Item 2 is evidence on skills, which are a key part of the committee’s remit. I am pleased that several individuals will provide us with their expertise this morning. I welcome Nicola McLelland and Iain McCaskey from the Alliance of Sector Skills Councils Scotland and Hazel Mathieson, Malcolm Barron and Gordon McGuinness from Skills Development Scotland. Thank you for coming along.
Good morning. Thank you for inviting us to the meeting. We are here to talk about the role of the Alliance of Sector Skills Councils Scotland. As members know, my name is Nicola McLelland. I am the Alliance Scotland’s research and policy manager. I am here with my colleague Iain McCaskey, who is the qualifications manager. I give apologies for Jacqui Hepburn, our director, who unfortunately cannot attend today’s meeting.
Thank you very much.
Thank you very much for the invitation to attend the meeting. Again, I send apologies from our chief executive Damien Yeates. The notification of the meeting came with slightly challenging timescales. For a start, this is Scottish apprenticeship week and our senior management team has been involved in a whole series of events promoting our apprenticeship programme across Scotland. However, Damien has said that he will provide further information, and he invites members to visit projects and activities of specific interest to them if they so wish. We can follow that up with the clerk at a later stage.
Thank you very much. Before I throw things open to committee members, I have a general question about the Government’s skills strategy, which was originally laid out in 2007 and refreshed in 2010. Is it actually achieving the improvements in the skills level of the Scottish workforce that were envisaged and which are required?
We are very supportive of the Scottish skills strategy. A lot of the work that has gone into it—and, indeed, a lot of the work that we are doing now—is on improving the system’s connectivity and agility. We work through the joint skills committee, which is an advisory group that was set up to sit between the Scottish Further and Higher Education Funding Council and SDS. We prepare evidence, take it to the committee, which is made up of representatives from the business and education sectors, and use it as a sounding board. We are seeing much more cohesion and collaboration across the system, with both our vocational training programmes connected into the college and university networks. Moreover, some very good work that has been carried out across the energy sector has resulted in a much stronger proposition supporting opportunities in energy, including oil and gas, renewables and carbon capture and storage.
I would like to pick up on a particular aspect. I have noticed a clear difference around the support for young people who are leaving school—for those who require more choices and chances. The strategy has given leadership and direction for local authorities and various partners to focus strongly on what is happening to those young people. We have seen initial evidence in challenging times of some improvements in outcomes for young people. That is one area that I would cite in which leadership and commitment from various people in local authorities, schools and colleges have led to a measurable difference. Whether we will get that again this year is, of course, another matter; the environment is obviously very challenging at present.
I want to comment on our engagement with employers. The Government has set quite stretching targets for engagement with employers, particularly around the delivery of modern apprenticeships, and we have seen significant increases in the delivery of modern apprenticeships and engagement with employers. Two years ago, we had a target of 18,500 modern apprenticeships. Last year we had to deliver 20,000 modern apprenticeships, and we delivered 21,000. This year, we are on target to deliver 25,000 apprenticeship starts for the Government. In addition, a new flexible training opportunities initiative was launched last year. Again, we have seen significant engagement with the small business sector in Scotland that shows that there is interest in the employer base in Scotland in enhancing the skills of the Scottish population.
I echo some of the comments by colleagues from Skills Development Scotland. A significant change has been the introduction of level 2 modern apprenticeships through to level 5. Three years ago, no level 2 frameworks were available for people to start as an entry; we now have 20-plus frameworks at level 2. There were only around 70-plus frameworks available, but 110 frameworks are now available across different levels, from 2 right through to 4. With the work of employers, key partners and key stakeholders, frameworks that were not available in Scotland, such as for pharmacy, fashion and textiles, have been introduced, and the creative and digital framework has recently been introduced. That helps to support Scottish business and candidates.
On labour market information and intelligence, the skills strategy has a commitment to an LMI framework for Scotland, and the Alliance of Sector Skills Councils in Scotland is very much involved in helping to develop it. LMI is key to the skills system in Scotland, as it informs the development of qualifications and helps, in speaking to employers, to highlight where skills gaps and shortages are so that people can think about how to retrain or reskill their existing labour force. Obviously, many stakeholders are involved in the development of the LMI framework, and that is very positive for Scotland.
I thank the witnesses for their opening statements. The answers to my question have opened up a raft of areas that I am sure we will get into.
I thank the witnesses for their presentations, and put on the record that a lot of very good work is being done in skills development. That message comes back from schools, colleges and universities, and I give many congratulations on that.
The simple answer is probably the performance framework around careers information, advice and guidance. The first aspect will be about positive destinations for young people. It is a key national outcome; it is shared by every local authority and community planning partnership and it is a key one for us to focus on.
We recently introduced a quality assurance framework for all our national training programmes. It was launched in April this year and is a self-assessment framework. We have trained assessors in Skills Development Scotland, so our network of 348 training providers are currently working their way through the self-assessment process to ensure that they are delivering quality for us. That hinges on the needs of the individual. Primarily, it is ensuring that the individual receives quality training, and it will be a condition of contract in the future that training providers must have achieved the quality assurance framework. Achievement will be banded, but they must have achieved at least the minimum for next year.
I have one supplementary on a point that has been put to us by groups such as the chambers of commerce and the Confederation of British Industry. A key focus just now is obviously on ensuring that the school population coming into the job market is better prepared—not just in qualifications but in working practices. Will you say a little about how you think progress is being made on that? Are those people fit for work? Never mind about the qualifications, do they understand the workplace?
A range of measures were introduced, probably initially through the determined to succeed programme, to get that concept across. A range of different activities happen in a load of schools in trying to better prepare young people for what comes, including employers visiting and engaging directly with schools, and pupils visiting and going on tours to employers. It is also a question of trying to develop the core skills that employers say they want, such as those around attendance, timekeeping, good positive attitudes and team working. Employers say again and again that those are the key skills—that the occupational skills are their job, but that people need those core skills before they come in.
I want to return to youth unemployment, which members have spoken about. We all recognise the challenges that Scotland faces on that. We know from the evidence that, if we lose a young person, it can be difficult to get them back into the workplace and to be productive. The witnesses have outlined several on-going initiatives, but the youth unemployment figures are still disappointing. What challenges exist for your organisations in trying to address the issue in the next few years? Has the response to the problem so far been robust enough?
In the past four or five years, the engagement of schools with what happens to their pupils beyond school has changed beyond all recognition. The scenario is that the level of commitment from schools to better preparing their pupils for what comes next is now much higher. Schools are focused on that activity. There are good examples in Edinburgh and West Lothian, where the local authorities are focused on the issue and have done a lot to engage directly with employers, to increase the opportunities for young people and to better prepare them for what comes next.
The introduction of level 2 modern apprenticeship frameworks has made a huge difference. It is an achievable programme and has allowed employers to retain candidates. People are on a recognised programme that allows them to progress to level 3. The introduction of level 2 has helped, as it is an achievable programme and a good entry into the job market that allows individuals to have that experience. People might go off into different occupational areas, but the programme gives them the grounding.
I was going to ask about level 2. Am I correct that, this year, the modern apprenticeship programme has 25,000 new places, of which 20,000 are level 2?
No.
I have got that wrong. Out of the 25,000 is there a quota for the different levels? How is the decision made on what type of apprenticeships are created?
That is based on demand information that we have from employers on job roles. The majority of the modern apprenticeships are level 3, but there are level 2s. I do not have the information with me, but I can have it sent to the committee. Within the 25,000 there are three separate chunks. We have 13,000 places specifically for 16 to 19-year-olds in any sector and 7,000 places for the key industry sectors—financial services, food and drink and hospitality—for people who are in work.
If someone comes in at level 2, is there a clear pathway for them? How confident are you that they will progress? Hazel Mathieson talked earlier about sustainability of employment. Are you confident that a level 2 qualification gives people security? Is there an expectation that they will move on to level 3?
It depends on the job role, because the person has to be competent in the job role. If the job in a workplace is only ever going to be at level 2, the individual will not progress. Individuals might be quite happy to work at that level. However, there are progression routes within all the qualifications, so if someone has the potential to progress to a higher level in the organisation, the funding is available.
I sit on the modern apprenticeship group. When we review frameworks we ask for submissions to articulate the progression clearly, whatever the level. We ask the sector skills council to articulate what the job roles and titles will be, what is involved in that and what opportunities there will be for candidates to move to another level or into higher or further education.
I understand that some young people who are in college will be classified as unemployed. Is that the case?
I would not have thought so, because they are doing something positive. It might depend on the number of hours that they do per week.
It might apply to part-time students.
I will maybe look at the background to your question and pick up on it later, if that is possible. I am not quite sure about the implications.
A large number of bodies and programmes are involved in developing skills in Scotland. Can the panel tell me a bit about how well bodies are collaborating and how well programmes are integrated?
There is strong integration at local level between organisations that work at that operational level. We have developed service delivery agreements with each of Scotland’s 32 local authorities. In some areas, particularly for our initiatives around youth and adult unemployment, we have devolved decision-making responsibility to the local level, so that our funds can complement existing resources, projects and other local activity, which might involve European structural funds or local authority funds. At local level, where services meet individuals, services should be fully integrated, but there is always work to be done.
Alliance Scotland works with a number of key stakeholders across Scotland. I highlight our joint workstreams with SDS on careers information, advice and guidance. We are in the middle of producing careers information and guidance fact sheets for each sector skills council. In addition, we have very much fed into the my world of work website, which is the careers management information website that SDS launched. In particular, the SSCs were involved in mapping all the job titles in the website to the SSC footprint. That is a key example of joint working in which we have been involved.
The Alliance of Sector Skills Councils in Scotland has memorandums of understanding with the Institute of Directors, the CBI and the Scottish Training Federation. We focused the consultation on the national occupational standards for modern apprenticeships through those organisations to help them to have input into the development of the framework for the national occupational standards. We worked with a range of organisations.
If I understand your question correctly, you are really asking about the degree of joined-upness that there is. I will cite two examples. First, Gordon McGuinness is very involved with the industry advisory boards, Scottish Enterprise, the sector skills councils and the FE and HE sectors in engaging directly with some of our key sectors about what our current skills needs are and will be in the future. It is about how we respond collectively to that and who has responsibility.
I have a supplementary question. What is the scope for closer partnership in developing skills? What evidence would you need in order to say that the system is working better? You have all referred to examples of where it has worked well or where a change has been made, but what was the outcome? What takes such change forward? What are the frustrations? What are the barriers? What do we need?
I will give you a live example. Every year we contract for a large volume of training. This year, there are about 46,500 places. A big planning process lies behind that and we do not do it ourselves but do it with partners. For our modern apprenticeship provision, we need to identify the future likely demand—we are assuming at this stage that employers want modern apprenticeships. We liaise closely with the sector skills councils via Iain McCaskey and the Alliance of Sector Skills Councils in Scotland, to ensure that we get as much information as possible from the employers that they engage with, so that we can identify our future recruitment and skills plans. I also work closely with our industry managers, who work with Gordon McGuinness, because they engage with the sectors differently and also with some large employers.
I echo that. We have established close relationships with Skills Development Scotland, the ASSCS and the SQA accreditation side. We act as a buffer to make sure that anything that comes into the modern apprenticeship group has met the criteria that have been set and that the agencies have engaged with small and large businesses. We have agreements or memorandums of understanding with those organisations and we look at the apprenticeship submission to see that those criteria have been addressed before it is submitted.
We have a real issue with youth unemployment at the moment and we are working hard on a range of measures on that, but there is also a danger that we will miss the good performance of the programme. All our apprentices in Scotland are at level 2 or 3, or employed status, which means that employers are paying them a wage and there is a core investment of funds in their training. That model is looked on with some envy by those south of the border and in Northern Ireland.
That was an interesting answer. One of the points raised is that employers such as the national health service have got away from employing young people. Why is that the case?
Such employers have tended to recruit experienced people and have not traditionally had business administration apprenticeships in the numbers that we might expect when we look at headcounts of public sector organisations. The permanent secretary has had a push on to encourage the public sector to recruit more young people. We have been working with a host of organisations to do that. There has been a drift to the current situation as there has been a focus on headcount. Employers are getting away from having an in-house training system that takes what can be raw young people, gives them a robust induction process and nurtures them through the development stages. Through a process of HR and planning, employers have stepped back from that. I do not want to single out the NHS because we are doing some good work with it across a range of activities, including examining skills shortages in terms of care workers. Given their size and age profile, it seems that some organisations have drifted away from inducting young people into their business.
Thank you for your time with us this morning. I would like to ask about Willy Roe’s review of post-16 education and vocational training, with specific reference to its recommendation on releasing employer leadership, which Mr McGuinness touched on. In the report, Skills Development Scotland was tasked with exploring more private sector investment partnership possibilities. Mr McGuinness touched on the work with local authorities. How are you liaising directly with the private sector on more opportunities and how are you responding more generally to the review?
You will appreciate that the review came out only a couple of weeks ago, so we are still working with our colleagues in the education and lifelong learning department on how that policy is interpreted. Further, as I said earlier, we are aware that Michael Russell is due to make a statement in Parliament about the review of post-16 education and how that will play into the new economic strategy. However, I can touch on the kind of activities that are currently under way.
The Alliance of Sector Skills Councils represents all the sectors, not just the key priority sectors. We would like to highlight that there are additional sectors without which the key sectors could not operate. For example, without the logistics sector, goods could not be distributed.
I have a question that is targeted specifically at Skills Development Scotland. I am sure that most committee members agree with me that, for people who are looking for work, face-to-face careers advice is critical. It is my understanding—please correct me if I am wrong—that Skills Development Scotland has moved to putting most of its material online and cutting down on face-to-face careers advice interviews. Is that correct? If so, what percentage of the face-to-face interviews have gone and how do you feel about that moving forward?
Our expectation is that we will have exactly the same number of careers guidance interventions with young people and adults this year as we had last year. We launched the my world of work web service last week, which has a number of objectives, one of which is to meet the requirements of a range of customers who prefer to use that resource. For many young people now, everything is in their phone including access to a range of services, and we must ensure that our services are accessible to that generation. Nevertheless, we recognise that some young people and adults do not have access to those resources, so we have available to them our call centre facility and our targeted, face-to-face service. There are well over 100 full-time and part-time centres of the kind to which Gordon McGuinness referred earlier, so that service is still accessible. We are trying to deliver a range of services in ways in which the customer—the individual—is looking for them. We are trying to accommodate the range of ways in which people are looking for those services.
I am glad to hear that accessibility is an issue, as it is a primary concern for us. You say that you are going to sustain the number of interventions. Do you mean face-to-face interviews, or does that include other things such as e-mails?
It will be group work and so on, but it is face-to-face interventions.
Thank you.
We are working with Young Scot to get the fact sheets on to its website once they are produced, which will be fairly soon. The fact sheets are short—two pages—and say what the job is about, giving a case study of somebody entering the sector and what they achieve at the end of it. They give a good introduction to an area of employment in a sector. We are producing 22 of those and they will be ready within the next month.
In the autumn.
We will be happy to share them with the committee when they come out.
My question has been partially answered. I am interested in what you said about the new industries that you are now engaging with—the creative industries, pharmacy and so on. Are you confident that the engagement with young people at school is happening early enough to enable them to understand those new opportunities? How do you ensure that they are being empowered in their choices at standard grade and highers and within the curriculum for excellence?
The Alliance of Sector Skills Councils is undertaking a piece of work with the careers IAG fact sheets that we have produced. We are working with a company called Tree of Knowledge to turn those careers fact sheets into materials for schools. We are going to link them with the curriculum for excellence so that, we hope, they will be embedded in the curriculum. We are focusing on years 1 to 3 in secondary schools. As Iain McCaskey mentioned, the fact sheets will give an overview of each of the sectors, including the entry points at which a 16 to 19-year-old can get into a sector and what the typical jobs are. They give key facts about the industries and, as Iain McCaskey also mentioned, case studies showing how people can progress through the sectors. We are working with Tree of Knowledge and the sector skills councils at the moment to develop those materials. We also hope that that resource will be placed on the glow website, and we are in discussions about that at the moment. We are hopeful that that will help school leavers and those at school to make more informed decisions about where their future careers may lie.
I am interested in how we incentivise employers. You have spoken a lot about how you engage with employers, but is there recognition that, in a difficult economic time, skills and training are often areas on which spending is reduced, particularly among small businesses? That applies not just to young people who are entering into employment but to existing employees. When the small business bonus scheme was introduced, there were suggestions that incentivisation could be provided that was tied into training and skills development. You have spoken a lot about developing relationships and holding conversations, but how do you reach the smaller businesses to encourage them to look at that as a viable option and a way of helping their businesses to grow and contribute more to the Scottish economy?
A lot of our programmes and incentives are aimed at the small business community, which is a very wide and diverse community. As well as having as much face-to-face contact as we can through appropriate forums, we work closely with the business gateway contractors, chambers of commerce and other appropriate organisations that represent small business. We take a lot of feedback from those organisations, which helps to shape and inform future provision. They tell us exactly what small businesses are looking for. A lot of our provision and our flexible training opportunities are aimed at the small business sector.
The alliance has been working with the Scottish Qualifications Authority on a joint piece of research on the returns to firms of investing in qualifications for their employees. It has not been published yet, but it is due to be published shortly. The aim of the research was to show employers what the benefits of investing in qualifications are. The findings show that it increases morale among the workforce and increases productivity. We asked firms whether, in the current economic climate, they were more likely to invest in qualifications and training. It was interesting that 25 per cent of employers said that they were more likely to invest in qualifications and training even in the current economic climate, and that 50 per cent of them said that it had made no difference at all. We are quite encouraged by those findings and we hope to build on that piece of work through some in-depth case studies, for which we are tendering.
You said that that report will be published quite soon. Will you share it with MSPs?
Yes, we can do.
Did you have a quick supplementary, Jean?
Yes. I suppose that it is a daft lassie question to help my understanding. Hazel Mathieson mentioned that there were 380 providers. It is about how the hierarchical structure works in passing on the ambition and aspirations of your two organisations to 380 providers, some of which will be organisations such as Barnardo’s or independent organisations.
Some are employers, too.
It is quite a big ask that they all have that ambition. I will give an example. I remember meeting a man who said that he did not want to take an apprentice. He was fed up with young folk—they did not really want to learn. Eventually, he was persuaded to take someone. He had no qualification, and he took a young lad. A couple of weeks later, he was found teaching the lad to read the sports pages of the Daily Record. He had got attached to him.
Interestingly, today we are going live online for our next contracting round. One of the recommendations in the Willie Roe report was to ensure that we were more transparent. We use the public contracts Scotland procurement site, although what we do is not really procuring. I suppose that it is more grant disbursement. It is not a procurement exercise because we are setting costs and so on. We are trying to make everything as transparent as possible. We put on our website who is awarded contracts. We currently contract with just under 350 providers, some of which are employers, because some employers have an internal training infrastructure to recruit young people in the key sectors and to upskill staff in modern apprenticeship standards.
I was not surprised at the number; I was just asking about the different kinds of organisations.
I have about 60 skills investment advisers working for me, whose day-to-day job is to manage the contracts that are out with providers. We are talking about £135 million-worth of business. We need to ensure, on a daily basis, that we are getting value for money and that achievement levels are good. We want to ensure that it is not good money being thrown after bad and that people in the system are sustaining, progressing or moving into employment. For modern apprenticeship delivery, we need to ensure that people are sustaining employment and achieving their modern apprenticeship. We have a network of staff throughout the country whose job it is to ensure that that system works.
Do you publish a list of people who take the contracts?
Yes. It is on our website.
The big issue right now for any public sector organisation and any organisation that works closely with the public sector is the funding landscape, and where we will be over the next few years with the state of the current financial settlement. Given that the overall amount is dropping, and that we have to consider the constraints that that brings, what would you like to see in the budget that will come forward from the Scottish Government very shortly? I appreciate that it might be slightly easier for the alliance to answer that question, given that SDS is a non-departmental public body, but any views that you have on that would be very enlightening.
The alliance thinks that the programmes that the Government and SDS have put in place have helped employers and Scottish business through a difficult period. That work will continue—we just have to work together sensibly.
We recognise the commitment that has been made to creating 25,000 modern apprenticeships over the parliamentary session. That is a significant statement and a commitment to our work and its contribution to the Scottish economy.
So, strictly in funding terms, the figure of 25,000 and the measures that have been put in place are broadly the way to go and should continue. Perhaps looking into what the figure of 25,000 is composed of would be the best way forward to further refine and improve delivery.
Absolutely. Having available to industry a portfolio of vocational qualifications, especially at levels 4 and 5, will retain and continue to upskill the existing workforce, which is important. There are various pathways from entry to underneath level 5, which is underneath a doctorate. In logistics, for example, a person can enter a warehouse and progress to senior management. The same applies to extractives and mineral processing—a complete portfolio is available. If somebody enters quarrying, they can go up to being a site manager. A raft of qualifications exists; that is emerging more and more.
The significance of modern apprenticeship delivery is that it involves a partnership with employers—it is not all from public investment. We are trying to maximise the apprenticeship programme’s benefit by maximising the contribution from employers. We can deliver 25,000 modern apprenticeships, but we need employer engagement—we need to maximise what we get from employers.
I ask Gordon McGuinness for clarification. I think that you referred to 25,000 apprenticeships over the parliamentary session—did you mean each year?
Yes—thankfully. That is for the record.
Good.
I obviously just thought that I heard the words “each year”. I thank Joan McAlpine for seeking that clarification.
Agenda item 3 is a discussion of the committee’s work programme, which follows from our away day—I should call it our business planning meeting—in August, when members discussed informally topics for the inquiry that we might be interested in having and issues for scrutiny of the draft budget and the spending review. In its discussion this morning, the committee will flesh out its approach to the work programme, after which we will publish further information on our web pages. At the beginning of the meeting, we agreed to hold the discussion in private, so I close the meeting to the public.