Call for Highlands and Islands Enterprise funding cut to be scrapped
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A NORTH politician has called on the Scottish Government to reverse a five per cent funding cut to Highlands and Islands Enterprise (HIE) to help the economy recover from the coronavirus outbreak.
David Stewart, a Labour MSP for the Highlands and Islands, pointed out that the agency had nearly £3 million axed from its budget by the government earlier this year at a time when there had been a reduction of 44 – nearly 50 per cent – in permanent operations staff since 2017.
He would like to see the cut reversed given the impact the Covid-19 crisis is having in the area but the government has refused to say if it will do so. Instead, it stated it will work closely with the enterprise agency to identify opportunities to manage the financial pressures "so that they can continue to meet the needs of businesses and communities across the region".
Mr Stewart was unimpressed with the response to his written question. He said: "Businesses and communities across the Highlands and Islands will be deeply concerned that the Scottish Government is still refusing to stop the considerable cuts to HIE at a time when small and medium-size enterprises the length and breadth of the region are facing some of the most significant economic upheaval and challenges in a generation.
"We already knew the effects of the coronavirus shutdown on businesses, including restaurants, shops and arts organisations, was going to be massive. Every day we hear evidence of businesses struggling and concerns over the long-term economic impact of the virus on the fragile rural economy.
"The Fraser of Allander Institute has estimated that if lockdown measures continue for a three-month period there could be a 20-25 per cent contraction in Scottish gross domestic product and I’m concerned the Highlands and Islands could face the brunt of the recession."
He added: "The cuts being passed down to HIE this year were always short-sighted. However, the impact that these cuts are going to have now due to the additional pressures being put on businesses across the region by the negative economic impact of Covid-19 brings this into even sharper relief.
"HIE plays an essential role in strengthening local communities across the Highlands and Islands, which is one of Scotland’s most economically fragile areas. It is vital the Scottish Government now listens to the concerns of people, communities and businesses and finally commits to reversing these cuts and shows a real commitment to supporting businesses and economic recovery in the region once we are through this crisis."
Jamie Stone, the Liberal Democrat MP for Caithness, Sutherland and Easter Ross, described the funding cut as "utter madness" and urged the Scottish Government to reconsider the decision.
"As we fight to beat coronavirus, we absolutely need to know that our Highland economic development agency has the finance to get our precious local businesses back on their feet," he said.
"I am deeply grateful to David Stewart MSP for raising this in Holyrood. I will ask the UK Government about what its plans are to support businesses in the Highlands as soon as Parliament is up and running online."
