Employability
The third item on our agenda is evidence from John Swinney, the Cabinet Secretary for Finance, Employment and Sustainable Growth, on improving employability. The cabinet secretary is accompanied by Hugh McAloon and Tom Craig from the Scottish Government. I welcome the cabinet secretary and invite him to make a short opening statement.
Good morning and thank you for the opportunity to contribute to the committee’s discussions on employability, which I welcome. Helping people to find, sustain and progress in work is a key priority of the Government. The goal is closely linked with our purpose of increasing sustainable economic growth and is also a clear social imperative, as we know that good-quality and sustained employment increases an individual’s financial independence and their confidence and self-esteem, which has far-reaching benefits for the whole community.
As the committee will know, we have recently launched “Working for Growth: A refresh of The Employability Framework for Scotland”. The aim is to ensure that our approaches to helping people into work remain appropriate in a very difficult economic and financial climate. We have promoted closer and better working between Skills Development Scotland and Jobcentre Plus so that people who are unemployed can more easily access the appropriate careers advice and training that is available for them. “Working for Growth” takes a person-centred approach and describes what we are doing to better understand and address the diverse barriers to work that people face.
Those barriers range widely, from issues such as childcare to addictions or a lack of confidence or skills. As entry into the work programme is mandatory for those who are longer-term unemployed, our focus is very much on prevention and on making effective early interventions for a range of clients. The committee has heard from my colleague Angela Constance about the significant investment that we are making to help young people. The committee will also have heard about the recent women’s employment summit, which I hope will be a platform for genuine innovation in the months ahead.
Underpinning all those efforts is an emphasis on getting the best possible value from the range of investments that we make. “Working for Growth” describes how we will introduce a procurement reform bill in the current parliamentary session. Among other things, the bill will set an expectation that community benefit clauses will be considered for all major contracts in the public sector in Scotland. The framework also includes details of a new approach to employability funding. The employability fund will from next year bring together our existing employability investments through SDS and the Scottish Further and Higher Education Funding Council in a new partnership-led commissioning process. The aim will be provision that is better tailored to the needs of people and local labour markets. The fund will deliver 25,500 individual training opportunities in 2013-14, which of course is in addition to the 25,000 modern apprenticeships to which we are committed in each year of this parliamentary session.
Working for growth also means that we must work better with employers. Next month will see the launch of our skills force service, which will be hosted by Skills Development Scotland. That is a new online and contact centre service that is aimed at improving access for employers to information on training, recruitment and workforce development. Over time, I expect the service to be further refined and enhanced. I will also look to local partnerships to further enhance their offer to employers.
As part of our wider economic strategy, the Government is acting to protect jobs and stimulate growth. I highlight that we are also strengthening leadership in support of our goals. Next month, I look forward to chairing the first meeting of the reconstituted Scottish employability forum. To help ensure the profile of employability and that our approaches are properly integrated, the forum will be chaired jointly by Scottish and United Kingdom Government representatives and local government representatives. As such, I believe that it will be well placed to set the national direction for employability in the coming years.
I am happy to answer any questions.
Thank you for that opening statement. As is our normal practice, with which you are well versed, I will start with a few questions, then open the session out to members.
During the employability debate in the chamber, the Minister for Youth Employment said, with regard to the employer recruitment incentive:
“In effect, what we have in mind is a wage subsidy scheme that will be targeted at the smallest employers. We will look to subsidise the employment for, say, six months. However, that level of detail is not battened down yet.”—[Official Report, 4 October 2012; c 12335.]
Can you provide us with more detail on that initiative? Can you also give us a bit more detail on the funding that is being made available in the draft 2013 budget to support the Government’s various employment initiatives?
It would be fair to say that the employer recruitment incentive is a departure from Government policy. We have not previously been actively involved in what one might call wage subsidy schemes. The rationale for our embarking on that came largely from a view that ministers formed with regard to the current economic circumstances: it is clear in a variety of areas that the prevailing economic conditions make it more difficult for people to commit to particular investments, whether in capital plant, new business development or taking on extra staff, or less likely that they will do so.
As a result, we feel that the Government must move into a place where previously we have not been involved, which is the provision of further assistance to employers to take on staff. The employer recruitment incentive will mean £15 million of public expenditure in 2013-14 being allocated from the Government’s direct budget. I would expect that sum of money to be at least matched by European social fund investment. Obviously, there will also be contributions from employers who are paying for staff into the bargain.
Our aspiration is to put together a focused initiative that will enable partnerships at local level to work with local employers to encourage people into employment. That is the thinking behind the employer recruitment incentive, which is focused very much on the needs of individual labour markets and on ensuring in particular that small and medium-sized enterprises, which face the challenge of supporting new employment recruitment, can respond positively.
Your second question was about the different skills programmes that the Government has available. We have a number of interventions. For example, there is the modern apprenticeship programme, which costs approximately £77 million; the get ready for work programme, which costs about £28 million; and the training for work programme, which costs £8.3 million. There is a range of other schemes, including community jobs Scotland, which costs about £6 million. There are also the resources that we have deployed for support for young people, particularly in areas of greatest need, which total about £9 million. There is a range of interventions in addition to the funding that the Government makes available for the higher and further education sectors for educational development.
Is the employer recruitment incentive not similar in some respects to the initiative that ended in March 2012? That involved Skills Development Scotland offering businesses up to £2,000 when recruiting an employee or a modern apprentice.
We are going further in the level of support that we are providing. Under the previous initiative, we provided support that was very much related to the costs that fall on employers—the additional areas of burden that may come, for example, from a sole trader going into new territory by employing somebody else for the very first time. The employer recruitment incentive is designed to provide support directly to individual companies to assist in the salary costs of young people, which is a departure for the Government.
We went to Dumfries and Galloway, to Dundee and indeed to Ardrossan, which is in my constituency, to meet some service users; we met people from the public and private sectors who are involved in employability initiatives and people who are delivering those initiatives in the third sector. One thing that we picked up was that there was a bit of frustration about the fact that the programmes are sometimes focused on narrow groups.
For example, during the pilot, community jobs Scotland had a project that was aimed at 18 to 24-year-olds. It is now available to 16 to 19-year-olds and in Ardrossan Michael McMahon and I, along with Jim Johnston and Ross Burnside, were advised by a 21-year-old that he is now too old for that scheme. There is concern about the age criteria for some of those programmes being a bit too inflexible, not to mention concern about the availability of the programmes to older workers in their 40s or 50s. What is your view on that? Given that the pilot was for people up to the age of 24, why did you decide to restrict the programme to those aged 16 to 19?
Part of the thinking has been to address a widely held concern across the country about levels of youth unemployment. It is in the nature of such programmes that a choice will always have to be made between breadth and focus. There is no hard-and-fast rule about how a programme can be best designed given some of those conditions. However, to ensure that programmes can be effectively targeted—that they can be marketed to the individuals who are affected—it is essential that parameters are established to give focus to the offering that has been made in the marketplace.
It is important to remember that a range of different areas of provision exists within the marketplace. We are trying to ensure that we have a sufficient range of interventions that will meet the needs of citizens who are looking for work and meet their expectations of what can be achieved.
In round-table discussions and again at the seminars that were held there was quite a concern about evaluation—about what sort of evidence there was, from across the board, on which programmes were working and which were not. How did the Scottish Government evaluate its employment initiatives to inform its decisions on how it would allocate money in that regard in the 2013-14 budget?
The key consideration for the Government is that we look at the outcomes that are achieved by particular programmes. The Government has not undertaken a self-standing independent evaluation of all those programmes to then decide whether to continue funding. I have seen the committee’s lines of inquiry in that regard and I will look with great care at what the committee recommends. If there is a sense that we need to consider more external evaluation of those programmes, there is clearly a case for that.
The judgment that we have come to is that we should focus essentially on the outcomes that programmes are achieving on an on-going basis. When those outcomes are acceptable, in the current economic circumstances we will continue to support those programmes. When the outcomes are perhaps not as strong as we would like, we will then revise and restructure those programmes. Of course, there is no certainty that all the changes that are then made to a programme will improve those outcomes, but we can deploy our best thinking to try to do so.
10:15
In the get ready for work programme, for example, the figure for positive destinations with regard to job outcomes is about 24 per cent, with a higher figure—39 per cent—for wider positive outcomes such as going into a job or further training or education. As we consider that to be on the low side, we have drawn get ready for work and training for work activity into the new employability fund, which will bring even closer together the interventions that Skills Development Scotland and the funding council can deploy to ensure that, with the person-centred approach that I referred to in my opening remarks, they are more focused on providing more comprehensive support to individuals.
We evaluate by looking at the outcomes that have been achieved, and if we think that there is a better way to achieve higher outcomes we will follow it. I reiterate, however, that the Government has not undertaken a formal, independent and external evaluation of the programme and I will listen with great care to the committee’s comments on the matter.
Members have been struck by some of the third sector’s excellent work to help those furthest from the jobs market get some of the skills required to get them into that market. However, one issue that has been raised is that annualised funding arrangements make long-term planning difficult and indeed make it difficult to construct training programmes, which, of course, are much more long term in nature. Obviously some people need much more intensive support than others. Do you intend to examine the issue and to consider giving the third sector bodies that are providing this important employability support greater financial security?
As increasing evidence will show, we have tried for some time now to expand the duration of financial support for third sector organisations. For example, by setting out a three-year budget, I am seeking to encourage other organisations to set out their own three-year budgets for deployment to third sector organisations, for which I accept that interruptions in funding can be a real issue.
Secondly, we have introduced particularly tailored third sector initiatives such as community jobs Scotland, which has been deployed exclusively through certain third sector channels and whose progress we are looking at carefully to determine the further support that we can deploy in that area.
Finally, much of the activity around the employability strategy is undertaken through the employability partnerships in each of the 32 local authority areas. Of course, that is not a new approach; essentially, it was the characteristic of the employability support that was put in place in 2006. The Government has given a tremendous amount of encouragement to those partnerships to utilise the third sector’s local capacity in order to find solutions that meet individuals’ needs and provide some of the flexibility that you mentioned earlier.
I open out the session to committee members.
I think that, in your opening comments, you said that all the individual initiatives depended on growth in the economy; you certainly indicated that growth was important in delivering on many of these areas. However, in the evidence that we have taken, there has been a real emergence of a demand for evidence of and a focus on where public spending is going to ensure that we achieve such growth. For example, Scottish Enterprise identified that, at best, one in 10 small companies has the capacity to grow.
Last week, Professor Kay indicated that we should look to support companies in areas where there is already growth rather than those in areas where we would wish to see growth. Will you comment on those comments that we have received about the need for a focus on where we can achieve growth?
That point perhaps gets to the heart of the reforms to Scottish Enterprise and Highlands and Islands Enterprise that I put in place in 2007. I agree entirely with Professor Kay that growth will come only from the places where you can get growth. That might seem like a statement of the bleeding obvious, but I think that it is absolutely correct.
As a consequence of the reforms that we undertook in 2007, Scottish Enterprise and Highlands and Islands Enterprise are asked to identify the companies in the Scottish economy that have growth potential and to provide intensive support to those companies to assist their growth. The remainder of the company base is supported by the business gateway and, as those companies’ growth plans emerge, some of them might become account-managed companies with growth potential. The grouping of companies with growth potential will never be static, because new entrants will come in as a consequence of new business ideas or business changes. The focus of the enterprise agencies is very much on identifying and supporting the companies that have the capacity to grow.
A key point, which I think that I have made to Parliament before, is that account-managed companies are not just the great big companies of Scotland. Account-managed companies can be two-person companies. For example, a few weeks ago I visited one such company, which is Skoogmusic down in Leith. That company is run by two people who left academia to set up a business down off Leith Walk. They are doing tremendous things and there are just two of them, but their company is account managed. They have a particularly innovative product and they are growing and have the capacity to grow.
I think that the analysis that the committee has heard is correct and it is reinforced by the changes that the Government has made. In all our activities, we try to ensure that the steps that we take are properly connected so that we can maximise the effectiveness of supporting the growth direction of individual companies.
The convener mentioned the evidence that we heard in Ardrossan. I recall that some of the companies that gave evidence to us work closely with Scottish Enterprise, business gateway, the local authority and others who are involved in delivering training and taking people forward into employability. However, their experience was that there was too much of a tick-box or head-count process taking place. When we talked about outcomes, they said that the approach seemed to be “Get as many people as possible through the system so that we can count them and say that we have been successful”, rather than a focus on how many people had stayed in employment or gone into full-time employment after they had been through the scheme. Do you take that criticism on board?
Obviously, if you heard that, that was what those companies were expressing. I reassure the committee that the Government does not consider a successful outcome to be getting a number of people on to the programme. I do not want to repeat the statistics that I gave on outcomes for the ready for work and training for work programmes, but 56 per cent of individuals who came through the programmes went on to sustained employment, which is getting on for a better position.
We must remember that some of the individuals whom we are talking about face significant challenges in getting into employment. I accept that we need to take particular steps and offer particularly intensive support to help those who are very far from the labour market. I can certainly assure the committee that I do not just look at the programmes and think, “Well, that’s the job done, because we have all the places filled.” The job is done only when we can see successful and positive outcomes, such as skill enhancement, sustained employment and sustained learning opportunities pursued by individuals. Those are the measures that we look for in all the programmes that we take forward.
My impression, from the evidence that we heard from a range of service providers and companies, is that providers and companies would rather that a smaller number of people were intensively supported than that a greater number of people were supported more generally. You talked about focus; that is what our witnesses want. Companies think that people are being foisted on them who are not prepared or suitable for the type of training that they are providing, because a certain number of people have to be put through the system, which is counterproductive.
I would be concerned if that were the case. I accept that individuals have different needs and issues to overcome if they are to enter the labour market. For some people, to send them to an employer without giving them the required preparatory support would simply be to waste the employer’s time.
Some of the programmes that operate provide focused support to individuals, to help them to overcome challenges. There might be timekeeping issues, which we might think are relatively easy to overcome but which can be enormous hurdles for some people. There might be issues to do with drug or alcohol addiction to overcome or issues to do with access to childcare, which I mentioned. It is all very well to say to someone, “Get yourself to a job,” but if there is no one to look after the children it is not worth the effort.
It is important that people are prepared to be ready for work. I will listen with great care to what the committee says in that respect and consider whether more can be done to address the matter as the Government goes about its programmes.
Employers and service providers talked about the preparatory work that is done in schools to help young people to understand what training they can and should expect to receive and what service providers will expect of them. There was a little concern that Skills Development Scotland is moving towards information technology and computer-based self-assessment and is disengaging from such preparatory work.
No. That is just a different—and, I contend, more relevant—way of approaching the task. I am not sure whether Skills Development Scotland has briefed the committee on its work on my world of work. It strikes me that my world of work is well positioned in relation to how the cohort of young people in Scotland—of which I am not a part—increasingly acquires information and takes forward plans and aspirations.
That said, the education system identifies young people who require greater and more intensive assistance, as it should do. The Government’s schemes and approaches must address that, into the bargain. Of course, curriculum for excellence is designed to try to engage young people and give them the flexibility that is required if they are to be equipped for the challenges of the world of work. The whole curriculum of Scottish education is much more focused on equipping young people for work than it has been in the past.
I agree with what Michael McMahon said, but I think that the complaints of companies that we met in Ardrossan—one was a call-centre company and another was a hotel—were more about the people that the Department for Work and Pensions sent them than about Scottish Government programmes. The DWP certainly came in for more criticism.
That programme deals with individuals who have been out of the labour market for more than nine months. In essence, we are supporting the cohort of people who have been out of work for fewer than nine months and we accept that they require additional support if they are to be made ready for employment. In many instances, that will be even more the case for people who have been unemployed for more than nine months.
10:30
I think that there is a real issue about the Scottish and UK Governments working together on that. The DWP, in particular, seems to be more target driven in getting folk to an employer.
Another issue that came up was employers being fed up about getting phone calls from umpteen different organisations that all want to place people with them, rather than from one central place.
I have a number of comments in response to that. I make it clear to the committee that, notwithstanding the rest of the political discourse that goes on, the Scottish and UK Governments have had a number of highly productive interactions on employability. It is an area in which we work well together. The Scottish employability forum will be jointly chaired on a rotating basis by me, the Secretary of State for Scotland and a representative of the Convention of Scottish Local Authorities. That is designed to signal the need for integration and co-operation in that respect. That is a key point in the activity that we undertake.
I want to pick up on the working for growth initiative, to which you referred in your opening remarks. You said that it takes a “person-centred approach”. Will you spell out what that means for people who seek to engage with it?
Essentially, the person-centred approach is designed to deal with some of the ground that I discussed with Mr McMahon, whereby each individual must be properly supported and encouraged to nurture their journey back into employment. For some individuals, that might involve a minor intervention that encourages them to look at particular information about vacancies or to do particular skills training. For others, it might involve a more fundamental assessment of their fitness and ability to commence employment, which requires much more intensive and highly focused support.
The key priority of the person-centred approach is to ensure that, in all circumstances, the individual gets the support that they require to assist them into employment.
You also suggested that it was recognised that that approach would involve working better with employers. Could you flesh that out a little? What was not working well? In what way will things be better now?
It is in that context that I have some sympathy with the convener’s remark that employers sometimes feel inundated with requests to be involved in some or other scheme or initiative. At a national economic forum meeting that we had across the road at Our Dynamic Earth, I was involved in a sub-group to look at support for employers in getting people into employment. A variety of individuals from public sector organisations set out what they were doing. It was all terribly encouraging—their work was good and comprehensive—until a guy stood up at the back and said, “Listen, I run a small business in Glasgow and I dinnae have time to keep up with you lot.” I can tell the committee that that had a real effect on me. It was a potent reminder that businesses are busy and that people have a lot to do.
Therefore, the approach that we take must be strongly focused on ensuring that if an employer is remotely interested in taking on an extra member of staff, we do not send them from pillar to post to check various websites and programmes; it must be a highly focused approach. It is in that respect that the person-centred approach is designed to help. That will manifest itself in a number of ways, principally in the development of our skills force, which is designed to simplify the way in which employers can find and recruit staff. That initiative will be launched on Friday by the Minister for Youth Employment.
Are employers engaged with this process?
Very much so.
I want to ask about a slightly different area that relates to the work of the Welfare Reform Committee, which I am a member of and whose convener is also present this morning. I am sure that Mr McMahon will agree that the committee is gathering a lot of evidence that suggests that the impact of some of the UK Government’s welfare reform agenda is likely to be negative on some of the individuals we are talking about, who are removed from the job market. Indeed, it might also bring into that category some people who do not yet fall into it. How is the Scottish Government focusing its efforts and bearing this issue in mind in its strategies?
In some of my earlier remarks about early intervention, I made it clear that, whether their situation has been prompted by losing their job or their benefits, the earlier we intervene with individuals who are having to look for work, the better. Because we are dealing with people who have been unemployed for less than nine months, we must ensure that our approaches are prompt and focused and meet the individual’s needs. Indeed, a major part of the whole welfare reform agenda has influenced our thinking that we must focus increasingly on the specific needs of the individual.
Let me try to characterise the shift in activity in our programmes. Essentially, we have moved away from a programme-driven approach to an approach that is much more focused on the individual, and I think that that will stand us in good stead in dealing with the implications of welfare reform. That said, Mr Hepburn will be aware from comments that have been made not only by me but by the First Minister and the Deputy First Minister that it will be impossible for the Scottish Government to protect all of these individuals and indeed all of Scotland from the implications of welfare reform. As the Welfare Reform Committee on which Mr McMahon and Mr Hepburn serve has detected, the consequences of welfare reform are going to have a very significant impact on the Scottish economy.
I am really pleased by your comment that your programmes focus on the individual and that there is an awareness of some of the welfare reforms that are happening.
In recent years, certain small social enterprises have grown up and are now employing hard-to-employ people, including those who had until then been using the health service, care centres and so on instead of getting into the pattern of getting up and going to work. In the region that I represent, some of these enterprises are very small and employ maybe six, 10, 12 or at most 20 people. Have you been able to make any connection or link between the costs that the health service used to incur in this respect and the funding for social enterprises, which are constantly looking to have their contracts renewed? The hardest thing for such bodies is that, as soon as they discover that they are fine for a year, they have to start concentrating on securing the next year’s funding. There needs to be some joined-up thinking in that respect. I suspect that when the enterprises’ funding applications go back to local authorities, the authorities assess them on the basis of the services that they themselves deliver instead of linking them with health service budgets or the implications of not funding or not continuing to fund them. Of course, I realise that long-term funding is always difficult.
I have recently been quite shocked at the DWP and how it helps fairly vulnerable people. It comes back to your comments about it being about the individual. Computer-generated letters arrive just when someone is beginning to have their confidence rebuilt by the kind of support systems that are in place, and they threaten people with withdrawal of their housing or other benefits, and I think that links are beginning to be made there. I appreciate that you might not be able to do anything about that, but you could be aware of it.
Jean Urquhart’s first point gets to the nub of the Government’s public sector reform agenda. In response to the Christie commission recommendations, we have opted to take an approach that is founded on a number of key elements, two of which are relevant. The first is about the focus on prevention, and the second is about collaboration and the integration of public services at the local level. I will explore some of those points.
For example, it is in the interests of the whole public sector that an individual who has a mental health problem is properly supported, nurtured and encouraged into employment in which they can have a routine and make a meaningful contribution to society. That is better than that individual not getting support and then getting into difficulties that can mean that they end up in healthcare or, even worse, in prison, which is where many people who have mental health problems end up. I do not wish to sound endlessly like the finance minister, but that costs an awful lot more. The prevention agenda is therefore vital to making sure that we take the right steps to support people and get them to a good outcome, which is why the person-centred approach is important.
The second relevant element relates to co-operation and collaboration at local level. It is just not good enough for public bodies to say that someone is not presenting as, say, a health service problem or a local authority service problem, so they will just not do anything. That means that people fall between two stools and the scenario that I have just outlined prevails and they end up needing more intensive and costly support in a hospital, an institution or, regrettably, in a prison.
Getting the preventative interventions correct is fundamental to what we must do at the local level. To assist that process, particularly in the grouping that Jean Urquhart has talked about, we have invested a huge amount of effort in supporting the development of the social enterprise sector. In 2007, I set out the policy objective of making the social enterprise sector larger and more comprehensive as a consequence of Government intervention and, happily, we are now in that situation. The job is not complete; the sector is still growing and the Government continues to support that with a range of interventions that are targeted at strengthening the capacity of social enterprises through the enterprise growth fund and the just enterprise business support programme. I see a significant role for social enterprises in supporting people who have vulnerabilities. In my experience, social enterprises are more successful than public sector organisations at getting people who are remote from the labour market into that market. That is why we are trying to improve their capacity.
10:45
To move on to the second point in Ms Urquhart’s question, if a person gets a letter in the post with a shocking revelation about their benefit situation or whatever, it can set them back. I have dealt with constituents who were in exactly that circumstance. I make a plea that all our interventions be effectively joined up. If an individual is being supported through one channel but undermined by another, that definitely does not deliver the best for them.
One issue that we have heard little about is skills shortages. Despite the fact that some people cannot get jobs, it seems that there are jobs that are finding it hard to get people. That appears to include jobs in the engineering and North Sea oil sectors. I believe that Scottish Power has many people who will retire soon. Areas such as hospitality are also included. Opportunities in hospitality are not always seen as career opportunities.
Do you have any thoughts about how we can deal with that issue? The schools are involved. Are schools and universities doing enough to point people in the right direction? We asked one of the universities whether they are training too many people in one kind of thing and not enough in others—whether enough engineers are being trained, for example—and it seemed to suggest that it was not its role to decide that and that it would simply reflect what people want to do.
The issue is quite deep-seated and complex, but it must be resolved if we are to avoid the situation in which I all too frequently find myself of having a conversation with employers about the lack of appropriate skills in the labour force. Some sectors of the economy are enduring significant skills shortages. We have a particularly buoyant, productive and expansive oil and gas sector, but there are quite acute skills shortages, which is precisely why I announced the energy skills academy proposal in the budget in September.
The Government’s actions to tackle the problem are pretty clear. First, we must encourage a much greater focus in the school system on preparing young people for work and employment. I refer to the point that I made to Mr McMahon. That is one of the purposes of the curriculum for excellence.
Secondly, we have to take action to remedy long-standing problems with our population’s interest in science, technology, engineering and mathematics—the STEM subjects. That action is now being deployed within the school system. The effects will take some time to emerge, but such action is undoubtedly important.
Thirdly, we must improve the dialogue between the business sectors and those who create the skilled population. I fundamentally disagree with the point that a university articulated to the committee that that is nothing to do with it. I completely and utterly disagree with that point of view. The Government has a range of industry leadership groups that cover a whole host of sectors, and we have mandated them to represent industry’s skills requirements and demands much more clearly. That system is getting much better. I regularly meet the industry leadership groups, and they met ministers just last week. Unfortunately, I was unable to attend that meeting due to the need to answer a parliamentary question, but the Minister for Youth Employment represented my interests. There has been a sizeable improvement in the dialogue between industry and the institutions on what the skills requirements are.
Those are the steps that we are taking, which are essential to deal with legitimate concern about the availability of skills in the labour force.
I accept that schools are not your main area, but do you think that there is a problem because many schoolteachers went back into schools after having been a pupil and a student but without having worked outside the system, so they do not have experience of that to pass on to young people?
I am not sure about that, but I am sure that, for the curriculum for excellence to fulfil its capability, teachers must, whatever their background, be able to represent the climate and direction of the curriculum for excellence to young people in our schools.
I see good examples in the schools of Scotland of people who are doing good work to encourage employers to come into schools. One issue that I am particularly interested in is the encouragement of a greater focus on entrepreneurship in the school population—I see that as an aspiration. I go to events in the Parliament garden lobby that involve social enterprises coming in from various schools and I feel as though I am being put through a sustained sales experience by the youngsters to whom I speak. It is great to see.
Ministers believe that the curriculum for excellence is a great way to create the climate that is essential to ensure that our labour market is influenced by a strong presentation of capable characters when they emerge.
The third sector has been mentioned a couple of times. On the whole, there is a good relationship at a high level between the Parliament, the Government, the third sector and social enterprises. However, we have picked up on the fact that, at a local level, that relationship is more patchy.
One of the successes that you and others have had has been the end of ring fencing, which has meant that councils have more freedom to focus on their priorities. However, there is a feeling in some circles that some councils will use their own regeneration agency or whatever to do the work and the third sector feels that it is excluded. Is anyone comparing the two sectors to see which of them could provide better results?
There is good evidence of the effectiveness of third sector organisations in the delivery of outcomes for individuals in those circumstances. I encourage public authorities to follow that evidence and plan accordingly.
We have tried to ensure that the issue that you raise is dealt with by embedding third sector participation in the work of community planning partnerships at a local level. The type of reform that we have undertaken with the third sector has been designed to create a clear articulation of third sector interests directly into community planning partnerships and to ensure that that is influential in guaranteeing that the third sector is able to play a significant role in the delivery of key programmes at a local level.
I watch this issue carefully because, obviously, I hear much of the same type of commentary that Mr Mason has raised with the committee this morning, and it is something that I discuss with my local government colleagues to ensure that—following on from the point that I made to Jean Urquhart earlier—the collaborative agenda is followed at a local level to ensure that the best organisation to implement the solution is found. That might be a third sector organisation that can straddle the interests of a local authority and the health service at the local level.
On the DWP and Jobcentre Plus, I get the impression that there has been a slight improvement in the relationship between Jobcentre Plus and other local public sector organisations. However, do you feel that, if that relationship were more fully devolved, we could make things more joined up in a way that would ensure that the problem that Jean Urquhart raised would be less likely to occur?
You have to consider this on two levels: the level of policy and the level of operation.
At an operational level, we work hard to ensure that everything is as aligned as possible. For example, yesterday, I was at a meeting of the Hall’s of Broxburn task force, which is dealing with an acute employment problem in West Lothian. Skills Development Scotland and Jobcentre Plus were represented at the meeting, too. There is a cohesive model of operation to support the employees who are affected by the closure of that company.
With regard to the policy issues, there will be areas where there is a lack of consistency and in which we could deliver more cohesion and focus if there were one policy approach coming from both Administrations. The argument for further devolved responsibility is clear in that respect.
I take a wee bit of issue with the deputy convener. On 9 May, we took evidence from the vice-chancellor of the University of Strathclyde, Jim McDonald, who emphasised that universities are aligning themselves with economic imperatives.
I was referring to a different university—that takes out only one.
I think that Universities Scotland is aware of and focused on the economic position.
It is essential that there are good and cohesive discussions between industry leadership groups and the further and higher education sectors. That is happening in a large number of areas. My point was that, if that view was articulated to the committee, I disagree with it.
What expectations should the committee and the business community have for the our skillsforce website? Is it an upgrade that consolidates existing provision and makes it slightly easier or better for employers to deal with, or is it a genuine one-stop-shop website where everything that any employer would want to know about taking on a new employee can be found? Where will our skillsforce sit between those two positions?
I think that it will be in the latter category.
In evidence, a number of businesses have expressed similar sentiments to those of the small business owner from Glasgow, although perhaps not quite as curtly and succinctly as he did.
It was very effectively put. It had a searing effect on me, I can tell the committee.
Is it the Government’s view that, if we have that business owner before the committee a year after the service has been launched, he will say that there is now a one-stop shop and that it is the only place where people need to look?
I hope that that will be the case.
Earlier, you gave a statistic that 56 per cent of people on a programme went on to sustained employment. I forget the name of the programme, so perhaps you will remind me. Was it the get ready for work programme?
It is training for work.
What is the Government’s precise definition of “sustained employment”?
It is continuous employment for six months after leaving the programme.
Does the Government track or intend to track what happens after nine, 12, 18 or 24 months, particularly with those who were initially furthest from the labour market, so that we know whether people are still in employment, or is six months the cut-off point?
Six months is the only point at which we judge whether we have achieved a satisfactory outcome from the programme. We could try to assess that at other points, but we would then get into territory about the scale and complexity of monitoring individuals’ employment patterns. There is a debate to be had on that, but the issue can become complex.
I take that on board, but if the committee concluded at the end of our work on improving employability that the situation ought to be tracked for more than six months, would the Government take that seriously?
It goes without saying that I will consider carefully the committee’s conclusions in its inquiry. I hope that I am giving the committee a sense that the Government has a range of approaches to the issue. We want to ensure that they are effective and that they have the effect that the Government hopes for. If the committee believes that our approach could be more effective in certain areas, of course I will consider that carefully.
11:00
I have one narrow, final question on the wage subsidy scheme that you talked to the convener about. You mentioned that there is £15 million for 2013-14 from the Scottish Government and—this is what I am worried about—you said that you expect £15 million from ESF. I would like some clarity on that. Is that money guaranteed or are you only hoping for it? Where are discussions in relation to that?
The approach has to be cleared through the programme management committees that monitor decision making around European social funds, and the process is under way to secure the necessary resources to support the programme.
At this stage, do you have an inkling of when that decision will be made?
It will all be done in good time to enable the programme to be operational in 2013-14.
Thank you.
My question arises from some of the things that other members have said.
When John Mason and I were in Dumfries, speaking to various sectors there, we got the impression that the public sector partners are working quite well together in the employability partnership. However, there is a perception in both the private sector and the third sector that the lines of communication with them are not as good.
The committee heard evidence from members of the private sector who were concerned about the sort of support that they were being offered by the business gateway, and in the local session representatives of the private sector said that they felt that they were not getting the training that would help them. For example, one manager said that some small businesses need management training if they are to expand, as people can enter management positions without the background that helps them to make their businesses more successful. Another example that was given is the lack of training hospitality in an area that is very dependent on tourism, which means that businesses are unable to access training in the hospitality sector.
How does the Scottish Government evaluate the success of the programmes and the employability partnerships? How do you look at the way in which the public sector communicates with the private sector and third sector?
Before I answer that, I would like to make a point about the business gateway. You raise an interesting point about the focus and performance of the business gateway. A small company might require a bit of management training from the business gateway more than an employer recruitment incentive. That is essential feedback, which we understand and will take action on.
I am pretty sure that business gateway organisations around the country will be providing management support and development to SMEs, but if it is not obvious or well communicated we need to know about that. That is material because of the critical point that we are at in the preparation of the business gateway contract and service. The solution to some of the employability issues might exist not in the list of employability initiatives that the Government happens to be running but in the business gateway. Therefore, ministers must ensure that our perspective is broad enough that we take into account those programmes and approaches, not just the list of employability programmes with a capital E.
We give guidance to local employability partnerships through the employability framework that I have set out, and we are involved in regular dialogue with those partnerships about how they are carrying out their activities. We are listening to the business community on the issues that it is concerned about, including the availability of skills, which Mr Mason referred to, and the availability of information, to which Mr Brown referred. As a consequence, we are changing some of the systems and approaches that we have put in place. That is how we exercise scrutiny in that respect.
Your final point about hospitality training in the south-west of Scotland is a good illustration of Mr Mason’s point that we need to ensure that provision in localities is what is required by the local economic base. That is why the dialogue among industry leadership groups, agencies and the employability partnerships is so close. We must ensure that we get that right.
Mr Mason and I attended the same local session, so we probably listened to pretty much the same evidence.
I will give you an example. In Dumfries and Galloway, the local employability partnership had an initiative that it believed would help to support businesses as a one-stop shop to which they could go for advice and so on. It sounded pretty good, but when we spoke to the private sector representatives we heard that they perceived it as a threat. That is rather worrying and shows that, in some way, the process of communication is insufficient.
That example probably relates to your experience with the individual who was unimpressed with a number of the initiatives that the public sector was coming forward with. There seems to be a lack of communication between the two sectors.
I would be the first to admit that, in this area, we must ensure that the communication is undertaken properly and effectively. I would also be the first to admit that we can get it wrong. There are lots of things on the go in relation to employability, and when I sit in these discussions I sometimes think to myself, “We’ve got all this activity under way—why are people telling me that there are skills shortages?” That is the simple question that I ask myself.
In the whole field of education and training outwith the schools sector, we are spending more than £2 billion as a country. For me, the £2 billion question is why, when we are doing all that, I am still having conversations with people who tell me that they cannot get the skills that they require or that they do not know how to find the information that is required. As I hope that I have told the committee, we are very much focused on trying to resolve the situation because it is just not good enough if people cannot get access to the information that they need or cannot get the skills that they require in the labour market when we are spending more than £2 billion on education and training.
Thank you, cabinet secretary. That concludes questions from the committee. I have a number of questions that I would like to ask you, but I do not want to eat into the time of the next session. We have had a very interesting session this morning. I thank you and your officials for your presence and for answering all our questions.
I suspend the meeting until 11:14 to allow members a natural break in which to get ready for the next session.
11:07
Meeting suspended.
11:14
On resuming—