Back to the Scottish Parliament European and External Relations Committee Report
Archive Home

Business Bulletin 1999-2011

Minutes of Proceedings 1999-2011

Journal of Parliamentary Proceedings Sessions 1 & 2

Committees Sessions 1, 2 & 3

Annual reports

SP Paper 607

EU/S3/11/R1

Volume 2

1st Report, 2011 (Session 3)

The Scottish Government's International Engagement Strategy

CONTENTS

Volume 1

Remit and membership
Report

SUMMARY OF REPORT

INTRODUCTION

Remit of Committee inquiry
Inquiry work streams

THE COST AND IMPACT OF INTERNATIONAL ENGAGEMENT

Financial Scrutiny Unit report on International Expenditure
Financial Scrutiny Unit report on Impact of International Expenditure
Main findings and recommendations

STAKEHOLDER VIEWS OF INTERNATIONAL ENGAGEMENT

Overview
Successes
Failures and suggestions for improvement
Lessons from other regions
International Development Fund (IDF)
Main findings and recommendations

INTERNATIONAL ENGAGEMENT APPROACHES BY OTHER REGIONS

Comparative study
Comparative study – lessons for Scotland
Main findings and recommendations

CASE STUDIES: OVERSEAS OFFICES

Scottish Government representation in Brussels
Scottish Government and SDI representation in North America
Main findings and recommendations

SUMMARY OF MAIN FINDINGS AND RECOMMENDATIONS

Volume 2

Remit and membership

Remit:

The remit of the European and External Relations Committee is to consider and report on-

(a) proposals for European Communities legislation;
(b) the implementation of European Communities legislation;
(c) any European Communities or European Union issue;
(d) the development and implementation of the Scottish Administration's links with countries and territories outside Scotland, the European Communities (and their institutions) and other international organisations; and
(e) co-ordination of the international activities of the Scottish Administration.

(Standing Orders of the Scottish Parliament, Rule 6.8)

Membership:

Ted Brocklebank
Patricia Ferguson
Jim Hume
Bill Kidd
Mr Frank McAveety
Irene Oldfather (Convener)
Sandra White (Deputy Convener)
Bill Wilson

Committee Clerking Team:

Lynn Tullis
Simon Watkins
Lewis McNaughton
Kathleen Wallace

The Scottish Government's International Engagement Strategy

The Committee reports to the Parliament as follows—

SUMMARY of report

1. The European and External Relations Committee has spent the past six months examining the Scottish Government’s international activity under its International Framework. This has included commissioning research on expenditure by the Scottish Government and its agencies and on the approach of comparator regions/nations to international activity. It has also involved an examination in situ of the Scottish Government’s Brussels Office and a case study of the work by it and Scottish Development International (SDI) in North America.

The cost and impact of international engagement

2. The Committee found that, if expenditure is considered as a measure, Scotland is generally becoming more international in its outlook. International expenditure increased by 54% in real terms between 2005 and 2010, most of this accounted for by a significant increase in the Scottish Government’s aid programme – the International Development Fund (IDF) – and a conscious decision by SDI to reinforce its business-supporting international network of offices.  Even bodies such as the Scottish Qualifications Authority (SQA) have internationalised – it now undertakes significant (profitable) activity in China, for instance.  The Committee is generally supportive of this process.

3. In commissioning this study the Committee has provided the first analysis of all public expenditure outside the UK since devolution. However, it has not been in a position to undertake a thorough audit of this activity. The Committee believes that this warrants further independent examination of the main public bodies with international expenditure (SDI, the Scottish Government, VisitScotland and the SQA).

4. The Committee therefore recommends that an in-depth independent study be undertaken of the international expenditure and performance of those bodies with significant international activity (paragraph 70).

Stakeholder views of international engagement strategy

5. The Committee also found that most stakeholders assessed the Scottish Government’s international activity as having improved since the Committee last examined the issue in 2005. This improvement was reported across the board from businesses supported by SDI to charities engaged in the International Development Fund. The Committee welcomes this positive progress.

6. Nevertheless the Committee has some criticisms of aspects of this activity—

  • the Scottish Government requires to better engage with local government, given some very effective work by a number of authorities;
  • the Scottish Government’s Framework has  yet to develop a culture of internationalisation amongst Scots, witnessed by the decline in language skills, for example; and
  • the Scottish Government does require to consistently evaluate its activity, and particularly its overseas offices.

7. The Committee therefore recommends that the Scottish Government review the International Framework to incorporate—

  • the role of local government in international activity (paragraph 120);
  • a new emphasis on developing a culture of internationalisation amongst Scots (paragraphs 121-122); and
  • a thorough programme of evaluation (paragraphs 117-118).

Stakeholder views of International Development Fund

8. The extension and expansion of the IDF has been generally welcomed and the Malawi aspect of the IDF, which has been evaluated, has delivered positive results.  The review concluded that the IDF had made real contributions to the achievement of the Millennium Development Goals in Malawi. However, the Committee supports calls for more synergy between the business and international aid elements of the Scottish Government’s international strategy so that its work in the developing world includes trade as well as aid.

9. The Committee recommends that the business element of the International Framework be revised to reflect its potential role in supporting the Scottish Government’s aid programme (paragraph 119).

International engagement approaches by other regions

10. The comparative study that the Committee commissioned and the interviews members undertook with comparator regions in Brussels indicate that the Scottish Government’s international activity is in the mainstream of European regions. In developing a network of business and general offices, in initiating an international aid programme (International Development Fund), in seeking to work with the Scottish diaspora (Diaspora Plan), and in seeking to influence migration policy (Fresh Talent), in all these aspects the Scottish Government is undertaking work also performed by other European regions. In this context the Committee, with the exception of the point below, did not find much to learn or recommend from the activity of other regions.

11. However, most other European regions seek to focus their international activity. The Committee has concerns that the Scottish Government’s activity – incorporating as it now does Europe, China, India, Pakistan, Canada, the USA, South Asia, Malawi and sub-Saharan Africa - may be spreading too widely.

12. The Committee recommends that the Scottish Government consider whether the geographical range of its international activity is spreading too widely for it to be effectively maintained (paragraph 144).

Scottish Government offices in Brussels and Washington DC

13. The Committee appointed two Reporters to examine the work of the Brussels Office. The Committee found that the office had a clear purpose and set of priorities and that steps had already been taken to ameliorate its costs.

14. The Committee received oral and written evidence from the heads of the Scottish Government and SDI offices in North America. Despite shifts in the world economy, the United States remains Scotland’s biggest trade and foreign direct investment partner, and SDI can report concrete and positive results in terms of business generated. The Committee is supportive of its activity.

15. The Committee was less convinced by the activity of the Scottish Government’s North America Office which, although it has a ‘softer’ and therefore less quantifiable role, has nevertheless been significantly late in delivering key aspects of its work, such as the USA Plan and its website. In the current financial environment the Committee questions whether the benefits of the Scottish Government’s North America office are commensurate with its costs.

16. The Committee believes that whilst there is an argument for a Scottish Government presence in North America, the Office has to date demonstrated insufficient evidence of a strategy and outputs and requires to be thoroughly benchmarked and evaluated (paragraph 211).

Scotland Week

17. The Committee also has some concerns about the operation of Scotland Week, in which both the Scottish Government and the Parliament have a role. It acknowledges the efforts that have been made in recent years by both bodies to extend the geographical remit of Scotland Week away from its New York base and to focus on building business from the event. Nevertheless the Committee believes that, in the current economic climate, it is time for a strategic rethink of the structure and scale of the event.

18. The Committee recommends that a strategic rethink be undertaken by the Scottish Government and Scottish Parliament of the structure and scale of Scotland Week (paragraphs 212-213).

INTRODUCTION

Remit of Committee inquiry

19. The Committee agreed in early 2010 to undertake an inquiry into the Scottish Government’s international engagement strategy. At the heart of the Scottish Government’s international work lies its International Framework1, which covers all the Government’s international activities, including those by its agencies.  Thus, the Committee’s inquiry covered all the international activity sponsored by the Scottish Government.

20. In agreeing the remit for its inquiry, the Committee was mindful of the inquiry into the promotion of Scotland2, which was undertaken in 2005 by its predecessor.  The International Engagement inquiry deliberately returned to some of the issues raised by the 2005 report and in this sense it was a longitudinal study, with the 2005 report used as a benchmark.

21. The Committee agreed its final remit and approach on 9 March 2010. The inquiry sought to answer three core questions—

  • Is there a clear, coherent, co-ordinated and well-resourced strategy for international relations within the Scottish Government and its agencies?
  • What successes have there been so far? What can we learn from the successes of other regions and their initiatives?
  • How do the international offices operate and what do they achieve?

Inquiry work streams

22. The Committee opted to undertake an innovative approach to the inquiry and undertook a series of different work streams within the inquiry.  The work streams were—

  • The cost and impact of international engagement
  • Stakeholder views of international engagement
  • International engagement approaches by other nations/regions
  • Case studies: Scottish Government offices in Brussels and North American

23. A summary of the evidence received in relation to each of the work streams, followed in each case by the Committee’s main findings, is included in the following sections of the report.

The cost and impact of international engagement (pages 7-15)

24. The Committee commissioned from the Scottish Parliament’s Financial Scrutiny Unit (FSU) a thorough investigation of the expenditure on international engagement.  The FSU’s report, which was published in June 2010, is included at Volume 2, Annexe B. The study covered not just the Scottish Government’s expenditure on its international offices, but expenditure by other Government-funded bodies (Scottish Development International (SDI), VisitScotland, and Scottish Qualifications Authority). The aim was to provide a complete picture of expenditure through the Scottish Block Grant on international activity.

25. The Committee’s consideration of the FSU’s report led to a request for further research into the benefits accruing from this expenditure as well as some further detail. The follow-up FSU study was published in October 2010 and this is included at Volume 2, Annexe C.

Stakeholder views of international engagement strategy (pages 16-25)

26. Rather than issuing a broad-brush call for evidence and then selecting witnesses to invite to give oral evidence, the Committee took a different approach.  It agreed to focus the evidence-gathering phase on written evidence and to take no oral evidence. On this basis, the Committee issued a targeted call for written evidence, in April 2010, with specific questions put to specific organisations.

27. This targeting was greatly aided by the previous inquiry into the promotion of Scotland, undertaken in 2005. Those organisations which had submitted evidence in 2005 were consulted again.  Where organisations had given specific views in 2005 these were reproduced and consultees were asked to provide their equivalent view now. In this way the Promotion of Scotland report was utilised as a benchmark of progress.

28. Other organisations and individuals which had not been involved in the Promotion of Scotland inquiry were welcome to submit evidence and a number did so.  A list of those who provided written evidence is included in the table on page 16, and a summary of their evidence is provided at Volume 2, Annexe D. The written submissions themselves are not included in the report, but are available on the Scottish Parliament website.3

29. The evidence gathered through this process and that derived from the other work streams was used as the basis for questioning the Minister for Culture and External Affairs, in December 2010.

International engagement approaches by other regions (pages 26-31)

30. The Committee has always seen value in examining the approach of other nations/regions to issues that affect Scotland.  The Committee commissioned a research study from Professor Michael Keating, University of Aberdeen, to examine how other comparable nations/regions undertake their international engagement. Professor Keating’s study is included at Volume 2, Annexe E.

31. This work formed the basis for a number of meetings and interviews with representatives of these nations/regions as part of a visit by two Committee reporters – Frank McAveety MSP and Bill Wilson MSP – to Brussels in November 2010.

Case studies: overseas offices (pages 32-44)

32. A key aspect of the international engagement work of the Scottish Government and its agencies is the operation of their network of overseas offices. The Committee considered that in order to assess international engagement fully it was necessary to examine this network.

33. Most of the Scottish Government’s overseas presence is provided by SDI offices and this network was recently assessed as part of the Economy, Energy and Tourism Committee inquiry.4 In addition, the Scottish Government operates three overseas offices: in Brussels, Washington DC and Beijing.

34. A case study visit to the Scottish Government EU office in Brussels took place in December 2010 and the report of the visit is included at Volume 2, Annexe F.  The visit was also used as an opportunity to examine the international and European strategies of comparable regions through their offices in Brussels.

35. The Committee also requested Parliamentary approval to investigate, on-site, the operations of the Scottish Government’s office in Washington DC, and its connectivity with the network of SDI offices in North America. However, this visit was judged an expensive undertaking at a time of reductions in public sector budgets.  As an alternative, the Committee held an oral evidence session in the Parliament with the Heads of the Scottish Government and SDI operations in North America. The Official Report of the evidence session is included at Volume 2, Annexe G. Each witness also provided subsequent written evidence and this is included at Volume 2, Annexe H.

Ministerial evidence to the Committee

36. Fiona Hyslop MSP, Minister for Culture and External Affairs, gave oral evidence to the Committee on all the work streams on 14 December 2010. The Official Report of the evidence session is included at Volume 2, Annexe I.

the cost AND IMPACT of international engagement

Financial Scrutiny Unit report on International Expenditure

37. The Scottish Parliament’s Financial Scrutiny Unit (FSU) produced its report on International Expenditure5 for the Committee in June 2010.  The report covered expenditure by the main bodies, at national level, that have significant expenditure overseas.  The full report is included at Volume 2, Annexe B.  The key findings are set out below.

38. The FSU report stated that the main bodies responsible for devolved expenditure overseas were: Scottish Development International (SDI) which accounted for 43% of the 2009-10 total; the Scottish Government (26%); VisitScotland (18%); and the Scottish Qualifications Authority (SQA) (6%). Other bodies accounted for 7%.

Figure 1: International spend by organisation, in 2009-106

eu11-1

39. Overseas expenditure by these bodies on international activity was almost £30m in 2009-10, which is slightly less than 0.1% of the entire Scottish budget. Overall overseas expenditure on international activities by the organisations studied had increased by 54% in real terms from 2004-05 to 2009-10.

40. Most of this increase is accounted for by a large increase in the budget for the International Development Fund, which grew from its inception in 2005-6 to nearly £9m in 2009-107.

Figure 2: International Development Fund: allocation since inception8

eu11-2

41. As stated in the FSU report, another major factor in the increase of international expenditure was that in 2005, SDI decided to increase its overseas market presence by 60% in order to promote its business objectives.  As a result, SDI increased its number of staff from 51 to 80.  This contributed to a £4.4m increase in expenditure in real terms by SDI between 2004-05 and 2009-10.

42. The International Development Fund expenditure could be considered as a separate budget heading as it is effectively grant aid to developing countries. Nevertheless, even excluding the Fund, international expenditure increased by 27% in real terms between 2004-05 and 2009-10, compared to 20% for the public sector as a whole.

43. There are a significant number of bodies which contribute to devolved international expenditure and some of the biggest increases in expenditure over the 2004-05 to 2009-10 period have been amongst those organisations that spend the least on international expenditure: Scottish Qualifications Authority (+654%); Learning and Teaching Scotland (+891%), perhaps reflecting increased internationalisation and income potential.

Figure 3: Change in international spending, 2004-05 to 2009-10 (real terms) 9

eu11-3

44. Against the trend of increased spending on international activities, VisitScotland’s expenditure has declined from £7m to £5.3m over the period from 2004-5 to 2009-10.  This is due to a reduction in marketing expenditure over the period.

45. There has also been a geographical change in expenditure over time.  In relative terms expenditure in the European Union and North America has declined, whilst it has increased in Asia and the rest of the world. The creation and growth of the International Development Fund is in large part responsible for this, but does not explain it all.  In 2009-10 Learning and Teaching Scotland, SCDI, the Scottish Government, VisitScotland, Scottish Arts Council, the National Theatre and SQA all categorised expenditure in the rest of the world where only two of these organisations had in 2004-5.

46. The picture with VisitScotland is interesting.  Over the period its marketing expenditure in Europe and North America declined, but increased in Asia and the rest of the world, reflecting the broadening out of the tourist markets it is seeking to penetrate, for example, in India.

Figure 4: International marketing of leisure tourism: spend over time and by region10

eu11-4

47. There does, therefore, appear to be a geographical spreading out of international activity across the globe which now encompasses some of the emerging global powers, such as China and India.

48. One of the unexpected findings of the FSU study was that, in many instances, it was not possible for grant-aided bodies to identify how much grant was spent overseas and how much in the UK.  This included, in particular, the amount spent under the International Development Fund.

Financial Scrutiny Unit report on Impact of International Expenditure

49. In considering the FSU’s report on International Expenditure, the Committee agreed to seek further information from the FSU on a number of issues. Primarily, the Committee invited the FSU to undertake an analysis of the benefits to Scotland derived from the international expenditure, including exports, inward investment, tourism and international development. This information was included in a second FSU report on the Impact of International Expenditure11, which is included at Volume 2, Annexe C.

50. The FSU report focused on economic impacts in light of the Scottish Government’s current purpose of increasing sustainable growth. It also focused on the four organisations that accounted for 93% of international expenditure in 2009-10 (SDI, Scottish Government, VisitScotland and SQA).

51. Reviewing the evidence available on the impact of international activities, the FSU found that these four bodies are having a positive impact in the areas in which they operate and are generally meeting internal performance targets.

52. However, the FSU considered that, “in a wider context, it is difficult to disentangle the effects of individual interventions from the impact of wider economic factors, such as exchange rates and international economic performance”. For example, the FSU noted that the Scottish Government’s international strategy includes a range of aims and objectives, including awareness and reputation building, increasing and sharing knowledge, and changing attitudes, which can be difficult to evaluate in purely financial terms.

53. In that context, the FSU stated that “it is impossible to draw definitive conclusions in respect of the overall value for money of the Scottish public sector’s overseas spending”. The FSU report highlighted that such definitive conclusions could only meaningfully be drawn at an individual programme or project level.

Scottish Development International

54. SDI spends more public money overseas than any other public sector body in Scotland and its international spending has risen by 47% since 2004-05. Spending is defined under two streams: promoting exports and attracting inward investment.

55. SDI’s performance figures show that, across Scotland as a whole, the number of inward investment projects has decreased over the period, but the value of exports has increased. The FSU briefing reflected the fact that SDI had met or exceeded its internal targets for inward investment over the study period.

Figure 5: Inward investment performance against targets 2004-05 to 2009-201012

eu11-5

Figure 6: Internationalisation performance against targets 2004-05 to 2009-201013

eu11-6

56. The FSU reported that “the impacts of SDI’s spend are in the same ball park as those from spend by the [English] regional development agencies14”. Also, SDI performed very favourably when compared to similar agencies in the area of quality of service delivery. SDI was ranked as the sixth best performing agency out of more than 210 that were assessed globally in a study by the World Bank.15

Scottish Government

57. Scottish Government direct spending overseas has two main components. The majority of it – more than two thirds in 2009-10 – is allocated to the International Development Fund. Most of the remaining funding is spent on promoting Scotland, and specifically on running the offices in Brussels, Washington DC and Beijing.

58. From 2005, just under £36m has been allocated through the IDF (in some cases to 2013) to 258 international projects in Malawi, south Asia and sub-Saharan Africa and in response to the humanitarian crises in Gaza, Democratic Republic of Congo, Haiti and Pakistan. The Scottish Government also supports two networking organisations and the Scottish Fair Trade Forum.

Figure 7: Breakdown of IDF spend (£m): 2010-1116

Breakdown of IDF spend 2010-11

59. The FSU cited the findings of an independent review of the Scottish Government’s projects in Malawi (2009)17, conducted by LTS International. The review concluded that 32 of the 39 projects were relevant, had been efficiently delivered, were effective in meeting their planned outcomes, had secured impact and were relatively sustainable. In comparison to other programmes of this nature, the review found the IDF projects performed well. Overall, the review concluded that the International Development Fund had made real contributions to the achievement of the Millennium Development Goals in Malawi.

60. In relation to the Scottish Government’s three overseas offices, the FSU report considered that “due to the nature of their work, it is very difficult to identify the specific impact of the overseas offices”. However, the briefing also stated that the Scottish Government had established varying degrees of measurement frameworks within individual country plans to gauge performance.

61. In measuring performance in an external context, the FSU report noted the positive results of the Anholt-GFK Nation BrandsIindex, which ranked Scotland 14th out of 50 countries in 2009. The index is based on 20,000 interviews with adults in higher and middle income countries on six ‘dimensions’: exports, governance, culture, people, tourism and immigration, and investment. The result put Scotland marginally ahead of New Zealand, Denmark, Finland and Ireland.

VisitScotland

62. VisitScotland’s international spending buys a programme of international marketing campaigns and a range of public relations activities. VisitScotland measured the value of additional tourism spending resulting from specific campaigns relative to the cost of those campaigns.

63. The FSU report reflected that, broadly speaking, VisitScotland’s campaigns in Europe have achieved a higher rate of return on investment than those in the USA, given the ratios of the campaign costs to spend generated. As with SDI, VisitScotland has been successful in hitting its own targets for the campaigns.

Figure 8: Return on investment for international campaigns 2004-200918

Year Target Geographic domain of campaign
USA Spain France Germany Netherlands
2004 15:1     38:1 18:1  
2005 33:1 (USA)15:1 (Europe) 33:1 44:1     19:1
2006 23:1     35:1 20:1  
2007 30:1 86:1 211:1     151:1
2008 ..     162:1 189:1  
2009 .. 69:1 131:1      

Scottish Qualifications Authority

64. The SQA’s aim is to promote and build Scotland’s reputation overseas, focusing specifically on the Scottish education system. In addition, the SQA aims to generate income through its international activities, which is used to support the SQA’s core activities and role in Scotland.

65. The SQA’s international activity is split into two main strands: awarding SQA qualifications overseas, with the main market being China; and international consultancy projects, undertaken on behalf of international development agencies and foreign governments.

66. The FSU report stated that both strands of activity have grown over the past five years. Current figures show that in 2009-10, income from SQA’s international awarding and consultancy activities generated £2.46m, exceeding the costs of delivering those activities and creating a surplus of £0.2m.

Figure 7: SQA international income19

67. The FSU commented, however, that whilst this financial performance is fairly easy to assess, the SQA’s wider aims of its international activities such as reputation building and awareness raising, are much harder to evaluate in quantitative terms.

Main findings and recommendations

68. The Committee notes that overseas expenditure by the Scottish Government and its agencies has increased substantially since 2005, by 54%. The Committee acknowledges that, in the main, this increase is the result of key policy changes to expand SDI’s overseas presence and to increase the size of the International Development Fund. The Committee is generally supportive of these developments, but continues to stress the importance of qualitative evaluation.

69. The Committee recognises that SDI has an important role to play in Scotland’s internationalisation and agrees that this is to be welcomed. This is, to an extent, reflected by the positive feedback received from Scottish businesses with which SDI has worked.

70. The Committee is grateful for the work by the FSU, which has shown the trends in international engagement spending and some of the benefits that can be attributed to this spending. The publication of this research has also brought transparency to the Scottish Government’s international spending which had not been previously available. However, the Committee considers that for any detailed conclusions to be reached, a more in-depth study must be undertaken on the main public bodies involved (SDI, the Scottish Government, VisitScotland and the SQA). The Committee therefore recommends that an in-depth independent study of their international expenditure and performance be undertaken (Recommendation 1).

71. In relation to the International Development Fund, the Committee supports the increase in size of the Fund since 2005 and, in particular, welcomes the Scottish Government’s focus in providing support for projects in Malawi. The Committee acknowledges that the increase in the Fund reflects the growing recognition by the UK Government of the importance of international development aid signified by its increase in funding through to 2014.

72. However, as it concluded during scrutiny of the Scottish Government Draft Budget 20110-12, the Committee recommends that a minimum level of expenditure of £3m should be set (ring fenced) for Malawi which should be explicitly defined in the budget for 2011-12. In addition, the Committee is concerned about issues regarding the allocation of the International Development Fund for 2011-12 and recommends that the Scottish Government ensures that the full Fund for that period is spent and that the process for applying for remaining funding is progressed quickly.

STAKEHOLDER VIEWS OF INTERNATIONAL ENGAGEMENT

73. The European and External Relations Committee received written evidence from 42 organisations and individuals.  A list of those who made submissions is included below.

Written evidence was submitted to the Committee by:

A G Barr plc. Scotland Food & Drink
Amnesty International Scotland's Colleges
British Council in Scotland Scottish Catholic International Aid Fund
Chemical Sciences Scotland Scottish Council for Development and Industry
Christian Aid
Confederation of British Industry (Scotland) Scottish Council of Jewish Communities
COSLA Scottish Development International (Danny Cusick)
Edinburgh City Council
EventScotland Scottish Enterprise
Fife Council Scottish Financial Enterprise
Highlands and Islands Enterprise Scottish Government
Professor Michael Keating (University of Aberdeen) Scottish Government (Robin Naysmith)
Scottish Qualifications Authority
Lloyds TSB Scottish Screen
Lossie Seafoods Ltd Scottish Trades Union Congress
Mackays Sportscotland
Network of International Development Organisations in Scotland Standard Life
Taipei Representative Office in the UK, Edinburgh
Oxfam
Pagoda Public Relations Universities Scotland
Quality Meat Scotland VisitScotland
Robert Burns World Federation Walkers Shortbread Ltd
Royal Society of Edinburgh Dr Alex Wright (University of Dundee)
Scotch Whisky Association  

74. The Committee commissioned the Scottish Parliament Information Centre (SPICe) to prepare a summary of the written evidence received and this is included at Volume 2, Annexe D. The key points raised in the evidence received are outlined below and the full written submissions are available on the Scottish Parliament website.20 In the text that follows in this section, all references and direct quotations relate to the written evidence received.

Overview

75. Most respondents were positive about the Scottish Government’s international engagement work, and believed that this work had progressed since the Committee’s previous inquiry in 2005.

76. The British Council stated—

“There has been a step change since 2005 in the level of detail with which the Scottish Government has been able to articulate and implement its international engagement plans. This is very welcome and builds on the early years of devolution when the role the Scottish Government wished to play in external affairs was being defined and developed.”

77. Standard Life asserted that the strategy for international relations was improving. It stated that “the Scottish Government’s International Framework published in 2008 clearly outlines their key objectives in this area and provides coherent measures for success.”

78. Other organisations indicated that there had been improvements in the Scottish Government’s international strategy since responding to the Promotion of Scotland inquiry in 2005. For example, in 2005, Pagoda Public Relations reported that—

“We are not convinced of the rationale for the generalised promotion of Scotland through one-off programmes of events that seem to cover a broad range of cultural and commercial objectives.  We would question whether pipe bands, a ministerial visit and associated events are effective in promoting and reinforcing Scotland’s international relationships in a sustained way.  Instead, we would suggest that these resources are applied to support mainstream initiatives to drive trade, tourism, inward investment and other forms of commercial and cultural co-operation.”

79. In response to the Committee’s request to provide an update on their 2005 comments, Pagoda Public Relations stated that “there is more evidence that ‘events’ now form part of wider programmes of work with clearer outcomes – and with a better prospect of sustaining relationships longer term.”

80. In 2005, the Robert Burns World Federation suggested that “there is no joined-up thinking, and that is where we have a problem.” In its evidence to this inquiry, the Federation stated that “we believe that matters have improved and opportunities are now being taken”.

81. Similarly, the Royal Society of Edinburgh (RSE) commented in 2005 that “there is a need for a more co-ordinated approach to promote Scotland abroad” and that “this applies to financial links, such as tourism and investment, and to cultural and education links.” Since then, the RSE said, “there have been developments in the Scottish Government’s international policies, notably the publication of the International Framework in 2008, and the various subsequent region-specific action plans”.

Successes

82. In the consultation to stakeholder organisations, the Committee requested views on the key successes of the Scottish Government’s international policy. Three key areas were highlighted in written evidence: the role of SDI, the presence of Scottish Government offices overseas, and the Year of Homecoming.

83. Specific support for the work of SDI was also highlighted by Universities Scotland, which stated—

“Universities Scotland and our member institutions work closely with Scottish Development International (SDI) as part of our international mission and very much value this association.

“Universities increasingly operate in a global market where competition is fierce.  Having up to date market information and effective and reliable risk management advice is very important to underpin our international activities and take advantage of new opportunities.  In our view, where it is done well, this service is best provided by an agency such as SDI rather than on an individual basis by institutions for obvious reasons of efficiency.  Over the last year the Education Team within SDI has supported the work of Scotland’s universities in forming a Memorandum of Understanding with the Association of Indian Universities which will forge closer working partnerships between institutions here and in India.  SDI has also been instrumental in the international promotion of the recently formed Energy Technology Partnership (ETP) which is an alliance of universities involved in research and development in energy. There is a strong international element to the work of ETP and the Energy Team at SDI has played a key role in helping realise this.”

84. In relation to the chemicals industry, Chemical Sciences Scotland considered that “this sector is dedicated to growing its value to our economy and SDl is a vital contributor to that ambition”. Lossie Seafood Ltd also valued the support of SDI—

“SDI is a crucial part of the ‘exporting from Scotland’ support in Scotland … Without the exhibition organisation of group stands around the world under the Scottish banner by SDI and other organisations we would not have the impact abroad … We could not make an impact abroad without the Scottish banner of SDI. We have added 1 million each year to our sales for the past 4 years.”

85. Linked to the work undertaken by SDI, the Scottish Council for Development and Industry (SCDI) suggested that the success of the International Framework was Scotland’s strong performance in attracting foreign direct investment.

86. AG Barr commented that one of the major successes of Scotland’s international engagement was the presence of overseas offices. SCDI supported this viewpoint—

“The Scotland House model in Brussels has been an effective champion of Scottish interests. There is merit in encouraging a coherent Scottish presence in key markets through the co-location of public sector agencies and private sector interests, to give added profile to Scotland’s presence.”

87. However, SCDI sought to extend and realign the Scottish Government overseas offices—

“the existing international presence of 3 Scottish Government offices and SDI’s 21 offices could be more effectively utilised if aligned with private sector operations based in the same locations … This extended network of private and public offices could be rebranded as Scottish Trade Centres. This would create a virtual global network of Scottish business support centres offering advice and in-market expertise across both public and private sectors.”

88. EventScotland, VisitScotland and the Robert Burns World Federation highlighted Homecoming Scotland 2009 as a success. EventScotland, which was heavily involved in the organisation of the Year of Homecoming, commented that “the year provided an unprecedented opportunity to bring public and private sector partners together to work towards the common goal of promoting Scotland.”

89. Whilst there has been some criticism of the Year of Homecoming, some independent voices supported the impact of the Year of Homecoming. For example, SCDI highlighted the impact of Homecoming and stated that “recent tourism figures show that visitor numbers to Scotland grew by 2.9% in 2010 bucking a 4% drop in international tourism numbers across the world.”

Failures and suggestions for improvement

90. The Committee also requested written evidence from stakeholder organisations on whether there were any areas in which the Scottish Government’s international policy had failed or could be improved. The key messages from responses included the need for proper evaluation of the Scottish Government’s strategy, that there was a lack of connectivity between the Government’s international policies and the interests of other groupings such as local authorities, and the failure to internationalise Scots at home.

91. The RSE suggested that “the time for discussion of strategy is over. There must now be a shift to action. The International Framework is over two years old. What is now needed is a clear picture of what action has actually been taken, how this has been monitored and evaluated, and what further action needs to be taken.”

92. Fife Council also referred to the importance of evaluation in terms of assessing the performance of the Scottish Government’s international policy. It stated that—

“it is notoriously difficult to measure performance in this area but it would help if some key performance indicators were identified and benchmarked against other northern European regions or nations of similar size. The reference to an increase in Scottish population in line with European averages is a useful start but there should be more of such yardsticks set out in the strategy.”

93. There was also a clear implication that the work of the Scottish Government and that of local authorities was not joined up. Fife Council stated—

“As in 2005, a key criticism centres around the underdeveloped links between international activity at the Scottish level and similar work taking place in the larger local authorities. This is partly the result of Civil Service culture and partly the result of local authorities themselves not promoting their diverse international activities. There are very few occasions during the year when officers or members at local and Scottish Government level come together to exchange experience and co-ordinate activity.”

94. The City of Edinburgh Council also suggested that there needs to be closer links between the Scottish Government and local authorities. It considered that “more value could be gained from alerting key partners to high profile visits to and from the relevant country with a view to creating a Team Scotland approach.”

95. SCDI used the example of links created by local authorities such as Angus Council with China—

“SCDI believes that international strategies should be developed for each of Scotland’s cities and regions which align with Scotland’s overall international strategy, and delivers against the cities and regions economic development agendas.”

96. SCDI also suggested that there needed to be greater connectivity between the Scottish Government’s international policy and international activity by UK embassies and trade agencies. SCDI suggested that, for example, “while UKTI [UK Trade and Investment] and SDI are generally working more closely together, feedback to SCDI indicates that there can be confusion on their roles abroad and the impression of duplication of effort at home.”

97. In relation to the GlobalScot network21, which consists of a number of prominent Scots who are located around the world, SCDI considered that greater practical benefit could still be derived from the network.

“To tap into this expertise, SCDI recommends a higher profile for and agreed access to a domestically-based GlobalScot network. While there are undoubtedly success stories from this initiative, we should have higher expectations of outcomes at this stage. SCDI has recommended that the benefits of the GlobalScot network should be maximised by increasing its profile and making it more open and accessible for Scottish businesses.”

98. Another area highlighted as needing further work was the failure of the Scottish Government’s international policy to develop a sense of internationalism amongst Scots. For example, whilst Pagoda Public Relations agreed the International Framework had been successful in relation to some economic development and tourism initiatives, it stated that “we remain less convinced that the International Framework and related initiatives have been successful in nurturing a culture of internationalism within Scotland itself”. In a similar vein, the RSE stated that—

“If Scots at home are to fully appreciate the opportunities and potential rewards of international engagement, it is essential to make them aware of what is being achieved already. At present, there is a tendency to focus on the past (the Scottish Enlightenment) and in some quarters there is even a culture of resentment of international success. This needs to change and we believe that the Scottish Government and Parliament could do more to recognise and celebrate what Scots are achieving now.”

99. In other comments, Amnesty International suggested that within the international policy there had been a failure to address the issue of promoting human rights with the exception of the China Plan. Amnesty commented that “the International Framework should be amended to require the Scottish Government to replicate the success of its consultation process on human rights and China by carrying out a similar consultation process prior to official visits to other countries with which it has official relations”.

Lessons from other regions

100. Consultees were also invited to comment on what Scotland could learn from the successes of other regions and their international engagement initiatives. For example, Quality Meat Scotland drew attention to the activity of the Welsh Assembly Government in promoting Welsh food.  According to Quality Meat Scotland, the Welsh Assembly Government had “a strategy to have a presence at as many International Food shows as possible to wave the Welsh food and drink industry flag”.  It is understood that industry representatives were also invited to be present on these exhibition stands.

101. SCDI suggested that Scotland should look at the example of Australia with the creation of a Business Club although, in its evidence, VisitScotland suggested that Scotland was in the process of establishing such a club.

102. VisitScotland suggested that “whilst no one country holds the perfect solution, many lessons can be learned from numerous destinations and how they co-ordinate their tourism promotion with industry and Government”. In particular VisitScotland suggested a lot could be learned from New Zealand and Australia.

103. Professor Michael Keating from Aberdeen University suggested that best practice could be spread across regions enabling Scotland to tap into good ideas from elsewhere. He considered that—

“An important potential in international linkages and partnerships is in policy learning. This requires that partnerships be extended to government officials at all levels and integrated into training and professional development.  In this way, we can learn in a non – superficial way about good ideas and their application. This implies, of course, that such partnerships be selective so as to make best use of limited time and resources.”

International Development Fund (IDF)

104. A number of substantial responses were also received from organisations22 that related specifically to the Scottish Government’s policy on international development. Whilst the operation of the IDF was not the main focus of the inquiry, the Committee is grateful for the detailed evidence that it received.

105. Overall, organisations reported that they were supportive of the Scottish Government’s international development policy. For example, the Network of International Development Organisations in Scotland (NIDOS) commented that—

“We feel there has been much progress made with the Scottish Government’s international development policy and programme since the last Inquiry and the impact of this programme has been much stronger and more coherent.”

106. Oxfam highlighted the increased budget for international development as being a key success—

“We feel that the increased funding has been matched by the increase in the overall quality of all projects that have been funded by the International Development Fund. In essence as the Government’s strategy has become more coherent and expansive it has enabled projects to improve and develop and this has resulted in real and positive change to peoples’ lives.”

107. NIDOS felt the international development policy had a more coherent and clear focus, particularly in relation to Malawi. In relation to areas outwith Malawi, however, NIDOS was of the view that there had been less coherence and focus to the international development policy. In addition, NIDOS suggested that a greater linkup and sharing of good practice between the three international development programmes (Malawi, sub-Saharan Africa and South Asia) would be beneficial.

108. NIDOS also suggested that there could be further coherence between the international development policy and the International Framework and in particular the rationale of economic development provided for the International Framework—

“As well as the opportunity for greater coherence and learning between the three programmes of the International Development Fund mentioned above, there is need for and opportunities for developing more coherence between the overarching International Policy and the International Development strategy. Currently the over-riding rationale for the International Policy is increased economic activity and business investment in Scotland. The International Development programme appears to be ‘tagged on’ with a ‘more responsible nation in the world’ rationale. The economic rationale for international relations is of course important, but can, where economic development is not done in a sustainable, just and ethical way, create conflict with development objectives and eventually with economic growth itself. In a world of greater inter-dependency and global problems such as climate change and conflict over resources, just focusing on economic growth is counter-productive. The Government’s theme of a ‘more responsible nation in the world’ and improved international relations, could form a more cohesive over-arching aim which would bring together both the economic aims and the international development aims.”

109. Similarly, Oxfam supported the view that the international development policy and International Framework should be more closely aligned—

“Oxfam Scotland also believes that for a clear, coherent international strategy to be effective it must focus on sustainable development, both from an international aid and an international trade perspective.”

110. Oxfam also suggested that the policy be broadened to cover climate change issues—

“Our experience internationally has taught us that climate change has a devastating effect on the lives of poor people and any Government strategy that aims to contribute to the global fight against poverty must have at its heart a strong commitment to aid climate change adaptation both at home and abroad.”

111. Tying in with some of the comments about the Scottish Government’s international policies, NIDOS commented on evaluation—

“There has been limited progress in developing a culture of evaluation and critique. It has been good to promote the good practice and success there has undoubtedly been. It would be useful to invest more in learning from what has not gone as well as hoped and in evaluating how the programme has developed the sustainability of Southern Partners (particularly in the programmes outside of Malawi). It would be useful to have more over-arching evaluation of the full International Development Strategy.”

112. In response to whether Scotland could learn from the successes of other regions and their initiatives, NIDOS highlighted the international development work of the Nordic countries, Switzerland and the other devolved administrations in the United Kingdom. NIDOS explained that in Sweden, for example, there “is a robust checking system and evaluation culture and withdrawal of funding where delivery is not being achieved.”

113. Also, Oxfam highlighted Denmark’s international development policy as a good model—

“Denmark’s International Development Policy states that its main challenge is the promotion of sustainable development through poverty-oriented economic growth. The Danish Government constantly works to ensure that Danish assistance fulfils its original goal of helping the poor by providing critical investments in education and health infrastructure plus support for the development of a private sector as an engine for growth.

“Special emphasis is put on the effort to promote the respect for human rights and poverty reduction for women and their participation in the development process.

114. Oxfam considered that whilst Scotland’s international development policy had made “significant progress towards delivering a quality outcome, comparable to Denmark’s… maximum impact for the poorest people needed to be a sustained priority and any review of the policy should prioritise this”.

Main findings and recommendations

115. The Committee acknowledges that much of the written evidence received in the inquiry welcomed the Scottish Government’s international strategy and the progress that had been made to develop the strategy since the Committee’s Promotion of Scotland inquiry in 2005.

116. The Committee specifically invited contributions from organisations that had previously been critical of the Scottish Government’s international strategy and sought an update on their perspectives. Improvements were reported by many organisations and the Committee welcomes this positive progress.

117. However, a key factor for the Committee and one which was highlighted in evidence to the inquiry is the need to monitor and evaluate the development of the Government’s international strategy. Whilst the International Framework is not an old document - it is just over two years old - the Committee is aware that much work has been undertaken in relation to external affairs since its inception. For example, the Committee has welcomed the work that has shown progress against the objectives of the China Plan. The Committee recommends that the International Framework should be evaluated to show what has been achieved and to what level, and what further action needs to be undertaken (Recommendation 2).

118. The Committee also considers that there would be value in evaluating the operation of the IDF outside Malawi. The Committee notes the positive outcomes of the independent review conducted of international development spending in Malawi. As part of this review process, the Committee recommends that consideration should be given to the operational suggestions that were made to the Committee.

119. Such evaluations could also usefully look at the connectivity between the various strands of the Scottish Government’s international strategy. For example, it was suggested to the Committee that more needed to be done to develop greater coherence between the International Framework and the IDF. The Committee heard that the focus on economic growth in the International Framework could sometimes be counter-productive to the aims of international development, for example where sustainability and ethical issues were not taken into account. The Committee is very supportive of the IDF and is concerned about the suggestion made by NIDOS that the impact of the IDF could be being reduced. The Committee recommends that the cohesiveness of the international policy documents should be assessed (Recommendation 3).

120. The Committee is also concerned about the comments which pointed to a failure to co-ordinate international policies and priorities in Scotland. In particular, the lack of connectivity between the Government’s policies and those of local authorities was strongly criticised by Fife and Edinburgh City Councils. The Committee considers that universities and colleges, the private and voluntary sectors, and local authorities all have important roles to play in following through and sustaining the Government’s international policies. The success of Angus Council’s work in building links in China has shown the results that can be achieved by local authorities’ engagement in the international context. On this basis, the Committee recommends that the incoming Scottish Government work more closely with local authorities to co-ordinate their international engagement strategies. There is an opportunity to take advantage of the good practice and experience of local authorities, such as Angus Council, which could inform and encourage other authorities to build overseas links and the Committee recommends that a seminar-based programme be established to facilitate the exchange of views and experiences (Recommendation 4).

121. The Committee is also concerned about the view expressed in evidence that the Scottish Government’s international strategy has failed to develop a culture of internationalisation amongst Scots. The Committee recommends that the incoming Scottish Parliament and Scottish Government seek to develop a scheme for secondments or internships to other regions and international institutions, such as the European Commission, so as to encourage the sharing of good practice and ideas on policy making (Recommendation 5).

122. The Committee is concerned about the poor linguistic performance of the Scottish population compared with much of Europe, including regions whose populations are bilingual (in two native languages), and recommends that language skills be promoted in order to encourage a culture of internationalisation in Scotland, and to equip young people to compete on a level playing field (Recommendation 6).

123. The Committee also acknowledges the comments made in written evidence about the need to engage more effectively with the GlobalScot network. The Committee recommends that the Scottish Government and SDI set out their strategy for improving their engagement with GlobalScots as a matter of urgency (Recommendation 7).

INTERNATIONAL ENGAGEMENT APPROACHES BY OTHER REGIONS

124. The Committee identified a need for comparative research to enable it to view the Scottish Government’s international policy against appropriate international benchmarks and to identify best practice among similar regions and nations. The Committee appointed Professor Michael Keating, Professor of Politics at the University of Aberdeen, to undertake the study.

125. Professor Keating’s research was based on case studies of Quebec, Flanders, Bavaria, Catalonia and the Basque Country. The research was intended to help inform questioning of the Scottish Government offices in Brussels and North America. In addition, the Committee’s visit to Brussels provided a good opportunity for members to examine the international work of some of the comparator regions.

126. Professor Keating’s study is included at Volume 2, Annexe E.  A summary of the key findings are included below.

Comparative study

127. Professor Keating’s overall finding was that the sub-state Governments that he studied had become increasingly active in international affairs in recent years. He suggested that this “was part of a general trend in which diplomacy is changing from old-fashioned, foreign-office dominated diplomacy that is concerned with security and high politics towards a more broad conception of diplomacy that involves economic, cultural, environmental and other matters.” On this basis, he considered that sub-state Governments are increasingly involved in external activities.

128. Professor Keating gave a number of reasons for this shift. Firstly, he suggested that “sub-state Governments believe that their internal competencies cannot be dealt with purely at home and that there is an external dimension to just about everything that they do.” He referred to these as functional reasons, and suggested that they were “probably the most important ones“.

129. Professor Keating suggested that a second set of reasons were political. He believed that whilst the particular focus depended on the political complexion of the party that is in power, the sub-state Governments were “all concerned with establishing themselves as something more than just administrative units within unitary nation states.”

130. The third set of reasons was what Professor Keating described as good practice or ethical issues. He suggested that “sub-state Governments are trying to show that they are good global citizens who set a good example in practices to do with human rights, overseas development and so on.”

131. In his report, Professor Keating discussed the changing nature of sub-state Governments’ international activities during the past 10 to 15 years. He considered that “initially, many Governments engaged in something of a scattergun approach whereby they signed agreements with everybody and launched strategies that were not necessarily well followed through.” In recent years, all the Governments that he had studied have reviewed or were in the process of reviewing their external relations policies. He suggested that these reviews were aimed at achieving “better focus, geographically and sectorally; better use of resources; and a clearer idea of exactly what external policy is for.”

132. Professor Keating reported that, gradually, regions were being more selective about whom they co-operated with and that, as a result, were increasingly finding the right partners. He suggested that “the more successful initiatives are with other countries and regions that have complementary strengths”. He explained that regions tended not to have linkages with other regions that had exactly the same offering, because they were competing in the same markets.

133. Other reasons for the success of sub-state Governments’ overseas engagement included the close involvement of civil society in those activities. Professor Keating considered that it was important—

“to open up to civil society rather than just regard such work as things that Governments do. Governments can sign agreements but firms, universities and research centres follow those agreements through.”

“It is a matter of finding the proper partners at home, and getting them to take up and carry on agreements. Otherwise, an agreement will simply remain an agreement between politicians with little follow-through.”

134. A particular focus for the sub-state Governments, Professor Keating said, was the development of links with the emerging economies of Brazil, Russia, India and China, the so called BRIC countries. Increasingly, he said, there was a search for regional partners in those places. The success of this approach depended, however, on the political dimension of those countries. Professor Keating contrasted Brazil, where there had been a certain amount of decentralisation and, as a result, regional partners existed, with Russia where there was a centralised system in operation making it difficult to find interlocutors below the level of the central state.

135. Professor Keating also highlighted trends in the way in which sub-state Governments approached their overseas representation. All of those that he studied had offices abroad which, he said, had a variety of functions. He suggested that the tendency now seemed to be for the emergence of two types of offices: offices of general representation; and offices that are part of a wider network of economic development and cultural offices.

136. The Quebec model, he reported, was very much one of Government representation and its extensive network of overseas offices dated back to the 19th century. Catalonia’s approach, however, was to work much more closely with civil society and the private sector and it did not allocate much of its own money, preferring to work in partnership instead.  The Bavarian model was said to be different again - most of its offices were run by the chamber of commerce. The Bavarian Government was more concerned with investment and technology than with political representation.

137. The idea of promoting internationalisation at home was also highlighted by the report which mentioned that “Catalonia and the Basque country were aiming for general fluency in at least three languages”. Professor Keating contrasted this with the linguistic performance of the UK which has an “appalling record on language” and it “is getting worse, not better”.

138. In his report, Professor Keating also discussed the sub-state Governments’ relations with their state Governments. He suggested that these relations depended upon a variety of factors, including party politics and the motives of the two Governments. Generally speaking, however, he suggested that “there was a tendency for relations to improve as states accept the legitimacy of sub-state Governments going abroad and as sub-state Governments recognise the need to work with their host states.” He considered that over the past 10 years or so, “roles and responsibilities are clarifying and settling down” and “there is probably less conflict”.

139. The report did not include comparisons between sub-state governments’ budgetary allocations for international activities. Professor Keating was wary about including such comparisons because of variations in accounting practices.  That aside, however, Professor Keating confirmed that Quebec and Flanders both had a separate ministry of international affairs and that these two regions spent much more than the others that he had studied. Flanders’ extensive competencies in the area of, for example, foreign trade and tourism, accounted for this higher expenditure. For Quebec, its extensive network of foreign representation accounted for the higher expenditure.

Comparative study – lessons for Scotland

140. During the Committee’s consideration of Professor Keating’s report, Committee members sought additional information about what lessons could be learned for Scotland. Professor Keating provided additional material that is reproduced below, followed by the Committee’s findings and recommendations.

“Scotland’s international engagement follows similar lines to that of other sub-state governments but there are some key lessons that are worth emphasizing.

1. International engagement is now a normal activity for devolved and federated governments, consistent with their constitutional responsibilities and competences. Scotland is in the mainstream here.

2. There nevertheless remain differences between a more functional approach and one that emphasises nation-building and the search for more autonomy or independence. This is a matter of political choice, to be decided through the democratic process.

3. There are also differences in the emphasis on economic, cultural and political objectives. The Scottish Government tends to subsume the field under economic priorities, consistent with the national performance framework but other governments recognize that other objectives are important in their own right. This too is a matter of political judgement.

4. Culture is often a contentious field. In the restricted sense, it refers to the creative arts. No nation or region has a single, homogeneous culture and there is a widespread rejection of archaic or stereotypical depictions of local cultures. Successful regions and nations are able to combine tradition and a respect for history with modernization, dynamism and pluralism.

5. Culture in the broader sense refers to national self-understandings and identity, including history. It can be a vehicle for collective action and a set of references for a project combining economic competitiveness with social solidarity. Again, this does not require a narrow or essentialist idea of national culture.

6. There is a general recognition of a need to prioritize by policy field, sector and geographical focus. Resources and effort should not be spread too thinly. Devolved governments cannot be involved in everything.

7. It is necessary to decide where devolved government might have most impact and to terminate activities that are not delivering a return.

8. It is important to identify who needs government support in external activities and who can manage on their own. Small and medium-sized enterprises are often the ones that can use support most.

9. There is a need for a focus of effort within the Government. External activities cut across functional divisions and many of the activities are delivered by line departments. A matrix organization is therefore needed. This can be more or less ambitious, depending on the objectives of external policy.

10. Relations with central governments are often governed by political factors but even when differing parties are in office there is a lot of shared ground. States are increasingly accommodating of sub-state activity as the practice of diplomacy itself broadens.

11. There needs to be understandings between levels of government and good communication. Functional departments as well as foreign ministries need to be aware of the interests of devolved governments in external matters.

12. In symmetrical federal states, there are formalized mechanisms for integrating sub-state concerns into the state’s external policy. In plurinational states, or those where there is asymmetrical devolution, relations with the centre are often bilateral and devolved governments may also have their own international networks.

13. Devolved and federated governments need to establish where there are shared objectives with central government and where they have a distinct interest. This requires a capacity to look ahead at emerging issues and to anticipate problems, for example in international negotiations and treaties.

14. International organizations such as UNESCO are important arenas for sub-state governments. Although they cannot become full members they can act within these in various ways.

15. Networking, often of an informal kind, is important. Secondments of officials and encouragement of young people to work in international organizations can help build these networks.

16. There is a lot of experience now of external offices and their role. A distinction is emerging between general-purpose offices, with a broad economic, political and cultural role, and more specialized delegations.

17. Internationalization of the home nation/region may be as important as projection abroad. Language teaching and internationalization of education and business play a role here.

18. Civil society has an important role to play in external projection, both in the design of policy and its implementation. This includes business, trades unions, the voluntary sector and educational institutions.

19. Development cooperation has become a significant aspect of the work of sub-state governments, usually in cooperation with the central government. Sub-state governments are learning where and how they can make the best contribution, given their limited resources and capacity. This often involves partnerships in particular parts of the world, or using skills and resources in which they have a special expertise.

20. There are opportunities for policy learning and innovation, which are not always well exploited. This requires identification of relevant fields and common interests, and sustained comparison and joint working to see what works where, why and how. Too often, policy learning is superficial and selective. Policy learning from elsewhere needs to be diffused within government and not confined to those who have studied overseas examples.

21. Diasporas can be a resource for economic and cultural development but, except in the Basque case, they are not well organized or even easy to identify.

22. Migration is an important issue and Quebec has established a role in identifying suitable migrants. There is not, among the other places studied, a case in which the sub-state government is more favourable to migration than the central government, as is effectively the case in Scotland. Quebec and Catalonia, however, show that integration into the local culture can be combined with citizenship of the wider state.”

Main findings and recommendations

141. The Committee welcomes the findings of Professor Keating’s comparative analysis, which reflect the fact that Scotland’s approach to conducting its international engagement is moving in the same general direction as other sub-state Governments.

142. For example, Scotland’s international engagement focuses on geographical areas and sectors where it has a competitive advantage, seeking regional partners to collaborate with where possible. In particular, the Scottish Government’s country-specific plans reflect its strategic approach to focusing on sectors of key importance to Scotland and where it has a competitive advantage, such as in the education sector, renewable technologies, and life sciences.

143. The Scottish Government also seems to be seeking collaborations in similar ways, such as by signing partnership agreements that then form the basis for collaborations at institution or company level. The benefits of having representative offices abroad has also been broadly realised although the nature of this representation differs. As with other regions, the Scottish Government has developed an international aid programme, is seeking to engage with its diaspora, and is seeking to influence migration policy.

144. Whilst the Committee welcomes the Scottish Government’s approach, which reflects the global trend in external relations policy, the Committee is concerned about the tendency to become involved in numerous different geographical areas at once. The Committee recognises that Scotland cannot be involved in every area and that, attempting to do so, risks spreading the already small resources too thinly. On this basis, the Committee considers that the Government’s activity in Europe, China, USA, Canada, India, Pakistan, South Asia, Malawi and sub-Saharan Africa offers a large spectrum of interest and may be spreading its engagement too widely. The Committee recommends that the Scottish Government consider whether the geographical range of its international activity is spreading too widely for it to be effectively maintained (Recommendation 8) .

145. The Committee notes the importance, as outlined in Professor Keating’s report, of the role that civil society can play in the development of a country’s international engagement policy. The Committee strongly agrees with Professor Keating that universities and colleges, the private and voluntary sectors, and local authorities all have key roles to play in following through and sustaining the Government’s international policies, and recommends that the Scottish Government should facilitate the collaboration of these groups (Recommendation 9).

case studIES: overseas offices

Scottish Government representation in Brussels

146. The Committee sent two reporters – Frank McAveety MSP and Bill Wilson MSP - to visit Brussels to investigate the operation of the Scottish Government’s European Union office. The visit, which took place on 6-7 December 2010, also provided an opportunity to study the operation of the international engagement strategies of Flanders and Quebec, and the European strategies of Bavaria and Catalonia. The report of the visit is included at Volume 2, Annexe F.

General observations

147. The reporters’ general observations from the visit are reproduced below.

  • “The constitutional settlement in each of the regions studied was significantly different from Scotland, which impacted on the nature of the respective Region’s operation in Brussels.
  • In each case the relationship between the region and the member state was deemed to be of critical importance. The rules governing this relationship were, in most cases, formal and detailed. In certain cases, personalities played an important role, notably Catalonia (and to a certain extent, Scotland).
  • Of the offices studied, the Scottish operation was the smallest in terms of staff numbers (12, versus Bavaria (30), Quebec (22), Catalonia (16). The situation in Flanders was not comparable because Brussels is the seat of the Flemish government.
  • Direct comparison of the costs of each office was difficult because of the manner in which each office was run. For example, the staff costs of Quebec and Bavaria in the case of policy officers were primarily met by the sponsoring home department. Only a single member of staff in the Scottish Representation was so funded. The Catalonian office was unaware of the overall costs of the operation. Each office had varying degree of discretion in budget spend. Each office expected there to be less funding in the short term due to the ‘age of austerity’.
  • Each operation would host visiting ministers on a regular basis, ranging from 2 – 3 per week in the case of Bavaria to 2 – 3 a year in the case of Quebec. Visits were considered to be important in securing high-level engagement.
  • Each office undertook broadly comparable functions (for broadly comparable reasons):

o Information gathering and reporting back to the home departments, often using expats located within the institutions.

o Seeking to influence, both formally (in the Federal regions) and informally, the EU institutions, a role which included the operational support of visiting ministers.

o Cultural (national) promotion allied both to policy priorities and more generally, with each region undertaking a number of ‘set piece’ events (for example Oktoberfest in the Bavarian Representation, St Andrews Day in the Scottish Representation).

  • Only Bavaria and Flanders – federal states – had the right to participate in (certain) European Council meetings. In the other states, participation was generally at the discretion of the member state minister (and limited by Council rules governing the size of delegations).
  • Each representation recognised the importance of a network of informal contacts and each would seek to cultivate this network via a range of means including cultural events, social components of formal events, bilateral meetings (coffee or dinner).
  • Each of the regions in a member state will work collaboratively and share intelligence. As might be expected, regions focus greater staffing resources upon priorities, and often rely upon other regions to provide intelligence on lesser priorities via the regional networks.
  • Regions with smaller staffs are required to prioritise and focus on a more limited suite of policy areas. The larger regions, such as Bavaria are able to cover all policy areas.
  • For each state the relationship with their MEPs was considered to be critical. Only the Scottish Representation stressed the importance of engaging with MEPs from beyond the national delegation.
  • A number of the representations have encouraged the co-location of other regional interests (both national agencies and private enterprises) within their office complex, including Catalonia, Quebec, Scotland.”

Scottish Government EU office

148. At the time of the visit, the Scottish Government’s EU office employed six policy officers and six ancillary staff. The annual operating budget was around £1m, although it was expected that this would be cut by 10% in the coming year.

149. The principal role of the Scottish Government’s EU office is to gather intelligence and report to the home departments in Edinburgh. In so doing it was anticipated that this information would help in the crafting of the Scottish Government position for its negotiations with the UK government in advance of formal European Council discussions.

150. The primary role of the Scottish Government’s EU officers is, therefore, to place the policies in a European context, provide guidance on the likely development of the policies, and facilitate engagement by the Edinburgh-based policy specialists on any given issue.

151. Although the vast majority of EU issues have some impact upon Scotland, the Scottish Government’s EU office operates a ‘policy triage’ system to allow for the prioritising of engagement. The office currently has four policy priority areas (as against 18 in 2007). The key themes are energy & climate change, justice, sustainable development and rural issues (including fisheries).

152. The reporters heard that the Scottish Government’s EU office considered that it had very good relations with UKRep, and participates in a range of policy briefings and engagements. In certain instances staff of the Government’s EU office function almost as a part of the UKRep team, notably in the field of justice. The office considered relations with the Scottish MEPs to be broadly positive, whilst recognising that there is always room for improvement. There was a general recognition that the priorities and activities of the Scottish MEPs were not always aligned with those of the Scottish Government.

153. Overall, the Head of the Scottish Government’s EU office considered one of Scotland’s weaknesses to be the relatively small number of Scots working within the EU institutions, a problem Scotland shares with the rest of the UK.

154. In detailing instances where the Scottish Government’s EU office had added particular value, the reporters heard about a particular case involving the Commission’s recent energy unbundling legislation. The legislative proposals as originally drafted would have had a disproportionately negative effect on Scottish energy companies. The Scottish Government’s EU office took a lead role in ensuring that the Whitehall departments were made aware of the situation.

155. A notable failing of the office was not having realised the disproportionate impact of EU sheep tagging legislation in Scotland as compared to the rest of the UK. However, it was accepted that this oversight had taken place before any of the current staff were in post (2002).

Flanders

156. Of all the regions studied, Flanders has the most significant powers for extra-territorial engagement, even extending to the signing of treaties. In certain areas Flanders has exclusive competence and takes the lead for Belgium in EU negotiations on, most notably, fisheries. Even where Flanders does not take the lead, the constitutional settlement ensures that the view of Flanders is never overlooked or contradicted.

157. Flanders external engagement is driven by Challenge V of the Flanders in Action Pact 23, a ten year plan, which was adopted in 2006, and which calls for more internationalisation. The plan sets out a series of broad priorities, as well as establishing how progress will be monitored and audited. It also establishes an annual reporting framework.

158. The principal priority of the Flemish Government in terms of international engagement concerns increasing exports both to neighbouring countries and to non-EU countries. At present exports depend upon a small number of large companies. The Flemish Government would like to increase the exports of small and medium sized enterprises.

Quebec

159. The Quebec Office in Brussels is responsible for both relations with the EU and with the Benelux countries and employs 22 staff. The overall cost of the office was said to be around € 800,000 per year.

160. Quebec is the only Canadian province with its own external representation; the others are represented through the Canadian embassy. The region has its principal offices in London (as a commonwealth legacy) and the Francophone countries (with the largest office in Paris).

161. The principal role of the representations abroad is to: attract inward migration (to Quebec); improve economic engagement/opportunities and attract inward investment; and raise the profile of Quebec. In recent years the Quebec representation in Brussels has been the main instigator of the Canada/EU trade agreement, indeed the current Quebec representative has extended his stay in post to oversee its completion.

162. The office divides its engagement into three divisions:

  • the EU sector, where it lobbies on issues likely to impact upon Quebec;
  • the bilateral service, where it operates a series of co-operation agreements with Wallonia, Flanders and beyond; and
  • the economic service, where it seeks to attract investment and secure partners.

163. The office stages a series of events each year focusing upon policy priorities, including seminars and small dinners, as well as two large set-piece events. The events allow the representation to increase its networks and to promote its activities.

Bavaria

164. The Bavarian representation is one of the largest in Brussels, with over 30 members of staff, representing each of the government ministries. (By contract, the combined representation of the l ä nder of Hamburg and Schleswig-Holstein is only two).

165. Bavaria, by agreement with the other l ä nder, represents Germany in the Education, Youth & Culture Council, and the Research Council. Bavaria also regularly occupies the second chair at Council meetings (normally taken by the member state’s permanent representative).

166. Bavaria tracks all EU policies. The new subsidiarity protocol in the Lisbon Treaty expands the ability of the region to exert influence and it is currently mapping out the procedures required to invoke the power. Of specific interest to Bavaria is any policy initiative that would impact upon its automotive industry.

167. Aside from the formal engagement and influence represented by the participation of the ministers of Bavaria as part (or lead) of the German Council delegation, Bavaria undertakes a wide programme of informal engagement to develop networks/contacts, secure information and to exert influence.

168. Some 300 events take place in the Bavarian representation ranging from the larger set-piece events (of which there are four per year) to smaller dinners, lunches, seminars and one-to-one meetings. Each member of staff has their own budget (usually around €1000) for entertainment/dining contacts. The representation also has significant contact with its MEPs and is an active participant in the Committee of the Regions.

Catalonia

169. The Spanish system of devolution and the status of the various autonomous regions is complex, and the relationship between each region and the Spanish central government is heavily influenced by personalities.

170. The Catalonian representation employs 16 members of staff and is co-located with a number of other Catalonian interests (cultural tourist and innovation related), taking the number of Catalonians in the complex to 30.

171. Catalonia has a number of policy priorities including agriculture and fisheries, transport, energy and environment, research (particularly the next framework programme), and the determination of the next EU budget. Ministers from Catalonia would seek to participate in four Council delegations: (i) Agriculture and Fisheries; (ii) Environment; (iii) Education, Youth, Culture and Sport; and (iv) Employment and Social Affairs.

172. There exists a co-operation agreement between the various Spanish autonomous regions, with facilitates both formal and informal co-operation. Catalonia also believes in the importance of co-operation with other regions in the EU and is active in the Committee of the regions, REGLEG ( political network for EU regions with legislative power), and various Mediterranean groupings. The representation also makes regular use of its MEPs both informally and formally.

173. Like the other regions, Catalonia hosts a series of set-piece events in Brussels, but the representation is of the view that these are less important in improving networks and securing influence than smaller more informal sessions.

174. In addition, the Catalonian representation has a database of some 700 individuals who have a connection to the region and work within one of the EU institutions, which it uses to exert influence and to gather intelligence. This was considered to be an important resource. The representation also makes use of the National Experts Programme to place Catalonians inside the EU institutions (with the cost met by the Catalonian Government).

Scottish Government and SDI representation in North America

175. The Committee was keen to investigate the Scottish Government’s operations in North America and, in particular, to assess its connectivity with the network of SDI offices that were also operating in North America.

176. The Committee did not receive approval to visit North America to conduct a case study and so, as an alternative, the Committee heard oral evidence from Robin Naysmith, Head of the Scottish Government office in the USA and from Danny Cusick, Head of Scottish Development International (SDI) in the Americas. The Official Report of the evidence session is included at Volume 2, Annexe G.

177. In addition to their oral evidence, both Mr Naysmith and Mr Cusick provided additional written evidence following their evidence session and this is included at Volume 2, Annexe H. However, due to the constraints of time, the Committee did not have an opportunity to question either witness on their written evidence.

178. A summary of the key points that arose from the evidence from Mr Naysmith and Mr Cusick is included below.

Functions and aims of the offices

179. At the time of the evidence session, the Scottish Government’s operation in North America was based in Washington DC with a complement of four staff24, whilst SDI’s North American operations were spread across six offices and employed 30 staff25. In written evidence, Mr Cusick added that he was also able to utilise UKTI resources in places where SDI did not have a physical presence.

180. In recognition of the differing size of their respective operations, the main functions of the Scottish Government’s and SDI’s North America operations also varied. Mr Naysmith told the Committee that his aim was “to progressively raise Scotland’s profile in North America and build important new relationships for Scotland”26 and “to add value by improving the co-ordination of activities by the Scottish Government and its agencies”. Mr Naysmith was also responsible for producing the Scottish Government’s strategies for engagement in North America (the USA and Canada Plans).

181. In his subsequent written evidence, Mr Naysmith provided his view on the benefits of being based in the UK Embassy in Washington DC. He said that, as a result, his office was able to take advantage of the support services provided by the FCO and other UK agencies. He also stated that having diplomatic representation in the Embassy allowed the Scottish Government to engage appropriately and directly with governmental and civic organisations. In addition, he suggested that his office was able to make use of the extensive FCO consular network in North America and was, therefore, “able to leverage the network to support the Scottish Government’s activities and open doors for Scotland”.

182. To achieve its aims, the Government’s North America office had “established a team Scotland approach to the promotion of Scotland in North America”27. As a result, Mr Naysmith considered that the activities of team Scotland in the USA and Canada “are now better co-ordinated, more credible and better value for money”28. Specifically, in relation to his collaboration with SDI, Mr Naysmith suggested that by working through SDI’s offices more effectively, he had been able to spread the work of his office more widely, geographically, to cover 17 states in the USA and five in Canada29.

183. The Committee, however, has some concerns about the ability of the office to operate effectively in the 17 USA states listed by Mr Naysmith. When questioned, he was unable to estimate what proportion of staff time was spent on which States, and in taking Chicago, Illinois as an example, he listed a number of Ministerial and other meetings, but little by way of concrete outputs.

184. Mr Cusick described SDI’s role as “business focused and business oriented”30 and as “essentially that of Scotland’s international sales team”31. He explained that the vast majority of companies that SDI worked with were SMEs on the basis that they had the greatest need for advice and assistance. In delivering his work in accordance with the objectives of the USA Plan, Mr Cusick referred to SDI’s four primary functions—

“We have a role to increase the internationalisation of Scottish companies, primarily through trade development; we track foreign direct investment into Scotland and promote our key sectors; we promote Scotland as a vibrant place to do business; and we promote Scotland as a place to work for talented individuals.”32

Outputs and measurements of success

185. In terms of assessing his success, Mr Cusick said that “success has to be about our gross value added [GVA]”33 and referred to two key measures. Firstly, on inward investment, which “is about the number of projects that we secure that come to Scotland or are safeguarded for Scotland”34, he stated that for the operational year 2009-10 “we have secured just under 400 high-value jobs and about 1300 jobs in total”35. He cited SDI’s overall inward investment GVA ratio as about 11:1. The second measure related to SDI’s work in assisting Scottish companies to break into the American market. For this operational year, Mr Cusick estimated it would assist 180 individual companies, representing possible future sales of £60m, which was part of SDI’s overall GVA return of about 7:1.36

186. In each case, Mr Cusick emphasised that the measurements were long term—

“We might speak to a client or potential client about inward investment today, but it might take two years for that to come to fruition. Equally, when we help a Scottish company to access the US marketplace, whatever introduction we make, be it through a collective exhibition, a mission or a one-to-one, it can take a considerable time for the sales to transfer through.”37

187. Mr Cusick also said that there were sometimes other “softer measures”38, the impact of which were more difficult to measure in the short term. He gave the example of a ‘learning journey’ that was held for 14 Scottish companies that were visiting New York and Boston. The programme looked at how the companies were directed and how they took forward leadership development.

188. Similarly, Mr Naysmith described some of his office’s outputs as “softer”39, compared to the hard outputs of, for example, number of jobs created. He said that “they are about creating a different perception of what Scotland is about through relationships, through exposing people to a different experience of Scotland, and through opening doors”40.

189. In written evidence, Mr Naysmith referred to a specific example of where he believed that his office had added value: “our engagement with the National Geographic Society has been hugely important both in helping promote the £10m Saltire Prize and, more generally, in promoting Scotland’s renewable energy credentials to a global audience”.

190. In terms of measuring the success of ministerial and other visits, Mr Naysmith acknowledged that the “measurement of the outcomes depends on the individual visit”41. He explained that—

“If we deliver the visit according to our objectives and achieve what we want to achieve in terms of who the minister sees, what he gets out of that and what we leave with our customers—to use that word in its widest sense, meaning business customers and the US market—we will regard the visit as a success. However, as Danny Cusick said, the hard outputs might come further down the track, or they might not. It is possible that such visits will not convert to real business opportunities. That is the nature of the game that we are in.”42

191. In addition, Mr Naysmith emphasised being “more joined up in our promotion of Scotland’s economic offering … as one of our success criteria” 43. He suggested that there was “no ministerial visit – indeed, scarcely, any event – that either my office or Danny Cusick’s offices in the USA and Canada is not involved in and in relation to which we do not collaborate” 44. He highlighted Scotland Week as the biggest and most obvious example of collaboration between his office and SDI’s offices in North America.

192. The Committee accepts that the outputs of the Scottish Government office are likely to be softer than SDI’s. However, the Committee was concerned that, when pressed on the specific outputs of the 19 successful ministerial visits’ that have taken place, Mr Naysmith spoke only of “one of my biggest successes as being able to open new doors for Scotland and establish new relationships” 45. Further pressed on the example of the Cabinet Secretary for Rural Affairs and Environment’s visit to promote Scotland’s year of food and drink, he responded that—

“A number of companies will be involved in that visit. I do not know how far down the track they are at this stage with regard to their decisions to invest in Scotland.” 46

Geographical engagement

193. In terms of their approach to deciding where to engage geographically in the USA, both Mr Cusick and Mr Naysmith were keen to emphasise that they were focused and strategic.

194. Mr Cusick said that “we do not take a scatter-gun approach; rather it is focused” 47. He recognised that SDI could not cover all of the USA and that it based its activity, therefore, on the key geographical parts of the USA in which it could get the biggest return for its investment and exploit the best opportunities. He explained that the approach was based on two factors, one being “key sector expertise and whether there is competitive advantage for Scotland in an area”, and the other being “relative prioritisation” 48.

195. Mr Naysmith referred to the USA Plan and set out some specific objectives. He stated that “an integral part of it [the USA Plan] is to work in key sectors where we believe we have particular opportunities and advantages” 49. In looking at a particular geographical area, he suggested that his primary consideration was whether the geography would fit with the objectives of the USA Plan. In addition, Mr Naysmith noted that other unplanned opportunities could also arise. In such cases, he said, “judgments are made about whether, on balance, it is a good use of time to take them up” 50.

196. Mr Naysmith stated that his office had responded to previous criticism in 2008 that it did nothing beyond New York and Washington DC. Looking ahead, he said that whilst he had extended his office’s promotional activities into a number of new states, he did not expect to expand much further. He expected to consolidate his position by going back to the same places because, as he said, “that is where the opportunities lie and that is where the priorities are for us” 51.

197. In this context, Mr Naysmith was questioned on the example of the Las Vegas international Celtic festival, but it was not clear to the Committee how this fitted with the criteria of distance or cost which he said were used to decide which events to engage with. 52

Scotland Week

198. Similarly, the geographical focus of Scotland Week had also been expanded to take in such places as Chicago, San Francisco and Texas. 53However, it appeared that there was no appetite to alter Scotland Week’s focus on the economic purpose of the promotional activities. Mr Naysmith considered that a significant step had been made in shifting the focus towards economic growth and engagement and that “it would be a big mistake to retreat from that or to allow the overall focus to become diluted by other attractive subjects” 54. Mr Cusick focused on the benefit derived from enabling Scottish Government Ministers to connect at the highest level with decision makers in some of the largest global organisations, which he described as “hugely important” 55.

199. In subsequent written evidence, Mr Naysmith responded to the suggestion that Scotland Week had become tired and out of date in terms of the events organised and the people involved. He stated that—

“I disagree. Such commentary is ill-informed, out of date and seems at odds with the Scottish Parliament’s own comprehensive report of its Scotland Week delegation.”

Engagement with the Scottish diaspora

200. It was also considered important to enhance engagement with the Scottish diaspora in North America. Mr Naysmith referred to the Scottish Government’s Diaspora Plan that was part of the work that was being done “to work out how to leverage the good will that exists into something tangible” 56. He suggested that means of communication, such as social networking media, could be used to communicate with the diaspora and to allow different parts of the diaspora to communicate with one another.

201. Mr Cusick said he tried to maximise the global Scot input into every event that his offices put on in the USA. He said, “we are fortunate to have a network of powerful and influential global Scots in North America” 57 and they “are anxious to be utilised as much as possible” 58.

Engagement with politicians

202. In relation to engagement with the USA Government, Mr Naysmith suggested that although he did not consider there to be a great deal of need to lobby politicians, there were occasionally circumstances where this could be beneficial. For example, he suggested that during a future visit by the Cabinet Secretary for Rural Affairs and the Environment the issue of trade barriers to Scottish food and drink could usefully be raised with the USA Administration. 59

203. Mr Naysmith also referred to the connections that his office had with the Friends of Scotland caucus in the House of Representatives, and with another in the Senate. Mr Naysmith said that such connections had provided helpful facilitatation on a number of occasions and had assisted the development of relations with some state legislatures. 60In written evidence, he conceded that “there is potential to make more use of the caucuses to open doors for Scotland”.

Publication of material by Scottish Government

204. The international Framework, published in April 2008, stated that the North America Plan “would follow in the coming year”. Mr Naysmith accepted that the USA and Canada Plans had been published two years later than expected. However, he explained that—

“the previous [Scottish Executive’s USA] plan was produced in October 2006, which was only seven or eight months before the May 2007 election. It was well researched and well received. In 2008, it was hard for me to say that the objectives in that plan were wide of the mark.

“The approach taken in the previous strategy was sensible and I thought that it would have been presumptuous of me, early in my time in office, to come in and attempt to rip it up and start again. So we concentrated on shaping our engagement differently, shifting our priorities and coming up with an approach that we felt would take us on to the next stage. I believe that the plan that we produced earlier this year does that, and I am happy that it built sufficiently on the previous plan to progressively raise our engagement in the way that I suggested at the beginning of my remarks.”61

205. The Committee remains concerned that such a scale of delay should have been entertained for a Plan to which the International Framework committed the Scottish Government in 2008.

206. Delays had also been experienced in setting up a new Scottish Government USA website. The Committee heard that Mr Naysmith’s predecessor had been actively considering the development of the website some six years previously. Mr Naysmith reported that he hoped that the website would be in operation by the end of the month. 62

Main findings and recommendations

207. The Committee recognises the importance of having overseas representation and acknowledges that other sub-state Governments employ a similar approach to delivering their international strategies.

208. The Committee found that the Scottish Government’s European Union Office, to which it sent two reporters to examine, had a clear purpose and set of priorities. The Committee also found that the Scottish Government’s representation operates in similar ways as the offices of other comparator regions in Brussels, but in many cases with a smaller staff complement.

209. The Committee considers that the office has an important duty in providing Scottish Government staff in Scotland with an EU perspective on policy issues of importance to Scotland. The Committee also acknowledges that steps are already being taken to reduce the operating costs of the office.

210. The Committee also considered the network of overseas representation in North America. Despite shifts in the world economy, the USA remains Scotland’s biggest trade and foreign direct investment partner. The Committee supports SDI’s international activities in North America and welcomes the fact that this performance is, on the whole, measurable and positive.

211. However, the Committee has some concerns about the Scottish Government’s office in Washington DC. The Committee is less convinced by the activity of the Government’s North American office which, although it has a softer and therefore less quantifiable role, has nevertheless been significantly late in delivering key aspects of its work, such as the USA and Canada Plans and its website. The Committee believes that whilst there is an argument for a Scottish Government presence in North America, the Office has to date demonstrated insufficient evidence of a strategy and outputs and requires to be thoroughly benchmarked and evaluated (Recommendation 10) .

212. In relation to Scotland Week, the Committee acknowledges that the current arrangements have had some positive results for business and trading relations, and have helped to reinforce relationships with key partners, including the diaspora. The Committee also welcomes the efforts that have been made to expand the geographical focus of Scotland Week beyond New York and Washington DC. Also, the Committee acknowledges the Scottish Government’s willingness to “continue to review and further develop the Scotland Week programme to ensure that it provides a relevant and cost effective platform”.

213. However, the Committee has some concerns about the operation of Scotland Week. On this basis, the Committee recommends that the Scottish Parliament and the Scottish Government conduct a strategic evaluation of Scotland Week to reconsider the structure and scale of their Scotland Week activities (Recommendation 11) .

214. The Committee notes the comments regarding the possibilities to engage more fully with the caucuses in the House of Representatives and the Senate and the diaspora in North America. It considers that urgent work should be undertaken by the incoming Scottish Government and its partners, particularly SDI, to better exploit the potential of the caucuses and the diaspora.

SUMMARY OF MAIN FINDINGS AND RECOMMENDATIONS

The cost and impact of international engagement (pages 7-15)

215. The Committee notes that overseas expenditure by the Scottish Government and its agencies has increased substantially since 2005, by 54%. The Committee acknowledges that, in the main, this increase is the result of key policy changes to expand SDI’s overseas presence and to increase the size of the International Development Fund. The Committee is generally supportive of these developments, but continues to stress the importance of qualitative evaluation.

216. The Committee recognises that SDI has an important role to play in Scotland’s internationalisation and agrees that this is to be welcomed. This is, to an extent, reflected by the positive feedback received from Scottish businesses with which SDI has worked.

217. The Committee is grateful for the work by the FSU, which has shown the trends in international engagement spending and some of the benefits that can be attributed to this spending. The publication of this research has also brought transparency to the Scottish Government’s international spending which had not been previously available. However, the Committee considers that for any detailed conclusions to be reached, a more in-depth study must be undertaken on the main public bodies involved (SDI, the Scottish Government, VisitScotland and the SQA). The Committee therefore recommends that an in-depth independent study of their international expenditure and performance be undertaken (Recommendation 1).

218. In relation to the International Development Fund, the Committee supports the increase in size of the Fund since 2005 and, in particular, welcomes the Scottish Government’s focus in providing support for projects in Malawi. The Committee acknowledges that the increase in the Fund reflects the growing recognition by the UK Government of the importance of international development aid signified by its increase in funding through to 2014.

219. However, as it concluded during scrutiny of the Scottish Government Draft Budget 20110-12, the Committee recommends that a minimum level of expenditure of £3m should be set (ring fenced) for Malawi which should be explicitly defined in the budget for 2011-12. In addition, the Committee is concerned about issues regarding the allocation of the International Development Fund for 2011-12 and recommends that the Scottish Government ensures that the full Fund for that period is spent and that the process for applying for remaining funding is progressed quickly.

Stakeholder views of international engagement (pages 16-25)

220. The Committee acknowledges that much of the written evidence received in the inquiry welcomed the Scottish Government’s international strategy and the progress that had been made to develop the strategy since the Committee’s Promotion of Scotland inquiry in 2005.

221. The Committee specifically invited contributions from organisations that had previously been critical of the Scottish Government’s international strategy and sought an update on their perspectives. Improvements were reported by many organisations and the Committee welcomes this positive progress.

222. However, a key factor for the Committee and one which was highlighted in evidence to the inquiry is the need to monitor and evaluate the development of the Government’s international strategy. Whilst the International Framework is not an old document - it is just over two years old - the Committee is aware that much work has been undertaken in relation to external affairs since its inception. For example, the Committee has welcomed the work that has shown progress against the objectives of the China Plan. The Committee recommends that the International Framework should be evaluated to show what has been achieved and to what level, and what further action needs to be undertaken (Recommendation 2).

223. The Committee also considers that there would be value in evaluating the operation of the IDF outside Malawi. The Committee notes the positive outcomes of the independent review conducted of international development spending in Malawi. As part of this review process, the Committee recommends that consideration should be given to the operational suggestions that were made to the Committee.

224. Such evaluations could also usefully look at the connectivity between the various strands of the Scottish Government’s international strategy. For example, it was suggested to the Committee that more needed to be done to develop greater coherence between the International Framework and the IDF. The Committee heard that the focus on economic growth in the International Framework could sometimes be counter-productive to the aims of international development, for example where sustainability and ethical issues were not taken into account. The Committee is very supportive of the IDF and is concerned about the suggestion made by NIDOS that the impact of the IDF could be being reduced. The Committee recommends that the cohesiveness of the international policy documents should be assessed (Recommendation 3).

225. The Committee is also concerned about the comments which pointed to a failure to co-ordinate international policies and priorities in Scotland. In particular, the lack of connectivity between the Government’s policies and those of local authorities was strongly criticised by Fife and Edinburgh City Councils. The Committee considers that universities and colleges, the private and voluntary sectors, and local authorities all have important roles to play in following through and sustaining the Government’s international policies. The success of Angus Council’s work in building links in China has shown the results that can be achieved by local authorities’ engagement in the international context. On this basis, the Committee recommends that the incoming Scottish Government work more closely with local authorities to co-ordinate their international engagement strategies. There is an opportunity to take advantage of the good practice and experience of local authorities, such as Angus Council, which could inform and encourage other authorities to build overseas links and the Committee recommends that a seminar-based programme be established to facilitate the exchange of views and experiences (Recommendation 4).

226. The Committee is also concerned about the view expressed in evidence that the Scottish Government’s international strategy has failed to develop a culture of internationalisation amongst Scots. The Committee recommends that the incoming Scottish Parliament and Scottish Government seek to develop a scheme for secondments or internships to other regions and international institutions, such as the European Commission, so as to encourage the sharing of good practice and ideas on policy making (Recommendation 5).

227. The Committee is concerned about the poor linguistic performance of the Scottish population compared with much of Europe, including regions whose populations are bilingual (in two native languages), and recommends that language skills be promoted in order to encourage a culture of internationalisation in Scotland, and to equip young people to compete on a level playing field (Recommendation 6).

228. The Committee also acknowledges the comments made in written evidence about the need to engage more effectively with the GlobalScot network. The Committee recommends that the Scottish Government and SDI set out their strategy for improving their engagement with GlobalScots as a matter of urgency (Recommendation 7).

International engagement approaches by other regions (pages 26-31)

229. The Committee welcomes the findings of Professor Keating’s comparative analysis, which reflect the fact that Scotland’s approach to conducting its international engagement is moving in the same general direction as other sub-state Governments.

230. For example, Scotland’s international engagement focuses on geographical areas and sectors where it has a competitive advantage, seeking regional partners to collaborate with where possible. In particular, the Scottish Government’s country-specific plans reflect its strategic approach to focusing on sectors of key importance to Scotland and where it has a competitive advantage, such as in the education sector, renewable technologies, and life sciences.

231. The Scottish Government also seems to be seeking collaborations in similar ways, such as by signing partnership agreements that then form the basis for collaborations at institution or company level. The benefits of having representative offices abroad has also been broadly realised although the nature of this representation differs. As with other regions, the Scottish Government has developed an international aid programme, is seeking to engage with its diaspora, and is seeking to influence migration policy.

232. Whilst the Committee welcomes the Scottish Government’s approach, which reflects the global trend in external relations policy, the Committee is concerned about the tendency to become involved in numerous different geographical areas at once. The Committee recognises that Scotland cannot be involved in every area and that, attempting to do so, risks spreading the already small resources too thinly. On this basis, the Committee considers that the Government’s activity in Europe, China, USA, Canada, India, Pakistan, South Asia, Malawi and sub-Saharan Africa offers a large spectrum of interest and may be spreading its engagement too widely. The Committee recommends that the Scottish Government consider whether the geographical range of its international activity is spreading too widely for it to be effectively maintained (Recommendation 8) .

233. The Committee notes the importance, as outlined in Professor Keating’s report, of the role that civil society can play in the development of a country’s international engagement policy. The Committee strongly agrees with Professor Keating that universities and colleges, the private and voluntary sectors, and local authorities all have key roles to play in following through and sustaining the Government’s international policies, and recommends that the Scottish Government should facilitate the collaboration of these groups (Recommendation 9).

Case studies: overseas offices (pages 32-44)

234. The Committee recognises the importance of having overseas representation and acknowledges that other sub-state Governments employ a similar approach to delivering their international strategies.

235. The Committee found that the Scottish Government’s European Union Office, to which it sent two reporters to examine, had a clear purpose and set of priorities. The Committee also found that the Scottish Government’s representation operates in similar ways as the offices of other comparator regions in Brussels, but in many cases with a smaller staff complement.

236. The Committee considers that the office has an important duty in providing Scottish Government staff in Scotland with an EU perspective on policy issues of importance to Scotland. The Committee also acknowledges that steps are already being taken to reduce the operating costs of the office.

237. The Committee also considered the network of overseas representation in North America. Despite shifts in the world economy, the USA remains Scotland’s biggest trade and foreign direct investment partner. The Committee supports SDI’s international activities in North America and welcomes the fact that this performance is, on the whole, measurable and positive.

238. However, the Committee has some concerns about the Scottish Government’s office in Washington DC. The Committee is less convinced by the activity of the Government’s North American office which, although it has a softer and therefore less quantifiable role, has nevertheless been significantly late in delivering key aspects of its work, such as the USA and Canada Plans and its website. The Committee believes that whilst there is an argument for a Scottish Government presence in North America, the Office has to date demonstrated insufficient evidence of a strategy and outputs and requires to be thoroughly benchmarked and evaluated (Recommendation 10) .

239. In relation to Scotland Week, the Committee acknowledges that the current arrangements have had some positive results for business and trading relations, and have helped to reinforce relationships with key partners, including the diaspora. The Committee also welcomes the efforts that have been made to expand the geographical focus of Scotland Week beyond New York and Washington DC. Also, the Committee acknowledges the Scottish Government’s willingness to “continue to review and further develop the Scotland Week programme to ensure that it provides a relevant and cost effective platform”.

240. However, the Committee has some concerns about the operation of Scotland Week. On this basis, the Committee recommends that the Scottish Parliament and the Scottish Government conduct a strategic evaluation of Scotland Week to reconsider the structure and scale of their Scotland Week activities (Recommendation 11) .

241. The Committee notes the comments regarding the possibilities to engage more fully with the caucuses in the House of Representatives and the Senate and the diaspora in North America. It considers that urgent work should be undertaken by the incoming Scottish Government and its partners, particularly SDI, to better exploit the potential of the caucuses and the diaspora.

Volume 2


Footnotes:

1 Scottish Government International Framework: http://www.scotland.gov.uk/Publications/2008/04/23150847/0

2 European and External Relations Committee, 1st Report, 2005, Inquiry into the Promotion of Scotland Worldwide:
the Strategy, Policy and Activities of the Scottish Executive (SP Paper 257) (24 February 2005):
http://www.scottish.parliament.uk/business/committees/europe/reports-05/eur05-01-01.htm

4 Economy, Energy and Tourism Committee, 8th Report, 2010,
Report onthe public sector's support for exporters, international trade and the attraction of inward investment (SP Paper 485): http://www.scottish.parliament.uk/s3/committees/eet/reports-10/eer10-08-vol01.htm

6 FSU briefing on International Expenditure (Figure 2), page 9

7 In correspondence to the Committee, the Minister for Culture and External Affairs stated that the latest figures for the IDF in 2009-10 amounted to £9m, and that this level of spending was planned to remain the same in 2011-12, as set out in the Scottish Government’s Draft Budget 2011-12.

8 Financial Scrutiny Unit briefing on International Expenditure (Figure 6), page 13

9 Financial Scrutiny Unit briefing on International Expenditure (Figure 3), page 10

10 Financial Scrutiny Unit briefing on International Expenditure (Figure 7), page 14

12 Financial Scrutiny Unit briefing on the Impact of International Expenditure (Figure 1), page 9

13 Financial Scrutiny Unit briefing on the Impact of International Expenditure (Figure 2), page 10

14 England’s Regional Development Agencies (RDAs): East of England, East Midlands, London, North East,
North West, South East, South West, West Midlands, Yorkshire and the Humber.

15 World Bank report on Global Investment Promotion Benchmarking: 2009 Summary Report (May 2009): http://www.ifc.org/ifcext/fias.nsf/AttachmentsByTitle/GIPB2009/$FILE/GIPB2009.SummaryReport.pdf

16 Financial Scrutiny Unit briefing on the Impact of International Expenditure (Figure 5), page 18

17 Independent Review of Scottish Government International Development Fund Projects Focused on Malawi,
LTS International (March 2009): http://www.scotland.gov.uk/Resource/Doc/257273/0076387.pdf

18 Financial Scrutiny Unit briefing on the Impact of International Expenditure (Table 6), page 23

19 Financial Scrutiny Unit briefing on the Impact of International Expenditure (Figure 12), page 28

21 More information on the GlobalScot network is available at: http://www.globalscot.com/

22 Responses on the IDF were received from: NIDOS, Oxfam and Christian Aid.

24 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1742

25 SDI’s North American offices are structured on a regional basis:
offices in Boston and New York cover the east, offices in Chicago and Houston cover the central region, an office in
San Jose covers the west coast, and an office in Toronto covers Canada. Scottish Parliament European and External
Relations Committee. Official Report, 16 November 2011, Col 1758

26 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1738

27 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1738

28 Mr Naysmith referred to his office’s key partners in North America as Scottish Enterprise, SDI, VisitScotland,
Historic Scotland and Creative Scotland. Scottish Parliament European and External Relations Committee.
Official Report, 16 November 2011, Col 1738

29 Mr Naysmith stated that his office had extended its promotional activities to: Texas, California, North Carolina, South Dakota,
Tennessee, Kentucky, Washington state, Wisconsin, Nevada, Georgia, Pennsylvania, Massachusetts, Virginia, Illinois, Ohio,
New Hampshire and Oklahoma; and, in Canada, to British Columbia, Ontario, Alberta, Manitoba and Nova Scotia.
Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1739

30 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1745

31 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1740

32 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1740

33 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1746

34 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1745

35 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1745

36 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1746

37 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1746

38 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1746

39 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1747

40 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1747

41 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1749

42 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1749

43 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1746

44 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1748

45 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1747

46 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1749

47 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1759

48 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1759

49 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1761

50 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1761

51 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1762

52 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1756

53 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1751

54 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1767

55 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1768

56 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1766

57 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1741

58 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1750

59 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1769

60 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1762

61 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1742

62 Scottish Parliament European and External Relations Committee. Official Report, 16 November 2011, Col 1751