It's a poisoned chalice. No-one in business would take it on. You could double my salary and I would not touch it
IT WAS unfortunate, perhaps, that Jack Perry timed the announcement of his resignation from Scottish Enterprise on a day when the eco
nomic news was again dominated by job losses. Hewlett-Packard, one of the stalwarts of the inward invasion masterminded by his predecessors, had just announced that 710 highly prized technical posts would switch from Scotland to the Czech Republic.
Inevitably, there were questions about what SE would be doing about it, though it was Lena Wilson, chief operating officer and Perry's number two, who led the agency's response that morning, arguing that the news on the jobs front was not all bad and the future looked bright despite the latest setback.
Some thought she gave a good account of SE's largely unsung success in attracting continued inward investment. Others felt she sounded more like a spin doctor presenting an over-optimistic view of the country's prospects than a senior figure fighting to keep Scotland in business.
Either way, Wilson now emerges as the likeliest candidate to succeed Perry, 54, who has decided five and a half years is long enough at the helm of an organisation that gets its fair share of critics but has nonetheless survived the Tories, Labour-Liberal Democrats and SNP administrations as the country's leading development agency.
But Perry's departure will raise renewed questions about the agency's role, its achievements and shortcomings and whether it has outlasted its usefulness.
In an internal memo to staff, Perry thanked them for creating something which he believed to be in good shape, "enormously valuable" and ready to evolve. He described his time at SE as representing "the most challenging, fascinating and professionally rewarding of my entire career… We have together come a long way over the last few years – I believe our slimmer, more focused organisation is now very much fit for purpose as Scotland's enterprise, innovation and investment agency."
The news of his resignation came as a surprise, though he is believed to have confided in one or two close associates a few weeks ago that he had decided it was time to return to the private sector. On Friday, after the news was announced, he laughed off suggestions that it was linked to the Hewlett-Packard announcement. "You cannot dictate what news is going to be around when you do these things," he said. "I could have picked any time, but I always said I'd give it four to six years."
He said that if offered a suitable executive job he may be tempted, but he is more likely to seek a portfolio of non-executive roles. He has turned down offers during his tenure of SE – he would be allowed under his contract to hold one such position – but is now open to offers. He is not involved in any negotiations. Until a successor is found, Perry will stay on. He has a one-year notice period, though it is assumed someone will step into the role before the end of the year.
Finding a successor keen on the £200,000 pay package will be easier than finding the right candidate: someone who can manage a national agency in a political cauldron. Peter Hughes, chief executive of Scottish Engineering, the lobby group for the country's manufacturing sector, said Perry had done a good job in difficult circumstances. "In many ways it is a thankless task. Jack has done a lot of good things, but the politicians used it as a political football."
He picked out Perry's support for the Scottish Manufacturing Advisory Service, an initiative that involves a squad of business leaders being sent in to help struggling firms. But he said the new man or woman at the helm of SE would face some of the same problems that frustrated Perry. "People will see it as a poisoned chalice. No-one in business would take it on. You could double my salary and I would not touch it. I don't like the political infighting and the way it is kicked about."
Iain McMillan, director of CBI Scotland, also believed Perry had achieved what he could and recalled that at the time he took on the job SE was recovering from the resignation, in rather less stable circumstances, of Robert Crawford. "SE was under siege. Jack has reorganised it, picked out six key industries to focus on, tackled the local enterprise companies and split off the skills work. I'd give him high marks for doing all that. It is a difficult job to do when every businessman thinks he can do it better."
McMillan struggled to think how the agency might be improved under new management. "I don't see any urgent need for reform. He has left it in a pretty sustainable shape."
Not everyone is so full of praise. One highly placed official at a business lobby group said: "Jack Perry is a perfect gentleman and he's a very good listener but, on the whole, his appointment has been a huge waste of money.
"In a way he was stymied by the intransigent structure of the organisation he inherited, but he wasn't brutal enough to break that down.
"There's a huge number of people working at Scottish Enterprise who think they are God's gift to the world, based on no track record. They don't deliver and yet years later you find they are still there and they have even moved up several scales. The place is heaving with them and they are costing us millions of pounds."
The criticism did not stop there. Accusations have been frequent that Scottish Enterprise has become an "unaccountable quango" that has favoured foreign players over Scotland's communities. "That's the trick he has missed," said one source. "A lot of foreign companies have pulled out and we would have been far better off supporting our own and giving more money and support to Scottish companies."
Another source questioned why more pressure wasn't applied to the likes of Hewlett-Packard to make them feel uncomfortable about relocating jobs. "It seems that SE's top brass just shrug their shoulders and move on. There is no emotional commitment," said one businessman. Some thought the current SE regime lacked senior people with contacts who could pull strings.
Perry admits that there were things he could have done better, but he rejected suggestions that the agency had become invisible, particularly during the financial crisis – "what could we have done about a global problem?" – or that its annual budget of £320 million could be better employed. "We have half as many people as five years ago doing the same work and the reaction we get from customers is very high," he said.
It begs a question about what the other half had been doing for all that time, but Perry said the agency's functions had grown to suit its needs at that time and it needed to be slimmed down. Some critics said reform took too long, that the agency had become obsessed with its own structure and was not focusing on the wider economic needs of the country. Perry's supporters blame the indecision on politicians.
Perry arrived at SE's Atlantic Quay HQ (he and 100 staff have recently relocated to other offices in the city) in February 2004 from accountancy firm Ernst & Young, which had produced his predecessor, Robert Crawford. He had been a chairman of CBI Scotland, a role that brought him into frequent contact with politicians, though such familiarity did not guarantee cordiality.
In the end he won approval for his restructuring plan, but not without a fight over the loss of the Business Gateway advice centres to local government. Insiders at SE say the government made a wrong move that has fragmented the service, but the SNP had promised to reward the Convention of Scottish Local Authorities when the party came to power. Cosla had expected £200m and the LECs to play with. As it turned out, Cosla got local regeneration worth £12m and the Business Gateways with a budget of £9m. The split left neither Cosla nor SE happy, but sources say Perry was prepared to let go in order to preserve the rest of his £320m budget.
Overall, he has rubbed along quite well with the politicians, even the more aggressive members of the current government who demanded bigger changes. Though constantly frustrated, particularly over the slow speed of decision-making, Perry felt that the relationship with Holyrood had been positive, saying he was never put under any pressure to leave, including the few weeks three years ago when claims of a budget bungle prompted some to call for his head. "It was way overblown. We ended up 1 per cent over budget. It was just £6m, and I have presided over £2.5 billion in five years."
One more testing issue has been the £450m committed to the ITI research institutes, a risky and ambitious attempt to turn university innovation into money-making companies. Some have criticised the initiative for being expensive and producing few companies. The board of the arms-length ITI Scotland was stood down against a fierce exchange of views, but Perry believed it to be the right thing to do. "We will still initiate programmes, but the emphasis will be on getting things to market," he said.
Perry's departure means SE, now under new chairman Crawford Gillies, will have an opportunity to reinvent itself once more. He believes he will leave SE with some promising initiatives, particularly in bio-science, and that the slimmed-down version of the agency is right for the time, even though his restructuring was devised when the economy was booming and it is now in recession.
The arguments about SE being either a firefighter or a risk-taker will no doubt continue under the new leader. Perry will bow out believing it has to balance the two.
"We are still out there fighting for Scotland. We think it still has a very good story to tell," he said.
