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Last Updated:  Friday, 28 February, 2003, 12:25 GMT
Enterprise body audit ruled out
Enterprise sign
Scottish Enterprise denied the claims
Enterprise Minister Iain Gray has dismissed calls for an immediate special audit of Scottish Enterprise.

Mr Gray said he was not going to give a knee-jerk reaction to reports of a leaked document which makes claims of serious delays in flagship projects and money wasted on consultants reports.

Scottish Enterprise, Scotland's main economic development agency, has denied the allegations of financial mismanagement.

The agency's chief executive said he took "grave exception" to the reports in The Scotsman newspaper.

'Waste and incompetence'

It was claimed that major projects run by the agency were near to collapse because of mismanagement and rows with local government partners.

Mr Gray said: "I have spoken with the chair of Scottish Enterprise (Sir Ian Robertson).

"He has assured me that these flagship projects are on time and being delivered and I have asked for more detail on that."

"If there are problems we will deal with them, but I am not going to respond to a leaked document which nobody has seen."

Iain Gray: Flagship projects
Iain Gray: Flagship projects

Earlier, Scottish Enterprise chief executive Robert Crawford dismissed the claims, saying the agency's staff were "highly committed, highly competent people".

The leaked document raised concerns that Scottish Enterprise, which has a budget of almost 450m, is failing to meet targets for financial savings.

It also claims the agency is spending millions using private consultants to help transform its operations.

Mr Crawford told BBC Scotland that benefits and productivity gains would be made as a result of the "business transformation process".

European grants

He said: "The savings achieved so far are on target. The overall savings net will be in the order of 150m and we will achieve them as we said we would.

"To achieve that we have used consultants as most organisations do because this is very complex IT management."

Mr Crawford added: "I am quite convinced that this agency is operating at the levels of efficiency that taxpayers and stakeholders would expect of it."

It was also claimed that maladministration of European grants has put at least 32m of funding in jeopardy.

Robert Crawford: Benefits and productivity gains
Robert Crawford: Benefits and productivity gains

Mr Crawford said there was a delay in the application for European funds but he said this would not stop the money being received.

Scottish National Party enterprise spokesman Andrew Wilson said there was "little evidence" to back up the attacks on Scottish Enterprise.

He said the "only motivation" for the story was to attempt to "scapegoat" the Scottish Enterprise leadership for "lamentable failure by Labour" on economy.

Scottish Conservative Enterprise spokesperson Annabel Goldie said: "We suspected that there was extravagance, waste, profligacy, even incompetence and our record of parliamentary questions will illustrate that.

"We have said repeatedly that post-devolution we thought the relationship of Scottish Enterprise, joined at the hip with the Scottish Executive, was obviously unhealthy."

Investigations correspondent Bob Wylie
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