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As you know, we have faced considerable financial challenges. Until the end of the year, it had remained my hope that we would be able to provide funding for that purpose. Ultimately, that did not prove possible.

I recognise the difficulty that that presents for employers, colleges and the Open University, which utilised that fund. We have been unable to restore it in the draft budget for the coming year—certainly, not in that form. I cannot and will not hide from that. It is one of the very difficult decisions that has had to be taken.

On whether I recognise that, ideally, we would want some form of funding of that type to be part of the offering, in the context of the reform agenda, as we go forward—

Colleges are preparing for the reforms—they absolutely are. The detailed conversations that we are having about a colleges-first model are an illustration of that. Colleges are planning for the opportunities that they see, notwithstanding the financial challenges.

However, it is not as simple as identifying duplication and thinking that, when something comes to an end, money will be freed up. In many instances, we need to take a phased approach. That is why I said that there is not a magic wand to make changes happen overnight, but we are actively looking at where there is avoidable duplicated spend.

We have our priorities. I need to invest in and beef up the careers service if we are to help our young people to make informed choices, and we need to support colleges to make the transition that they will have to make. Everybody has an ask. One of the biggest challenges with all reform is how we get the momentum that is needed to deliver it, given the financial difficulties.

I did not quite pick that up, convener. I hope that I did not make a bold statement. I hope that I was very clear in what I said, which was that we anticipate that, in the draft budget, the money that colleges will have for their core budget at the start of the new financial year will be broadly in line with what they will have finished up with—in fact, we think that it will be slightly better than that—except in relation to the in-year changes that were made.

There are external factors that mean that I cannot sit here and say that what happened absolutely will not happen again, but we are working very hard to avoid that. The UK Government will have a budget at the beginning of March. If, as has been flagged—this might be right; it might be wrong—that budget focuses on tax cuts, that will have a negative impact on our budget. Therefore, I cannot sit here and guarantee that what happened will not happen again, but we are trying to be as open as we can be with colleges and others at the outset and to proceed on that basis.

That is a difficult question to answer because we do not know what a fully fledged SEEP would look like. The level of applications to the fund was not particularly high. I accept that a lot of that was down to timing and its pilot nature. It is difficult to gauge what the level of interest would be if we get it up and running and therefore what the associated cost would be. That is very much work in progress. However, I stress that it is joint work in progress.

As part of the exercise, I am speaking to a lot of employers and sectors. Some sectors will make progress for themselves, as they understand their skills shortages—financial services is a case in point. That is helpful, because we know what we need to do in that space. However, you are right to say that there is both current need and future need, and we need to future proof what we are doing.

For example, we are told that we are short of 600 or 700 planners at the moment. That is important, because planning is the building block of construction and of the economic development that needs to flow from it. My question is: what is the planning degree of the future and is it the same as the one that we had five years ago? From my perspective, as a layman, we now have far more need for expertise in marine planning, aquaculture and so on.

That is an illustration of the exercise that we are going through now, in which we are considering what the planning degree of the future will be and what we anticipate providing that it will require. We are also considering whether our universities that are involved in providing that education can immediately deliver that. If not, we need to know how we equip them to do so. Then there is the question of critical mass. If we now have a need for 600 or 700 planners, what is in the pipeline? Universities need to know that. They also need to know what is in it for them to provide those courses in whatever locality they need to provide them in. That is part of what we are considering.

We should acknowledge that some of those relationships already exist. Some colleges are embedded in their communities and have great relationships with them. For example, West Lothian College already has relationships with employers, and those can be developed further.

I cannot say today that we have a vision for how that will work in practice, but the regional skills planning model should provide the opportunity for employers, the chambers of commerce, colleges and universities to have that direct dialogue. That is where we have to strike a balance between national planning for workforce skills and regional need, because very often that dialogue will be at a regional and local level.

I cannot talk about what was happening prior to my coming into post; I can talk only about what I am seeing currently. If we have not met the ask of employers in that regard, there will be a variety of reasons for that. Some colleges might not have had the capacity to do it, for example. That is a growth area and one that we will have to move into. A conversation is currently taking place with colleges and employers about how we do that.

You are right to raise the issue of microcredentials. They must be of a sufficiently high standard to be credible, and we will have to go through an exercise on how we deliver them. How do we become agile in that space while maintaining the credibility and integrity of the qualifications?

We also need to ensure that the qualifications that we offer are not so narrow that the course that an individual takes is applicable only to the company that they currently work for. That is an element that we need to consider. As I said, we have progressed in a lot of areas; that is one area that is still under consideration.

One of James Withers’s legitimate criticisms of the existing landscape was that there are many funding sources, which can be open to exploitation and which mean that a bureaucracy grows up. If a college can draw down from 70 or 80 funding sources, it must, rightly, account for how it spends the money, so a huge bureaucracy grows up in the college to deal with that. It would help to strip that out—with the right safeguards in place for the spending of public money—and allow colleges to get on with doing what they are meant to do. That is a tangible benefit. There is also a greater transparency for us, as parliamentarians, around how that money is spent. Both of those things are important.

James Withers’s call for that was based on his conversations with employers, colleges and universities, so there was a good backdrop to what he was asking for. I do not suggest that it is a magic wand that will suddenly make everything wonderfully better, but I think that it is a useful step. He wanted to move to a single funding body. Apart from the legislative aspects, that is quite a leap in one go, which is why I have indicated that we will do this in stages. We will consolidate the apprenticeship funding in one locality and the student funding in another. Perhaps the former is more important than the latter in real terms. Bear in mind that, in some instances, the transfer of staff in order to deliver that will be subject to the transfer of undertakings (protection of employment) regulations. That is why it will take time—not because I want it to. However, that will allow us to look at it and deliver, and it will give us a springboard from which to move on to what James Withers called for—recognising, of course, that the universities have expressed some concerns about having a single funding body, which we need to address.

I have spent the past six months really listening, and I have had a lot of detailed feedback on most of that, but I have struggled to get a full picture of the community learning and development offering right across the country. There are areas where the provision is really good. I have spoken to people who have gone through that learning process and have really benefited. In some cases, they have simply developed life skills, which is important. However, others have had the opportunity to go on to college and get into meaningful employment. We cannot leave people behind, and I am not satisfied that I have the full picture of what is happening.

I know that most people will—I do it myself—roll their eyes at the thought and say, “Not another review,” but I thought that it was important to have one. In that way, as we take forward the overall reform, we will fully understand what is happening for that cohort of people, whether they are young people who struggled in the school environment and fell through the cracks or people who are that bit older but still have the opportunity to get into work. We now have the review up and running, and we have set broad criteria and have tasked Kate Still with coming back to tell us exactly what she believes the picture out there to be. We will look to act on that alongside the Convention of Scottish Local Authorities, with which we are working jointly.

Throughout the reform work, there are opportunities for elements of the system—colleges or whatever—but there are also challenges for all of them. One of my challenges for the colleges will be to satisfy us that their pathways are readily accessible so that people who are identified through CLD are helped to move seamlessly into college courses if that is what would best suit them. In many cases, those pathways are there, but I want to be satisfied about that offering. Rural settings are a case in point—is the situation different in rural settings? I want to be more assured than I am that that provision exists, because we have a moral obligation to those people but also because of the workforce shortages that we talked about earlier. From an economic perspective, we cannot afford people who could be in the workforce not being in it.