SCOTLAND'S enterprise network is to be more accountable with a code of

practice and a new spirit of openness.

Scottish Secretary Ian Lang and Scottish Enterprise officials said

yesterday that the Lecs would adopt a code of practice that included

regular rotation of directors, a system of consultation with external

bodies and individuals in relation to filling board vacancies, and

meetings with local industry and interest groups.

There would also be discussions with local authorities and other

appropriate bodies on the company's business plan, publication of annual

performance targets and achievements, and regular briefings and public

statements on the Lec's activities.

Mr Lang told the Scottish select committee at Westminster that the

enterprise network had agreed to adopt the new system. The committee,

which is investigating the operation of Scottish Enterprise, has been

concerned that a ''jobs for the boys'' network was operating in the Lecs

and that they were far too secretive.

The issue was raised yesterday by Aberdeen North Labour MP Robert

Hughes, who said there was a potential conflict of interest and a lack

of openness in Lec activities. He praised Highlands and Islands

Enterprise, which has a policy of open declaration of its activities,

and questioned Mr Lang on whether this should be extended.

The Scottish Secretary told him: ''I do welcome the steps taken by

HIE, and indeed I welcome any steps that improve openness and

transparency, provided that is compatible with commercial

confidentiality.''

Mr Lang strongly defended the way in which the Lecs operated, claiming

that the right balance had been struck between the central,

co-ordinating role of SE and the more detailed decision-making on the

use of resources which could be done at local level.

Scottish Enterprise chairman Professor Donald MacKay, presenting the

organisation's third annual report in Glasgow yesterday, said they were

following the lead of the private sector in adopting the code of

practice.

''We are doing what's been done in the private sector. Cadbury

produced a code of practice. We intend to go down the same route in

Scottish Enterprise ... there will be a code of practice against which

people can consider the performance of the LECs.''

The past year had been a good one for the organisation and the

Scottish economy generally, Professor MacKay said. The enterprise

network was performing well in terms of exports, inward investment,

improved training and environmental spending.

''Our general view is that we are expecting a continuation of the

recovery and indeed, a strengthening of the recovery throughout this

coming year,'' he said.

According to SE figures, Scotland attracted more investment from

overseas than any other part of the UK last year. In all, a record

number of 95 projects which created or secured more than 11,000 jobs and

involved #587m of planned investment were brought to Scotland.

''It's been a very good year. We have had an unusual and very high

success level in the inward investment area,'' said SE chief executive

Crawford Beveridge.

The agency channelled 86% of its #451m budget into the local

enterprise network and helped 3462 new businesses to get off the ground.

Welcoming the report, Scottish Industry Minister Allan Stewart said:

''Scottish Enterprise has demonstrated the capacity to respond with

skill and imagination to the challenges of fast-changing circumstances

... we now see an established and effective network in place.''