% that doesn't get out there I have to say that we have had incredibly encouraging engagement with them and willingness to work with us on a plan as to how we address the problem. Okay, thanks very much. I am sure that when I met Ofcom recently they do not have a programme of basically forcing the mobile companies to share mass, is that part of their initiative, isn't it? Yes, that's part of it and two of the operators have a joint venture company that are looking at upgrading mass and extending the mass footprint across the UK so mass sharing is an important part of a way forward. Can I just follow up one other question that Gordon MacDonald asked about population? I regularly visit Inverness it's remarkable that the growth in population in Inverness and in the Murray-Forth area over the last 20, 30 years but to what extent has the population growth in the Highlands being concentrated in that area whereas some of the more remote areas on the west coast and in the far north haven't really seen much growth? The answer to that is a bit of yes and no Inverness has grown rapidly but if you look at percentage population growth then the Highland Council area Orney and Shetland are way above 10 per cent plus the western is between the last two census the western is population grew by 4.6 per cent over that period of time so there have been different rates of growth but that rate of growth is the national rate over that period of time the one part of our region where population declined between the last two census is the Argyll and the Islands area and even within Argyll and the Islands places that all been grew quite substantially and other parts Midcontire and so on didn't that's partly what has prompted the creation of the Gael economic forum but it's not just an issue there about population decline or young people choosing to leave to study in Glasgow or whatever else which is understandable it's actually the working age population that is actually a challenge there so there are particular challenges that we're working with Argyll and Bute Council and others around Argyll but across the rest of the Highlands and Islands population grew at a local authority level in each of the local authority areas I've been sitting listening to you and can I say first of all happy anniversary I remember actually a number of years ago seeing a documentary about Highlands and Islands what it was like and your story has moved on since then can I ask before I go on to other questions what you're doing to improve your image to the world what is the plan in order to update a documentary or something to show what you've done in the last 50 years we are shamelessly taking the opportunity of the 50s to try and do some of that so we've done a fair amount of work with the press to both local national and some international press to get the message out there later this month I've been asked to give the Andrews Day lecture in Brussels so we want to tell the story through these sort of mechanisms but there's maybe three things I would just mention to you I'd be very happy to send each of you a book we've just produced and that tries to tell or to weave through the pages of the book how the region has evolved but it tells the story through the eyes of the people working in the region today so we will use that the second thing we have is we've produced a timeline so I can invite you just to go on to our website and you can just look through the decades and through different themes at what's happened and again we'll be using that to promote the Highlands and Islands and there was a third thing which is completely out of my mind so we're using the opportunities of media coverage of the book and the timeline but also the First Minister is introducing a reception hosted here in Parliament to which you'll have been invited and supplement what we would normally do working with SDI in terms of promoting the region I look forward to that and as I say I do remember this was an excellent documentary a number of years ago I come on to the factor of jobs and also the factor of and I'm not taking away what you have done but you've exceeded all the targets since 2011 every target you've been given you've exceeded it and I compliment you on that but have you taxed yourself enough have you moved it what are you intending to do as the chief executive to promote to your staff to do better if we go to the factor of targets most companies have targets when I worked for the Royal Bank of Scotland I had targets and it was like carrot and stick but you know how are you moving your staff to do you have regular meetings with them to say well we've done this we've done that, we've exceeded this we've exceeded that let's do better what you're doing to do better so a few thoughts one is we have exceeded the targets and met the targets you'll also have seen it over the course of that four year period the targets haven't remained static either so some of the ones around turnover growth around international sales have actually increased the targets so we are pushing staff in that regard I would have to be honest and say this year is quite a tough year out there businesses are finding it more difficult than I think we've seen for some time and we were just reviewing the half year position just recently and we need to push to get some of the targets this year it's not as easy so we do do that and each of our business units have their own set of targets which we're asking them to meet and deliver the second thing we've introduced this year is it's not just the numbers but it's actually making sure that underneath the numbers we're doing enough of the right things innovation and internationalisation that's come through the Scotland's economic strategy then we've invested considerably in both of these activities and we're asking our staff to do more in those sort of areas now not all of that activity will hit a top line turnover target very readily but we want more businesses active in innovation we want more businesses working towards or active in international trade so we've developed a number of trackers you may have seen them in our operating plan number of tracker mechanisms or measures or indicators that we are asking each of our business units to make sure we're doing the right things and more of the right things which will make its way up to the top line targets but maybe that, does that answer your question or give you a sense of how we're trying to push through? If I take it down, I'll do a brief third question In the review you had the review confirmed that many of your workforce who are meeting and exceeding the expectations of the clients however there are others who have some way to go in achieving what is expected of them the evaluation suggested in some occasions current salaries being paid to some of your staff are not attracting sufficient candidates of appropriate calibre can I ask you do you pay a bonus if someone exceeds their target and if not are you considering looking at current salaries scales in order to attract better quality not that I want you to sack anyone but basically to attract or improve the workforce within your organisation No, we don't pay any bonuses and we operate within the Scottish Government to pay guidelines so that's just the given let me just say that and you would expect the chief executive to say this but with staff we have our outstandingly good and we have experts in the organisation who really are experts in some of the things we do I think the comment you make and maybe the source of it was maybe our account management review of last year and what that highlighted was the consultant stock it might be challenging to recruit some people of the requisite skills I have to say, since that review was done we've had one or two changes in account management and some of the account managers have been able to attract outstanding quality so I'm not concerned with that the other thing we've done however and links to this was the review was saying are you certain you've got your best account managers working with your best high growth businesses and what we've done is a major overhaul of account management where we've stratified the account management portfolio slightly differently we now have a smaller number of dedicated account managers and match that expertise more effectively to the businesses that have that growth potential so I'm very comfortable with the calibre of staff that we have outstandingly good in many cases but we've managed to align the resource slightly better to the company needs and that was one of the key recommendations of the evaluation Diolch yn fawr. Okay, thank you. Lastly, Patrick Harvie Thank you, convener and also apologies for being a bit late. Trains were slightly chaotic in Glasgow this morning and apologies if I retread anything that you covered before I got here obviously it's difficult for all of us to do pre-budget scrutiny we don't have a budget to look at that's for you and for us as well I learned yesterday that budget is going to be published just a day before Parliament breaks for Christmas recess so when we take that home for a Christmas reading can I ask you what we should be looking for from your perspective not in the enterprise budget but in the rest of the Scottish budget particularly given that we know cuts are likely to be coming down the line from the UK Government in relation to affordable housing in relation to education and skills in relation to transport the things outside of the enterprise budget not your own organisation's budget what are the decisions that we should be looking at to see whether the Scottish Government's budget is going to make your agenda more deliverable in the rest of the budget Okay, do you want to answer that? Feel free I suppose that I could try Yeah, yeah, yeah Yeah The thing about economic development is it doesn't happen in isolation from everything else so critical things that affect the economic performance of the Highlands and Islands infrastructure investment so we've got commitments around A9 we've got the rail upgrading from Inverness to Aberdeen but investments in infrastructure are important and the commitment to renewables because although it may be slightly slower coming through than ever to hope I'm of the opinion that there are still huge opportunities for that we know that housing and affordable housing is a constraint to growth in many parts of the Highlands and Islands so we had a workshop with many partners this week looking around the youth agenda but access to housing and affordable housing is a major challenge one of the top five challenges that are facing young people across the Highlands and Islands the whole focus around youth I think is really important because we have a demographic challenge behind a good population figure so things that would encourage the growth of the development of education the support for the University of the Highlands and Islands these sort of things off the top of my head would be important We know that there's unlikely to be more of everything Are you able to outline any particular concerns areas that would be troubling for you or opportunities that you think the Government should be prioritising? Probably not beyond what I've said I think that housing and infrastructure are critically important issues for us transport networks are vitally important as well, whether it's the ferries or other things as well so I should probably give a bit more thought and come back with a sensible answer for you but these sort of things seem to me to be on what we do and skills Thank you That brings us very neatly towards the end of our time Can I thank both of you for coming along this morning for answering our questions to be very helpful to us We are now going to have a suspension of the committee for the member's day commemoration and we will reconvene at 11.50 If we can reconvene I'd like to welcome our second panel of witnesses this morning from Scottish Enterprise We're joined by Adrian Gillespie who is the Managing Director of Operations, Company Growth, Innovation and Infrastructure and Ian Scott, Chief Financial Officer Welcome to you both I've got about until about 12.30 for this session Can I remind members if they would to keep their questions short and to the point would be helpful in getting through the topics that we want to cover in the time available I wonder if I can start off and ask you just a process question We are, as you know, late according to the normal timetable in relation to this year's budget We've been told Scottish Government's budget will be published on 16 December I wonder if you can tell us what impact that's going to have on your own budget setting a final and indicative budget for the coming year available I'll take that It's a bit later this year We're probably about one month behind our normal timetable on that We would normally be having initial discussions with our board at their meeting in early December but we're not going to be able to talk about any particular figures then although we already have had a strategy session with the board we've discussed what our priorities would be going forward and the board's given the executive team some things to think about there to bring back to them as soon as we can do that so we'll probably be following up on that in early December but it will be at the end of January before we take a first draft to the board then end of February board meeting for possibly a final draft but certainly by the end of March we should be in a position to be able to sign off on that budget I want to ask you the same question I asked HIE who were in before you in relation to the different work streams Are there particular areas of work in the event of the budget changing other increasing or perhaps more likely decreasing other particular areas of work which you're more or less likely to be able to flex as a result of budget changes? We operate very similar obviously to Highlands and Islands I would estimate that this time of year we're normally in the region of about 60 per cent committed towards next year's budget because a number of things we do here obviously go over the 12-month period the flexibilities that we have are possibly more on the direct investment side we invest somewhere in the region of about £60 million into companies every year purely just because of the timing of that those aren't legally committed until the deal was effectively done on that but that's really important expenditure that goes out a long way to growing new and quality sustainable businesses so it's not an area we would want to reduce but that's the area of flex that we've got in there at the moment I think the key thing for us might be more than Highlands and Islands is we've got quite an asset base I think we've talked about that here before between our property assets as well as our investment assets and we have begun to see over the last 12 months a freeing up of the investment assets so the job for us is to maximise the income from those assets going forward as opposed to necessarily reducing the expenditure in the areas that are also very important to us we just thought on that point how is that progressing in the current financial year your ambition was to realise £23 million worth of asset proposals from property can you give us a flavour of where you are in relation to that total our latest estimate specifically to do with property disposals is now down to £16.6 million main reason for that was that there is one deal that we are working on at the moment that initially we thought would happen towards the tail end of this year it now looks as if that will move maybe one or two months back into early 1617 and that deal itself is worth in the region of about £17 million for one piece of land so as much as that we've had to take it out of this year's forecast that's £17 million that we are pretty sure will be a start to next year's income forecast so it will go a long way to helping us then we've managed to still maintain a fairly healthy level in there because there's another deal that we didn't know about at beginning of the year about property and Edinburgh it looks as if we'll be able to sell before the end of the year probably in December for about £10 million so that's come in to support that so that's why it's going down that £6 or 7 million overall though as I say the investment assets we've seen more exits coming through there than we originally envisaged so actually we've made up that shortfall in the business plan this year with further income from those so overall between the two I think we'd originally forecast £29 million of income we're actually looking about our latest forecast at about £30.5 at the moment so we're on track for that and have you found in terms of property disposals have you found that the market has improved compared to previous years? Yeah, I think so particularly with the property in Edinburgh it's a joint property that we've got with Edinburgh City Council so the return that we're getting on that is certainly more than we would have envisaged at the beginning of the year certainly more than we're holding it on the books at so that's really good Okay, thank you I'll bring in Dennis Robertson Thank you, convener, and good morning In our earlier evidence session about their work within the renewables can we see within your evidence that it's not in your strategic plan the renewables why would that be? Good morning everyone thank you for the opportunity to present today the renewables market has changed a lot over the last couple of years particularly influenced by policy at the UK level and some areas that we thought were large opportunities like offshore wind manufacturing for example aren't the opportunity that we thought they were we're still pursuing specific investments in those areas but we do see renewables now having reached the stage where there are a number of identifiable opportunities that we will pursue through our existing funding arrangements and through our existing inward investment arrangements the wave market as we know has been particularly difficult and we've seen the companies in that sector really struggle to attract private sector investment however through our investment funds particularly the renewable energy investment fund we're still pursuing some very exciting transformative investments such as the MAGEN tidal flow investment and the 2B energy twin blade offshore wind turbine so we still have those investments that we are pursuing against what is quite a difficult market background with reference to that is it the uncertainty in the market that's making you hesitant in committing more of your budget in this or attracting investors it's not so much our hesitance it's the lack of appetite for private sector investment in particular sectors or where the appetite is not as strong as it once was so clearly that has a knock-on effect for us because we invest we invest alongside businesses or we contribute to speed up individual business investment so that's the big influence on our investment How damaging is that in you meeting your carbon emission targets in terms of reducing that I guess it's separate in terms of the investments that we would be pursuing would in the main be around the employment driver offshore wind manufacturing for example was around employment around a market opportunity there are still other ways of realising our own carbon reduction targets in terms of the companies that we support or indeed our own emissions targets so obviously in terms of work renewables there have been some changes in onshore renewables which have more of an effect in terms of the the profile of energy that's generated within Scotland having said that there's not a large amount of manufacturing investment in that sector in Scotland so I would say that they are separate but connected issues so you mentioned obviously within the UK content and were you surprised that the recent announcement that Amber Rudd is considering supporting renewables outside the UK when we're actually withdrawing the support within the UK I guess these are policy issues that don't affect our direct it's a policy issue but it does affect how you would actually look at attracting investors investing in an industry of the future clearly the renewables market and the energy market is very much affected by the policy towards supporting or reducing support within each market there is obviously an effect between policy and the stimulation of activity I guess the most impact of development over the last couple of years has been in the offshore renewables market compared to the opportunity that we thought it was in 2009 for example to be able to provide a figure for how much you're committed within that renewable sector in terms of budget on the budget analysis that we've put in the business plan you'll see there's two specific lines in there but renewables and energy gets spread throughout a number of the lines specifically under the internationalisation side sorry the innovation side we've got the renewable energy R&D support we've got that in there at £9.2 million and under the investment side we've got the renewable energy investment fund at £18.9 million so about £28 million in total specifically never mind the individual company work that we do I was aware that our reef team, the renewable energy investment fund they've got a work in progress list at the moment that adds up to deals totaling over £100 million of which we would ordinarily put in about £30 million of that so there's still a healthy pipeline as regards those renewable investments ok, thank you I'll just follow up on that renewable energy issue first of all the Scottish Government four years ago set a target that 100% of renewable electricity would come from Scottish electricity would be met from renewable sources by 2020 now you may have seen a report just out this morning from Scottish Renewables saying that in actual fact it's likely that the renewable production will fall short of that at less than less than 90% is that an analysis you agree with or let me put it slightly differently is that one that concurs with your experience of the shrinking of the market that you've just described ok, thanks Liz we've not had the opportunity to review the report but I've seen the news reports and Neil's statements this morning clearly in the 2020 targets there was a large element of offshore wind that was forecast to be part of the energy mix that market has been much smaller and slower than was anticipated at the time and clearly there have been changes in the onshore wind policy support in that area so I would think that there would have to be some very large reconfiguring of what those 2020 expectations were so I can imagine that that would be a very stretching target at the moment but I would say that was based mainly on the offshore wind capacity not being what was anticipated at the time so I guess in that case you will be looking for opportunities to reverse that contraction of that sector particularly well offshore wind there is a long term market in offshore wind and we would still be wanting to pursue that market very aggressively but we had a number of inward investments lined up in onshore wind and offshore wind before some of those policy changes took effect so we still maintain those relationships but it's very much a longer term opportunity now compared to what we thought it was a few years ago In the wider picture of energy within the Scottish economy clearly the biggest difficulty in the last 12 months has been the downturn in the price of oil and gas and the downturn in economic activity have you made an assessment of the impact of that on economic activity in the Scottish Enterprise area so our focus has been on supporting those affected by the change in the oil price through the task force that Lena Wilson has chaired and very much engaging the industry around supporting those affected initially and also ensuring that, for example confidence is maintained in areas where there is still opportunity and also looking to the medium and longer term around what has to change within the industry in order to make the northeast and continental shelf activities more competitive within a global market so that's very much been our focus we've engaged intensively with not just our account managed companies but companies across the supply chain with the newly established oil and gas authority with oil and gas UK there's a very strong partnership between industry and the regulator and ourselves first of all understanding the short term challenges and supporting companies through them there's a lot of opportunities particularly for innovation and how we can get more of the innovation and more of the ideas coming from the supply chain and being adopted by the operators we feel there are considerable cost savings that can be made by having more of a culture of engagement between operators and the supply chain around transformative innovation that will reduce cost and increase production recovery rates to extend the life and indeed encourage more assets to be brought forward so we're still very much taking a short term tactical arrangements around support but also looking to see how this focus on cost can actually be used in a positive way to come out the other side of this much much leaner and fitter When I asked Highlands and Islands Enterprise a similar question they did indicate that they were currently undertaking an economic impact assessment on the Shetland economy and the impact of the on-gaster intern there but clearly you'll be aware that the impact in the Scottish Enterprise area extends far beyond the north-east and into the supply chain across the central belt I wonder if you have a view on prospects there and I'm thinking particularly the case of BiFab has been mentioned to me a fabricator that operates in both oil and gas and renewables and particularly offshore renewables which you've highlighted are there prospects for more to be done to enable people with skills and equipment relating to oil and gas to diversify into renewable and other sectors and if so how much apart you talked about a short term tactical response is that something that you look at in a more strategic way A couple of questions First of all in terms of diversification yes very much so we're working with a number of companies on diversification I would say bearing in mind the comments I've just made about renewables it wouldn't be limited to renewables we would be looking at much wider engineering opportunities than renewables so yes diversification in terms of the longer term impact of what's happening at the moment I think if the oil and gas downturn and the downturn in offshore wind that happened at different times there would be more positive things that could be said about diversification from one to the other or back again I just wonder in strategic terms looking into the 2020s looking beyond this immediate budget but looking ahead how you perceive those parts of the supply chain that have looked to either or both of these sectors Okay well clearly that will be heavily influenced by the recovery and the oil price the short term challenge is the medium term challenge as well as about making the UK continental shelf cost base more competitive with other investment opportunities around the world it is perceived as a high cost base at the moment and I think there is a big big opportunity to use the innovation and the expertise that we have within the sector to make a difference there which will also establish longer term international opportunities so the learning that we take from how we are more innovative how we recover more from aging assets for example will be in demand around the world we still see a very very important and exciting opportunity for oil and gas for many many years to come and particularly in the areas where we have a specific competitive advantage around for example aging assets structural integrity that kind of thing I think there is very much a shared view between the industry now and the support agencies around where those areas of competitive advantages are, Subsea would be another one for example and focusing our efforts on those areas On this section if I could ask again if I refer back to Highlands and Islands Enterprise I think they told us that they had 80 account managed companies which were aligned to some degree on the oil and gas sector and with which they were working particularly do you have an equivalent total and if you can give us some idea about what that looks like that would be very helpful for companies in the oil and gas sector that we account manage our support goes way beyond the account managed companies though as well particularly in light of recent developments so working very closely with business gateway and with other supply chain partners so 350 clearly over 2,300 it's a very significant amount of our company base it also is a sector which very much influences our turnover growth targets our international turnover growth targets and we're already seeing some of our monitoring of turnover growth for this year being affected by what's happening in oil and gas so it's something that we're very focused on there is a well obviously I've mentioned the opportunity for many times to come there's concern there and that concern influences what we give to the sector at all levels within Scottish Enterprise just before we move on from energy a couple of follow-ups there's a different issue a couple of follow-ups on energy you talked about wider opportunities in engineering in terms of diversification there was some press commentary I saw a couple of weeks ago at the time of the Chinese Premier's visit around opportunities for Scottish engineering companies from the investment in the new nuclear plant Hinkley Point in Scotland is that something that you're actively involved in supporting Scottish businesses in terms of trying to win contracts the nuclear supply chain is something that we've been involved in through our energy team for some time now mainly around the decommissioning opportunities but the certification and the expertise around decommissioning can very often be applied to global opportunities in new nuclear so it would be something that we would be assisting our companies to understand where their opportunity may lie for them Can you put a figure on that at the moment or is it too early to say? Too early to say at the moment we have very good relationships with those companies who have been involved in decommissioning through the support that we've given them so our routes to those companies would be very straightforward but I don't have a figure on the size of the opportunity no on gas when you talked about the future of the sector I mean is it helpful to have people campaigning to disinvest pension funds from oil and gas I mean we get less and less all the time as you can imagine what measures does that send to people whose jobs depend on that sector and young people looking to have careers in that sector is that sort of thing helpful? Well I think perhaps you know the the question that is probably more around done to help stimulate the industry and provide confidence in the industry and provide the right messages to young people about the opportunity that exists and will exist for some time to come so yes I know where that question is going but it would be something that we would take a direct view on our priorities is supporting the companies to access both the UK and international markets so you're clearly wanting to invest in oil and gas not see disinvestment sorry Scottish Enterprise you want to invest in oil and gas you don't want to see disinvestment we want to see investment into the oil and gas sector it's a very important part of our economy I'm sure Patrick Harvie's got a question on this point I was going to ask a question about another energy issue but I'll perhaps reflect on the warning given by Mark Carney recently about the potential impact on the whole economy if all of our pensions are heavily exposed to an overvalued industry I think that's the basic argument around divestment but that's probably a much longer debate perhaps for another time one of the commitments on energy that the Scottish Government has given is on energy efficiency this was to become a national infrastructure priority and I've seen a number of people who have jobs that are involved in that 10-year programme that is likely to develop out of that which would aim to achieve an impact on every building in Scotland we're told there's a range of projections about the amount of work involved the number of jobs involved all of them are substantial I suspect none of them are quite pinned it down yet have you been involved in any discussions with the Scottish Government yet about what the opportunities are to make sure that they've got the skills that they need to do the work that's going to come in and to see how that work is going to be funded whether that's going to be in the upcoming budget or in the longer term I haven't been involved in any direct conversations about that but Scottish Enterprise is very much involved in the low-carbon sector in terms of stimulating innovation particularly around opportunities like energy efficiency so yes, we're very much involved in helping companies in that sector I guess there are two areas there are the technologies around energy efficiency and there's the installation there's the refitting and we work with companies that are growing in those areas but there are also a number of companies that are supported by Business Gateway in terms of installation fitting I guess more locally based companies and the level of capability there and what more needs to be done to equip those companies with the skills that they need Scottish Enterprise isn't yet at the level of discussing with the Government what this national infrastructure priority will actually mean in practice for the businesses working in that sector A lot of the support that we give will be relevant to companies in any sector but in terms of the opportunity installation that would be something that Skills Development Scotland would be more involved in and that we would work with companies through Business Gateway to support those kind of companies so there's recognition there that it's an important priority and that there are business opportunities there I guess Scottish Enterprise support is more around companies that would have a wider and international market opportunity around technologies for example Okay, thank you Okay, thank you Richard Black My question is mainly on jobs I noticed that you put in your submission that your target is to have 5,000 more innovation active companies 650 million of additional company innovation to spend over the next five years How do you propose to do that? So, innovation key part of our business plan is an area where Scotland for some time hasn't measured amongst the best in terms of our global competitors We put a lot of focus into this area in recent years, we've got a number of new initiatives that are more focused around driving demand for innovation rather than I guess what we've done more of in the past which has been supporting innovation and R&D projects to help to speed them up or to make them bigger to make them happen in Scotland Really the challenge that we have is to increase the amount of demand for innovation So we're working through supply chains for example, we're working through an initiative called Seek & Sol which works with those at the top of the supply chain to understand what their business challenges are, what innovation opportunities that might be in the back of that and then working with their current and potential supply chain to drive innovation through the supply chain system Another area where we're very active is the whole area of open innovation which I guess teaches companies how to take innovation out with their own company and work more with their supply chain work more with their wider business contacts around how to make their own company and their own products more innovative That's something that we've found there's a strong appetite for but there's actually not a great capability within the company base here for going out with the company I guess the practice is the ways of going about stimulating innovation more broadly than the your own organisational structures and we're seeing a very strong demand for that as well I'm very encouraged by the response we've seen to calls that we've put out to companies to get involved in this programme and I'm sure we have in the submission that we've got quite high expectations about the number of calls for innovation that are going to come from that that wouldn't have happened otherwise So really our role is stimulating innovation because we've got the capacity to innovate We have a business improvement tool called Improve which is a EU adopted diagnostic which is not about innovation projects it's more about how ready is the company to innovate how is the company structured how engaged are the company's workforce how much are they dealing with our customers how engaged are they in markets how much help companies to prepare to be much much more innovative to help them to take advantage of some of these projects that are coming forward So Scottish Enterprise Ian, what did you think? I think the best example of the work that we've done over the last few years on that is with company Alexander Dennis who makes buses they're in viral 400 bus model as a prime example of that they helped us to achieve the outputs and targets but I think they're now capturing some like 50% of the UK market and buses because of the innovation work they've done in there Never mind the multi-billion pound deal that they may have from the Chinese authorities when they were over recently So it's a great example of the work that we've done with them that's achieved that And they're in my region so I complement them on that but can I again move on to the factor of jobs we have Scottish Enterprise the organisation that basically has to drive Scotland's economy and improve and all the other things we want you to do so let's get out there and get it done What are you doing with local what work are you doing with local councils local universities local colleges people are now saying the population is getting older skill shortages there are people who are leaving so we're engineers we need so many engineers and we have skill shortages all over the place what are you as an organisation doing to ensure that Scotland doesn't have a skill shortage in all the places that people are now talking about that we're going to have in the next couple of years with people retiring Okay so we do that in the main through each of the sectors in which we operate so for example as we mentioned a sector that is affected but just exactly that issue we've been working with Skills Development Scotland putting together the skills investment plan the actions that then come from that and Scottish Enterprise's role in the main would be to help companies to deliver on their skills requirements so that would be through perhaps support for training training plus is a product that we're deploying much more now than we did in the past and also through for example modern apprenticeship programmes that's really where the approach that we would take there is to put an account team together around the company so for example GlaxoSmithKline Operations in Irvine and Montrose we have an account team that doesn't just include Scottish Enterprise it includes Skills Development Scotland as well and we've worked with them on some of their skills requirements and also how they can work with other companies in the sector around developing their own skills initiatives so I guess it's about working as a team Team Scotland, you mentioned local authorities as well they would be very much part of our account team plans local authorities we've focused much more on our regional engagement really over the last few years we have location directors that work with each of the local authorities to understand some of their challenges just going back to innovation as I didn't mention as well I think local authorities in the public sector and the NHS can very much play a part in stimulating innovation in there we have involvement from them in this open innovation programme so I think a whole range but for us what's key is understanding each company's requirements understanding where a sectoral approach can be more beneficial than an individual company approach and then working with Skills Development Scotland and other partner agencies to help deliver on them and again just to add a wee bit context that as well as those public sector agencies that the agency has talked about actually working with companies to invest in youth is a big theme that we've got at the moment I think every single company that has accepted an RSA application since the 1st of April this year that's 44 companies have all committed to putting an investing youth plan together for those companies and we'll work together with them to ensure that they do that and I think that's where we want to see more of the investment of the agency that we can give them and that's for the business pledge I think it's been very helpful in stimulating some of these discussions with companies so for example Smirling, Cuthbertson and Kilmarnock they were a recipient of RSA we had that conversation about having invested in youth policy they haven't invested in youth policy but that's also got them into areas of interest like IIP Scotland and I guess opened up that whole conversation around how a more engaged workforce a more I guess a more highly developed trained workforce and different workplace practices can actually contribute to the growth of the business Lastly, just to the last comment because you know if you allow me you're going to ensure that we don't have a skill shortage in the next 10 years and all the fields that people are now looking at so this is a very fluid situation as well I guess we'll do everything we can to minimise those skill shortages and industry is very engaged around this issue as well we have the industry advisory groups we have within some of those industry advisory groups specific skills subgroups that are putting a lot of focus on this area we're investing more than we did in the past around areas like training plus so I think there's a strong commitment there from us to minimise those skills shortages I think you will always have areas of skills shortages because industry is so dynamic it's not that long ago where we were talking about the skill shortages and oil and gas and the knock-on impact of that into other engineering sectors so we have to be quite nimble in terms of how we deal with what our global market changes Thank you Gordon MacDonald I want to move on to the subject of exports and you quite rightly said that one of the drivers in growth for the Scottish economy is internationalisation and the inquiry on internationalising Scottish business called for more co-ordination between SDI, chambers of commerce, local authorities in relation to particularly trade missions what steps are being taken to address joint working? Okay thank you so there have been some immediate steps taken so for example the community of practice that we referred to in our submission which is bringing together local authorities bringing together the Scottish Government bringing Scottish Development International so we would be striving for a much much more co-ordinated approach and we very much recognise that internationalisation is a strategic priority it's also a big challenge in terms of moving from where we are now to where our ambitions lie and that will take involvement from all of our partners so we very much see this as a team Scotland and a wider approach as well so there have already been meetings with UKTI and a better working relationship being established there to co-ordinate our activities so I'm positive about the progress that we've made so far there's more to be done for some time now in terms of getting to where we want to be around our export and internationalisation targets so we're starting to get a more co-ordinated organisation in terms of trade missions to try and grow the economy and in your written submission you also stated the key to future growth lies in increasing international competitiveness of Scotland's companies and sectors the companies can do so much you've talked about the innovation of Alexander Dennis we've talked about investment and obviously there's increased productivity but what I wanted to ask is what is out with the control of companies i.e. what effect is the strength of having on the competitiveness of Scottish exports and what can be done to address that if anything so thank you I mentioned the need to be nimble in terms of some of the global economic shifts and you've highlighted one of them there around the strength of sterling and the impact that can have on the exports yes it does have an impact on our competitiveness it's still a hugely important export market and we've still got a huge amount of focus on that but we are also looking to other markets so for example whilst growth in China isn't what we thought it was going to be it's still growing very rapidly the Indian economy growing better than expectations the US economy getting back into very encouraging growth that's a very important export market in Scotland as well so having that outlook in terms of the advice that we give around those economies where opportunities are increasing but also looking at the specific sector so for example in food and drink the premium food opportunity very successful particularly around some of the Asian markets oil and gas there are still opportunities in oil and gas and opportunities in the Middle East in Saudi Arabia for example more opportunities opening up in the Middle East as well so I guess we just have to be very nimble and very relevant in terms of the advice that we give to companies about where those opportunities lie but again that will always be a dynamic situation right and in terms of connectivity you've highlighted that in growing the economy through exports it's important we have good connectivity and that obviously suggests direct flights so how important are direct flights and if APD is devolved in a couple of years time to the Scottish Parliament how important would be gradual reduction in APD in growing direct flights and also sustaining jobs here and increasing exports direct flights are hugely important we've had quite a bit of success in direct flights actually in recent years there's been a lot of new routes to Canada for example we've got a lot more direct routes into Asia but there's more to be done and particularly around more direct flights to China, to India, to South Africa so we're very clear in terms of where we are targeting our resources we're working very much again as Team Scotland with Transport Scotland with Visit Scotland on this and as I say we have had some successes anything that can be done to make the Scottish airports more competitive will be very helpful in stimulating those new routes so that would be something that we would see as an opportunity to get more direct flights from some of these key emerging markets OK, thanks so much Thank you That leads neatly I suppose to questions about choices and priorities for enterprise agencies as well as for government and you have now endorsed the prospect or the principle of inclusive growth as an additional strand to your strategic priorities and to your budgets One point that might be raised would be to suggest that a budget allocation of 10% is modest but I wonder if we could start simply by understanding what you understand by inclusive growth and what is it that Scottish Enterprise does or can hope to do in future towards that objective In terms of inclusive growth our focus is very much on the growth element of that that's what Scottish Enterprise does is it stimulates growth and growth in those key companies and sectors that we work with The inclusive element of that is a big opportunity because what we're striving for by more internationalisation more innovation is that we want the economy to be more productive The inclusion of all of our assets through their people infrastructure the more inclusive we can make that the more engaged we can make that system of people skills then the more competitive and productive the economy is going to be It stands to reason there's also evidence to show that more inclusive economies grow faster We are very much developing the evidence base For example we're involved in the initiatives around business innovation innovative workplaces the Strathclyde University fit fair innovative transformative workplaces We're very much working with them to establish the evidence base in good practice It is an emerging area of work for us You mentioned the 10% I think the 10% demonstrates that we were active in this We recognised the importance of good leadership the importance of regional selection for example through regional selective assistance I would compare it to our spend in other important areas like innovation I think we're off to a very good start in terms of how that compares to the innovation internationalisation spend There's a combination of building on work that we've done in the past around regional selective assistance I mentioned more deployment of training particularly in light of some of the changes to RSA to regional aid that were made at the European Union level last year that encourages us to use training as more of a tool in terms of attracting investment Ian mentioned our investment in youth and the work that we've done around RSA and investment in youth We are quite encouraged by some of the signs that we've seen the involvement of women and minorities in terms of the new engagements that are being made with Scottish Enterprise and Business Gateway over the last few years so for example in terms of new business engagements that we've made we're seeing about 47% of them now being made by women and that's almost double what we've seen in the past It is very much about making sure that those assets are working together to have the most productive engaged economy that we can possibly have and that will make us more internationally competitive I guess to be fair you have a different remit from Hans and Ion's Enterprise which I'm sure you'll comment on but when I asked them about inclusive growth they talked about geographic and social and digital and I think while clearly leadership development entrepreneur support and encouraging investment are all things that are good things they're not I'm not sure I see them as particularly inclusive certainly not in a social sense Is the fact that your remit does not include a specifically social remit mean that when you talk about inclusive growth you're simply talking about growth and trying to be inclusive and promoting that? Well if I can it's not focusing us away from that there are many areas of our activity that go across the whole of Scotland one particular one is our investment function through the Scottish Investment Bank and we talked about the Reef Renewable Energy Fund earlier on that funds invested 2.25 million in a community wind farm in Stornoway going towards a £14 million project up there for a 9 megabyte wind farm so there are examples where we are doing that maybe because our wider focus is more on the growth side of things maybe that's why it comes through maybe more strongly in there but it's absolutely the types of things we do as well Could you also mention though in terms of regional engagement a couple of points to make on the way that we actually capture the spend that inclusive growth is not just influenced by inclusive growth inclusive growth is hugely influenced by things like innovation, internationalisation there's a direct link there so for example many of the companies that we work with around things like leadership very much leads to inclusive growth I think it's essential that if we're going to have engaged workforces for example innovative workplaces that we've got organisations that are well led a strong link there in terms of regional engagement though our investment in the Dundee waterfront substantial £33 million investment in the Dundee waterfront is absolutely based on understanding that there is an opportunity there to have a stronger economy so this is an economy which for many years has had lower growth lower employment rates higher unemployment rates the waterfront investment is about transforming some of those some of those kind of key economic indicators so we are very much involved at a regional level I'd also mentioned the city deals as well that we're very much involved in I'm involved in the Aberdeen city deal in terms of the leadership sponsorship of that piece of work very engaged with the local authorities in pulling together that and in fact actively contributing around the innovation and internationalisation themes and using our expertise to inform the bids that are put into the city deals and what is going on that wouldn't necessarily be captured in budget lines I guess that's part of my concern is that I'm not sure the budget line is particularly helpful in illuminating the work you're doing and I completely take the point you make that good economic development kind of good social outcomes but as an agency you're not particularly in a position to implement social policy and I guess I'm looking to see policy directions in which you are going now because you now have a strategic priorities of inclusive growth that you weren't pursuing before before that was added to your list of strategic priorities I think that what we can bring is a couple of things we can bring a strong knowledge of the growth opportunities that can help our partners in terms of the specific social vision initiatives that they're working on I'm thinking of things like through the community planning partnerships and their involvement and engagement about the opportunity there the other area that we're very much involved is about raising ambition something that we've discussed in Dumfries and Galloway for example we're involved in Fife is about how can we accelerate ambition that will lead to changes in some of the economic indicators that we would like to see in a different place I think that we're a very important part of the effort around social inclusion we bring a specific expertise to that and I would expect us to be informing those policy decisions if not leading on some of them Finally, if I may Ian mentioned that 44 companies since the new financial year had accepted that they should have a youth policy as part of the conditions or at least in connection with the receipt of regional selective assistance that's not a formal condition is it and my question is are there other requirements put on recipients of funding through Scottish Enterprise and are any of those conditions formal requirements that relate to the social policy we do take the approach of encouraging and incentivising rather than regulating around some of these matters and I think those 44 companies I think that demonstrates that that approach the feedback from our RSA team is that there's not been any resistance in fact the opposite that companies have welcomed these conversations and have put in place practices that they wouldn't otherwise have done so I think that demonstrates that that approach will probably take companies along with you on conversations that you're introducing about how engaged is your workforce how could that be changed so that would very much be our approach for example in youth employment further in terms of our support if there was a youth employment dimension so for example an organisational development support I think the example would be Steve Addering in fourth ports by encouraging him to take on more youth we would actually go slightly further in terms of our contribution to some of those projects so it is about incentivising encouraging using the evidence base that we have and that we're continuing to build about why taking this approach is actually more beneficial to the company and to the economy Thank you very much Patrick Harvie got a follow-up On this inclusive growth agenda which I have to admit I'm struggling with a bit as well to see that it's any change of direction that doesn't seem to me any more meaningful a concept than sustainable growth was they both sound pretty much like vanilla GDP growth to me your answers on this theme didn't mention the business pledge your written evidence does it says as part of your approach to this inclusive growth agenda you're actively promoting the Scottish business pledge and around 30% of signatories to date are account managed companies would you mind just putting that statistic round the other way what proportion of your account managed companies have taken up the business pledge okay so it would be in the region of it would be a low proportion of our account managed companies how many account managed companies are there we've got 2,300 a few dozen of them have signed there's 40 39 of 40 but it's early days I mentioned earlier the business pledge how useful it was opening up discussions with companies about this whole area and it has been I guess if you let's look at the living wage the number of companies that have formally signed up to the living wage that's 300 so we're up to over 100 in the business pledge already and that's only after a few months so I think that's quite encouraging in terms of your reactive I'm not trying to be scathing here but after a few months you're somewhere around 1% perhaps a little bit more than 1% of your account managed companies have signed the business pledge which is the first step in a journey toward more ethical business practices and again about raising ambition as you mentioned this is very much part of that agenda you know the Scottish budget is about to vote you another year's funding you're going to have opportunity to use that to use the public money that's given to you to drive that figure up to drive up the number of your account managed companies who have committed to the business pledge where would you expect it to be by the end of the financial year that this coming budget will relate to well I would talk to to continue to see the sort of progress that we've seen we're having those conversations with companies I don't want to put a figure on it really because you know this is about engaging it's not about I don't think setting a target I'm trying to tick boxes this is about opening up conversations with companies about these important areas so I would talk to see continued progress the conversations have begun with companies we've discussed it with over a thousand of our account managed companies now so I would hope we've got more companies in the pipeline another 20 companies in the pipeline looking to be assessed for the business pledge of our account managed companies so we're seeing that pull through there are also a number of companies who are already involved in areas like the living wage and some of the other themes such as innovation and internationalisation that are actually very happy to participate in those companies without signing up to the business pledge I guess there will be some companies that will get engaged in that conversation that won't necessarily sign up for their own reasons but I would expect to see progress you've begun that conversation with a thousand of your account managed companies it would be reasonable then to say that all of them would have been approached to take part in that conversation by the beginning of the financial year that this budget relates to would it be a reasonable expectation that public money that's being spent through Scottish Enterprise is one of the incentives if companies want to access support services that are coming through you or indeed access grants that this would be one of the incentives that's put in place to ensure that people take the business pledge seriously and sign up so for example we are taking moves in that direction so for example we know that we get a better return companies have a mix of support that includes innovation, internationalisation and some element of organisational development as well we see the returns within companies being higher there's a good argument there for us therefore to go further in terms of our support to encourage more companies to undertake that kind of initiative so we will incentivise we'll continue to find ways to incentivise companies to get involved so you will put in place incentives and presumably disincentives in relation to the business pledge? Not disincentives I think it would always be about encouragement and winning the argument through the evidence base that we have and through the evidence of the impact that it's had on other companies that we work with so sometimes that will be about more money sometimes it will be about more attention from us in terms of the resources that we put in through our organisational development team which we are growing and which we are who are coming up with a lot of good new initiatives around around this whole area so I would expect us to see to be doing more in this area and using means at our disposal to encourage companies to do what the evidence points to is a more productive way of doing business I'll give just an example on that one a company that we've the ODI team has worked with Genius Foods they're in the gluten free bakery market a small company with 20 people in it but did a couple of acquisitions so they're up to about 400 people so we want to be close to them with the growth ambitions they, from the work that we've done with them we've helped put training programmes in place that's increased their spend on training of their employees from £82 a head up to £300 a head we've also got them to look at their overall paying benefits package which has significantly increased that for individuals in there but they've still got an objective to achieve the living wage so if there was conditionality in there that said we couldn't work with them because they weren't signed up to the pledge because they weren't at living wage we wouldn't be able to work with those companies so there's still a lot of work that we need to do to get companies by encouraging them to have better progressive employment practices than making it conditional so that's not a policy of this time to do we all accept that it's about moving people along in a journey but that movement has to happen and perhaps some of these questions could be followed up with the cabinet secretary at the end of the pre-budget scrutiny in relation to the arguments for conditionality and I just follow up just on that last point Mr Glesby because this whole question of conditionality is one that the committee spent quite a lot of time looking at in terms of our recent inquiry and unless I misheard you you said something in relation to incentives and the business pledge and you said some of this will be about more money so are you actually saying that Scottish Enterprise will offer to help businesses who sign the business pledge when it wouldn't offer to help businesses who didn't? What I was saying is that companies get involved in some of the areas that are pointed to in the business pledge like innovation internationalism where we know there's an impact that will go further to encourage companies to do that not specifically to sign the pledge but to get involved in some of those activities but the pledge is a very good way of introducing these conversations to companies and getting that on the agenda so it wasn't specifically about incentivising the pledge to sign the pledge would be incentivised it would be about undertaking because the pledge was based on the evidence that we have about what works in terms of making the economy better All right, thanks for clarifying that Joan McAlpine Thank you very much, convener I'm glad you mentioned in recent Galloway because I'm going to raise it again as I have done in the past in committees and obviously with both of you privately it relates to the 2.1 section of your written evidence on supporting Scotland's companies and I've obviously raised the subject of the recent Galloway before because we don't have a huge number of companies of the size that you're used to account managing and also because in many ways it's not a city region and it's more like areas of the Highlands and Islands in terms of the support it needs so I guess I'd like you to tell me how you've changed your practice in your region to improve things and also this differentiated approach that you mentioned in your evidence could you maybe in the context of that talk a bit more about that and how you're measuring it I'll bring in Ian in a minute Ian has specific responsibilities for the south of Scotland but conversations that we had about increasing ambition about working closer with business gateway and understanding what will work in terms of increasing ambition levels and trying to get more companies pulled into the account management system we've also our employees have been very much involved in terms of coming up with new ideas about what would work for the economy and have built specific workshops to develop new project ideas about, for example, the dairy space around how we can help to stimulate the economy we've got some specific ideas about the regeneration of Annan and the decommissioning of the power station there and what other uses we might be able to put that to so I think quite a lot of focus on that I would say that you mentioned the business space as well a big part of our work in Dumfries and Galloway has been provision of business space to allow companies to grow and to pull more companies into that growth system so I think there's been a lot going on but I'll bring Ian in at this point on the things that I could say about Dumfries and Galloway there but I was down at Dumfries and Galloway business week recently and it was great to meet a number of companies that were down there on several occasions one account managed company was fantastic at demonstrating the growth that they've had down there so we do need to try and get more companies with that level of support I think there is about 20 companies in the growth pipeline as we call it at the moment by progressing them through I think Adrian's given a commitment in the past to the council down there that we will look at moving companies into our account managed programme even if they weren't meeting the hard criteria that we've put in the past in there I think we've made some movement on that I think there's two or three companies that we've looked at doing over the last six months in there so you would consider doing that even if they didn't meet right, you would be more flexible absolutely, we recognise some of the issues down there and we will act flexibly on that criteria, but we will act flexibly for quality businesses that are in that growth pipeline to get them through into account management so now When you say you've worked more closely with business gateway what does that mean in practice and how does it change things? I certainly saw a lot of evidence down there of really close working that I think there was one presentation night where there was a lot of companies along there and a number of the agencies all stood up and we're all speaking with one voice about how they work together in there particularly all of them including two or three I think that way is from my own organisation that we're saying to all the companies that were around if you need to access any support or you think you need some access and support go and contact the business gateway because they are the front line for us we've worked very closely with them and we'll be able to deliver the services to you but the business gateway is absolutely at the front of that I think that the council have just recently taken the business gateway into their own ownership down there and we've certainly got a very good relationship with the council down there now I think that's progressed over the last 12 months or so OK, that's good I don't know if you heard when I asked the previous session with Highlands and Islands Enterprise about the whole issue of mobile connectivity obviously there have been a big emphasis in broadband and I think it's fair to say we're making headway in both the Highlands and the south of Scotland in broadband but access to mobile coverage as the Highlands and Islands Enterprise said it was the most important issue for people in the Highlands and I would say that my region is probably one of the most important issues as well have you had the kind of conversations with mobile operators that the chat from HIE mentioned in his evidence? I don't think we have had that yet but particularly for that area of the south of Scotland I sit on the south of Scotland alliance alongside the recent Allway Council and Scottish Borders Council and at the last meeting there were a number of discussions about both areas there still Joan, both broadband and particularly mobile as well and we're going to work together as a group to try and progress that so it will come through the south of Scotland alliance working in conjunction with the councils to make representations to whoever can do something about that down there broadband has had some progress down there but there's still quite a lot of coverage that needs to be done as well and we're going to work hard to do that too on broadband implementation I think there might be some lessons we can learn from the approach and the expertise that they've got in-house that we might be able to apply to some of the locations that you mentioned this morning and some other locations that we know about that could maybe benefit from some input from that so we'll take that up I thought it was interesting that the chief executive said it was a piece of work that he personally was taking forward at HIE and he had been asked to do it by Mr Swinney and it might be helpful if there was something similar that we could do in our area We'll certainly make sure that he's got access to the south of Scotland and the rest of Scotland to continue that work that he's going to do for me, John Okay, thank you very much I think that's called passing the buck Teamwork, thank you The politician can come across people who want to do things in Scotland and there are two aspects that jump out at me and I want to ask you if there are any more One is planning getting people putting in an application and not being passed or whatever and the time it takes to get planning and the time they get to section 75 order et cetera et cetera and the other is funding investment and trying to get to you know locally I think the green investment bank has only spent 4% of their funding in Scotland but is there any other if you'd like to comment maybe those two aspects and are there any other aspects that you have come across that you think we should be looking at in order to improve economic activity in Scotland Okay, specifically on the planning, we on an individual basis with companies will work with them where they've got planning concerns and that we will use the relationships with local authorities for example to assist with that I think the other area is utilities as well which comes up as sometimes a frustration for companies or in terms of implementation time or in terms of actually kind of inhibiting growth so that would be another area again we would tend to take that up individually with the relevant company or local authority that would be involved in that and we would do that often that would be below the radar and we would try and sort that out and remove any barriers but that would be the other area that would spring to mind in terms of sometimes getting in the way of investment or slowing it down sorry was there another question there around the green investment bank sorry you've got the Scottish investment bank continue to address both supply and demand issues companies seeking finance you know is it you know basically are banks now starting to lend you know are you involved with companies that they say oh it's easier I can talk to my branch manager and he wants to give me or she wants to give me money now it was before years ago it was no can I respond to that I've been working alongside the Government team on the business development bank so we've been speaking to a number of the banks out there for that I think it's clear banks are lending but there are still some areas that they find difficult to lend to and that's what we're trying to work with them to take them up with some kind of products that will allow that to happen so whether that's some co-investment or some guarantee or something we're working on that at the moment and hopefully over the course of the next few months we'll be able to come out and announce something on that and then is through our access to finance team so as well as the work within Sib as well as giving out money alongside other co-investors we actually have got a team dedicated to working with companies to help them to put proposals together in a way that they've got a better chance of accessing finance and over the last couple of years we've been very successful in that to the point where we I think we doubled the resources we're putting into it and we're going to expand that even further as a result of the work on the Scottish business development bank we're also going to look at how are making it easier for companies out there to be able to find out and access so some kind of digital solution to be able to pull some of these products together to make it easier to do that we're looking at doing it at the moment as well so we've made progress but there's still some way to go on that Thank you, Cuntheor Slightly going back to the wider question of the economic impact of the oil and gas downturn and we talked about that earlier on and you talked about a short-term tackling response and the importance of that There are further figures out today which show that the claimant count over the last 12 months in Aberdeen is up by 39% and in Aberdeenshire by 66% these are very significant figures I'm sure you'll appreciate it Is it time to assess the impact of this on the north-east regional economy and on the Scottish economy? Is this something that Scottish Enterprise can take a lead on in the way that Scottish Enterprise is doing? I would argue that we are taking a lead in terms of the response This is something that we'll give consideration to whether there's a piece of work to be done here I think that we very much appreciate the scale of what's happening here and I think that we're doing all of the right things I'm not sure that putting numbers on it at the moment is going to be particularly helpful I think that we're very much focused on the task at hand and also what needs to be done for the future We have the oil and gas strategy which is being refreshed at the moment and recognises some of the changes that have taken place so there's a huge amount of effort going on there whether it would be worth partnering with high in terms of looking at the impact more widely is something that we'll take away and follow up with you That's it On behalf of the committee I thank you both for coming along to us in our deliberations and we will now suspend briefly and go into private session