Companies with past connection to SE awarded PERF : FOI release (reference 4839)

19 September2020

9 October 2020

I would like to discuss the processing procedure for the PERF and the correlation of companies with past connection with Scottish Enterprise being successful and also whether those same companies were also in the first tranche.

All PERF applications were appraised against three fundamental elements of the Fund – Vitalness was assessed, leading to financial due diligence, where Vulnerability and Viability were assessed.

• Vitalness* - assessment of how pivotal the business is to the post Covid 19 recovery of its local authority area;
• Vulnerability - assessment of the financial impacts on the business of Covid 19 (clear cash flow gap); and
• Viability - assessment of the likelihood of the business trading out of its Covid 19 position as a result of a PERF award, as part of other financial restricting activities.

*Vitalness Assessment – each applicant was scored against four criteria to ensure impartiality and fairness, creating a final Vitalness Index for each applicant:

1. Economic – Turnover as a percentage of the average turnover for their Local Authority area

2. Wealth – Average salary as a percentage of the average salary in their Local Authority area

3. Leverage – Percentage of their supply chain in Scotland

4. Company Vitalness Assessment - used the narrative provided by the applicant on “why they believe they are pivotal to their community”.

The assessment and decision-making stages of the appraisal process were undertaken by experienced economic development professionals with a strong business background; and the necessary delegated authority to make these decisions. Our assessment process was reviewed by the Scottish Government and Scottish Enterprise Auditors; and was approved by Scottish Government Ministers prior to the Fund going live. Since the Fund was completed, Scottish Government’s Audit Team undertook a review of our process for fairness, accuracy and consistency of decision making. The audit report highlighted that the appraisal process had “distilled complexity down to a robust process with really good, clear, transparent decisions”.

The table below provides the number of businesses that were awarded PERF. Those that are relationship-managed by Scottish Enterprise (SE), Highlands & Islands Enterprise (HIE) or South of Scotland Enterprise (SOSE) are identified as DRM. A small number of businesses are relationship-managed by Skills Development Scotland – SDS. Non relationship-managed businesses are identified as NRM, although we would point out it is possible that some non relationship-managed companies may have had some kind of interaction with SE in the past. We would also advise that a small proportion of PERF applications (1.4%) were processed and awarded by WeAreUMi*. Where applications were processed solely by WeAreUMi, data is not held on Scottish Enterprise’s records systems, therefore those 24 PERF recipients are excluded from this analysis.

• In total 1,763 businesses received PERF.
• Of the 1,739 successful awards where data is held by SE, 304 awards (17% of total) were made to SE, HIE or SOSE relationship-managed companies.
• 201 applications (67%) of the 304 awards were awarded in the first phase of application processing.

*The supplier WeAreUMi were appointed by SE through Public Contracts Scotland for the COVID-19 Grant Funding Support Project.