South of Scotland MSP Colin Smyth has stepped up his calls for better business support for rural communities disproportionately affected by the Covid-19 lockdown, during a virtual Scottish Parliament question session with Cabinet Secretary for Rural Economy Fergus Ewing on Friday.
The local MSP highlighted the disproportionate impact of the Covid-19 pandemic on rural communities and urged the Government to reverse cuts in funding announced in the last Scottish Government budget to the new South of Scotland Enterprise Agency and Highlands and Islands Enterprise.
A blog from the University of Strathclyde’s Fraser of Allander Institute in March stated: “Rural communities are particularly exposed to the economic impacts of the measures put in place to reduce the spread of the coronavirus. Smaller business, in impacted sectors, and greater prevalence of self-employment mean that the impacts may be larger in these communities.
“There are already long-term challenges impacting on the outlook for rural areas in Scotland, such as an ageing population and heavy dependence on a relatively small number of industries. We will all be affected by the impact of the pandemic. But as this crisis unwinds, appreciating and responding to differences across the country will be crucial.”
The blog highlighted the fact that Dumfries and Galloway had the biggest percentage of self-employed people in Scotland, with over a fifth of workers in that category- twice the national average. The number of self-employed workers in the Scottish Borders is also substantial at almost a fifth of the workforce. In South Ayrshire over 13% of the workforce is employed in tourism compared to a Scottish average of just over 8%.
Meanwhile the recent Scottish Government budget set a budget for the new South of Scotland Enterprise Agency at £28.1 million for 2020/21. However, in the financial memorandum that accompanied the legislation setting up the new Agency the promised budget from the Government for its first year was almost £4 million higher at £32 million.
The Government pledged that the funding for the new Agency would be same per head of population as the Highlands and Islands Enterprise (HIE). As a result of the proposal in the Scottish Government budget to slash funding for HIE from £61.1m to £58.2m for 2020/21 (on top of the cut from £71.7m to £61.1m for 2019/20) the funding per head of population will fall, resulting in a cut in the planned budget for South of Scotland Enterprise Agency
Speaking during what was the first ever virtual session of Rural Economy and Environment Questions, Colin Smyth asked said: “Covid-19 is first and foremost a public health crisis but it is also an economic crisis, with rural communities disproportionately affected because of the importance of sectors such as tourism and hospitality.
“The support so far has been very welcome but can I ask the Cabinet Secretary [Fergus Ewing] if there’ll be further financial support for those rural businesses really struggling at present, particularly those who miss out on the current schemes.
“And given that the Scottish Government budget for Highlands and Islands Enterprise and the South of Scotland Enterprise was lower this year than was anticipated, will he consider extra funding for those agencies to help support Scotland’s struggling rural economy?”
Speaking after the question session, Colin Smyth added: “Every day I am contacted by local businesses who are really struggling during this terrible time which is why I am continuing to call on the Scottish Government to help as much as they can.
“The alternative doesn’t bear thinking about: that hundreds of businesses in the south of Scotland simply do not survive the current crisis. That’s why we need both a boost in direct support to businesses from the UK and Scottish Government and a reversal of the planned cut in promised funding to the new South of Scotland Enterprise Agency.”