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If you’re thinking about applying for funding or submitting a project proposal, it’s useful to understand the legal constraints that we must comply with.

We support companies and sectors to develop and grow to stimulate Scotland’s economy as set out in our Business Plan but we operate within legal constraints and need to ensure we provide the best value for the public purse.

Legal constraints

Our economic development remit is defined by law as set out in the Enterprise and New Towns Act 1990. Our funding needs to comply with EU state aid rules, which limits the amount of funding we can provide. Generally, we must avoid providing funding that has the effect of distorting competition, e.g. by giving supported companies an unfair advantage.

There are specific funding schemes for creating and safeguarding jobs (such as Regional Selective Assistance), taking new products and services to market (such as R&D support) or for meeting environmental needs. In applying these schemes, we seek to maximise the potential impact on the economy, and will take account of the additional investment provided, both by the company and other providers of funding. We will also take account of the likelihood of the project proceeding with or without our help, as well as having any harmful effects on other local businesses. As a public body, our operations need to be transparent and inclusive and our procurement must comply with EU and Scottish public procurement rules.

It is worth noting that certain issues, including R&D tax credits, corporation tax and business rates, are not within our remit, but can be used by companies to support their own investment.

Scottish Enterprise’s remit and functions

Scottish Enterprise’s formal remit and functions are described in our annual report and accounts setting out our role as an economic development agency of the Scottish Government. Scottish Enterprise is an executive Non-Departmental Public Body of the Scottish Government with a Resource Budget allocated by the Scottish Ministers.

Scottish Enterprise makes a distinctive contribution to the Government’s goals for the economy, set out in Scotland’s Economic Strategy. Our approach is set out in our Business Plan which guides all our activities. Reflecting our remit, any proposals for funding or support – be it for projects, investments, or activities at company or at sector level – are appraised in detail by Scottish Enterprise independently and if successful are funded from Scottish Enterprise’s budget. As we have many more demands on our resources that we have available budget, this entails rigorous prioritisation, to ensure we select for support only those projects that make the most significant impact on the achievement of the priorities and objectives set out in our Business Plan. This prioritisation is based on appraisal against some clear operating principles, set out below.

Our operating principles

Our operating principles are underpinned by the ambition and priorities of our Business Plan, informed by our accountability to the Scottish Government and by our duty to demonstrate impact. Reflecting this:

  • Proposals are preferred that are led by the private sector, demonstrating a clear route to viability and evidence of market demand
  • Generally, we favour projects that involve shared risk between the private sector and the public sector. This includes a preference for majority private sector funding
  • Proposals need to demonstrate that industry will be actively involved in shaping and contributing to the delivery of the project and the achievement of impact
  • Our support in key areas like innovation is for company-led proposals, with a clear route to market. While we can support a wide range of activities, from feasibility study to the development of near-to-market products and services, we tend not to fund academic research
  • We work in partnership with other public sector agencies, to achieve economic impact. These agencies include:
    • Scottish Funding Council: university funding – including research and R&D funding
    • Skills Development Scotland: skills development and training
    • Zero Waste Scotland: resource efficiency, waste reduction
    • Scottish Environmental Protection Agency: environmental regulation and protection
    • Transport Scotland: transport policy and funding
    • VisitScotland: Tourism promotion and development
    • Business Gateway: general company support, in conjunction with Local Authorities

How we appraise funding applications and project proposals

Our appraisal of funding applications and project proposals assesses the business case for funding on five dimensions: strategic fit with our Business Plan, optimum value for money, commercial viability, affordability and potential to be delivered successfully.

As minimum criteria to obtain funding or support any application or project proposal will need to demonstrate:

  • A clear fit with the priorities that are set out in our Business Plan
  • A strong rationale for funding by the public sector
  • Credible evidence that the project will achieve the required economic impact, relative to the cost of delivery
  • Clear viability in terms of risk, both to the recipient project and to SE
  • Value for money for the public purse. We are unlikely to fund a proposal if we view that the project could attract other sources of funding available (including commercial sources such as a bank loan). It may be useful to think of SE as the ‘funder of last resort'