Business: New Deal for Business Group Minutes: June 2024

Attendees and apologies

• Deputy First Minister and Cabinet Secretary for Economy and Gaelic, Co-Chair (Deputy First Minister)
• Dr. Poonam Malik, Co-Chair
• James Fowlie, Convention of Scottish Local Authorities (COSLA)
• Nathalie Agnew, Muckle Media
• David Lonsdale, Scottish Retail Consortium
• Louisa Macdonell, Business in the Community Scotland (BiTCS)
• Karen Meechan, Scotland IS
• Marc Crothall, Scottish Tourism Alliance (STA)
• Joe Hind, Scottish Food and Drink
• Colin Borland, Federation of Small Businesses (FSB)
• Julie Ashworth, Institute of Directors (IoD)
• Sara Thiam, Prosper
• Sandy Begbie, Scottish Financial Enterprise (SFE)
• Barry White, Chair NSET Board

Apologies

• Liz Cameron, Scottish Chambers of Commerce (SCC)
• Mairi Spowage, Fraser of Allander Institute (FoA)

Items and actions

Key points and actions from the meeting

Welcome - Deputy First Minister’s opening remarks

Deputy First Minister (DFM) thanked members for hard work to strengthen the relationship between business and Government. Keen to determine where the Group can implement real change. Committed to making the New Deal for Business work fully, and particularly committed to delivery and action rather than just to discussion.

Open to feedback from members about what format works best for meetings and the process of ongoing engagement with the delivery element of New Deal for Business Group Momentum needed to deliver Programme for Government (PfG), despite challenges with the pre-election period, ensuring PfG aligns with economic growth and prosperity for all as a priority across all policy areas. 

Dr Poonam Malik’s opening remarks

Dr Malik welcomed members and DFM to her first meeting as co-chair of the Group. She noted the Group offers a platform for business and SG to work together to improve economic growth. This relationship is built on trust and meaningful understanding of each other’s priorities. NDBG is about businesses, improvement in environment where businesses can operate most effectively and efficiently and working culture improvement. Noted that PfG engagement was the focus of the meeting and reiterated the need for measurement of progress but in a way that business can see real-world change. 

New Deal for Business Progress update (Dr. Poonam Malik)

Dr Malik offered a progress update, highlighting the dashboard for progress monitoring which offers an opportunity to demonstrate real change. Based on the 6 outcomes, achievements include:

• the New Deal for Business Unit is delivering culture change through supporting colleagues in understanding how to engage and effectively capture business impact within policy development - taking forward a programme of internal outreach
• programme of policy scrutiny by the Regulatory Reform Group, including on Public Health and Circular Economy/ Net Zero policies, which is providing advice to Ministers on effective implementation 
• publication of the revised BRIA template accompanied by staff guidance and an updated best practice policy cycle which is now ready for testing
• both the BRIA and best practice policy refreshments will help to embed the principles of the New Deal for Business. Businesses will begin to see an increase in consistency of approach across government, bringing the business voice more regularly in to design and development of new and assessment of existing policy
• a survey to test colleagues’ confidence and capability around engaging with business will form part of the outreach programme. This will also allow for more accurate testing of existing processes to map business engagement pan-Scottish Government
• a programme of NDR discussions has provided the opportunity for focused conversations within teams looking at specific issues, including Reliefs and Property Improvement, Promotion of Reliefs, Impact of Reliefs and Review of Devolution of Empty Property Relief and Improvements to the transparency of valuations and information flows. Five task teams have been set up to continue consideration of specific issues including how NDR supports Net Zero
• Scottish Government’s monthly economy publication now includes a summary of the latest data on business conditions (including evidence on business concerns and costs)
• a Wellbeing Economy Description targeted at business has been developed. NDBG secretariat will invite members to provide feedback on the description

 

The Group’s main points on progress reporting, included:

• welcome progress that the Regulatory Reform Group (RRG) is bringing – for example Minimum Unit Pricing time frame consideration was welcomed. Noted a disconnect between ambition and what The Group is delivering. The experience of the Budget process was not reflected in the progress updates and consequently, colouring green (on track) for outcomes felt generous. Positive themes happening but tax rates and the burden remain. This resulted in some nervousness around reporting as certain recommendations track green but have not delivered economy opportunities such as tax, planning consent, etc. Need to ensure the levers SG has powers over provide economic growth as indicated was the underlying theme of New Deal for Business delivery
• agreement that there was no need to take a deep dive for the progress on each of the 78 actions, however, members invited observations on what is changing at an operational level. For example, more insight into the changes the Group is driving and where the New Deal principles are working in action would be helpful
• Dr Malik next invited Philip Whyte, Head of FM Priorities Unit, PfG Team to introduce the purpose and ask of the PfG team for engagement with NDBG members and relevance of the member’s feedback for including the learnings into shaping the next PfG

 

Programme for Government Engagement Overview (PfG):

• SG PfG team opened session, noting its determination not to lose momentum and drive, despite pre-election period. This year for PfG, there is a real drive to focus on what the Government wants to deliver. Key areas will be the 4 priorities (economic growth, better public services, net zero and eradicating child poverty) set out by the First Minister on 22 May 2024. Team is keen that the priorities are delivered across SG areas with no one portfolio having ownership of any one of the 4 priorities
• is it affordable – fiscal landscape is challenging. Is it deliverable – crisper articulation of what SG is going to deliver. Is it impactful – will it deliver the change needed?
• keen to determine where can we work across areas to avoid silos so no one portfolio owns any one action

 

Workshop Session explored three themes: form, process and content

Form: the role of the PfG within Government, and how it is used by business (including reflections on the PfG format, distribution). 

 

Members’ Feedback on form:

• frequency: Keen to explore the necessity of a PfG every year, only required if there are substantive additions or changes to be made, and ensure we are channelling our focus to key areas. Key to working with business is ensuring there are no surprises
• transparency & Timing: There is a disconnect – the PfG reads as though addressed to an internal SG audience, which is not relatable/ open to interpretation. Businesses need to be able to better see the outcomes (what success would look like). What is new and what is not
• timing and phasing of proposals is critical – businesses need to understand when things will happen to guide actions needed (suggestion of a Ghant chart). Transient Visitor Levy used as a good example of phasing delivering better outcomes.  This will also inform assessment of cumulative regulatory burden
• language in PfG needs to ‘speak’ to business. Request to test the PfG near final draft with the Group to translate into the right language for business
• relevance: alot of PfG can be “turgid and irrelevant.” Only a few announcements tend to be critical. Something that makes it clearer what is directly relevant to different audiences would also be helpful – what can X sector bring to delivery of PfG
• political nature: noted political demand for “something shiny” in PfG, citing DRS as an example. Noted the likelihood of an unsettled 12-18 months following UK election. Suggested that was a good time to focus/ consolidate rather than imposing too many new regulations
• accessibility: businesses need to be able to understand commitments. For example, a ‘£5 million package’ is not helpful – what does it mean in practice for businesses. Suggested PfG could be presented through different lenses, such as place-based dimension, or a sectoral dimension
• communication: need to demonstrate how the workshop feedback has been taken on board. Suggested use of more media to reach more people and businesses. For example, podcasts, video, and audio content may be a way to capture more business and be more attractive than reading a “dry” document. Suggested that local MSPs speaking at town halls events to explain how the PfG will affect locals was also suggested. DFM indicated it could almost read like a manifesto
• process: agreeing an approach to engaging the business organisations’ memberships to inform the content of the Programme for Government 

 

Members’ Feedback on process

• engagement: highlighted the need to consider how SG engage those in business who are not already disconnected from Government. Think about how we get them to understand the importance of PfG, noting many SMEs are time limited. Consider utilising business organisation network to develop PfG over coming weeks (and adopt similar process for Budget and other set pieces)
• if NDBG members have any queries on the day PfG is published, dedicate a contact they can reach out to e.g. to understand if a particular initiative/measure is applicable to their members
• development Process: Favoured a change to the cycle of policy and budgetary events, suggesting multi-year budgeting, a reduced importance for the PfG or a 5-year PfG process based on the parliamentary cycle
• links between policies to be better articulated (e.g. how do NSET and PfG link together)
• alignment: suggested using existing strategies rather than designing new to better align areas that need to deliver to achieve economic growth “don't reinvent the wheel”
• parliament process: recognised that Parliamentary process can add complexity and challenge to business engaging with PfG. Advised that expectations raised by PfG should not be set if they cannot be met
• content: reflection on key asks from business and cumulative impact considerations that have been collated and highlighted to Ministers. Discussion of the opportunities for how business can support the Scottish Government’s strategic priorities

 

Members’ Feedback on content

• education and skills: both key to supporting a high performing economy. Withers review was a year ago, no clear change. Colleges are a key and flexible part that can assist in business skills shortages and needs. An immediate conversation is needed with the UKG regarding immigration barriers to fulfilling skills gap
• housing: more housing required to support labour shortages, particularly in more remote areas
• taxation strategy: visibility required on future tax plans, offering tax stability/ certainity
• immigration strategy: need stronger engagement with UKG. Fast approaching crisis point with labour and skills shortages
• flexible Workforce Development Fund: Grants for SMEs to help with skills development previously pulled. Funding for graduates/interns needed which helps create entry job level support to help economic growth
• investment: PfG should be a prospectus document for investors, showcasing Scotland as an attractive place to do business
• support for Business: 95% of businesses are SMEs, clear support needed for those to achieve economic growth. Major drawback is the lack of skills/ labour shortages to foster that environment. PfG needs to show improved collaboration across the various organisations and external stakeholders boost for example skills
• trading conditions: need to be alive to trading conditions (e.g. retail sales currently flat, footfall down, yet supply chain and statutory costs are rising)
• Rural Economic Policy: Scotland’s rural and Highlands and Islands communities should be considered in policy development not just central belt
• public cector: reform required to ensure private and public working better together
• Community Wealth Building: amplify by rewarding social investment and consider how to bring social policies into delivering on growing the economy
• Short Term Lets: decoupling planning and health and safety. Two different agendas but decisions are being coupled when these are two distinct regulatory regimes
• regulation: a number of regulatory initiatives at the moment (e.g. HFSS, alcohol marketing, cups levy, vaping etc) consideration needed for cumulative impact on any potentially new initiatives

AoB

No additional matters were raised. 

 

Actions

• Members to feedback on format of NDBG meetings going forward, covering how we balance the process with capturing the real-world changes. Feedback to be shared to NewDealforBusiness@gov.scot by 5 July
• Members to provide any additional comment/ feedback on NDBG Progress reporting by 5 July
• NDBG Secretariat to share description of a Wellbeing Economy to the Group for feedback by close 14 June 2024. Complete – circulated to the Group on 14 June
• Members to advise how they can support PfG Team to engage more businesses in the PfG development process and to share any further PfG feedback, not already captured to NewDealforBusiness@gov.scot by no than 26 July 2024
• NDBG Secretariat to offer opportunity for subgroup members to input to PfG feedback collation. Feedback sought by 10 July 2024
• NDBG secretariat to collate/ share PfG feedback with PfG Team to ensure it is included
• NDBG Secretariat to work with PfG Team to arrange a PfG update and feedback PfG team to make themselves available for 1-2-1 discussions for NDBG members to follow up any on specific areas of interest. Members to arrange by 5 July 2024 via NewDealforBusiness@gov.scot
• PfG Team to ensure feedback from Group and subgroup members is considered throughout development – including the potential to develop bespoke summaries that can better speak to businesses (alongside other groups)
• session for NDBG weeks commencing 12 or 19 August