The Scottish Government has been told it has placed Highlands and Islands Enterprise (HIE) in a “dire” position and risks undermining its important work.
Concerns have been raised by Tory Highlands and Islands MSP Donald Cameron, who suggested budget cuts appear to be a “deliberate means of downgrading” the development agency.
He has questioned whether those multi-million-pound budget cuts will cost agency jobs and investment in the region and outlines his fears in a letter to HIE interim chief executive Carroll Buxton, which also highlights recent reports that HIE has frozen funding for new businesses.
The Scottish Government’s recent budget reduced HIE funding from £61.1 million in 2019/20 down to £58.2m for the coming financial year of 2020/21.
The cut represents a £13.5m decrease from the £71.7m the agency received in 2018/19.
In his letter, Mr Cameron recalled a Scottish Government attempt to abolish the HIE board five years ago. He remained anxious about the agency’s future and said the cuts “heighten those fears”.
Mr Cameron acknowledged as a publicly funded body, it might be difficult for HIE to express a view on the budget.
But he added: “I would like to know what kind of impact this funding cut will have for HIE and if, in your view, it will impact the way HIE presently invests in the region and if all existing jobs within HIE will remain secure.”
“Our region faces major challenges, including the loss of our young people and the threat of depopulation, combined with a worryingly fragile transport infrastructure.”
Mr Cameron also said he was “deeply worried” by reports that HIE had said there would be no new commitments or approvals for projects in the coming year until there was “more clarity on affordability”.
Speaking after his letter was sent, Mr Cameron said: “Our region faces major challenges, including the loss of our young people and the threat of depopulation, combined with a worryingly fragile transport infrastructure.
“Yet Highlands and Islands Enterprise, which should be taking a lead in coordinating economic regeneration and delivering the necessary resources, has had its funding slashed by the SNP Government.
“This is a dire situation for HIE and it’s something the SNP needs to address as a matter of urgency.”
A Scottish Government spokeswoman said it was “working closely with HIE to identify opportunities to ameliorate in-year financial pressures” so it can “continue to meet the needs of businesses and communities across the region. We are also supporting the economy and communities of the Highlands and Islands through our commitment of more than £200 million over the next ten years to city region and growth deals, our additional support for agriculture and forestry and continued support for the Scottish Rural Development Programme,” he added.
A HIE spokesman said: “We have received the letter from Donald Cameron MSP and will respond to him directly.
“With a reduced budget, we are taking stock of our commitments and will prioritise rigorously and fairly to deliver the best outcomes we can for the Highlands and Islands.”
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