STB's Statutory and Policy Framework

1. An understanding of the mandate given to the Board must be the starting point for any consideration of its effectiveness and of the continuing need for its functions. This Chapter describes therefore the main features of the statutory and policy framework within which STB operates. It also looks at the 1992-93 review of public sector support arrangements for the Scottish tourist industry and concludes by comparing STB's activities and structure with those of other National Tourist Organisations in the UK and elsewhere.

Statute and Functions

2. STB is one of three National Tourist Boards established by the Development of Tourism Act 1969. Along with the British Tourist Authority (BTA), the Boards are charged with promoting the development of tourism to and within Great Britain. STB's principal functions are:

­ to encourage people to visit Scotland and people living in Scotland to take their holidays there; and

­ to encourage the provision and improvement of tourist facilities in Scotland.

3. The Board also has the following statutory functions and powers:

­ to advise Ministers and other public bodies on tourism matters; (s.5)

­ to promote or undertake publicity in any form; (s.2)

­ to provide advisory and information services; (s.2)

­ to promote and undertake research; (s.2)

­ to establish committees to advise the Board in the performance of its functions; (s.2)

­ to give financial assistance by way of grant, loan or equity (or a combination of these methods of funding) to provide or improve tourist amenities and facilities; (s.4)

­ to give grant or loan to new hotels or improvements to existing hotels; and (s.7, 8 and 13)

­ following an Order in Council, to administer a scheme for the registration of tourist accommodation. (s.17)

4. Apart from the last 3 items on the above list, the Board exercises all these powers and functions. The Board's scheme of assistance for tourism projects was suspended with effect from 29 June 1993: the background to this decision is outlined in Annex D. A Hotel Development Incentive Scheme was operated by the Board until 1973 under sections 7, 8 and 13 of the Act. To date, a statutory registration scheme for tourist accommodation has not been established. In 1986, however, STB launched a voluntary, non-statutory quality assurance scheme which remains in being (though in considerably modified and expanded form).

5. The Act also requires the Board, in discharging its functions, to have regard to the desirability of:

­ fostering, supporting (financially or otherwise) and, in appropriate cases, co-operating with the organisations discharging functions corresponding to those of STB in relation to areas within Scotland; and

­ consulting with other National Tourist Boards and any relevant persons and organisations.

6. The Act (which restricted STB's freedom to carry out overseas promotion except on behalf of BTA) was amended by the Tourism (Overseas Promotion) (Scotland) Act 1984 to allow the Board to carry on activities outside the UK for the purpose of encouraging people to visit Scotland. Such activities are subject to the approval of the Secretary of State who is required to consult BTA. At present, the Board's role is to supplement, but not replace, BTA's efforts on Scotland's behalf as the Authority retains prime responsibility for undertaking the co-ordinated marketing of Britain overseas. The consultation and approval procedures reflect these intentions. The Board may also, as it could prior to the passing of the 1984 Act, carry out overseas promotion as the agent of BTA.

Role of the Secretary of State

7. The Secretary of State for Scotland is responsible for setting the policy priorities and guidelines for STB together with its annual budget. The relationship between the Secretary of State, the Department and the Board is set out in a Management Statement which is issued by the Department and which sets out the policy, structural and operational framework within which STB operates. The Statement was first introduced in 1993 and was recently reviewed by the Department in consultation with the Board. The revised version came into effect on 1 September 1997.

The Role of the Appointed Board

8. As a Non-Departmental Public Body, STB is a body corporate supervised by a chairman and board who have collective responsibility for its overall control and management. The chairman and all 6 board members are appointed by the Secretary of State. The board is required to ensure that STB's activities are consistent with the 1969 and 1984 Acts and with those policy priorities set by Government. Inter alia, they are also expected to approve strategy, provide policy direction to the Board's executive, allocate resources, set targets and ensure that arrangements are in place to ensure the Board's effective financial management.

Aim and Objectives set for STB

9. The Board's Management Statement currently states that the Government's aims for the tourism sector in Scotland are to encourage and secure an improved performance on the industry's part by promoting a fiscal, regulatory and economic climate in which it can prosper and by providing appropriate targeted financial and other assistance. More specifically, it states that STB's main aim is to help maximise the economic benefit of tourism to Scotland. The Board is to undertake this task by:

­ promoting Scotland as a tourist destination;

­ encouraging and supporting the Scottish tourist industry;

­ encouraging the provision of high standards in the Scottish tourist industry; and

­ advising, and facilitating the provision of advice to, tourists on all aspects of holidaying in Scotland.

10. The Board is expected to devise and pursue policy objectives consistent with the preceding statement. The Board's current corporate objectives are as follows (in descending order of priority):

­ to increase visitor expenditure (in real terms);

­ to develop all-year round tourism;

­ to develop tourism outwith the main tourism areas; and

­ to promote high quality in all tourism facilities and services.

11. In fulfilling both key and corporate objectives, the Board is expected at all times to:

­ align its policies with the aim and objectives contained in the Strategic Plan for Scottish tourism published by the Scottish Tourism Co-ordinating Group, as revised from time to time;

­ maximise income from sources other than the Exchequer;

­ manage its expenditure of resources efficiently, economically and effectively; and

­ conduct its business in the light of its Charter Standards Statement.

Expenditure, Staffing and Operational Activities

12. STB is funded mainly through grant-in-aid from The Scottish Office. Normally, between 70% and 80% of the Board's planned expenditure is met from grant-in-aid with the remainder being generated by charges for the services provided. The Board's expenditure, income and staffing for 1996-97 are summarised in the following table:

Table 2.1: STB's Grant in Aid, Income, Total Expenditure and Staffing by Main Activities, 1996-97

13. The Board's principal activities cover:

­ the promotion of Scotland as a visitor destination in both UK and (in partnership with BTA) overseas markets;

­ the operation of quality assurance schemes for serviced accommodation, holiday parks and visitor attractions;

­ the provision of financial support for, and sponsorship of, the network of Area Tourist Boards;

­ the commissioning of, and participation in, a range of tourism-related studies and the maintenance of a research database covering Scottish tourism;

­ the co-ordination of, and participation in, action arising from the implementation of the Strategic Plan for Scottish Tourism; and

­ the provision of press and PR support for the Board's UK and overseas marketing campaigns and for the industry as a whole.

Previous Policy Reviews

14. This is the first occasion on which STB has been the subject of a Prior Options Review. This is not to say, however, that the Board's role has not been scrutinised in the past. During the 1980s and the early 1990s, National Tourist Board support for tourism in either Scotland or Britain was examined in varying degrees by a range of Governmental or Parliamentary bodies. The most recent and significant of these scrutinies was the review commissioned by the then Secretary of State for Scotland in 1992 into the public sector's support for the Scottish tourist industry at both the national and local level. Implementation of the recommendations which resulted from this review and the consequent need to let the new arrangements settle in led to the deferral of a Prior Options Review of STB until 1997.

15. The 1992-93 review arose from widespread concern that the support arrangements then in place had become fragmented and were no longer fully effective. Following a public consultation exercise (which produced well over 400 responses) Scottish Office Ministers concluded that there was indeed scope for improving the method of delivering tourism support and that any new structure should operate to a national strategy, be administratively simple, be based on partnership, incorporate effective liaison arrangements and be achieved through evolutionary change. The action taken to achieve these goals was as follows:

­ the composition of the Scottish Tourism Co-ordinating Group was reviewed and strengthened;

­ an industry representative body, the Scottish Tourism Forum, was established to bring together a wide range of interests to contribute to strategic thinking at the national level;

­ a strategic plan for the industry was devised, published and implemented and has been the subject of regular review;

­ STB was given overall national responsibility for tourism marketing and ATB sponsorship with effect from 1 April 1994;

­ also from 1 April 1994, responsibility for business development was consolidated within Scottish Enterprise (SE) and Highlands and Islands Enterprise (HIE) with STB's scheme of assistance for tourism projects (operated under section 4 of the 1969 Act) suspended with effect from 29 June 1993;

­ the Area Tourist Board (ATB) network was reduced from 31 to 14 local boards with effect from 1 April 1996;

­ with effect from 1 April 1995, a significant number of STB staff and functions were transferred from Edinburgh to Inverness; and

­ co-ordination arrangements between STB, SE and HIE were improved by means of cross-board appointments.

16. Annex D constitutes a more detailed commentary on the action taken and, specifically, its practical outcome. In overall terms, the conclusion drawn by the Steering Group from this analysis is that the rationalised support structure introduced by the review has been of positive benefit. Some difficulties remain but the Steering Group believes that the new arrangements have proved considerably more effective than those they replaced and that they continue to be much more relevant to the industry's needs.

Comparisons with Other National Tourist Organisations

17. At an early stage of the Review, the Steering Group concluded that it would be of value to find out more about the other National Tourist Organisations (NTOs) currently operational within the UK in order to compare and contrast their arrangements with those pertaining in Scotland. The bodies in question are: the British Tourist Authority, the English Tourist Board, the Northern Ireland Tourist Board and the Wales Tourist Board. Given Bord Failte Eireann's high profile and reputation, it was also thought appropriate to extend the coverage of this survey to the Irish Republic. Annex E analyses NTO arrangements in the UK and Ireland under a number of basic headings and provides supporting commentary.

18. Some consideration was also given by the Steering Group to NTO arrangements outwith the UK and Ireland. Given the very large number of NTOs now active throughout the world, it was decided to concentrate on a small number of countries that could be said to be generally analogous to Scotland (in terms of size) or otherwise were likely to be of relevance to the Scottish situation. Three countries were selected: Germany, Norway and New Zealand. Sub-national arrangements in Canada were also considered. A desk review of these countries' NTOs and their related arrangements was undertaken by STB. The Board's analysis is set out in Annex F.

19. As far as comparisons with other NTOs in the UK and Ireland are concerned, STB has no clear analogue. The NTO it resembles most closely is the Wales Tourist Board but, even here, there are distinct differences, especially with regard to capital development. No doubt in common with the other NTOs, STB's situation arises from the arrangements and requirements ­ policy or otherwise ­ peculiar to its own area of operations, not least in Scotland's case the different structure of public sector support for tourism. On this basis, the Steering Group concluded that none of the other NTOs currently operational in the UK and Ireland offers a model that can be easily applied to the Scottish situation.

20. One theme common to UK and Irish NTOs was, however, noted. Despite often very significant differences in structure and approach, there is widespread recognition that, as a matter of good practice and as a means of saving scarce resources, NTOs should pursue a focused strategic role which aims wherever possible to facilitate improvement in industry performance and to then withdraw in favour of industry action. All the NTOs in question have either moved or are moving in this direction.

21. Looking further afield, the Steering Group felt that, given the limited nature of the study undertaken by STB, any attempt to reach detailed conclusions would be fraught with difficulty and likely to produce misleading results. Accordingly, the Group decided to confine itself to the following general observations:

­ in terms of arrangements for support, it is clear that the approaches adopted can vary radically from country to country and this appears to bear out the conclusion already reached in relation to UK and Irish NTOs;

­ in terms of functional responsibilities, international comparisons suggest that the approach adopted by STB is broadly similar to that of other NTOs;

­ no sensible view can be taken as to the relative impact of NTOs and, as a consequence of this and also of their organisational differences, it is very difficult to make meaningful comparisons of their performance; and

­ there is no comparative evidence to suggest that tourism in Scotland is over-subsidised in terms of public sector support.

22.Overall, the Steering Group concluded that there were no grounds for believing that the arrangements for national support of the Scottish tourist industry are generally inferior to, or likely to be less effective than, the practice elsewhere. Where there are significant differences, they are explicable as a response to the particular requirements of the Scottish situation. The Steering Group felt that such lessons as could be learnt from these comparisons lay in the detail of what happens or has happened elsewhere or in any general principles that might be identified as having particular relevance to Scotland. The Group adopted this approach in considering its detailed recommendations as to the Board's future structure and role and the delivery of its functions.