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Item 4 is evidence from the Longannet task force. Before we begin, I want to mention two process issues. Johann Lamont has had to leave us to attend to parliamentary business elsewhere, and Patrick Harvie has to leave us shortly for the same reason. Those members might come and go during the meeting. I just wanted the witnesses to be aware that they are not storming out because of something that you have said—yet.
I thank our witnesses for coming and I apologise that we are running a little late. We have until about 11.30 for this session. I should declare an interest in that I am a member of the Longannet task force. The committee is keen to hear from the task force about its work, how it will support the Longannet workforce now that that closure is imminent, the wider plans for the Fife economy and how the economic hole that will be created by the loss of Longannet can be filled. We also want to get a more general understanding of the value of such task forces. I currently sit on three Scottish Government task forces. We are keen to understand the purpose and objectives of a task force.
I welcome our witnesses. There are six of you, so it is quite a large panel. Please do not feel that you all have to answer every single question that is asked, otherwise we will be here for some time. We have with us Stephen Boyd, assistant secretary of the Scottish Trades Union Congress; Hugh Finlay, the generation director at Scottish Power; Calum MacLean, PACE—partnership action for continuing employment—manager at Skills Development Scotland; Councillor Lesley Laird, the deputy leader of Fife Council; Fergus Ewing, the Minister for Business, Energy and Tourism at the Scottish Government; and Danny Cusick, the senior director for food and drink and tourism and textiles, and location director for Fife, at Scottish Enterprise.
Minister, do you want to make an introductory statement?
Yes—thank you.
I welcome the opportunity to address the committee on the on-going support for the workers, businesses and communities that are affected by the premature closure of Longannet power station. This is a timely opportunity, given that electricity production at Longannet is due to cease in just over two months.
Against a backdrop of concerns for energy security linked to shrinking margins across the Great Britain electricity system and, in particular, concerns for the consequences for Scotland of losing future power generation at Longannet, the Economy, Energy and Tourism Committee recently completed an inquiry into security of supply. The Scottish Government’s view of energy security and energy policy is much less sanguine than the view that was presented in the committee’s report, “Plugged-in Switched-on Charged-up; Ensuring Scotland’s Energy Security”, which was published on 26 October.
Following the planned closure of Longannet and a combined loss of around 5GW of coal-fired capacity across Britain, the outlook for winter 2016-17 is a huge concern, given the ageing nature of much of GB’s capacity and the fact that investment in new and replacement baseload capacity has stalled. We have legitimate concerns about the adequacy and stability of Scotland’s electricity supplies after Longannet closes, and we have made those concerns known to the UK Government—from the First Minister to the Prime Minister—and to National Grid. In particular, we continue to seek reassurance that system recovery plans, or black-start arrangements, and the time taken to restore power supplies will be adequate following the loss of Longannet. National Grid and Scottish transmission owners are responsible for developing those plans.
The Scottish Government has developed effective ways of responding to economic shocks, depending on their nature and whether they involve business failure, a decision to close part of a business or particular difficulties in a sector. Usually the PACE response is sufficient, and it is complemented by business support that is offered through the enterprise agencies and local authorities. However, when the impact of the economic shock is particularly severe, greater intervention, which is either locally or nationally led, has been put in place. Such interventions build on the existing available PACE support as well as general economic development support through local authorities and the enterprise and skills agencies.
The task force approach provides a focus for understanding the challenge and impact of the economic shock and for exploring all potential approaches for support and future activity. Of course, the circumstances surrounding the establishment of a task force are always unique. It is essential to emphasise that no two task forces are the same—in fact, every one is different.
The task force enables a bespoke response to the different circumstances of each event. When the shock is more localised, local authorities have assumed a leadership role, building effective partnerships to respond to the situation in their area. I recognise the extent of the impact that the closure of Longannet will have on Fife, the neighbouring areas and across Scotland. Close partnership working with all partners is essential to ensure successful outcomes, such as mitigating the prospect of job losses and identifying how the wider business interests can be supported.
10:30The Longannet task force will continue to work towards identifying the various needs and requirements prior to the closure. The emerging Longannet economic recovery plan will shape that work going forward. If I can go off script for a moment, the support that we have had from the local authority and the company has been exemplary. The plan that will be developed will set out activities that could re-establish a fair, inclusive jobs market, replacing lost job opportunities and promoting regional cohesion in identifying an after-use for the site. It will look at ways of supporting sectoral diversification and building skills, and ways of capitalising on the location of Longannet and the availability of strategic transport connections, local labour markets and business networks. It will also look at how to rebuild community confidence in the site.
I am grateful to have the opportunity to make this statement and I look forward to working with the committee on the Longannet task force and on the general issue of the use of task forces.
Thank you, minister. I am quite keen that we do not spend a lot of time going over the energy policy debate, because we have done that many times in the past. It is more important to focus on the work of the task force, how we can help to replace the jobs that are going to be lost, and the broader question of regeneration.
In that context, I will start by asking you a question, minister, but maybe Councillor Laird can come in on it as well. The task force has been established and I presume that its work will last for some years—perhaps you can elaborate on that—but how will we measure its success? At what point will we be able to look back and say “Right. That task force was set up and it did its job because we know have this position in Fife to replace what was lost in Longannet.”? Will it be four or five years from now? How will we measure the success of the task force?
The task force has primarily to work with our partners to focus on what can be done in practice. The primary focus has to be on understanding as quickly as possible the facts, the nature of the problems and the impacts on people and the economy. A task force is formed because there has been a very severe shock; not simply a few people losing their jobs—of course, for them, that is a tragedy—but a substantial impact of an economically seismic nature on a local community, whether it be Glenrothes in Fife, the steel community in Motherwell, the town of Fraserburgh or the Longannet community.
Each case will be entirely different, but it is important to say that evaluation comes afterwards. Convener, I am sure that you would agree that the primary focus has to be on doing the job, especially in terms of what can be done of a practical nature. Therefore, to answer your question about evaluation, that comes later.
I do not know whether you want me to do so at this point, but I can provide some information. Thanks to officials, we have information from the Fife task force about an outcome, which contains a breakdown of those who have received full-time work and training.
Maybe we should explain, minister, that the Fife task force is for Tullis Russell.
Indeed. I was just going to say that. We cannot give similar information on outcomes for Longannet, because it has not closed yet. One of the benefits of working with the company before the closure is that we can plan for what is about to happen. That is different from, for example, the disgraceful case of Mike Ashley and USC in Ayrshire, when workers were told that they were being made redundant on the spot and the company refused to respond to our letters. In contrast, the relationship with Scottish Power has been one of very close engagement and partnership. We have worked very closely with Hugh Finlay and his colleagues, which has the benefit that the workforce has a period of about 18 months to prepare and plan for life beyond Longannet. It is a great sadness, a great shock and a great loss but, on a human level, thanks to the approach that this enlightened company has taken, we are able to plan much more efficaciously.
I am probably hogging the show at the moment, but I am very interested to hear what my colleagues in Fife Council and Hugh Finlay from Scottish Power have to say about the matter.
In the case of Longannet, although the greatest impacts will perhaps be on Fife, they will not affect Fife only. Some local authority colleagues would say that they will be equally affected in their areas, and they are represented on the task force as you know, convener.
Evaluation has difficulties. Nobody has a duty to come and report to Fergus Ewing, saying, “By the way, I’ve got a job now.” A lot of people will just get on with their lives and go and get a job for themselves. There is no duty to report in such cases. We find out about that through PACE doing evaluations by sending out questionnaires to people. That is the basis upon which statistical data is obtained about individuals.
The measurement of economic impacts is much more complex. Logically, the exercise can only be done after a forensic, comprehensive, encyclopaedic picture is created of the actual benefits of Scottish Power to the supply chain and then an analysis of what happened to the money that was injected into that supply chain.
Intellectually, convener, I hope to persuade you that evaluation is not an easy or simple process. We have a method of dealing with it specifically in relation to people, and rightly so. PACE can talk about that in a lot more detail than I can.
On the slightly more nebulous concept of wider economic impacts, direct and indirect, it is intellectually difficult to find a method of evaluation of the serious impact that does not involve disproportionate costs. Danny Cusick might be able to address such a conceptual problem in more detail, if you and other members wish him to do so, convener.
I will invite Councillor Laird to contribute on my question. In five years’ time, how will we be able to look back and say, “That task force was a success”?
I start by reiterating the point that each task force is different. You have some experience of the one for Tullis Russell but the circumstances that led to the establishment of that were very different. The Longannet task force has a broader reach, not just in Fife but throughout the central belt to the west. The way to approach it clearly has to be different.
Any task force needs to look carefully at the short-term, medium-term and long-term objectives that we are trying to accomplish through it. The short-term ones are fairly clear, in that there is a human impact and job losses. The impact is not just felt at an individual level; there is an impact on communities. Therefore, it is important that the task force takes mitigating action to address the aspects that are within our gift and control to do something about.
Convener, you have touched on a broader question: what are the wider ramifications of sudden impacts on local economies? How do we plan, assess and prepare a better and more resilient workforce in our communities and a stronger economic infrastructure?
As regards the Longannet task force, six workstreams are effectively examining those short, medium and long-term areas. As we work through the work of the task force, it will be a matter of starting to flesh out what we think are the medium to long-term impacts. Some of the workstreams aim to address areas such as the lack of incubator and small business growth units within the Kincardine area. The task force might want to explore that further.
The measurement of that work needs to be done further down the road, when we manage to attract, develop, grow and sustain businesses. As the minister says, the picture is complex, but we have to have some objectives in mind in the timescales, and we have to be clear about our objectives.
I reiterate that by pointing out that task forces take up a lot of resources, time and contributions, not just from the officials here but from all the people from the various organisations who are working to deliver the plan. We should not fail to recognise the amount of time, effort and money that it costs to write the plan and deliver it, and it is the delivery that will test whether we have done a good job with our planning.
Thank you for that.
Mr Cusick, do you want to comment?
The approach that we take to measure the wider impacts is important and, as the minister and Councillor Laird have said, it is also awfully complex.
The impacts are not just on businesses; they are across communities, people and businesses. Each agency will put together a measurement and evaluation framework to track our interventions. Skills Development Scotland will track, as much as possible, where jobs are and where people who are directly involved are redeployed. Scottish Enterprise will seek to track all the interventions that we make to support companies that have either been immediately affected or are in the immediate area. By tracking those interventions, we can look at how many projects have been accelerated and how many jobs have been created over time.
Through a formal measurement evaluation, the task force can then try to get a sense of whether the collective inputs have mitigated the effects of what we know, at the moment, is the worst case scenario in terms of economic impact. A framework and a governance structure are in place. We will look seriously at how we intervene, and at the outputs that those interventions create.
Stephen Boyd wants to come in.
In answer to your question, convener, it is tremendously difficult to measure the success of the task force. Instead, it might be helpful to think about what is expected of task forces that are established in such circumstances.
In the first instance, it is clearly about assisting individuals who are in danger of losing their jobs. We can come back to some of the specifics but, generally speaking, task forces do a reasonable job. Working with a responsible employer and having a reasonable timeframe to deal with the issues assists with that job, as it did in this case. However, that is not always the case.
Secondly, and maybe more importantly in this general discussion, when a task force is established in circumstances such as this, to what extent can it reasonably be expected to deal with the long-standing economic development problems in many of Scotland’s communities? Those problems have been pretty intractable in some areas.
The best example of that is the coal task force, which, as you will remember, was established after the very sudden collapse of the surface mining sector in Scotland. I attended some of the meetings of that task force out in Cumnock. East Ayrshire has long-standing and deeply ingrained economic development problems. Can a task force that is established in such circumstances really begin to address those problems? I am not entirely sure that it can. That suggests that, to start looking at those conditions, we need a different kind of task force with a much longer outlook.
You have raised a range of interesting issues.
I am keen to bring in Patrick Harvie, as he needs to leave the committee shortly.
Thank you, convener. The other committee that I have to go to has been delayed, so I have a little longer. However, the question that I want to raise is relevant to the last point that Stephen Boyd made, so it is helpful to bring it in now.
In his opening remarks, the minister rightly talked about circumstances where we are thrown into an urgent situation of which we have no foreknowledge and so we have to respond reactively. However, there are situations where foreknowledge is coming. The Longannet plant is closing, whether or not that is necessary—there is disagreement over that. It is closing a few years earlier than anticipated, but it has been known for a considerable time that the plant was coming to the end of its life.
Would it not have been helpful if all of the intensive activity that Councillor Laird talked about had begun much earlier and at a calmer pace, building it into the Government’s economic planning, rather than merely being reactive? The end of burning coal for electricity has been anticipated for a long time.
I am not sure whether the phrase “foreknowledge is coming” means anything, but I think that I get the drift.
Sorry about the tautology.
10:45
I refute the assertion that there was any kind of panic, unseemly rush or lack of preparation. Hugh Finlay is here, and he is the man who can talk about Longannet with more authority and passion than anybody else on this planet. Longannet should not have closed. I am answering this, convener, because the question has been put. Longannet should have continued to do the great job that it has been doing for Scotland for the past several decades at least until the end of this decade.
Convener, you have been in the boardroom at Longannet. There is a picture on the wall there that shows the employees and “Longannet 2020” is the slogan on the wall. The professionalism and enormous investment that Scottish Power has made in Longannet for the past 10 years should have been utilised in various ways.
I am not reopening the rights and wrongs of the UK Government’s failure to respond in any meaningful way to our repeated requests and arguments. However, shortly after it became evident that the Prime Minister was not for turning, to coin a phrase, and that there would be no intervention from the UK so there was nothing more that we could do, we turned immediately to working with our colleagues on the council and the company to address the consequences.
Mr Harvie has raised a fair general point but it does not apply to this situation. On the contrary, we had a considerably lengthy period before the closure and the workforce has had quite a bit of time to think about things. We have had time to engage with Stephen Boyd and his colleagues and with Hugh Finlay and Lesley Laird, and we have done so in detail.
The company can talk about the opportunities in Scottish Power for some people. Other people are fairly close to retirement. I have met some of them more than once because I have visited the plant several times. Other people are highly skilled, and I am interested to hear Hugh Finlay talk about them, because an awful lot of them will find jobs without a great deal of difficulty, although they would not have chosen so to do.
I refute Mr Harvie’s suggestion and think that, on the contrary, we have sought to make the best of a situation that we felt strongly should never have arisen.
I certainly did not accuse the Government of panic—I did not use that word. However, the Government’s energy policy documents anticipated something like 2020 as being the end of the plant’s operational life. Does any of the other witnesses share the view that Stephen Boyd seemed to be heading towards expressing, that a longer-term piece of work for a task force to look at the final 10 years of a plant such as Longannet would prepare us so that, if it was to be closed a few years earlier, more of the work would have been started? That would be better than having to do the great deal of intensive work that Councillor Laird talked about after an announcement was made.
I do not want to go back into the economics of the situation, because that has been presented to the committee in the past. I am not sure how Scottish Power would have prepared beforehand for what happened once the decision had been made.
My focus is now on the staff and all the people who have been impacted by the decision. The task force met before the firm commitment to close was made, and that was useful for us. We have strong engagement with the trade unions—the partnership between the company and the unions is as strong as it can be.
The reality for the staff is that, when the task force started, 236 people were employed by Scottish Power at Longannet. Of those, 16 have left and taken up new roles in other companies. As the minister said, 152 were able to take advantage of the quite substantial retirement package that was offered. A number of them might want to seek further employment, but they are in a much better position than they would have been without that package. Our company redeployed 27 employees across the business, leaving about 17 per cent who want to remain with Scottish Power but who we have not been able to sort out yet. One member of staff in that position is far too many, but 17 per cent is a lot lower than I expected.
For me, the focus has to be on managing the people right now. From that point of view, we are in a good position. We still have some time between now and the full decommissioning of the station to try to work with the people who are left and get them work elsewhere. In that, we have been supported by PACE. We have brought in about eight or nine organisations, such as Police Scotland, the Weir Group and Ineos, and made presentations to staff. The station has a really skilled workforce, so there are still opportunities.
From a people point of view, we have to be sensitive to the timescales. We have done that, which has flowed through into a situation that we need to keep working at but that is pretty strong.
In such circumstances, early intervention is crucial. The eight or nine-month period that we have had at Longannet is pretty good compared to many other instances.
It is interesting to think back to when PACE was established in the early part of the previous decade. The original intention was always that it would examine the company that was in trouble and consider various ways of saving it, such as looking for a new buyer, considering employee buy-outs and ways of changing employee ownership. However, that never happened because, when companies are in such a situation, they do not want to engage with Government agencies or, in most circumstances, their workforce. There are also often barriers to companies doing that. When we examine the ownership structures in the Scottish economy, we see that we are often talking about branch managers, who can hear about such decisions quite far down the line.
We all agree that intervention is crucial and, over the past few years, we have had a couple of workstreams in PACE on that, but it is tremendously difficult to make it work in practice and we should not underestimate that. We have all been trying to make it happen for more than a decade, but it is tremendously difficult.
In my answer to the previous question, I was getting at the point that there are apparently intractable problems of economic development for communities around Scotland. Task forces that are established in relation to industrial closures perhaps have unreasonable expectations placed on them to begin to solve some of those problems, so considering a new approach to economic development in such areas might supplement the task force approach to specific industrial closures.
I reinforce the point about early intervention. As the minister said, PACE is often faced with companies that go into administration, such as Tullis Russell, which means that we have no time. We have a comprehensive monitoring and evaluation programme for PACE in which we follow up every customer who receives an in-depth service. Our research consistently shows that, the earlier that we can get in front of employees to deliver services, the better. From memory, I think that three to six months is the optimal time for that.
We have had good co-operation and support from Scottish Power and Right Management, which is its outplacement agency. The feedback that we have received from unions, employees and the company is that the timing is right in this intervention. We have been working with employees since before Christmas—I can provide more detail on that—and we have enough time to do the job in hand.
Stephen Boyd’s point about the wider infrastructure and how we respond to that is well made. When it was suggested that Longannet was closing, Fife Council was proactive in approaching the Scottish Government and asking for a task force to be formed. Particularly on the back of the Tullis Russell announcement, we felt that it was important to get on the front foot and start to make plans where we could. However, there is a balance to be struck between that and undermining business confidence by intervening prematurely. That is a very difficult balance for politicians to try to strike. Nonetheless, it is better to be proactive than to come in later in the day and try to respond to issues on the ground.
Patrick Harvie’s point on the wider economic assessment is really important. The committee is raising a good question. For example, let us look at the example of the impact of the economic climate on the oil industry and the likely repercussions of that. In Fife, we have been taking stock and assessing with our manufacturing sector what the implications of the flow-through of that into Fife will be. Around 12 per cent of industry in Fife is in the manufacturing and engineering-led sector. Clearly, we want to understand early what the fallout will be and what, if anything, the council can do to facilitate dialogue, so that like-minded people can get together and look at possible interventions.
It is absolutely essential that we scan the economic horizon. Instead of having a task force coming in at the back end, we should, at the front end, scan the horizon, assess what is coming and put time and effort into more proactive development activity. We also need to ask whether that activity is focused on the right areas, given some of the legacy issues that communities across Scotland are still dealing with.
My question is to Councillor Laird. We are looking at being proactive, as you said. A jobs fair will take place on 28 January, I think. How responsive have external organisations and agencies been regarding that jobs fair?
We have a proactive economic development team in Fife and our officers have strong relationships with the business community. We are proactive in ensuring that we have those relationships. When such situations arise, we have a good network of businesses that we can connect to, which helps us to understand what opportunities there might be for redeployment. That was well demonstrated in the situation with the Tullis Russell workforce.
We also have strong relationships with Danny Cusick and the PACE team, and with the trade unions. The on-going work on those relationships means that, when something happens, we can quickly mobilise resources, and that has been well demonstrated across the two task forces.
Have you had a good response in terms of who will come to the jobs fair?
Colleagues who are organising that are probably better placed to talk about the specifics of the response.
Through the Centre for Engineering, Education & Development, we have gone out to Scottish Enterprise account managed companies and companies with connections to Fife Council. Employers are coming in. As of two days ago, we had approximately 12 to 15 employers, including large employers such as Ineos, GSK, Scottish Water, Lockheed Martin and the Weir Group. A number of recruitment agencies are coming, and on the day we will have guidance and support agencies, provided through PACE.
Does that match the diversity of the workforce that is seeking future employment?
There is probably no quick answer to that. Each member of the workforce is treated as an individual who may have multiple career goals. For example, an engineer may want to stay in the power generation sector or move to another sector such as food processing engineering or defence engineering, or they may wish to set up their own business. People often have a number of career options, so we try to spread the net as widely as we can. Scottish Power has been proactive in linking into local employers such as Ineos and GSK. Wherever a member of staff has a clear job goal, we will try to bring an employer to them.
We have heard about the human impact on each individual and their families. Someone—it may have been the minister—said that each job loss is a tragedy in itself. Have you had any engagement with Fife NHS Board about offering support to individuals to address the possible impact on mental health? This may be a question for the minister, but have you engaged with the banks to ensure that they are sympathetic to those who have been made redundant and have not yet found employment? My first question probably is for Councillor Laird.
Personally, I have not had contact with the health board. I know that Scottish Power has a strong support structure for its employees.
We have a very active occupational health department, and counsellors are available to staff who want to talk. We have also offered all staff financial advice and have put in place classes that cover a broad spectrum from the basics of interviewing and preparing CVs, in order to prepare people for other things, through to support in the form of counselling, whether that is just a general chat or something more than that. All of that is available to every member of staff.
11:00
Minister, do you want to respond?
These are matters for the company, which I think has dealt with them responsibly, and for the agencies involved. My role as convener of several task forces is to work closely with everybody, provide overall co-ordination and quickly determine what practical measures, if any, can be taken in a whole range of areas including training, business growth, community regeneration, infrastructure, future use of the site and environmental mitigation.
As I think Mr Boyd and Mr Harvie have pointed out, each task force has a different focus. The coal task force, for example, did great work in persuading the Office of Rail and Road not to hike up the costs of freight per tonne. That is what we did, and I do not think that that would have happened had the task force not questioned—I was going to use a stronger word—the ORR. If the task force had not been there, that would not have happened, and it then went on to review planning processes for restoration. By contrast, the Tata task force has focused almost exclusively on the twin tasks of identifying a commercial operator that, ideally, would take over the two Scottish sites and making that proposition more viable by addressing cost issues.
As I have said, each task force has a different focus and, as you would expect, we work closely with local authorities in particular—in other words, with people such as Lesley Laird and David Ross, the councillor convener of the Fife task force. If it is necessary to address health issues or approach banks, for example, we will do that, but we do not start off by doing that. Instead, we start with a really focused inquiry on what the matter in hand entails and what we can usefully do.
One of the good things that emerged pretty quickly from the task force’s work was ScotRail’s recruitment of DB Schenker drivers. When it was confirmed that Longannet would close, ScotRail discussed with DBS the potential recruitment of 60 DBS rail freight drivers who were affected, and it advised that it would welcome applications, which, of course, would need to be assessed. That led to former DBS drivers being successful in taking up positions with ScotRail—there were not many, but that was the result for the individuals concerned. That happened because our initial focus led us to that problem, and we then went to ScotRail to see whether it could help, which it could. That is a practical example, and although one might argue that the solution might have emerged anyway, it probably emerged sooner than it would otherwise have done because of the focus of the task force and the huge amount of work that Lesley Laird has mentioned.
I know that we are not going back into policy, but I thought it very instructive that when Amber Rudd and Stephen Lovegrove gave evidence to the Energy and Climate Change Committee after the Longannet closure had been announced, Mr Lovegrove said:
“Ofgem, following the European Union’s third energy package, is effectively saying that there has to be a form of differential pricing so that the generating plant is not responding to irrational economic pressures”.
Talk about the pantomime horse getting out before the door is closed.
My question is for Calum MacLean. Last night, after 18 months of work, I was privileged to have a members’ business debate on the heavy goods vehicle driver crisis. Scotland is short of 11,000 drivers, and the demographics and the entry position are such that that shortage will have an impact on businesses. I am not suggesting that everyone at Longannet wants to be a lorry driver, but what regular dialogue or on-going discussion do you have with Skills Development Scotland—or does it have with you—in order to keep ahead of the game on what it might perceive to be shortages in particular industries?
Colleagues in SDS who have responsibility for specific sectors have regular dialogue with the heavy goods associations. I do not have the detail on that—
I am not just talking about heavy goods vehicles—that just happens to be the case in point. I am not laying this at your door, but we should be ahead of the game in indicating the demand.
On the dialogue with the HGV sector and others, we have a team of sector managers whose job is to engage with industry, to look at future needs and to articulate them through skills and investment plans. That work is fed into our one-to-one guidance process, which supports everyone who is under threat of redundancy. In this case, we are advising not only Longannet but a number of supply chain companies. Everyone who is threatened with redundancy is offered one-to-one consultations and the opportunity to identify training that might meet their needs and assist them to get a job in the labour market. That would include HGV training, bus driving training and so on. For each—
However, there is a knock-on effect. We talk about food and drink, particularly exports. Joan McAlpine’s speech in last night’s debate was helpful. It is extremely difficult to get HGV drivers to take our exports to our ports of exit. Not everyone wants to be a lorry driver, but it is a highly paid job. I am surprised that there seems to be no mention of that when I talk to those who lead the HGV industry.
I will report back on the discussions that colleagues have had. A discussion about training options is on the table for every individual, and HGV training is certainly one of the options that we would discuss with them.
To give the committee some reassurance, I can say that there is well-developed dialogue across the skills agenda throughout our key sectors. Calum MacLean alluded to the skills development plans. On food and drink, a team from Skills Development Scotland and industry is looking at—
Mr Cusick, that is not the case. We had to drag them to the table to put out to tender the development of a full survey on the HGV market; the tender closes today. They have not been at the table.
That might be the case on the logistics side, but in terms of the immediate skills that are required for the industry, the focus is certainly on industry requirements. That is then taken through to training schools and further education.
As Mr Boyd and Mr Finlay have said, one of the many benefits about having a bit of time is that, if any of the workforce involved in any of the areas where there has been a severe shock—or, indeed, any worker—has 18 months or a year in which to decide what he or she wants to do, and if their plans include going back to college or university, that time can be used to make an application to get on a course. If a person does not hear that they are to be sacked until the day before it happens, the next available course might not start for six months, nine months or a year hence.
We work extremely closely—I should have said this initially, and I apologise for not doing so—with the colleges and the universities, as appropriate. We have had great support in Fife in particular, where they have risen to the challenge. I think that I have a table that shows how many of Tullis Russell’s workforce have decided to pursue diverse training. Where there is more notice, there is a bit of time for planning on a human level. Someone can think, “I fancy doing something entirely different. I’ll just go back to college or university.” That is much easier to do in a Longannet-Scottish Power process than it is where the workforce hear the day before that they are to get their P45.
My response probably reflects Mr Brodie’s point fairly accurately. In Fife, we took a view early in our administration that we needed to have a more accurate assessment of matching skills with training. We undertook a partnership study with Professor Alan McGregor of the University of Glasgow to assess more accurately what the demands and skills requirements were. Over the past few years, we have been implementing an alignment of that plan. We are making sure, for example, that the Fife economy is focused around delivering the skills that the businesses in Fife and beyond need, because we must recognise that it is a global market and not become too parochial in our skill set.
It is also about understanding the relationships between education and the colleges, and ensuring that that pipeline is working effectively. As I said earlier, if you are not regularly scanning the horizon and understanding what is changing, you will not be connected to how things are changing in the market. We are attempting to do that in Fife, but you can see from some of the examples that we have discussed that the picture is very dynamic and is changing all the time. How do we get better mechanisms that are more proactive in scanning the market so that we are ahead of the game and not catching up?
I think that the Government, the minister, the leaders of industry and the trade unions are doing the best job that they can in the circumstances. However, I do not understand—Councillor Laird can tell me whether I am wrong about this—why each council does not have an a priori list of the major employers in its area and regularly meet those employers to see what their financial situation is and what the market and employment conditions are. Councils might do that, but it certainly does not seem to be happening in the economic development teams in some of the councils that I have talked to.
I think that you have to look at that in the context of what has been happening more widely in local government. There have been 40,000-odd job losses and protecting front-line services often means, unfortunately, that economic development gets targeted. I am pleased to say that that is not the case in Fife. We are proactive and have a register of our top 250 companies, which we regularly meet and have dialogue with. We have officials who are matched to those companies, so we have relationship management on that basis. I regularly go out and meet businesses and I hold different forums with cross-sections of the business community in Fife.
It is about having the time and resources, but it is also about having the strategy and the plan that shows that we are very clear about what we are trying to achieve and—to return to my earlier points—about what our short, medium and long-term objectives are and how we are delivering them on the ground. That is what we are attempting to do in Fife.
Yes, I know. I ran a company in Fife and I know how well Fife does in that regard.
Scottish Enterprise has a portfolio of 2,500 account-managed companies at any one time. Each of those companies has a dedicated account manager and there is on-going dialogue with them. In the immediate area around Longannet, there are 189 account-managed companies across Fife, Clackmannanshire and Falkirk. There is continuing dialogue with those companies to understand their needs and requirements, and to identify where we can accelerate or support growth projects.
It is important to make a couple of general points to back up those that Councillor Laird and Danny Cusick have made. First, there is the on-going work, entirely apart from the work of task forces, that is the bread-and-butter work of the enterprise network and business gateway, which has assisted 801 new-start businesses in Fife. Danny Cusick beat me to it in referring to the account-managed companies that we are working with. In 2015 and to date, five regional selective assistance projects have been approved in Fife, totalling £540,000, with the creation of 39 jobs. As you will know, convener, most of that work goes on under the radar and behind the scenes. Because it is good news, it does not really feature very much in the press. The people involved know about it, but it does not really hit the headlines.
Secondly, there is an entirely separate area in which we work with not only the enterprise network and local authorities but insolvency practitioners on early intervention to get, if you like, confidential forewarning of potential industrial difficulties and companies in difficulty. A lot of the work that I am involved with relates to that confidential work. We have built up relationships with the Institute of Chartered Accountants of Scotland and insolvency practitioners that allow us, in confidence, to try to address difficulties behind the scenes. In some cases that means averting administration and in some cases it means looking post administration at how the business could be continued if it is viable and profitable or could be made so. There is a range of other work aside from task forces that we try to do to the best of our ability.
Lastly, I am aware that the Fife economic team is extremely proactive. They hold business breakfasts, which both John Swinney and I have attended. I visited a number of companies recently—Oceaneering, FMC, BiFab and Raytheon—and I frequently visit those and many other companies in Fife. They are all major employers in Fife and all have different challenges and successes.
So, all that work carries on and it is the staple of economic development work in Scotland: working together to try to achieve sustainable economic growth and assist people to get and keep jobs.
11:15
We need to be very careful about thinking that skills gaps, shortages and mismatches are a consequence of agencies and local authorities not doing their jobs properly. For instance, if the road haulage industry is facing a skills shortage on such a scale, the industry must have a good, hard look at itself, in the first instance, and secondly—
Which it is doing, by the way, by bringing its administration up to Scotland.
That is good to know.
The Longannet closure is not a secret to anyone. There is a reservoir of skilled people there on which to draw, so the HGV industry should be right in about it. Calum MacLean and his colleagues have organised jobs fairs, but they cannot invite every employer in every industrial sector to be involved. They should be making themselves aware of such opportunities and making the most of them.
This has been an interesting discussion. I am a member of a task force in Fraserburgh, which faces very different challenges—in some ways, they are steeper challenges in relation to people. The position that Hugh Finlay described is perhaps more encouraging than he anticipated that it would be at the beginning. The focus on people is absolutely right.
I am interested in the other aspect of the issue, which is the impact on community. The sudden disappearance of a high number of highly skilled and well-paid, technical jobs has an impact not just on the individuals concerned but on Kincardine, in this case, and the immediate vicinity. Will the task force members comment on that?
Stephen Boyd said that there was a time when the first question that PACE would have asked was whether there was an alternative operator. It is clear that we are not in the circumstances that might have applied 15 years ago. Nonetheless, the site itself is of value. What can the task force tell us about disposal of the site and how it might be connected to economic development for the local community?
We need to make people aware of the position in relation to the site. We will close the station on 31 March; we will then have nine months of decommissioning and making the site safe. At that point, even if a decision was made to demolish the building, starting from 1 January 2017, there would be four years of substantial work to bring it down. It would be broadly five years from now before the site was available to do things in any meaningful way.
That does not stop us having discussions in the task force and its offshoots and looking at suggestions for the site that are doable, where we can work together. ScotAsh is on the site at the moment and we are able to manage things so that it can remain there and continue doing what it is doing. We are always open to that. However, we are talking about a five-year period—if a decision is made and nothing else changes—before the site has been levelled and is in a position that is similar to the position at Cockenzie, for instance.
That is helpful. Perhaps we could hear the local authority point of view about the impact on the immediate neighbourhood of the job losses. Many of the people who are involved are taking early retirement or being redeployed elsewhere.
I will make a couple of points. Two task forces have been set up. The two companies have highly skilled workers, and in Scottish Power’s case they are well-trained workers, who have had on-going training support and who have regularly upgraded their skills, so when the event happened they were marketable—they had a skill set that made them attractive to other businesses, as we can see from the companies that responded.
The question for me is how we build resilient and sustainable communities. That is part of the work that we need to look at more broadly. How do we ensure that our education system is fit for purpose and is about not just education but building resilient people, who can see the wider economic horizon and understand what it means for them and the skills that they will need if they are to remain marketable, given what is happening.
Colleges have a key role in that regard, and it is regrettable that at a time when we want more people to have opportunities to gain, refresh and update skills, the college sector has for various reasons lost the pivotal role that it has played over the years.
If we really want to look at the wider economic impact, we need to understand all the levers that contribute to people’s resilience in terms of their skills and their outlook. If we do that for communities, we stand a better chance. We operate in a global environment. Lots of companies are competing for investment and for skills, so we need to make sure that we stand out. That starts with getting the people in our communities the right skills.
Thank you very much.
I want to reflect the importance of both the community and the site. As Councillor Laird alluded to earlier, there are specific and separate strands within the action plan, and she is focusing on both of those aspects.
Let me follow up on the point about the site, which is quite important. It seems to me that a task force can go down one of two routes. One is to say, “We have a workforce and a skills base, and we will try to disperse them; some people will take retirement, and some will go to other jobs elsewhere.” An alternative route—which I think was attempted at Tullis Russell, without a great deal of success—is to try to find another enterprise to come in, occupy the site and take up some of the employment. I would be interested in any thoughts on that.
In the case of Tullis Russell, the only enterprise that I am aware of that had any prospects with regard to skills and employment in the area was Cluff Natural Resources. It came in with a proposal for underground coal gasification in the Forth, which I know Fife Council was not very enthusiastic about. Cluff pulled out because of the lack of political support and policy certainty from the Scottish Government. Should we not be more welcoming of that sort of initiative, which could bring skilled jobs to the area?
Fife Council can speak for itself, but first, conceptually speaking, I do not think that those are the two possibilities—disperse or get inward investment. It is quite the contrary, actually. My approach in convening task forces throughout the country is based on the essential need to engage with the local businesses that are there already. Those that are doing well are able to assist by providing one, two, three or more jobs, and all local businesses want to help. They want to be asked to contribute.
That is why in Hawick we will be holding an event for local businesses thereanent in a couple of weeks’ time. That is why in Fraserburgh I held an event last Monday for local businesses, which led to two potential actions. By reaching out to local businesses we learn things that are current. We learn about their plans—which perhaps they can bring forward—and about potential vacancies. In the case of Fraserburgh, filling vacancies may be assisted by the provision of a local bus service from Fraserburgh to an area not far from there where many of the workers do not have cars but there currently is no bus service.
The approach is to find out the local facts. Yes, of course, finding an alternative use for the site is appropriate for some task forces. Yes, of course, inward investment can be the answer. Yet whether it is Diageo, Vion or Freshlink—or Fraserburgh, Fife or Longannet—we need to reach out to local businesses as well as having the task force, which is a largely public sector activity. We also need to have events that reach out to the local business community.
I can absolutely assure you that many local businesses in Fife have risen to the occasion. Incidentally, I think that I am right in saying that Marine Harvest has recently decided to locate a new plant in Glenrothes in order to conduct a salmon fish-processing activity there. Therefore it is not correct to say that Fife is a no-go area for inward investment. However, that is not necessarily the primary approach to take.
Also, by its nature, an inward investment plan takes a long time to bear fruit. I am involved in innumerable projects at the moment that may or may not come to fruition. What they all have in common—particularly the larger ones—is that they take years, not months, to deliver. Therefore, from a task force’s point of view, they have less efficacy than reaching out to the local business community and workforce representatives and engaging intensely with them straight away.
However, is it not a source of regret that the prospect of many hundreds, if not thousands, of skilled jobs that arose from the proposal by Cluff Natural Resources has, at best, been put on the back burner for the time being?
I thought that we did not want to debate wider energy issues today—that was your admonition at the beginning.
It was a specific proposal to create jobs in the vicinity of Longannet—
In several years’ time. With respect, I am afraid that that is where you are wrong. Let us assume that you are correct and that the project should proceed. We have made our position fairly clear on the moratorium on underground coal gasification and hydraulic fracturing. I will not rehearse it right now, because I think that it is well known.
However, even if the project were to proceed, those jobs and opportunities would not emerge for several years. What the task force needs to do, as I think you said a moment ago, is to deal with the immediate shock to communities, individuals and companies. That is one of the purposes of the task force. It is quite right that we debate wider energy issues or, as Mr Boyd indicated, wider economic and energy policy issues, but they are not the focus of what we do in the task force world.
Okay.
Fife is absolutely open for business and for high-quality jobs. That has already been demonstrated with some of the employers that we have been talking about today. However, we are trying to look ahead and be proactive—that is why we are investing in the Fife energy park, because we have ambitions for Fife. A number of key projects are already emerging there, all of which take time to nurture and develop.
The key point that we have to address is the balance between attracting inward investment and growing our own indigenous businesses. We need to ensure that we have the right infrastructure, skills and workforce in place to help support those. One issue that the Longannet task force has recognised is that there are not enough small incubator growth units in the area.
It is not just about addressing the problems that are emerging out of the Longannet situation. It is about looking at the situation more broadly and asking how we make sure that the economy is set up better for the future. It is about taking the opportunity through the task force to do that.
To go back to the convener’s point about Cluff Natural Resources, our planners had a dialogue with Cluff but I am not aware that there was a specific proposal. As a council, we have to balance the needs of business and the environmental concerns of the community. Until we have matched up all those parts and done due diligence, it would be premature to be welcoming anyone.
I agree with the minister that the choice is not as stark as was presented in the convener’s original question. I also agree with the minister that the work of task forces can be tremendously helpful in understanding local supply chains and the nature of the local economy.
I am concerned about what we have been dealing with in Scotland over the past year and the number of losses of large-scale workplaces in a productive sector and what that means for national and local economic resilience. Lesley Laird used the word “resilience” and it is a good way of positing the questions that we are dealing with. Unless we manage to replace that kind of industrial capacity, local economies will suffer. One of the stark lessons of Longannet is about the scale and nature of the local supply chain. Of course we should be doing all that we can to nurture local small businesses, but local small businesses rely on large-scale productive workplaces to support local demand and local supply chains. Unless we manage to replace that scale of workplace, I have concerns about the trajectory that some of our local regional economies are on at this time.
To add to the comments of Councillor Laird and Stephen Boyd, I think that it is about looking at both strands. It is about building the capacity and capability of companies that are already in the area and trying to make them as internationally competitive as possible, while also pursuing any opportunities that arise from strategic assets or propositions to attract companies from other parts of the UK or other parts of the world to Fife and other parts of Scotland. Those strategies are happening. They are complex and difficult and, as the minister alluded to, they take an enormous amount of time.
However, that does not prevent us from looking at ways to promote and sell Scotland as a viable place to do business. As you know, our track record on that has been second to none. Outside of London, we are able to attract the most inward investment of any region of the UK and we have done that for several years in a row. That focus will not diminish and will still be very much part of our on-going plans.
We are at the end of our time. As there are no members who are desperate to ask a final question, we will draw a line under the session now. I thank the witnesses on behalf of the committee for coming along to the meeting. It has been an extremely useful session for the committee in helping us to understand the work of the task force, and clearly we wish you well in your endeavours. We will move into private session.
11:30 Meeting continued in private until 12:00.Previous
Enterprise Bill