Scottish Enterprise has invested just £500,000 from a cash pot of £10 million, a report from Holyrood’s Economy, Energy and Fair Work Committee has revealed.
MSPs said they were “concerned about the lack of progress” in using the funds from the Scottish-European Growth Co-Investment programme.
They called on the body to take “urgent action” to ensure “this money is spent to benefit the Scottish economy”.
The committee is demanding an update from Scottish Enterprise on its progress within six months.
Economy Committee Convener Gordon Lindhurst said: “With only £500,000 invested by Scottish Enterprise out of a pot of £10 million, the committee is concerned that there has been a lack of progress in committing the money for the Scottish-European Growth Co-Investment Programme.
“We urge Scottish Enterprise to take action to ensure this money is used to benefit the Scottish economy.”
He spoke out after the committee’s pre-budget report revealed Scottish Enterprise underspent by £13 million in 2017-18.
The agency told MSPs most of this was from the Scottish-European Growth Co-investment Programme, which aims to use both Scottish Government and European money to lever in private-sector funds.
In the report, MSPs said they were “concerned about the lack of progress” in committing the funds.
It said: “With only £0.5 million invested by Scottish Enterprise out of a pot of £10 million, the programme has not been a success to date.”
The committee added: “Given the underspend in financial transaction money over the last year, the committee does not have confidence that Scottish Enterprise will commit the increased funds.”
A spokesman for Scottish Enterprise said: “We thank the Economy, Energy and Fair Work Committee for the opportunity to present evidence to the pre-Budget panel and look forward to reviewing the recommendations of the report.
“The nature of our work means that in any given year there are a range of factors that have an impact on our budget, and we always work carefully to manage them.
“We remain dedicated to stimulating inclusive economic growth in Scotland using all of the support mechanisms available to us, and are working with companies the length and breadth of the country to grow and expand their operations.”
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