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Only in the Inverness Courier
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2 September, 2010
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By Gareth Williams, Highlands and Island Manager, Scottish Council for Development and Industry
Published: 28 July, 2009
BILLED as a chance to grill bosses on where the public's money is being spent, the Chancellor and Lord Mandelson met the leaders of the UK's biggest banks to quiz them on whether their businesses were lending enough to support our economy's recovery.
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When the Government rightly decided to pump billions of pounds into stabilising the nation's financial institutions, maintaining access to finance for the real economy was a key reason. But reports from the Bank of England and Scottish Government have recently given evidence that credit is now less available and more expensive for some businesses. Both surveys conclude that overall lending has been reduced, especially for industries regarded as "too risky". Fees have gone up on renewal or review of facilities and decision-making is taking longer. Sectors which are being especially hard hit are tourism, hospitality and construction. Worryingly, given their priority in Highlands and Islands Enterprise's strategy, the approvals rate for Scotland's high-growth firms appears to have gone down dramatically by 35 per cent between 2007 and 2009. In consequence, almost a quarter no longer expect to "grow moderately" compared with this ambition in 2007. Most now expect to stay the same size and 5 per cent of "high-growth firms" expect to get smaller. The repercussions are clear. Scotland's economy shrank in the first three quarters of this year at the fastest rate since comparable statistics were first collected in 1995. UK banks are now pledging significant new lending and, as we heard at the last Highland Economic Forum, the problem has been compounded by the exit from our market of foreign banks. But concerns persist. Earlier this month the convener of the Scottish Parliament's economy, enterprise and tourism committee, Iain Smith, met SCDI members at Inverness College to highlight its forthcoming inquiry into banking. A key question to businesses is: "What evidence do you have on the issue of the availability and cost of credit, and what effect have the initiatives undertaken by the banks, government bodies, regulators and others had?" SCDI will be convening a meeting of Scotland's financial services sector and we would value your evidence. Please send it to gareth.williams@scdi.org.uk. Even in these tough times, many Highlands and Islands businesses are performing outstandingly, which should not only be supported by government and lenders but celebrated by us all. That is the purpose of SCDI's Highlands and Islands business excellence awards, where we recognise achievement in the following categories:
Nominations are being sought for a number of these awards and entry forms can be found at: www.scdi.org.uk/e/highlanddinner.html. I would urge you to consider applying. Business News - only in Tuesday's Courier 
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