Critical report into Scottish Enterprise's business start-up scheme ignored by deputy First Minister

Nicol Stephen, the deputy First Minister, gave the go-ahead for a controversial £12m-a-year Scottish Enterprise business start-up scheme to continue without reading a critical report showing that half of its ventures failed within three years.

Stephen, who is also the Enterprise Minister, ordered that the Business Gateway scheme, which provides advice for start-up companies, should be saved despite a £30 million overspend by the agency.

Documents obtained by The Sunday Times under the Freedom of Information Act reveal that the decision was taken without the minister reading a critical report by consultants.

Murdo Fraser, deputy leader of the Scottish Conservatives, said: “A lot of the money going to Business Gateway isn’t being spent as effectively as it could be . . . You have to question whether this is the best use of taxpayers’ funds. It is disappointing Nicol Stephen took the decision to safeguard this project without having looked at this report on its effectiveness. It shows, yet again, that he has failed to get to grips with the problems in Scottish enterprise. He has got to sort out this mess.”

Stephen ignored critical business report (Sunday Times, 9 April 2006)