Monday, May 08, 2006

Enterprise, the Scottish way

Ladies and gentlemen, via David Farrer, let me present to you a wonderful example of how to run a business, the Scottish public sector way.

Scottish Enterprise describes itself thusly:
Scottish Enterprise is Scotland's main economic development agency, funded by the Scottish Executive. Our mission is to help the people and businesses of Scotland succeed. In doing so, we aim to build a world-class economy.

All very laudable, I think that you'll agree. If only.
Story in full THE Scottish Executive is set to agree a multi-million-pound rescue package for Scotland's troubled economic development agency.

Nicol Stephen, the enterprise minister, yesterday revealed that ministers were looking at a complicated accounting device to wipe out overspending at Scottish Enterprise.

He told Holyrood's enterprise committee that the agency had spent £25 million from last year's budget on economic development projects, but the money should have been set aside to cover "other costs" such as depreciation and property expenses.

David explains why this is a load of old rubbish, by amplifying what depreciation actually is (because obviously the Scottish Executive haven't got a fucking Scooby.
That £50 million total over the two years , combined with an overspend on its budget of £9 million for last year, has left the agency with a total funding gap of about £60 million and jeopardised some projects it supports.

That's right, ladies and gentlemen, the public-sector agency which is supposed, essentially, to help people to run, develop and keep their businesses going is, in essence, bust. Now that, Alanis, is irony. But how did it get to this parlous state?
The overspend was set to be repeated this year by Scottish Enterprise chiefs, who claimed they needed to use the cash to cover the cost of projects, even if that left them with an accounting shortfall.

Right, so basically SE said, "look, we don't have any money, but we'll just keep spending it anyway."

What the fuck? What kind of example does that set for businesses? "Yeah, go ahead, spend money. Nah, don't worry if you haven't got it, something'll turn up."

In SE's case, what turned up was the sodding taxpayer, as per fucking usual. Unfortunately, most businesses aren't nearly so fortunate.


Unity said...

>>> What kind of example does that set for businesses? "Yeah, go ahead, spend money. Nah, don't worry if you haven't got it, something'll turn up."

Dunno - sound like Enron to me

Devil's Kitchen said...

Yeah, but the last thing that we want to do is to encourage that sort of behaviour!


Anonymous said...

But that sort of behaviour, as you know, is not at all unusual in the public sector.

Devil's Kitchen said...

You are, alas, entirely correct; I do know. I was thinking about something that you'd mentioned when I wrote this...


Tim Newman said...

Dunno - sound like Enron to me

Doesn't sound much like it to me. I can think of far better examples of spending money with no hope of return than Enron. Enron did not stray very far from normal business practices in spending money per se. What they did wrong was not record this expenditure in its accounts, such that senior management, investors, and auditors (allegedly) did not know about it.

I think you've just picked up Enron as being a classic case of a firm being badly run and hence going bust. It is anything but. Look at Rover or Marconi for that.

Anonymous said...

If Scottish Enterprise would actually allow competition for many of their contracts, (rather than award them to BT in return for backhanders), they would waste far less public money.

BT are still their main telecommunications provider, even though other suppliers have demonstrated massive reductions in cost..

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