Scottish Government refuses to say if it will reinstate HIE funding to support region's economic recovery
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Question marks hang over the Scottish Government's move to cut Highlands and Islands Enterprise (HIE) funding by five per cent.
In a written question to the government, Highlands and Islands MSP David Stewart asked what plans it had to reverse the 2020 Budget decision in light of the impact of Covid-19 on businesses, and to support economic recovery in the region.
The SNP agreed a deal with the Greens to pass the budget in Holyrood earlier this year which saw £2.954 million slashed from HIE for the coming year.
It would bring the total shaved off the enterprise body in the last two years to £13.5 million, while there has been a fall of 44 in permanent operations HIE staff – close to 50 per cent – since 2017.
However the SNP government refused to confirm whether it will reverse the cuts.
Instead it stated it was working closely with HIE to “identify opportunities to manage the in-year financial pressures so that they can continue to meet the needs of businesses and communities across the region”.
Mr Stewart said: “Businesses and communities across the Highlands and Islands will be deeply concerned that the Scottish Government is still refusing to stop the considerable cuts to Highlands and Islands Enterprise at a time when small and medium size enterprises the length and breadth of the region are facing some of the most significant economic upheaval and challenges in a generation.
“We already knew the effects of the coronavirus shutdown on businesses – including restaurants, shops and arts organisations – was going to be massive. Every day we hear evidence of businesses now struggling and concerns over the long term economic impact of coronavirus on the fragile rural economy.
“The Fraser of Allander Institute has estimated that if lockdown measures continue for a three-month period, there could be a 20-25 per cent contraction in Scottish GDP and I’m concerned the Highlands and Islands could face the brunt of the recession.
“The cuts being passed down to HIE this year were always short-sighted, however, the impact that these cuts are going to have now due to the additional pressures being put on businesses across the region by the negative economic impact of Covid-19 bring this into even sharper relief.
“HIE play an essential role in strengthening local communities across the Highlands and Islands, which is one of Scotland’s most economically fragile areas.
"It is vital that the Scottish Government now listen to the concerns of people, communities and businesses across this region and finally commit to reversing these cuts and show a real commitment to supporting businesses and economic recovery in the region once we are through this crisis.”
It comes at time when the SNP’s handling of the economic impact of the Covid-19 crisis has come under fire amid claims that many businesses are finding it difficult to access lifelines grants while others say English businesses are getting a better deal.
