National Strategy for Economic Transformation Delivery Board minutes: 1 November 2023

Attendees and apologies

Present

• Neil Gray, Co-Chair, Cabinet Secretary for Wellbeing Economy, Fair Work and Energy
• Barry White, Co-Chair, Former Chief Executive Scottish Futures Trust
• Ellis Watson, Former Chief Executive, DC Thomson Media Group
• Gillian Docherty, Chief Commercial Officer, University of Strathclyde
• Douglas Millican, Former Chief Executive, Scottish Water
• Ewan Aitken, Chief Executive, Cyrenians
• Roz Foyer, General Secretary, Scottish Trade Union Congress
• Sir Simon Lister, Managing Director, BAE System Naval Ships

Apologies

• Audrey Cumberford, Principal and Chief Executive, Edinburgh College
• Nora Senior, Former Executive Group Chair, Weber Shandwick and past Chair, Enterprise and Skills Strategic Board
• Uzma Khan, Vice Principal Economic Development and Innovation and Deputy Chief Operating Officer, University of Glasgow

Supporting Officials

• Gregor Irwin, Director General Economy, Scottish Government
• Aidan Grisewood, Director Economic Strategy, Scottish Government
• Richard Rollison, Director for International Trade and Investment, Scottish Government
• Stephen O'Neill, Deputy Director Entrepreneurship, Scottish Government
• Lewis Hedge, Deputy Director for Fair Work and Labour Market Strategy, Scottish Government
• Adam Reid, Deputy Director Skills, Scottish Government
• Rachel Phillips, Team Leader Regional Economic Policy and Programmes, Scottish Government
• Marcus McPhillips, Deputy Director Economic Strategy and Delivery, Scottish Government
• Mathew Cramb-Low, Head NSET Delivery Unit, Scottish Government

Items and actions

Welcome

Mr Gray welcomed members to the ninth meeting of the NSET Delivery Board and introduced Marcus McPhillips as the new Head of the Economic Strategy and Delivery Division, and noted apologies from Audrey Cumberford, Nora Senior and Uzma Khan.

The minute of the September Board meeting was approved subject to any final amendments to be submitted to the Secretariat by Friday (3 November).

Mr Gray also noted the exchange of letters on Housing and invited those who had not seen these to contact the Secretariat.

Opening Remarks

Mr Gray reflected on recent discussions on NSET which highlighted the need to refocus, refresh and review the Strategy to ensure that we are capturing the current economic climate. The pillars of NSET are strong but we need to prioritise and maximise the opportunities with the inclusion of areas such as Housing, as well as the continuing focus on entrepreneurship and innovation.

Gregor added that we are now eighteen months into the Strategy and proposed we use the next six months to review what has worked well and build on that, engaging with stakeholders to ensure the Strategy is more impactful.

Mr Gray opened the discussion up to members who noted:

• the changed, and changing, context of the economic climate and the associated opportunities, including the speed of AI development and increased emphasis on energy security across the EU
• a broad welcome for a review of the fitness of purpose of the Strategy going forward, NSET progress and the opportunity to review the progress of the Board itself
• the range of expertise and knowledge on the Board and asked that the Board be actively involved in the work to support the NSET review

Mr Gray agreed that the review would be done in partnership with the Board and asked for any other comments.

Overview of NSET Programme Performance

Barry invited Stephen O’Neill to give an update on Programme 1 Entrepreneurial People and Culture.

Stephen gave an overview of Programme 1 noting:

• Recent activity:
  • return of the Scottish Ecosystem Fund in partnership with Scottish Enterprise, to distribute to organisations that don’t usually receive government funding. Around 40 organisations have received funding, with around £1.6m having been discharged so far
  • continued support to organisations whose funding had been in danger due to economic pressure, (Entrepreneurial Scotland and Scottish Edge)
  • early progress on delivery of the Ana Stewart Review on widening access to women and other minorities through the Pathways Fund
  • working with SDI on international investment – a large group of US investors visiting Scotland just now
  • Par Equity announced £100m Series A fund dedicated to Scotland and the North of England
  • Techscaler – over 300 business’ have signed up and are receiving support and the Dumfries Hub opens this week meaning all seven hubs have now been delivered
• New Frontiers:
  • Innovation Strategy – delivery and funding
  • expansion of International activity – visit to Web Summit in Portugal and a trip to Austin, Texas and Silicon Valley
• Risk
  • Finance – the ongoing pressures on budgets across portfolios

Members noted:

• the entrepreneurship workstream is going very well
• importance of the move to bring Digital and AI into this Programme
• clarity of support, good that Data Lab has continued funding, but it is reduced and will mostly be directed towards SME’s
• that Colin Cook as SRO was looking at Programme structures and remits more generally 
• with respect to attracting overseas entrepreneurs to Scotland, that there had been constructive discussions with Scottish Enterprise as well as discussions with some of the universities on talent attraction. Stephen noted that Alexander Holt who was behind the establishment of the CivTech Programme has now joined the Division and will be working on a project with Ross Tuffy and the universities on inward investment and the team had drafted a paper on this

Barry thanked Stephen and invited Richard Rollison to update on Programme 2 New Market Opportunities.

Richard noted that:

• the RAG rating of Programme 2 has moved from Green to Amber as while papers and strategies have been produced and published, we don’t yet know what the impact of them will be
• there had been discussions on the urgency to seize opportunities in Scotwind and instil confidence in the industry, noting the announcement by the First Minister of £500m over the next five years is critical to getting this right
• the Investor Panel is bringing its work to a conclusion and its recommendations will be published later this month
• Inward Investment – we are continuing to attract inward investment and are still the best place outside of London, although this is getting very competitive
• exports – Scotland’s goods export performance continues to outperform the UK
  • SDI’s results have been positive for the last few months
  • later this month the Scottish Exports Survey will be published including service data
• taking forward a review of making best use of public sector support

Members commented:

• given the speed at which things are moving in the Green Energy Sector this is an area that will benefit most from what we do, but we will have to really drive hard and compete to secure supply chain opportunities
• Mr Gray highlighted the need to pull together the Green Industrial Strategy, FM investor panel recommendations, energy strategy and Just Transition outputs into a coherent proposition for investors

Barry thanked Richard and invited Rachel Phillips to update on Programme 3 Productive Businesses and Regions.

Rachel noted:

• as with Programme 2 the RAG rating of Programme 3 has moved to Amber which is reflective of movement and reframing of activity
• we recognise the need to reframe Programme 3 and that some of the original Actions in Programme 3 would best sit with the work in Programme 1, with the aim that Programme 3 will bring a place-based focus and link to the strategic work and regional elements of the policy prospectus   
• the new Programme incorporates 3 current strategies at different stages of their evolution
  • the Regional Economic Policy Review where the focus is now on implementation
  • Community Wealth Building where the focus is on legislation but also supporting communities to take advantage
  • Public Service Reform which needs to address the role of regional agencies vs national, the role of REPs and how differing regional approaches affect national strategies
• a lot of the budget the Scottish Government has is tied up in UK Government Policies

Barry noted that the regional strategy was adopted last December and therefore the need to see meaningful progress in delivery and asked the Board for comments:

• the Board agreed with the pivot of Programme 3 to regional strategy focus with the digital component moving to Programme 1
• the Board expressed some concern over the variations in effectiveness across different regions and offered Board member assistance to support the resilience of the weaker regions 

It was noted that we are bringing Intelligence Hubs and regional funding proposals forward for decisions, which are aimed at pushing this whole agenda forward. They will take full advantage of the offer of support from the Board and appreciate the support from Simon in reference to the lived experience of working in partnerships on a regional scale.

Barry reiterated the offer of support and thanked Rachel for her update then invited Adam Reid to give an update on Programme 4 Skilled Workforce.

Adam noted:

• lots of work underway across the skills system to make it more agile to economic need
• the Programme will need to be updated to reflect our response to the Withers Review and the Publication of the Purpose and Principles for Post-school Education, Skills and Research
• publication of the Initial Priorities for Change across the system at the end of June, which includes building on the work of the careers review offer, national careers service, new funding model, skills planning and a leadership role for SG
• Minister planning to do more work with employers

Barry opened the discussion to members who noted:

• they were looking forward to the deep dive on Skills at the next Delivery Board meeting
• reflected on the challenges in designing the next stage of skills reform and echoed the offer of support from the Board to build consensus and bandwidth for implementation
• asked if there was a timetable for responding to the Withers Review

It was noted that an initial response to the Withers Review had been set out and officials will be setting out further material in due course.

Barry thanked Adam and invited Lewis Hedge to give an update on Programme 5 - A Fairer and More Equal Society.

Lewis noted:

• conditionality in Public Sector Funding – focus on redoing the business and regulatory impact assessment
• sector Fair Work agreements going ahead in adult social care, retail and construction
• employability – working with local government and COSLA to transform employability in Scotland, focused on the next phase of NOLB from 2024
• economic inactivity, focus on how the health system is supporting people to get into and stay in work and engagement with business on flexible working
• work ongoing on a business case for a multiyear NOLB strategic plan
• many of the original actions are complete so the Programme is in a good place to feed into the NSET review

Members noted:

• a concern around pace and need to sure that we deliver across the Public Sector and all publicly funded organisations
• keen to form a proposal on how the Trade Union movement can assist with the implementation
• welcome the offer to parents, making sure childcare is right and flexible with wraparound really important
• concern on the real living wage in areas like construction and care
• concern around timeline of funding for 2024. Aidan noted it was important to look at options to provide certainty in future years. He also noted that local government has a role here too in terms of risk appetite and important that SG and local government work collaboratively on this

Forward Look and AOB

Barry thanked members and confirmed that the next meeting would be held in person on the 29 November.

Action

• NSET Secretariat to circulate the exchange of letters on Housing with Board members
• NSET Secretariat to update the Board on the Review plans and schedule to co-ordinate diaries and specialisms of Board members before end December
• review of the Board’s progress would be considered as part of the wider scope of the NSET review
• OCEA – Dashboard data needs to be updated to reflect the latest data available
• Board Members – Invited to input to shape the agenda for the 29 November – comments invited to Secretariat by early next week.  It was noted that the agenda timings would be reviewed to allow a full discussion on the Green Economy Deep Dive