Future Skills Scotland
Agenda item 3 is Future Skills Scotland. I let the previous discussion run on deliberately, because it was fascinating. I welcome Stephen Boyle, who is the director of Future Skills Scotland, from which we received quite a lot of evidence either directly or indirectly during our inquiry into lifelong learning. Further documentation from Future Skills Scotland has been circulated to us today, and that has been extremely helpful.
Stephen Boyle may say a few words by way of introduction, before we move on to questions from around the table. I apologise in advance that the time scale that we originally anticipated might need to be squeezed. I need to get to item 4, and we are gradually losing members—you can tell that it is only a few weeks until the election.
Stephen Boyle (Future Skills Scotland):
I thank the committee for its invitation and for the interest that it has shown in our work. The committee's report into lifelong learning sees Future Skills Scotland as contributing to a successful lifelong learning strategy. At its simplest, our contribution to such a strategy would be to help people and organisations make better decisions than they would otherwise have been able to make. We do that in three ways. First, we try to make information about the labour market more accessible to people. Secondly, we work with our colleagues in Careers Scotland to ensure that its staff and clients have the best possible information about the labour market. Thirdly, we analyse the labour market to inform the work of policy makers and decision makers.
My final point by way of introduction is about how we work. The committee's report emphasised the importance of coherence in lifelong learning in Scotland. For that reason and others, I value the relationships that we have developed with a range of organisations in Scotland, such as the funding councils, the Scottish Qualifications Authority, learndirect Scotland, the emerging sector skills councils, employers, trade unions and others. We will not do our job well unless we work with and through those organisations. It is all well and good for me to say what we would like to do, but we will not succeed unless we work with those organisations.
Again, I thank the committee for the interest that it has shown in our work. I will try to answer members' questions.
Because he needs to leave soon and Stephen Boyle is his ex-boss, I will give the first opportunity for questions to Andrew Wilson.
I thought that the evidence was substantial enough.
In comparison with other sections of the economy, the labour market is one on which much information is available. First, will Future Skills Scotland's project to make that information accessible produce only long-term results or is it a short-term thing? Does Future Skills Scotland see itself being involved in the project for an extended period or is the project simply to kick-start the process of rationalising decision making?
Secondly, if Stephen Boyle were to pick out one conclusion from the initial tranche of research, what would it be? What does all the work that has been done since Future Skills Scotland started tell policy makers about where resources are currently being misallocated? Have the outputs of Future Skills Scotland made you aware of any obvious crying need to fill a gap that is unfilled because of the imperfect information that people had in the past?
I agree in part that we know a lot about the labour market; we know a substantial amount about the supply side of the labour market. We know how many people there are and how many there will be. We know how many are going through the education and training system and what they are achieving. On the supply side, we are reasonably well covered, although there are gaps. However, until recently, there has been a substantial gap in our understanding of the demand side—in particular, there has been a gap in our understanding of what employers want and need and of what employers think the education and training system is not providing. We have made some initial steps to fill that gap, but more work remains to be done.
On whether the project is for the short term or the long term, I would say that some things can be addressed in a reasonably short time. One of the reasons why we were set up was to try to make information accessible to people. Within the next year or so, I hope that we will have gone about as far as it is possible to go in building systems that provide information to people—that work should be mostly done.
The analysis that is required to inform policy-making and resource-allocation decisions will be a continuing job. I am not saying that it is a job that we would have to do, but it must continue to be done.
Our initial research suggests that there are three lessons that we need to learn in relation to changing the balance of resource allocation. It is important to say that the research does not tell us that what the education and training system in Scotland has been doing until now has been completely misplaced; in fact, it tells us quite the opposite, but it also tells us that there is a need for a change of emphasis. First, there must be a greater emphasis on making the education and training system as effective at imparting softer skills as it is at imparting technical skills. Secondly, there is a need to stimulate demand for investing in people in the smallest workplaces—the smallest workplaces should be focused on fairly ruthlessly. Thirdly, it is necessary to focus on people who are in lower-skilled jobs, because it is in those jobs that employers report the most extensive skill deficiencies.
I might have missed something in your submission. My question is simple. I was interested in the definition of skills shortages and skills gaps, but I noticed that the criteria for determining them related to the labour market. In other words, it was the standpoint of employers and what they reported that determined such shortages and gaps.
I wondered about the broader situation in the economy. Surely it is possible that some skills gaps in the economy in parts of Scotland might not manifest themselves by reference to an employer. Let us consider the availability of electricians, plumbers and builders, for example. If the presence of a small number of businesses in an area satisfies those businesses and they are not looking to take on more people, that does not necessarily mean that the economy in that area is being fully supplied with what it needs. That explains why people in many parts of Scotland are frustrated that they cannot access a plumber, an electrician or a builder. How does Future Skills Scotland take that element into account in its work?
One of the industries in which skills gaps and skills shortages emerge strongly is construction. That is a classic case of the anecdotes having a substantial basis in fact.
Let us start from the position that, by and large, the market economy is an effective mechanism for informing people and helping resources to be allocated. That means that if there were a strong pocket of demand for plumbers in a particular part of the country, for example, we would expect that demand to manifest itself by leading existing plumbing businesses to recruit more people or by encouraging more people to set up plumbing businesses. If either of those things happened, skills shortages or skills gaps would be revealed. The approach that we have taken should pick up any of those gaps or shortages that exist.
I hope that we all agree on the need for a Scottish labour market unit which, I suspect, is a necessary part of the architecture. I am happy to agree that we will adapt it as we go along.
I think that we have set Stephen Boyle impossible tasks, because what prompted us to have him here was what we said about tourism—I do not know whether the clerks shared that fact with him. In my view, which the committee shared, interesting material might have been forthcoming. I am grateful that we have been given data to support the anecdote on that area. That is important. I think that we invited Mr Boyle on a false premise.
I noticed from the work programme that a body of work is going to be done on graduate underemployment. Given what we heard in the earlier session, that is a core constituency. What was the thinking of the advisory group in going for graduate unemployment? Was it just to see what was out there, or was it with a view to coming up with some prescriptions that flowed on from whatever was found?
First, the advisory group has not approved this programme yet—we are hoping to do so fairly soon—so this is a draft work programme, which has been discussed with most members of the advisory group.
Why have we identified graduate unemployment as an area of interest? We put the work programme together by consulting a broad range of partners and stakeholders. Graduate unemployment was one of the themes that came through strongly from a number of those partners and stakeholders in the higher education sector and beyond. You will be only too well aware that there is a lot of anecdotal evidence on graduate unemployment and what happens to graduates, but there is precious little evidence about where they go and what they do once they complete their courses of study. We thought that it would be helpful to try to inform that debate, given the importance that is rightly attached to the higher education sector in Scotland.
I take it that the programme has gone through the Scottish Higher Education Funding Council and the Scottish Further Education Funding Council. Where is the impetus coming from?
It has come from a number of places. Interest in the issue has perhaps been voiced most strongly by the Association of Graduate Careers Advisory Services and the Scottish universities. If we proceed with the work, we will involve them and the funding councils.
I do not want to gainsay what anyone else says, but it strikes me that that is an important piece of work so far as future planning is concerned.
I should know the answer to this, but I take it that Future Skills Scotland looks at the broadest range of skills. For example, I met my local health board in Dumfries and Galloway to discuss the vexed issue of dentists, the lack of which is a serious problem there. Are such issues, which relate to the professions and public services, within your remit as well, because it is clear in rural Scotland that there are significant shortages of those people and not just of tradesmen?
The second issue is demographic migration. The way forward in providing the skills that are needed is to train people who are there, because inducements such as golden handshakes to take people to, for example, Stranraer do not seem to work. People who want to be in the area need to be identified, and then ways found of giving them the skills to do the jobs that need to be done. Are those issues addressed as part of your on-going remit?
It is fair to say that we have not even begun to scratch the surface of the issue of specific skills such as dentistry. In our first year, we had to set up basic platforms and do basic introductory work, which we have completed. Given the resources that we have at our disposal and given the competing requests, in time we will move towards some of those more detailed and specific issues, but if we are to do that, we will not do it in isolation. To take another example, if we wanted to do more detailed work on specific construction trades—or if we were interested in specific components of the health service, such as dentists or physiotherapists—we would expect to work principally with the sector skills councils as the issues emerged, because they bring the industry expertise and the employer perspective, which could add to the work that we do.
A fair amount of work has been done on demographics; I am not sure that we can add a great deal to that. The substantial changes in the demographic profile of Scotland affecting the size of the working-age population will not really hit us for another 20 years. The first year in which the working-age population of Scotland will fall below the current level is about 2021. However, the way in which the age profile is changing is important. By 2021 there will be about 25 per cent more people of working age over 50 and a significantly smaller proportion of people aged 35 and less. I agree that that will mean that a much greater premium will be attached to training and retraining people during their working lives, and to drawing into work the substantial number of working-age Scots who are currently economically inactive.
I understand what you are saying about working with others. However, there seem to be a number of wider issues and I am not sure who is addressing them. One of the issues that we face perennially in rural Scotland is to do with partner employment. We may equip one person with skills, but they will not deploy those skills in a specific area if their partner's skills cannot be deployed there too. That is a very serious issue. People now want to have a two-income household.
Demographic trends are reinforced by migration. In south-west Scotland, the part of the population that is growing fastest is people over 90. The number of people aged between 15 and 24 is declining. Is that issue covered by your remit? If you are not responsible for it, who is?
At this stage, we are not responsible for it. From the way in which David Mundell described the problem, I suspect that it is not substantially a labour-market problem. It may have labour-market manifestations and give rise to labour-market symptoms, but it seems to be a more general problem of attracting people to and retaining them in certain parts of the country. I am not referring exclusively to parts of rural Scotland. To be honest, I think that it will be a considerable time before we are able to get to grips with that kind of issue. However, during the coming year we want to examine some of the distinct characteristics of rural Scotland that differentiate it in labour-market terms from other parts of the country.
What information on demographics will you be able to provide us with? I welcome your submission, which does not cover all your work and future work. We have just completed our report on lifelong learning and are putting considerable emphasis on the importance, with an aging population, of people being able to adapt, relearn and reskill throughout their lives. However, we are still working in a system that focuses most of our resources on the post-school period of education. We will need more information on the benefits and downsides of support systems that allow people to retrain and reskill later in their lives. I, too, was expecting Future Skills Scotland to provide that information but perhaps it is not within your remit.
You are obviously focusing on the skills gaps. Do you also study the training schemes and the graduates that Scotland is producing and the impact that they are having on the economy? In other words, if we are training more ophthalmologists than we need, what impact does that have on the economy? Does it drive up the standard of ophthalmology in Scotland?
There is a very strong emphasis on a highly trained and highly skilled work force. Does that boost the economy by boosting the high-end of productivity?
I do not know whether your draft work programme is in any order or whether it is just a list, but point 14 refers to the Scottish funding councils. You are working on a work plan. What is your relationship with the funding councils? How do they use your information and vice versa? I am sorry to throw so many questions at you.
No, that is fine. Your first question was about the aging population and what intelligence we might be able to supply that could inform planning and decision making.
Yes. What skills are people relearning? How many are reskilling? How many are going back to university? That is the sort of information that I am looking for.
Almost all that information is somewhere in the public domain. We are working towards drawing it together in one place or making it accessible from one place. We will not have reached our objectives if, within the near future, it is not possible for people to go via us or our website to find that kind of information. The task is not to create new information but to marshal what is already there.
We have not looked at the impact on the economy of investing in particular skills, and our stakeholders and partners have not asked us to consider that. I would be quite open to doing that if there was a demand for that information.
You asked about our relationship with the funding councils. We live with Highlands and Islands Enterprise and Scottish Enterprise, but we have to serve a wider constituency. The funding councils are one of the key partner organisations with which we work. Last year, they worked closely with us on putting together the questionnaire that we used to elicit from employers information about skills gaps and shortages, and on a range of other issues that were of specific interest to the further education and higher education sectors. Next week, we are starting to work with the two funding councils to provide information that they will use to prepare their first joint corporate plan. We have formal and informal arrangements, which means that they have an open channel to us if they require information and we can go to them if we require input for the work that we are doing.
You obviously operate within the enterprise framework. Do the enterprise networks regard your organisation as a tool that can help them in their operations or is it seen to be an asset that can be shared? Are the funding councils looking to you with enthusiasm, optimism and hope that you will provide them with a good service? Do you think that although you are not working solely within the enterprise network, you are clearly part of that side of the economy?
The enterprise networks pay the wages and that is not an insignificant consideration. Our role within the enterprise networks is to inform decisions about the design and delivery of training programmes and the works of Careers Scotland.
The Scottish Executive clearly expects—and the expectation is understood and shared by the two enterprise networks—that we should play a role beyond the organisations of which we happen to be a part. The funding councils are examples of organisations with which we must have a close relationship.
Unfortunately, we have to bring matters to a close. I apologise for not giving you as much time as I had hoped. As you know, our agenda ended up being a bit fuller than we had anticipated.
Thank you for your extremely helpful written and oral evidence. I guess that our successor committee will be coming back to you fairly soon after the election to talk through some of the issues that you have raised and to follow up issues from the lifelong learning report.