Introduction

Highlands and Islands Enterprise (HIE) was established under the Enterprise and New Towns (Scotland) Act 1990. The Highlands and Islands have a population of 370,000 spread across an area bigger than Belgium or Wales and the task of the HIE Network is to unlock their potential and help create a strong, diverse and sustainable economy where quality of life is matched by quality of opportunity.

The HIE Network has substantial powers and resources to achieve economic and social development results. Powers include finance for business start-up and expansion, provision of factories and offices, training programmes, assistance for community and cultural projects, and measures for environmental renewal.

Ten Local Enterprise Companies (LECs), locally-based and private sector-led provide front-line delivery of assistance and advice. They are contracted to and backed up by the Network's strategic core body in the Highland capital of Inverness. The 12-strong Board of HIE is appointed by the Secretary of State for Scotland, while the boards of the Network's LECs comprise a maximum of 12 directors of which two thirds must be drawn from the private sector.

The HIE Network's policy of Accountability through Openness guarantees public access to details of all financial assistance approved, the registered interests of HIE and LEC board members and any financial transactions relating to these. A new policy of Appointability through Openness, opens up the selection process for directors of its 10 Local Enterprise Companies. It introduces measures including: local advertising and consultation to identify talent; use of nominations panels containing independent representation; and sifting of candidates against clear job descriptions and person specifications.

Achievements in 1996/97

The backdrop to the HIE Network's activities is its Strategy for Enterprise Development, which identifies its overall aim as enabling the people of the Highlands and Islands to fulfil their potential. The strategy has three key thrusts: growing businesses, developing people, and strengthening communities. Four sectors have been identified as offering the strongest potential for growth; namely tourism, food and drink, manufacturing and production, and knowledge, information and telecommunications.

HIE Network investment of £16.7m levered in £66.6m from the private sector. The number of businesses and organisations committed to Investors in People (IIP) totalled 340. The number of starts under the Skillseekers programme totalled 2,011, while in the Training for Work programme, there were 1,596 starts. There were 335 positive outcomes, from the Training for Work programme, including those going into employment or further training. HIE Network investment of £1.57m levered in £8.45m in community and other sources, a ratio of 1/5.

HIE secured £33.4m in funding from the Millennium Commission towards the £100m start-up costs of the proposed University of the Highlands and Islands, which will harness high level technology to deliver higher education from a base of 12 existing colleges and institutions in the north of Scotland. There was also considerable success in securing European Union funding from the Highlands and Islands Objective One programme to fund major schemes for investment in business infrastructure.

Plans for 1997/98

The main output and performance targets for 1997/98 include assisting 1,250 business projects to create or retain 3,050 jobs at an average cost-per-job of £2,950. HIE Network investment of £16.5m should lever in £54.5m from the private sector. The target for IIP commitments is 500, with 90 recognitions targeted. HIE aim to increase the level of young people in employment through Skillseekers to 50 per cent and to increase the number of VQs achieved to 600.

HIE anticipate continued strong demand for Community Action Grants and expect to approve 313 projects at a cost of £1.2m, levering in £2.8m from community and other sources.

Key projects for the HIE Network will be: the continued development of the UHI proposals; the start of a new ferry service between Campbeltown, Argyll, and Northern Ireland; completion of an £8m redevelopment of a key textiles mill in Sutherland; progress on a proposed funicular railway for the Cairngorm ski area and substantial investment in restoring the village of Aviemore to a pre-eminent position in Scottish tourism; and commencement of work on two major new Business Parks in Easter Ross and Moray.

Key Performance Targets
			1995/96		1996/97		1997/98
Key Measure			Set	Achieved	Set	Achieved	Set
Finance for Business     No. of cases approved     Value of approvals (£m)     Direct jobs created or retained     Cost per job (£)     Leverage Ratio			1200 20.0 2,955 3800 3.2	916 17.6 3,135 2,900 2.7	1,250 16.1 3,000 3,000 3.3	931 16.7 3,451 2,700 4.1	1,250 16.5 3,050 2,950 3.3
Investors in People     Recognition			50	13	80	48	90
Property Provision     New floorspace (m)     Receipts from sales (£m)     Vacancy Rate (%)			13,500 3.0 7.5	18,559 2.88 6.2	6,000 3.0 7.5	5,800 3.1 7.3	14,00 3.2 9.0
Land Renewal     Area Returned to economic use (%)			60	60	65	74	65
Skillseekers     SVQ's achieved     Employed status (%)			695 30	625 25	570 32	617 49	693 50
Training     Positive Outcomes (%)     SVQ's achieved			28 383	22 512	24 294	21 499	28 326
Community Action Grants			320	493	292	431	313