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Just 9% of companies asked in a recent poll say the Scottish Government understands the business landscape in the country.
The Fraser of Allander Institute spoke to 400 companies for its Scottish Business Monitor to gauge the sector’s confidence in policymakers.
First Minister Humza Yousaf has sought to be more business friendly since taking office earlier this year, including offering a “new deal for business”.
The survey found that just 9% of respondents agreed or strongly agreed that the Scottish Government understood Scotland’s business landscape, compared with 64% who disagreed or strongly disagreed.
These results are obviously pretty disappointing for the government, with the vast majority of businesses not feeling that the government understands business or that they engage effectively
Mairi Spowage, Fraser of Allander Institute
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It found that 8% agreed ministers and officials engage effectively with the business community, while 67% disagreed.
Some 80% of respondents in the hospitality sector disagreed with both statements.
For both questions, larger companies were more likely to disagree with the statements.
Mairi Spowage, director of the Fraser of Allander Institute, said: “These results are obviously pretty disappointing for the government, with the vast majority of businesses not feeling that the government understands business or that they engage effectively.
“However, they underline the importance of the Scottish Government resetting their relationship with business. It is therefore more important than ever that the new deal for business leads to changes in approach in the future.
“These indicators can help us track progress over time – and hopefully see improvements in the relationship.”
David Anderson, head of corporate at Addleshaw Goddard in Scotland – the firm which helped the think tank undertake the business monitor – said: “Developing the best environment to do business is essential for the economy to thrive, so it’s important for policymakers to be aware of the sentiment among business leaders in this regard, the good and the not so good.
More than anything, however, the findings emphasise the need for business and government to come together and engage more effectively
David Anderson, Addleshaw Goddard in Scotland
“These results are very timely and speak to the frustrations that businesses are clearly feeling.
“More than anything, however, the findings emphasise the need for business and government to come together and engage more effectively – working in partnership with the business community is what the new deal of business is about and these figures provide a benchmark as we move forward.”
Responding to the survey, Wellbeing Economy Secretary Neil Gray said: “While we are doing everything we can to support business at this tough time – given the impact of inflation, energy prices, and higher costs of borrowing – this report highlights that more is needed to show that the Scottish Government is working alongside the business community.
“This is why the new deal for business group was set up, to reset that relationship with a focus on co-designing policies that will have a positive impact on the day-to-day operations of business.
“The group’s first set of recommendations have been accepted by the First Minister and we are in the process of implementation.
“Next week’s Programme for Government will include further initiatives to support business as we develop an economy that is fair, green and growing.”
Scottish Tory economy spokesman Murdo Fraser said the study was an “abysmal verdict” for the Scottish Government, adding: “It’s weeks since Humza Yousaf was promising a ‘reset’ of his party’s relationship with Scottish businesses – itself an admission of their previous failure.
“But he’s still refusing to pass on the money received from the UK Government to give firms rates relief they would get elsewhere in the UK. And has reaffirmed his commitment to the Greens, a party explicitly opposed to economic growth.
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“So far, there’s no indication Humza Yousaf is prepared to listen, or change the policies that have seen stagnant growth and a host of new burdens and regulations on Scottish firms.
“He must abandon the stubborn position that was taken with the disastrous Deposit Return Scheme and is being repeated with short-term lets regulations, pass on rates relief, and finally engage with the business community’s real priorities.”
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