Scottish Enterprise cuts small business funding after cash pot runs dry

Scottish Enterprise has been instructed by its chief executive to suspend all future support grants and to slash internal budgets as the business agency faces financial difficulties.

Scottish Enterprise cuts small business funding after cash pot runs dry

Steve Dunlop

Steve Dunlop, chief executive of the agency emailed staff earlier this month asking staff to implement the changes. The email, which was leaked to the Sunday Mail, said that “unforeseen factors” had left the organisation exposed with more than a month remaining of the financial year.

Mr Dunlop outlined that a series of cuts would need to be implemented to alleviate its financial woes. These included:



  • Pulling the plug on new spending commitments unless “legally committed”
  •  Immediately halting the recruitment of new staff
  •  Cutting all travel unless absolutely necessary

It is expected that Scottish Enterprise’s funding will be slashed from £374 million to £340m in the government’s forthcoming budget.

Mr Dunlop wrote: “Scottish Enterprise is expected to find savings and our draft resource budget allocation for 2020-21 represents a nine per cent year-on-year reduction.

“Until the budget is finalised and until we have concluded our discussions with the Scottish Government about matching our budget to our priorities, we have decided it is prudent to make no new spending commitments or offers of support for financial year 2020-21.”

The funding cuts arrives as the Scottish Government prepares to invest £2 billion of public money into its new Scottish National Investment Bank over the next ten years.

Hundreds of businesses receive support from Scottish Enterprise each year - with start-up company’s depending on grants from the organisation to launch their business.

Scottish Enterprise has an estimated 1100 employees based in 14 offices across the UK and a further 33 overseas.

A Scottish Enterprise spokesperson said: “Any suggestion that Scottish Enterprise has called a halt to funding for small and medium-sized businesses is false. The truth of the matter is we have stimulated a high level of demand for strategic investment and our budget for the current financial year, ending in March, is now fully committed. We have an indicative budget of around £340m for our next financial year, beginning April, which will deliver over 3,000 projects across Scotland with companies of all sizes.”

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