The Scottish Government have been accused of not doing enough to support Highlands and Islands Enterprise and going ahead with the 5% cut in funding as laid out in the Scottish Budget 2020 amounting to £2.954m .

MSP David Stewart, Labour, has said that this amounts to a  fall of 44 (almost 50% reduction) in permanent operations staff working within the organisation since 2017 .

David Stewart 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 Highlands and Islands Enterprise 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 now struggling and concerns over the long term economic impact of Coronavirus 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 GDP and I’m concerned the Highlands and Islands could face the brunt of the recession.”

The survey by the FAI found that in Scotland:

• The number of firms seeing an increase in their volume of business during Q1 2020 fell to its lowest level since Q1 2009. The outlook for the next six months is even more stark, as would be expected, with the outlook being the most negative since the survey began in 1998.
• When asked how long businesses could survive under current levels of trading, of those who responded to this question, 54% said less than three months while a further 32% said they could survive for four to six months.
• More than 95% of businesses who expressed interest in applying believe the ‘Coronavirus Job Retention Scheme’ being put in place has the potential to be very effective/effective in supporting their survival.

David Stewart continued:

“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 bring this into even sharper relief.

“HIE play 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 that the Scottish Government now listen to the concerns of people, communities and businesses across this region and finally commit to reversing these cuts and show a real commitment to supporting businesses and economic recovery in the region once we are through this crisis.”