Less than one in 10 firms believe ministers understand business environment

Less than a tenth of firms think the Scottish Government understands the business environment, a new survey has revealed.

Research by the Fraser of Allander think tank found only 9% believed this – the same as in 2023 – while 62% disagreed.

Joao Sousa, deputy director of the Strathclyde University-based Institute, said the results of its latest research would “undoubtedly be disappointing” be disappointing for the Scottish Government.

While ministers launched their New Deal for Business last year, Mr Sousa suggested that “meaningful collaboration” is needed between the government and businesses for any improvement in relations.

His comments came after Fraser of Allander surveyed more than 350 firms across the Scottish economy during August and September.

It found that just 6% of firms believe the Scottish Government engages effectively with their sector, with this down from 8% in 2023.

With more than two thirds (68%) of firms disagreeing with this, Fraser of Allander suggested there could be worsening perceptions of government engagement.

And while almost a fifth (19%) of companies believe they can influence policy if new announcements have an impact on their business, 46% disagreed with this, up from 39% last year – with this said to be a possible indicator of growing frustration amongst businesses over their ability to affect policy making.

Speaking about the survey, Mr Sousa 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.”

However he said there was a “shared responsibility” for the relationship between ministers and businesses, with Mr Sousa stressing that “business representatives and firms, both locally and nationally, need to actively engage in this reset”.

He added: “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.”

Deputy First Minister Kate Forbes insisted that the Scottish Government is listening to businesses.

Ms Forbes, also the Economy Secretary, stated: “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.”