Absurdity as job creators face dole

responsibility

IN his chairman's statement in the first annual report of Scottish

Enterprise, Sir David Nickson wrote: ''I am delighted to see the

Scottish Enterprise network working together with such dedication,

efficiency, cohesion, and with such high morale.''

Six months on, these words peal with some very discordant echoes. That

cohesion and morale have been sorely tested as the successor bodies to

the old SDA and the Training Agency face up to the prospect of a

(perhaps) swingeing budget cut in 1993/94, resulting in up to 200 job

losses among the network's own staff.

The bruising tensions erupted last week with a leaked warning of the

impending job losses, before the core body, Scottish Enterprise

National, had had time to inform its 390 staff that up to 100 of them

might have to be sacrificed.

The previous week, chief executives from the 13 local enterprise

companies in the SE network had been told of the likely scale of the

financial squeeze and its consequences. While the 390-strong core would

bear the brunt, the LECs (with around 960 staff) were told they might

have to cut up to a further 100 jobs as well.

The core body technically employs almost everyone in the network, for

reasons of administrative simplicity. But each LEC will be free to meet

any cuts in its management budget next year in its own way. However,

since two-thirds of these resources go directly on staff costs, it's

hard to see how job losses can be avoided.

In Bothwell Street, they blame one or other of the LECs for blowing

the whistle in public on the threat to jobs. But some LEC sources are

seizing on the story getting out as an opportunity to bash the core and

wonder, semi-publicly, whether it really has any long-term role. ''Why

shouldn't they take all the pain?'' typifies that faction's

uncompromising line.

Meanwhile the real architects of this planned squeeze, Scottish

Secretary Ian Lang, his advisers, and the Treasury, are standing well

clear of the action, like prison guards watching the condemned push each

other to the front of the queue for punishment.

It is an unedifying sight. But not everyone is at everyone else's

throat. When the 13 LEC chairmen met Sir David recently to discuss the

situation, the first half of the meeting was devoted to rehearsing all

the reasons why the Government should protect the budget of a body it

created to breathe new life into economic development and skills

training in Scotland.

But, when the group then faced up to how to respond should the cuts go

ahead, there was, according to one of those present, a consensus that

both SEN and the LECs must review their resources. It is what you might

expect of private sector business people, well used to making hard

choices in their own companies.

Indeed there are some LEC board members and some on the SEN board

itself who will vouchsafe, in private, that the system has fat on it

which needs to be shed. One big LEC is said to have cut 10% of its staff

in the past year.

Of course they would happily avoid cuts if this spending round hadn't

threatened to be so bloody. But, if cuts there are to be, they want the

fat to go, wherever it is to be found. Hence their ill-disguised anger

that anyone should seek to exploit the predicament in partisan fashion.

The Bothwell Street core adopted a maximalist approach from day one

when allocating resources to the network. Some 85% of the total budget

went to the LECs in year one. But by doing that, SEN ran the risk of

inciting its LEC brood to demand even more, if times turned tough.

And so it has proved, at least as far as the malcontents are

concerned. But SEN is already proposing to take the biggest hit itself

this time round. While it could end up shedding 25% of its staff, the

LECs, which carried a collective surplus of some #14m into this year's

budgets, are facing, at most, a 10% staffing cut.

The big unanswered question is whether such voluntary attrition at the

core will render SEN incapable of providing a strategic Scottish focus

to the more localised economic development activities of the LECs. There

must be a real danger, if the dogfight isn't stamped out quickly, of the

complete balkanisation of the old SDA/Training Agency structure.

There is still time for some eleventh-hour appeals to Ministers to

look again at the fractured logic of what they are proposing -- deep,

real cuts in the resources available to its main delivery vehicle for

developing Scotland's economy, environment and skills base in the midst

of the most protracted and nasty recession many of us have experienced.

Indeed some of those on the receiving end are still hopeful that the

message will get through.

But if deep cuts are imposed and job losses follow, it is vital that

responsibility is pinned where it belongs: on the politicians who

promised us a structure which would have ''a major impact on the

prosperity and living standards of the Scottish people for the rest of

the decade'' (Mr Allan Stewart on April 2 last year) and are now taking

an axe to jobs in the very organisation itself.

That, rather than a sterile ding-dong between LECs and SEN about whose

jobs should be on the line, is the issue here.