 Felly, ond gwaith bod chi am ymddill yn ardal unigion mae'r Cymru Cymwyntolol Rwyfyrr yn Fyrwyrd. Y decisions 1 yn ystod y Prifysgol 4, 5, 6 a 7 yr ystod ond ein ddim yn grath o darnef. Yng nghyddiwch. Diolch yn fawr i llwyddoedd o Cologne BT, Dean Lockhart a Andy Whiteman, ac mae yllaf Wily Cofi a Tom Mason sydd am ddwych. I would ask everyone in the public gallery to turn off any electrical devices to silent please. We now turn to the item on our agenda, the business support inquiry. We have three witnesses with us this morning, whom I would welcome at this stage. First of all, Andrew Dixon, fund manager of Business Loan Scotland, Keith Devine, senior director of business banking in the Royal Bank of Scotland, and Professor Gary McEwen, who is the chief executive, not executive, hopefully, for Elevator. Welcome to all three of you this morning. Just to say that the microphones will be operated by broadcasting, there is no need to press any buttons, so if you do want to come in to the discussion at any point and don't feel you're making it in, just raise your hand so I can bring you in. I'll start with a question generally to the three of you, which is what do you think of the provision of access to finance for SMEs in Scotland? Is there sufficient finance provided and available to small to medium-sized enterprises in Scotland? Are there specific difficulties that SMEs in Scotland face gaining access to finance? Who would like to start? I'm here representing Business Loan Scotland, so we're a local authority-backed loan fund, so we've got the money of the bank effectively to be able to lend to SMEs, and predominantly our market is new and growing young businesses. I think that there's definitely room for improvement in terms of when it comes to access to finance. I think that there's been a number of initiatives more recently where there's been more financial products out there. I'm not sure to what extent we are totally aware of what each other is doing, and that's certainly the case for small and medium-sized businesses to understand what's actually available. What form would that, I think that you mentioned, need for more access to finance? What form could that take? In terms of financial products, I think that there's a good range of financial products out there from your microfinance to your debt finance and to your equity finance. The bit that I'm interested in that I'm responsible for is the debt finance between £25,000 and £100,000, so that's what I'm probably most able to talk about. I think that there's a good range of financial products out there. It's making sure that businesses, when they actually need funding, know where to go and how to access it. If they do that, is there sufficient financing there for businesses in your experience? Yes. I think that it's improving. The range and the amount of funds that are available are definitely greater now than perhaps the way they are a number of years ago. The range and the amount of funding that's available has definitely increased. I represent Elevator. For those who don't know, we deliver almost 25 per cent of all business gateway startups for Scotland. Many business advisers are recruited to connect people to finance as one of their roles, but those advisers have to have a very broad range of skills available to them. The navigation of the funding mechanisms is perhaps the most difficult part of the adviser's job to try to navigate through the many different places that access to finance can be found. There is a lot out there, but it's complex. The other issue is that entrepreneurs who really should be focusing on building reputation and credibility companies can spend too much time continually looking at the next round of funding. It's such a time-consuming. Entrepreneurs will often reflect after four or five years of the journey and think that they become funding experts, because that's the problem that we have—it's not really that joined up. There's not a road map that would be helpful for what is a small country. How could that be improved? I do agree that there's plenty out there. However, there's sometimes too much in one area of a business growth in terms of its timeline. When a business is just beginning, nobody really wants to touch it because there's too many unknowns and too little to go on. Funding available for businesses that are in growth mode is much easier. I agree, but I don't think that we have it evenly spread on the journey of a business. We need to do more for start-ups. We need to do more for the early-stage growth ones, because the market takes care of stuff after that, in my view. How we can help the situation is by having perhaps more of a CPD process within the business gateway programme to allow the business advising community to have a better grasp on how they might navigate through the—they could seriously spend all their time just raising money for clients, because it's such a tough thing to do. That would mean that they couldn't do their business, presumably. Or does it stop them focusing on the business? I think that if I was to try and sum up my view, the task of raising money to grow a company is an onerous one. It takes a disproportionate amount of time from an entrepreneur's workload, time that could be more valuable spent actually building the business, until they get to the point when they can have a finance director who can maybe take control of that. In the early stages, it's difficult. Of new businesses and young businesses, you find the principle that the owners of the directors are working in their business as opposed to on their business. I think that that's a key change that entrepreneurs need to be able to make. Business owners need to be able to make in terms of the need to be able to have the teams around them that can actually do the day-to-day stuff that's required to grow, start up and develop that business, to allow the principal, the director, the management director, to be able to work on their business and undertake those tasks of looking at how they're going to access new markets, how they're going to raise funding, how they're actually going to go and create the opportunities that will then create the jobs that we're looking for, certainly from an economic development perspective. Mr Devine, is RBS ready to lend money to start-up businesses? I think that in short, the answer is yes. We are very proud of the fact that we bank one in three of businesses in Scotland. The sector of the bank that I'm involved in is the start-up to £2 million turnover phase, and we have around about 111,000 customers who are in that sector. We support businesses in a variety of ways, so we have a team of 65 relationship managers who work locally with customers to find out what they need and how we can help. We have a team of eight business growth enablers. Those are individuals who don't have day-to-day responsibility of supporting active customers. Their job is to be the public face of the bank to let customers know about the wider ecosystem in Scotland, to see who can support and that's both internally, within the Royal Bank and externally. We are trying to make it much easier for customers to access finance, and we've taken various initiatives such as looking at pre-approved limits, so customers who haven't approached us for funds, we are going to them and proactively saying, based on what we know about you, this is how much we think that we can lend you. Of our 9,000 or so customers who are looked after by our relationship managers, we've got around £168 million worth of funding that has been approved, that we are simply waiting on a customer saying, yes, I would like that funding. To date, of the £168 million that we've made available, only £12 million has been taken up, so we would see it as a demand problem rather than a supply problem. However, I would echo what my colleagues have said, that one of the things that we can improve is to signpost better in terms of the range of support that's available from banks, different agencies, the growth bodies who are out there, because I think it's fair to say that not every customer knows who can offer what. I think that some of the criticism that might be made of that sort of scenario is presented is that businesses say that the funds may be there, but they can't get the lending or they can't get it on long-term reasonable conditions. I think that we seek to offer competitive terms that are market facing, that are right for the business. We are in the business of lending money to sustainable companies who are in a position to pay it back in the future. We don't seek to put unnecessary conditions or charge it prohibitive rates. We want to offer fair terms for the individual deal that is put in front of us. I'll come to Jackie Baillie now. Can I drill down into some of the responses that you've been giving to the convener and make the observation that, certainly immediately post the banking crash, it was a supply problem rather than a demand problem? I wonder on that basis, do you think that competition in SME banking has improved? Is there more choice out there now for a business coming for a loan? I wonder whether I can start with Keith Devane. I think that competition is a great thing. It ensures that banks continue to innovate, where banks will seek to be different, differentiate not just the blind supply of funds, but what else we can offer a business, an entrepreneur or a community. We seek to do that by not simply supplying funds but to connect people, to offer advice, to offer free events. That's to both our customers and non-customers, really to make sure that customers are aware of what the options are available. I do take your point that, 10 years ago, perhaps there was a supply problem, but I think that things have moved on significantly since then. Our experience is that we have funds available to lend to the right business who are able to pay that loan back in the future. It's not in anybody's interests bank, economy and customers for us to lend money that is not affordable that can't be paid back. We are at pains to make sure that we are tailoring the right package to the right customer. How much has your overall lending portfolio increased by since, say, 10 years ago? I'll be happy to come back to you on the 10-year figures. What I can tell you is that, since the start of 2018, our asset book has grown by about 5 per cent. Previous year, it grew by around about 7 per cent. Do any of the other panel have observations on that point about competition? I think that there is a good level of competition. I still think that the four major banks still dominate the Scottish market in terms of providing facilities for overdrafts and in-term loans, but the whole raison d'etre for business loans Scotland is to come and fill that gap when the private sector is not prepared to do it. That might be because the banks are not prepared to do it for a number of reasons. It might be to do with risk, it might be to do with lack of security, etc. Our whole raison d'etre is to try and get the funds available to the business that they need to deliver that project, that plan and the timescale that they require to do it. Business Loan Scotland is relatively new. We have been going about 18 months. Before that, some of you may have heard of either the West of Scotland loan fund or the East of Scotland investment fund. We have merged into what is now a Scotland-wide loan fund, and we will go where the demand is. However, we are there to try and fill that gap that is left by the private sector, otherwise there would be no remit for us to get involved from an economic development perspective. The private sector would be doing what the private sector is supposed to do, but that gap definitely exists. Professor McEw? The last 10 years have seen a real change in the landscape. 10 years ago, the banks largely withdrew into their shell for a while. I am not sure that we have seen—I have to say that the Royal Bank of Scotland has been, to me, the most active player in the market of all the banks. The rest do not have too much appetite for the early stages of an organisation, because it is just broadly too high-risk and too much effort. I think that the Royal Bank are possibly the exception to that. They are very active. However, we have seen other products peer-to-peer lending and crowdfunding. Many things have come in in the last 10 years, which has broadened the range of the menu. I think that that is healthy, but there are still gaps. It is good to see local authorities becoming involved to fill some of those gaps. However, there are more things that can be done. There are examples that we are certainly trying to emulate from Europe, where the business start-up community and the banks can work better together. I think that we would do well to copy some of what they are doing. I think that it is right to say that there has been an impressive growth in the alternative finance sector. Is it not true that this accounts for a very tiny proportion of what is out there? Colleagues will explore further with you what you think we can learn from other countries. What actions do you think needs to be taken now to improve that landscape? I think that there is still a perception issue where people perceive that banks do not want to lend. It is up to us to get past that. It is not up to our customers to come knocking on our door and come asking for funding. We have to make them aware that we are there, we have to be proactive, we have to tell customers about the successes that we are having. We have to make sure that they are aware that there is an appetite to lend. I think that we also need to help to prepare businesses that are in the pre-funding stage, where we are either offering advice one-to-one or in groups or, alternatively, to signpost when a business might benefit from going to another agency. I think that we all accept that these days accountants do not simply survive by completing a set of annual accounts once a year. They are in the market now to offer advice. Although that advice can be very good on occasions, normally it is advice that the customers are charged for. It may be that they are not actively promoting the services of accelerator hubs, business gateway or other agencies that are in a position to perhaps help with grant funding as opposed to debt funding. Can I take that one stage further? Obviously, raising awareness with businesses is critically important. Is it the accountants that you target, or who else in the business would you target to increase their awareness and understanding of what is out there? We will target anybody who we can talk to. That would be customers, accountants and solicitors. Really, we want to spread the message as far and wide as we can. Ultimately, as I said earlier, we thrive when Scotland thrives. When businesses are doing well, we do well. However, we need to lend to the right businesses on the right terms, where there is a realistic chance that we are going to get our cash back in the future. Does removing relationship managers from the branch network help that process? It is fair to say that the relationship manager is a cornerstone of the service that we provide. It is what differentiates us from other banks in as far as we have the biggest network of relationship managers. You have mentioned branch closures. However, in reality, our relationship managers are tasked with going out to businesses as opposed to saying, Ms Bailey, would you like to come in and see us? That may have been the case 20 years ago, however, we recognise that businesses want to be seen at a time and place that is convenient for them, so we strive to do that. It gives us a better insight into a business where we can wonder about, we can see things, it sparks good discussions. We do not rely on customers coming into a bank branch and sitting in our office to discuss lending. Just as well, because you have fewer of them. Andrew Dixon? I would say that businesses turn to their bank or their accountants for that professional advice, particularly when it comes to raising funding. If they can raise the money from the banks, all well and good, there is no need for funds such as Business Loan Scotland to get involved. However, the entry point to us is to the network of local authority economic development teams and the business gateway service. That is where we rely heavily on the network of economic development officers, business gateway advisers on the ground at the local level. When they are working with businesses and they identify a business that is to raise funds, we are one of the solutions that are available, particularly if it is relevant to raising funding in the range that we can offer of 25 up to 100. The starting point for businesses is going to their own professional advisers, their banks and their accountants. Sometimes they are solicitors, so we try to get our message out there to all the banks and the accountants, because we do not know when that business is going to be looking for funding, but we just need to make sure that the network is aware that we exist and that we have got the facilities to support that business, particularly in filling that gap if they have one. You asked about how that could be improved. The fundamental problem is that when you are in an SME, if you are an entrepreneur trying to start or grow, that you are in the risk business inherently and the banks are not in the risk business. That is the problem. How we solve that, you mentioned relationship managers. I think that they went some way before to bridging that by giving the institution some comfort that they were in control and they assessed the situation. That is a loss to us. The fact that there is a lot of it is going to computer says yes or no, which scares entrepreneurs a lot and scares them away from borrowing. However, we do have some examples if you will be aware of the Scottish Edge, which to me is a master stroke of bridging that gap between the risk and the risk a version. You have Royal Bank of Scotland supporting it, the Hunter Foundation of Scottish Government. Now you are blending people with different risk appetites into something that does bridge a gap and business flow in Scotland and many of the like. We probably need to acknowledge that banks and entrepreneurs talk sometimes in a different language and it is maybe up to all of us to think about how we create different models that bridge the gap. On the subject of computer says no, I think that at Royal Bank, on the occasions where we do try to use technology to speed up lending decisions, the times when the computer says no, it actually does not say no, it says refer. What we do is refer that lending decision to a human being who can look at it to say is there more to this deal than meets the eye, i.e. it is not square pegs and square holes. Sometimes the decision will still be not yet, but we then have a conversation with that customer to say that this is what we would need to do in order to make a deal viable for you and for the bank. Although technology plays an important part in what we do, we still have human beings who are there to look at a deal to say does this stack up or could we tinker with the deal so that it is the right thing for both the bank and the customer. Ultimately, we have spoken about risk. The risk to the bank and the risk to the entrepreneur are the same. We both want to manage and minimise that risk and make sure that we are doing the right thing for the customer who is in front of us at that particular point. That was useful to know. I am glad that humans are still involved. If I was to reflect, my view is that my local businesses miss having the relationship manager on their high street. It is somebody that they could trust and who the bank obviously had trust in as well, so I think that we are missing something. I would be very interested to hear about what we have learned since the Royal Bank of Scotland debacle with the global restructuring group. People will be aware that this was a service that was meant to be supporting small businesses. That was struggling. It was closed in 2013 and there was a subsequent FCA inquiry that concluded that, while some of the businesses transferred by the RBS inter-restructuring division were not viable, but of those who were judged to have sound prospects, the FCA found that one in six had been damaged through GRG's management of them, including through higher interest rates and new fees. I would be interested to know what we have learned, particularly given that Brexit is in some shape or form around the corner, and has trust been rebuilt? I will start with Mr Devine. I think that the main learning that we have is that when we are looking at lending proposals that come across our desk just now, the key thing that we look at is whether that business can serve and support the debt that it is taking on. Both in the current climate, where interest rates are at historically low levels, but we also start to look at what happens if the economic landscape changes. How could that business support that loan if interest rates were to perhaps increase? Alternatively, what would happen if a competitor opened alongside their business and turned over reduced? Does the deal still stack up? Are we lending in a responsible fashion so that the business can meet its obligations both now and in the future? There are no guarantees. There will be times when we will lend cash and something happens to that business that puts it in difficulty in months or years to come. We have closed the global restructuring group. However, we still have specialists who are there to help businesses in times of highly stressful situations, so we are there to support the customers that we have. Do other members of the panel wish to contribute on this? I am not sure that I can add much more than that, but we need to bear in mind that we should be treating the customer fairly. I am very happy to answer questions, but this is definitely not my sweet spot. Given that we have already mentioned a B word, that will be Brexit. I would be particularly interested in the panel's view about what impact that will have on business support, given that European structural funds and ERDF have been particularly important in this regard. The nature of business support in terms of how it is provided and the level of support that SMEs will require, whether that will change if so, you know why and how. I will start with Mr Dixon. With Business Loan Scotland, as we currently exist, we have received European funding. That comes to an end for us at the end of December. We have been offered to move into a new debt fund in partnership with the Scottish Government from January. We are looking to conclude that. However, with the lack of ERDF funding that is going to be there, clearly there will be a reduction in resources that are available to business support services, to perhaps business gateway in terms of the funding that they are able to add to their core service using ERDF funding. Without replacing that ERDF funding, there has got to be a reduction in the level of service, the level of resources that are available for business support programmes. As far as a customer is concerned, Brexit obviously increases the level of uncertainty in terms of what is going to happen. That is going to place a degree of not knowing what is going to happen post Brexit and leading up to Brexit. That will clearly have implications on working capital requirements and cash flow requirements for businesses as they try to understand what is going to happen to their customers and their suppliers. Funds such as Business Loan Scotland or the new fund from next year may well have to come in and support businesses with capital working requirements and cash flow requirements, probably more than we have done to date. I echo many of the things that Andrew Scott said, particularly around uncertainty. Businesses like certainty like to be able to plan for the future based on, I suppose, known outcomes. Right now, we do not have that. Within the Royal Bank, we will continue to do what we currently do, where we will sit down with any customer to discuss any concerns that they have, and we have experts on hand who are able to talk either in general terms or to answer specific queries that may affect one business or another. Professors, is this an area that you would like to comment on? I would like this one. The business gateway funding has been at best static for the past eight years or so. That does nothing to help innovate and try new things. However, with the introduction of ERDF funding, that has been a welcome addition to that. We run a business accelerator in Dundee University, which is hugely successful, but it is staffed by people who are funded through the ERDF programme. We also have, in Aberdeen, a diagnostic review system that we have been able to implement again through ERDF. It has been able to really add value to the core business gateway funding, as we see it. If that is ultimately lost, there will be some decisions to make about how it does not hamper us trying new things and is able to develop services. It has definitely filled a gap where business gateway funding has been a fairly static income line. I wonder if I could start with you, Professor, whether you had any views about what we could learn from business support in other parts of Europe and in other parts of the UK in terms of what works well and what works less well elsewhere. What we have in Aberdeen and Dundee is a manifestation of the best that I could find in Europe or in the States. Babson College, which is the number one university for entrepreneurship in the States, tweeted recently that having seen the Aberdeen business gateway facility, they said that there was nothing better in the US, which was a great endorsement. However, the best cities and regions to create are creating entrepreneurial cultures within them. Business gateway is a service that is part of an ecosystem, but it is not the ecosystem, it is part of it. It is incumbent on us to create entrepreneurial communities. All the big cities, for instance, if you take Barcelona, they have a great example of having just about as many people as Scotland has yet. They only have one place where all the entrepreneurs go, but it is filled with energy and integration. That is definitely the way to do it. We created such a centre in Aberdeen four years ago now, and we are recently audited by ECOS, but we are generating 14 per cent of the business gateway startups annually, despite only having 8 per cent of the population. It has been truly transformational in creating an entrepreneurial culture. There are lots that we can learn. In Activa, we copy it, we have every single bank represented in the space where they work side by side by the advisers. We have created an open access space where the public can walk in. There is no formality around it, there is no reception, no badges. If they want to speak to business advisers, they just speak to business advisers, they are all there. There are lots that we can learn from some of the continental ways of doing things that generate great amounts of energy. I think that I would like you to see that in action, but to have such a centre in the main cities and connect them all up in Scotland, because we connect our Dundee facility and Aberdeen facility, and the energy in these two places now is quite palpable. There are lots to learn, but we need to look outside Scotland sometimes just to get some inspiration from what they do in other places. Thank you very much for that. Do other members of the panel wish to contribute about what we can learn from elsewhere in the UK or further afield? I am not sure that I can say more than what Professor McEwen has added, but where it works particularly well in Scotland and we need it somewhere else in Scotland, we should actually be making sure that that type of resource and service is absolutely available. What I have heard anecdotally from other people who come up to see the system and the service that we have in Scotland is that businesses and entrepreneurs are well served, I believe, compared to other parts of the UK. We have a good system in place to the business gateway service, and we are much more joined up than we were a good number of years ago. Certainly, the gateway service has been transferred over to responsibility under the local authority umbrella and cosiler, and I think that that has been a move in the right direction. I think that my colleagues are better placed to talk about provision in other countries. What I would add is that the ecosystem is the important part here, where we have different bodies who are connected and who can point customers or businesses to other agencies to other areas where support can be given. Scotland is well served in terms of accelerator hubs. We have two of our own, one in Edinburgh and one in Glasgow, that work very well. So far, we have helped around about 800 businesses. They in turn have created 2,000 jobs. A really important stat, as far as I am concerned, is that those businesses who are given that type of support, typically the survival rate after 18 months is around about 85 per cent, as opposed to the UK average of 20 per cent survival rates, without that sort of support. Clearly, we are doing some things very well. It is just making sure that we are touching as many businesses in Scotland as we possibly can. My final question, convener, for all panel members. Given that all the evidence shows that addressing the underrepresentation of women in the economy and other groups, whether it is people from a BME background, people with disabilities or folk from more disadvantaged areas, if we tap into all the talents that are good for businesses and for our economy, I wonder whether the panel would agree with that and if they could share with the committee what they are doing to address the underrepresentation of particular groups in our economy. I start with Mr Dixon. I absolutely agree with what you have said. What I am coming from is trying to make sure that any business that needs to access finance is able to do so irrespective of who is leading that business or who owns that business. What I am trying to do is make sure that the supply of access to finance is there for businesses as and when they require. We measure how many female entrepreneurs we have supported and how many businesses are led by females. That is generally increasing over the past number of years. Predominantly, the number of businesses that are owned by males is about 75 per cent. I think that about 10 to 12 per cent of what we do is female businesses that are owned. Where we are able to measure businesses that are jointly owned, it makes up the balance. I would look to my colleagues in the local authorities and the business gateway service to make sure that our message is being spread far and wide to the businesses that they are working with so that, if that business has a need for funding, we are one of those options. Committee heard evidence a few weeks ago from Women's Enterprise Scotland, who pointed to some very stark statistics about women being far less likely than their male counterparts to be able to access finance in the first place. Some of that was about how services were articulated, presented, targeted. They were not gender aware. There were also some inherent views about particular types of businesses and some businesses being written off as lifestyle businesses. I appreciate Mr Dixon's quantifying and counting the representation of women. I would hope that other groups would, but what has specifically been done to reach those that are underrepresented in receiving services? We have an active marketing campaign that tries to spread our message across Scotland in a number of channels. We are very active online using social media to try to get our message across that we are open for business and that we are there to support businesses that cannot raise all the funds from the private sector. We are using social media as part of our marketing campaign. We are doing adverts and case studies across a number of media channels, whether it be publications or newspapers. I am trying to spread the message that, if you are a business, irrespective of who is running that business, if you are looking for funding, we might be able to help you fill that particular gap in need. Given that SMEs and people running SMEs are not a homogenous group, and we have also heard evidence from the Women's Enterprise Scotland that just trying to remarket and retarget the same old products does not necessarily address issues of underrepresentation. I would be particularly interested in what the banking sector is doing. We seek to offer the right support and the right solutions to any customer who sits in front of us irrespective of their background. However, I recognise the point that you are making particularly around women-led businesses. In terms of the Royal Bank, we have worked closely with Women's Enterprise Scotland for the last five years. We have 60 women and business specialists in Scotland. Last year, they organised and ran 300 female-focused events across the whole country. Those were attended by 11,000 women. We looked at subjects such as women in agriculture, women in leadership, quite a broad range of different topics. In terms of the two entrepreneurial hubs that we have, which are there to support businesses that have the ambition and potential to grow, 43 per cent of the candidates who are going through that programme are female-led businesses. We are not quite at the 50 per cent mark yet, but we are certainly very aware of our responsibilities to help female entrepreneurs and female business owners. We will seek to continue to do that. Professor McEwen? This is a changing environment. I remember that, back in the mid-90s, Scottish Enterprise had a target of 15 per cent of female-led entrepreneurship, which seemed very aspirational at the time. However, for the past two years in the Aberdeenshire area, more than half of the entrepreneurial starting business in those two years have been female-led businesses. It has come on a lot, but we have two issues in Scotland. The first is that we need to help more businesses to start up. I think that we have been limited. The Scottish Government has a start-up target, which amounts to around 10,000. I think that, nationally, somebody must have decided at one time that that was a barometer of our entrepreneurial health. I do not know where it came from, but it should go, because, to me, it limits ambition. What could we really achieve as a country if we take the lid off that? However, we are going to achieve more by unlocking the untapped potential of the latent entrepreneurship that lies in all the groups that you have just spoken about. When you give it a focus, like we have done with women's entrepreneurship, the results can be quite startling. Young people are another one where we need to join that up better. We need to be teaching entrepreneurship at a very young age and making it a normal thing for a young person to come through their life and expect that one day they will run and be a wealth creator. We need to do all those things inclusively. There is no point in repeating the same mantras to the same people all the time that are going to be entrepreneurs anyway. We have to unlock the potential of the entire country and to grow our economy inclusively that way. I want to explore a little bit with the experience with Business Gateway over the 10 years. I remember being in the Parliament when the transition took place from the enterprise networks to Business Gateway providing that localised support. It was just to get your thoughts on how the model has worked over the period in terms of the level of support and advice that small businesses get in the local communities using that model. We could not deliver the loans that we put into small businesses without the Business Gateway service and without the wider local authority economic development teams that are providing services to SMEs across their local areas. I have seen the transition from Scottish Enterprise over to Cosly and the local authorities. I have seen a more joined-up approach over those 10 years. I think that there is room for improvement and there is some way to go. We are fighting against a decline in resources and, in particular, staff that are in the Business Gateway service and local authorities generally as budgets are under pressure. However, we could not do what we need to do without the Business Gateway service and the advisers that are there. I think that my fellow panellists are in a better position to describe the support from Business Gateway rather than the bank. I would categorise our relationship with Business Gateway at a local level, where our local relationship manager or business growth enabler will have a contact within the local business gateway. The strength of that relationship will probably be determined by the individual's concern. At national level, I am not aware of any formal relationship between Gateway at Scotland level and the Royal Bank of Scotland. We do not, for instance, see specific figures on the metrics that the Gateway records. When Scottish Enterprise had Business Gateway, I think that it was a good thing that it went to local authorities because they have a better sense of what is happening locally and the local needs. There was an attempt to standardise the offering of Business Gateway so that, regardless of the area, you got exactly the same thing, but that has over the years fragmented slightly so that each area offers something slightly different. I do not think that that is a bad thing because we are a small country, but there are very different needs in different parts of this country. Having travelled extensively and looked specifically at the business support available in other European countries and in the Americas, I found nothing better than Business Gateway. It is not perfect, it has gaps, but there is a model in there that, if it is built right and delivered correctly, is a gem of our country. We should not forget that, in many countries, small businesses are left to languish and find their way. It will have its critics, but I would invite those critics to go and see what happens in other countries. Do you see the other problems that you referred to earlier? You were talking about that it is difficult to navigate the variety of funding mechanisms and so on, and every small business seems to almost have to appoint a finance director and concentrate on finding money. Were those issues there before the Gateway model appeared and have we made it worse? We certainly have not made it worse. Without Business Gateway to help you navigate, it would be like flying a plane without a navigator. For a business to try to navigate its way through funding rounds, it would be a real challenge if it did not have someone to show them the way, but even the people showing the way are often overwhelmed by the changes that are constantly happening in that market. That simplified process that you have mentioned from your experience in Europe and elsewhere is not a direction of travel that we should begin to develop and embrace much more across the world. There are some interesting things. In Spain, for instance, the banks work alongside their equivalent to Business Gateway. Once the person has been through an extensive period of learning and business planning over a six-month period, often as long as that, the bank takes a very different view on the proposition. If it is funded, it is charged 2 per cent less than its standard rate. There really is an integration between how we as Business Gateway develop people to make them less risky so that they can meet the bank halfway. There is still a disconnect that we could probably improve by coming to some better cohesion of how we hand clients on through the process. One of the things that I noticed when the enterprise was still there was that it was enterprise-assure in my case, which was the presentation to me, perhaps quarterly, of what was happening in my constituency in terms of new business startups, our performers, our local businesses and so on and so forth. That was kind of lost. I felt when it moved off to Business Gateway that perhaps they did not feel they were the custodian or were responsible for delivering that kind of business information. Where does that lie now, currently, if any of us members around the table was to ask for a complete business profile for their Scottish parliamentary constituency? I think that it will be fragmented, because there are so many different ways of delivering Business Gateway, which is another point. However, in the last Friday of every month in Aberdein City and Shire, we invite MSPs or local authority councillors to come and have an update on how things are going. This coming Friday, I believe, we have our next one. We find it really important that, quite often, local politicians do not know exactly what is going on in the area in terms of how they are doing economically and how the startup culture is developing. They get a lot out of it if they take the time to come along. I can certainly give you the stats in terms of what we have done as Business Long Scotland over the past 18 months. I can certainly share that with you after today. I believe that stats are recorded for the Business Gateway service for the whole of Scotland, and that is probably a question that you need to ask Business Gateway in terms of what does that mean for Ayrshire, in particular, or East Ayrshire specifically. There must be measuring what they are doing, and it is a matter of communicating that to the proper individuals. I just find that it is very rarely available on a constituency basis. It is usually a local authority or some other boundary. I do find that it is very rare indeed that we get it on a constituency basis, so it should be of greater interest to colleagues. We have a report on a local authority area, so I can tell you how many businesses we have supported in each of the local authority areas. It might be interesting if you could give us that in writing, perhaps, if that is possible. That might help the committee. Gordon MacDonald Just to continue the conversation that Willie Coffey started, when you look at the level of support that is out there in addition to financing for small companies and startups and new entrepreneurs, there is a wide range of business advice from the banks, from the Chamber of Commerce, sometimes from the Federation of Small Businesses and, obviously, Business Gateway. Even this morning, we have heard a range of comments from Scotland as much more joined up than other parts of the UK, yet SMEs are not totally aware of services and finance available, and there is a need for better signposts, and that is just from this morning. How do we improve collaboration between all the different organisations that are involved in giving better business advice? Very good question. I am not sure that I can answer that to give you a definitive answer. What would you like to see changed? My priority is to get the message out there that Business Loan Scotland exists, and the route for a business to come in seeking funding for ourselves is either through the Business Gateway Service, sometimes the local authority of business advisers, sometimes the accountants. That is predominantly where we get our referrals and the applications that are coming to Business Loan Scotland. It is a constant battle to try and keep that awareness out there, certainly amongst a lot of the organisations that are there to represent members, such as the Chamber of Commerce, the Scottish Chambers and the Federation of Small Business, as you have mentioned. It is a continual battle to make sure that they are aware of what we can do. We are there to fill that gap in the market, but we do not know when that business is going to be looking for funding at that point in time, but we need to make sure that the whole of Scotland is aware that, yes, they can come and approach us if it is absolutely appropriate and relevant to do so. I am not sure that I am answering your question, but there is more to be done. We need to be able to do more, and we just need to make sure that people are aware of the different sources of funding, particularly from my perspective. Those sources of funding have been increasing over the past number of years, so there is more choice and more availability, and it is trying to make sure that all the stakeholders are joined up and connected. I think that businesses like information and recommendations from a Royal Bank perspective, we can understand that business gateway is a standalone independent body who may not want to be seen to be too close to one or any particular bank, but what would be useful for us would be to be able to share specific good news stories or specific statistics with our customers that could endorse the benefits of going to business gateway, be it looking at survival rates, be it access to funding, jobs created. Right now, we do not see specific statistics that we can share with our customers to say this is the benefit of going to business gateway, and this is why we can recommend that service. As a default, many of our customers will go and see their accountant because that is the person that they know and trust. They have that relationship built up, as opposed to going to gateway or any other body where we do not have the evidence to say this is why it could be very good for your business. In terms of spirit of collaboration, you said that businesses like information. As far as I am aware, RBS is still the largest provider of banking facilities to businesses in Scotland. Would RBS consider carrying posters and leaflets for business gateway to highlight the services that are available from business gateway? We will do anything that will support our customers and the local communities. If we can share information with our customers, we would be delighted to do so. Your original question talked about business advice from FSB and chambers of commerce. I would be surprised if those organisations would suggest that they give business advice. There is an ecosystem out there. This country will work because the ecosystem will learn to work together. The model that we have chosen to create, as I said, was based on other models. We have business gateway at the heart of what we do because the clues in the name should be the gateway to everywhere that we need to go. When we walk into our centre in Aberdeen or Dundee, we will be able to interact with business gateway. It is the heartbeat. However, in the same space, we have banks represented, we have accountants and lawyers, we have the planning department of the local authority, we have the chamber of commerce downstairs and FSB are in regularly. The concept of creating a regional hub of entrepreneurship is the go-to place, but it is the place where you go and you will be able to access everything that you need so that the navigation is less difficult. That is my vision, to see what we have created, replicated in all our cities and connected up, and that would be best in class globally, I would say. Has that been replicated anywhere else in Scotland other than the areas that you referred to? We work quite closely with Fife. They wanted to do something similar. They have done a version of that, but it is on a small scale. To have it all fragmented for people to go along to vanilla spaces where they fail to be inspired, fail to be able to integrate and have peer to peer support is not the way forward. To me, the way forward is to have larger regional centres where you will see an example of how you get 8 or 9 per cent of the population to produce 14 per cent of the startups. That is what happens when you do that. Another way of getting a message across is about effective marketing. Again, previously, we have heard conflicting evidence, and some of the evidence that we have had previously, ranging from business gateways, a well-known brand among the public, and the service is easy to contact to. There is a lack of real marketing effort that continues to inhibit the reach of the service to new companies. How effective do you think business gateway marketing is? What needs to change in order to get that message across? That is okay, right? There is a core business gateway marketing team, and I think that they do a great job. First, they controlled everything. However, over the years, there has been more budget released locally to do local marketing using local phone numbers. We also do a lot of marketing on our own, and that combined effort works for us. It is great to be on national TV. It works quite well, but we could always improve on those things. However, the core marketing team is only part of the solution. The local authority could market it probably better, and whoever is delivering it could also market it. For us, those three problems add up to a fairly decent penetration of the business community. There was a suggestion from some evidence that we heard on one of our visits that television was one expensive to get that advert across and would not necessarily reach the target audience, given that the younger people tend to watch television differently from years ago and are not necessarily watching television when they are out building a business. There should be more effective ways of delivering that marketing, whether it is social media or whether it is using leafletting in various places where people could be at airports or libraries or bank branches, for instance. Would that be more effective? I am not a marketing expert. I am sure that the marketing teams would come to their own conclusions. The business gateway brand is a very well-known brand in Scotland. Prior to that, all the local and enterprise companies had their own little brands. We had first business in Rembrewshire. We had all sorts of names, and there was no identity. It really does have an identity. People do know that business gateway is the go-to place, but the mechanisms that they use—I would hope that they will be as innovative as they can be and realise that there are different ways of marketing through social media, et cetera. I think that it is a combination of all those outlets and channels to get that message across, because you do not know when that person is going to be apart at the traffic lights, look at the billboard and then you have the business gateway being promoted. The bit for me more recently, which has struck a chord, is where you have seen case studies and examples of businesses that have received that support from the business gateway. By and large, businesses can identify with business and they understand that that particular type of business, that sector, that segment, has been able to get that level of support from the business gateway. If they can get it, perhaps I can get it as well. I think that using real-life case studies and examples does that a little bit extra for me in terms of selling what the business gateway service is all about and what it can do and achieve, hopefully, for your business. Certainly, that was the message that those of us that were at Dublin yesterday speaking to Enterprise Island got across that real-life examples is a better way of getting your message across, so I would agree. Mr Davin, do you have anything to add? I do not have anything to add to it. My last question is about how we deliver a minimum level of quality service across the country. Again, we have heard conflicting evidence. One said that having the setup that we do provides flexibility tailored to local needs and circumstances. However, we have also heard evidence that says that the quality of service is highly dependent on the skills and experience of the adviser. What do we need to do to make sure that there is at least a minimum consistency of support across the country? I think that any service that is being delivered will always be down to the quality of the individual who is sat in front of you. Generally speaking, the anecdotes that we get back about business gateway are very positive. Our customers tell us that they, in the main, have good experiences. However, in the run-up to appearing here today, I did canvass some views. I suppose that people always want to tell you the extremes. We got the one case of a retailer out in Lanarkshire who wanted to go and get a grant so that they could set up online. Things were incredibly slick, fast and they got what they wanted very quickly. Equally, I spoke to an accountant who told me of a business in Edinburgh where it took six months to get to the point where the thought funding had been agreed only for a new manager to come in who decided that he personally wanted to review every single application that was in the office. That funding has stalled, and there are no immediate timescales on when a conclusion will be reached. Generally speaking, business gateway is a recognised and trusted brand, but it will always come down to the individuals who are there. That is why it is important that we have recognised metrics that we record and publish so that we can see whether SLAs are being achieved. The problem was addressed some time ago with the introduction of the Premier Advisor programme. All business advisers in Scotland, within a year of employment, have to pass a set of exams to be able to work in the business gateway service. I am quite closely involved in that process as an assessor, but the bar is not particularly high. We could consider making it tougher. I also think that the business advisers who are dealing with start-up businesses and the ones who are dealing with growing companies need to have different sets of skills themselves, and yet we only have one qualification, which is at that lower level. I get twitchy when it comes to people who might cross that bar, but they are trying to work with companies and they are at their depths. We also do not have any CPD after. Once they qualify, they qualify. We do not have a continuous improvement of the business advisory support. I think that we could probably do better at monitoring. As a business gateway provider, I can tell you intimately what is going on in the areas where we are involved, but I could not tell you how anywhere else it is doing, because it is not published. There is no cohesion between our advisory teams and the ones in Fife or Glasgow. We do not talk, so there is a lack of sharing of best practice. There is a lot that we could do to make all of the—there is about six or seven hundred business advisers operating. We could all go up a few notches quite easily if we did some simple things. It does come down to the people and skills and their abilities. We need to be able to advise the business with the best information and the best advice that it needs at that point in time. Thank you, convener. I sort of harped back some 20 years and the conversation that we could have had then. Not too much has changed, although I am encouraged by what is going on in the north-east in terms of the startup and the elevator activity. My question is whether we—there are some alternative models to what we are doing to make sure that we get sustainability in the numbers. If we have got the start-up, the enterprise going on the start-up, whether that is materialising into sustainable businesses and by what proportion. I am also conscious that entrepreneurs do not like borrowing money in overdrive terms, because it is so risky for them. The money can be withdrawn or it is not secure to them, and some form of much longer-term investment in the companies might be appropriate. What has not been discussed in any way has been sales levies in terms of investment, because people do not like taking equity too early in the business to lose control and the opportunity for making money out of it disappears. However, some alternative way of investing in the medium to long-term might be appropriate. Your views have been appreciated. I am happy to pick up the first question, perhaps less so the second question, on sustainability. We have two challenges in this country. One is to start more businesses, and the other is to help more of them to grow to be significant. Business gateway shortfall is that it does not do a whole lot to create an entrepreneurial environment, to encourage people to get to the start line. It is a responsive, reactive service when someone wants business advice that they can have it. However, we have chosen to, as a social enterprise, we take our surplices and invest it in the early stages to try to help more people to get to the start line. However, the other part of the equation is what we do with the ones that have now started and are beginning to grow, because they need a level of education that is quite different from that, which business gateway will offer them. We invest in the other end of trying to get more of them to grow. Our modelling is around trying to create a surplus as a social enterprise, put business gateway in the middle of what we do and use our surplices to invest in the parts of business gateway that we do not do to ensure that we have an end-to-end service. The e-course report highlights that as quite unique, which I think was submitted as part of our written submission. However, it suggests that for every pound of surplus that we are investing at that pre-start stage and every pound that we invest post-start, we have managed to unlock another £3 of private sector investment into that process. That, in turn, alludes to a GVA of £21 for every pound that we spend. It is a model of recycling wealth back into our community and making sure that, while business gateway is a heart, it is not the complete body that we have to fill in and make sure that we have more entrepreneurs coming through to the process. We have a way of handling the growth aspirations of those who come out of the process. As a loan fund, we are in the risk business. We are there to take that risk when the private sector and the banks, in particular, will not take that risk for the reasons that I gave earlier. For me, as a loan fund, I am trying to make sure that the businesses are adequately funded, not the minimum that they need to get that project delivered, but that they have some headroom so that they can weather any storms that are coming round the corner that we cannot foresee, we cannot forecast, and therefore, to make sure that they have that headroom and the cash flow behind them to deal with any downturns in supply, demand, whatever might be. It is just trying to make sure that the businesses are adequately funded where they can weather those storms. However, what is the issue of the banks themselves when they withdrawing funding for no reason of the enterprise, but for our external reasons, and the interest rates rising, as they might well do over the next five, ten years? That represents the risks to the business, which might be sustainable at the present interest rates, but not sustainable to higher interest rates. As I touched on earlier, one of the things that we do as a responsible lender is to look at both the current situation but also to look at the future in terms of what ifs. What if interest rates do rise? For instance, when we are assessing a lending application, we will take that into account in terms of if interest rates go up, can that business afford to service the debt? Similarly, with turnover, we will look at the level of turnover that is sustainable. What would happen if turnover did drop? It is not in our interests, it is not in a customer's interest to lend money that is not going to be affordable in years to come. Equally, we are in the risk business. We will seek to lend funds where it is appropriate to do so, where it is the right thing for our customer and the right thing for the bank. In the end of the day, you are not in the risk business, because, as Professor McGowan said, the companies in the risk business, the banks are not. Whereas some form of other equity type investment is much more appropriate for going from the beginning of start-up or somewhere that is demonstrating a viable business to something that can be sustained over four, five or even ten years. Your 18-month figure of being successful to me is not a measure at all. I respectfully disagree with you, Mr Mason, in terms of whether we are in the risk business or not. We are lending more and more funds on an unsecured basis to new and existing customers, where we are looking at that business as a viable proposition that can afford to repay funds back over three, five or ten years. However, we lend that money without any explicit guarantees. There are no guarantees that every company that we lend to will still be there in ten years' time. We are in the risk business. We seek to minimise the risk for the benefit of both the bank and our customer. I reiterate that it is not in a customer's interest to borrow money that they are not going to be in a position to pay back in the future. I am looking at some alternative model other than lending straight money with an interest payment. What about a sales levy system? The old-fashioned ANRDC used to invest in companies for great search and development and get its return on a sales levy basis. Is that not a possibility in terms of an alternative model? There may be alternative models available and perhaps not in the best position to answer that question. Does anybody have an alternative model for what is fairly standard? I think that it is horses for courses and it is what is relevant to the business at that point in time. An equity investment might well be appropriate for that business, but the owners are going to relinquish part control or ownership of that business. Generally, what we find is that young businesses and new businesses might end up accessing microfinance. They might then move on to the debt finance that we can supply and then, further down the line, it might be equity that is appropriate for them at that stage. There are other forms of finance that are available from the bank, whether it be the higher purchase and voice finance, all that broad gamut of finance that is available. I am not particularly up to speed with what you referenced there in terms of sales release. At the moment, I see a situation in which we have plenty of people wanting to start and they are moving them through and continuing on to a much greater rate than we are doing at the moment. The actual sustainable entrepreneurial business has not improved dramatically. It is slightly better than it used to be, but it is certainly not anywhere near what we need to do. I do not think that there are any new models. A business can really only either borrow money, it can sell equity and it is for and return for cash, or it can be given money in the form of a grant. Anything that we create is going to be perhaps the innovation around how we blend those. I think that the Scottish Edge fund is an example of how you have different partners with different Scottish Government are in there because they want the economy to be better. The Royal Bank are in there because they see a commercial return. They see a welding together and it is more products that are cleverly blended to meet the needs of our current entrepreneurs is what we need to do. I do not think that we are going to see any radical new models that are going to be amalgamations of previous models. John Mason I am in the position now where I am hearing that there are different ways that business gateways are being done around the country. I am hearing that Aberdein and Aberdeinshire are hugely successful. If I got you correctly, you have got 8 per cent of the population and then was it 25 per cent of start-ups or 14 per cent? The last few years have been fluctuating between 13 and 14 per cent of the start-ups of the 10,000, so that area contributes about 1,300 to 1,400 start-ups of the 10,000. That creates the question for me that, as I understand it, there is about £15 million going into core services for a business gateway. How do we, sitting here on the committee, measure, if Aberdein is really more successful than Lanarkshire or Glasgow's model of a bit all more joined up, better or worse? Do you think that we can measure it or do we just have to say, well, Aberdein is so different from Lanarkshire, we can't compare them? I think that the comparison part would need to be down to your best judgment. What we have been trying to do is we had little interest in the Scottish Government target. We were given a target by a local authority, but for years that was just constraining what we did, what gets measured, gets done. That shows no ambition as a country at all. What we wanted to demonstrate was that if you take away and remove those barriers and really do all the right things that you need to do to create an entrepreneurial culture, what would happen? What would happen if we took the lid off this thing? We have taken the lid off for four years now and we can now demonstrate what has come of that. I would love for you to see and experience what that is. I am open to visiting Aberdein. You have said that you have taken the lid off, which suggests that a contract that you have with the local councils has been removed, but the opposite that we have heard is that, if there is not a contract with a third party like yourselves, the council takes it in-house and just cuts the target and cuts it and cuts it and cuts it to what it can comfortably do. That does not sound very positive. Again, I will leave you to be the best judge of the outcome of that. What I explained to the local authority was that we understand that you have given us a target, which is demographically assigned to us, but we thought that by focusing on doing the right things that the target would become almost the baseline. This year, probably in the middle of December, we will have met our target given to us by the Scottish Government, and we have still got to go through to April. The local authority began to panic that we are going to close up shop and not deliver a service, but that is not what we are here for. As an enterprise trust, we are there to continually improve, so we are determined to deliver more startups of a higher quality this year than we did last, and we will again the next year. Whether you get that determination and ambition within a local authority is a question that you need to ponder. When it comes to measuring, something like measuring a startup is relatively straightforward, but we have also had evidence that in some areas there is a continuing support for a business that can grow quite big and that the business gateway is still in there giving help. The same might be true of the banks or anyone else. That is more difficult to measure. I do not know whether the others feel that can we measure all that satisfactorily or can we not? We do not currently see any data from business gateway, so we are a little bit blind in terms of measuring the success and what sort of bank we get for our buck. Can it be measured? I think that we would first of all have to establish what are the important things. Is it survival rate? How many new jobs are created? Again, similar to Professor McEwen, that would be something for you to decide what is important, but can it then be subsequently measured? Can you ask business gateway either locally or nationally for that kind of information and relationship? No, we have not. We have also had a local business gateway saying that they were disappointed, because they were trying to do advice for small businesses. Royal Bank came into the area, did not speak to them, started up its own advice for local businesses, and there was just no relationship between the two. Is there room for improvement in that area? Undoubtedly. If that has been the feedback that you have given on behalf of the bank, I apologise for that. We do not seek to come into an area and take over. We want to be part of that local ecosystem, where we can work collaboratively, where we can recognise the things that we do very well, but equally we can recognise either events or services that a gateway can offer, that we can make our customers aware of, so that they get the benefit of, I suppose, both worlds. Okay, thanks. Sorry, Mr Dixon, I do not know if you want to say anything. Probably can't add much more than what's already been said, but for me it's about the journey. Where are we now and where do we want to end up? I think that we do need to be able to measure what we're doing, how much input are we putting into the business gateway service, how much money, how much staff resources and ultimately what difference are we making, because if we're not making any difference, why are we doing it? So can we measure it? Can we compare one area with another? That's probably a question for the business gateway. I can tell you what we measure as far as Business Loan Scotland is concerned, and I can tell you what we're doing in each of the geographies that we take down to the local authority level. I know how much our inputs are into Business Loan Scotland. I know how many businesses we've supported. We're monitoring our businesses after 12 months of that investment going in. I can tell you how many jobs those businesses have created in that period of time. I can also tell you what increase their turnover has gone up or sometimes their turnover decreases. I can tell you that information certainly from my perspective, but I think that we need to be able to measure what we're doing. My final point would be around the strategic board. I don't know that it is going to have a specific relationship with the business gateway, but can it create a more joined-up business support environment? Is that a hope? We are a small country, albeit a fantastic small country, and we could be doing with anything that allows us to collaborate more. The concept of the overarching strategic board bringing together the key organisations to work more closely together, that can't be a bad thing. Once we come down to the level of business support, it becomes rather more diluted. We could learn lessons about how we collaborate to create this ecosystem. I think that we're doing that. I only observe what the strategic board is doing in relation to Scottish Enterprise and the Scottish Funding Council and allowing them to integrate their services more. It's exactly what should be happening, but once that comes down to business support level, I'm not sure that it's particularly apparent to most people what it's doing, but I'm sure that it's doing good things. That's the early days yet. Thank you, Jamie Halcro Johnston. Thanks very much, convener, and welcome to the panel. I've got two questions, one very quick, which is to keep the Keith divine. I should probably say that I'm a partner in a small business, which also banks with RBS, but I just wanted to get an idea. Given the proportion of businesses that use yourself and Bank of Scotland, I think that 60% according to the survey, is a lack of switching within the market, but we've seen quite a lot of bank closures over the past few years, and I'm speaking tomorrow in a debate on the current round with Bank of Scotland. I just wondered what your analysis has been or what analysis has been done in terms of either the positive or negative impact of those bank closures on being able to deliver business support, particularly in rural areas such as the Highlands and Islands that I represent? We're very proud of the fact that one in three Scottish businesses bank with us, they've chosen to bank with us, they've chosen to stay with us. It's a competitive market, and the fact that those businesses continue to thrive and choose us as their banking partner tells us that, in the main, the services that we are offering our customers meets their needs. Whilst branch closures have occurred, we've trebled the number of points at which our customers can do basic banking transactions, pay in, take cash out over the last five years through our relationship with the post office, through our network of mobile branches that drive 8,000 miles a week across Scotland. We've continued to innovate where we are using our digital services very well and making sure that customers irrespective of whether they're in the north of Scotland or the south of Scotland have access to our experts either through the 65 relationship managers that we have on the ground, our eight business growth enablers who are there running events, they're connecting people, but we also have 600 business managers who are employed in our contact centre who are there to answer customer questions or refer customers to a relationship manager if the customer needs to phone outside normal banking hours. So, while customer demand for our branches has reduced, we are still seeking to support these customers in Scotland through a variety of ways. If we look at the north of Scotland, we know for instance that there's a higher proportion of agriculture businesses there, so we have a dedicated team of agriculture managers in the central belt, it may be real estate finance specialists, it may be healthcare, so we have experts in our local area who can help those local businesses and we're keen to speak to any business who wants to engage with us. Increasingly that in particular in rural areas, that business advice, that business advice and support that's been done over the phone or rather than face to face? It will be done sometimes by telephone, but equally we task our relationship managers of going out to our business customers premises so that it's more convenient for the customer, but it gives us a better insight into the business by pitching up, seeing the premises, seeing what needs to be done, having discussions in a place that's convenient for the customer, rather than dragging them into a bank branch. Okay, thanks very much. The question I've just widened out a little bit, a question I would give to all panellists. We've talked a lot about business support and obviously the past of support and the advice is around skills. If you're growing a business, you need the employers to do that with the requisite skills. I'm just wondering how important that is in terms of the advice and support that you give and how easy it is for you to be able to direct those organisations, those businesses that come to you to find the skills that are required. Sorry, if I can ask for some clarity. Do you mean skills in a potential workforce or do you mean the skills that they need to actually grow their business? Sorry, skills in a potential workforce. So, as a business begins its journey, it gets to a point. Sadly, we reckon that only one in 12 companies that start ever become of significance. When I say significance, we term that as having maybe eight or nine employees, perhaps. That's something that we need to address and that's about the skills and attributes that the entrepreneur has to develop to be able to do that. I think that we have an issue in Scotland around how we educate entrepreneurs, but there does come an inevitable point when they have to begin to create a workforce. That's a really big step for entrepreneurs. It's so important that they get the right people at that point. That's when the collaboration with other organisations becomes important to ensure that they not only go through the correct mechanism of how they employ, but they also get the right people. Their first few employees are so important to do that. However, the access to that tends then just to go into the conventional—I'm looking for staff, so I'm going to advertise this. The other end of the scale is how we prepare using developing young workforce to have a workforce that's ready to enter these businesses. However, the two tend to meet reasonably successfully, I feel, but there's always scope for more collaboration. However, it's a very important point in the development of the company when it first takes on. If it takes on one person, it's possibly the only time that the business will ever double in size. If that's not the right person, it can lead to all sorts of anxiety. It's more, I think, an issue for the entrepreneur in how they select than it is about how they access the right skills. That's maybe further up the growth chain. We recognise that the quality of our people is what differentiates us between our competitors, which is why we have continued to invest in our people. All of our relationship managers go through an accreditation programme that's run through the Chartered Institute of Bankers in Scotland. Our business growth enablers are also externally accredited. We've appointed community bankers, particularly in rural areas. We have tech experts in each branch to help customers with technology. We look at the needs of individual markets. If we're in a rural area, we know that we need to provide expertise in agriculture. We will have dedicated relationship managers who specialise in that, who will know what's happening in the industry, who will attend, for instance, a local mart so that they can see what's happening to prices, so that they can speak to multiple customers on the same day, to make sure that our customers know that we're there for them at a time of need and that we are experts in the markets that we operate in. We're also lucky that, in Gogerburn, we've got an army of experts that are at our disposal, so if we've got a customer who wants to talk about Brexit that our relationship manager can't answer, we can go to our economics team, who will be happy to have a one-on-one conversation with that customer. About a quarter of the businesses that we support we'll end to will be new start businesses, so they're starting from zero, effectively. They have their business planned together and they're looking to get together the funding that they need to get their business up and running. Invariably, we're looking for them to be employing people. A few quarters of the businesses that we support, which I would describe as existing businesses, will go on an average and create about four new jobs per business over the next 18 months to two years. We're very specialist in being able to provide the funding that the business needs. We would look to the advisers to that business to make sure that that business can tap into the relevant resources and services that are available to talk about recruitment, to talk about skills and to make sure that the policies and procedures are there as that business becomes an employer and takes on additional members of staff. Thank you very much to all three of our witnesses for coming in today. That concludes our evidence session with you, so if you wish to leave at this stage the committee will move on to item 3 on the agenda. Thank you very much. Item 3 on the agenda is the Diligence Against Earnings Variations Scotland Regulations 2018, which is a Scottish statutory instrument number 345 of 218. Those regulations will raise the threshold beneath which deductions may not be taken from earnings by harassment and increase the sum protected from harassment in a bank account. Do any members of any issues or issues raise, Deputy Convener? Thanks, convener. On the specific issue of the amount being raised, I'm supportive of that, so I don't have a problem with that. I think that there is the wider issue that we've been looking at recently, a whole variety of ways that people can have their debts managed. There do seem to be differences. It doesn't all seem very joined up, so under one system a person is allowed one amount to live on, under another system it's a completely different amount or calculated in a different way. I think that it would be useful if at some point we could raise with the Government either in writing or when the minister comes to discuss that wider issue about is it, I know that it's complex but is it possible as we go forward to make that system a bit more joined up? The committee, are you content with that? Very well. Thank you. In that case, if we're agreed, the instrument comes into force, subject to that caveat. I'll now suspend the meeting and we'll move into private session.