Contents
Skills
I thank our second panel of witnesses for their attendance. Mark Smith is head of early careers strategy at Standard Life; Gareth Williams is head of policy at the Scottish Council for Development and Industry; Helen Martin is assistant secretary at the Scottish Trades Union Congress; and Gordon McGuinness is director of industry and enterprise networks at Skills Development Scotland.
I want to ask about modern apprenticeships. Mark Smith, will you talk about the work that Standard Life is doing in the context of the challenges and potential benefits of increasing the number of apprenticeships?
Yes. We have done a lot in the early careers space over the past three or four years. Formal apprenticeship in the modern apprenticeships framework is probably the lowest-volume aspect of what we have done; most of our focus has been on graduate entry, early career, entry level and school leavers as opposed to formal apprenticeships—although we have still had more than 300 in the past five or six years.
There has been an interesting shift in the past three years. The vast majority—almost 90 per cent—of the modern apprenticeships that we have had were taken by people under 25. For a long time, the apprenticeship route was available to existing staff members to further their careers, as opposed to being targeted specifically at entry-level roles. We have done a lot in that regard.
The apprenticeship route has to be aligned to the skills that our business uses. If an apprenticeship is available that will enhance what we do, we will offer it—it is as straightforward as that. We have been pleased to work on the foundation-level apprenticeship, and we have spoken to Skills Development Scotland about graduate-level apprenticeships.
If we can focus on areas that are of interest to us, we will be supportive. If that means taking on more apprentices, we will be delighted to do so. If it means that we reduce the number of graduates that we take so that we can take more apprentices, we will look at doing that, because it is about getting the right skills blend that we need if we are to move forward. We are happy to look at any solution that takes our skill set forward.
What drove the large increase in the type of apprentices that you described?
Six years ago, we did not employ anyone aged under 21 in the business. We will not be a sustainable business for another 200 years if we do not reach out to our communities and give young people their first career opportunities. We therefore started a school leaver programme, which was not tied to any skills training or formal accreditation but was just an opportunity to give a formal, structured work experience to young people who deserved it—they were more than talented—irrespective of their background or qualifications or anything else.
The approach was driven by two things: the realisation that we did not have the numbers of young people, which was a failure on many levels; and a determination not just to do the right thing but to build a skills base that would take us forward.
That was the start point for us. Back in 2010, less than half of 1 per cent of our staff were under 25. That was the driver for, first, the school leaver programme, and then a refocus on traineeships. The investment 2020 scheme comes into our investment operation, and we have foundation and graduate-level apprenticeships. The suite of opportunities in our early careers programme started with our Edinburgh guarantee scheme—the school leaver programme, which offers a six-month paid internship—and now cuts right across the business.
It is important to us that we have the skills to move the business forward. We have done the right thing, by trying to connect with communities and be as diverse as we can in our employment practices, across lots of groups. Whether we are talking about school leavers, ethnicity or whatever, we try to target groups wherever we can.
It is exciting to see what we have done and I am delighted to have taken on the role of looking at how we join up our internal programmes, from school leaver programmes right the way through to postgraduate programmes, and at how we internationalise the frameworks for openness and diversity that we have established here, because for us, a business in which staff are just ageing and do not have the right skills is not a sustainable business.
How many apprentices continue through the programme and how many drop off?
It depends on the programme. Of the people who enter our school leaver programme—the guarantee scheme, whereby school leavers are given the living wage and put through our development programme—just under 70 per cent remain employed with us at the end of their paid six months, and 28 per cent go on to other employment or higher education. Only 2 per cent do not go to a positive destination.
For graduates, we have a more than 90 per cent retention rate, and for apprentices the retention rate is also 90 per cent. We have lots of anecdotes about people who have progressed from an apprenticeship or trainee scheme and are still with us. We have very high retention rates.
A lot of the programmes are still quite young, so there is still time to see the benefits fly through the business. I have been filled with pride when, for example, someone does a programme such as career ready, which involves being mentored by one of our staff members for two years and doing a paid internship in summer, then spends six months on our school leaver programme, then becomes a modern apprenticeship and after that starts working towards professional qualifications.
That has been happening over the past five years, and it demonstrates the power of unlocking a latent talent stream, which we were not tapping into five or 10 years ago. The transformation of our age profile is extraordinary. As I said, in 2010, half of 1 per cent of our staff were under 25; at the start of last week the rate was 7.3 per cent. We have worked hard and we are pleased with what we have done. We acknowledge that the internal potential is massive as we ensure that the talent that we have recruited progresses and takes our business forward.
Will the other panel members talk about challenges and potential benefits in relation to the modern apprenticeships scheme? Will you also talk about the role of employers, organisations such as SDS, the third sector and education establishments in delivering apprenticeships?
Thank you for the invitation to come along.
Mark Smith has described a model that we have been encouraging many businesses to take up. Too many companies in the private and public sectors get out of the way of recruiting young people and inducting them into the business. The development of modern apprenticeships and the wider apprenticeship family that Mark Smith talked about—foundation and graduate apprenticeships—is something that we are keen to promote further to businesses.
Scotland has had a strong apprenticeship model and a stable policy environment for apprenticeships, which I think that employers have welcomed. There is a commitment that all apprentices should be employed.
Earlier in this meeting, Vonnie Sandlan gave you some statistics on wages, but those were minimum levels; apprenticeship rates are set as part of the national minimum wage at UK level. Many employers in Scotland, particularly in the private sector, pay significantly above that. Not all but many public sector employers pay the living wage for apprenticeships.
11:30Employers in the private sector recognise the need to compete for young people, which also influences their wage rates. An organisation such as Scottish Water may take into account that its investment in training will cost it around £120,000, combining wages and its top-up training, over and above what SDS gives it as a contribution to take a young person through their apprenticeship. Such organisations are making a not insignificant investment. As Mark Smith says, the young person is getting the right skills that are the right fit for those organisations’ business.
We see the introduction of the apprenticeship levy, which Government officials would say has been imposed on Scotland and the other devolved nations by the UK Government, as an opportunity to take that apprenticeship investment further. SDS has formed the Scottish apprenticeship advisory board, which is chaired by our chairman but has a large representation of senior people from across the business community. There is a good gender balance, too. The board met for the second time yesterday in Glasgow and had input on the quality and standards measures that we plan to undertake.
We have had engagement with senior officials from the Scottish Government. The Minister for Employability and Training, Jamie Hepburn, met our employer engagement group two weeks ago and had a presentation from foundation apprenticeship participants in engineering. We have discussed the issue of vocational or academic routes. There were two young people there who had experience of the foundation apprenticeship; one was targeting a university programme and the other was looking for a vocational route back into the workplace.
It is an exciting time for us. There is a lot of work and we have an extensive programme of engagement with many of the levy-paying companies in Scotland. We are trying to get them, as we would put it, “levy ready”, and ensure that they have a good awareness of vocational routes and can tap into the latent skills and talents that Mark Smith referred to. It is an important time for us.
The provider networks and the third sector have been touched on. There is good, strong engagement there. There will be a Scottish apprenticeship advisory board, which will be supported by our employer engagement group, our standards and quality group and a group that will look specifically at equality issues. That is backed up by our current MA equality action plan.
The modern apprenticeship programme is one of the skills programmes that our members report most positively on and we welcome the plans to increase the number of starts in this session of Parliament. That is based not just on our members’ their experience but on the international evidence linking apprenticeships with higher productivity. We think that we need to protect and sustain the Scottish model, which emphasises quality, rather than moving towards more of a volume approach. I welcome the comments so far from the witnesses about diversity and looking at gender stereotyping in particular areas. That is an issue that we would endorse.
We welcome the introduction of graduate-level apprenticeships. Many of our employer members want to make the link between working and learning in relation to higher-level skills. We also welcome the introduction of foundation apprenticeships and hope that, over time, those can be made available to young people in every school. At the same time, we recognise that there are challenges, for example in rural areas. The apprenticeship programme will not be suitable for all; it will be industry led and we need to look for particular solutions in some areas, including in rural areas.
I would echo a lot of what other panel members have said. We are very supportive of the apprenticeship scheme in Scotland. As others have said, we think that it is very good quality. That is one of its key strengths—the fact that we have defended the status of apprenticeships as employed by employers and paid at a decent rate. Unions argue for the living wage for apprenticeships, and we achieve that in many instances.
We have concerns about some of the equality aspects of the apprenticeship system, as there is still clear gender segregation in the frameworks. SDS is doing a huge amount of work on that, and we are continuing to prioritise changing that profile to ensure that people get the right opportunity to work and that gender segregation is not maintained in our economy through the apprenticeship system.
We are also concerned about the number of disabled workers who gain access to apprenticeships. There are some simple things that we can do to support the trainers who deliver the frameworks so that they understand how they can make reasonable adjustments and how they would support a disabled student. That could help as we move forward.
We are equally concerned about the numbers of black and minority ethnic people who take up apprenticeships; again, more work could be focused on that area. We are very supportive of graduate-level apprenticeships, which we see as a move in the right direction. We would like them to be used to bring people into high-level sustainable careers and to provide high-quality opportunities for workers.
We support the concept of bringing people from schools into workplaces, and we think that foundation apprenticeships are a good innovation in that respect. However, we have concerns about the fact that a foundation apprentice is not employed and not paid, which is a departure from the employed-and-paid status in the apprenticeship scheme. We can see some of the arguments for why that should be the case. However, we believe that it is important that it should not start to erode the employed-and-paid status in the wider apprenticeship scheme; that the young people who are in foundation apprenticeships should not be exploited in the workplace; and that there should be proper consideration of how foundation apprenticeships link with apprenticeships and with the minimum wage requirements that come with that.
As Gordon McGuinness said earlier, employment law from Westminster means that there is a minimum wage rate for apprenticeships. Simply calling something a foundation apprenticeship does not take away the need to pay the minimum wage. There are some practical issues there, and we think that it is very important that we design a skills system that supports young people into work and gives them access to good-quality opportunities, and which makes sense in the wider employment context.
My question is specifically on equality of access. Disability organisations have put a number on the level of involvement of people with disabilities in apprenticeships. Can you give us any figures on that?
Secondly, to what extent is SDS working with NUS Scotland on those issues? What is SDS doing specifically to address the question of segregation, because Helen Martin is right to say that apprenticeships are in danger of reinforcing an inequality that is already there? What has SDS done to respond to those disability groups that have highlighted the very low numbers of people with disabilities who are accessing apprenticeships?
I will come back to the committee on that so that I am rock solid on some of the statistics for participation levels.
We have done a lot of work in the past two years that is reflected in our action plan. Helen Martin sits on our group, which has worked with a number of representative groups such as BEMIS—empowering Scotland’s ethnic and cultural minority communities; the close the gap project; Engender, Capability Scotland; Glasgow Disability Alliance; and Glasgow Centre for Inclusive Living. Those are just some of the groups that we have worked with. We have targeted issues around not only disabled young people, gender balance-related activity and the number of black and minority ethnic people but care leavers, who are an important group in terms of equality of access to the labour market.
We have developed an action plan in conjunction with our partners. It is a five-year plan with SMART—specific, measurable, attainable, realistic and timely—targets attached. We have received £0.5 million from the Government as part of the investment programme to initiate progress on those issues. There has been a lot of development of projects with the specialist groups that deliver them so that, as Helen Martin said, learning and understanding can be shared with our network of providers in a way that builds capacity. There is a big focus on employers, with an attempt to communicate messages about the abilities of disabled people, rather than allowing them to maintain jaundiced views about what disabled people cannot do. The five-year programme has touched on the science, technology, engineering and mathematics agenda, with big projects being undertaken along with the Institute of Physics, Engender and others.
We have found there to be a disparity in relation to self-declaration of disability. There has been a tendency for people to withhold that information from employers or training providers when making applications. That is an important point, because we have resources that we can use to support young disabled people in the workplace, where we are aware of them. That is a key aspect for us. We are working across partners to come up with agreed definitions of disability across the sector.
Do you have figures for the number of people with disabilities who have accessed apprenticeships in the past three years?
I will get them for you. I have them in my pack here.
I certainly do not want to create a hierarchy of discrimination, and I recognise that there are particular issues to do with job segregation for women in work, but are there specific things that disability organisations have highlighted to you around the extremely low figures? To what extent are you able to approach that as a separate stream of work rather than as a general issue to do with attitudes to inequalities? It cannot simply come down to the attitude of a young person who perhaps does not want to declare their disability. I understand that the numbers are very small, so there must be fundamental barriers.
They are small. If somebody else wants to pick up on your point just now, I will get back to you in a moment with details.
Our disabled workers committee raised issues around the specific point about disabled people getting access to apprenticeships. It had heard reports that one of the big barriers for disabled workers was that the training provider did not have enough understanding of disability equalities and how to make reasonable adjustments to support the young person through the entire scheme. The problem was not so much with the employer but with the training provider. In some ways, that is extremely worrying, because that should not be happening in the system. However, the other element is that, because those training providers are commissioned by SDS, there is a simple institutional fix, as people can insist on better understanding of and outcomes for disabled workers within the contract. The situation with employers is more challenging but, if the main barrier is with the training providers, there should be things that we can do this year and next to correct that issue.
We already know that phenomenal numbers of people with visual impairments are unable to access work. That connects to the debate about the extent to which we support people with disability through the benefits system. That is very important, but the other part of the issue relates to the fact that there are things happening in the system that are actively stopping people working. In terms of priorities for the work of SDS, we need to ensure that there are no trainers who do not get the point that I am talking about and that people understand the broader significance of the issue in terms of the potential of people with disabilities to work, which is that it is not just an issue about fairness within apprenticeships but a broader issue about fairness in the world of work.
I do not disagree.
The work that we undertook around the 2014-15 starts for modern apprenticeships shows that only 0.41 per cent of people in the programme declared that they had a disability. When we undertook an exercise with our training providers that involved negotiation with the young people in the programme, those numbers increased to 3 per cent. When we went back and analysed their school records, looking at equal cohorts, something like 12.5 per cent had been recorded as having disabilities.
We have a range of measures that target both young people and employers, and those young people in the education system, particularly at that transition period. We have a data-hub structure, which is a record system that is shared with all education institutions—schools and colleges—the Department for Work and Pensions, SDS and SAAS. It is about using that type of big data to analyse and understand where young people are in the system, then getting careers coaches and careers advisers working with them and linking them into our training organisations to try to pull more young people with disabilities into the training system.
11:45
Would you set quotas within the programme?
We have targets. I will send you a copy of our five-year action plan, and we are more than happy to come back with some of the specialists in our team and sit down and have a more detailed session with you. However, we have a published five-year action plan that is a real focus for our work and our training organisations, and there are targets in that.
With respect, those targets are not working, so would you consider looking at quotas? That would mean identifying a certain amount of your funding to deal with apprenticeships that would go only to people with disabilities.
We have a number of incentives that are target driven, such as wage incentives and incentives to tempt young people into the workplace. Those targets exist and we will be measured against them.
But would you ring fence part of your budget?
Yes, that has already been done.
It is ring fenced.
Yes.
I want to ask about the apprenticeship levy. My feedback from businesses is that they very much hope that it is an additional source of income and that it correctly dovetails with lots of the other programmes that are already happening. I think that the Scottish Government and the UK Government are consulting about how that money should be allocated. What do you think a good allocation would be, in terms of how it should be done rather than the amount? I note that the Scottish Government has said that it is possible that the levy undermines the discrete Scottish aspect of apprenticeships. Will you comment on that?
We have met the Minister for Employability and Training, Jamie Hepburn, a few times now in relation to business consultation, so there has been significant consultation at the Scottish Government level, which has been appreciated by individual organisations and by representative organisations such as the Confederation of British Industry Scotland. I think that there is frustration at the Government level about the lack of detail on how funds will come to Scotland and whether they will be ring fenced or part of the Barnett formula. The Scottish Government’s consultation exercise, which closed last week, prompted six questions that were broadly around whether the Government’s ambition of 30,000 MAs by 2020 was the right level or whether there should be more or fewer, and whether the foundation apprenticeships should be part of the levy system. There are also questions around more flexible use of the levy in terms of workplace training and support outwith the apprenticeship programme and around whether some of the funds should be used to support young people into work through employability programmes.
We have not had the outputs from that exercise, but we have heard concerns from employers who operate both north and south of the border who want a programme of activity that is not too dissimilar north and south of the border. You asked about the English system, and England has set a target of 3 million apprentices over the course of the UK Parliament. The equivalent figure for Scotland if it followed that target in percentage terms would be about 60,000 apprentices. Our gut feeling is that that would be too many and would be just about chasing numbers.
We have an expansion plan to take the number to 30,000 apprenticeships by 2020, which involves undertaking a fair amount of work with industry bodies and looking at sectors on a regional basis. For example, we can identify clusters of engineering companies, and the percentage of apprentices in that area is lower than we would have anticipated. So it is very much about having a targeted marketing campaign, and off the back of things like foundation apprenticeships we have a growth programme that will complement that.
I do not know whether I am fully answering your question. There is a lack of detail at present. There is a recognition that the UK Government has said that a pound in will mean a pound out in terms of an employer, but there are some fairly complex structures appearing in terms of a levy payer wanting to use that within their supply chain. It comes across as potentially fairly bureaucratic.
What is your understanding of the timescale for a decision being made about the allocation?
I imagine that it would be best to ask a Government official about the timescales. The consultation exercise has been concluded and I understand that the announcements will be made around November, but that will be for the minister to decide.
It is good to hear that there is widespread recognition of the importance of apprenticeships. Last week, the committee’s visit to Stirling Community Enterprise demonstrated to Fulton MacGregor and me the opportunities that apprenticeships can provide when they are delivered well.
However, we are only eight months away from the introduction of the apprenticeship levy and, despite all the good work that has been done in Scotland, I suggest that you are being slightly diplomatic in the language that you use to describe employers’ reaction to the levy, Mr McGuinness. Over the summer, employers have said to me that there needs to be clarity and that there are serious risks. Are we ready for the apprenticeship levy? If we are not, what must happen to ensure that we are ready?
Government ministers themselves would express a degree of frustration about the amount of detail that is available at the UK level. On top of that, a number of changes have been made to the UK Commission for Employment and Skills that undermine the support structures around things like national occupational standards, which have greater importance in Scotland because much of the Scottish Qualification Authority’s portfolio is built on national occupational standards, and those structures were designed at a UK level. Colleagues have been taking action to address that.
If an engineering company makes a commitment to an apprenticeship, that is a four-year commitment to take a young person through their apprenticeship, and there are issues about what the future financial landscape will look like. That is not within our control, and at this stage it appears not to be within the control of the Scottish ministers, who are waiting for information from the UK Government.
I put the same question to Mr Smith, Mr Williams and Ms Martin. Mr McGuinness is sitting in the middle and waiting for things to happen. What is your feeling about the risks and opportunities from the apprenticeship levy and what needs to happen between now and April?
The majority of our members would not be opposed to the principle of an apprenticeship levy. The biggest concern has been around the lack of clarity, principally at the UK level. There is a degree of sympathy with the Scottish Government’s position. That said, earlier this year, the Scottish Government went around and spoke to a couple of hundred businesses, and the outcome of that was not clear in the consultation that was issued over the summer, to which businesses had only a very short time to respond. That is another concern.
Gordon McGuinness has highlighted some of the issues, including the concern about the Scottish model and how the funding will come back to Scottish businesses, the cross-border issues for businesses, and the impact on existing levies such as the Construction Industry Training Board levy and the industry support for the continuation of those. There are also concerns around the thresholds and whether they will be linked to inflation or changed if there are continuing pressures on public sector budgets, which could bring a lot more businesses into the system.
We have been picking up issues for the public sector, sectors of the economy that have different training models, such as the legal sector, businesses that place a lot of temporary workers in other businesses and therefore do not necessarily offer their own training schemes, and businesses whose work and workforces fluctuate—the point in the year that is chosen for making the calculations might draw some such businesses into the system, and ways of addressing that would have to be found.
I return to the point that the lack of clarity is the overriding concern. We understand that significant amounts of money will come to Scotland. As has been said, businesses want to have a strong voice in how that is spent and want strong evidence of additionality in relation to the plans that were in place.
We see the levy as a tremendous opportunity. We support its introduction because it is important that employers take a strong role in providing skills in their workplaces, and that role has been lacking to an extent. We can already see that the levy is increasing employers’ interest in getting involved in training and skills policy and in having a strong voice in how the money might be spent.
The levy provides a really good opportunity to put in place proper infrastructure for the training and skills environment, as envisaged by the Wood review. The SAAB—I think that the initials stand for the Scottish apprenticeship advisory board—will be crucial and will provide an opportunity for employers and unions to sit together and talk about what apprenticeships should look like and what the numbers in different sectors should be. There was no opportunity for such discussion previously because the level of buy-in from employers was not the same; now, the level of interest is higher.
The system has potential dangers. For example, will it just suck up employers’ training budgets and mean that being an apprentice becomes the only training and lifelong learning that is available to employees? We must guard against that, because apprenticeships cannot be the only training that we offer; there must be a good range of options for a range of workers who are in a range of circumstances.
Whether everything is funded from the levy, whether the levy does a distinct thing and other money is drawn down for lifelong learning and other training or whether employers are expected to provide such training in addition are all up for discussion. A lot of the decisions about where the lines are drawn concern the level of funding that we will receive from Westminster. Until the question about funding is answered, it will be difficult to understand how much the levy will provide in the education and training system and whether it will stretch to foundation apprenticeships, unemployed workers and the workplace as a whole. All that depends on the amount of money that is in the system.
We are clear that we need a training and skills system that can do all the things that I described and which fits together nicely, and the levy must play a role in that. In an ideal world, we will meet the challenge and maintain the best aspects of the Scottish system, which relate to the quality of apprenticeships, the status of apprentices as paid employees, employer and union involvement and the industry standards that underpin all the training. However, serious technical issues need to be resolved.
Clarity would be nice. The sooner we know the position, the sooner we can make plans and provision. We know what the levy will cost us, so we know that a cash amount will go out. We also know that we will not be able to reclaim a great deal of that; it will go and we hope that it will feed necessary skills development and evolution. That is okay—we are comfortable with that and we think in principle that it is a good thing.
12:00We are cautious of chasing volume—the idea that we should just go for a target and have however many tens of thousands or hundreds of thousands of apprenticeships. They must not be in spaces that are not needed and do not meet the demands of business and employers. What are we training our young people for if the apprenticeships are not for real jobs with decent wages at the end?
Nobody wants to pay the same money twice. We already invest a lot in pre-employment training. We invest in our own trainees and graduates because we need their skills. We get that, but my fear is that someone in another part of the fiscal process will say, “We are paying this money every year. Why are we paying for all those trainees and interns? The money is going out on that levy, so justify why you spend it.” Currently, we have a strong business case for why we spend the money in the way that we do to bring young people in, and long may that continue.
There is a lot of detail. We would like some clarity. I am looking at how we can align our internal programmes to an apprenticeship framework in Scotland and England. The majority of our training, development and recruitment is still here and that will continue, so we need to align it to what is available in Scotland. For us, it would be ideal to get the greatest flexibility possible through the levy funds. We would love to get back out every pound that goes in. I do not think that that will happen, but it would be great to have the maximum flexibility in how we claim those funds.
Many different aspects of the matter need to be considered and clarified, and one of them is age. It is absolutely right that we ensure that our young people have the right skills for the world of work but, as we see in the north-east, big economic changes can happen. I come from the retail industry, which has seen huge technological change. We need to deal with that sort of thing. Is there a danger that, if we overfocus the levy and the wider skills system on young people, we will fail to build a system that can cope with such economic changes and the reskilling that we will need to do in the future?
That is absolutely right. We have done a lot of work supporting veterans into the workplace. The focus on early careers does not necessarily relate to the young early career: it can be somebody returning to the workplace—for example, a parent or carer. That is about tapping into the necessary skills. We do not want to put a cap on who we work with and where we draw our talent from. We have seen people coming out of the forces with amazing technical ability that we need. Our investment 2020 programme has taken in people who have rejoined the workforce after 12 years raising children. It is important to have the right skills and training capability to maximise those people’s potential. The focus for us has been on youth but it is by no means the only focus.
I take your point about clarity but are you saying that, when it is announced how the levy will work, you will lose X amount of money into the system, it will come back to Scotland and you want the Scottish Government to put all of that into training and skills but not just into the narrow measure of modern apprenticeships? Am I right about that?
That would be our preferred outcome. My understanding is that the English system has a kind of digital voucher and it is run through the pay-as-you-earn system so it is possible to see how much goes out every month. I think that employers can claim monthly—although that might not be technically correct. A system that allows us the maximum flexibility to claim for the training of our people would be good.
Gareth Williams, as an industry representative, is that a fair perspective on how Scottish business would like to maximise what goes into the system and, therefore, what it gets out of it?
It is fair. There is a recognition that not all businesses will be able to get everything out, but they still want to influence how the money is spent to maximum benefit.
Helen Martin, you made some interesting points about the potential conflict if the policy is narrowly focused, as it could be south of the border—again, we do not yet have clarity. I asked earlier about developing Scotland’s young workforce. It seems to me that there would be a straight-up clash if we had a narrow focus that took a lot of money out of Mark Smith’s business, as he has just reflected, and did not allow us to continue developing Scotland’s young workforce. Is that a fair observation?
It depends on how the system is designed. One of our challenges is how we make it align with the other skills policy requirements in Scotland.
There is also the opposite challenge. If we design the scheme too broadly and people are allowed to do pretty much anything with the money, does that undermine the entire concept of an apprenticeship? We have been very tight in Scotland about what we consider an apprenticeship. It has been based on industry standards and it has been tightly designed. In England, the concept is already much looser.
It is not beyond our ability to marry all those things together, but we have to recognise that there are going to be tensions within the systems. There are principles that we are trying to defend as we try to design a system that actually works for the Scottish economy. We have the opportunity to get into the idea of creating an infrastructure that allows us to think about what we need for the Scottish economy and to get away from an arbitrary, target-driven process involving a top-down policy lever.
We will finally have employers and unions around the table together, so they can sit and talk about skills needs and skills development, and they can design solutions and pipelines that work sector by sector, rather than necessarily always having to be driven from an outside, Government forum.
None of you are arguing that we have to reinvent the whole wheel again, are you?
No.
The last thing we need to do is to rip the whole lot up and start again, just because there is a new thing called the apprentice levy. I still think that developing Scotland’s young workforce is a great programme. We should be doing an awful lot more of it. Is it your collective view—I am sure that SDS takes this view—that we should not reinvent it all but that, if we are going to have some new moneys, they should be concentrated on the programmes that are working effectively? Fine—I see you all nodding.
I want to ask about the skills review. We have had sight of an SCDI submission that states:
“there is some duplication and confusion among users, and some interventions lack scale.”
That is a line in the submission that you kindly provided to the committee on the skills review. Could you talk to that line? What is the
“duplication and confusion among users”
that your members are concerned about?
It is widely recognised that the skills landscape is cluttered. As you will have seen in our submission to the committee, we are most directly involved in the STEM area. When we start to map out all the interventions in that area, we find that we cannot fit them on a side of A4—nowhere near it—and the situation is replicated in other areas.
Much of the work that is going on is very good, and we would not want to denigrate it in any way, but it becomes more of a challenge for employers to navigate their way in and for the initiatives to achieve a scale and national reach with input from employers—which, as we all know from the work that the Wood commission has done, is essential.
Another example is in the digital area, which is obviously a high priority. There are a number of initiatives in that area that are specifically aimed at tourism businesses or on which tourism businesses can draw. They would all appear to be struggling to achieve their aims, partly because of that confusion.
We think that there are a lot of positive things in the system. I have mentioned apprenticeships. There is the work that SDS does on digital and there is My World of Work. Those are all widely appreciated.
Why is the confusion there? Those bodies that the skills review is considering are all Government bodies. Presumably the minister or the civil servants who are sponsoring those bodies are responsible for ensuring that there is no confusion and that there is clarity.
It is important to note that our comments in our submission do not just reflect the number of Government bodies—not just the four agencies that are specifically referenced in the review—albeit there are issues between those bodies. We would always want a no-wrong-door approach to be applied across all those bodies.
My reference was more to the wider interventions that take place from the public and private sectors and the need for greater clarity across them. It is not necessarily about reducing them all to one but at least making it easier for employers.
Mark Smith, do you have a view on this as an employer?
The landscape is very cluttered. I sit on the developing young workforce board for Edinburgh, Midlothian and East Lothian. One of the ambitions is to take a strategic view of the landscape and ask how we cut through some of the noise to connect employers who want to do something with schools and colleges that want to do something with them. In essence, that is a simple and noble ambition but, in practice, there is an awful lot of noise.
From colleagues and different things that I am involved in, I can maintain that most employers are doing something but we do not have a strategic view of whether they are doing the right things. Are they connecting the right skills gaps? Are they planning the right interventions that are needed with schools and colleges? Do schools know what provision is out there? Do we have a sense of what the gold standard interventions are that are available to all the skill sets and all the age groups? We should do, but we do not.
The landscape is absolutely crowded and cluttered. There are a lot of good intentions out there. The fear with DYW and city deals is that we are adding more complexity and more layers that will make it harder for employers, schools and young people to connect.
We do a number of things under our own steam because it is something that we feel passionately about, and we will always try to offer the provision that we make available to all schools. We do not want to have just one relationship with one school, for example, because we want everyone to have the opportunity. It is not easy.
How would you simplify the situation? Presumably you are talking about Edinburgh because you are a major employer there. I am not expecting you to solve Scotland’s problems; we have not got all day. What would you do in Edinburgh?
A tool called Marketplace has recently been launched; it invites every employer to list their offer or proposition. It is a space that joins education and employers. Schools and colleges can access it to see what is available and draw it down to make the connection.
I am pleased that we try to work in partnership. The DYW board took the bid to work with SDS to build a platform so that we did not end up building a platform that is good only for one part of the country. It can be replicated across Scotland because it is a good piece of software. That is just one aspect.
There is a danger of making things too complicated. We want a forum in which young people and employers can connect. That might be digital or real. We worked with the Prince’s Trust on a concept called get hired, which is funded by our charitable trust. It is straightforward: the Prince’s Trust finds disengaged young people, works with them and helps them to get job-ready. In the morning of each get hired day, the young people do skills sessions with volunteers on CVs and interviews, and, in the afternoon, real employers come into that environment and interview them for a real job there and then.
That system has brokered the introduction between talented young people who might not have been formally recognised as having a talent, and employers. A physical environment in which young people and employers can come together on neutral ground cannot be hard to engineer.
Gordon McGuinness, presumably you would accept that there are different ways to do this in different parts of the country. Edinburgh’s circumstances, where it has major employers like Standard Life, are very different from those in the rural areas that some of us represent that have, for example, a combination of big oil companies and small engineering companies. Is SDS’s approach to reflect that? Developing Scotland’s young workforce is a good example of how different partnership boards in different parts of the country are doing different things to reflect their circumstances at the same time as getting rid of the noise, as Mark Smith elegantly put it.
I was going to refer to the development of Marketplace because there is a danger that we will end up with multiple employer-facing websites. We have done good work with Mark Smith and the team at the Edinburgh DYW group, and we are working hard across the national DYW group with Rob Edwards and others to adopt the Marketplace system as a national model that can be adapted at the local level. A larger employer such as Arnold Clark with multiple locations or, indeed, Scottish Water could identify the geographical locations that it could play into.
12:15The wider cluttered landscape is a mix of charities, initiatives and local activities. Things are probably most congested in the STEM area, and we have started a piece of work with the Scottish Government in order to produce a co-ordinated STEM strategy across the education system. We found that, although colleges had rightly focused on STEM, they were coming up with a strategy that potentially did not sit comfortably with, say, a local education authority. The aim is to bring more cohesion into systems at a strategic level and, importantly, to make a strong link with the curriculum and the learning outcomes that have been designed. The key thing is to design initiatives that fit and work with lesson plans instead of having some new initiative that sits outwith the curriculum.
Locality is important. Because I sit on the University of Highlands and Islands FE regional board, I am familiar with many of the challenges in the Highlands and Islands, particularly for the larger employers in that area, which are seen as the go-to businesses. We also need to be creative in using digital content for basic stuff such as interview skills. I think that UHI uses technology far more effectively than many other regional colleges, simply through necessity.
This is an issue that we need to work at. In regions such as the Highlands and Islands, there is probably a bit more work to be done at a national level with regard to the DYW groups, but we are working with people on that.
Finally, two of the challenges that Ian Wood set out in his report, which was published in June 2014, were that
“Less than 30 per cent of Scottish businesses have any contact of any kind with education”
and
“Only 27 per cent of employers offer work experience opportunities.”
Have those numbers got better in the past couple of years?
They are getting better. DYW groups have run a very aggressive campaign with local employers; I am thinking of Ayrshire in particular, where they have a history of co-ordinated work experience at a school level.
This is something that more employers are becoming aware of, and we have tried to co-ordinate activities through some of our sectoral work, through industry leadership groups and through groups such as Scotland Food and Drink. That kind of co-ordinated approach provides better-quality engagement and more consistency at a national level, although it can also be taken at a local level.
I will follow on from Tavish Scott’s line of questioning. When, in the previous evidence session, which focused on further and higher education, I asked Shona Struthers about regionalisation, the merger of colleges and what she saw as a criterion for success, she said that she had seen greater co-operation between businesses, employers and colleges. Has that been your experience since the merger programme? Have you found co-operation to be greater than before? I just want to get a sense of how the changes have impacted on your relationship and your co-operation with colleges across the country.
To be honest, my insight into that is limited. We have had a good relationship with Edinburgh College, especially around the formation of the foundation apprenticeship and its role in shaping the developing the young workforce programme. It is a key partner in that in this region. Therefore, my experience and interaction so far have been positive.
However, that is really all I can say. We have engaged, and that engagement has worked well. To be perfectly honest, I do not know of anything that went before that I can benchmark it against.
It is important to recognise that some of the colleges had very strong links with employers prior to the changes; indeed, some of them had been set up on a more regional basis.
We think that progress has been variable. Some of the college regions—Ayrshire, for example—have certainly stepped up and are forging closer links. Some of that is related to the development of city region partnerships or regional partnerships. In other areas, progress has been a bit slower, and I hope that that will soon become more evident.
In principle, the merger programme is a good move that should provide greater clarity in the relationships between schools, colleges and employers. We would also like universities to be more plugged in to the system. While relationships might be diverse, at least every school knows the college that they would draw on for mutual support in their endeavours, and the situation would be similar with universities. Employers would also be clear about those relationships regionally.
We maybe have a slightly different perspective. I do not think that it is fair to say that relationships with colleges are improving at a workplace level, although that might not apply so much at an employer level. For workers who are trying to undertake learning, opportunities at college are much reduced as there is much less part-time provision, fewer night courses and much less community learning.
Our own learning project, Scottish union learning, commissions learning courses that are designed according to the needs of workers. We decide that we want to do—for example, a sign language course, a course on a specific skill or a type of workplace skills course—and we design the course and tender it out. However, the number of colleges that are in a position to even respond to those tenders has gone down. That is, in effect, commercial work, but there is now much more of a focus among colleges on full-time learning for 18 to 24-year-olds than there is on lifelong learning and flexible learning for workers in the workplace.
We have had very goods links with employers in the past. Through Scottish union learning, we have done quite a lot of skills pipeline development in specific areas. For example, in the bread industry, we designed a skills pathway in partnership with a local college for a particular level of baker who was in very short supply in one area of Scotland. Colleges have an essential role in the skills pipeline. We have the impression that the merger process was very disruptive to that role, and it is now about trying to build those relationships back up.
I think that there are still some issues about how the mergers are bedding in and how staff can be used. There are potentially still quite a few issues in Scotland in the college sector.
As Gareth Williams said, some colleges had a strong relationship with local employers. I am on the board of Clyde College. One of the colleges involved in the merger was Cardonald College, which had a long history of industrial partnerships, particularly in gas, water projects and that type of thing, so there was a legacy.
It is early days for regionalisation. Everybody thinks that it just happens and that that fixes everything but, as colleagues have said, there is a process of bedding in. In the case of Ayrshire College, two and a half colleges have been brought together in a stronger form and the college has a strong relationship across the Ayrshire region with much more engagement with industry to help to shape provision and the curriculum.
As John Kemp said, SDS produces evidence bases around regional skills assessments, which are a detailed analysis of the demographic profile of the region and economic conditions within it. That work is informed by Scottish Enterprise and is done through the funding council, and it is supplemented by the work that we will do on sectoral development plans, of which there are 10. Those will be cornerstones on which the regional colleges plan their regional outcome agreements.
As part of the planning process that I have mentioned, Dumfries and Galloway College, for example, used the early outputs from that work to adjust its provision. It grew its engineering provision and it developed the technicality of the provision to a higher level, which was what local businesses needed. The college did not abandon hairdressing and beauty altogether, but reduced numbers a little so that there was a better spread of activities. It also deepened its engagement regarding vocational experience and modern apprenticeships within the region. That was done through conversations from the senior management team—Carol Turnbull—and through the board.
What we want is to use the evidence base to get a better picture of what the curriculum plan should be for an area. For Glasgow, we have been doing work with the local authorities within the city deal region, as well as the three large colleges on the Glasgow Colleges Regional Board. There were nine colleges in Glasgow before, so they never planned a curriculum across the city centre in the way that they now can, and they are making good use of the evidence base that we have prepared.
There are positive developments in terms of planning. Helen Martin described pressure in the system regarding the fluidity of budgets and Johann Lamont made the point earlier about women returners programmes—it is worth investing in getting the evidence base from those kinds of things and proving their worth. All too often the colleges did not capture what the outputs and outcomes from those types of activity were.
My question relates tangentially to Ross Thomson’s point. The workers who often do not have access to further education opportunities or who are passed over for skills and development training tend to be those in the most precarious forms of employment: zero-hours contracts, temporary work and so on. How do we ensure that we are not creating a vicious circle for those people, in that other workers will pass them by because those opportunities are simply not available to them?
That is a good question. Digital exclusion is an issue and literacy and numeracy are also still big issues for us. Local authority budget cuts impact on community education, which would have been the traditional portal for people to enter the system—your visit in Stirling would have been to that kind of venue. Those are the areas where provision has fallen back fairly significantly.
We have been doing some work on literacy and numeracy levels, and a priority has been placed on closing the attainment gap. It is fine to put a strong focus on schools, but kids might go home in the evening to parents who cannot help them with their homework to a sufficient standard, or the kids themselves might struggle with literacy and numeracy. There needs to be a broader recognition that those basic skills are needed for employment. A 25-year-old who is in the workplace and struggling with literacy and numeracy could be there for another 40 years. The use of digital technology to support those skills more effectively is an area that we can look at and apply some scrutiny.
That is an issue that the STUC feels strongly about, as you might imagine. The prevalence of precarious workers is increasing within our economy, and it is a real problem that we are creating a two-tier workforce. There are groups of workers who are in precarious contracts, be that agency worker contracts, zero-hour contracts or umbrella contracts. There is a whole range of contracts that are designed to keep workers in a precarious situation, that enable employers to use workers’ labour at their will, and that mean that employers do not have to worry about paying sick pay, training workers or bringing them into the workplace in a way that we would want to see. That is unacceptable and there has to be a policy focus on precarious work. There has to be an expectation that employers do not keep people in precarious work for years and years, excluded from training opportunities and apprenticeship offers under the apprenticeship levy, for example. We have to ensure that those workers are either moved off those contracts or given proper skills pathways into other forms of work.
Employers often say that those contracts are good as they provide flexibility, but there are better ways to provide flexibility within our labour market than to keep people in a position where they do not know whether they will be able to pay their mortgage each month. We also find that there are big equality dimensions to the issue: BME, female and young workers are clustered in precarious grades. It is not necessarily the case that those workers have skills shortages; actually that they can be graduates or very highly skilled people who have got into this kind of work and are finding it extremely difficult to get back out of it again. It is a structural problem in our labour market that we have to focus on.
12:30
Is there a significant difference in how easy employers make it for those workers to be organised and unionised compared with workers in more secure kinds of employment?
It is much more challenging to organise a precarious workforce, but we are putting a big focus on it. I do not know whether you have seen our better than zero campaign—
I have.
The difficulty is that, because this workforce is so precarious, they are simply not taken back if you try to advocate in the usual way for them. There is no dismissal as such; they just do not receive their hours, just because they are unionised and are causing problems in the workplace. After all, you can stop receiving hours just because you have taken your child to the doctor. Becoming a union representative is not really an option, and it is therefore very difficult for the union to organise in the traditional way. That is why we are using leverage campaigns to organise for vulnerable workers; they are all about direct action instead of traditional forms of organisation. Indeed, what happened at Sports Direct this week started as a leverage campaign by Unite, so such an approach can have really quite dramatic impacts on how workers are treated in the workplace.
That said, we must start to see precariousness at work for what it is—a form of exploitation—and ensure that the people who are in those grades get opportunities to improve their skills and move through into the workplace. Such contracts are increasingly being used in the public sector, the national health service and universities, and they are becoming more and more legitimate as a form of work. It is therefore important to ensure that those workers are not being carved out of our skills agenda and that we find ways of bringing those people into a better situation.
We do not have zero-hours contracts; we are a living wage employer and a living wage friendly funder for our charitable stuff. We believe passionately in real jobs and real wages, and we provide them throughout our supply chain.
However, there is obviously a problem here. When we started to get involved in this work five or six years ago, it was easy to carve out opportunities for school leavers. I will share with the committee an anecdote: when I was asked to take over this work, I went up to our seventh floor and found rows and rows of desks with 16 and 17-year-olds under exam conditions. I turned to the woman who was running the programme and asked, “What are we doing?” She said, “They’re doing their aptitude tests”, and I said, “We know that they’re no good at maths. What are we learning here that’s new?” We stopped that approach; I am not a human resources professional, but I instinctively knew that it was putting additional barriers in the way of people accessing genuine opportunities with us.
We then turned off the minimum qualification attainment for school leavers. If someone wants to work with us and has the ability to do so, do I care whether they have one higher? If they are the right person, they are the right person, and they deserve a chance.
It is easy for us to take a principled position, because we have the financial resources to do so, but we also try to influence and help others where we can. If we get our own house in order, we can start to talk more publicly about the living wage, skills and that kind of stuff. I remember once using the terrible corporate phrase “moving further upstream”, which got me into a wee bit of trouble. It is fine to help people post education find jobs and access, to pay the living wage and so on, but how do we make sure that we turn off the tap? How do we start influencing things further upstream to ensure that people who are coming through education, who are transitioning from primary to secondary education or who are vulnerable or come from chaotic households get the support that they need? As an employer, we cannot do much in that space; however, as a funder, we are able to do something, and we have started to partner with a charity called SkillForce on an award to help people transition from junior to secondary education and with the career ready programme to ensure that people from disadvantaged backgrounds get access to employers like us and jobs like ours and get mentoring from our staff to ensure that they are not excluded.
There are things that employers can do, but it comes back to the question whether the employers who want to get involved know what is available and know the best interventions to get behind and support. In response to the earlier question about what I would like to see, I have to say that I would love us as a country to strip things back and make some brave decisions about some of the things that we fund and support and really focus on the things that make a difference. However, I will leave far more qualified people to identify what they actually are.
The fair work convention and the labour market strategy offer an opportunity to start addressing these issues. We need to generally raise our sights on workplaces and have more of a focus on that, including the quality of leadership, management and how people are treated. Helen Martin referred to a number of disappointing cases that tell a larger story. At the same time, we have to acknowledge that the world of work is changing and people will work more on a project basis where they come together for a particular task. There are also higher aspirations around working flexibly and changed expectations of careers and the number of different roles that they involve. Balance is the wrong word to use, but in addressing those fundamental issues, we should not try to push people to make choices that they would not necessarily want to make.
Gillian Martin has some questions that she would like to ask. I will soon draw the meeting to a close, so these will be final questions.
I have a short question about something that was mentioned a long time ago now, about the challenges for rural areas, because I represent a rural area. I am interested to know what you think those challenges are and how they could be addressed so that people in more remote areas can get apprenticeships.
The misconception is that only larger employers take apprentices. The vast majority of apprentices will be with small to medium-sized companies. Part of the work that we are doing around the expansion plan is to report on a detailed geographical basis on apprenticeship uptake across the apprenticeship groups in occupational areas. There are challenges in the island communities, which is where we see the foundation apprenticeship model as being a better model for connecting young people to local employers and creating a relationship rather than the young people thinking that they need to move away to get a job. There are opportunities there.
Earlier we touched on the number of employers within a local area and the opportunities to consistently deliver foundation apprenticeships. That is challenging and we are working on that with stronger partnerships between colleges that support apprenticeships and local schools. We will need to think creatively about how we use things like digital technology and so on to get people started with their career.
I suppose that there are issues around smaller businesses. Mark Smith’s remit is to deal with the problem for a very large company, but a small employer taking on the additional responsibility needs support.
That is a challenge that has been identified. The Federation of Small Businesses undertook a study two years ago through Rocket Science, which identified the challenges that face small businesses that make that commitment, especially if they do not have a human resources team.
A number of models for shared apprenticeships have been piloted within geographical regions. There is one in Dundee and Angus just now, and one in the construction industry in the Highlands. Coming back to the apprenticeship levy and its potential additional and flexible resource, could similar models be created? It comes back to the structure of the apprenticeship model. We want employers to make a commitment to employment for young people and that could be a stumbling block. If it is, it is a good stumbling block and the principle is a good one, but more needs to be done to provide information and support for small and microbusinesses to recruit young people.
Fulton MacGregor has a question, and then we will go to Richard Lochhead.
My question is on skills for the future. What role do you have in identifying future skills rather than those for the here and now? The committee’s papers contain an amazing statistic that I was not aware of—they say that 65 per cent of the children who are in primary school now will end up in jobs that do not currently exist. In your various roles and functions, what are you guys doing to look at future skills?
We undertake a lot of that work with sectors. The industry leadership groups for Scotland’s key and growth sectors, which Scottish Enterprise and the Scottish Government support, help to set the industrial strategy for sectors. We work alongside those groups to look at growth ambitions for companies and future skills as the groups understand them. We produce skills investment plans, which articulate the types and volumes of skills that will be needed.
Some stuff is emerging. Dialogue took place yesterday about fintech, which is a merger of financial and technical skills that it is said could transform the financial services industry. With Scottish Enterprise and Deloitte, we are looking at the opportunities and threats from that. A threat is that digitalisation could take swathes of employment out of operations such as call centres.
We consider future skills needs. We look at international research and we are concluding a report on jobs to 2022. We make projections and we want to understand where the growth areas are and where the demand for replacing skills is—somebody touched on that in relation to health services and other areas. There is jobs growth, but the largest requirement for jobs in the labour market will come from replacement demand, which is the need to replace those who are coming up to retiral age.
Health boards will be quite heavily hit by the apprenticeship levy, but they will not be able to put another few percentage points on the bills to their customers. We and the Government need to think creatively about how to support that. An example is that NHS Greater Glasgow and Clyde could pay £6 million into the levy fund and will have significant skill challenges because of the age profile of its workforce, but that could be applied to engineering companies or any other organisation. We need to understand the balance of what the skills system needs to produce to meet the replacement demand as well as to respond to new stuff.
Can we link that to another discussion point that all witnesses have mentioned, which is—to use a phrase—about getting to the hardest-to-reach people? Daniel Johnson talked about the initiative in Stirling that he and I were at last week, and I have visited a routes to work programme in Coatbridge in my constituency. Such initiatives are doing a lot of work to get to people who find it difficult to get into employment. Have you thought about identifying skills for the future in conjunction with looking at the people who are hard to employ?
The Scottish Government’s policy structure includes a skills pipeline, which is segmented into four strands. That is how public sector organisations such as us, local authorities and colleges view provision. The first line of the pipeline involves engagement with those who are disengaged. An aim is to help young people—and adults—to move through the skills pipeline. We can come back to the committee with a bit more detail on that Scottish Government framework, which has worked well. The approach has helped local employability partnerships to ask how much provision they have for each part of the pipeline and whether they have stepping points—transition points—for young people to move through the system towards more sustainable jobs.
Richard Lochhead will ask the last question.
I will keep my points brief. My questions are about Brexit, given all the debates that have taken place over the past few years about the challenges of skills gaps and the need for taxpayers of the future. That leads us into discussion about people from overseas coming to work in Scotland. How do you feel about the potential impact of Brexit on meeting those challenges? What steps can you take to try to prepare Scotland for those potential future challenges?
12:45
Finish with an easy question, eh?
The Scottish Government has established a cross-agency group, which has been pretty well publicised, and Skills Development Scotland has been working with the Government, Scottish Enterprise and Highlands and Islands Enterprise to look at the evidence base and reform it.
A UK-level report—I am trying to remember its name—gives us a breakdown and a Scottish sample size that looks at the industrial sectors and the make-up of foreign nationals and UK migrants in the workforce. We have done an initial analysis of that. It will not come as a surprise that areas such as tourism and food and drink depend heavily on such people. In some sub-sectors, up to 35 per cent of the workforce can be made up of EU nationals. The decision is about what will happen to individuals in that category—whether they will be able to stay or will have to return to their home countries. Even if they stay, we need to think about what the future flow would be like, because some of our sectors have heavily depended on them. The life sciences sector, for example, has depended on international recruitment, although maybe more from the United States.
Any immigration system, whether it is points based or whatever else, needs to support the Scottish Government. The current migration policy is quite challenging. A new levy system has been introduced into it with the condition that the home nation needs to demonstrate that a skills plan is in place to meet the needs of employment categories that are identified as suitable for recruitment. Therefore, in digital coding, which is currently on the recruitment list, for example, we have responded to and with industry through CodeClan.
We can therefore demonstrate that we are taking actions, but in the longer term things will depend on decisions that are taken at UK level for some sectors, including seasonal sectors such as the soft-fruit sector. It will be pretty challenging if that potential flow of labour is turned off.
There is also a short-term pre-Brexit issue in respect of uncertainty among people who are here already—about the possible impact on their ability to get a mortgage, for example—and whether they will just choose at some point to return home, given all the uncertainty.
Helen Martin and I are involved in the cross-party post-study work working group, which has involved Liz Smith and others. We have presented a strong case to the UK Government on why there is an economic need to reintroduce the flexible route. We have not had a very positive response so far, despite what was said in the Smith commission, the cross-party support and the broad business, education and trade union support that exists, but we keep trying to make the case. The new minister is in post and there is a new context, and I hope that we will at least be able to get a foot in the door at some point and develop a scheme.
I also want to mention our own young people. If our international priorities change and we need to export more to non-Europe parts of the world, we will need to think about whether different language and culture skills will be required and prioritise that, especially because we all know that we need to improve exporting know-how in our businesses.
I am tempted to say that it is way above my pay grade to talk about our strategic approach to Brexit. I will focus on skills. Standard Life recruits locally, nationally and internationally, and that is not going to change. The key thing is that we get the right candidates. We will invest in skills in the pipeline to ensure that we have a broad, rich and deep talent stream to fish in. That was a terrible analogy. We believe in that, and we will continue to work and invest in it. We will continue to recruit internationally, nationally and locally.
I would like to focus on the development of people’s core skills. Earlier, we touched briefly on the question of the future world of work and what skills will be needed. We do not know what will be needed in 20 years—although we can make some wild sci-fi led guesses—but people’s ability to build strong career foundations on core skills such as teamwork, confidence and communication will not change. If we can make good interventions in education in the early years, that has got to be good for society as a whole and for us as an employer, because we will all reap the benefits.
The STUC has some concerns about the effect of Brexit on certain sectors of the economy. The effects will depend very much on the deal that is struck with the European Union, what access we have to the common market, what deals we do with other parts of the world through trade agreements and what conditionality comes with those. We can identify certain sectors as being more vulnerable than others to some of the challenges—manufacturing sectors, in particular—and we are looking to the Government to support sectors that face particular vulnerabilities during the transition.
The STUC is also concerned about the status of European nationals. As others on the panel have suggested, some workplaces—the NHS, for example—simply would not function without European nationals. Our universities fall within that category as well. We are hopeful, but not confident, that good outcomes can be achieved for European workers who are currently in post.
However, as Gordon McGuinness rightly said, the question is about what will happen to the flow of labour for seasonal workplaces and workplaces that are dependent on low-skilled labour from the European Union. To date, we have an immigration system that has no low-skilled labour element within it because that labour has all come from the European Union. Therefore, the question is about how we can design an immigration system that contains a component for low-skilled labour. I do not think that we, as a country, have had any discussion about the principles that we would like to see behind a system of that nature. It is a serious question not only for how our workplaces will survive, but for what is acceptable to the wider community and what people want to see in such systems, going forward.
I do not want to overstate our concern, but we also have an eye on the tensions within workplaces. Those tensions are not just between European and non-European workers but stretch to more general tensions between workers of different ethnicities. It is important to ensure that, throughout the process, we do not allow a racist discourse to creep into our policies or allow that to play out at workplace or community level. Trade unions are very concerned about that, and we will focus on that over the next period.
I thank Richard Lochhead for finishing on that simple question.
I would like to return briefly to the target that we have set on disability, which is to increase the employment rate among young disabled people to the population average by 2021 and to have a correlation in modern apprenticeship starts to match that. That figure is currently 12.5 per cent, and we have a mid-point target for 2017-18 of 6 per cent of all MA starts. The figure will be reviewed annually thereafter.
Thank you very much for attending the meeting today.
12:54 Meeting continued in private until 13:03.Previous
Further and Higher Education