Economy (Support for Young People)
The next item of business is a statement by Keith Brown on supporting young people in the context of the economic climate. The minister will take questions at the end of his statement, so there should be no interventions or interruptions.
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Young people are our future workforce. They represent a pool of talent that we must nurture and invest in if we are to achieve our goal of sustainable economic growth. However, it is also true that recession hits young people the hardest and can do them disproportionate and lasting damage—as most of us who have lived through previous recessions will be aware. Sadly, the high price that was paid because of previous Governments’ failures to tackle the effects of earlier recessions on young lives is still evident.
This time, we were not prepared to accept the prospect of another lost generation. From the word go, the Scottish Government has recognised the threat, which is why we have helped to build provision that helps young people to avoid the worst effects of the downturn. So far, we have made provision for record-breaking levels of investment in higher education, further education and training provision. We have made young people a priority for the Scottish Further and Higher Education Funding Council and for Skills Development Scotland, we have introduced 16+ learning choices, which will offer appropriate post-16 learning to all our young people and, through ScotAction, we have provided an additional £16 million in 2009-10 for 7,800 apprenticeship starts and a further £16 million in 2010-11 to sustain those apprentices in training. In addition, we have made a commitment to Parliament that we will do yet more to stimulate growth, including creating the right business conditions and a new skills strategy that will position Scotland for recovery.
Although youth unemployment in Scotland has increased, our record on youth unemployment is the best in the United Kingdom. Our youth unemployment is still lower—at 14 per cent—than the 17 per cent that is recorded for the rest of the UK. However, we cannot be complacent. Although we are out of recession, we know that the recovery is fragile and that job prospects remain uncertain. Throughout the downturn, we have remained vigilant and proactive. We have anticipated movements in the labour market and we have acted swiftly and decisively.
Last year, we noted that a greater number of young people stayed in learning after the summer. Of course they did; with the number of school leavers going into a job down by 7 percentage points—the largest fall since 1992—a higher proportion returned to school. Indeed, the figure was up by more than 3 percentage points. In addition, a higher proportion went into college and university—the rise there was nearly 6 percentage points. That is good, because we want young people to stay in learning because that is the best way to improve their long-term employability. It is heartening that so many young people and their parents and carers also see that value. That increase in the number who are continuing in learning is also a clear demonstration that our institutions—our schools, colleges, universities and training providers—are able to respond effectively to increased demand.
However, more returners last year means that we are likely to have more leavers this summer. We recognised the challenge that such an increase would present in the coming year. Correspondingly, we have been planning in order to ensure that the whole process is managed as effectively as possible in the interests of young people. To that end, earlier this year I established a small task force to consider how we could best respond to such a development.
First of all, we had to understand the problem that we are dealing with. Let me give members the facts, in so far as we can predict them. From the information that we have been able to cull—not least from young people themselves—we expect a relatively modest increase of about 3,000 in the number of young people leaving school and college this summer. However, the figure could be greater. As I said, we are currently relying on information about young people’s stated plans, but the reality might turn out to be different as young people change their minds and circumstances change. The vast majority of those 3,000 people are school leavers, most of whom will want to remain in learning or move into training, although some will want employment.
Although we expect that there will be more leavers than usual right across Scotland, the challenges in meeting increased demand for learning will, self-evidently, be more acute in areas that have high levels of youth unemployment. From previous recessions, we know that young people who already struggle—people such as care leavers—can be doubly disadvantaged. The Government is taking swift and decisive action to deal with the pressure. We believe that we know the scale of the problem, where it will be most acute, and which young people will need most help. We also know what support young people are going to need, and what employers need to help us to help young people.
Today, I am announcing a comprehensive and affordable package of incentives and support. This will comprise 800 vocational pathway opportunities for young people. It will include an incentive of £1,000 for up to 2,000 employers who take on a modern apprentice who is a care leaver, or other young person who might otherwise struggle to get such an opportunity. It will also include around £400,000 for a new entrepreneurial intervention. In addition, £300,000 will be made available for graduate advice, information and work placements. Crucially, there will be a brand new Skills Development Scotland employer one-stop shop called step forward Scotland. In recognition of the fact that young people have a variety of interests and ambitions, there will be around 1,000 new volunteering opportunities.
That comprehensive offer builds on and complements existing Scottish Government investment. We have made available £15.3 million for 4,100 additional college places. Last week, the First Minister announced 5,000 additional all-age modern apprenticeship places, and young people will have access to those opportunities. Altogether, and notwithstanding the additional measures that we announced recently, we will produce another £6.5 million in additional measures that build on the wide range of opportunities and support that is already available across Scotland.
I will be clear. We are not creating jobs; we cannot do that. We are also not guaranteeing places; no Government has ever done that and we are not doing it. Our priority is to ensure that every young person who is leaving school, college or university this summer has the support that they need for as long as they need it, so that they can move into long-term sustainable employment. Skills Development Scotland will help us to deliver that. Our intention is that absolutely no one should fall through the net. When the jobs market is tight, those who are harder to help, such as care leavers, tend to get pushed to the back of the queue, and that is not acceptable. Our focus is on all young people, but we will emphasise vulnerable groups.
The job of Government is to lead and to act decisively. We have to make our priorities clear, mobilise all the resources that are at our disposal, and ask our partners to step forward for Scotland, which is precisely what we have done and will continue to do. Over the past few months, we have spoken to many people about our hopes and fears for young people. We have spoken to employers, local authorities, colleges, the voluntary sector, trade unions and many others. In all my time in public service, I have rarely encountered such consensus on a single issue. Tackling youth unemployment must stay right at the top of the agenda.
Employers, especially smaller employers, are often pressed for time, so we need to make it as easy as possible for them to access young people who are looking for opportunities, which can produce great benefits. This afternoon, I met some young people from Edinburgh who had found employment with an Edinburgh hotel group, which had invested in them by giving them training opportunities. That is exactly the kind of activity that we want to maximise.
I am certain that everyone in the chamber this afternoon can subscribe to our view. We might debate how best to tackle youth unemployment, but we must tackle it. The package that I have announced today is specifically designed to deal with the pressure that has been created by this summer’s leavers. It will not make youth unemployment go away, and it will not distract us from the bigger job that is still to be done. I have every confidence that the efforts that we have made during the past few months, and the response that we can expect from our partners, will make a massive difference to our young people.
The minister will now take questions on the issues that have been raised in his statement. The next item of business is due to start at 25 minutes past 3. Members who wish to ask a question should press their request-to-speak buttons.
I thank the minister for early sight of his statement.
He said that tackling youth unemployment must stay at the top of the Government’s agenda. He is right, and I agree with him. That is why Labour argued for extra funding for modern apprentice places in last year’s budget. We did so again this year, and I am pleased that the Scottish National Party listened to our arguments. We also fully support the creation of a one-stop shop for information on how to access youth training funds at Skills Development Scotland—something that is long overdue and which I have previously discussed with the minister.
The minister will be aware of the briefing that was produced this week by the Alliance of Sector Skills Councils, which reported that 20 per cent of Scotland’s employers are reporting skills gaps, especially in the retail motor trade and the hospitality, leisure, travel and tourism industries. What steps are being taken in his new measures to point young people to where vacancies exist? Can he offer some further explanation of what is meant by the new entrepreneurial intervention and how that will work? I warmly welcome moves to give extra help to care leavers, but will he outline in a bit more detail how that assistance will be delivered? Finally, when will we see the new refreshed skills strategy to which he referred?
I thank David Whitton for those questions; I will try to answer each one.
I will take the last question, on the refreshed skills strategy, first. Mr Whitton will acknowledge that the skills landscape—if I can put it that way—across the United Kingdom is changing rapidly, and we have had to take a bit more time to take that into account, although we will not hold up the strategy for too much longer. Some of the points that he made about skills gaps that have been identified by employers will be addressed through the refreshed skills strategy. As I have done with the statement today, I will do what I can to ensure that he gets early sight of that strategy, which should help to answer some of the questions that he has asked.
It is fair to say that no Government has done as well as it should have done for care leavers, and we accept completely that it is not an easy issue to resolve. Through the one-stop shop, we intend to ensure that all care leavers are not left once they leave care. They rely on the state to a great extent throughout their lives up to that point, so it is only right that the state does not run away and leave them to fend for themselves when they leave care.
Each care leaver will, through Skills Development Scotland, be given a key worker who will work with them. It will not be a one-off contact. Once they have made contact in the first instance—we will encourage everybody to make contact, whether they are employers or young people—there will be a continual monitoring and presenting of new opportunities as they arise for the young person. In addition, I have written to every single one of Scotland’s colleges to ask them to have particular regard to that group of people and the opportunities that they represent.
We will also revisit the issue over the course of the summer. We know that the situation will change over the summer, but we also know that we will not get some of the relevant hard facts until September, or perhaps even later. We have a serious intention to deal with the issue, and the incentive that I announced—the £1,000 that is available for up to 2,000 employers—will make substantial inroads.
The last point is on the one-stop shop. It seems obvious that we should introduce one, and the idea has been mentioned over many years in relation to various public services. However, it is much easier to say than it is to do, as it requires substantial systemic change. Although we are making the change for the particular pressure that we envisage, we think that it will produce long-term benefits for the whole skills agenda in forthcoming years, as people will find it easier to access the skills agenda. That is particularly the case for employers, who will have one place to go to get answers to their questions and will not be shunted around different agencies, and for young people, who will also have one place to go to get the answers that they want. We hope that the marrying up of demand and supply will help us to achieve a positive outcome.
I, too, thank the minister for prior sight of the statement.
I have three areas of questioning. First, the minister mentioned the fact that the Government cannot create jobs, but it is, nevertheless, in the position to create incentives, one of which has been the reduction in business rates. Is the Government mindful of the comment by Iain McMillan of the Confederation of British Industry that the private sector will be the basis on which new jobs can be created? Will the minister tell us a little more about how the Government will proceed with that?
Secondly, the minister said that it is better for people to be in learning because that is the best way for them to improve their opportunities. That is usually true, but not always. The idea of insisting that people go to college or university is sometimes a little away from the truth of what some people would like to be able to do. Will the minister provide us with a little information about how schools and colleges could be better interlinked for formal vocational training at school level? There are opportunities that are not just about staying in learning institutions, which the minister mentioned in his statement, and they should be pursued further.
Thirdly—
I must stop the member there, as she is going on a bit too long, and we might run out of time.
On the first question, there are specific incentives. The adopt an apprentice schemes that are run under the ScotAction programme will continue over the course of the next year. They are incentives for young people to get opportunities, but they are also incentives for employers, because they allow them to take on people with support from the Government. The reason why we have always stuck with an employer-based approach to apprenticeships is that we recognise that, as the member suggests, these things are best done through employers rather than colleges or universities.
The new £1,000 incentive will help the private sector, as businesses will have access to that money and will take people on, hopefully at a higher rate than they would otherwise have done.
I did not mention Mr Whitton’s point about the entrepreneurial intervention, which is also relevant to the question that has just been asked. I recognise that it is the case now, more than in other recessions, that some young people will express an interest in setting up their own businesses. It is certainly easier to do that today, particularly with regard to information technology and web-based businesses. In recognition of that, we have put together a new initiative that will not cut across existing ones. It will give people education and practical advice in that regard and will move them towards a positive outcome. That initiative has been positively accepted by people in the employers’ organisations—including, I believe, Iain McMillan.
We are providing other opportunities. We recognise Elizabeth Smith’s point—that young people have a different set of options that they want to choose from, and that college and university are not always the best option. We have to ensure that they have that opportunity where nothing else is available to them. However, through initiatives such as the volunteering initiative and the entrepreneurial initiative, we are trying to present young people with different opportunities, and we are hopeful that that will be positively received by them.
I also thank the minister for the advance sight of the statement and for the other information that he provided.
Can the minister confirm that all of the programmes will be delivered for young people in rural as well as urban areas, no matter what background they have?
Does the minister accept that the one-stop-shop approach would have more credibility were it not for the fact that the changes to the structure of Scottish Enterprise and Skills Development Scotland, which was set up as a separate agency, removed a one-stop-shop approach in many rural areas, with the removal of the local Careers Scotland offices, which were integrated into Scottish Enterprise and worked in direct partnership with local businesses and councils?
Can the minister confirm where the £6.5 million that he refers to as being “additional” comes from within the budget lines, given the fact that the Government has indicated that it is operating within a fixed budget, and that all the money has already been committed?
The minister made no reference to programmes for young people who are currently in school, particularly those who are in their fifth and sixth years in secondary school. I am thinking specifically about concerns over the funding for the get ready for work programme and the training for work programmes. Will those programmes continue in their present form, with the current levels of funding?
The programmes will apply to rural areas as much as to urban areas. There is one caveat, however, which is that we have identified particular hot spots across the country—ones that we could probably all identify—where there is greater need. The same opportunities will be presented across the country, but it is only right that there should be a more intense application of them in the areas of greatest need.
On SDS and Scottish Enterprise, SDS represents a coming-together of four organisations. That rationalisation has happened already. Such things are never straightforward and must be worked at over time, and there is a continuing process whereby we are trying to make the situation more rational. I am more than happy to listen to any suggestions that the member might have about how we can do that even better and how we can make services as cost effective as possible, at a time when we are examining public finances.
On the budget lines, we have created the initiatives through a combination of new money—I mentioned the £15.3 million that is associated with college places, which is not part of this announcement—and through being more efficient with some things. We have also ensured that the money from some projects that have reached the end of their time and will not be carried forward is applied to that priority. I am happy to get back to the member with more information, if he would like to know exactly which budget lines the money has come from. I do not want to provide the information now as it would prevent other members from asking questions.
I am not entirely sure about the member’s point about fifth and sixth year pupils. I will pick that up when I check the Official Report. The 3,000 figure that I mentioned comprises 2,000 of those whom we expect to leave school and 1,000 of those whom we expect to leave college. It is not our intention to keep people in those places if they do not want to be there and we can provide other opportunities for them. However, I am happy to get back to the member with more information, if I have not answered his question.
I will try to get in as many questions as possible, but they must be brief, so I ask the minister to keep his answers correspondingly brief.
Two successful elements of the support that the Scottish Government has provided to young people during the recession are the adopt an apprentice scheme and the two-for-one scheme, which aim to promote and encourage the take-up of apprentices by businesses and to ensure that, wherever possible, apprentices have the opportunity to complete their training. Will the minister set out his future plans for those schemes and confirm whether they will continue into next year?
I confirm that the invest in an apprentice and adopt an apprentice initiatives will be kept and rolled forward to next year. We believe that they have been extremely successful. That is perhaps underlined in some of the figures that I mentioned earlier in relation to our relatively positive position on youth unemployment compared with the rest of the UK. The initiatives that we have taken in the past year to ensure that young people have those opportunities are partly responsible for that.
I am afraid that I cannot say what will happen beyond next year because we will have a comprehensive spending review in which we have to analyse everything that we are doing. I therefore cannot guarantee what will happen, but the initiatives will continue for the next year.
The member’s question, for which I thank her, has brought back to my mind Mr Purvis’s question about the get ready for work and training for work programmes. It is the case that those will continue. As I think Mr Whitton said earlier, we announced 35,000 opportunities this year with a slightly different balance between apprenticeships and other opportunities. Not only will those flexible opportunities continue, but there will be more of them this year.
The minister said that the Government is aware of where the problem is most acute. Does he agree that the problem of youth unemployment is particularly acute in North Lanarkshire and South Lanarkshire? How will he ensure that areas such as Lanarkshire can access not just a fair share of the additional resources and opportunities but a larger share, if the needs of Lanarkshire’s young people are more acute than the needs of young people in other parts of the country?
On the minister’s 1,000 volunteering opportunities, in what ways are they different from the opportunities that are offered by Project Scotland? Is there perhaps an opportunity for the Government to overturn its misguided attempts to get rid of that organisation?
On the member’s final point, we intend to work, and are working, positively with Project Scotland. She might recall that, at the time when the Project Scotland initiative was controversial, the Cabinet Secretary for Finance and Sustainable Growth encouraged Project Scotland to be involved in exactly the kind of initiatives that we are discussing and to work with Skills Development Scotland and others in order to do that. We will be working with Project Scotland, and the engagement on that so far has been positive.
The member’s other point was about North Lanarkshire and South Lanarkshire. Representing Clackmannanshire, I am well aware that there are intense hot spots around the country. I repeat the point that I made previously: where there is greater demand, we will meet it, using the same solutions that we see throughout the country. We have used that approach in the past. It was done to an even greater extent with college funding last year, which went to specific colleges to cover the areas of greatest need. This year, we recognise that there will be demand throughout the country, but that does not prevent us from giving the greatest support to those that are in greatest need, and we recognise that North Lanarkshire and South Lanarkshire are two of those areas.
I want to ask about the entrepreneurial intervention. I listened to the minister’s answer to Elizabeth Smith, but it is still not clear to me what is actually going to happen with the money. Can he give us some details and say how it will be different from, say, the Prince’s Scottish Youth Business Trust or the business gateway?
First, we have involved PSYBT in the construction of the initiative. It will be a new product. It will not replace something that already exists but will fill a gap in the market. It will create a structured entrepreneurial learning path for school leavers, building on what we have done already under “Determined to Succeed: Enterprise in Education”.
The initiative will be targeted at higher-level achievers—primarily pupils who have participated in Young Enterprise Scotland’s company programme—and will comprise first, a programme of immersion in theory; secondly, as I have already made clear, practical experience with a local entrepreneur; and thirdly, market testing and business start-up activities. First, we have to identify the participants in order to carry out marketing and awareness raising. That work will start this month. Familiarisation will take place over July and August, applications will be selected in August and the programme itself will start in September. This sort of approach has never been taken before in this context and I reassure the member that the initiative is genuinely new; however, we very much hope that it will provide a template for future activity.
As someone who has two sons who will graduate this summer, I should probably declare an interest. In any case, I certainly stress the need for swift action to support summer leavers.
I have previously raised concerns about the scrapping of Scottish Enterprise’s graduates for business scheme. Of the 250 graduates who had internships under the scheme, two thirds found employment with those businesses. What is being done to replace that successful scheme? Moreover, is the minister able to give further information on how the £300,000 for graduate advice, information and work placements that he mentioned in his statement will be delivered?
Margaret Smith might be aware of the talent Scotland graduate placement programme, which will be rolled out at the end of the month by Scottish Enterprise and Highlands and Islands Enterprise, and which aims over the next three years to place approximately 720 graduates in three-month to 12-month projects with businesses in Scotland. HIE will also provide 160 undergraduate placements over three years. The scheme will replace the now discontinued graduates for business programme that Scottish Enterprise ran and—I say in response to the other part of her question—will be provided through the talent Scotland website, linked to the Association of Graduate Careers Advisory Services shared vacancy service, in order to ease access for businesses and graduates. Work to update the website is under way. The scheme will involve a working partnership including AGCAS, SDS, the Scottish Further and Higher Education Funding Council, HIE and Scottish Enterprise. For its part, the Government has agreed to provide £60,000 this year to support the position of project manager to be based at AGCAS. There are other elements to what we are doing for graduates, and I am happy to provide the member with more information.
If the one-stop shop, which for a number of reasons is a very welcome initiative, proves to be successful, will the minister consider expanding its role to help small businesses and sole traders and allow them to continue to take on young people beyond this summer’s student intake?
I thank the member for that important question. Some employers, especially smaller ones, have found it difficult to access easily skills and training opportunities, partly because of the plethora of different agencies and organisations. That is why the one-stop shop is so important. Although we have very much focused on ensuring that the initiative is introduced to deal with the pressure from the summer leavers that we have identified—I thank SDS, in particular, for the huge amount of work that it has carried out to ensure that it works right from the start—I acknowledge Sandra White’s point that it will produce huge benefits for small employers and sole traders, who often do not have enough time, or who need assistance to navigate the skills landscape.
As I said earlier, the idea is that with a single phone call the employer will get information about different agencies. Of course, they might well have to go to another agency for more in-depth information—there is nothing wrong with that—but they must get a proper and full response with that first phone call. We certainly want to continue the initiative, because we think that it will have real benefits.
Can the minister assure Parliament that any additional resources, such as the all-age modern apprenticeships, will be directed to where they will have the greatest impact and meet industry needs? For example, although the new Forth crossing will be a major job-creating project, Fife colleges have told me that they are finding it very difficult to provide the number of apprenticeships in areas such as welding. Will today’s action plan deliver to young people skills that are matched to industry needs, including those of major projects, and will the minister take steps to address the issues that Fife colleges have raised?
The issue has already been raised with me in relation to at least one college—Carnegie College—and I have undertaken to Mr Whitton that I will look at the pressure that has been identified in that respect. The driving feature of the schemes is that they are demand-led—in other words, people come forward to take up the opportunities—but we are more than aware of future large-scale capital projects and the skills demands that they will make on the Scottish economy, and are directing resources towards those ends.
That concludes the statement.