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Pathfinders to the Parliament

Executive Summary

Many crosscutting policy issues were recurrent throughout this Progress Report such as science, skills, lifelong learning, higher education, transport, planning, support for small businesses, business environment and telecommunications infrastructure. Good progress has been made with most of these policy issues.

In the area of science for example:

• The Executive's Science Strategy for Scotland was published in August 2001;
• The final report of the Roberts Review of the supply of people with science, technology, engineering and mathematics skills in the UK was published earlier this month;
• We are planning new specialist technology institutes to deepen Scotland's R&D capacity, and encouraging commercialisation through a range of measures;
• These include the 33 million Proof of Concept Fund, helping our Universities develop ideas for commercial exploitation; and
• Enterprise Fellowships for young technology entrepreneurs.

The review of Regional Selective Assistance (RSA) acknowledged the need to encourage more investment in research, technology and development in Scotland and to further stimulate commercialisation of university and higher education research. In particular, the scope of the scheme has been expanded to offer support to projects where traditional capital expenditure is low through taking account of intangible assets and salaries, considerably extending the range of projects which can be supported. Marketing efforts are also going to focus on attracting more projects involving university spinouts, high tech start ups and other knowledge intensive activities.

• We are also setting up a 20 million fund of funds to support the private sector in providing small scale, early stage equity to Scottish firms;
• At the same time we are working with Scottish Enterprise to establish a new programme to help more companies become 'investor ready' - to be able to access available funding and reach their potential growth; and
• We have also established a 12 million fund for Scottish Enterprise to develop transatlantic collaboration between Scottish universities and US counterparts, and the first such link between Edinburgh and Stanford Universities was announced in February to develop language recognition technology.

A good deal of work has been done on skills and lifelong learning.

• Careers Scotland was established on 1 April 2002 to provide the UK's first all age guidance service with informed, quality advice for young people and adults to help them better match their skills to jobs;
• The Future Skills Scotland Unit was established in July 2001 to understand the Scottish labour market, identify skills shortages and better match skills supply to demand. The Unit will work with a wide range of stakeholders, such as business, local enterprise companies, Sectors Skills Councils, and education and training providers to promote a better understanding of the Scottish labour market to ensure that Scots are ready for tomorrow's jobs;
• Learndirect scotland was established in October 2000, with its web-site, helpline, and accredited learning centres to stimulate take up and simplify access to learning. There have been over 5 million hits on the website, over 315,000 calls to the helpline and more than 300 branded learning centres established to date; and
• We are also developing initiatives through the New Deal to help people obtain jobs in sectors with skill shortages.

The Executive is currently working on a new long-term lifelong learning strategy in tandem with the Enterprise and Lifelong Learning Committee Inquiry, which has opened up the debate to everyone with an interest in skills and learning. We have already achieved much in this area.

• In 1998, Opportunity Scotland set out the then Government's vision of lifelong learning in Scotland, including a 10 point Action Plan;
• All 10 points have already been achieved, or are nearly completed, including the establishment of learndirect scotland;
• Widening access to Further and Higher Education; and
• Training 15,000 Modern Apprenticeships - this was later increased to 20,000 a figure which has now been surpassed over a year ahead of target.

Developments in the sphere of Higher Education include:

• The Review which will ensure graduates are more market orientated and promote collaboration between institutions and key partners;
• Ensuring every student in Further or Higher Education is IT literate when they graduate;
• Removing tuition fee contributions from all eligible Scottish full-time students; and
• Implementing our new adult literacy strategy to help 80,000 people by 2004.

Transport was both a Pathfinders sub-group in its own right and also a recurrent policy theme.

• The Transport Delivery Report, published on 21 March 2002 sets out an impressive range of transport achievements across Scotland and the Executive's vision for the future, focusing on the key transport challenges that face us - congestion, greater integration and completing vital missing links;
• The Report integrates transport policy with other relevant policy areas including planning, education and economic growth. Many of the Pathfinders recommendations have been incorporated into the Report, either as completed achievements or in the vision for the future;
• Record amounts are now being invested in improving and modernising public transport, motorways and trunk roads. The motorway and trunk road programme 2001-04 commits the Executive to delivering a 660 million programme of improvements and maintenance;
• The Transport (Scotland) Act 2001 gives powers to local authorities to introduce road user charging schemes (with hypothecation of revenues to fund local transport improvements);
• Traveline became operational on 1 January 2001 and provides national travel information; and
• Free local off-peak bus travel, within concessionary schemes, will be introduced by October 2002 as well.

Taxes, rates and support for business services all featured in the original report, as did the need to ensure a level playing field for businesses throughout the UK.

• Tax credits for research and development for larger companies were announced in the 2001 pre-budget report and consultation has begun (already in place for SMEs);
• Business rates and valuation treatment practice is harmonised as much as possible throughout the UK; and
• Business participated in consultation on proposals for a small business rates relief scheme. One of the key principles of the scheme is to spread the burden of rates more fairly as small business' rates bills are disproportionately high. Business will still be paying the same amount overall in non-domestic rates.

The RSA Review will deliver more focus on growing Scottish businesses and provide support for quality projects. The review highlighted the difficulties faced by business as a result of the number and complexity of business support schemes.

• Local Economic Forums have a key role in reducing the current confusion, overlap and duplication in support to business.

In addition, the Review will:

• Provide more joined up delivery from the Executive and the Enterprise Networks;
• Streamline the application process and aim to half the decision time for the majority of applications;
• Encourage more higher value and entrepreneurial projects; and
• Improve marketing.

The 'Improving Regulation in Scotland' Unit was set up by the Executive to secure better regulation.

• The use of Regulatory Impact Assessments by Executive Departments ensures policy development with an assessment of impact on business.

For telecommunications:

• The Executive's Broadband Strategy was published in August 2001 to make broadband connections more affordable and pervasive; and
• Scottish Enterprise's project ATLAS aims to encourage cheaper services by increasing the competitiveness of the telecoms market in Scotland.

Turning to the specific industry sectors themselves, progress has been made, and is on-going, in the construction sector with:

• Improved efficiency and operation of the planning system identified as a key priority;
• Commencement of work on the public expenditure planning cycle and PPP deals worth 2.7 billion at various stages of procurement;
• Provision of substantial additional resource to the New Housing Partnership Programme;
• Progression of Housing Stock Transfer proposals with the recent successful Glasgow ballot (April 2002), which is expected to deliver over 3 billion of housing investment, and create over 3,000 jobs in the construction industry in Glasgow; and
• Scottish Enterprise is taking forward the 'Rethinking Construction' initiative.

In the defence sector, Scottish Development International is working on trade development for all sectors, including defence, with support from Regional Selective Assistance, as appropriate.

Important for the drinks and hospitality sector is the current review of the liquor licensing law by an independent committee. This committee has consulted widely with business interests and is due to report back early in 2003.

Progress for the electronics sector:

• The Electronics Industry Action Plan published in October 2001;
• Development of a 'Software Academy' by Scottish Enterprise provides a focus for software skills sources and employers needs;
• Funding of a sectoral skills audit by the Executive to identify skills provision, gaps and solutions;
• Over 2,200 in training for Modern Apprenticeships in the electronics sector - last year Scotland was first in the UK to pioneer Modern Apprenticeships, not just for the under 24s but, for everyone; and
• Development of the Alba Centre as a focus of Scotland's future R&D in Microelectronics.

For the engineering sector, good progress has been made on skills, especially with the Roberts Review of the Supply of Skilled Scientists and Engineers in the UK. The review of RSA will ensure a Scottish focus for the sector.

Progress has been made in the financial sector with:

• The Action Plan for Financial Services launched in June 2001, reflecting the needs of a large and dynamic sector, operating in a rapidly changing business environment and an increasingly competitive global marketplace. It gives a high priority to people and learning, and addresses the practical issues facing the industry in attracting and retraining a skilled workforce.

Developments in the manufacturing sector include:

• Publication of "Created in Scotland" (March 2000) in close consultation with the Scottish Manufacturing Steering Group recommended a range of 52 initiatives at the Scottish, and the UK level, with good progress being made on implementation;
• The Education for Work Review is due to report in summer 2002 and tackles a key problem highlighted in the Pathfinders report, namely the plethora of education/business initiatives;
• RSA continues to play, an important role in supporting manufacturing. In the five years to end March 2002, the manufacturing industry in Scotland was offered 422 million in grants, levering in over 2.5 billion in private investment and aimed at creating and safeguarding more than 57,000 jobs. The RSA review highlighted the need to ensure that all sectors, including manufacturing, are encouraged to invest in higher value areas such as design, research and development. The new scope - support for intangible assets and salary costs for new, quality jobs - will help firms make these higher value investments;
• E-business strategies have been developed by the Enterprise Networks; and
• The "Make it in Scotland" Project - improving the image of manufacturing to young people - is being further piloted this academic year, with the national rollout being undertaken by Careers Scotland for next year.

In the retail sector:

• The first Scottish Retail Consortium Annual Conference is due to take place in May 2002;
• The Scottish Forum on Community Safety is working with the business sector to tackle retail crime;
• Research is currently underway which will look at the impact of retailing on transport; and
• From spring 2002, GDP data will be disaggregated down to include data on the retail sector.

Progress has been made in the small business sector with:

• 'A Smart, Successful, Scotland' committed to the promotion of key Scottish clusters;
• Establishment of the Small Business Gateway;
• Establishment of Local Economic Forums in 2001 to simplify business support services;
• Introduction of Business Mentoring Scotland in April 2000; and
• The Review of Regional Selective Assistance, the Proof of Concept Fund, Technology Ventures Scotland and the Scottish Institute for Enterprise all accord with the Pathfinders recommendations on the enhancement of the interaction between business and science.

In the textiles sector:

• The Scottish Textiles Forum has been established and branding/marketing initiatives are being reviewed by Scottish Enterprise; and
• A dedicated team within Scottish Enterprise has identified branding as a key area and has set up a programme that could benefit approximately 15 companies.

For tourism:

• Funding for VisitScotland, Scotland's national marketing agency, has been increased;
• The tourism industry benefits from spend in many other portfolios as well as from European funding; and
• The national tourism strategy was published in February 2000 with an industry website, tailored training programmes, new marketing campaigns, golf and genealogy strategies and Modern Apprenticeships for the tourism sector. A review of this strategy is already underway.

Finally, in the Utilities sector:

• The Scottish Utilities Forum was established in 1999 and has met six times since January 2000 to discuss a wide range of issues;
• The Forum has also been used to brief MSPs on environmental regulation and employment opportunities arising from renewable energy development;
• Consideration is now being given to merge the Forum with the Cross Party Group on Oil and Gas, thus widening the Group's remit to include all energy issues; and
• New trailblazer Sector Skills Councils are being set up, including 'Cogent', launched last month (March 2002), which covers oil and gas extraction, petroleum and chemical manufacturing industries.

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