Finance and Public Administration Committee

Meeting date: Tuesday, May 31, 2022

Official Report 712KB pdf

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Skills Development Scotland

The next item is to take evidence from Skills Development Scotland on the trends behind the income tax forecasts. The session follows on from issues raised during our 2022-23 budget scrutiny. It also sets the scene for our pre-budget scrutiny this year, which will be informed by the Scottish Fiscal Commission’s next forecasts, which are to be published later today.

I welcome to the committee meeting Chris Brodie, director of regional skills planning and sector development, and Andrea Glass, head of regions and enabling sectors. I understand that Mr Brodie would like to make a short opening statement.

Good morning and thank you for the invitation to give evidence to the committee. I begin by thanking the committee for agreeing to reschedule this appearance, which was originally due to take place five weeks ago. After managing to avoid Covid for two years, I took a short trip to Spain and unfortunately brought back an unwanted present. I am therefore very grateful for the rescheduling of this evidence session.

I will briefly set out some context around Skills Development Scotland. We are the national skills agency for Scotland and deliver a number of core services on behalf of the Scottish Government. We have more than 800 career staff who are embedded in every secondary school in Scotland and work across a range of public access centres.

We also run the modern apprenticeship programme on behalf of the Scottish Government; we delivered more than 25,500 modern apprenticeships last year. We also jointly deliver graduate and foundation apprenticeships with colleagues in the Scottish Funding Council.

The part of SDS that Andrea Glass and I work in is the skills planning directorate. We play a central role in working with employers to understand their skills needs now and in the future. We develop a range of evidence and insights, some of which we shared with the committee as pre-reading. That information is, in essence, cascaded out to training providers, colleges and universities with the intention that it is used to inform skills provision in Scotland. We also have a small team that delivers direct support to companies to help them to understand their skills needs at an individual business level and look at upskilling and reskilling opportunities.

It is also important to say that we have a direct influencing role in a number of the areas that I described but we also have an important indirect influencing role in respect of the skills system. Scotland currently invests somewhere in the region of £2.1 billion or £2.2 billion per year in post-16 education and skills, excluding the cost of student support. SDS’s annual budget is in the region of £216 million out of that £2 billion or so, and we directly invest somewhere in the region of £85 million to £90 million per year in apprenticeships.

We look forward to giving evidence to the committee and hope to be of help with its inquiry.

Thank you very much for that. I will start with some questions and then we will go round the table.

“Scotland’s National Strategy for Economic Transformation” was published on 1 March and includes what have been described as

“five bold new policy programmes of action”.

Those include creating an entrepreneurial nation, developing new markets and industries, enhancing productivity and innovation, skills growth, and delivering high rates of employment and wage growth. In the three months since that was published, what changes, if any, has Skills Development Scotland made to its approach in order to take on board those priorities?

I will begin and Andrea Glass may come in with some follow-up points.

The first thing to recognise in relation to those five pillars of the national strategy for economic transformation is that, although you would instinctively think that SDS’s primary role would be around a skilled workforce, we also have a role right across the strategy. We are working with colleagues on the young persons guarantee. The team that I mentioned that works directly with businesses is also supporting ambitions around new market opportunities for inward investment. That team also supports some of our work on the business support partnership and direct support to businesses.

Our primary areas of action are, however, around a skilled workforce. I will pick out a couple of examples. One of the named projects in the national strategy for economic transformation is the green jobs workforce academy, which we launched on 23 August last year. I will be in front of SDS’s board next week talking about the development proposition for the second phase of the green jobs workforce academy. At the moment, it provides a resource that connects people with emerging opportunities in relation to the transition to net zero. We expect that the scale of job opportunities that will emerge over the next five to 10 years will be significantly greater than what we are seeing at the moment. We are therefore building functionality into that resource and looking at how we align upskilling and reskilling support for individuals and businesses with that work.

I will point to another area, which I suspect will get to the heart of the discussion about productivity and skills. We are working very closely with colleagues in the Scottish Funding Council on the alignment of skills provision in Scotland’s regions and sectors behind the needs of the economy. We have some sectoral work which, again, is looking at the transition to net zero. We also have some work in the north-east and the south of Scotland that involves working with education partners—the universities and the colleges—and the regional economic partnerships to ask where we think jobs are going, whether the skills system is currently delivering against those ambitions and what may need to change.

From your response, it seems that you are saying that the strategy is based on a lot of the work that Skills Development Scotland is doing in the area—would that be right? That was not really what I was asking about; I was asking what you were going to change or do differently as a result of the strategy. You talked about what is being done around, for example, the green jobs programme from last August. Has the strategy been built on some of your work as opposed to the other way round?

I can maybe explain that slightly better than I did. The direct answer to your first question is that yes, like other public agencies, we were involved in the discussions to shape the national strategy for economic transformation. Some of the areas that I picked out deliberately referenced some of the actions that have been identified. I think that there are 78 actions across the national strategy, and I was looking to pick out some of the actions that specifically relate to our work in SDS in order to give the committee a sense of the progress that we are making on them.

The convener is right to point out that the green jobs workforce academy predates the publication of the national strategy for economic transformation. However, the importance of that work, and the potential contribution that it can make, is one of the reasons why it is a named project.

11:15  

The unemployment rate is about 3.7 per cent in the UK, and in Scotland it is a record low of 3.2 per cent. However, is that a realistic figure? For example, we understand that the percentage of people who are economically active in Scotland is more or less the same as the percentage for the UK—it is 75.6 per cent, which is 1.1 per cent lower than the UK—but is that a realistic figure for full-time involvement in the economy? What percentage of those people are less than fully economically active and are working part time? Is there hidden unemployment? I understand that Sheffield Hallam University produced a study that showed that there are more than 1 million people who should be included in the unemployment figures but are not. What is the real picture? I think that, on paper, the picture looks rosier than is really the case. A lot of that is possibly because it is a time of huge vacancies in certain skills and there is a geographical mismatch of jobs and skilled people.

There is a lot in that question—I will try to pick my way through it. I warn the committee that I have been known to talk about this area at great length, so I will try to be brief. The first thing to say is that your characterisation of the headline figures is absolutely right. Adult unemployment is at a historic low. Youth unemployment in Scotland is remarkably low—it is something like 5.6 per cent. However, I agree with you, because I am not sure that that tells the full story of what is going on in our labour market. Economic inactivity is somewhere in the region of 21.4 per cent. I think that you have slightly earlier figures, because we updated our Covid labour market insights yesterday; the gap between our economic inactivity rates has closed, putting Scotland’s rate close to the UK average.

Let us consider the long-term situation: the issue that we have in Scotland is to do with rising or fairly stable economic inactivity. I will come back to that in a moment. There is a flip side of the labour supply perspective, and that is what is going on in the economy. In short, every jobs market indicator that I look at suggests that we have a very hot labour market at the moment. From a certain perspective, that is a good thing. A high number of vacancies are being posted—it is higher than the pre-pandemic level. We also see lots of evidence of employers having recruitment challenges.

Although you might not have asked this, I might offer what you can do around that. We need to think differently about the labour supply challenge. Part of that is about looking hard at that economically inactive figure. You are right to point out that a significant proportion of that group—off the top of my head, the number is about 110,000 of the 230,000 economically inactive people in Scotland—is looking for work. We need to reframe our thinking about that group and ask how we get those people into the jobs that we know that employers are looking to recruit to at the moment because they are having difficulties doing that.

There are other dimensions to the issue with regard to demographics and some of the implications of what is going on in the skills system as a result of the pandemic. However, I agree with the premise of your question. Drilling down into the figures for economic inactivity is important, because I suspect that those people would want to work if they could find a job, and we know that employers are having difficulties recruiting.

There were two parts to the question. It was quite an extensive question, so I apologise for that. The other part was about part-time working. What is the situation with the proportion of people who are working part time? What is happening with regard to the geographic balance? I represent a constituency in North Ayrshire where the market is not particularly hot, relative to, for example, Edinburgh. I and other colleagues from the west of Scotland have concerns that there is an east-west divide in Scotland. There might be a north-south divide in England, but it is more of an east-west divide in Scotland. How do we address those specific challenges? We can talk about percentages for Scotland, but there are marked differences between different parts of the country, as I am sure you are aware.

Yes, absolutely. On part-time workers, I have an extensive briefing in front of me that has just about every statistic that you can imagine for the labour market but nothing on part-time workers, so I will undertake to provide something in writing to the committee after the meeting.

You are right to point out the difference in unemployment rates across the country. For a long time, there has been an emerging east-west divide in Scotland in terms of population growth, economic growth and unemployment. That picture is beginning to change. One of the bits of data that we have been tracking since about 2014 or 2015 is the change taking place in the north-east. When I visited Aberdeen 10 years ago, the flippant comment that you would typically hear was that you could count on one hand the number of people unemployed in the north-east, because of the buoyancy of the labour market. However, that is no longer the case, and the north-east is now moving back to the national average. That east-west breakdown is now breaking down.

Andrea Glass will talk about some of the things that we might do around this in a moment but, for me, a number of issues lie at the heart of this matter. First, how do we ensure that conditions for creating good-quality jobs exist in areas of significant unemployment? Secondly, it needs to be recognised that North Ayrshire, in particular, is 20 or 30 minutes away from a really strong labour market in the wider Glasgow city region. The transport infrastructure plays an important role in connecting people to jobs, but the important thing is skills, which brings me back to our focus on skilling, reskilling and upskilling people for the jobs of today rather than the jobs of 20 years ago and on improving people’s employability skills.

It is worth noting the very important work that is done in regions through the regional economic partnerships. The SDS regional skills planning leads manage the relationships with our regional partners right across Scotland, and part of that is about understanding where in those localities—the regions and the local authority areas—the challenges lie. It is important that we have a good evidence base for understanding the problem that we are trying to solve, and local partners can come together on that basis and begin to address the challenges, be they unemployment or whatever, within a particular locality. By having that strong evidence base, we can begin to ensure that we are solving the right problems, because it allows us to identify the challenges that we face.

I asked about part-time work not only because many people prefer it but because a lot of people do not feel that there is a full-time job in the area for which they are qualified or in which they are skilled. With regard to skills, I visited one of the major employers in my constituency during national apprentice week, and a number of apprentices to whom I talked all said the same thing to me. When they were thinking about a career post-school, they were told by their careers advisers, “If you don’t go to university, you’re a failure.” If one person says that to you, you take it as anecdotal, but if a whole wheen of people say the same thing, you have to think, “There’s an issue there.”

In your opening statement, you said that you have 800 careers advisers in Scottish schools. What kind of message is being given to younger people? We are trying to build more houses in Scotland, for example, but we need more roofers, plasterers, electricians, plumbers—you name it—as well as engineering skills blah blah blah. If everyone goes to university, there will be a shortage of people to go into apprenticeships, particularly as we do not have the same number of migrants coming into the country and the birth rate is at an historic low. Are we not facing a perfect storm in the years ahead?

As an immediate response to your comment about careers advisers, I would say that the influences on young people’s career choices go wider than such advisers to include their teachers, their parents and their peers.

Of course.

I can tell you that Skills Development Scotland’s careers advisers do not push the message that, if you do not go to university, you are a failure. It is important that we communicate to young people the range of choices available—and, of course, we deliver modern apprenticeships, too. If a careers adviser is pushing that message, I would like to meet them. That might sound very threatening, but I just do not think that that is a message that we are looking to put out through SDS careers advisers.

Again, you have hit on an important point, and one that is a real paradox when you consider some of the data that we look at. We have significant labour shortages at the moment, for all the reasons that you have described and partly because of older workers leaving the labour market as a result of Covid. At the same time, record numbers of people are going into further and higher education—and, in saying that, I am in no way denigrating either.

One of the interesting innovations that we have introduced into the system at the SFC is the notion of graduate apprenticeships, which give people a higher-level qualification while they are in the workplace. They also have the added benefit of equipping young people and letting employers see the quality of the employees—an employer can get somebody working in their business, and young people can get the opportunity to learn how to learn. Broadly, then, I would be in agreement with the points that you have made.

To be fair, I did not really think that the career advisers were saying that about going to university, but that is the message that a lot of young people are picking up. I have raised the issue in a number of fora, because I think that it is certainly something that schools need to address more directly. I know that, when I have held employment fairs, some schools have been very snotty about sending kids along—even kids who are not even going forward for exams, never mind those who are likely to go to university. Therefore, I think that graduate apprenticeships are hugely positive.

I want to stay with the issue of demography for a wee bit longer. The figures are quite stark. They show that, by 2045, the number of people of a pensionable age in Scotland is expected to increase by 21 per cent, while the number of people in the workforce is expected to decline by 2 per cent and the number of children is expected to decline by 22 per cent. That shows what the long-term situation is going to be. With 192,000 fewer people in the working-age population, the economy is going to have to be a lot more productive if we are to cope with the people of pensionable age at that point—I include pretty much everyone in this room in that number, of course.

I want to ask about the migration figures specifically, because they are slightly ambiguous. Your submission says:

“Almost twice as many people left Scotland and moved overseas (31,300 out migration in 2019/2020 compared to 19,700 in 2018/2019)”.

When you say “overseas”, are you including England and that, or are you talking about countries beyond the United Kingdom? Last year, the birth rate in Scotland was 48,000. If we are losing 31,000 people in one year, that is pretty disconcerting at a time when the workforce is shrinking.

Do you know anything about the age, skills and educational profiles of the people who are leaving Scotland? As I have said in this committee before, many people come to Scotland to retire, but we are losing a lot of people in their 20s and 30s who are moving to the rest of the UK or beyond.

What are we doing to attract more people from the rest of the United Kingdom to live and work in Scotland?

I am sorry that there is a lot in there—there is so much to ask about, and I am trying not to ask everything.

I will pick up on a couple of things about what is going on in relation to demographics and migration, and then talk about what we might do about that.

Again, you are right: Scotland’s demographic profile has been challenging for a number of years and will continue to be challenging for the next 20 years. That is a consequence of, as you alluded to, the falling birth rate. In that regard, we are not unusual compared with both other Organisation for Economic Co-operation and Development countries and developing countries. This might sound blunt, but there is very little that you can do about that now. We will be dealing with the consequences of the low birth rates 20 years ago for another 20 years.

The really interesting story is around migration. In the 10 years to 2018, the Scottish population overall grew by about 290,000 people, and 90 per cent of that rise was due to in-migration. That 90 per cent could be cut almost perfectly in half, with half of that number coming from the rest of the UK and half from the EU—145,000 people moving north and 145,000 people coming in from the EU.

The consequences of Brexit and the pandemic have turned that flow down to a trickle. Those two elements are related, of course: we have lots of evidence that many EU nationals went back home to Europe to see out the pandemic and then were perhaps unable to come back into the country because of changes in immigration rules. The second issue—it will sound obvious when I say it, but it is important to bear in mind—is that the entire global economy and population stopped moving for two years. It is too early to say whether the levels of migration that we were seeing in 2021 are typical of what we will see future years. However, what I can say with some confidence is that that flow of in-migration, which was typically of younger people of working age who were highly skilled and were likely to be engaged in the labour market, has slowed down considerably in the past four years as a result of Covid and Brexit.

11:30  

The Scottish Government is wrestling with how to turn round the challenge that we face with regard to the working-age population. It published a population strategy in late 2019 or early 2020. For obvious reasons to do with the pandemic, that has not progressed, although it has picked up pace significantly over the past six months. It looks at measures that can be taken to increase the birth rate by creating a good environment for people to have families—that is a long-term intervention. It also features a talent attraction approach, which involves being clear about the sorts of skills that we want to recruit and bring into Scotland—we might decide that health workers and care workers are an important part of the mix, or we might go after, for example, digital technology skills and life sciences skills. Linking that to the priorities of the inward investment strategy and the national strategy for economic transformation is key.

The important part of the strategy is how you action that. Just before the pandemic, I had the good fortune to visit Copenhagen to look at how Denmark goes about talent attraction. From that, it was evident that Scotland needs to sell the distinctive qualities of the country in terms of the quality of life and employment opportunities here and the fact that it is a good place to raise your kids. Further, it is important to have a focus on who you are going after and to not only market to individuals but to follow up that marketing and ensure that you land that lead, for want of a better term.

Finally, the proposals around the talent attraction service also envisage some kind of settlement support for people who are coming to the country, whether they are from Bromsgrove or Barcelona.

I realise that I asked quite a lot of questions, but there are a couple of points that you have not responded to. Can you say something about the age profile of people leaving Scotland and whether you are including other parts of the UK when you talk about people going overseas? I do not know what the word, “overseas” means in the submission—does it mean people leaving Scotland or does it mean people going beyond the United Kingdom?

Attracting people to Scotland when a lot of people are leaving Scotland is like trying to fill a sink with the plug out. Surely, retaining people in Scotland is half the battle, and it is particularly important because, I believe, a disproportionate number of educated and highly skilled people are leaving. I know a number of people who have got, for example, a son who is an oncologist in Scotland or an information technology consultant in Boston—I do not mean Boston in Lincolnshire; I mean Boston in the States. Scotland continues to export an incredible number of talented people. We need to think about retention as well as attraction.

For clarity, the number that I was quoting—290,000 people over 10 years—was a net figure for migration; it is the difference between those who left and those who arrived. You are right to say that migration is complex. There are flows out of the country and flows into the country.

The other thing that I would say is that the data on migration is patchy. There is a bit of a treasure hunt involved in putting a shape on it.

I will make two quick observations. Almost as important as the issues that you have raised are the flows within Scotland. I have done a lot of work with South of Scotland Enterprise and in the Highlands and Islands. The situation in the Highlands and Islands is fascinating, as its population has grown by 6 per cent or 7 per cent during the past 20 years. However, that has primarily been as a result of older people moving there to retire, as you have described. The work that partners are undertaking there is about looking at the University of the Highlands and Islands as an asset that can be used to retain people in the region. We worked with Western Isles Council to scope the career ambitions of every person in school from secondary 4 to secondary 6, and we designed foundation apprenticeship offers around those ambitions, linked to provision at the college.

You are right to say that we need to focus on retaining people in Scotland, but we also need to focus on retaining and anchoring skills in Scotland’s regions.

To come back to the pandemic, digital connectivity and the breaking of the necessary link between where people live and where they work presents some opportunities to do things differently.

I want to talk about loads of things, but I will not, because colleagues want to come in. I will ask one final thing before I open the discussion out to colleagues, because there is so much to get our teeth into.

In your submission, you mentioned that

“The number of inactive people ‘discouraged’ has risen sharply during the pandemic but is starting to fall.”

I wondered what “discouraged” meant, so I looked at footnote 22, which says that it means,

“Those who are not looking for work because they believe no jobs are available.”

I find that point astonishing given that we have record levels of vacancies in the economy and that every aspect of the economy seems to have a chronic shortage. For example, the airports—not so much in Scotland but south of the border—have been clogged up, not just because of shortages of air crew but also of people in security and baggage handling posts. One would think that those vacancies would require all levels of skill. Where are we on that discouragement? Is the situation continuing or subsiding?

I have one final question about productivity. Reports differ on whether working from home increases productivity or decreases it and on whether a hybrid model is actually the best of both worlds. What is Skills Development Scotland’s view on that point?

I will say a couple of brief things on economic inactivity and the discouraged workers. If we look at the economic inactivity numbers, the numbers of people who are “discouraged” are relatively small in comparison to other groups, so part of my response is that we need to look elsewhere for the big challenges around economic inactivity. The big growth has been in people who are inactive because they are long-term sick and people who have gone on to study.

You are right—I look at those numbers all the time and that one makes me scratch my head. We have a hot labour market, lots of jobs, and recruitment difficulties, so why are people thinking that no jobs are available? What my colleagues who crunch those numbers tell me is that that group is typically, in the language that they use, “fluid and responsive to labour market conditions”. To put it in a layperson’s terms, that group will get smaller as people recognise that the labour market is now in a better position.

I do not want to say that discouragement is a red herring but, for me, it is probably not the most critical issue in relation to economic inactivity, because that group expands over time quite quickly.

There was a second part to the question, which—forgive me—I have forgotten.

I have forgotten as well, now that I think about it. It was just about discouragement and so on—I was asking about what is being done. No—you have answered that one.

The second one—that is the thing when you think on your feet and do not write things down—[Interruption.] It was about working from home. Has Skills Development Scotland carried out research on which model is more productive—working from home, working in the office or a hybrid model of the two?

The best way to respond is to talk about the approach that SDS is taking. Like everyone else, on 16 March 2020 we flipped from an organisation that was fully in the office to fully at home within 48 hours. We have had two years, pretty much, of working from home. Indeed, I have done my past couple of committee appearances from the comfort of my spare room rather than the committee room.

SDS’s approach is to test the benefits that we will get from hybrid working. We have recognised that hybrid working has had many benefits for employees and colleagues. Andrea Glass is on the team and she might give you a different view, but the volume of work that we have gotten through as an organisation has been significant because we have not been travelling to meetings during the pandemic. Personally, I have not been travelling all over the country. Home working brings big efficiency gains, for want of a better term.

At the same time, one misses out on interactions with colleagues, on creative thinking around new ideas, and on project starts and completions. It is too early to say whether a hybrid model of working will improve productivity, but my gut tells me that it will. However, I might need to come back on that question in two or three years to say how it has worked out.

Andrea, do you have anything to add to that?

Yes, certainly. A lot of my team are out in the regions, and those who are in Highlands and Islands or the south of Scotland have found some significant benefits in a hybrid working model. They are not having to travel huge distances for meetings all the time, and that has allowed them to be more focused. When there is a meeting that they need to be at, they can do it virtually. They can also make a judgment that, if they absolutely need to be in the room for the benefits that Chris Brodie talked about, such as social interaction or workshopping ideas or whatever it might be, then they are able to be there.

There are also benefits in terms of the green agenda to not travelling so much. It enables organisations to demonstrate their commitment to net zero, and that is very important for us and our partners.

The one challenge that I see around it is the fact that people are expected to be available 24/7. There is perhaps some concern that if they are always undertaking work online, they do not have the breaks that they might have in the office. That can be a little bit challenging. On balance, though, I think that the hybrid working model will work, and it will give opportunities for balance.

We will open up the session.

I come back to the Sheffield Hallam University study around hidden unemployment—I think that is how they phrased it—that the convener mentioned, and specifically the million people who are on incapacity benefits. I preface this by saying that the report’s authors made it very clear that there is no suggestion that large numbers of people are on incapacity benefits who should not be. It is not about fraud; people who are on incapacity benefits have legitimate incapacities and that is why they are on them.

The basic thrust of the report is that a large number of people are on incapacity benefits because they do not feel that they are able to get employment, or they are searching for employment, but while they are doing so, those benefits are the most appropriate social security for them. The subset in Scotland is about 100,000 people. Do you have any data on how many of those people in Scotland would like to be in employment?

I do have that figure somewhere—of course, now that I am looking for it, I cannot find it. Perhaps I can try to pick up on that question but we can follow up with the specific data, or Andrea might find it in a moment as she looks through the briefing papers.

As I have said already, I think that there is a real imperative from a labour market perspective to look at how we re-engage people who are described as economically inactive back into the workplace. I want to be clear that, in terms of what we deliver as an agency, that is not a service area where we have specific training or opportunities. We work with colleagues in local authorities and other partners in that respect.

I also think that it is an important driver for business to recognise that group of people as a potentially important source of skills and talent for filling labour shortages. Part of that is about businesses recognising the point that the convener made earlier, that a job that needs to be filled might not need to be filled full time. Employers might find that offering reasonable adjustments that do not necessarily impact on the business but which facilitate ease of access to jobs for people who are on incapacity benefit is a good way of plugging gaps.

Andrea, have you tracked down the figure?

I am afraid not.

It was a very specific figure to ask for, so there are no worries if you do not have it immediately to hand. If you could follow up in writing on that—

I will find it on the train back to Glasgow, no doubt. I can offer to provide it in writing to the committee.

Thanks very much. As a follow-up question, in terms of availability of that data, I acknowledge that you just said that this is not one of SDS’s primary or core responsibilities, but if you were to conduct further research into that group of around 100,000 people, would sufficient data be available to you? Do you have the data that you would need to contact those people directly, or would you have to go through the UK Department of Work and Pensions for it?

There are two parts to that question and part of my frustration is that we spotted this economic inactivity issue about six or seven months ago and I have a detailed report—a deep dive—on economic inactivity that we shared with our board and which we can summarise and share with the committee.

11:45  

It is important to recognise that the economically inactive group is made up of a range of different groups of people. You are right to focus on getting people back into work who might want to go back to work and who have long-term limiting health issues. That number went up quite significantly during the pandemic, as did the number of students in FE and HE, and those are the two groups that account for most of that change.

I have done it again—I have forgotten the second part of your question—my apologies.

It was about your ability to conduct further research in this area. Do you need to go through the DWP or do you already have access to all the information that you need?

Although I said that SDS does not have a direct service delivery role—we do not run the employability fund any more—one of the services that we run on behalf of our partners is the 16-plus data hub. Working in collaboration with the DWP, local colleges, schools and universities and using anonymised data, we can track where every young person aged 16 to 24 is on their journey through either the education system or their engagement with employment.

We identify young people who are at risk and share that information with our partners. That dataset does not extend to the economically inactive but, although I do not know for sure, I suspect that the DWP will be aware of who those individuals are and will be working with them, either one-to-one or on a group basis.

I have one final question, somewhat related to that. You mentioned that economic inactivity rates have gone up in part because of the high number of young people in Scotland who are in FE and HE. The net result of that is that we have, on the whole, a highly educated population and yet one of the most perennial bits of feedback that we get from employers—I remember it from 10-plus years ago, when I was at the senior phase of high school, and it is still the case now—is not just that they cannot find the young people but that they cannot find the people with the right skills.

Leaving aside specific skills shortages such as not being able to find enough qualified plumbers, electricians or radiographers, for example, the other element is general employability skills, such as the ability to work as part of a team, good communication skills and so on.

I realise that this is a very broad question, but, when we have such a highly educated population, with such high levels of participation in not just the senior phase of high school but in FE and HE, why do we have this perennial issue of employers saying that the skills are just not there?

I am an enthusiastic supporter of the idea that education is not just about employability—people go into FE and HE for all sorts of reasons—but it still seems odd that we have this disconnect. We have huge participation in further and higher education and yet we have employers saying that the skills are still not there.

It is a great question and it is quite a challenging and emotive subject, so I will preface my remarks by saying that Scotland’s colleges and universities are a huge asset to the country, particularly when it comes to research.

At the heart of this is the mistake that we often make of equating high levels of qualifications with high levels of skills, but they are two quite different things. I will give a couple of examples, which go back to some of the sectoral work that Andrea Glass and colleagues in my team did a number of years ago. We were looking at skills for the life sciences sector. Scotland’s university system turns out high-quality graduates but their lab skills capabilities were not there. Our approach to that was, first, to run a 16-week retrofitting course, for want of a better term, to put those lab skills into graduates. That was then taken up as part of the curriculum by universities, so we saw a problem and we resolved it.

For me, the work that we are doing with colleges and with the Scottish Funding Council through some of the national strategy economic transformation projects is about looking at the skills system in the round and recognising that we have assets, but asking how to better align the system behind the needs of industry so that the gap that you describe does not emerge.

It is about aligning the system behind where jobs will be rather than where they were, and it is about having more courses in areas around the green transition and digital, where we know the economy is going to grow.

We need to look at the depth of the curriculum. The example that I gave about life sciences is replicated across a range of other courses. If you get industry engaged in designing the curriculum, you get graduates who are more ready for industry.

My final point is—I would say this, wouldn’t I, because I work for Skills Development Scotland—if you look at the data, our comparators in the OECD that do not have that gap between qualification and skills have much more workplace learning. Apprenticeships are not perceived as the second choice, as you described, convener; they are a fundamental part of the skills system.

The final part is about upskilling and reskilling. The economy and the labour market have changed massively during the past two years, and that ain’t going to slow down in the next 10 years, so how we keep worker skills up to date is a key question for us.

It is probably worth remembering the importance of meta skills, which are the higher-order, timeless skills that enable individuals, from school age and into the labour market, to become adaptive learners in whatever context the future brings. Those meta skills are really important and they need to be embedded in all sorts of provision and learning, because they enable individuals to respond to the challenges that we will face in the future.

I would love to get into more detail on that, but I would be at risk of wearing my other committee—which was called the Education and Skills Committee—hat. Perhaps another time.

I take your point, Mr Brodie, that there is a difference between skills and education. However, are we sending too many people to university?

That is a great question, which has put me right on the spot. Surprisingly, the answer that I will give you is that I do not think that it is as simple as that. As I said earlier, Scotland’s universities are a huge asset with regard to their research capability and in terms of providing a pipeline of talented and capable graduates. They are also a big draw for international students; we need to think about how we keep some of those international students to work in Scottish businesses.

Our issue is the nature of the journeys that young people take through the education system and, in some cases, the length of time that they take. We send so many people to university, as John Mason said, because although the college system is, in part, producing people who have the skills to go straight into work, it is increasingly becoming a route to getting the qualifications to go on to university to study.

The other nuance to the conversation is, as I have alluded to, recognition that the skills that we need to teach in our colleges and universities must be aligned to the future.

I will offer one observation, without answering the question directly and getting into some difficulty. There are a number of professions—for example, accountancy—for which people now need to go through university. However traditionally, looking back 30 or 40 years, the route to gaining those skills was the workplace. That is why we and the Scottish Funding Council are looking almost to reintroduce the concept of on-the-job learning through graduate apprenticeships, which are delivered by universities, to get people into the workplace.

That is a fair point. I am an accountant, actually. Perhaps the situation is not as simple as I was suggesting. The idea of graduate apprentices is an extremely good one.

You talked about aligning with the needs of the future, or words to that effect. I am not asking you to do it, but how easy is it for anyone to predict what we will need in the future? I presume that that is why we have the census—I will plug people completing the census today.

During my lifetime, or while I have been a member of the Scottish Parliament, in some years we have said that we have trained too many teachers, but in other years we have said that we have not trained enough teachers. The same applies to nurses and some other professions. Is future need incredibly difficult to predict?

It is not easy to predict future need. Predicting the future is not what our forecasting work is about. It is guaranteed that the minute you write a forecast, it will be wrong to some degree. I have the debate regularly with college principals and colleagues in the skills system. We commission a set of national forecasts every year and we cascade them out into the skills system. Is that because we believe that they will tell us that we need 12 plumbers in Lerwick next Thursday? No, it is not. However, they show us, directionally, where potential pressure points in the economy will be, which is an important thing for skills providers to understand.

The depth of our work is in engagement with employers. It is one thing to know that there is pressure in the oil and gas or engineering sectors, but we need to understand what creates that pressure and where the pinch points are in terms of skills.

I have a team of sector leads who work across 16 or 17 industries. Underpinning the forecast is a readout that we share with colleges, universities and training providers. It will say, for example, that there are issues in the digital arena around, for example, cloud computing. I might be wrong about the example, but the readout will say what specific skill needs are. It is not just about forecasting; it is also about putting some meat on that and saying which skills employers tell us we are missing.

The challenge is in respect of the speed at which the skills system can respond to that. One of the things that the national strategy for economic transformation highlights—we firmly believe this—is that the old models of two-year or three-year courses will not work in a fast-changing labour market. There is definitely a role for them, but we need our world-class assets to focus on upskilling and reskilling. There is already much evidence from the pandemic that universities and colleges have moved provision online, so the ingredients exist to meet that challenge.

Are we making progress on getting more women into certain professions or, generally, into the workforce? We have often heard that, if women were setting up businesses at the same rate as men, the economy would be much better off. I suspect that that applies to various sectors—the economy would be better off if more women were high up in the engineering sector and all sorts of places.

There is certainly a challenge in that respect. It can be argued that we are underutilising the potential of the workforce if not everybody is able to take up the opportunities that exist.

We know that inequality is a potential drag on economic growth, so we need to look at how we can get more women engaged in the labour market. We have to be clear about opportunities and we have to work to break down barriers. Do we understand why women are not engaging, or why business start-up numbers for women are not so high? We also have to ensure that we have the right support in place once individuals are in the workforce. Are we offering the right conditions in terms of flexible work practices and access to relevant training to allow women to take up opportunities?

I do not have detail about the actual numbers. Can you add anything, Chris?

We can follow up with some specific data. One of the challenges in relation to apprenticeships—particularly trade apprenticeships—is that we have had significant gender imbalances. They are obvious: women are much more likely to undertake hairdressing qualifications and men are more likely to undertake construction qualifications.

A significant body of work over the past five years has addressed that issue. We have appointed a senior adviser on equalities to examine what we could do in our apprenticeship programme. I know that we have made some progress—not in eradicating the imbalances but in changing the dial and closing the gap between male and female participation in some frameworks. One of the things that we have learned is that the issues have a societal root, rather than their root necessarily being in the design of our frameworks.

I was going to ask about that in a supplementary question. You have people in schools; I hope that you can assure me that they are working on this. When I speak to young people when I visit schools, I get the impression that many girls have just not thought about engineering. That is because of peer pressure or their families feeling that they should not go into those jobs. If you can show us figures that show that we are making progress, that will be encouraging. I get a bit despondent at times.

12:00  

I do not have figures at my fingertips, but I will provide them. I am fairly—if not very—confident that a change has been made in the metrics around the original targets that were set.

On your point about the messaging that is being put out, our careers advisers in schools are absolutely on message that construction is a career that is open to all and that hairdressing is a career for all. Any career is open to all. Our apprenticeships marketing reflects that message as well, as does the diversity of occupations that receive our apprenticeship awards. I sincerely think that at Skills Development Scotland we recognise that matter and take it very seriously.

Okay—

[Inaudible.]—that you have to start very early on. Careers advisers are working with children in primary school to ensure that opportunities are identified and that children do not feel that there are barriers to their being able to engage in any sector. That early work is very important, because it lays the foundations that enable breaking down of gender stereotypes in relation to various types of job. It is very important to start when people are young.

I absolutely agree with that.

The other thing that I will touch on is the other end of people’s lives—early retirement. It can be argued that people retiring early—especially highly skilled people—is having a negative effect on the productivity of the country as a whole. I have highly skilled friends who are the same age as me who have already retired. Maybe I should be considering it, as well. Is that a bad thing? It provides an opportunity for a younger person to come into a highly skilled job. In terms of the national performance framework, we have other aims in society—for the environment, for example. People who retire early might voluntarily get involved in some of those things. How do we get the balance right?

Andrea will answer first. I hope that I will not contradict her when I respond.

We certainly have a very tight labour market at the moment. For that reason, we really need to make sure that everybody’s skills are still engaged. Older workers are important for the contribution that they make to the economy.

The evidence is a bit mixed. There is no clear evidence that older workers affect productivity when it is measured at the level of the firm or the team. However, some economy-wide studies have suggested that the ageing workforce might reduce productivity slightly due to the smaller numbers of workers in their 40s, which is the productivity prime. Maybe that is one for my employer—I turn 50 on Friday, so I will be beyond my productivity prime. The contribution of older workers to productivity is likely to differ by job type. For older people, jobs involving hard physical labour might be more challenging than more neutral occupations. However, we know that because of demographic challenges there is value in engaging and retaining older workers in the labour market.

It will take a wide variety of supports to do that. They could be around eliminating age bias in recruitment practices, or making sure that work remains attractive to older workers through there being a good working environment, a healthy working life and flexible options. To focus on skills again, the support could be through developing and maintaining skills throughout careers and ensuring that older people have access to the training that they need in order to be productive in the workforce.

From the SFC’s economic and fiscal forecasts, in data from 2016 to 2020 we know that the biggest increase in economic activity is in the over-55 age group.

I will make two points. Interestingly, there was a lot of talk—I might have mentioned this at a previous committee appearance—about the great retirement that emerged as a result of Covid. Some of the early data that we have suggests that that is more a UK phenomenon than a Scottish phenomenon, and that leakage from the workforce has not been so great in Scotland. That might become clearer in future months.

I also highlight the fact that, although we have seen a big increase in economic activity among those aged 55 to 65, we have not seen the same among people aged over 65. That is despite there being an increase in the pensionable age to 66 then 67. The impact on economic activity of moving the retirement age from 65 to 67 remains to be seen. At best, the picture is mixed.

Thanks, convener. I think that I will carry on working for a bit longer.

Thank you. Michelle Thomson is next, to be followed by Daniel Johnson.

I will pick up on two areas that John Mason already referred to, although I am not entirely sure whether that is a good thing, convener.

The first is the role of women, which is a personal interest of mine. I was reading the “Climate Emergency Skills Action Plan 2020-2025: Key Issues And Priority Actions”—or CESAP. As is the case with many other worthy documents, I find in it mention of women, green jobs, the pay gap, representation and so on. However, in common with the practice of most agencies, women are added to the main strategic document, rather than being worthy of a specific strategy document. That is of particular interest to me, as we start to look at the transition around skills that we can be involved in from the beginning.

Therefore, will you have a specific bespoke strategy for women in your emerging strategy, and do you plan to have one as your climate emergency skills action plan evolves? Before you answer, I will say that, in my opinion, without someone being accountable and responsible, that will continue to be only a bolt-on to the main thrust of the plan.

By happy accident, you could not have a better set of witnesses for the question on the climate emergency skills action plan, because Andrea Glass and I co-authored the document in the heady days of December 2020. I do not necessarily agree with the idea that we ever saw women as an add-on. However, you are right that the document does not include a stand-alone section or chapter that states: “Here are the particular challenges that women face in terms of the transition to net zero.” Therefore, I take that point on board.

You referred to ongoing development of the plan. Implementation of the plan is overseen by the climate emergency skills action plan implementation steering group, which includes not only representatives of public agencies and the enterprise agencies, but Lesley Laird who is the director of Equate Scotland. The challenge that you have set with regard to how we reflect that in the future development of the plan is one that I am happy to take on with Lesley, outwith the committee, to see how we can best respond. We can follow that up with the committee fairly quickly. Andrea might want to come in on that.

Before Andrea comes in, it is probably worth your while to note that I asked the same question of the enterprise agencies. They do not have a separate document either, so you will have similar views on that. Only if you have a separate document will you have specific measures of success, or lack of success, and an absolute focus on outcomes.

I would appreciate your thoughts on how, from the start—particularly in relation to the term “just transition”—we are going to address those different areas. I suspect that we might want to pick up on the matter again, given Andrea’s comments about economic contribution. I will bring her in on that, because it is a broad area.

You have raised an important point, not least because many of the opportunities around net zero in the climate emergency skills action plan are in areas that have historically had more male engagement, including construction, engineering and transport. We therefore, as Chris Brodie mentioned, certainly need to focus on that.

I could compare that with some of the work in the skills action plan for rural Scotland, in which we have undertaken a number of focused activities on supporting women, including projects on getting women into agriculture and projects that enable and support women to understand the opportunities that are available to them. We have also done business development work on childminding, specifically for rural businesses. In focusing on a specific sector, there are opportunities to develop projects and programmes that support women. As Chris Brodie said, that is something that we would be more than happy to look at with the committee.

Every strategy will have two sides, a push and a pull, and what you outlined reflects both sides of that—how you incentivise and measure whether your stakeholder partners are actually producing instead of just encouraging them, although I am not saying that you would not also encourage them.

On another area that follows on from what John Mason was saying, I very much enjoyed reading your comprehensive submission, and I was pleased to note that you made reference to some of the factors that influence productivity. That is something that I have talked about often. Macroeconomics, for example, is absolutely fundamental, as are exports and research and development. I was reminded of the example of EMEC—the European Marine Energy Centre—in the Orkney islands, which has lost its funding now even though it is an excellent example of a project to do with another area. I am pointing that out to encourage you to continue to do that in the future, because it is my perception, having come to Parliament, that there is not necessarily the same understanding across the board of the factors that influence productivity. I am simply commenting that I was really pleased to see that.

My next wee point is that I wonder where your thinking is on competence versus excellence. You will be aware of the Cumberford-Little report, which came out a couple of years ago. I did not hear all that much about it after it was launched but, in fairness, that was in the middle of the pandemic. That report is clear about the need for a move from mere competence to excellence, with excellence being a differentiator that will drive us forward. I want to get a steer on where your thinking is around that theme and how that will feed into your strategy.

It is a great question. The distinction that you make between competence and excellence is really important, not just from a skills perspective but from the perspective of driving productivity. We made reference to the apprenticeship programmes, and that is where I will focus my remarks.

For a long time—too long—apprenticeships have wrongly been perceived as necessarily an add-on. We have placed great effort on working with employers to make sure that apprenticeship standards are up to date and fit for the workplace of tomorrow, not the workplace of 20 years ago. That is an important part of creating the conditions for competence to move to excellence.

The second part is around some of the innovations that I have already referenced. The extension of the apprenticeship family into the graduate space is a really important part of the move from competence to excellence. How employers shape that broadening of the depth of the qualification is a really important part.

Our graduate apprenticeships go up to Scottish credit and qualifications framework—SCQF—level 11, I think, but in Germany the approach to apprenticeships allows the opportunity to achieve a Meister qualification, which takes you beyond the qualification of an undergraduate degree. There are challenges around embedding a qualification of that nature and dropping it into the Scottish system immediately, but we have that ambition internally at SDS.

We are looking at how we can create the conditions whereby a graduate apprenticeship is not the end point and people can continue to build beyond competence and excellence in workplace settings through apprenticeship qualifications. The other advantage of delivering qualifications in a workplace setting is the cascading of the skills and experience through the workforce. I agree that that could potentially make a big contribution to productivity in the long run.

Do you want to add anything, Andrea?

I have nothing to add.

12:15  

I will make one remark about the hybrid working comment, because it is important to consider the issue holistically. Speaking as a former retailer, I know that people who work from home do not spend as much money during their working day. It is not just about how many widgets you produce. However, that is not the main thrust of my questions.

I will ask two questions to follow up Ross Greer’s questions about the labour market, labour activity and the impacts on low pay. What work is being done to unpack that first issue a bit more? As Ross said, that is not a new issue; we have been sending more people on to tertiary education for 30 or 40 years, and higher wages should be an outcome of that, but we are not seeing that. To unpack that a little more, about 40 per cent of people go on to higher education, including colleges; however, looking only at full-time university places, we have a slightly lower proportion than England, which has overtaken us.

What is going on? You would expect that, if a higher number of people were going on to higher education in the college sector, their education would be more vocationally focused and would translate into higher employment rates and higher wage rates. Is there work going on to unpack that? Is there work on whether there is a mismatch between skills and requirements and on whether those transitions are working correctly? We need to delve into those headline figures and understand what is happening at a sectoral level. Is that work under way?

There is a lot in that question, so I will take it in parts. I will briefly return to the comment on hybrid working to say that you are absolutely right. I should also have said that it is clear that hybrid working is not an option in many industries or for many workers. Nevertheless, you need simply to walk around Glasgow or Edinburgh city centre to see that hybrid working has had a challenging effect on city centres. I absolutely recognise that point.

I will pick up on wage rates and my comments on the journeys between college and university. We have wrestled with that issue in Scotland for a long time, and we need to be open and honest about the fact that we still have too many people who are in jobs that pay low wages.

Yes.

That is a long-term challenge that everyone can put their shoulder behind and say that we need to do something about. The question then is, what can we do about it? Previous committee witnesses commented that our goal has to be to create a better range of high-quality jobs. That is important, because it helps to grow Scotland’s tax base, which is a significant part of the committee’s focus.

We have a lot of work under way, but we need to think about the issue at different levels. The Scottish Government has had a strong focus on the principles around fair work, which it should be commended for. That is about addressing low pay and being clear with employers that paying the living wage and creating the conditions for good workplaces is important.

At the other end of the economy, the focus on inward investment and business growth is important. We need businesses to come into the country and recruit the highly educated and highly skilled workers that we have, but we also need to grow our indigenous business base. At the risk of sounding like a broken record, I emphasise that the focus on upskilling and reskilling is important. We need to create opportunities for people to progress in the workplace, learn new skills and develop. We need all those things to happen in tandem—there is no silver bullet. There needs to be an approach that recognises that the labour market operates differently for different people and that it needs a range of policy responses.

The point that I was making about colleges and universities was subtly different to the point that I heard. Yes, colleges provide vocational skills for lots of young people, but my point was that those young people often do not take the skills into the workplace; they take them to university, and it can be another two or three years before they hit the labour market.

Some of the data that we have around graduate underemployment and the underutilisation of skills generally shows that, in Scotland, there is a bit of a gap between people’s qualifications and the extent to which they are used in the workplace. Some of that is down to the quality of jobs, and some if it is because the skills that we are giving people might be becoming degraded by the time that they get into the workplace.

I agree with all that, but we will make progress only if we do detailed research, both quantitative—we need more refined data about how the situation varies by sector—and qualitative, which involves considering what those transitions look like. You have described the problem, but we need to carry out research to identify the solution.

I will pick up on something that you just said, which is absolutely spot on—too many people in Scotland are stuck in low-wage jobs. Picking out what the Resolution Foundation has said in recent weeks, I find it slightly horrifying that, although headline wage growth is happening at pace, if we factor in inflation and remove extraordinary wage payments such as bonuses, the poorest paid are actually seeing their wages shrink quite considerably in real terms.

At a time when so many relatively well-paid areas of work are screaming out for people, is there not a role for much more focused and direct interventions? This is a rather crude example, but how many people with a truck driver’s licence could earn £40,000 compared with the minimal wage that they might be on now for want of a training course? Do we need to be a lot more direct, focused and surgical? Although I absolutely agree with what you are saying about the modern apprenticeship, it takes several years to complete and it is quite inflexible. Do we also need a more surgical labour market intervention to get people into work where they are needed and, critically, where they can earn higher wages?

I would argue that we do, and I would argue that some of those surgical interventions were initiated in some places as a result of Covid. At the risk of getting slightly technical, I would distinguish between upskilling and reskilling. Upskilling is very much about raising people up in the jobs that they are in, whereas reskilling is about the transition from a job, such as the jobs that you have described, which might pay low wages, into an area of opportunity.

During the Covid pandemic, we worked with colleagues in the Scottish Government and in colleges and local authorities to develop a range of transition training fund opportunities, some of which were in targeted areas just as you have described. A lot of hard work and research went into identifying where those opportunities were, lining up training provision and getting people to make the transition from areas in which there were no jobs into areas in which there were jobs.

I have been saying today that, in relation to Scotland’s skills mix and the £2.2 billion that we invest in skills and education, given the way in which the economy and the labour market will change—which is a given—we will have to focus more of that resource on those priorities if we are to meet labour market need and drive productivity.

I agree with that, and I think that we need to see that work being taken forward.

I wonder whether our approach to skills is too detached from our approach to enterprise support. More than 90 per cent of businesses are small businesses that have seen zero productivity growth over the past decade or more. Those are small businesses—a handful of people work in them—and you cannot divorce the employee from the business, because they are one and the same. It makes no sense to have an approach that looks at business investment and support separately from skills. Indeed, that approach forces us to shoehorn apprenticeships into businesses that cannot support or sustain them. There has been a lot of talk about apprenticeship sharing. However, as someone who has run a small business, I know that small business owners do not want to share their employees with their competitors, so that is a non-starter.

Do we need to think about small businesses more holistically instead of separating out investment in skills? Should we take a holistic approach to supporting the business skills of small businesses by treating the employee and the business as one and the same, in order to get productivity going in that sector?

That is a great series of observations, although I do not necessarily agree on the situations that you describe.

I have a couple of points to make, the first of which is about small businesses. I think that it is a myth that no small businesses engage in apprenticeships. That is not the case. In many sectors, small businesses are the primary users of apprenticeships. That is not the same as saying that apprenticeships work for every small business—you have given a powerful example of why apprenticeships do not work for some businesses. However, we cannot necessarily act on that.

I will now turn to the relationship between skills, business growth and the enterprise agencies. When it comes to our work in understanding skills needs, I know from my time at SDS that we cannot write a plan unless employers endorse and recognise that story as their own. That is not my view; it is the view of employers. We have stuck to that principle. At one point, SDS was part of Scottish Enterprise. I have a colleague who jokes that he has done more work with Scottish Enterprise now that he is in Skills Development Scotland than he did when he was in Scottish Enterprise. I do not know how true that is.

During the pandemic, every Tuesday morning, I spent two hours on a call with colleagues at South of Scotland Enterprise, Dumfries and Galloway Council and Scottish Borders Council, on which we shared insight and intelligence about what was happening—on where funding opportunities were emerging and on where there were labour shortages or where people could potentially be made redundant. We forgot about our organisational boundaries and just got on and tried to do the right thing. Much more of that work is done in the part of SDS that I work in than was the case before. We try really hard to work closely with our enterprise agency partners and to engage with businesses on the delivery of our services.

Thank you. That was very helpful.

I have two quick questions. You described the outcome agreements between universities or colleges and the Scottish Funding Council. Do graduate apprenticeships feature in those agreements?

In attempting to answer that question, I would genuinely be taking a guess. The outcome agreements are negotiated between colleagues at the Scottish Funding Council and individual universities. I could find that out for you or ask a colleague to find that out.

I would be grateful if you could, because it is important that graduate apprenticeships feature in those agreements. In relation to your job, I think that it would be helpful if there could be a more joined-up approach to that, because, like you, I think that graduate apprenticeships are extremely beneficial. I wonder whether we are talking enough about them and giving them enough consideration.

When you speak to people in schools, how much comment do you get about youngsters not necessarily having the breadth of curriculum that would be desirable from the point of view of their going straight into the workplace, rather than doing college and university courses?

In response to your first question, I will come off the fence and say that I believe that the answer is, “Yes, they are included,” but I would like to confirm that with colleagues in the Scottish Funding Council. If they are watching at the moment, they will be throwing their hands up in horror or nodding their heads.

12:30  

On your question about our engagement with schools, my part of the business does not do a huge amount of direct engagement with schools, but we do a lot of direct engagement with employers. The issue that you have raised is not one that I hear regularly or recognise as one that is raised regularly by employers. We are much more likely to hear questions about the efficacy of existing apprenticeship programmes and whether those programmes provide young people or, indeed, older workers with the skills to operate in a workplace; about the fit, appropriateness and volume of skills in the labour market; and about college and university provision. I do not hear an awful lot about the issue that you have raised.

Thank you. I think that there is a disconnect there and we need to do more on that.

My first question is about the green jobs workforce academy. Is there any data yet on how effective that has been and how many people it has helped into new employment, or is it still early days?

I will provide some written data by way of follow-up. With so many numbers, there is always a danger that I will quote numbers that will be taken as gospel, but I will do my level best.

The academy is only seven or eight months old. We have developed an original product that we always envisaged would have later functionality, and that work is on-going. I hesitate here, because I have a ballpark figure, but I may get the numbers slightly wrong. I think that about 3,800 individuals have used the site and followed through. I do not understand the technicalities of that, but I am assured by our digital team that the hit rate, which describes individuals going to different parts of the website, is strong.

At the moment, we do not have data on the extent to which the academy is then moving people on to colleges in Aberdeen, Glasgow or Edinburgh, for example, as a result of their engagement with the website, which was asked about at previous committee meetings. We are working on building in that functionality.

We have not heavily marketed the green jobs workforce academy yet, as we have recognised that the functionality that we want it to have, which includes access to the full range of courses and training provisions that are available across Scotland and, potentially, access to funding support, is not quite there yet. We would expect to see the numbers going up considerably as the workforce academy moves into its full scale of operation.

At present, then, is it more of a signposting website that shows people where green jobs are and where green training is, or is that too simplistic?

I think that it is about more than that. The ambition for the green jobs workforce academy is to get the message out about the range of opportunities that there are here and now, but also the opportunities that are to come, in relation to the transition to net zero. It is very much targeted at adults, but it is also targeted at some of the groups that Mr Johnson described—people who might be looking to make a career shift.

The website has an assessment tool that helps people who are currently employed. The example that I always give is someone who is working in heating and plumbing who can fit gas boilers. What skills do they need to develop to be able to fit heat pumps or alternative technologies, and where would they find those skills? The website also aggregates some of the learning content that is already available, and it makes that available to individuals for free at the point of use.

We are working on developing a skills wallet that will create a stratified entitlement—an individual’s entitlement will depend on their circumstances and the extent to which other funding would be available to them. For example, someone who is based in Inverclyde and is unemployed would get access to a greater training entitlement than someone like me who is based in Glasgow and is fully employed. The stratified entitlement will allow people to access training as it develops.

It is important to say that the green jobs workforce academy does not sit on its own. We are focused on making clear to people in the workforce what opportunities are available at the moment, how to access them and where their skills need to be. We are working concurrently with colleges, particularly through the Energy Skills Partnership, to build the capability in green skills across Scotland’s college network. Even if we did nothing else, the green jobs workforce academy would expand the availability of provision because the skills system will catch up.

My next question, which ties into that, is about your involvement with ScotWind. How can we ensure that as many of the opportunities that we can possibly get from that remain in Scotland?

ScotWind is a great example, but it is not the only one. We are also looking at some of the potential legislative drivers around the decarbonisation of heat in buildings. With ScotWind, we are at the licensing stage, but rather than go into the specifics of our engagement, I will say that the approach that we are taking is to get close to the developers, or to the employers in respect of the decarbonisation of heat in buildings, to understand when that investment is likely to hit the ground—whether it will be in 2022, 2023, 2024 or 2025—and to understand where skills are currently available and where they are not.

At the moment, we have a very focused piece of work with colleagues in Glasgow looking at the decarbonisation of heat in buildings. That will land us on a gap analysis, which will involve looking at how many people we need, what skills exist in the workforce, which skills are missing and how local and regional colleges can develop a curriculum with employers to ensure that those needs are met.

We do not want to see change only in Glasgow, Inverness or Aberdeen, so that provision needs to be licensed or delivered through all of Scotland’s colleges or moved on to the academy platform so that the investment in new training is available to all. That is where the green jobs workforce academy could come into its own.

With regard to ScotWind, has that engagement with potential employers already started?

It has, although not directly through my team. One of my colleagues is leading on engagement with ScotWind but, again, the approach is to understand the timing of investment. We know that we have licensed for a significant uplift in Scotland’s offshore wind capability, but it is about understanding how much of that will happen and when, and which specific requirements will be driven by it.

Going back to an earlier example, I note that, 15 years ago, I did some work on the decommissioning of oil and gas rigs in Scotland. At the time, that was seen as a significant opportunity for Scotland. In reality, some of it did not transpire, but the work that we did meant that we thought about what was involved in breaking up oil rigs, where the money would flow, where it would translate into jobs and whether those jobs would be available in local labour markets. Our role in SDS is to provide that overarching national picture and to provide local partners with some of the tools and support to wrestle with what ScotWind means for Shetland, Aberdeen or Glasgow, because it will mean different things in different places.

I guess that that information will then flow into the regional skills investment plans and the sectoral skills assessment plans.

Absolutely. The plans are one thing. I should probably shut up and let Andrea Glass say a few words, as the work of her team is absolutely about taking the insight that we gain from our engagement with employers and ensuring that it gets into the hands of local authorities and colleges. More than that, we need to ask what we can do about it.

The regional skills planning approach is about looking at the evidence, working with regional partners to identify opportunities such as the examples that Chris Brodie gave, understanding what the opportunities are, and then looking at what the priorities should be and what we need to do to ensure that the labour force in particular regions can access those opportunities. We then need to agree some actions. The regional skills investment plans are not something to just be left on the shelf. They have action plans associated with them whereby partners come together and deliver around the specific issues that come up in a particular region. That is the approach that the skills planning leads take irrespective of where the opportunities are across Scotland.

How do you keep them live? I guess that the documents should be changing quite regularly.

All the actions that come out of the plans are governed through either regional economic partnerships or the specific subsector workstreams that flow from them. Partners will come round the table to review progress against the actions, which are live in that, if amendments are needed to respond to new opportunities that come on board, the partners will make them collectively by meeting through workstreams that are led by skills planning leads.

As a last point on that, is there a review of those actions? Does that come back anywhere?

Andrea Glass talked about governance. In essence, we have regional groups, some of which are chaired by SDS and some of which are not. We bring all the partners together and we hold one other to account for what we said we were going to do. Typically, we have found that about 80 or 90 per cent of the actions in the regional skills investment plans get delivered. Some of the things that are not delivered get overtaken.

There is a point that I was trying to make with the example that I gave of our engagement with the team in the south of Scotland. There are six or seven things that we progressed as priorities during the pandemic, for which we just rolled up our sleeves and got on with it. I did not say to Andrea, “Hold on—you need to rewrite your skills investment plan before we can move on these things”. The plans are really important for setting the direction, but it is more important that the ground level is agile and responsive to what has been a really difficult set of circumstances over the past two years.

If we simply took a view that the regional skills investment plans were gospel, we would quickly run into the sands. We try to put an emphasis on agility and on working with and, importantly for a national agency, listening to regional partners about where the opportunities and challenges are on the ground.

I feel somewhat frustrated, because there is so much else that we could ask questions about, from the rural and islands productivity lag to research and development and the core growth sectors. However, I will finish by asking a couple of quick questions.

First, people at school often assume that, whether they get an apprenticeship or go to university or whatever, they will get a job working for someone. I do not know that enough is being done to try to teach what we might call entrepreneurial skills. It is accepted across the Parliament that Scotland has a low rate of new business start-ups relative to the rest of the UK and beyond. What is Skills Development Scotland doing to address that? At what level should it be addressed? Should it be addressed in schools, for example?

I will ask my second question now as well. It is about people with disabilities, which we have not touched on. I remember that, when I was a councillor way back in the 1990s, there was a policy that, if possible, 3 per cent of all employees should be people with disabilities. Interestingly enough, the public sector lagged behind the private sector in that regard. There have been a number of initiatives over the years to try to increase the number of people with disabilities in the workforce, in order to improve productivity and those people’s quality of life.

My questions are on those two issues: entrepreneurial skills and people with disabilities.

I will pick up on the first question, and perhaps Andrea Glass can pick up on the second.

As I said at the start when I was asked about the national strategy for economic transformation, SDS has a role to play in working directly with colleagues to ensure that entrepreneurialism is embedded in our work on the young persons guarantee and the work of our careers advisers.

I think that there is a cultural thing around entrepreneurialism, and I often wonder how much it can be taught and how much it needs to be experienced. You might see me here, in a shirt and tie, as a dull civil servant, but my career has taken me down different routes. I worked for a big American company when I graduated. I then quickly started up a business at the age of 27 with one of the directors before moving into a company and then starting up another business on my own. I then ended up in the public sector. There is something in Scotland about people not being afraid to take a risk and try something different. At a personal level, some of the skills that I learned—or, rather, that were forced upon me—as someone who was running a business are skills that I have certainly found useful in the career that I am in now.

In short, entrepreneurialism is exceedingly important but, at a personal level, I am not sure to what extent it can be taught.

That is interesting.

12:45  

We know that about 51 per cent of people who have core or work-limiting disabilities are in employment. How that relates to the figure for the wider population is clearly an important issue. We have undertaken work in a couple of areas to address that. First, our work on the apprenticeship equality action plan, which we have mentioned, is important in providing apprenticeships to those with disabilities. We have worked closely with partners to focus investment on supporting diversity and to ensure that employers know what support they need to put in place to support apprentices who have disabilities to work effectively.

Secondly, SDS has undertaken a good piece of work on neurodiversity and digital technology with ScotlandIS, our enterprise and skills partners and industry. We have looked at the skills and strengths of individuals with neurodiverse conditions, including dyslexia and a range of others, and at the barriers that are associated with those conditions. We have demonstrated where those people’s strengths lie and we have supported them with specific job opportunities that are available to them. We carry out good research, and then we provide support to move individuals with disabilities into employment. It is a very focused approach.

The focus of my question was whether a higher proportion of people with disabilities are moving into employment; it was not so much about what you are doing to move them into employment. Is the strategy actually working?

The only thing that I am aware of in that regard is that the final progress report, in 2021, on the apprenticeship equality action plan showed that there had been an increase in the number of apprenticeships for those who are disabled. Beyond that, I do not have detailed statistics. We can come back to you on that.

Thank you. The session has overrun, and I realise that members have itchy feet and have other things to do. For example, John Mason, Michelle Thomson and I have another meeting that started a minute ago. We will therefore conclude the meeting and consider our work programme next week, if members agree to do so.

I thank Andrea Glass and Chris Brodie for the comprehensive evidence that they have given. There are still a few issues that we might want to touch on, so we will probably be in touch with them on those.

If you would like to explore other issues and would find a further session useful, even if it was in private or in a different setting, we will be happy to arrange that.

Thank you very much.

Meeting closed at 12:47.