A new survey shows that the Scottish Government’s ‘New Deal for Business’ initiative has done little to turn the tide with the business community.

Only 9% of Scottish firms agree that the Scottish Government understands the business environment in Scotland, compared to 64% of businesses that disagree for the second year in a row.

This is according to the latest Scottish Business Monitor, a survey of over 350 firms conducted in August and September, produced by the Fraser of Allander Institute at the University of Strathclyde.

The Institute also asked firms about their relationship with the Scottish Government as part of an annual assessment following the New Deal for Business launched in April 2023, comparing the findings to last year’s report.

The report found that just 6% of businesses agreed that the Scottish Government engages effectively with their sector, down from 8% in 2023, meanwhile 68% of firms disagreed with this statement.

While nearly a fifth (19%) of firms believe they can influence Government policy if new announcements affect their business, 46% disagree. This is an increase from last year’s 39%, reflecting a growing frustration among businesses regarding their ability to have a say in policymaking.

The latest analysis also finds differences across sectors, with construction and finance firms expressing the highest levels of dissatisfaction. In contrast, businesses in the professional, scientific, and technical activities sectors were slightly more positive, although overall confidence remains low across the board.

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“These results will undoubtedly be disappointing for the Scottish Government, particularly given that it’s been well over a year since the launch of the New Deal for Business,” João Sousa, deputy director of the Institute, said.

“While no one expected a dramatic reconciliation in only a year, the Government would have hoped for at least some signs of progress. But that is not what we found. And while businesses have undoubtedly faced broader challenges from economic instability over the past 15 years, some specific high-profile policies and political turmoil closer to home have only strained this relationship further.

“Of course, there is a shared responsibility here. Business representatives and firms, both locally and nationally, need to actively engage in this reset. Real improvement in the relationship between Government and the business community can only come through meaningful collaboration — and these results should serve as a clear mandate for making that happen.”