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I encourage people who are leaving the public gallery to do so as quickly and as quietly as possible.
The next item of business is a members’ business debate on motion S6M-16148, in the name of Alex Rowley, on Scottish Engineering’s “Engineering Skills Gap Analysis for Scotland”. The debate will be concluded without any questions being put, and I invite members who wish to participate to press their request-to-speak buttons now or as soon as possible. I also advise members that we are a little tight for time, so I would welcome it if speeches were around the time limit.
Motion debated,
That the Parliament notes the publication of Scottish Engineering’s report, Engineering Skills Gap Analysis for Scotland; is concerned by the findings of the report, the production of which aims to allow industry and government to work in partnership to maximise the opportunities for Scotland’s economy, and its society as a result; notes that the results in the report are derived from the output of a survey of 70 engineering companies based on their operations in Scotland; is concerned with the findings of the report that skills pipeline gaps for existing industry are “an immediately stark situation” with “no allowance for the additional demands” of offshore wind, grid infrastructure investment, decarbonising heat energy or green hydrogen production; notes the view from the survey that “unless there is a rapid change in the required skills investment there is a considerable risk of damage to incumbent industry [and a] risk to inward investors of failure to reach the skilled staffing levels they require, with negative impact on their projects, and reputational risk to Scotland’s ability to accommodate such opportunity”; further notes the view that the Scottish and UK governments must encourage the next generation of skilled workers and make the funding and resources needed available to provide the apprenticeships of today for the jobs of tomorrow, and notes the calls in the Mid Scotland and Fife region and across the country for the Scottish Government to take action to foster a new partnership between schools, colleges, universities and industry to ensure that young people are aware and able to take advantage of the opportunities available in Scotland’s industrial sector, and that the future of Scottish industry is secured for the benefit of people across Scotland.
12:50
I thank members who signed my motion for debate and my business manager for allowing the time for it.
I have been consistent in my view that if we are to secure the future of Scotland’s economy, we must be laser focused on ensuring access to education and training in the skills that we need for the future. As policy continues in the direction of a just transition towards a greener economy, investing in the skills and education of the future has never been more relevant.
Scottish Engineering chief executive Paul Sheerin recently described the current outlook for the Scottish economy as an “industrial revolution-sized opportunity”. I agree, but that description came with a stark warning that Scotland was at risk of missing out on the opportunity due to a lack of a skills pipeline.
The comments came after the publication at the start of the month of Scottish Engineering’s “Engineering Skills Gap Analysis for Scotland”. I believe that we need to seriously consider the report’s findings and the implications for the future of engineering and its impact on our economy.
The results are the output of a survey of 70 engineering companies from a broad range of sectors, based on their operations in Scotland. Scottish Engineering reported that
“The skills pipeline gaps for these roles are an immediately stark situation”.
Indeed, a look at the average demand across 31 engineering roles showed that industry will require an additional 33 per cent of the volume that is currently in role by the end of 2025, rising to 46 per cent by the end of 2026 and again to 58 per cent by the end of 2027.
If those figures are concerning, the conclusions are cause for further concern, as it should be noted that the gaps are only for existing industry. That means that there is “no allowance” for the additional demand of offshore wind, grid infrastructure investment, decarbonising heat energy or green hydrogen production—sectors that are essential to Scotland’s stated aims of achieving net zero. The report concludes:
“Where that demand is for the opportunity for inward investment, unless there is a rapid change in the required skills investment there is a considerable risk of damage to incumbent industry.”
Scottish Engineering also estimates that 20 per cent of demand for apprentice training programmes has
“been unmet due to real terms funding cuts to apprenticeships in Scotland.”
When I speak to employers of skilled workers across the Mid Scotland and Fife region, one issue that comes up time and again is that due to a lack of the skilled workers that are needed to meet industry demand, the whole of the United Kingdom is having to share pools of workers for each skill. An example of that is the Hinkley Point nuclear power station project in Somerset, England, which is attracting workers from Scotland, due to the high demand for skills and the higher pay on offer.
That is why it is crucial that we look at this issue from a UK-wide point of view. The Open University’s “Business Barometer 2024” found that,
“Despite tiny green shoots of improvement, the skills gap in the UK remains stubbornly high across sectors, regions and all four nations.”
Across the UK, 62 per cent of organisations are facing skills shortages; in Scotland, the figure is 56 per cent; and a concerning 52 per cent of organisations do not have specific recruitment, retention or training initiatives for targeted groups.
As a result, my motion calls for two things. First, the Scottish and UK Governments must work together to encourage the next generation of skilled workers by making available the funding and resources that are needed
“to provide the apprenticeships of today for the jobs of tomorrow”.
There is a clear and desperate need for that. I urge both of Scotland’s Governments to recognise the urgency of the situation that we are in and act accordingly.
Furthermore, I believe that the Scottish Government must
“take action to foster a new partnership between schools, colleges, universities and industry to ensure that young people are aware and able to take advantage of the opportunities available in Scotland’s industrial sector”.
An academic to whom I spoke recently told me that we must do more to build the relationships between schools, colleges and industry. He was very clear that that should start in primary 6 and primary 7, not in secondary 3 and secondary 4.
I know that there is a lot of on-going work by the Scottish Government and its agencies, and I do not want to undermine any of that, but much more has to be done if we are to give every child the chance to gain the education and skills for the jobs of today and tomorrow. We need a revolution in skills from primary schools to secondary schools and colleges, all working in partnership with industry. We need a regional skills strategy for every region of Scotland, along with regional funding to deliver a regional workforce plan.
Government at every level must work in partnership with industry. We must listen to the concerns of industry on the apprenticeship levy and the calls for reform, the concerns at the intention to wind up the Scottish apprenticeship advisory board, and the concerns expressed by business about the decision to remove Skills Development Scotland from post-school funding.
The future for jobs in Scotland can, and should, be very bright, but it requires a stronger partnership and a new approach that puts education, training and skills at its very heart, and it should be driven by education and industry working together in partnership. Scotland deserves nothing less.
We now move to the open debate.
12:57
I congratulate Mr Rowley on securing the motion for debate in the chamber and for his contribution, which I thought set the scene extremely well. I am grateful for the opportunity to debate the key issue.
Governments should do what they promise, but they should not promise what they cannot do. I say with some regret that it seems that the UK and Scottish targets to achieve net zero—by 2030, in the case of the UK—are simply unachievable. I submit that we should not be setting targets that are unachievable. I am thinking of, for example, the target to install a million heat pumps by 2030, and, indeed, the target for installing renewable heating systems in the 170,000 houses that are off the gas grid and 1.2 million homes overall, when we are actually installing only a few thousand a year. Those targets are simply green pie in the sky—they are just stupid.
What do we need to do, and what should we do in order to be able to do it? Many do not appreciate that the renewables opportunity, which is a form of industrial revolution for this century in Scotland, will create a volume of civil engineering projects of a like that is completely without precedent. Those projects include pumped storage facilities; grid schemes; Global Energy Group’s work at the Inverness and Cromarty Firth green freeport; electrification of the east coast line; hospitals; housing; schools; and schemes associated with Scottish Water and its £1 billion a year investment. When we tot all that up, it amounts to around £50 billion or £60 billion over the next 10 or 15 years. That is without precedent.
As Mr Rowley has argued, the skills challenge that arises from being able to do that work is simply on a scale that we cannot begin to comprehend. I am no expert in the area—I await what the minister has to say with interest—but I know that a lot of good work is being done by industry in schools and colleges around Scotland. However, we need to multiply that considerably. Along with the other capacity problems that we face in achieving our aspirations—aspirations that are all desirable—it should be a big focus of what we do.
The member has made a powerful series of points. Does he agree that, with the change in early recruitment in the shipbuilding industry necessitated by recent difficulties that it has faced—I am thinking of the trade assistant role that it has introduced, which removes academic entry qualifications—a great pathway is being offered to those who do not have traditional skills to enter the industry and build their skills in a practical way, and that that has been compounded by the creation of the applied shipbuilding skills academy in Glasgow?
Fergus Ewing, I can give you the time back.
I do not have the knowledge of shipbuilding that the member might have, but I sympathise with his point.
A lot has been done by colleges and by, for example, the University of the Highlands and Islands. A recent report by Statkraft, the second biggest company in Norway and Europe’s largest generator of renewable energy, has found that a “transformational” pumped storage project, according to UHI, offers “significant” opportunities with up to 500 workers needed at the peak of the construction period. That is just one of a very large number of projects; not all of them will go ahead, but many will.
I also want to praise the efforts of industry in this respect. For example, the Civil Engineers Contractors Association has created its own scheme, which provides an 18-week course for young people with the opportunity of a guaranteed job interview at the end. It has a success rate of more than 50 per cent going into engineering.
I do not have the time to elucidate further, so I will close by saying that I know that a lot is being done—I am not here to criticise—but should we not focus much more on this issue and far less on the high-level rhetoric about unachievable targets? Such targets take up so much of our discourse and, frankly, they conceal the real problems that lurk beneath the surface, problems that it is our duty to tackle and solve.
13:02
I am delighted to have the opportunity to speak in this debate and I thank Alex Rowley for bringing to the chamber an important subject that I have discussed many times.
We are a nation that is synonymous with innovation and engineering know-how—even the miracle-working chief engineer on the Starship Enterprise was a Scot. However, no matter how strong our reputation is, we cannot afford to rest on our laurels. Yesterday’s successes are no guarantee of tomorrow’s. That is why it is important that we give the next generation of young engineers the opportunity and the pathway that they need to develop their talents and become the skilled workforce that Scotland’s engineering sector needs.
As Alex Rowley’s motion and the Scottish Engineering report point out, there is a widening gap between the workforce demands of engineering businesses and the supply of available staff. In the south of Scotland, that gap is nowhere more acute than in Ayrshire, which has a well-established engineering sector that is desperate to grow. Recently, we have seen the arrival of subsea cable manufacturer XLCC, whose multibillion-pound investment at Hunterston is expected to need as many as 3,500 skilled workers over the coming years. Indeed, XLCC and some other businesses are so concerned about securing a skilled workforce that they are investing significant sums of money in developing their own in-house training schemes, often in collaboration with Ayrshire College.
Although Alex Rowley’s motion highlights the growing demand for engineers in the renewables sector and energy sectors, we should recognise that there is enormous potential for growth in other parts of the engineering sector. Ayrshire is also home to Prestwick airport and the cluster of international aerospace businesses that surround it. It comes as a surprise to far too many people that more than 50 per cent of Scotland’s entire aerospace workforce—more than 4,000 jobs—is based in and around Prestwick.
In my time as an MSP, I have been fortunate to visit many of those businesses and see at first hand the time and money that they have committed to creating sophisticated world-class facilities in Scotland. Those global businesses have put faith in Scotland’s engineering workforce to deliver, and they have ambitions to invest more. The Ayrshire growth deal can be a catalyst for that investment, supporting businesses, including Ryanair, Woodward and GE Caledonian, to take forward their plans for growth. Taken together, those plans are expected to create 1,500 new jobs within the aerospace cluster in the next three years.
However, all those investments can succeed only with the right workforce behind them. A significant number of those jobs are aimed not at graduates but at apprentices, giving young people a valuable opportunity to earn and learn at the same time. Most, if not all, of those apprenticeships depend on local colleges having both the funding and the capacity to deliver them. However, as with many colleges across Scotland, Ayrshire College is having to fight an uphill battle to balance its books. The Scottish Government’s latest budget looks set to deliver a below-inflation increase and continue a trend that has meant that funding has fallen by 17 per cent since 2021-22, according to Audit Scotland. The college is perfectly placed to facilitate millions, if not billions, of pounds of inward investment into its local area, but instead of getting additional funding to make the most of that opportunity, it is being asked to find at least £1.5 million in savings.
I appreciate that, in every budget, difficult choices have to be made, but cutting college funding is not a difficult choice—it is a nonsensical choice. Ayrshire has one of the lowest workforce productivity rates in Scotland, but the potential in the area is enormous—nowhere more so than in the engineering sector.
If both the SNP and Labour Governments are serious about delivering economic growth, the greatest opportunities lie in places such as Ayrshire’s engineering sector.
I have no doubt that, across the chamber this afternoon, we will have unanimous agreement on the importance of the engineering sector, apprenticeships and creating the skills pathway to grow the workforce. However, we urgently need a willingness from both the UK and Scottish Governments to make the choice to back the sector, prioritise funding for engineering apprenticeships and focus that investment where there is greatest demand.
13:07
I remind members of my voluntary entry regarding trade union interests in the register of members’ interests.
I begin by thanking Alex Rowley for not just leading this afternoon’s debate, but acting with such speed to get this report on the agenda of Parliament.
It is a pity that the Government does not display the same sense of urgency because, for all the independent reviews, the Government reports, the ministerial statements, the surveys of the landscape and the creation of strategic boards, what we are witnessing is a catastrophic skills crisis and a Government that is not part of the solution but part of the problem.
Public investment in skills and training is not going up—it is coming down. Skills Development Scotland is about to be abolished. For all the talk of a just transition in our economy and of reforms in our public services, there is no leadership, no strategy and no plan for either.
So this report by Scottish Engineering should serve as a wake-up call. It lays bare what is going on out there in the real world on the factory floor. Because of the demographics of the current workforce and because of expectations of business growth, employers estimate that a third more engineers will be needed in Scotland by the end of this year, that 46 per cent more will be needed by the end of next year, and that 58 per cent more will be needed by the end of the year after that. In some trades, it is even higher: in electrical and electronic engineering, the skills gap and the replacement and recruitment rate will be nearly 100 per cent.
The horizon for this analysis is the next three years. The problem is that an engineering apprenticeship takes four years to complete, and it takes six years to be fully competent. As the report concludes,
“unless the company has started training already, that resource will not be ready at the time of need.”
Workforce skills are central to the economy. They are too important to be left to market forces, to free enterprise or to employers alone. They cry out for Government leadership. That is why I have long argued that we need to establish not only sectoral collective bargaining with the trade unions, which we do, but sectoral industrial and economic planning with the trade unions, including effective planning for skills. We need a minister for labour in the Cabinet. We need an end to cheap labour. We need to open up apprenticeship opportunities to all—including to those from areas of multiple deprivation, and to women as well as to men—with a guarantee of an apprenticeship, useful work or a vocational training place for every school leaver by incentivising small and medium-sized enterprises, boosting numbers and putting the funding in place.
The challenge here is dimensional—it is one of scale—but it is also systematic and it is ideological. We cannot rely on the logic of capitalism to decide our future. We need workforce planning, we need an industrial strategy and, above all, we need economic democracy. To some, this will be seen as idealistic, socialistic—as impractical, unworkable or undesirable. Yet there is nothing more impractical, unworkable or undesirable than the notion that we can continue to run our economy the way that we do at the present.
I make no apology. It is time for radical change. People should have the right to slot in and out of education and work with income protection—the right to liberation within work, but liberation from work, too. If ever we are going to win the skills revolution, a just transition, useful work in place of useless toil and transformational economic change, it must be driven by a vision, forged on a plan and inspired by authentic, principled political leadership, but it will only be delivered with the support of the people.
13:12
I am very concerned by the report on the engineering skills gap. I recognise that this is now a very acute issue as we transition Scotland’s economy to a green one and invest in the opportunities ahead in that green transition—specifically in renewable energy, but also in heat networks and all the other engineering infrastructure that we will need.
The shortage of engineers in Scotland, and in the UK as a whole, is a long-standing issue. Two decades ago, when I arrived in the UK, I knew that there was a shortage of engineers here. That is one reason why I chose to come here. I had Canadian student loans to pay off and, at that time, getting $3 to the pound seemed like a good way to pay that off. I had heard that there was a shortage of engineers, so I bought a one-way ticket and rocked up. I was offered two jobs in my first week.
That is how acute the shortage of engineers is and has been for the past 20 years in the UK, including in Scotland. My colleagues and I experienced that daily as we tried to build ambitious projects in various parts of the UK, including for renewable energy in Scotland. We were trying to find electrical engineers, electrical technicians and mechanical engineers, but there were just not enough of them. Many of my colleagues were immigrants like me.
When we were members of the European Union, we were able to draw on the talents of EU citizens under the freedom of movement. The acute skills shortage in the UK due to a lack of home-grown engineers was previously supplemented by immigrants like me. However, Brexit cut us off at our knees by restricting the ability of a particular pool of talented individuals to come here smoothly to work. We have an acute situation, which is set against the needs that we have for our transition.
Whether through an apprenticeship, a higher national certificate, a higher national diploma or a degree programme, a career in engineering is exciting. The recruitment of more young people into engineering in Scotland and the rest of the UK is a long-standing issue. I have always thought that part of the problem was because engineering is framed as if it were all about maths and sitting at a computer staring at a screen, watching numbers scroll by like in “The Matrix”.
Engineering is very hands on. It is teamworking; it is being creative; it is solving problems that nobody has ever had before. Right now, it is problem-solving that will save our planet—that will change our future and mean that humanity can survive and thrive. Engineers are right on the edge of that.
For me, there is nothing more rewarding than working as part of a team to build something real that you can point at and say, “We created this thing that had not existed before. We have tried something new, maybe we have failed a few times, but we have learned a lot and here is this thing that we have built.” Presenting that exciting vision around engineering has to be the way to encourage more young people into this space, by emphasising the creativity, teamwork and rewards that come from solving the problems that our world desperately needs solutions to.
The Withers review of the role of Skills Development Scotland is a timely opportunity to look into this space. I challenge some of my colleagues’ assertions that Skills Development Scotland is not in need of significant review. I think that it is, particularly around careers advice and the way that skills are taught and made available to people at different ages. More young people need to be encouraged to take up maths and physics, but also career changers, upskillers and career returners need to have access to engineering skills and the pathways into engineering, whether that is through apprenticeships for all ages or being able to access university and college courses at older ages.
I want more people to consider learning the basic engineering skills, whether in mechanical, electrical, civil or computer engineering, because all of those areas lead to exciting careers. You do not need to have a fancy master’s degree in environmental engineering to work in renewable energy and the environment. Get those basic degrees behind you—they are what we need, and I absolutely encourage anyone who might be interested to take those up.
13:16
Coincidentally, on Monday, I was in the offices of Arup in Edinburgh. Colleagues will be aware of that firm’s significant impact on engineering across countries, including Scotland and the UK. There I was reminded of what Lorna Slater has talked about. I had the privilege of working for an engineering firm for some time in my 20s, and I know that people who work in engineering are solution-focused and creative and a really inspiring bunch to be around.
They are also an integral part of our economy now and certainly will be into the future. That is why it is commendable that Alex Rowley has brought the motion to Parliament so that we can discuss the importance of having a reliable pipeline of new engineers coming into the Scottish market and future proofing our systems. We must ensure that a growing number of people go into that area of our economy, which is necessary for our nation’s future as well as for our wellbeing, productivity and gross domestic product. We must also ensure that we create a system that meets our needs, with regards to not just the net zero transition that is in front of us and the huge opportunities that will emerge in the decade ahead and the one after that, but to how we build the future of the Scottish economy in the 21st century.
We are considering this issue in a time when the Scotland’s opportunities and potential are buoyant and wide, when it comes to net zero but also in other industries. However, we also face a global scenario of significant challenges because of what is likely to come from US economic policy and its effects on the stability of the global economy. Within the UK economic framework, we are still uncertain and very worried about what the effect of the national insurance increase will be.
We cannot take for granted the opportunities that are related to net zero and engineering in Scotland. We must be strategic and proactive in how we plan for what is ahead. I commend the Government for instigating the Withers review and taking the time to consider it. I look forward to the minister’s summing up today as well as to the statement next week to learn more about what the Government will do in this area.
Some of those decisions will be quite difficult, and change may be required. Collectively, we need to make sure that we consider what is in the best interests of young people and of the future needs of the economy. We also must be brave when it comes to the disruption that might be needed.
When I speak to people in the industry, whether they are involved in the mass growth at the port of Leith or in other sectors of engineering that operate in Edinburgh Northern and Leith and in Edinburgh as a whole, they are not shy about saying to me that they want industry to be more involved and that they want us to make change and progress. I am interested to hear what the minister will say on that today and in the coming weeks.
I will raise two points that we need to consider. One is about awareness. Organisations such as Edinburgh Science, which is based in my constituency, and local networks do a lot to raise awareness of the opportunities that exist for young people, but it seemed to me when I was on the Education, Children and Young People Committee that we lacked consistency across the country in how we let people know about opportunities. That feeds into our collective ambitions to address poverty and to ensure that we encourage our young people towards positive destinations. Unfortunately, we know what effect a small minority of people going in a bad direction can have on our community and on them.
The second point is about retention. We are losing a lot of skilled people who have been trained in Scotland, including in engineering, to other countries. We need to consider whether we need systemic change to encourage more people to stay here, and we need to think about the finance that we are spending on training other people’s workforces.
13:21
The debate rightly centres on the nationwide skills gap in engineering and the impact that that has on growth, opportunities, education and Scotland’s broader economy. Although it is a Scotland-wide problem, all the failures are in evidence at local level, too.
The challenges that are being imposed on Ayrshire College are a perfect example. The institution continues to thrive in spite of the near-impossible environment in which it is expected to work. There is a record number of student enrolments in partnership developments, and the college expects to play a key role in preparing a workforce for future projects in the area that will lead to the creation of 5,000 jobs in the Prestwick aerospace cluster and at Hunterston.
However, there is a problem. For years, the Scottish Government’s funding settlement has meant that the college has had to cut its cloth. Staffing and non-staffing budgets have continued to reduce. Even with the below-inflation increase that is planned in the upcoming budget, the money does not go far enough. In fact, once pay deals and other rising costs are catered for, further cuts might have to be identified. The UK Labour Party’s national insurance changes will also hit the college for a further £1 million.
At Ayrshire College, without further funding, a staggering £2.5 million-worth of savings will need to be made in 2025-26. There is simply no way that the college can feasibly be expected to make those savings without there being serious implications for people and businesses in Ayrshire.
Our economy needs colleges more than ever to train up enough people for emerging economies, to staff the renewable energy revolution and to ensure that we have the supply chain to facilitate projects that lead us to net zero. If anything, the Government should pump money into those institutions now in order to reap the results later. Doing so would also bolster opportunities for young people, ease concerns about job losses coming down the tracks in other sectors and guarantee that, when jobs emerge in the energy and engineering sectors, we have enough home-grown workers to fill them.
The success of colleges also attracts people to live in communities that are at risk of rural depopulation. Without funding, there will be lost opportunities. Ayrshire College and others like it are anchor institutions with broad-reaching arms. They provide not only qualifications that can bring people into gainful employment but social and practical skills that can be a catalyst for helping people to lift themselves out of poverty.
The skills gap report highlights a concerning skills deficit, and it is vital that more support, not less, is provided to our further education institutes. The Scottish Government should stand by to work with colleges to offer additional capital investment and greater funding for projects and courses that are tailored to meet the regional needs of sectors and employers across the country.
Ayrshire College is just one example of an institution that has, for too long, been undervalued, underfunded and underestimated. Fortunately, as a result of its dedicated and proactive leadership team, it continues to defy the odds.
It is time for the Government to listen to colleges and to the industry—by doing so, we would get the benefit now and in the future. We cannot continue to expect the colleges of Scotland to make the impossible happen year after year.
13:25
I genuinely thank Alex Rowley for bringing this important debate to the chamber. Not only do I welcome the opportunity to explore the topic, but he has framed his motion in such a way that, had it been introduced to the chamber as Labour Party business, I think that the Government might well have pretty much accepted it. At the very least, we would have had a constructive debate about it. Just as I acknowledge Mr Rowley’s motivation and his passion for the topic, I think that he knows my commitment to moving things forward in this space.
The Government shares Scottish Engineering’s desire to realise the huge opportunities for Scotland in emerging sectors. However, I recognise the concern of the organisation’s members with regard to being able to access support as smaller, already-established businesses, not just as part of inward investment initiatives or in relation to the additional demands to which Mr Rowley referred in his motion and in his opening speech.
We recognise that the manufacturing sector is key to the delivery of our broader ambitions for Scotland’s economy. That is why, in recent years, we have invested extensively in infrastructure for the sector—notably, £75 million of investment in the National Manufacturing Institute Scotland.
In recognising the significance of the sector, my ministerial colleagues and our officials have held several meetings with Scottish Engineering to discuss its report, to which the motion refers, because we understand the challenges and the opportunities that it highlights. Solutions to some of those challenges are not simple or necessarily quick to deliver, but there are opportunities to make progress now. I will return to those later.
Engineering apprenticeships are already a priority for Skills Development Scotland, and the demand for new starts with contracted providers and employers for engineering apprenticeships has been met for this year, albeit through SDS’s in-year reallocation process. Between 2021-22 and 2023-24, the number of engineering modern apprenticeships increased from 1,264 to 1,826, and the figures for 2024-25 have totalled 2,255 for the engineering and energy-related occupations grouping. There is investment in apprenticeships.
However, the report suggests that there is still unmet demand on top of those who are already in training and that there might be a number of factors for that, such as the capacity of the system, including college capacity. We are exploring that further to ensure that we better meet the needs of the economy from the outset of the allocations process. As I said, the number of engineering modern apprenticeship starts has increased year on year, as has been the case with graduate apprenticeships.
With regard to “the additional demands” of other sectors, to which the motion refers, it is important to note that having the necessary education and skills provisions in place is only one aspect of meeting workforce demand. A range of other interconnected factors—for example, demographic changes, migration policies, housing and accommodation, employer pay and conditions and, as the report notes, competition from other sectors—also have a direct impact.
The answers to the issue of wider labour shortages often lie outside the post-school education system. For example, they sometimes lie with employers in attracting and retaining staff.
The motion refers to a “risk” to inward investment and the level of investment in skills. Scotland has a strong track record on attracting inward investment—for the ninth successive year, we have remained the top-performing part of the UK for inward investment projects outside London, which highlights the continued success of our approach. Nevertheless, we are alive to the need to ensure that the trained individuals whom inward investment projects require are available to them.
On funding, the draft budget provides more than £2 billion for colleges, universities and the wider skills system. I say gently to Mr Whittle and to Sharon Dowey that we would be unable to sustain that level of funding if their party had got its way on the budget. A total of £1 billion of tax cuts can be achieved only by cutting public spending.
The minister has highlighted exactly why you keep getting this wrong. If he had invested in the college sector continually, we would have grown the economy, and your tax take would be much bigger.
Speak through the chair.
That, sir, is why we are having problems.
[Inaudible.]—investment in the sector at the same time as they are, I presume, supporting their party’s policy on tax cuts. They cannot square that circle.
In order to best use the on-going substantial investment in the sector, we need to drive agility and efficiency in the system. We need employers to think creatively and work together to, in some instances, build the critical mass of students that the training providers will require to deliver the asks that are being made of them.
As members have alluded to, we need to do more in our school system. Developing the Young Workforce groups across Scotland do fantastic work, and we need to encourage that incredibly valuable activity across the system. On Ben Macpherson’s point, improving the participation levels of employers in order that they can shape the outputs of our training offering is a particular focus of all the reform work, because that is essential.
Over the next few years, we will undertake a programme of reform of the post-school education and skills system. That will include improving career support so that there is better information available on career choices, potential job prospects and earnings; connecting students, schools and employers, as Alex Rowley is looking for; reforming apprenticeships by reducing the system’s complexity and getting the focus right; and building an improved understanding of the post-school qualifications system.
In order to meet our economic, social and environmental aims, our skills planning work will involve putting in place a mechanism to collectively agree and prioritise Scotland’s strategic skills needs, with a specific focus on regional needs. I fully anticipate that engineering skills will be central to addressing many, if not all, of those needs, but we need a robust and objective method in order to gather data and influence provision accordingly.
As well as enacting longer-term reforms to the skills system, we recognise that more immediate action is needed to address engineering shortages. That is why we are actively introducing a project to identify specific actions that could be taken to address skills shortages in the short term. Officials will be engaging with the sector in the coming weeks to assess options and agree potential solutions.
The debate has highlighted challenges that the engineering sector faces. In responding to Mr Rowley, I hope that I have made it clear that we are alive to the challenges and seeking to respond to them. We are committed to working together with the sector on short-term and longer-term changes to address those challenges and realise investment opportunities for Scotland. I look forward to working with Scottish Engineering, colleagues across the chamber, employers, colleges, other training providers and universities in order to take that work forward.
That concludes the debate, and I suspend this meeting of the Parliament until 2 pm.
13:24 Meeting suspended.Air ais
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