AN SNP minister has been forced to defend his government’s £2.8 billion small business scheme that was panned by respected economists for “no evidence” it has been effective.
Public Finance Minister Tom Arthur attempted to justify the Scottish Government’s Small Business Bonus Scheme after the Fraser of Allander Institute found “no evidence” that the initiative has done anything to help small traders.
Mr Arthur, however, admitted that the data from the £2.8 billion flagship scheme merely amounted to “opinion or anecdotal” conclusions.
Respected economists at the Fraser of Allander Institute insisted it had been “exceptionally difficult to reach any definitive conclusions” about the scheme’s impact.
A lack of useful data and other problems made it “almost impossible for any systematic assessment” to be done into how the policy has affected jobs, investment or business growth.
The official evaluation report said that, although businesses felt there were benefits to the SBBS, the experts could “find no empirical evidence that identifies the SBBS as supporting enhanced business outcomes".
Mr Arthur attempted to rubbish the conclusions by the Fraser of Allander Institute, telling Holyrood’s Finance and Public Administration Committee that “absence of evidence is not evidence of absence”.
The minister was responding to pressure from Greens MSP Ross Greer, who pointed to the experts “essentially saying that there is no hard evidence that the Small Business Bonus Scheme is improving economic performance”.
Mr Greer added: “That seemed, given the amount of money that’s put into the scheme, it seemed an alarming conclusion for such a respected institute to essentially say there’s no evidence that this is working.”
Mr Arthur claimed that “the challenge is actually having the data to evidence the impact”.
He added: “I think what we do know is there is positive support for it, for example, from the FSB. There’s a recognition from many of the small businesses that benefitted from it – they value it.
“But I take your point around the need for more robust data rather than what could be characterised as opinion or anecdotal.”
The minister told MSPs that enhanced data would “allow us to be more effective in shaping policy – whether that be specific reliefs or whether it be for future consideration of more fundamental reforms”.
He added: “In my experience in engaging with business as a minister and also as a constituency representative for the last six years, is that the scheme is very-much valued by the businesses who receive it.
“I think it’s important that we carefully consider what Fraser of Allander have outlined in the report and that’s why we’re going to establish a short-life working group to consider it in more detail.”
Mr Greer, said he would “agree absolutely with the FSB that we need a tax system that supports small businesses”.
But he added: “If you forgive me for being flippant, if we ask those who receive free money ‘is it a good idea that free money is given out’, of course they are going to say yes.
“The Fraser of Allander Institute’s conclusions were concerning, given the amount of money that’s involved.”
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