In their place, a network of dynamic Regional Development Banks, and a Highlands Development Bank, are proposed to be established to drive up economic growth and employment. Councils, Colleges and local business leaders will constitute the Banks and they will be responsible for business support and economic regeneration, skills and training and tourism.
Best practice from around the world and within the UK has been looked at, but these Banks are designed to support the specific needs of the Scottish economy.
His paper sets out radical plans to make Scotland the most innovative and entrepreneurial economy in the world.
Commenting on the launch of this significant paper, Liberal Democrat Finance spokesperson Jeremy Purvis said:
“Where we need national solutions, the Scottish Government will be shaken up and a high level economy department will be established.
“Scotland will be promoted for visitors and businesses by bringing together Scottish Development International and VisitScotland into a body called Scotland International.
“National and high growth businesses can access investment support in Finance Scotland, a body that brings together a myriad of funding options and quangos ranging from Scottish Enterprise and the SFT into a single body.
“The reforms are designed to generate higher, faster and more sustained economic growth in our regions. This is the challenge of the next decade. It is in the context of flat budgets for the coming period and we simply need to get more results from tax payers’ money. As a result of the unsuccessful SNP changes in 2007, for every £2 spent by our economic development quangos nearly £1 is spent on staffing, accommodation and administration. This is not affordable and we have to think differently.
“That is why a debate about where the public sector invests its reserves will be started by these proposals. £3 million of taxpayers money was written off in the Borders because it was invested in Iceland.
“That could have underwritten £3 million of lending for local businesses this year and helped over 100 companies in the Borders struggling with cashflow.
“The economy cannot afford the level of duplication and waste that exists. Local regions have been stripped of power and the ability to invest and this must need to change.
“For the first time also, proposals that the Regional Development Banks will have elected business leaders as part of them means businesses are at the heart of setting policies to support the economy.
“Colleges who know their local economies best will be given the tools they need to drive up skills and training. Tourism destinations for the first time will be able to access support from the Banks, and have a single source of skills and training support.
“Tourism businesses will form part of the Bank's Board. For Scotland to be promoted internationally we will move away from VisitScotland, SDI and Scottish Government officials overlapping and a single body will be established.
“Together these proposals will stimulate growth. We have seen the success of the South of Scotland Loans Fund that by a smarter use of public money we can generate economic activity. We have seen the dedicated Austrian Tourism Bank give direct support while Scottish tourism has struggled.
“With the other proposals in the paper, the most radical set of changes are being proposed for a generation. In leadership, business support, the role of businesses and the bringing together of skills, training, lending and tourism, we are addressing the real challenges that the Scottish economy face for the next decade.”
Commenting, leader of the Scottish Liberal Democrats Tavish Scott MSP said:
“Scotland needs some new economic thinking.
“The SNP’s performance has been poor and they simply have no new ideas.
“That is why Jeremy Purvis’s proposals come at the right time.
“When unemployment is rising, emerging business rates are lamentable and growth within the economy is stagnating, then doing nothing is not an option.
“We are determined to created jobs across Scotland in a new government for all of Scotland.
“That is our number one priority.”
Lauren McNicol, Policy Executive for CBI Scotland said:
“This document contains many useful policies.”
Graham Johnstone, Chairman of Adam Smith College, Fife and elected head of College Chairs in Scotland said:
“Scottish colleges share the Scottish Liberal Democrats' aim of making Scotland the most innovative and entrepreneurial economy in the world.
“These proposals to establish Regional Development Banks and stimulate economic growth are a valuable contribution to the debate on how Scotland can move from fragile economic recovery back to sustainable growth.
“This paper recognises the key role the colleges of Scotland play in their local regions and proposes an even greater role in future. We warmly welcome the innovative approach proposed by Jeremy Purvis MSP on how the public sector landscape can be rationalised and made more efficient.
“It is important that the Scottish Government ensure scarce resources are targeted to frontline delivery of services to business and communities. These proposals go a long way to delivering that.
Scottish Chambers of Commerce Chief Executive, Liz Cameron said:
“Scottish Chambers of Commerce welcome this important contribution to the debate on Scotland’s future economic planning and development.
“This paper contains much that is worthy of consideration and our hope is that politicians of all parties will work together to deliver the right environment for Scotland’s businesses to lead us out of recession.”