SNP government’s relationship with Scottish firms ‘deteriorating’

The study shows nine per cent of Scottish firms agree that the Scottish Government understands the business environment in Scotland, compared to 64 per cent of businesses that disagree.

The findings are the Scottish Business Monitor, a survey of over 350 firms conducted in August and September, produced by the Fraser of Allander Institute think tank at the University of Strathclyde.

The Scottish Government said it will “keep working with business to improve productivity, bring investment and create high quality jobs”.

John Swinney, First Minister is under pressure to improve the relationship with business (Image: PA) The Institute asked firms about their relationship with the Scottish Government as part of an annual assessment following the New Deal for Business launch in April 2023, comparing the findings to last year’s report.

The report finds that six per cent of businesses agreed that the Scottish Government engages effectively with their sector, down from eight per cent in 2023. Meanwhile, 68 per cent of firms disagreed, suggesting worsening perceptions of Government engagement.

A slightly better 19 per cent of firms believe they can influence Government policy if new announcements affect their business. However, 46 per cent disagree with the statement, up from 39 per cent last year, reflecting a growing frustration among businesses regarding their ability to have a say in policymaking.

The latest analysis also finds differences across sectors, with construction and finance firms expressing the highest levels of dissatisfaction. In contrast, businesses in the professional, scientific, and technical activities sectors were slightly more positive, although overall confidence remains low across the board.

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Fraser of Allander said: “The results suggest that the Government’s New Deal for Business initiative has done little to turn the tide with the business community. Instead, the findings indicate that this relationship has either stagnated or deteriorated further.”

João Sousa, deputy director of the think tank, said: “These results will undoubtedly be disappointing for the Scottish Government, particularly given that it’s been well over a year since the launch of the New Deal for Business.

“While no one expected a dramatic reconciliation in only a year, the Government would have hoped for at least some signs of progress. But that is not what we found. And while businesses have undoubtedly faced broader challenges from economic instability over the past 15 years, some specific high-profile policies and political turmoil closer to home have only strained this relationship further.

“Of course, there is a shared responsibility here. Business representatives and firms, both locally and nationally, need to actively engage in this reset. Real improvement in the relationship between Government and the business community can only come through meaningful collaboration – and these results should serve as a clear mandate for making that happen.”

The Fraser of Allander Institute said it introduced the questions last year to allow the Scottish Government and the business community in Scotland to understand how the relationship between the sectors is changing as the New Deal for Business is implemented.

In response to the findings, Kate Forbes, Deputy First Minister, said: “The New Deal for Business Group has helped shape the First Minister’s recent Programme for Government and informed our key priorities regarding economic growth.

“We are listening, and there are good examples of business already feeding into policy development.  Deepening this relationship is an ongoing process, and I’m committed to building on the progress to date.

“The Scottish Government will keep working with business to improve productivity, bring investment and create high quality jobs for Scotland.”