Spending by Scotland’s two public enterprise agencies — Scottish Enterprise and Highlands and Islands Enterprise — totalled £398 million in 2014-15, according to a report by Audit Scotland.
That’s a reduction of 12% in real terms since 2008-09, Audit Scotland said.
Despite the fall in spending, Audit Scotland found that both agencies “have been successful in their respective roles, with clear strategies and good governance arrangements in place.”
However, the report said the Scottish Government needs to do more to link the agencies’ work to its economic strategy “and to set out in detail how that strategy will be achieved.”
The agencies work with or assist around 11,200 businesses each year and “there are good examples of the agencies working with partners to achieve a positive impact, such as creating jobs,” Audit Scotland said.
Audit Scotland said Scotland’s economy is worth about £142 billion.
The report “recognises that economic growth is complex, and concludes that the Scottish Government needs to be clearer on how its strategy will be implemented.”
It said a stronger approach is also needed “to measure progress towards achieving the government’s economic priorities.”
The report said that for example, although the enterprise bodies perform well against their individual targets, “it’s not possible to measure how they contribute to delivery of the government’s strategy.”
The report notes that a lack of information on the full range of support for businesses “creates a risk of duplication.”
It said that “building a clear picture of the support available, clarifying roles and responsibilities, and raising awareness of what’s on offer will make it easier for businesses to understand and access these services.”
Caroline Gardner, Auditor General for Scotland, said: “The advent of new financial powers means that the Scottish Government now has a direct stake in the performance of the Scottish economy.
“Scottish Enterprise and Highlands and Islands Enterprise have a positive impact on businesses and communities but their work is only part of the activity that contributes to the Scottish Government’s ambition for sustainable and inclusive economic growth.
“New powers, continuing pressure on public finances, and uncertainty following the recent EU referendum mean that the Scottish Government needs to target public sector activity and funding where they will have the biggest impact on achieving its economic strategy.
“It also needs to be able to measure progress so its plans remain on track.”