§ 4. Mr. Connarty
To ask the Secretary of State for Scotland when he last had discussions with Scottish Enterprise on its outturn expenditure for 1992–93.
§ The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart)
My right hon. Friend and I have regular contact with Scottish Enterprise on a range of 318 matters. No meeting has taken place to discuss outturn expenditure for 1992–93 as it was within the budget limit, but did not involve significant underspending.
§ Mr. Connarty
Has the Minister asked in the past, or will he ask in the future, for detailed figures about the amount spent by Scottish Enterprise and by the local enterprise companies on consultancies? Is he aware that when I criticised my local enterprise company for spending money on something that I thought was wrong, I had a flood of letters from businesses throughout Scotland saying that what disturbed them was that when they asked for money and assistance, they were sent a consultant? Those consultancies consist of what have been described as broken-down accountants, many of whom are former Scottish Development Agency employees.
There is now a serious question, which I hope the Minister will investigate, about exactly how much pork barrelling is going on. If it is not illegal, just how much is value for money? The business community is growing sick of consultants, who were once SDA employees, growing fat and not aiding the companies that look for assistance, but lining their own pockets from Scottish Enterprise funds.
§ Mr. Stewart
I do not agree with the hon. Gentleman's general allegation. There are facilities, which have been used, for audit investigations by Scottish Enterprise when there are allegations against local enterprise companies. However, I hope that the hon. Gentleman will continue to take a strong interest in the activities of local enterprise companies and that he will make representations to them. They are ultimately publicly accountable, and it is healthy that the hon. Gentleman and others take a real and close interest in their detailed activities.
§ Mr. Kynoch
The hon. Member for Falkirk, East (Mr. Connarty) should come to my part of the world—Kincardine and Deeside. I hope that my hon. Friend will join me in commending the Kincardine and Deeside Enterprise Trust, which is part of Grampian Enterprise, for setting up open learning schemes aimed at self-employed managers and intended specifically to teach them small business management and business methods, and to deal with tourism. Is not that Scottish Enterprise working at its best, being flexible and aiming its activities to where they are required in a way that makes it possible for managers to participate?
§ Mr. Stewart
I agree entirely with my hon. Friend. Indeed, when I was in his part of the world recently, I was able to see something of the work that the enterprise trust and Grampian Enterprise were undertaking in open learning and in other ways, such as the skill seeker programme in which Grampian Enterprise has been in the lead. That is the essence of the local enterprise company network. Individual enterprise companies can have flexibility and can take initiatives to meet the needs of their own local areas.
§ Mr. Wallace
What percentage of Scottish Enterprise's budget is attributable to training? Given that the Minister has just explained to the hon. Member for Falkirk, East the importance that he attaches to public accountability, will he deplore the practice by some local enterprise companies of inserting contractual terms that prohibit any training provider from criticising the local enterprise company for any of the ways in which it handles the 319 budget? Surely the local enterprise companies, which are responsible for public money, should not seek to make themselves immune from public criticism.
§ Mr. Stewart
The local enterprise companies do not seek to make themselves immune from public criticism. They have to have meetings and they have to publish accounts. Ultimately, they are responsible, through Scottish Enterprise and the Secretary of State, to the House.
§ Mr. Gallie
Is my hon. Friend aware of allegations made by the Labour MEPs MacMahon and McCubbin that Scottish Enterprise has misused European social funds? The fact that they have made those allegations may have jeopardised future funding. Will my hon. Friend confirm whether there is any truth in the allegations? If he cannot confirm their truth, will he condemn the actions of those who have been elected to responsible places and yet have acted so contemptuously?
§ Mr. Stewart
Not only am I aware of the allegations, which received wide publicity, but I wrote to Mr. Hugh MacMahon, with copies to Mr. McCubbin and to hon. Members. I shall put the matter in a more neutral way than my hon. Friend has done. I believe that the two Members of the European Parliament were, at the very least, extremely, seriously and deliberately misled about the facts of the situation.
§ Mr. Worthington
The Minister said earlier that local enterprise companies are publicly accountable. That is nonsense. They are secret, self-serving societies which are inward-turned and do not have to account at all.
The Minister said that he was in favour of accountability. Performance tables and public reports have been imposed on other organisations. When will the Minister impose performance tables on local enterprise companies?
§ Mr. Stewart
The performance of LECs is critical in the determination by Scottish Enterprise of their budgets for future years. That process is comprehensive and rigorous.