29 February 2008

Minutes of Scottish Enterprise Board: 29 February 2008

Present

Sir John Ward CBE, Chairman

Jack Perry, Chief Executive

Pat Denzler

Fred Hallsworth

Charlie Morrison

Donald MacRae

Colin McClatchie

Ray Perman

Apologies

Barbara Duffner OBE

Sir Timothy O’Shea

Douglas Lamb

LEC Chairs

Charles Hammond, SE Edinburgh and Lothian

Apologies

Vic Emery, SE Glasgow

In Attendance

Roger McClure, Scottish Funding Council

Hugh Hall, Chief Financial Officer

Paul Lewis, MD Industries

John Phillips, Senior Director, People and Organisational Development

Julian Taylor, Research and Policy

Lena Wilson, Chief Operating Officer

Brian Jamieson, SE Secretary

Imelda Molloy, Corporate Office

1. Carbon neutral – proposed implementation framework - SE (08)22

John Mason, Scottish Government, and David Gass and Liz Bogie, Cross Cutters Unit joined the meeting for this item.

The Chairman welcomed the team, noting that the Board had already looked at the internal targets. This presentation looked at SE’s wider activities and challenges of Carbon Neutral.

David Gass introduced John Mason who heads up the Scottish Government work in this area.

John Mason presented on the Government approach with particular reference to the business agenda. Key points were:

  • The business view was increasingly that companies needed to be green to grow.
  • The Scottish Climate Change Bill will be in place by Autumn 2008 setting challenging targets by 2011 and 2050.
  • Analysis had been done to identify routes to meet these targets and the technology that would be required.
  • Part of the solution lay in efficiency gains which companies might adopt themselves and part in public sector interventions.
  • SE had a leading role in the context of sustainable economic development.

Liz Bogie presented on how that role for SE could be played in various zones of influence.

  • Internal activities on which the Board had received a report at the January meeting.
  • Projects and programmes, on which the current paper focuses.
  • Wider influencing role.
  • Policy role.
  • Scottish economy and global economy.

Progress to date was presented, followed by an Implementation Framework Covering:

  • Business challenge and opportunities
  • Thought leadership
  • Baseline Data and offsetting

It was felt that the approach to businesses should stress the financial benefits rather than resource audits. Subject to that, the Board supported the direction of travel and suggested a six monthly review of progress, together with the ongoing tracking of operational carbon reduction initiatives.

Minutes of board meeting held on 25 January 2008 and 19 February 2008 – SE (M) 208/209

The minutes of the previous meetings and the outstanding action points were approved.

2. Chairman’s report

The initial sift of applications for new Board Members had been completed, with interviews scheduled by late March. As new appointments would not be in place until July or August, Pat Denzler and Douglas Lamb had accepted extensions to 31 July.

The Cabinet Secretary had chaired the Strategic Forum involving SE, HIE and VisitScotland. The Scottish Funding Council and Skills Development Scotland would attend future meetings.

The LEC Chairs Meeting had been updated on the transition progress. To keep Chairs engaged, telephone conference calls were being scheduled between meetings.

The first National Economic Forum had taken place with a very wide attendance by interested parties.

The Chairman had addressed the internal Management Conference on the vision for SE and its fit following the Ministerial review.

The Business in the Parliament event was thought to have been the best held to date.

The Chairman was conducting the annual Board Member reviews in March.

It was proposed to hold the May Board meeting in Brussels over two days to understand from the European Commission the new opportunities for new funding streams.

3. Chief executive’s report

The major issues on transition matters were outlined:

  • The Skills Development Scotland Interim Board, on which Barbara Duffner sits, was meeting that day to confirm the likely transfer date.
  • A meeting with Council Leaders had agreed the Business Gateway transfer, with a Transition Advisory Board to oversee issues.
  • Negotiations continued on the local regeneration transition.
  • Discussions also continue on the future use of Atlantic Quay.
  • 180 Voluntary Severances had been agreed. It was likely that the 200 target figure will be exceeded.

The Chief Executive reported on the meeting of the SDI Management Board. The Audit Committee would monitor the governance in this area.

Paul Lewis gave an update in relation to Stirling Medical Innovations.

The Co-Investment Fund awaited confirmation of the ERDF match funding. This would enable ring-fenced funds to be committed by SE.

(Charles Hammond left the meeting)

4. Finance and performance: Period 10 review – SE(08)23

Iain Scott joined the meeting for this item and presented the key issues as the year end approached. There were an unusual number of variables.

This gives the opportunity to balance competing projects to produce the projected minor underspend but is challenging in the timescale available.

The priority performance measures all now looked achievable for the current year.

There was a risk that staff departures could impact on performance but so far this had not occurred. Thanks were recorded for the work to date.

5. Business plan 2008-11 – SE(08)24

Andy Downie and Stuart Patrick joined the meeting for this item.

Hugh Hall set out the time table for finalising the Business Plan.

A summary Paper was tabled showing the prioritisation criteria adopted. It was accepted that this was in the early stages of development and that the evidence base in some areas was not robust. Stuart Patrick, as the new Commercial Director, would be conducting a zero based review of activity for years two and three of the plan.

The final plan would come to the next Board Meeting and be published thereafter.

Points made in discussions included:

  • involving the Investment Committee in the prioritisation work;
  • rewording the section on SDI; and
  • welcoming input from the Minister at a future meeting.

Subject to the issues raised in discussion, the Board welcomed the draft plan, which was more accessible than previous documents.

ITI Scotland update

It was noted that the Investment Committee has already had a session with ITI Scotland recorded in the minutes of their meeting.

The Board had asked to consider the Creative Biopharma project alongside ITI Scotland. It was noted that the Information paper addressed four conditions set by the Board but a decision paper was requested setting out precisely how the project fitted with the other components of the business pipeline.

Paul Lewis introduced David Creed from ITI Scotland and Ian McCoull, Head of Innovation in SE.

Ian McCoull recalled the objectives of the project at inception. It was now four and a half years since approval and three and a half years since launch in the context of an envisaged 12 year programme.

The aim was ultimately to produce high growth, high tech companies in key future markets by investing in the critical and missing research and development part of Scotland’s infrastructure. The project did not seek to displace academic research or be a substitute for companies’ product development.

David Creed reported on progress. The plan had been to:

  • build a pipeline in years one to four;
  • deliver to companies in years one to eight; and
  • harvest the impacts in years eight plus.

To date, ITI Scotland had:

  • managed 22 research and development programmes, with 10 potential programmes being assessed;
  • 122 patents filed; and
  • commercial deliverables by way of licensing or commercial deals.

Activities were illustrated by case studies from each of the ITI divisions – Energy, Life Sciences and Techmedia.

The Priorities for the future were:

  • Market research providers and commercial partners.
  • New membership drive.
  • ERDF funding application.
  • Driving funding application.
  • Driving value and containing costs.
  • Proactive working with SE groups.
  • New MD appointment in Energy.

David Creed was thanked for his report. This was an important area going forward.

Areas for future focus were:

  • fit with other initiatives;
  • value added to the economy in the medium term; and
  • the scope for sharing commercialisation mechanisms with, e.g TMRI, SHIL.

Once the ITI Scotland review had been completed and considered by the Investment Committee, the Board wished to evaluate ITI Scotland in the context of all the initiatives supporting High Growth Business Starts and the Business Growth Pipeline.

The Board would return to this topic during the year possibly at a Strategy Day.

(Roger McClure left the Meeting)

6. Committee updates

The Minutes of the Operations and Investment Committees were noted. ITI Scotland would return to the Investment Committee once the current review was completed.

The Audit Committee would meet on 17 March but the Chairman of the Committee has been briefed on the real time audit of the transition programme which had been positive.

7. Information papers

The Board noted the following Information Papers.

Creative Biopharma SE(08)25

SMAS Approach to Service Sector SE(08)26

Outstanding Action Points from SE Board SE(08)27

Global, UK and Scottish Economic Commentary SE(08)28

Monthly Update – Operations SE(08)29

Monthly Update – Industries SE(08)30

Monthly Update – International Operations SE(08)31

Approvals Within Delegated Authority SE(08)32

Complaints and Testimonials SE(08)33

Calendar of Forward Events SE(08)34

8.LEC board members

The Board recorded their thanks to the large number of dedicated LEC Board Members who had given up their time voluntarily. The Chairman would write conveying that appreciation.

Brian Jamieson
SE Secretary
February 2008