New Deal for Business Group - Report on Progress & Recommendations: Implementation Plan

Key Actions

Sub-group 1 – Regulation

Key Actions

1. The Regulatory Review Group (RRG) (chaired by Professor Russel Griggs) will be re-established from 26 October 2023 and will work with industry and the Scottish Government on a renewed remit to advise Ministers.

2. By April 2024, a new Business and Regulatory Impact Assessment (BRIA) and

Toolkit will be developed with business. This will include stronger focus on the specific impacts on small business, as well as the impact on consumers.

Business understands that there is a role for regulation when there is a wider societal benefit, and that the government will require them to do things that they may not choose to do and that may come at a cost. When these situations arise, it is even more important to involve them in finding ways to deliver the purpose and outcomes desired by the policy in a way that benefits business and society.

The Business Regulation Sub-group has presented 38 recommendations, with 23 to be actioned in the short term, 11 over the medium term, and 4 over the longer term. The success of implementing these recommendations will be measured in the long-term by the improved relationship with businesses in developing and applying new regulations. We recognise that an improved relationship with businesses will not mean that business does not raise any issues with regulations. However, it should result in fewer significant concerns and more effective implementation of new regulations.

Sub-group 2 – Business Partnership

Key Actions

3. By April 2024, conduct a full and deep dive into the Scottish Government policy development cycle to reinforce the need for and capability to undertake effective engagement at all stages wherever possible – including pre-policy, particularly when regulation is a potential outcome.

4. By October 2024, a systematic mapping of current engagement with business by policy areas across Scottish Government to properly capture a wide range of business voices in the development of policies.

Developing an improved business partnership requires a culture shift and an improved and consistent approach to working with business. This will require a sustained and concerted effort across the Scottish Government. We are pleased to note that the Scottish Government’s senior management team is fully signed up to ensure this happens.

The recent publication of this year's Programme for Government not only reinforced the Scottish Government’s commitment to reset the relationship with business but also offered a useful opportunity for officials engaged with the Programme for Government team to analyse, as far as possible, the cumulative impact on business of the content to inform senior leaders and Ministers. Discussions are ongoing to develop a formalised process for next year.

The Business Partnership sub-group 2 presented 15 recommendations: two immediate covering a timeline for implementation of all 78 recommendations, included in this plan, and a review of the membership and terms of reference for the NDBG. A further 7 are short-term (6-months) recommendations, 4 are medium-term (12 months), and 2 are for longer-term (18-months) implementation. To date, as well as working with the Scottish Government's Policy Profession to undertake a deep dive into the policy development cycle, we have ensured that all Cabinet submissions and Accountable Officer templates now have a New Deal for Business section to consider and outline the impact of policies and regulation on business.

We recognise that small businesses are at the heart of our communities, providing not only jobs but goods and services. As part of the New Deal for Business, we will work with small businesses to ensure their voices are heard and improve the support the public sector offers. A new Small Business Unit is being set up in the Scottish Government to work more closely with small businesses and ensure their voices are heard in the policy development process.

Sub-group 3 – Non-Domestic Rates (NDR)

Key Actions

5. Over the next 18 months (to April 2025), keep all NDR policy reforms under review to ensure that the NDR system delivers the most competitive environment to do business whilst supporting our communities.

6. Over the next 18 months (to April 2025) review the design of the administrative and digital processes of the NDR system to ensure a more productive and efficient environment for all.

The consultative sub-group on NDR was established under the NDBG to advise on further enhancements to the NDR system. The initial sub-group meetings considered the current operation and administration of the NDR system, with the objective of ensuring the best environment to do business and deliver a growing economy whilst supporting our communities and recognising the importance of NDR income in funding the delivery of local public services. The sub-group presented 10 recommendations broken down into short, medium, and long-term measures. The sub-group reconvened after the summer and agreed a forward work programme and structure of future engagement.

Sub-group 4 – Wellbeing Economy

Key Actions

7. In the first 6 months (to April 2024) as early examples of Scottish Government engagement with business in support of Wellbeing Economy aims, there will be a programme of meetings with business organisations, enterprise agencies, sector representatives and employers to seek businesses’ views in relation to health and work, and flexible working, and engagement with business to inform the development of sectoral Just Transition Plans.

8. In the first 6 months by April 2024, we will agree with businesses, business organisations and other partners, priority actions to implement the recommendations in the medium and longer-term, building on the Scottish Business Purpose Commission report; and over the next 18 months (to April 2025) we will work with them to: develop a description of Wellbeing Economy, in particular the role of business in a Wellbeing Economy; and draw on exemplar businesses in Scotland to produce a summary report of metrics that businesses can use to measure, monitor and evaluate the impact of their actions and that will help inform how they can contribute to building a Wellbeing Economy.

The Scottish Government is clear on building a Wellbeing Economy, which is central to the National Strategy for Economic Transformation (NSET) and supporting the transition to a net zero economy. The Wellbeing Economy subgroup was tasked with identifying ways for businesses and the Scottish Government to work together towards a Wellbeing Economy. The sub-group presented five recommendations, which build upon the Business Purpose Commission report and focus on creating conditions for transformative change through partnership working towards a Wellbeing Economy.

The Cabinet Secretary for Wellbeing Economy, Fair Work, and Energy has established a Wellbeing Economy Expert Advisory Group (WEEAG) to provide advice on key areas of the transition to a Wellbeing Economy. The Scottish Government will work with businesses, business organisations and other partners, building on the Business Purpose Commission report and drawing on the expertise of the WEEAG, to develop a programme to work with businesses to implement NDBG recommendations, including developing a simple description of the Wellbeing Economy, identifying key metrics to help businesses understand their needs, and identifying ways to showcase the benefits of contributing to the Wellbeing Economy transition.

Sub-group 5 – Sharing Key Metrics

Key Actions

9. In the first 6 months by April 2024, share and use data on the type of support businesses are searching for, to help the Scottish Government understand business needs.

10. In the first 6 months, by April 2024, review and share information on key sectors and market opportunities, building on the work in NSET on new market opportunities.

Sharing key metrics and real-time evidence across different sectors is crucial. This Group’s work has the twin aims of ensuring the Scottish Government is aware of the business climate and can consider policy in the light of this and, Scottish businesses can use metrics and data to capitalise on sectoral and international market opportunities and to contribute to the NSET metrics.

The group will also propose the set of business metrics on business sentiment, business engagement and business confidence that will form the measures of success of the Implementation Plan.