Scottish Businesses Feel Misunderstood: Is Govt Listening?
Scottish Businesses Feel Misunderstood: Is Govt Listening?
Shocking new report reveals 69% of Scottish firms believe the government doesn't grasp business needs, and 71% say engagement is lacking. What's next for Scotland's economy?
A recent report paints a rather stark picture of the relationship between Scottish businesses and their government, revealing a widespread feeling that ministers simply don't understand the complexities of the commercial world. More than two-thirds of firms surveyed, an eye-opening 69%, expressed a belief that the Scottish Government fails to comprehend the business environment.
Furthermore, 71% feel that ministers are not effectively engaging with them on policy matters.
This increasingly “negative picture” was highlighted by the University of Strathclyde’s Fraser of Allander Institute in their Scottish Business Monitor. The findings arrive at a critical time, with Finance Secretary Jenny Gilruth poised to deliver the Scottish budget in December, making the report a crucial barometer of business sentiment.
So, what are businesses hoping for?
Topping their wish list, with 34% prioritising it, is the urgent reform of business rates.
This issue significantly outranked other concerns, though supporting skills and training (14%) and income tax adjustments (12%) also featured prominently as key areas for government attention.
While the overall sentiment appears gloomy, the report did uncover some glimmers of progress. A notable 22% of firms now report knowing an effective route to influence Scottish Government policy, an increase from 14% last year and the highest share since this question was introduced in 2023.
Additionally, activity across all six of the monitor's key indicators improved in the third quarter of 2026, with sales returning to positive territory for the first time since Q2 2024.
However, these positive signs are overshadowed by persistent concerns. Expectations for future sales have weakened, and uncertainty remains pervasive. A staggering 99% of firms identified economic and business uncertainty as a major concern, closely followed by 93% citing political uncertainty.
Cost pressures are also a significant hurdle, with 82% of companies reporting higher total costs this quarter, and 86% anticipating further increases over the next six months. Employee costs are the most commonly reported pressure, while energy is expected to be the main driver of future cost hikes.
AI adoption, meanwhile, held steady, with 65% of firms using AI in their operations.
Emma Congreve, deputy director of the Fraser of Allander Institute, underscored the importance of the upcoming budget. She stated that the budget presents a vital opportunity for the Scottish Government to mend and strengthen its ties with the business community.
Congreve warned that when businesses are uncertain about policy direction or its potential impact, it introduces another significant risk to decisions regarding investment, recruitment, and growth. Businesses have made their priorities clear, and with widespread cost pressures, the upcoming budget will be keenly watched to see if the government truly listens and responds.
