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Last Updated: Thursday, 22 June 2006, 13:24 GMT 14:24 UK
Report rebukes enterprise chief
Scottish Enterprise
Scottish Enterprise received financial help after its budget overspend
Scottish Enterprise and its chief executive have been criticised by MSPs over its budget problems.

The enterprise committee said Jack Perry was unduly optimistic that ministers would help the agency tackle its budget shortfall.

The report said Enterprise Minister Nicol Stephen created confusion over the agency's restructuring plans, an accusation he denied.

Mr Perry said the agency had been open about the reasons for its overspend.

The Scottish Executive gave the agency 50m in May in order to offset its 34m overspend last year.

The report criticises Mr Perry for failing to act on early warnings of problems and being in breach of his guidelines.

My own personal view - and I must stress this is not the view of the committee - is that his position now is untenable
Alex Neil
Enterprise committee convener

It said: "What is clear, however, is that in all the correspondence received detailing the discussions between the Scottish Executive and the enterprise agency, there appears to be no specific signal from the department that any such optimism on the part of the agency was founded."

The committee also accused Mr Perry of breaching guidelines by failing to raise the alarm over the possible overspend.

It said the agency appeared to believe its problems could be solved without having to ask the executive to vary its budget.

'Smallest mistakes'

Mr Stephen was accused of creating "the worst of all possible worlds" by overruling Scottish Enterprise's initial plans for a restructuring, resulting in a "confusing compromise" now proposed which, "in an attempt to please everybody, runs the risk of pleasing no-one".

The minister said he had full confidence in Mr Perry and dismissed the committee's accusations.

We have a compelling vision on the table which we firmly believe could deliver a step change in Scotland's economic performance
Jack Perry
Scottish Enterprise chief executive

He said: "It is simply not true to say that I overruled structure proposals.

"Scottish Enterprise submitted proposals and these were agreed. Scottish Enterprise formulated its proposals after a period of consultation.

"The feedback I gave Scottish Enterprise during the consultation was that I wanted to see local decision making and business involvement retained."

Two months ago Mr Perry told BBC Scotland he accepted responsibility for the agency's financial problems but warned against stifling creativity by punishing people for the "smallest mistakes".

Responding to the report, he said was "surprised and disappointed" by the criticism.

Mr Perry added: "We have a compelling vision on the table which we firmly believe could deliver a step change in Scotland's economic performance.

'No solutions'

"It has the broad support of the business community in Scotland and ministers.

"On this subject the committee appears to offer no alternatives and no solutions."

The committee's convener, Scottish National Party MSP Alex Neil, said it had found the recent management of Scottish Enterprise's budget "wholly dissatisfactory" and singled out Mr Perry.

He told BBC Radio Scotland: "Jack Perry as the chief executive is the chief accounting officer and, as we have said in our report, we do not believe his performance as chief accounting officer has been very satisfactory.

"He has not done what a chief accounting officer should do.

"My own personal view - and I must stress this is not the view of the committee, the committee did not take a view on that - is that his position now is untenable."

However, a spokesman for First Minister Jack McConnell said: "He has absolute confidence in the chief executive."




BBC NEWS: VIDEO AND AUDIO
Hear Alex Neil MSP's views on the chief executive



SEE ALSO
Funding aid for enterprise agency
11 May 06 |  Scotland
Enterprise overspend 'good value'
25 Apr 06 |  Scotland
Scottish Enterprise job cut fears
29 Mar 06 |  Scotland
Agency in budget overspend claims
22 Mar 06 |  Scotland

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