I'm quitting £200k-a-year hotseat, says Mr Enterprise

JACK Perry, the £200,000-a-year chief executive of Scottish Enterprise (SE), is quitting the agency. His unexpected resignation, effective once a successor has been found, is set to spark an upheaval in and around the boardroom.

The agency's board, led by chairman Crawford Gillies, could take six months to find a successor, though it will want to move as quickly as possible.

The announcement came barely a day after electronics giant Hewlett-Packard announced it was ending manufacturing in Renfrewshire with the loss of up to 850 posts. Production is being shifted to the Czech Republic.

The plant, opened in 1987, was one of Scotland's biggest inward investment successes.

Mr Perry denied yesterday there was any connection between this and his resignation.

Sources close to the agency say there was little left for Mr Perry to do after the latest organisational reshuffle and that there was some frustration at the coolness of relations with the SNP administration.

Another said he was quietly pleased to be getting out without a crisis, scandal, internal civil war or budget battle.

Possible contenders for the post include Lena Wilson, chief operating officer of SE, and Frank Blinn, a senior figure in the accountancy giant PricewaterhouseCoopers (PwC).

One area where change is most likely to be felt is in the agency's relationship to the SNP administration. SE was not given a major role in combating the recession, even though it is the country's premier public-funded agency specifically set to promote enterprise.

A more activist role is likely to emerge, with activities in the hi-tech business start-up area sharpened and expanded.

Mr Perry said yesterday:

"I always felt that between four and six years was about the right length of time to occupy this particular hot seat and now having been in post for five and a half years, I feel the time is right to move to the next stage of my career."

Mr Perry, formerly a partner in PwC, was appointed under the previous Labour-Lib Dem coalition. He helped stabilise the agency after a series of reorganisations and reforms – only to end up leading a convulsive reorganisation of his own soon after the SNP took over at Holyrood. He leaves behind an agency with a slimmed-down workforce, budget and operational role.

The Local Enterprise Companies (LECs) were shorn off to local authorities, the skills function was hived off into a separate organisation and other slimdowns and economies were pushed through.

The suspicion was that the SNP administration always regarded the agency as a tool of west of Scotland Labour, with many Labour "lifers" in middle and senior positions.

Relations, while polite, were cool and its work and activities brought under the remit of finance minister John Swinney.

"In the past few years, we have done much to transform SE," said Mr Perry yesterday. "We are now absolutely focused on supporting our business customers with projects and programmes driven by the needs of Scotland's key industries.

"We are one single, cohesive, national organisation operating without narrow geographic boundaries. We are much slimmer and more cost-effective, too."

The agency never formed part of the First Minister's Council of Economic Advisers and seemed to be kept well away from the government's broader economic agenda.

This situation grew increasingly anomalous as the recession deepened and with it calls for the administration to be more pro-active and to use all the tools available to it.

But by the time the full blast of recession struck, the agency had lost much of its former power and prestige, its staff had been slimmed down and its budget was also strictly limited.

SE's diminished status also reflected changes across the economy. Scotland's economic performance came to rest increasingly with major international companies, business service operations and, until recently, the financial services sector. By 2007 the days when the manufacturing sector ruled the policy roost were long gone, and with it the "big hitter" role of a government agency.

Mr Perry says he has no plans for life beyond SE. He is known to hanker after a "portfolio" career, working with a number of companies.

Critics of Mr Perry's tenure say the organisation drifted into inconsequence after the last reorganisation 18 months ago.

"There was no spark. It seemed comatose," said one "The agency needs new leadership and new ideas and a complete break with the past."

But a former SE colleague, Lorna Jack, said: "I think he did a terrific job. He was the right person at the right time for Scottish Enterprise – very calm, very professional.

"He was just a no-ego chief executive that put the organisation first and took the flak that comes with the role in a non-egotistical way."

Ups and downs of his controversial five-year tenure

December 2003: Jack Perry is appointed chief executive of Scottish Enterprise (SE).

April 2005: SE under fire for investing £25 million in a healthcare company, Stirling Medical Innovations, after criticism that it represented too big a commitment of taxpayers' money into a single project. Mr Perry is forced to admit that SE's programmes have had little impact on improving Scotland's poor productivity levels.

November 2005: Board members of SE's local enterprise companies, along with the country's small businesses, express outrage over the agency's plans to restructure the network.

December 2005: Mr Perry comes under pressure from MSPs concerned that his radical overhaul of the agency could backfire.

January 2006: Officials across the SE network are told to slash spending plans after finance directors discover it was on course for a £100m overspend. MSPs tell SE to "fundamentally rethink" its proposed structural overhaul.

March 2006: Audit Scotland tells SE to improve its self-evaluation methods and provide a clearer assessment of its contribution to expanding Scotland's economy. SE hits back at "saboteurs" who have leaked internal documents alleging a projected £40m budget overspend "crisis" in 2006-7. Ministers order accountants to study the books at SE after the business development quango overspends by £30 million.

April 2006: Tomorrow's Leaders International (TLI), a government scheme to help turn bright young Scots into the entrepreneurs of tomorrow, is scrapped as a result of the cash crisis at SE. First minister Jack McConnell gives his personal backing to beleaguered SE chiefs. MSPs threaten legal measures against SE if it fails to appear to present its restructuring plans and answer questions about its £30m 2005-6 budget overspend. Former Scottish industry minister Brian Wilson calls for scrapping of SE.

May 2006: SE under fire for shelling out at least £30,000 a year on chauffeur-driven limousines. Enterprise minister Nicol Stephen gives SE £50m of extra funding.

June 2006: SE removes a senior executive who oversaw a £60 million "black hole" in the budget only to give him a new role with the same six-figure salary. MSPs condemn Mr Perry's response to the SE financial crisis as "wholly dissatisfactory". SE announces up to 100 job losses.

August 2006: Mr Perry forfeits annual bonus. SE stripped of its entire training, skills and education functions so it can focus solely on growing and creating private-sector firms.

September 2007: Salaries and bonuses for top bosses at SE increase by more than a fifth. Two senior SE executives are accused of favouritism in awarding contracts several months before the economic development body suspended them.

December 2007: SE to give its 2,600 staff private medical cover at a cost of £500,000 under a five-year deal.

June 2008: Jack Perry admits that £35m of taxpayers' money used on the Stirling Medical Innovations project will not achieve expectations.

August 2008: SE posts surplus of £2.5m on its 2007 budget. It emerges that staff ran up more than 17,000 sick days in a year.

January 2009: SE takes charge of ITI (Intermediate Technology Institutes) Scotland.

April 2009: Mr Perry accompanies Alex Salmond to Beijing on visit to meet senior figures in Chinese commerce.

Bill Jamieson: 1970s throwback whose time has gone – we just don't need it any more

NOW that Scottish Enterprise has been buttoned up, clipped, shorn, shaken and slimmed down, quite what is the point of keeping it at all?

The tenure of Jack Perry saw many of the flailing legs of this 1970s industrial octopus chopped off. Gone now is the sense of a mighty mover and shaker, the agency that moved mountains – or moved a lot of earth in landscaping projects and advance factories.

And long gone is the reverberating tread of its former leaders: heavyweights such as Lewis Robertson, who had a contacts book that opened up like a giant accordion, swallowing up most of his desk.

Whose telephone numbers were not on those intensely documented pages – the secretary-general of the United Nations? The head of the World Bank?

Scottish Enterprise, aka the Scottish Development Agency, is a shadow of its former self and not even the administration at Holyrood seems to have much time for it.

It has been reduced to a specialist venture capital investment trust and business advisory arm, with heavy concentration in esoteric sectors such as biomedical research and life sciences.

A logical progression would be a steady transition of its fund management business into the private sector. If the aim is to provide start-up capital to new high value-added businesses on commercial judgment and criteria, as opposed to job preservation, SE is as good as in the private sector already – although full conversion could see a further 25 per cent shaved from its budget.

Its strategic role also looks over. The agency never formed part of the First Minister's Council of Economic Advisers and seemed to be kept well away from the government's broader economic agenda. This situation grew increasingly anomalous as the recession deepened and with it calls for the administration to be more pro-active and to use all the tools available to it.

But by the time the full blast of recession struck, the agency had lost much of its former power and prestige, its staff had been slimmed down and its budget was also strictly limited.

Its diminished status also reflected changes across the economy. Scotland's economic performance came to rest increasingly with major international companies, business service operations and, until recently, the financial services sector.

By 2007, the days when the manufacturing sector ruled the policy roost were long gone, and with them the "big hitter" role of a government agency.