Scottish Government defeated over Scottish Funding Council plans

Keith Brown - Parliament TV

MSPs have inflicted a second defeat for the Scottish Government over its plans to merge the boards of the country's enterprise agencies.

After previously rejecting the notion of Highlands and Islands Enterprise (HIE) losing its independent board, yesterday MSPs also voted to demand the Scottish Funding Council (SFC) retain its own board.

A review is underway which proposes to establish a new statutory board to co-ordinate the activities of HIE, SFC, Scottish Enterprise and Skills Development Scotland.

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Economy Secretary Keith Brown had told Holyrood's Education and Skills Committee the merger would lead to the "strategic alignment of the delivery of skills, enterprise and education", but the Scottish Conservatives said the idea had not been endorsed by the agencies themselves nor was it backed by responses the government's own consultation.

"It is not at all clear why, to have better strategic alignment, we have to unpick the governance structure of all four agencies," said Conservative education spokesperson Liz Smith. "There was a complete absence of evidence from phase 1 to support the Scottish Government’s intention and there is now real concern about where on earth the Scottish Government is going. That aspect of the whole debacle is causing the greatest concern."

Education Secretary John Swinney said: "The Government conducted a policy analysis in coming to a conclusion about which approach was the right one to take. At the end of that process, the conclusion that we came to concerned the importance of securing greater alignment through the work of a superboard."

The Scottish Funding Council allocates funding to universities and colleges. The Conservative motion was passed by 63 votes to 62 after Labour, the Greens and the Liberal Democrats also said they could not support the Government's proposals.

HIE chairman Lorne Crerar has suggested the individual groups could retain "delivery boards" within the new structure. A ministerial statement from Keith Brown is expected in the next few weeks.