A row between Scottish Enterprise and the LECs over where job cuts
should fall is allowing the architects of the scheme to escape
responsibility
IN his chairman's statement in the first annual report of Scottish
Enterprise, Sir David Nickson wrote: ''I am delighted to see the
Scottish Enterprise network working together with such dedication,
efficiency, cohesion, and with such high morale.''
Six months on, these words peal with some very discordant echoes. That
cohesion and morale have been sorely tested as the successor bodies to
the old SDA and the Training Agency face up to the prospect of a
(perhaps) swingeing budget cut in 1993/94, resulting in up to 200 job
losses among the network's own staff.
The bruising tensions erupted last week with a leaked warning of the
impending job losses, before the core body, Scottish Enterprise
National, had had time to inform its 390 staff that up to 100 of them
might have to be sacrificed.
The previous week, chief executives from the 13 local enterprise
companies in the SE network had been told of the likely scale of the
financial squeeze and its consequences. While the 390-strong core would
bear the brunt, the LECs (with around 960 staff) were told they might
have to cut up to a further 100 jobs as well.
The core body technically employs almost everyone in the network, for
reasons of administrative simplicity. But each LEC will be free to meet
any cuts in its management budget next year in its own way. However,
since two-thirds of these resources go directly on staff costs, it's
hard to see how job losses can be avoided.
In Bothwell Street, they blame one or other of the LECs for blowing
the whistle in public on the threat to jobs. But some LEC sources are
seizing on the story getting out as an opportunity to bash the core and
wonder, semi-publicly, whether it really has any long-term role. ''Why
shouldn't they take all the pain?'' typifies that faction's
uncompromising line.
Meanwhile the real architects of this planned squeeze, Scottish
Secretary Ian Lang, his advisers, and the Treasury, are standing well
clear of the action, like prison guards watching the condemned push each
other to the front of the queue for punishment.
It is an unedifying sight. But not everyone is at everyone else's
throat. When the 13 LEC chairmen met Sir David recently to discuss the
situation, the first half of the meeting was devoted to rehearsing all
the reasons why the Government should protect the budget of a body it
created to breathe new life into economic development and skills
training in Scotland.
But, when the group then faced up to how to respond should the cuts go
ahead, there was, according to one of those present, a consensus that
both SEN and the LECs must review their resources. It is what you might
expect of private sector business people, well used to making hard
choices in their own companies.
Indeed there are some LEC board members and some on the SEN board
itself who will vouchsafe, in private, that the system has fat on it
which needs to be shed. One big LEC is said to have cut 10% of its staff
in the past year.
Of course they would happily avoid cuts if this spending round hadn't
threatened to be so bloody. But, if cuts there are to be, they want the
fat to go, wherever it is to be found. Hence their ill-disguised anger
that anyone should seek to exploit the predicament in partisan fashion.
The Bothwell Street core adopted a maximalist approach from day one
when allocating resources to the network. Some 85% of the total budget
went to the LECs in year one. But by doing that, SEN ran the risk of
inciting its LEC brood to demand even more, if times turned tough.
And so it has proved, at least as far as the malcontents are
concerned. But SEN is already proposing to take the biggest hit itself
this time round. While it could end up shedding 25% of its staff, the
LECs, which carried a collective surplus of some #14m into this year's
budgets, are facing, at most, a 10% staffing cut.
The big unanswered question is whether such voluntary attrition at the
core will render SEN incapable of providing a strategic Scottish focus
to the more localised economic development activities of the LECs. There
must be a real danger, if the dogfight isn't stamped out quickly, of the
complete balkanisation of the old SDA/Training Agency structure.
There is still time for some eleventh-hour appeals to Ministers to
look again at the fractured logic of what they are proposing -- deep,
real cuts in the resources available to its main delivery vehicle for
developing Scotland's economy, environment and skills base in the midst
of the most protracted and nasty recession many of us have experienced.
Indeed some of those on the receiving end are still hopeful that the
message will get through.
But if deep cuts are imposed and job losses follow, it is vital that
responsibility is pinned where it belongs: on the politicians who
promised us a structure which would have ''a major impact on the
prosperity and living standards of the Scottish people for the rest of
the decade'' (Mr Allan Stewart on April 2 last year) and are now taking
an axe to jobs in the very organisation itself.
That, rather than a sterile ding-dong between LECs and SEN about whose
jobs should be on the line, is the issue here.
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