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Michelle Thomson has raised a hugely important point, particularly in the light of the challenges that the Government faces—which are well known to the committee—in relation to the Deputy First Minister’s update to Parliament at the end of last year. My portfolio is not insulated from those challenges.

We have worked hard to protect the education budget as best we can. My understanding of the public sector reform that is needed is that all organisations need to play a role—that all our public sector bodies will have to play their part. We need to take a nuanced approach to that, mindful of the fact that that will be easier for some public bodies than for others, given the services that they deliver. I am acutely mindful of that, given some of my responsibilities to those organisations—for example, our qualifications organisation—and the services that they deliver.

Michelle Thomson touched on education reform. Following discussion of the budget, we will go on to a session on that very issue. I am mindful of the need to support education reform, which is why the budget contains additionality—of just over £12 million, I think—to support the reform process. However, I accept that we will need to work very carefully with those organisations.

At the end of last year, the Deputy First Minister set out that there will be a 10-year plan and that we will look across Government to reduce spend—to be blunt—and to see where there are efficiencies to be made across the piece. All organisations will have to be part of that drive, but, to refer to Michelle Thomson’s specific point, we will have to take a nuanced approach. The way in which the budget has been delivered takes such an approach. It protects certain services, such as health and education, through the three-missions approach. I will seek to do that through reforming the public bodies in the education and skills portfolio while remembering the impact that education can have. It is not just about the spend in relation to education itself; it is also about preventative spend, which can benefit other portfolio areas.

There are a number of different demand-led programmes. I will bring in Stuart Greig on some of the specifics.

My understanding is that some of the savings that were generated from the Scottish Funding Council included—as the committee will know—money from the transformation fund, which saved in the region of £46 million. That is baked into this year’s financial settlement. There were a number of other demand-led budget lines, including the education maintenance allowance, for which there was less uptake in the previous financial year than had been forecast. There were also reductions to the European social fund income and, more broadly, the strategic change transformation fund.

Stuart Greig may want to say more on the specifics of those budget lines from the previous financial year.

I am happy to write to the committee with more detail on that. I do not have the specifics of those budget lines in front of me—

I say to the member once again that, as cabinet secretary, I stand by the policy of free tuition. It is a policy that the Government funds. We also provide additionality to the sector for student support that does not exist in other parts of the UK. I am sure that we will come on to talk about that, too.

The universities are currently facing challenges in relation to international students. I have spoken about some of the challenges around the changes to immigration rules, which are making it far more difficult for certain institutions to attract inward investment through international students.

The member raises a really important point. I engage directly with university principals, and I met the principal of the University of Edinburgh just last week to discuss the exact issue of international students.

I have to say to the member that one of the real challenges comes from changes made to the immigration rules, which make it far more difficult for universities to attract students from outwith Scotland and international students, who are put off by the immigration rhetoric coming from the UK Government and what the rules might mean for visas. We heard more detail of that from Alastair Sim of Universities Scotland on “Good Morning Scotland” just this morning.

I suggest to the member that some of the challenge comes from another Government, although I recognise his point about the cross-fertilisation of Scottish places. That is not a new feature of how we fund higher education in Scotland; it has been the case for a number of years. Bluntly, it relates to my party’s policy of funding free tuition for students. I think that that is a good policy, and it is one that I will stand by, but I recognise that it creates challenges for our universities.

Because our universities are autonomous, independent institutions, they are experts in working independently of the Government to raise finance, whether through international students coming to study at their institutions or through other sources. I have a lot of faith in our university sector and, from my engagement with principals directly, in their ability to respond to the challenges. Nevertheless, I remind the member that some of the challenge, particularly in relation to international students, does not rest with the Scottish Government.

I say to the member that it is not my responsibility, as Cabinet Secretary for Education and Skills in Scotland, to mop up the mess made by a Government elsewhere in its approach to international students and immigration. Decisions that have been taken elsewhere are harming the sector in Scotland. If the member has any leverage with his colleagues at Westminster, I suggest that he make those points vigorously to my opponent at Westminster. I recognise the challenge, but I will not walk away from the Government’s policy of supporting free tuition for our young people.

I go back to my response to Mr Kerr about those being additional places. Of course, we look to quantify, and the SFC does that measurement by looking at places, how we can allocate additionality into the system and forecasting what that will mean for the sector. I am sure that the committee is aware that longer-term forecasts predict a reduction in demand compared to our current school-age provision and that, therefore, across the piece, we expect to see fewer young people coming through the system in the coming years. That work will be factored into the SFC’s—

I go back to the point that I made to Mr Kerr about there being record numbers of Scottish young people going on to university at the current time. I do not think that the removal of places will adversely affect that.

The second point that I made to Mr Kerr was about the allocation work with the SFC, which, at this stage in the financial year, we would not expect to have detail on—that has not been the case at any point in the past. However, I am happy to write to the committee with more detail on that point.

The SFC looks at those calculations every year. It considers the very point that you make about calculating the number of spaces and the funding that is required. Then, of course, ministers are required to make grant provisions. We will write to the SFC about our expectations of how we can protect certain courses and young people from certain groups, for example, and that will be factored in to the allocation from the SFC. However, you are right to say that the SFC looks at that as a forward planning approach.

The places that you refer to are unique in that they are additional Covid places that we built in during the pandemic. At a time of financial uncertainty and extreme challenge across my portfolio, their removal was one of the less worse options—I suppose you could describe it as that—for how we might balance the education and skills budget.

The arrangements around colleges’ flexibility were made by Mr Dey and my predecessors, so they were baked in. It is fair to say that, as you heard from him last week, some of the changes have not been as dramatic as we hoped and have not delivered the flexibility that Mr Dey and I and our predecessors hoped for.

The SFC has made some enhancement in relation to flexibilities on the college funding mode and, now that the budget has been published, it is working with the sector on what the sector can deliver with the resources that it has. However, that has not happened overnight. There has been a challenge over a number of years with the power that colleges have to be flexible.

Through the tripartite group—I know that the committee took evidence about that from Mr Dey last week—we are examining any remaining opportunity that there might be to give colleges that additionality, particularly when ensuring public accountability, because they do not have the same flexibilities that other bodies have. I recognise that challenge. Colleges have raised it with me directly since I was appointed. That work includes our considering processes that allow our colleges to have the maximum flexibility to allow funds to be generated from estate disposals, for example.

I know that the committee took evidence on that exact point last week. It is fair to say that those arrangements are not operating in the way we would have hoped. Part of the challenge relates to the classification of colleges. Stuart Greig might want to say a little more on that, because I know that it is a historic challenge for colleges. The answer rests in the tripartite group’s work to look again at how we can drive forward more flexibility in this space. As you heard from Mr Dey last week, that has not worked in the way that we first envisaged.

I have the Universities and Colleges Admissions Service statistics in front of me. I do not know whether they are for 2022-23, but they show that more than 35,000 Scots have, once again, secured a place at one of our universities. The data from last December shows that record numbers of young people aged 19 and under secured a university place in 2023—that is, last year. That includes a record number of young people aged 19 and under from deprived areas. On Mr Kerr’s point about socioeconomic disadvantage, it is hugely important that we remember that cohort of young people who are supported through our school system through things such as the Scottish attainment challenge and the fact that we have a consistency of policy approach to widening access to higher education.

Mr Macpherson asked about numbers. Since 2006-07, when my party came into office, the number has increased by more than 31 per cent to 33,880 in 2021-22. Significant numbers—as he suggests, a record number—of young people who live in Scotland are now going on to study full-time degrees at Scottish universities. That progress is certainly to be welcomed.