Jobs crisis as quango delays £34m lifeline
Enterprise grants still on hold
The Scottish Government’s business quango has failed to distribute £ 37.8million of support grants six months into the financial year.
Scottish Enterprise (SE) only recently started to process “non-Covid grant applications” – despite ministers having allocated funds to the agency in April.
Opposition politicians and business leaders have warned hundreds of technology jobs are at risk if the research and development financing is not passed on.
SE chief executive Steve Dunlop resigned last month and the agency has been in meltdown since March, when it was forced to freeze support and slash internal spending due to a cash crisis.
Labour MSP Neil Findlay said: “We are in the midst of a jobs crisis, the chief executive off SE has gone and now businesses who are desperate for financial support can’t get access to it.
“Economy Secretary Fiona Hyslop has to tell Parliament what on Earth is going on. We cannot stand back and allow this situation on to get even worse.”
The Scottish Tories’ economy spokesman an Maurice Golden added: “We are facing a jobs crisis and will need to invest heavily in new and enterprising businesses to drive forward our economic recovery.
“Chancellor Rishi Sunak has stepped up and delivered £1.7billion in recent weeks to Scotland and the SNP must get that funding out the door now.”
IOTech CEO Keith Steele, who set up his firm’s largest development centre in Edinburgh in 2018, is one of those awaiting support.
The start- up, which also has offices in Newcastle and Taipei, builds software for computing companies. Steele is looking for a research and development grant from SE to employ 10 graduate engineers.
He said: “Research and development support is very useful for start-up companies like ourselves. It helps us get investment projects kick- started and we’ve been delighted with the support from Scottish Enterprise so far.
“The support provided helps accelerate product development so we don’t miss the small market windows for high-tech products.
“One of the reasons we decided to set up in Scotland was because it has traditionally been a great environment for smal l- tech companies looking to expand and create jobs. The support we are seeking from Scottish Enterprise would result in the direct new hire of 10 graduate engineers. There will be hundreds of graduate tech jobs across the country relying on this research and development funding stream being in place.
“We want to get on with creating the thriving technology industry that Scotland deserves.”
The Sunday Mail revealed in March how SE had frozen spending after running out of money over a month before the end of the financial year. An internal memo demanded all grants and internal travel budgets be slashed.
The Scottish Government said:
“We’ve provided SE £ 37.8million for research and development in 2020-21. The awarding of research and development grants is an operational matter for SE.”
An SE spokesperson said: “We’ve been working hard to get more than £ 200million of financial support out the door to save thousands of businesses and jobs under threat from the impact of Covid-19.
“This is a massive undertaking and, inevitably, has impacted on some of our business- as- usual activities.
“We have only recently been in a position to start taking forward existing non- Covid grant applications.”