Highland And Islands Enterprise Network Organisational Review

2nd March 2006

The Highlands and Islands Enterprise (HIE) network is embarking on a programme of organisational change aimed at improving its service to customers and enhancing the agency's efficiency and effectiveness.

The changes have been expected since HIE launched its new strategy for the area, A Smart, Successful Highlands and Islands, in June last year. They represent the most significant review of the Network's structures since the organisation was established 15 years ago.

The most visible change will be a reduction in the number of HIE's local enterprise companies (LECs) from 10 to nine. This will be achieved by merging three current LECs into two new ones. One new LEC will serve the area currently covered by Inverness, Nairn, Badenoch and Strathspey Enterprise (INBSE), plus Easter Ross and the Black Isle. The second will serve the area currently covered by Skye and Lochalsh Enterprise (SALE) and include Wester Ross. The present Ross and Cromarty Enterprise (RACE) office in Invergordon will remain, under a new name, as part of the merged LEC arrangements.

The new LEC structures will better reflect local economies and greatly enhance the Network's capability to plan strategically in both areas. Careers Scotland localities in these areas will also merge, in line with LEC boundaries.

The boundaries of the seven other LECs and localities will remain unchanged. However, all LECs will be renamed as the Network adopts unified branding, similar to that introduced by HIE Moray last year.

Around 25 new posts will be created in support of the new strategic initiatives set out in A Smart, Successful Highlands and Islands, but, overall, the Network's staffing level is set to decrease. Over the next two years, HIE plans to reduce staffing to around 515 full-time equivalent posts from the present 555. The reductions are planned to be achieved largely through staff turnover and voluntary severance may be considered in some cases.

In keeping with HIE's long-term commitment to public sector jobs dispersal, as many as possible of the 25 new posts will be based outwith Inverness. A new office accommodating around 35 staff will be opened in Dingwall and options for enhancing access to Network services in Wester Ross are being examined. There will be an overall increase in the number of staff based in the islands.

Opportunities to further decentralise existing functions will also continue to be pursued. A full review of the Network's office premises is already underway, with a view to improving local service delivery, identifying scope for further dispersal of posts and achieving savings in running costs. The potential to share premises with other public bodies will also be examined.

Careers Scotland (CS) services in the Highlands and Islands will become more closely integrated with the HIE network. CS staff will, for the first time, join with LEC teams to offer fully integrated Network services in each area. All staff in each area will report to the senior management of the LEC and will, where possible and suitable, work from the same premises. The present 10 CS Local Advisory Boards (LABs) will be disbanded, with their functions passing to LEC boards.

New guidelines to streamline the functions of LEC boards and to ensure they operate in a consistent way throughout the Network will be introduced. These will be accompanied by revised audit arrangements. Ways of maximising the strategic contributions of LEC boards to the discussions and decisions of the HIE board will be developed.

At the same time, proposals to open parts of HIE board meetings to the public, using technology where appropriate, will be developed.

The Network will also take responsibility for ensuring that each Local Economic Forum (LEF) operates effectively to deliver the economic development component of community planning. New ways of building on the Network's already considerable engagement with individuals and groups in the Highlands and Islands with expertise in business, skills, voluntary and community development will also be explored and developed.

Detailed financial plans for implementation of the organisational changes are being developed. The current estimate is of a one-off investment of between £2-3million. It is estimated the changes will result in annual savings of £1.3million in running costs. Savings achieved will be recycled into the Network's front-line services.

The organisational review included detailed consultation, both within the Network, including LEC boards and LABs, and with Highlands and Islands business organisations, MSPs, MPs, and local authorities. The proposals developed from this extensive process were approved by Deputy First Minister Nicol Stephen and the HIE board and will be implemented over the next two years.

HIE chairman, William Roe, said: "In our strategy we set out an ambitious agenda. It focuses not only on consolidating the upturn large parts of our area have experienced in recent years, but also on striving to ensure that over the next 20 years businesses, people and places throughout the Highlands and Islands gain sustainable benefit from the economic, political, and environmental changes sweeping the world in the early years of 21st Century.

"It was clear to us that, if we hope to achieve such ambitions, our own organisation, established in its current form in 1991, needed to embark on a journey of change too.

"In setting out on that journey, we have sought to make the landscape of economic and community development in our area less cluttered and more efficient, effective and accessible. We have also reflected the highly significant and still growing impact of the city region of Inverness - the inner Moray Firth area - as an economic driver for the region as a whole. Doing so in no way diminishes our commitment to achieving balanced growth throughout the area and targeting our resources to less prosperous parts and remote or fragile areas. Indeed our new structure will see us better placed to pursue these aims. We are also, through our commitment to base as many of our own new posts as possible outwith Inverness, demonstrating our own determination to continue to lead by example in the dispersal of public sector jobs."

HIE chief executive, Sandy Cumming, said: "We carried out extensive consultation before embarking on this process of significant change and we do so confident in the knowledge that we have widespread support from our stakeholders both within and outwith the HIE network.

"At the heart of what we are doing is a desire to truly unify the operations of the Network, to ensure that we are equally effective in every area in which we operate and that we offer the same excellent level of service to every customer, wherever they may be. Our commitment to dispersing jobs and increasing the number of Network posts based in the islands is the clearest possible statement of intent we can make that while we work towards unification, we are not about centralisation."