Education and Culture Committee

Meeting date: Tuesday, March 1, 2016

Official Report 588KB pdf

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College Reform

Welcome to the Education and Culture Committee’s seventh meeting in 2016. I remind all present that electronic devices should be switched off.

Our first item is to take evidence on college reform, with a focus on the impact on learners and employers. I welcome Annette Bruton from Edinburgh College, Paul Little from the City of Glasgow College, Barry McCulloch from the Federation of Small Businesses and Gordon McGuinness from Skills Development Scotland.

Before we move into specific areas of questioning from the committee, I ask each of you to give a short overview of the benefits that you expected to result from college reform and whether they have been delivered.

I can view the reform from two sides: as a board member and chair of Reid Kerr College in Paisley until it merged to become part of West College Scotland, and in my role at SDS, particularly in relation to our work on sectoral development. When we started working with the energy sector, we had a meeting with colleges and the sector at which 41 of the then 43 colleges were in the room. It was difficult to have a strategic conversation with the colleges and develop how they responded to industry. I believe that the regionalisation agenda—with bigger colleges that have expertise and can invest—has been a positive development that can only develop further to establish stronger work between industry and the college sector.

As for individual experiences, there is a danger of conflating the issues of regionalisation with the budgetary pressures that are faced across the public sector. I spend a fair amount of time talking to students across colleges and I am on the board of Glasgow Clyde College, and I think that the student experience is strong. I do not have any statistical evidence or any feel to compare the position before and after regionalisation, but the experiences that I have had have been positive. I was at Ferguson Marine Engineering in Port Glasgow last Friday, which has 15 apprentices who are undertaking their studies at West College’s Clydebank campus; that experience is positive not just for the students but for their supervisors and instructors.

College mergers involve a big cultural change, which I have detected, and that takes a good number of years to work through the system—I do not think that we are quite through yet. However, from my perspective and that of Skills Development Scotland, the regionalisation programme has been a good step forward.

We expected two benefits for small businesses: increased responsiveness to the labour market and enhanced employer engagement. If we are being honest, there is still some way to go. It is early—we should stress that and not draw too many firm conclusions—but the evidence that we have suggests that, in the past two years, college leavers have been slightly more prepared for work, so there are quite positive early signs.

The last time I was here, I talked about the three Rs—regionalisation, reform and reclassification. I have reflected since then and I now think that we as a sector face six Rs—rationalisation of budgets in a number of colleges, regionalisation, reclassification, a revamped funding formula, a reintroduction of national bargaining and a refocused curriculum. At the same time, internally in colleges, staff have faced restructuring and a realignment of cultures. At the City of Glasgow College, we also had the redefinition of college education.

I am sure that some would have thought that there was a deluge of reforms. However, I believe that the approach has been a success—although we are probably unique, as we are in our sixth year after the merger and reform, having trailblazed a lot of it. We are further down the road, as Gordon McGuinness alluded to, and benefits are beginning to show. Those benefits include greater subject choice for students, better articulation opportunities and better employment opportunities. Our new super campus has 21st century learning facilities.

In my submission, a huge increase in our performance can be clearly seen. Before the merger and before the reforms, our colleges in Glasgow were below average; now, we are not only above average but sector leading. There is a stronger student voice. As the First Minister has seen, there is a world-class college sector, particularly in the city of Glasgow.

As a sector, we now have colleges of scale and influence, with an enhanced reputation. Given the pace at which the reforms were carried out, there were bumps and wrinkles, but overall this has been a success story—for the students, the sector and the staff. At my college, the staff have benefited from higher salaries, more holidays, more promotion opportunities and a better working environment. When we look at the overall picture, the college reforms—as challenging as they were—have delivered for students first and foremost, for staff and for the college sector.

If we look at what the reforms were intended to deliver, Edinburgh College is working hard to achieve better choices for students—not necessarily more choices, but better ones; more coherence for individual students and groups; much better pathways; and, fundamentally, a completely different relationship between the college, local authorities and employers, with the benefit that we can now offer to community planning for young people and the local economy. All those things are really good to deliver.

Like Gordon McGuinness, I am cautious that we do not consider whether the reforms have been advanced more quickly or slowly without taking into account economic challenges and their knock-on effects in regions across Scotland. I am optimistic about our college’s future, but I am more cautious than Paul Little was about how far we have gone in delivering benefits. We still have a long way to go to achieve employer engagement—rather than just checking things out with employers—and to articulate the learner pathway from secondary 4 to the end of college or university. Although we have started to improve our curriculum offer and pathways, there are challenges for our students in their funding and how easy it is for them to stay at college.

I thank you all. Mary Scanlon will start the questions.

When I read the two submissions from the colleges in Glasgow and Edinburgh, I thought that they could not be more different. One is positive and successful: it shows an increase in part-time and full-time higher education and FE rates across the board, which is bringing benefits. As a member of the Public Audit Committee, I have heard not so good words about the FE sector recently—particularly about Coatbridge College—but the Glasgow submission is wonderful and is what everyone is looking for.

Then I read the Edinburgh submission, which is quite depressing. We hear phrases such as “working hard to achieve” and “long way to go”—all that we hear about is the problems and how difficult the merger has been. Under the leadership of Paul Little, the City of Glasgow College has done much in a positive way to enhance the student experience and allow greater opportunities to move forward. I am aware of the college’s capital build, as I had the pleasure recently of visiting the Riverside campus—any student or member of staff would be proud to work there. Why, of those colleges in Scotland’s two biggest cities, is one so positive and one so negative?

We did not set out to write a negative response for the committee. We sought to give a balanced view of where we are in the college sector. Many people are aware that Edinburgh College needs a significant transformational change. To come with an overpositive view to the committee would have been unhelpful, because there are still things to do to bring about the transformation that is set out in my plan for the college.

The students at the college get a very good experience as individuals, as they would tell you. However, it would be disingenuous of me to say to the committee that everything in the college is the way that I would wish it to be; we have some way to go.

10:15  

You have pointed out the difficulties, the challenges and the risks, and the fact that meaningful engagement is variable. If I were a student who read that and who was deciding whether to go to Edinburgh or Glasgow, it would be a no-brainer: I would be right on that train to Glasgow. I would like to hear from Paul Little why the City of Glasgow College has managed to overcome the same challenges. Edinburgh has had no different challenges from Glasgow. Why has Glasgow been able to overcome them and move forward?

That is a challenging question. I will not get into the politics of the two cities—I will avoid that one. You would be very welcome if you came to Glasgow again on that train.

I am a wee bit old for further education.

At the heart of our change effort—and remember that we are a bit further down the road—is the fact that we kept the students very much at the centre. We have a college purpose statement. We do not have mission statements or vision statements—those are management jargon. We use the concept of plain English. We talk about our purpose and our way. Our purpose is simple: it is to let learning flourish.

Every single thing that we have done in the reforms—designing the new buildings; the change to our teaching approach; and the big emphasis that we have put on performance—has been for one reason, and one reason only, which is to let learning flourish. We ensure that every student—there are more than 30,000 full-time and part-time students at the City of Glasgow College—flourishes, whatever their background. We have students from black and minority ethnic backgrounds and, since the reforms, their success rate is up. We have students from a disabled background, and their success rate is up. We have students from underrepresented sections, and their success rates are up. Our higher education success rate is up by 12 per cent. Our success rate for FE students, who account for about 40 per cent of the total, is up by 19 per cent.

There has been a huge team effort. Our board was fully engaged, our management team was focused on the learner and our staff were not distracted from the core activity, which is learning and teaching. That has been enhanced by our always having had a compelling vision of a positive change. We have embraced the change as a positive thing—it has not been imposed on us. The staff have also had the opportunity to benefit from the next generation.

What reform has done for Glasgow, and the City of Glasgow College, is to give us a chance to reset our approach. If you had to start all over again in any activity, you would have a chance to rethink all your fundamental approaches. We did that and we had a chance to reframe all our priorities. We reframed them back—we gave the college back to the students and maybe took it away from the teachers.

That is interesting but, fundamentally, is it not the case that Glasgow started its process two years earlier than Edinburgh did?

I assume so.

Is that correct, roughly speaking?

Yes.

Is it fair to say that Glasgow has had a two-year head start on some other colleges in the process, which is partly the reason for the difference? I have seen some of the changes, and it is clear that Glasgow had challenges in the early stages of the merger, although it now has a world-class facility.

I think that we started three years ahead, because we merged in 2010. Ultimately, I will not be dragged into making a comparison with any other college. I am talking about how we planned the approach and the focus that we put on the outcome of the change process. I hope that in the fullness of time all the colleges will see the benefits and flourish, so perhaps time has helped us.

I will go on to the reduction in learning activity that has been well documented over the past few months. The Audit Scotland report has the reduction in part-time student numbers at more than 150,000; the cut in the number of places for under-16s, which is an SDS issue, at more than 20,000; and the reduction in college places for over-25s at 74,000. I appreciate that those cuts are not all happening in Glasgow. The same Audit Scotland report gives the reduction in Scottish Further and Higher Education Funding Council income between 2012 and 2014 as £166 million. That is a huge cut—of about a third—to the college sector.

I would really like to ask whether small businesses are concerned about that. What has happened to the under-16s? The Wood commission’s recommendations were supposed to enhance the experience of under-16s, who were to have a day or half a day in college and the vocational experience. On the over-25s, have we focused so much on apprenticeships that we are not allowing the second chance in further education that people such as me had?

Given the budget cut of £166 million from the Scottish funding council and the huge cuts in places for part-time students, under-16s and over-25s, are colleges not being allowed to provide the opportunities because of funding issues, or is SDS not fulfilling its role in giving people opportunities?

Our funding is distinctly different from the Scottish funding council’s. Our modern apprenticeship programme is growing and the relationships with colleges in relation to the delivery of that programme are growing. In that sense, the reduction in activity cannot be attributed to Skills Development Scotland.

Are you funding more places or fewer?

Our main development programme—I think that we are working with 20 colleges in 2015-16—is the foundation apprenticeship model, which we had piloted in Fife and West Lothian over the past two years. We have around 300 young people in the programme in 2015-16, with an expectation in 2016-17 of more than 1,000 young people undertaking foundation apprenticeships, probably with school-college partnerships. That is a really exciting development.

The issues that small businesses come to us about focus purely on skills and recruitment. We know that 22 per cent of small businesses in Scotland recruit college leavers, which is a proportion that has been fairly stable over the past few years. When we have discussions with smaller firms, it is on that basis and not on the basis of whether colleges are sufficiently resourced to deliver what the Government wants them to.

At the City of Glasgow College, we are fortunate in that 60 per cent of our income comes from the Scottish funding council and about 40 per cent is non-SFC income. We have seen a huge increase—in the region of 60 to 65 per cent growth—in non-SFC income, which compensates for the SFC income position. At one stage, we were losing in the region of 16 per cent of our grant—a huge number—but, because we are a college of scale and we are entrepreneurial, we compensated for that. We have an international dimension, which helps, and we have strong links with the business community—we work with between 1,000 and 1,500 businesses.

We have delivered and are continuing to deliver the reforms that Mary Scanlon is talking about for students who are under 16. For example, we work with local schools in Glasgow to provide higher education units in the senior phase. We are pioneering the approach of seamless activity from school to college, with opportunities at college for technical, associate professional and higher professional levels, through to university level. Since the merger, we have articulated more than 7,600 students from the City of Glasgow College straight to university. We have also had 1,500 students who have stayed at the college to study for undergraduate degrees in specialist areas.

It was having the partnership with industry, having the provision that is resilient to funding pressures and having the entrepreneurial spirit that we inherited and further developed that allowed us to cushion some of the challenges. However, they were challenges and there is no doubt that they complicated the significant change agenda.

The areas that Paul Little just outlined, such as the international work and the commercial work that we do, certainly help to mitigate economic pressures. Edinburgh College has also worked with the City of Edinburgh Council to provide more school-college places, so we are doing a lot more in our academies work and we are doing work that pulls through into higher education. We have a good outturn for our students: 96 per cent of our students who we are able to track go on to positive destinations, so that is positive.

There is definitely a funding pressure on us. Our regional outcome agreement was predicated on a 1 per cent reduction in budget year on year and that money is flowing through to other colleges. A difficult unintended consequence for any college that does not recruit in a given year is that its funding is clawed back in that year. A college still has its staffing bill and overheads, but it has a reduction in its budget, which has a knock-on effect the next year.

There are budgetary pressures, and we do things to mitigate them, including the international work and the commercial work. However, the key thing that we are doing is reviewing and rewriting the curriculum. The bulk of the demand is from students who come straight from school. We have a huge demand from people who, when they leave school, do not yet have the qualifications to meet the entry requirements for some of our courses. We are the only college in the area, so it is down to us to correct that. We are therefore making a big effort to deliver entry-level courses for students who leave school at 16, 17 or 18. That will help us financially and help us to serve our communities better. We are doing that to mitigate some of the economic pressures on the college.

I will ask my final questions together. Not everyone has to answer all of them.

First, I want to ask about national pay bargaining. I have brought along an SNP manifesto that says “Re-elect” and has a picture of Alex Salmond on it—James Dornan is delighted about that. It makes a commitment to collective bargaining and to having the same terms and conditions for staff across Scotland. That was in 2011, but now, in 2016, three months away from the election, we still do not have national pay bargaining.

As you know, I was an FE lecturer, and I know that my former colleagues in the University of the Highlands and Islands are paid up to £7,000 less than college lecturers elsewhere in Scotland. That is quite a significant disparity. I ask Annette Bruton and Paul Little where we are on national pay bargaining and when it is going to happen.

My second question is on the regional boards. We heard that the Scottish Further and Higher Education Funding Council was invited to leave the regional board in Glasgow for some reason a wee while ago. Can Paul Little tell us whether his success in Glasgow is due to the efficiency and effectiveness of the regional board or whether it has been achieved despite the regional board? I am aware that there is no regional board in Edinburgh.

My final question is for everyone. We were promised that the mergers would bring improvements in the quality of learning. I would like people, particularly Barry McCulloch, to say whether there has been a significant improvement in the quality of learning and to say how that is measured.

Not everybody has to answer all of those questions. Let us start with Paul Little and Annette Bruton.

National pay bargaining is a process and not an event. I once saw a sign in a shop—

It has been a process for five years.

And it is coming to an end. Let us be honest. We have achieved national bargaining for support staff, which has been a huge endeavour. We have not had national bargaining for nearly 20 years, so it is probably not realistic to think that we can get it in a number of months or even a year or so.

The challenge in relation to national bargaining requires a team effort on the part of the Scottish Government, the college sector and the trade unions, and the Scottish Government has to help with transition money. That is a huge part of the process, but it has not yet been forthcoming.

The college sector is making earnest efforts to get the decision making right. The teaching unions are frustrated that we have not achieved collective bargaining, but the frustration is probably to do with the robust internal consultative mechanisms that colleges have in order to ensure that the boards, as the employers, have a fair say and can shape the process.

We have made an offer to the teaching unions and we are still locked in intensive discussions. As I said, we have settled with the support staff. I hope that, with the teaching side, we can achieve not just a national bargaining framework but a settlement. However, that requires a team effort. The Scottish Government, colleges and the trade unions must all take a realistic approach.

Glasgow has now had a regional board for more than two years, and the three colleges in Glasgow have worked together excellently. We have agreed a curriculum to 2020 and we have ensured that we focus on students’ success. The regional board is doing its own business—it is trying to get itself settled down and so forth, and it is trying to add some value. Let us hope that it will do that.

10:30  

It is still trying to add value.

I am sorry, but I am not going to let Paul Little back in. Annette, would you like to speak to both points?

The board at Edinburgh is both a regional board and a college board; it is a single board, so the situation is different.

This year’s settlement with support staff and the uplift of 1 per cent that we agreed to pay our teaching staff have put me £0.5 million further into the red, but I am 100 per cent behind national bargaining. It is the right way to go. We need to accelerate the pace and look at the college funding mechanism alongside the review of pay and conditions. We also need to look at all the professionals who support student learning. We need a wider review.

The mechanism is in place and it has begun to work on the support side, but we have a good bit to do. I agree that we need to accelerate the pace on terms and conditions and national bargaining.

I will come back to Paul Little if I get a chance, but first we will hear from Barry McCulloch.

Three to four years ago, if you spoke to businesses about the role of colleges and their impact on the economy, you would have got a fairly negative answer. Now, we are getting better, although it is taking time. The answers that we get from our members and other businesses point to skills shortages and how they are being addressed by the college system. That is starting to feed through.

On how schools and colleges and the system as a whole instil the types of character and soft skills that businesses are looking for, such as communication and problem-solving skills, there is still a huge journey to take. For the past two years, about a quarter to a third of small businesses have highlighted skills shortages as a key barrier to growth. How the college sector is addressing those shortages is unclear.

I was glad to hear that both principals support national pay bargaining and would like to see it come in at a faster pace. Have your colleges agreed to pay harmonisation across all your campuses?

Yes.

We have agreed to harmonisation of pay, but not terms and conditions. My point was that, alongside the necessity for national bargaining for a salary increase, which is well deserved, there is an equally important necessity to modernise the workforce and its terms and conditions. We were able to agree with our trade unions that we could pay our staff more, but we still cannot agree that we can alter their terms and conditions.

It is a big challenge to have conditions that make the workforce flexible so that we can be responsive to industry. As a college, we have found that difficult, and as a sector we have found it difficult to get the unions even to want to discuss the modernisation of terms and conditions.

We have harmonised both pay and terms and conditions.

Has the barrier in Glasgow been that trade unions have refused even to discuss harmonisation of terms and conditions, or is there a reluctance to have discussions before national bargaining comes into play? I want to be clear on the harmonisation of terms and conditions.

We have industrial harmony at the college. I do not want to open that up. At one point, we agreed with the local trade unions and the staff to have a vote on revised terms and conditions. The staff voted in favour by majority, but then the officers of the branch and the national officers ignored that vote and we were back to zero again. To an extent, our challenge is that we were harmonising perhaps four or five sets of terms and conditions from a wide variety of legacy colleges. Glasgow enjoyed some of the best terms and conditions in the sector and, as you can imagine, some staff were reluctant to give those up.

Harmonisation of terms and conditions is a work in progress, but our performance rates show that it has not in any way hampered our teachers’ commitment to student success. We will continue to debate and discuss the matter with the unions constructively at a local, college level. Some of our senior staff positively support national bargaining and the discussions that are associated with the modernisation of terms and conditions. A lot is at stake and we want to ensure that we negotiate harmonisation properly.

My second question is about the quality of learning. Annette Bruton said that 96 per cent of her students go on to positive destinations. Can the witnesses give me any statistics for the difference between pre-merger and post-merger percentages of students going on to positive destinations and achieving passes in their courses? What range of pre-reform and post-reform statistics are the witnesses’ colleges using to measure success?

We use two groups of measures to examine the student experience. We use student feedback surveys to examine what students say about the student experience and we consider the performance indicators that are published nationally. We consider how well we have completed further and higher education courses and the degree to which students have achieved what they set out to achieve.

This year, we have made some improvements in full-time FE and HE courses, and our performance indicators on part-time FE and HE are not as good as they were last year. I did not bring those figures with me, but I can make them available to the committee. The main reason why the further education statistics are down is that students are completing units of their courses but not the full course. I think that we can turn that round within this year. We have already put in place measures to ensure that it does not happen again, and I am sure that there will be a significant improvement in those performance indicators this year, because it is about resulting and not the quality of work.

Students are positive about being in Edinburgh College and their feedback about their courses is positive. We do very well in higher education courses, and the students who go on to the degree pathways from Edinburgh College to a range of universities—in particular, Edinburgh Napier University and Queen Margaret University—are very positive.

According to the most recent set of Scottish funding council figures, the City of Glasgow College is the third most popular destination—after the University of Strathclyde and the University of Glasgow—for school leavers who proceed to higher education.

Our full-time success rates in higher education have increased from 64 per cent pre merger to 76 per cent post merger. In part-time higher education, they have increased from 75 per cent to 78 per cent. In full-time further education, they have increased from 53 per cent to 72 per cent, and in part-time FE they have increased from 72 per cent to 82 per cent. Our student satisfaction rate is 94 per cent. In other words, 94 per cent of the students are satisfied with the college. In addition, 90 per cent of students are satisfied with their course, 89 per cent would recommend it to a friend and 93 per cent would recommend the college.

Like Mary Scanlon, I was slightly baffled by the discrepancy between the reports from the Edinburgh and Glasgow colleges in relation to their experiences. I do not think that it is fair to say that the reason is just that Glasgow started the process three years earlier; its process was not driven by legislation and was backed by a merger fund. The minister at the time suggested that there would be £50 million of recurrent savings that would support the merger process. However, Audit Scotland has indicated that no such efficiencies were delivered. Is that not a more accurate reason why Glasgow finds itself where it is and Edinburgh is experiencing the challenges that it faces?

I am not so sure that it is.

You do not agree that having a merger at your own discretion, in your own time and backed by a merger fund is a considerably more straightforward proposition than having it driven by legislation, against a backdrop of cuts and in the absence of the £50 million that ministers suggested would be delivered through efficiencies?

I agree to a point with what you have said. However, all colleges were free to merge before 2010. The City of Glasgow College looked at the funding landscape and, because of our plans for the building, we had to anticipate that funding would go down. We approached the Scottish funding council as colleges that were working closely together and we sought money from it at that stage. Any college or set of colleges in Scotland was equally entitled to do that.

We received £2.5 million from the funding council. It would have been great if all colleges had received that, but one of the things that the City of Glasgow College did for the sector was to produce and circulate a report on the lessons that we learned. We established a merger research centre and shared openly all our documents and approaches. At one stage, we were assisting 20 colleges in Scotland with their mergers and actively helping to project manage three in support of their mergers.

The money helped, but so did the enormous team effort that the boards and the managers put in, and the enormous effort of the teachers to keep focused on the learning. Perhaps we had first-mover advantage and initial funding, but I like to think that the lessons that we learned—painfully—and were able to share with the other colleges in order to help them compensated for the money. The slight difference was that we did our merger in four phases, whereas I think that the other colleges had shorter time spans.

Let us not forget that, on top of the mergers, a huge number of other reforms were distracting their managers at the same time. We did not have those reforms at the time when we merged—we did not have regionalisation, reclassification, a refocused curriculum or the other reforms that I mentioned earlier. We could not anticipate them all, although we anticipated that some were coming down the track. Glasgow as a city is very progressive, and we just tapped into that and tried to get ahead.

I have looked into the question and tried to understand the answer since I took up post last summer. We all have better hindsight than we have foresight, but it seems to me that the business case for Edinburgh College was very optimistic. It set out to reduce 240 full-time equivalent posts over a two-year period at a time when there was an agreed no-redundancy policy.

At that time, the college got funding from the SFC to support a voluntary severance scheme, which went some way towards helping to make the college the shape that it wanted to be. However, looking back on it, one of the ways in which the college could have done things differently was by looking at the amount of front-line management and the promoted-post structure for teachers, because the college planned to take out 60 per cent of management posts. Nobody wants to spend too much money on management, but I think that that left the college short of the people who drive change on the curriculum side.

We had some funding to support the college for voluntary severance, but 18 months ago—this was before I took up my post, but it is well documented—the college asked the funding council for a significant increase in cash for the year to invest in the college and help to turn it round. A small sum of money was forthcoming. About £2.5 million was asked for, and the college was able to get £300,000. That is the scale of investment that the college needed at the time. Without the ability to hold reserves, it is difficult to see how colleges can make such investment, when they need to, in transformational change. More investment at that stage would have really helped the college.

10:45  

We have seen figures from the funding council suggesting that between 2010-11 and 2014-15 enrolments dropped from 383,000 to 297,000 and head count dropped from 306,000 to 227,000. What has been the student experience in Glasgow and Edinburgh, particularly for part-time opportunities? Could you also address the concerns that have been raised by National Union of Students Scotland about the availability of bursary support? The indications are that around 70 per cent of bursary support in colleges has been maxed out, and questions have arisen about how students will be able to sustain themselves on their courses for the remainder of the term.

We will be able to support our students this year. We have projected forward, but it is tough, because the bursary support is very tight. We have an emergency fund with which we help our students as well. Our student numbers have dropped, partly because we could do more to recruit and also because figures for skillseekers training and jobseekers allowance have dropped in this area, so we have fewer of those students, and two of our universities dropped their entrance levels, which had a material effect. We have had a drop overall, but we have had a 1 per cent decrease in our credits year on year and we have transferred credits to other colleges as well. We have felt the effect of a reduction in student places, but we are trying to support our students as best we can, given the current student position in Scotland’s colleges.

We still have part-time students. Just under two-thirds of the college is part time. There is no doubt that there has been a refocus in the college and the sector, from lifelong learning to developing Scotland’s young workforce and prioritising 18 to 24-year-olds, but we have still been able to attract and support part-time learners.

The other challenge that Liam McArthur mentioned was bursary support. That is a real pressure for all the colleges in Glasgow and for my college in particular, especially as we had planned to increase the number of full-time further education students at the college. We are having to dip into some of our own moneys to support that. I hope that additional bursary money can be found, because a bursary makes the difference between a young person coming to college or not. It is that simple.

I would like to ask about developing Scotland’s young workforce, which Paul Little mentioned. A key part of college reform was the refocus that he referred to, and I would like to talk about the tale of two cities’ colleges. One thing that came up in the Wood commission was the fact that building relationships with business was extremely important, and one of the key parts of regionalisation was that colleges would be better placed to do that. However, it seems from what we have heard this morning that although, as Paul Little said, Glasgow seems to be in a good place, more work could be done on employer engagement, which Annette Bruton mentioned. Where exactly are we with both colleges at this point?

Glasgow is in a great place, in the sense that we have planned to refocus our approach away from academic industry departments and towards industry academies. We have 100 planned, and in our second year of that planning we have delivered 28. The approach involves working closely with businesses. We get the businesses to help set the assignments for the students, and at any one time we have around 3,000 students in that student experience. We also have 40 staff currently doing industrial placements. We have students who are getting inputs from industry bodies to show what industry standards are required, and we try to ensure that we are teaching to those industry standards.

How do we know that we are doing that? We take part in skills competitions that are sponsored by industry. The City of Glasgow College is ranked number 1 in the United Kingdom for its technical professional skills. It also delivered membership of the UK squad in Worldskills, and culinary arts is at a world-class level.

Our approach is very much focused on delivering for Glasgow and indeed wider than that. We have a number of national centres of expertise, so we are delivering UK wide and even internationally. That is probably partly to do with our legacy. The City of Glasgow College was very much a higher education hub. It has worked closely for a number of years with industry and I think that we are going to continue to raise that game.

This is an area where many parts of Edinburgh College excel. Many of our young people, including those who are part-time and in work and those who are in our full-time courses, have good links with industry.

We have a large number of placements. We have industry-quality facilities in the college, where industry comes in and works with us. We have a positive story to tell. Like Glasgow college, we win a lot of industry awards and we have a lot of industry events inside the college.

The committee wanted to look at policy today. The policy area that we need to look at is how to make it easy for employers, particularly small and medium-sized enterprises, to engage with schools, colleges and universities without it being done in a piecemeal way.

We have good employment relationships with our departments in the college and I am keen for us to develop a way for small businesses in particular to be able to be asked once and contribute once. Small businesses need to be able to talk to schools, colleges and universities all at the same time rather than what happens now, where we have a lot of people putting a lot of demand on small businesses’ time. We could get more leverage for community planning and economic development in an area by improving that element of our work.

I am interested in hearing from Barry McCulloch and Gordon McGuinness about the interaction. From the Wood commission on, there have been complaints that the interaction has not been great. Are we any further forward on that?

I would probably say no, because if we reflect back on the Wood commission and the Scottish Government’s response to that, in “Developing the Young Workforce”, we see that the Government was quite clear that employers and businesses had to shape and benefit from the wider education system.

There is a seven-year plan. It is early days, but I am struck by how little we know about the relationship between small businesses and colleges. Based on the report on schools that we published two weeks ago, there are things that we can tease out. There is a need to unpack the notion of industry and concentrate on the 98 per cent of small businesses that are in and around the college network, and deliver what they need.

To be honest, I think that we are getting there. Annette Bruton made the important point that we are reaching a stage where multiple groups are forming and we could substantially overegg the pudding. There is a need to rationalise and focus things at the regional level. The colleges have the right scale and they have the focus. However, we need the colleges to work with the schools and give that access point to the local business community. That is still not there.

With small businesses in particular, is that not a legacy from the past? To be fair, it is always difficult to engage with small businesses, because they tend to have one person who is trying to push the business forward and they just need somebody there and then to deal with the issue. It is a difficult area to begin with. It is not like dealing with larger businesses that have five-year and 10-year plans. A lot of small businesses are just looking at the here and now and at how they are going to progress. We need to work on that relationship, which, as far as I can tell—coming from a self-employed, small business family background—has been an issue forever.

Absolutely. When we review the policy and history around the issue, we see that we have been talking about it for well over a decade. We have not cracked it yet. From our research relating to schools—and I see no conflict between what is happening there and the situation in the college sector—we found that although small numbers of small businesses are engaging, the issue is about how they engage, how committed they are and what they are willing to do, whether that be work experience, classroom talks, guidance on entrepreneurship or guidance for principals. They are willing to engage, but they need to be asked.

Were we to design a system—which we are about to do—to engage in meaningful proactive grassroots engagement at an ultra-local level, we would build up relationships with staff and break down barriers, and the outcomes would flow from that. We see that when businesses are engaged in schools it leads to better outcomes for the young person and for the business. There is a wage premium on business engagement and there are better outcomes, as it leads to low levels of young people who are not in education, employment or training. It is a win-win situation, so there is a need to galvanise the whole system across Scotland to deliver what businesses need.

I agree with a lot of Barry McCulloch’s comments. Last night, I attended a meeting of the national DYW—developing the young workforce—group. Rob Woodward, the managing director of STV, chairs that group. It was the first time that the local groups had all come together.

The Glasgow group has probably now been up and running for more than a year. Strong private sector leadership from the chamber of commerce has been backed by a strong private sector board. Other groups are now coming through the system. They get three years’ funding from the Government to set up support and so on. Those groups will be important in providing the glue to bring education and business together.

I was enthused last night as a result of hearing a lot of positive contributions from across the country. There is probably more experience of the work across the three Ayrshire councils, which have always had a strong relationship with the chamber of commerce, to support work experience. They see this approach as building on that.

The challenges for engagement with small business was one theme that the working groups discussed last night, so it is definitely on their radar. There are practical issues about small businesses getting time out of the day-to-day running of their business to commit to participate in a school curriculum, as there is little opportunity to chop and change at the last minute due to the pressures of business. I was enthused last night by the work of the DYW groups and by the progress that has been made, but there is more to be done and it is a challenging environment in which to do that on an on-going basis.

We have provided each of the groups with our regional skills assessments, which provide a fairly detailed analysis of regional economic geographies and will, we hope, help them to set priorities in their business plan. We will also work with them on their key performance indicators in relation to things such as modern apprenticeships and the equality and diversity agenda.

I have one final question. Colleges have always delivered—or have been known for delivering—vocational education. The current focus is on vocational education and, obviously, we have to go for that to deliver for business. What specific changes have taken place as a result of the Wood commission’s report and the Scottish Government’s refocus on the strategy? In addition, how have partnerships developed with local authorities? Renfrewshire was one of the areas highlighted in the Wood report, where Reid Kerr College—as was—Renfrewshire Council and the chamber of commerce worked together. Where have the partnerships been successful? Where have they been developed? Where have we gone with that?

The work that we have done with our three local authority areas is a particular strength of Edinburgh College. We are not only represented but active at all levels in the community planning partnership, including on the skills groups, the workforce groups and the economic development groups, and I am supporting East Lothian Council by leading its poverty commission.

Sitting alongside that, we have refreshed our entire approach to employer councils, so we now have employer councils in every curriculum area in the college. They have been refreshed this year and we are trying to make it easy for employers to comment not only on the effectiveness of our courses but at the stage of designing the courses. That has made a major difference. We have increased the number of students who get more regular placements and we have increased the number of business partners who come in and work with us in the college. There is still a bit to go on the DYW agenda, but we are seeing a significant shift in our vocational orientation in both further and higher education.

11:00  

The City of Glasgow College was one of the first to learn what we were doing, because of our close links with industry and our partnerships with schools. Through working successfully with the local authority, we have pioneered putting higher vocational education into the senior phase of schools. That is an extension of the school links programme.

We have supported some novel and innovative developments, such as Newlands junior college, which is the academy that Jim McColl sponsors. We provide all the vocational expertise for that. It is a specialised solution that is trying to help hard-to-help young people to get back into education and move on to employment.

The college also works closely with the chamber of commerce, on whose board I sit. I smiled when I heard Gordon McGuinness talk about the work of Glasgow Chamber of Commerce because, only last week, I said to the chief executive that one third of his report was based on education and that I had never seen that before in the nine years that I had been associated with the Glasgow Chamber of Commerce. The Glasgow Chamber of Commerce is increasingly working more closely with the college.

We work with Glasgow economic leadership. Glasgow is a cohesive city and three colleges in Glasgow have mapped their curriculum to the priorities of Glasgow as it goes forward to 2020. We are trying to ensure that we have that workforce pipeline to avoid the skills shortage that is coming down the track.

We work closely with large companies. We work with micro-companies, but we also work with some of the top 10 shipping companies in the world.

The full spectrum is there and students are benefiting from that. For example, we got 245 guaranteed interviews for our students. The City of Glasgow College aspires to guarantee jobs in the future for all our students.

Does anyone have anything to add?

If you look across the college landscape, you can identify strengths through partnership development activity. Earlier, I referenced the work that we have done with the energy sector. There is an energy skills partnership that is a consortium of colleges that was initially led by Dundee and Angus College, and it has a development manager, Jim Brown, and a team around him. It is a fantastic example of how the curriculum can be shared across the college network. For example, overhead line technicians who were developed in Inverness were shared with Fife, Ayr and Dumfries and Galloway. That process was very rapid, and it works with SSE and Scottish Power, which are making huge investments in their grid connections.

You can look into Ayrshire and some of the work that it has done around an engineering forum, particularly on aerospace. Earlier we touched on the hospitality sector and what West College Scotland has been doing with Ferguson Marine. There will be similar examples in other colleges. Forth Valley, for example, is really strong on process engineering.

Sometimes we get a bit frustrated with business because everything has to be delivered in local colleges. We should recognise that we are not in a huge place and we should do more in the way of sharing and knowledge transfer across the college environment. We are all part of the public sector and funded by the public sector, so there should be more collaboration on meeting the needs of industry, and some good examples of that are emerging.

To be fair, Gordon, you are not alone there.

Unquestionably there has been significant investment in employer-led infrastructure during the past two years and there will be for the next two years. The point that I was trying to make is that there is a difference between formulating and agreeing a strategy at the high level and the operational delivery on the ground. We have to watch that closely to make sure that it delivers what small and micro-businesses need.

At this juncture, I stress the need to make sure that there are sufficient knowledge transfer partnerships between college staff and businesses to break down the barriers at the local level. That would go some way towards producing more mutual benefits and learning. At the moment, they are quite different worlds and there is a degree of mutual misunderstanding about what takes place on the other side.

Most of the answers that I was seeking have been given in response to George Adam’s questions. It is good to have reassurance that the consultation, or rather co-operation, is now working for businesses. It is a giant step forward for the people you are involved with among local authorities, schools and employers. There has always been a frustration that any kid coming out of college with a qualification was not going to get a job of any description, and it can get to the stage of asking whether it is really worth while.

Barry McCulloch said that 22 per cent of small businesses take college people. Is there still a willingness there? Does dialogue take place with larger businesses, as George Adam mentioned? What kind of dialogue takes place?

A couple of months ago, I chaired a conference at which Paul Little was one of the speakers. There were very few large employers represented among the audience. It was more about people who wanted to deliver retraining and services. I have found that larger employers do not seem to be actively involved, but is that barrier breaking down a wee bit?

I think that it is. Scotland does not have that many large businesses. It is almost entirely small and micro in its nature. However, larger businesses can allocate resources in a much easier way. As we highlighted in our report, if a micro business with four employees gets involved in a school and provides two to three hours a month, that is the same as a business of 250 employees hiring a new member of staff. The time and cost constraints that the smallest businesses in Scotland face for doing those things are challenging. Whereas larger businesses can typically allocate specialist resources to corporate social responsibility and employer engagement, the owner of a micro business is doing multiple jobs. They are running the business, managing the human resources and doing the legal work. Bolting all that on to the commercial pressures that they face is challenging.

When we spoke to small businesses about their relationship with the education system, we found that they were very willing to get involved, because it is an extension of their almost moral altruistic belief that they need to do more to prepare young people for the world of work. The motivation and the belief are there; it is a matter of getting the mechanism right and shaping the ask and the proposition to get more employers to contribute.

I have a further question, which is for those in the college sector. The reform is a giant step forward for a lot of people, and a lot of people are buying into it, but there is still some criticism. For example, the NUS has said that student support is not fit for purpose. The Educational Institute of Scotland has said that the college reforms have not improved education in the sector. Will you comment on that?

I would disagree that it has not had any benefits to the sector. College reform was due, and it is welcome. I think that it will bring great benefits to the sector—it is certainly helping to turn things around in my college.

The fact that college students do not have the security of funding that university students have is a major disincentive for students in Scotland. At Edinburgh College, and probably across the sector, the students who drop out early on in their courses—before they are a quarter of the way through, which is the critical point of counting—cite financial difficulties as the main reason for leaving. There are significant pressures on students who are trying to come to college. There are good childcare benefits, but the financial pressures on students are leading many of those at our college to drop out very early in their course.

Let us not forget that there was no significant college reform for about 20 years. There were only small changes and initiatives. After that time, it is obvious that such a huge reform agenda delivered at such speed will lead to that reaction, particularly from the teaching unions.

Reform has delivered transformational change for some colleges and probably transactional change for others. It has been a major step change for some; for others, it is a work in progress or it is about being larger and doing more of the same for now, although hopefully that will develop into something better over time.

The pressures on the students whom we serve in the colleges are ever growing. We were, I suppose, pleased that we received a flat-cash settlement, because we were possibly expecting a further cut to college budgets. We are looking ahead to see what might happen in the future. We do not want any further cuts to the college sector, because ultimately they affect not the institutions per se but the people we serve.

The students whom we serve are among the most vulnerable in Scotland and Glasgow. We work really hard to try to convince the policy makers that they should ring fence bursary moneys. We support NUS Scotland’s call for more of that because, as I said, if those moneys are not available, students will not attend college. The students whom we serve have challenging backgrounds and that support money, which, at the end of the day, is not a lot of money, makes the difference between students being able to afford to travel to college and subsidise their living expenses or taking a part-time job and staying at home. Ultimately, any additional moneys that we can get, particularly to support the bursaries, students or the sector are very welcome and very much needed.

Can I ask one further question, convener?

Very briefly.

Can the witnesses advise us of what the drop-out percentage is?

Across the country, I think that it is about 5 to 6 per cent, but it varies from college to college.

I do not have a figure with me, but we can write to you with that.

We can certainly provide that to the committee, if that would be helpful.

Thank you.

If my questioning is a bit robust, that is not a critique; it is to help me elicit a better understanding of what is going on.

There is something missing. Last year, the number of attendees of colleges was 119,000. If we add in those who were funded by the SFC and the European social fund, there were 121,000, and there were another 598 for Scotland’s Rural College. However, only 671 were presented by SDS. Perhaps Mr McGuinness can explain that.

I have engaged with Gordon McGuinness and I thank him for his help with the project that we carried out on heavy goods vehicles. As a consequence of that, I did an analysis of employment shortages in Scotland in the HGV, forestry, hospitality and construction sectors and found that we have a requirement for about 150,000 to 180,000 people. That is now, not 10 years down the road.

We have heard about the industry academies. Exactly how does SDS engage with them in a meaningful way? There is a need to determine and forecast what is likely to happen by sector. Where is the sectoral analysis that tells us what is likely? How do we then translate that into the industry academies and into developing the places and courses in colleges that are required to meet the shortages that we have? How do you engage?

I will give you a bit of background. Skills Development Scotland works through the industry leadership groups, which are constructs of the Scottish Government and Scottish Enterprise that help to drive economic strategy. The Scottish energy advisory board meets in Edinburgh this afternoon. We have now developed 10 skill investment plans in conjunction with industry leadership groups, which look at the key and growth sectors.

Is that in Scotland?

Yes. There are 10 of those plans, which are on energy, food and drink, tourism, finance, information and communications technology, life sciences, engineering, chemical sciences, construction and creative industries. We have carried out other pieces of research in areas such as textiles and HGV road haulage—as you mentioned—and done a piece of work on forestry and timber technologies.

We produce those plans, but we see industry as the custodians of them and industry signs them off. The plans are shared through the joint skills committee, which is an advisory group of the funding council and SDS. Indeed, Barry McCulloch and Paul Little have just joined the skills committee. Those are cornerstone documents, on a sectoral basis, for colleges to analyse to get a better understanding of sectoral needs.

11:15  

In November 2014, we published the regional skills assessments, all of which are on our websites. We updated that data two months ago. The assessments bring together all the economic data that we can garner, including outputs from the colleges and Nomis—the UK system through the Department for Work and Pensions—and feedback from Scottish Enterprise about what it sees as growth areas. Again, the regional skills assessments are cornerstone documents that we hope—and that the funding council insists—colleges will incorporate into their regional outcome agreements to inform how they set out their forward plan and meet the needs of local economic development.

The regional outcome agreements are the agreements for funding from the funding council to the regional colleges.

That is all very interesting. As you know, I sit on the Economy, Energy and Tourism Committee, at which we have discussed the issue previously.

All of those bodies are talking to each other, and I am sure that we are all interested in outcomes and improved productivity. You talked about all the data that you are gathering. By the way, I am not criticising or getting involved between Edinburgh and Glasgow—God forbid that I would do that. Clearly, the two cities are at different stages of development, and I am sure that they are sharing their expertise. However, Annette Bruton’s submission on behalf of Edinburgh College says:

“the college sector needs to improve the volume and quality of its employer engagement”.

We will come on to that—one of my colleagues will cover it. The submission goes on to say that

“more needs to be done ... to ensure that the college has the right data to forecast employer needs effectively.”

What happens to the data that you produce? Where is it being translated to an outcome that will meet the shortages that exist? I do not see that happening.

The data is articulated into the regional outcome agreements. I was looking at the University of the Highlands and Islands further education regional outcome agreement, which cites a lot of our material throughout, in relation to the industrial sectors and where UHI will prioritise. Along with the SFC regional outcome managers, our staff undertook sessions with each of the regional colleges. There is a narrative report and a data matrix of around 50 data sources for the purposes of sharing that information.

You could perhaps ask colleagues who are here about that. We certainly worked across the three regional college structures in Glasgow to share that information. As Paul Little said, based on that information, those colleges have set out a curriculum through to 2020. We feel that it is a rich source of data and, for a variety of reasons, it will develop more.

When there was the larger objective of European structural programmes, economic data had to be produced to justify the European funds. Over the past 10 years, because of changes to the Scottish Enterprise structure and local enterprise companies merging into one structure, not as much data has been produced. In the past two years, we have done a good job of pulling that information forwards. We may be able to do a more general information session for members about that, but there is a really rich source of data available, which is held in high regard and has received positive feedback from the majority of colleges.

That is very helpful but, on that basis—this is my last question—why has SDS secured only 671 places through the employability fund when, in fact, a target of 2,650 places was set?

I am not familiar with those figures from among the figures that I have in relation to the employability fund. Are you talking about places through colleges or—

Yes, it is through colleges. In a ministerial letter of guidance in 2015, SDS was asked to deliver 17,150 training places in total, including 2,650 college places through the employability fund.

There have been issues around the colleges, their responsiveness to our funding criteria and availability of places. Some colleges have focused on that strongly and others have probably focused more on their core business. The figure that I have for the volumes that were delivered in 2014-15 is that there were 2,596 through the employability fund within the college structure. We might need to come back and share figures with you.

If that is the case, convener, I would like the Scottish Parliament information centre to have another look at the figures that were presented to us in our papers.

If Gordon McGuinness has different figures, it would be helpful if he could supply them to us.

Okay.

Thank you.

Mr McArthur, do you have something to add?

It has been covered.

I thank the panel members for coming and giving us their time—we really appreciate it.

11:20 Meeting suspended.  

11:24 On resuming—  

I welcome Angela Constance, Cabinet Secretary for Education and Lifelong Learning, and her accompanying officials. This is the second panel this morning on college reform. I invite the cabinet secretary to make some opening remarks.

Thank you, convener. I am sorry to hear that you are suffering from a sore throat.

I welcome the opportunity to join the committee to discuss the important matter of college reform and its benefits for learners and businesses and to look to the future of this valued and valuable sector.

I will start by saying a few words about the college sector. Colleges play a crucial role in this Government’s commitment to improving the employability of all Scotland’s young people. Colleges’ ability to flex to the needs of industry, attracting young people to courses that better prepare them for the world of work, is excellent. Current youth employment levels are at their highest for 10 years and colleges have played a significant role in that achievement. Quite simply, colleges matter—they make a vital contribution to our people, our economy and our society.

I turn to our reform programme. Our overall ambition is to improve young people’s life chances and to generate the skilled workforce that Scotland needs for economic growth, while, of course, ensuring the best use of public funds. The essential building blocks of reform were a regional structure, creating colleges of considerable scale and influence; outcome agreements to ensure far greater transparency about the impact of colleges and their contribution to Scottish Government priorities; and strengthened governance, with increased accountability and board effectiveness in improving outcomes for learners and businesses alike.

The importance of proper stewardship of colleges, which is a live issue, cannot be overstated. Good boards can support a college to better the lives of students and to help businesses perform better. They can be a force for great good. However, because of their vital role, poor boards risk actively making things much worse.

I acknowledge that—as other contributors have pointed out—a reform programme of this scale and pace has been extremely challenging. Structures have changed considerably, placing great demands on college leaders and their staff. However, to their enormous credit, we are beginning to see evidence of the impact of our reforms. Colleges are delivering their targets; their activity is more closely aligned to the needs of learners and businesses; they are having a greater impact; and they are a good example of public sector reform.

The sector is already playing a central role in the delivery of Scotland’s youth employment strategy—developing the young workforce—which is, in itself, another major public sector reform.

This is an effort that is reliant on the vision, input and commitment of many partners, particularly schools and employers. It is my belief that the regional structure that is now in place across Scotland and other aspects of reform have been instrumental in the great progress that has been made so far.

Reforms have given colleges a major role in meeting regional skills needs and the influence and capacity to do so. Colleges have implemented the most profound set of public sector reforms in Scottish tertiary education for more than a generation, which is a remarkable achievement.

In its “Scotland’s colleges 2015” report, Audit Scotland acknowledges many positives. The report confirms that college finances are sound, that planning for mergers was good and that the sector has responded well to a period of significant change.

Now that the debate over structures is behind us, we must ensure that those structures work to their full potential and we must continue to evidence the benefits.

My letter of guidance to the funding council, which was published last month, sets out priorities for both the college and university sectors. In what has been a tight financial settlement for public service in Scotland, I am pleased to have been able to protect college resource funding at 2015-16 levels.

I have been clear about the priority that I attach to continuous improvement in learner outcomes. I recognise that there is more to do and I look forward to continuing to support the sector in its next phase.

11:30  

Thank you, cabinet secretary. You have mentioned a lot of the issues surrounding the changes that have taken place because of the reforms, but can you tell us in a nutshell what you expected the overall benefits of college reform to be and whether they have been delivered by the reforms?

In a nutshell, and to answer your question at a high level—we can get into the detail later—we want to ensure that Scotland has a skilled workforce and that young people leave college with the skills and qualifications that will get them into work. We have certainly seen positive destinations for college leavers. It is the first time that we have published that information, with the figure sitting at 81.5 per cent for positive destinations into further study, training or employment. The funding council has put a range of measures in place for continuous monitoring of the impact of change. It is about ensuring that we have the right learning in the right place and that we have high-quality learning that is equipping the workforce for the jobs that exist today and for tomorrow.

The Wood commission recognised the benefits for employers of a strong vocational education system and the positive engagement between employers and education providers, but it also pointed out that only 29 per cent of employers are recruiting young people directly from education. Colleges Scotland said that colleges now act as a regional hub for engagement with employers to deliver the Scottish Government youth employment strategy and that is said to be particularly helpful for employers that are small to medium-sized businesses, enabling them to engage more effectively. That said, has college reform demonstrably improved links between colleges and business? Is there better engagement now than there was before and are there examples to demonstrate that?

What college reform has achieved, along with the developing the young workforce agenda, to which it is inextricably linked, is to secure better partnership working between colleges, businesses and schools. When you look at the pace of development around foundation apprenticeships, you will note that the initiative started off with two pathways and that there are now several pathways crossing seven key sectors of the economy, with about 300 young people pursuing a foundation apprenticeship. For other vocational courses that pupils are doing in their senior phase, we have seen a significant expansion from year 1 to year 2, and there are 2,500 senior phase pupils studying a variety of courses in colleges. Those 2,500 students are pursuing 170 different types of college courses across 20 or so local authorities and in hundreds of schools.

Colleges have always been particularly good at engaging with local employers, particularly small employers. I have certainly seen evidence of that over the years from the college in my area, West Lothian College, which is constantly tweaking what it provides and how it provides it in response to employer need. What college reform and the young workforce agenda have managed to do is to put the architecture in place to ensure that system-wide change. Ian Wood has often talked about having colleges of scale and influence.

There are also the invest in young people groups at a local level, and the work in that area is led by Roseanna Cunningham and Annabelle Ewing. Those groups are crucial, because Colin Beattie is right in saying that it is not acceptable that only 29 per cent of employers employ young people directly from education. If we are to address structural youth unemployment—we know that youth unemployment in general is at its lowest level since 2005—that figure needs to be much higher, and there are some important key performance indicators around that in the young workforce and youth employment strategy.

The evidence that we have seen so far indicates a bit of a gulf between the big companies that have the mechanisms and structures to enable them to engage with schools and the small to medium-sized businesses that provide the bulk of the employment in Scotland and that have a much more complicated capability. Because they are small businesses, they do not have the same time, resources or facilities, but it is really important that they become engaged. A lack of knowledge about how to engage effectively has been highlighted, as has the complexity of doing that. Have the college mergers helped in that respect?

I believe that they have. The invest in young people groups also have an extremely important role in leading the engagement, particularly with SMEs, at a local level. Some members will be familiar with Dundee and Angus College, which provides an excellent example of how to engage businesses of all sizes in the locality. I have visited the college, including its coding academy, on a number of occasions and I have seen the breadth of activity that it is engaged in within key sectors such as science, technology, engineering and mathematics, ICT and coding. Its work starts with primary school children and it works with senior-phase pupils and adult learners, providing evening classes as well as full-time courses in coding. That is a great example of how to engage SMEs and, because of the college’s modern facilities, it often has SMEs leading the input, delivering sessions to students and working closely with students as mentors. There are exemplars out there, of which Dundee and Angus College is one.

I am pleased to hear about those exemplars. I have one last question. How do you expect the remaining barriers to employer engagement to be overcome?

The whole ethos of the college reform and the young workforce agenda recognises that there are barriers, particularly for SMEs, and a bit of push and shove is required on both sides. There are definitely things that the world of education could do better. It must be more outward looking, and I would contend that it is. Dundee and Angus College is not the only college that engages local business effectively—other examples include Forth Valley College, West Lothian College and City of Glasgow College as well as South Lanarkshire College, which I visited recently.

The 21 regional groups will be led by industry. This is not about their being led by the world of education or local authorities, although those have an important part to play—colleges must be represented on those groups and, as community planning partners and the local education providers, local authorities need to be at the table as well. The regional invest in young people groups will be led by industry, which will help enormously, and there is an appetite for that out there. Nevertheless, it is not easy for small businesses to engage proactively; we must be more welcoming and enable that to happen.

You mentioned the important role that colleges play in increasing productivity. My personal experience with colleges in the south of Scotland, particularly in Ayrshire, has been a happy one. Although it has been difficult at times, clearly, great strides forward are being made.

You said that the college structural reform is behind us and that the structure is now in place. I wish that I was as optimistic as you are about structures. I do not know whether you heard me ask a question of Gordon McGuinness earlier. I have to say that SDS has been helpful with some of the projects to help particular sectors. However, funding council statistics say that, of the 121,000 places in 2014-15, only 671 came through SDS. I know that SDS is in another cabinet secretary’s portfolio, but 671 places from the employment fund out of 121,000 places does not seem a lot. Is the structure working?

I am not sure that we would necessarily look at colleges and their contribution to employability and our economy solely through the prism of things such as the employability fund. There are employability funds that come from the funding council and go directly to colleges. Of course, colleges are free to bid for the employability contracts through open procurement, along with other training providers, and there is also an element of SDS funding that is ring fenced for colleges.

I am struggling to see the connection between structures and employability provision, but I am sure that Mr Brodie will enlighten me.

Let me try. It is important that the structures all hang together. As I said, I know about the two areas that contribute to productivity that you have talked about, and I know about the contribution that colleges make to employment. I am surprised by your comment that SDS’s £6 million employability fund is not directly associated with business and employment. Do we have the processes in place? I will give you an example, which I mentioned to Gordon McGuinness, who has been helpful. As a result of an exercise that I did as a consequence of a project on HGVs, I have found that there is an estimated shortage in the workforce across the HGV, forestry, hospitality and life sciences sectors of 150,000 to 180,000 people. That is not 10 years down the road, but almost immediately.

SDS is one of the parties that are responsible for engaging with the colleges and ensuring that the skills are there. Of course, SDS also does that through training providers. I am asking about the process and about the guidance, because there are two cabinet secretaries involved, although I am sure that the agenda is the same. Therefore, I am kind of surprised that you are unable to say why, out of 121,000 places in colleges, only 671 were for employability training. Maybe I am not being clear enough in my questioning.

The core of what colleges do is about employability, whether that is higher national certificate courses, higher national diploma courses or more specific employability courses such as the certificate for work readiness and colleges’ participation in delivering employability fund provisions—I am not saying that all of that is not important. The 671 places that Mr Brodie refers to account for only a small proportion of the employability fund activities.

11:45  

The broader point that I think Mr Brodie is making is about the broad connectivity and strategic alliance between Skills Development Scotland, the funding council and, of course, the colleges; it is imperative. All those organisations work hard to ensure that outcome agreements are connected with the regional skills plans that are led and pulled together by skills development colleges. That is important because, although we have a national economy and raising productivity to increase growth throughout the economy is a key plank of the Government’s economic strategy, it is imperative that we have a good handle on local economies.

Mr Brodie mentioned the importance of the work that is done in Ayrshire College. Ayrshire College is a good example of a college that is making educational provision that is connected to its local economy.

I understand that; we have demand for labour and labour opportunities. What I am trying to elicit is how we—all the various bodies that are involved—optimise supply to meet that demand. My understanding was that part of the intention of the college reform was to ensure that supply could meet the skills requirements. That is not a question.

I think that that is why the funding council and SDS have a range of joint planning activities. Those two organisations have to be working hand in glove to make appropriate plans for provision, which has to meet the needs of local economies. I am absolutely clear in my expectations that both organisations have to have that focus on local economies. I think that, largely, colleges do have that. Is there room for improvement? Of course there is.

I think that we are all familiar with the recent figures on college places: the cut of 150,000 part-time places, the cut of 20,000 places for under-16s, and the cut of 74,000 places for over-25s. In total, almost a quarter of a million places have been cut from further education. We were told that the sacrifice of all those places would lead to more full-time places, because many of the part-time places were on what were referred to as “hobby” courses. However, the number of full-time places in further education has actually gone down by 2,000. We have had a cut of £166 million in college funding by the Scottish Further and Higher Education Funding Council—that is in an Audit Scotland report—and a quarter of a million fewer part-time places, but the promise of more full-time places has not happened. What has gone wrong?

I dispute that anything has gone wrong. I will be rehearsing and repeating some familiar arguments, although I respect the fact that this is an area that members are very interested in and focused on.

We made a very clear commitment in our manifesto to maintain the full-time equivalent at 116,000 places a year. That is the measurement to which we made a very public commitment. There are a range of reasons why we feel that that is a more rounded measurement than some—there are many measurements of activity within the college sector. We prefer the full-time equivalent measurement to head count, for example, because head count does not always reflect the volume of activity associated with individual courses. We know that 142 very short courses can be equivalent to one full-time course. To cut to the chase, as a Government we have always been clear about our target, which is to provide 116,000 full-time equivalent places a year—that was a manifesto commitment. We have always exceeded that target. The philosophy behind it was to move towards more full-time provision relating to recognised qualifications that would improve people’s employability prospects.

I appreciate that, but your predecessor, Mike Russell, also had that goal. If 244,000 part-time places had been sacrificed for several thousand additional full-time places, I think that we could have accepted that. My problem is that we have sacrificed a quarter of a million places—I am using Scottish Parliament information centre and Audit Scotland figures—but we have also had a cut in the number of full-time places. I do not want to repeat myself, and I appreciate what you say about full-time places, but part-time places can lead to people starting up their own businesses. As a former part-time student, I am aware of the benefits of part-time courses.

We were promised that there would be a measurable increase in quality as a result of the college mergers. How is the quality of the student experience of education and training being measured?

I will gladly address that specific point, but before I do so it is important to say that part-time provision is important and that it still exists in the sector.

Part-time provision has been cut by 48 per cent.

As I have previously explained, we have moved towards full-time provision, but although the number of full-time students over the age of 25, the number of full-time students under the age of 25 and the number of women full-time students have increased, I stress that we still have part-time provision in the college sector. That is not an insignificant investment. There are also still very short courses that have a role to play in providing access to further education or that have a strong employability component.

As regards Mary Scanlon’s question about information that gives a good insight into the quality of provision, I referred earlier to the first-ever college-leaver destinations survey. I think that it is a very important source of information that demonstrates where students head to once they have completed their college courses. As I said, the positive destination figure is at 81.5 per cent.

In addition, a student satisfaction survey is in development. A pilot has been carried out, and an event will be held later on in the year, at which the findings of that pilot survey will be shared with stakeholders and, I am sure, MSPs. Next year—for the first time—the funding council will publish a student satisfaction survey. Lots of local surveys are carried out in colleges, but it is important that there is a student satisfaction survey across the sector. All students will be asked for their views.

Other work is being done by Education Scotland to support colleges in strengthening their ability to self-evaluate and ensure that they have good-quality assurance arrangements in place.

I have a final question. I am sure that you are as familiar with your party’s 2011 manifesto as your friend and colleague Mr Salmond is. It contains a promise of national pay bargaining and a promise of a national set of terms and conditions. I am sure that you know that in the Highlands and Islands—where I was a lecturer before coming to Parliament—former colleagues of mine in the college sector are paid up to £7,000 less in their annual salaries than colleagues elsewhere in Scotland. I think that we would all find it unacceptable if the salaries of teachers, nurses and doctors in the Highlands and Islands were less than they are in the central belt.

This morning, we heard from the college principals that intensive discussions are taking place; they have been taking place for five years now. We need to accelerate the pace. Also, transitional moneys are needed. Funding to colleges from the funding council has been cut by £166 million. Could some of that money be allocated to addressing the college lecturers’ pay gap? I understand that the issue in relation to college support staff has now been settled and that they have a national set of terms and conditions, so it is just the lecturers who are left.

The Government remains absolutely committed to national pay bargaining, for many of the reasons that Mary Scanlon has outlined. Progress has been made—considerable effort and a lot of detailed work have gone into devising the national rules and procedures. The majority of colleges are signed up to the national rules and procedures and to the principle of pay bargaining. I am keen to push that forward through my discussions with the sector as a whole, with staff representatives and with the funding council.

I do not believe that we are far away from national pay bargaining, but we all have to pick up the pace and get agreement in principle that everybody is signed up to it. There are still some issues on the college side. Some of them are not so much about the principle of national pay bargaining; they are more internal, around how the sector as a whole is represented within Colleges Scotland.

I have always been crystal clear that harmonisation will not be achieved overnight. However, national pay bargaining is not unachievable and we all have to make that final step.

Is the Government willing to fund transitional moneys? Obviously, the University of the Highlands and Islands could not possibly give every lecturer an extra £7,000. Given the huge pay gap, is the Government willing to put money into the sector to ensure equal pay, once the agreement has been reached?

We are looking closely at the detail of that. I am conscious of the challenges for smaller institutions—Mrs Scanlon will be familiar with some of them. It is harder for the very small institutions and we are cognisant of that.

On that last point, Paul Little from the City of Glasgow College said that national pay bargaining is a process, not an event. He is confident that we will get there reasonably soon, which is fairly encouraging.

My colleague Mary Scanlon seems to be able to get away with showing SNP brochures to the committee, which is great—if only I could get away with that. She was talking about the difference between full-time and part-time places, but surely the latest data from the SFC are positive? They show that

“95% of teaching hours were delivered on courses leading to a recognised qualification ... since 2006/07 ... the number of funded FTE students studying recognised qualifications is up almost 2,000”

and

“the number studying HNCs or HNDs, qualifications highly prized by employers, is up almost 4,000 ... in 2012/13”.

Those positive data highlight that further education colleges are doing their bit to ensure that people are ready for work once they leave college.

12:00  

A number of important statistics relate specifically to outcomes. Mr Dornan is right to say that the number of students achieving HNCs and HNDs increased by more than 22 per cent between 2006-07 and 2013-14. Crucially, there has also been a 34 per cent increase in the number of students who progress from college to university with advanced standing, which is important for the widening access agenda. We should not forget the role that colleges play in providing higher education across the sector—it is nearly 20 per cent of their provision. The City of Glasgow College primarily provides HE.

On the number of full-time students achieving recognised qualifications, almost 11,000 more students are successfully completing full-time courses, whether in FE or HE provision. There is much to be pleased with on outcomes for students.

You said that progress has been made on achieving a solution on national pay bargaining. However, in its submission for today’s meeting, the Educational Institute of Scotland said:

“the reform process has singularly failed to make substantive progress in relation to national collective bargaining and equal pay for lecturing staff across the sector.”

Those comments seem to clash with your comments on progress towards national pay bargaining. Will you comment on them?

I met the EIS Further Education Lecturers Association recently. I meet a range of stakeholders and trade unions regularly. I do not think that we are far away from national pay bargaining. As I said to Mary Scanlon, we all have to step up to the plate on that. We appreciate that some issues still must be resolved, and I am really keen that they are, so I will do what I can with the relevant partners.

I would be very keen to see a road map to harmonisation. I am keen to see the funding council and, crucially, the trade unions and Scotland’s colleges working together to provide that road map, to see what progress towards harmonisation can be made over time.

We would all like to see quick progress towards national pay bargaining, but your comments seem to contrast with those of the EIS, which also said that

“failure is likely to lead directly to industrial action”.

Would you consider it to be a failure of Government if there was industrial action as a result of a failure to reach an agreement on national pay bargaining?

Any industrial action would be regrettable, and it would not be in the interests of students or their families. The Government is not the employer, although we have a role in terms of being the glue in the system. I will continue to do what I can to support and encourage trade union representatives and the employers to work together in the interests of their institutions and—which is fundamental—students.

You are right to say that the Government is not the employer. However, as Mary Scanlon pointed out, achievement of national pay bargaining was in the SNP manifesto, so I expect the Government to do that, rather than just say that it is not the employer.

The EIS also said that

“no other national harmonisation process has been unfunded”,

and it cited the McCrone agreement for teachers and the national health service agenda for change. This question is along the lines of Mary Scanlon’s: will there be any additional funding to bridge the gap? Aside from national pay bargaining, do you have any comments on the colleges that have not accomplished harmonisation of terms and conditions in their college structures?

A number of things have to be unravelled. It is important to be clear that the prospective industrial action is about the 2015-16 pay settlement—it is not about national pay bargaining. The Government remains committed to the principle of national pay bargaining. We will do everything that we can to make it a reality. As I have already said, I firmly believe that we are not far away from that.

On the pay settlement for this year, as indicated by Ms Scanlon, the three support staff unions have already settled. Harmonisation has always been a longer-term issue—it was never going to be resolved overnight. We need a road map of how we will get there. It is important. The road map is not something that I will do in my office in splendid isolation—it has to be devised by trade union representatives, representatives of the workforce and employers so that there is buy-in across the sector from the workforce and employers.

I welcome James Dornan’s confirmation that the SNP will be producing “brochures” in the future, rather than manifestos. “Brochure” sounds a lot more fuzzy and cuddly.

Mary Scanlon pointed to the drop of 150,000 in part-time student places. The figures that we have had from the funding council on full-time equivalent learning suggest that there has been a more than 3 per cent drop in hours of learning for 16 to 24-year-olds and a drop of over 12 per cent for those aged 25 and over. Overall, there has been a drop of just under 8 per cent in the student unit of measurement since 2010—from 2,070,000 to just over 1.9 million. Even in the full-time equivalent places that the cabinet secretary has indicated are the key measure, we are seeing a drop in numbers. Does that not suggest that the Government is failing to deliver what it promised?

No. I appreciate that there is a range of statistics and measurements that can create quite a complex picture. When we look at the average hours per student, however, we see that it has risen by 63 per cent. Before our term of office, the average hours of learning per student was 246 hours. The figure now is 401 hours.

We know that we have more people both under 25 and over 25 studying full-time courses. That has been a deliberate policy choice of the Government because having more full-time courses leads to more recognised qualifications and better job prospects. That does not mean that part-time provision—which is important—does not exist.

We go from more learners and more hours to the figures that have been produced by the funding council, which show that the number of hours by age group is down and the SUM figure is also down.

On funding, in the first panel, Annette Bruton suggested that a lack of student support is the main reason for non-completion of courses. Paul Little from the City of Glasgow College made the plea that there are real pressures in that area and more funding is needed. Is that a plea that you are likely to heed?

I am very alert to the range of issues within our student support system. I know that Mr McArthur and I will discuss that in detail later this afternoon.

I point out that student support is at a record level and that there has been a 29 per cent real-terms increase in student support during the Government’s term of office. It is at just over £105 million. Back in the day, we inherited a student support budget of approximately £67 million. The bursary that is paid to young people from low-income families or people from low-income households in Scotland is the highest anywhere in the UK. We have always looked for ways to improve continuously the student support offer. It is quite a complex proposition, and I would certainly like to see it simplified. We are putting more money into student support, and where shortfalls occur, we have always met them.

Finally, on the college merger process itself, one of the arguments that your predecessor, in supporting the reform package, put forward for why additional funding was not needed—or certainly not needed to the extent that the college sector was suggesting at that time—was that he was predicting £50 million of annual savings by 2015-16. Audit Scotland has made it clear that those savings have not materialised. Why do you believe that Michael Russell got it so badly wrong?

The Scottish funding council has confirmed that the £50 million of annually recurring savings will be evident from this financial year onwards.

So those savings are not apparent for 2015-16, but that is simply due to a delay in their arrival.

No, not at all. I do not think that we ever said that the savings would be immediate. When you embark on a reform programme, you often have to invest some money, and money was certainly invested in making the mergers possible. I do not think that Mr Russell ever made any claims about savings being immediately visible. As the funding council has confirmed, those savings of £50 million per year will be made from the coming financial year.

I will agree to disagree on that one. On you go, convener.

That is very kind of you, Liam—thank you. John Pentland can go next.

My question follows on from Liam McArthur’s question on student support, which is an issue that we have asked previous witnesses at committee about. In fact, NUS Scotland raised concerns about student support, saying that it was not fit for purpose. I am, in a way, relieved that you are going to give additional money to it, cabinet secretary, but I want to ask two questions. First of all, we knew prior to hearing that evidence that a percentage of students had dropped out because of a lack of support. Have you any idea what that number is just now?

It goes without saying that for any student, whether they are at college or university, the financial support that they receive is important. Although there will be many reasons why students drop out—for example, their personal circumstances—their personal finances and the financial packages that are available are an important part of ensuring that they continue to engage with their course.

Can you tell us what the drop-out figure is?

I can go away and ask the funding council or individual institutions—

We would like to track that, if you are giving additional—

I can ask them whether they have that information.

It does not help when you both speak at the same time.

No—of course. Sorry, convener.

I am sorry, cabinet secretary—I could not catch the end of your answer.

I was saying that I would be happy to ask the funding council or individual institutions about what type of information they have with regard to the matter that Mr Pentland raised. However, it is important to recognise that the level of positive destinations for people leaving college is at 81.5 per cent, and we know that completion rates have increased during this Government’s time in office. I am not saying that student finance is not important—we need to give it serious consideration. We are increasing investment; completion and retention rates are up; and students are achieving positive destinations.

Finally, you have said that the budget for 2013 to 2016 has flatlined. If you are going to give money for additional student support, where will that money come from?

As happens every year, any gap in student support will be met from our resources, and we have redirected resources into student support.

12:15  

The cabinet secretary will be glad to hear that I have just one question, but it is probably the most important. A key part of college reform was developing Scotland’s young workforce and focusing on vocational training for young people. We heard earlier about all the great work that has been going on in colleges in Glasgow and Edinburgh since then. The college sector has been doing that historically, but is the situation better now? Has college reform helped to achieve that focus? How can we, at this stage, address those areas that are not engaging with business to the extent that they should be? How can we help colleges to ensure that they deliver on that?

As I said in answer to Mr Beattie, colleges’ involvement with the invest in young people groups is absolutely crucial, as is the engagement between schools and colleges. That engagement has gone from strength to strength.

We started off with two pathfinders for the work that is being done on foundation apprenticeships, but we now have several pathfinders in that area and most local authorities are working with their local colleges on things such as foundation apprenticeships. As I said to Mr Beattie, 2,500 senior-phase pupils across Scotland are taking courses at college, and a wide variety of college courses is available to young people. That has a mutual benefit for college reform and the young workforce agenda.

Since the days when I was the Minister for Youth Employment, I have made it clear that I want to see parity of esteem with regard to vocational education and higher education. Much of that starts in the senior phase in secondary schools. The real ambition in our senior phase in secondary schools is for us to move towards a more bespoke system for individual young people that allows them to choose the right blend for them. They do not have to make a choice between pursuing what are strictly understood as being academic subjects and vocational subjects; instead, they should be able to get the blend that suits them.

The pace of change, from year 1 to year 2, in the number of senior-phase pupils who are taking courses at college and in the progress that has been made on foundation apprenticeships is encouraging. We must continue to make that progress at that pace.

I want to go back to Chic Brodie’s line of questioning on SDS’s involvement. I think that I am right in saying that, when the proposal was first made to transfer funding through the college learning programme—which is now the employability fund—there was concern about fragmentation. I think that, at the time, the funding of college places and training in general was described as “biscuit tin”. Is there any concern within Government that we might have too much segmentation or fragmentation of the funding, which is not helping to provide a clear view of what is happening with the delivery of training and skills development?

We always need to be alert to having clear strategic priorities. We want to strike the right balance between having a range of different funding opportunities and not having funding that is+ too fragmented. For me, the bigger principle is the outcomes, and our starting point must be to ask what the funding delivers for students, first and foremost.

I thank the cabinet secretary and her officials for coming to the committee. As usual, we are grateful for your time.

I suspend the meeting briefly.

12:20 Meeting suspended.  

12:23 On resuming—