Skills Development Scotland
The next item of business is a statement by Angela Constance on Skills Development Scotland. The minister will take questions at the end of her 10-minute statement and there should therefore be no interventions or interruptions during it.
09:00
Against the background of the interest that various members have expressed, I will now make a statement on the voluntary severance scheme announced by Skills Development Scotland on 16 December.
First, I make it clear that a matter of this kind, relating as it does to the staffing of a non-departmental public body, is properly a matter for the board and executive of SDS, having due regard to efficiencies while maintaining operational capability. That approach has held whatever Government has been in office. Nonetheless, the facts are as follows.
Skills Development Scotland will need to find savings of £21 million during the next financial year from a budget of £210 million. That, of course, is a direct consequence of the cuts of some £1.3 billion imposed on Scotland by the United Kingdom Government. Let us be clear about the context in which SDS and the rest of Scotland’s public sector now has to operate. We face a financial challenge without precedent since devolution, one that represents the biggest reduction in public spending imposed on Scotland by any United Kingdom Government.
The voluntary severance programme opened by SDS is a central part of the organisation’s plans to meet its share of those significant savings. I accept that it means that jobs will go from the organisation. I regret that. However, there are two important points that I want to make absolutely clear. The first is that the SDS programme is a voluntary scheme with no element of compulsion. The second is that there will be no negative impact on service delivery as a result of the scheme. I have that unequivocal assurance from SDS and I am happy to give the Parliament that unequivocal assurance. What we have is a voluntary scheme about which we have categorical assurances from the board of SDS that service delivery will in no way be compromised. In fact, the very purpose of the scheme is to help SDS to make the efficiencies that it needs to make in order to protect spending on training programmes and other front-line services. Those are the top-line facts.
I turn now to the voluntary severance scheme. The scheme was announced by SDS on 16 December and will run until 28 January next year. The aim is to secure up to 125 full-time equivalent leavers from the organisation. That number will come from an existing base of nearly 1,400 full-time equivalent staff. Staff whose applications to leave are accepted will depart the organisation by 31 March next year. Final decisions on applications made under the scheme will be ratified by a sub-committee of Skills Development Scotland’s main board.
To summarise: the scheme seeks up to 125 full-time equivalent staff from nearly 1,400, there will be no compulsory redundancies and there are assurances from the board that service delivery will not be compromised. In fact, it is quite the opposite, as the scheme aims to identify the savings necessary to protect front-line services with SDS continuing its commitment to make available 34,500 training opportunities.
As I said earlier, we regret the loss of jobs that will result, but this is the sort of tough decision that SDS simply has to take if it is to protect service provision from the full force of the cuts that have been levelled at the Scottish Government. The scheme is essentially about creating a yet more efficient organisation and getting scarce resources to where they are most needed: the front line.
In a moment, I will say something about the volume and effect of SDS’s skills interventions, but first I will address efficiency. Skills Development Scotland has a strong track record in getting maximum value out of public money since it was set up in 2008. It has achieved £20 million of efficiency savings over the past two years and is on track to deliver its target of a further £19 million this year. For example, Skills Development Scotland and Scottish Enterprise have developed a shared service contract for information technology provision and expect it to deliver efficiencies of around £20 million over five years.
What about service delivery? What is Skills Development Scotland’s track record on that and why is it so important that we protect it? The interventions that Skills Development Scotland makes are delivering. They are improving outcomes for the unemployed, those who want to improve their skills and young people who face a particular threat from the recession and the Westminster cuts. On that too, let us look at the facts.
Skills Development Scotland has demonstrated its ability successfully to direct resources to support people into work, from work to work and to progress in work. It undertakes a number of functions, including, as members know: an all-age careers service that operates the length and breadth of Scotland; support for young people leaving school and college; a range of national training programmes, including modern apprenticeships, training for work and get ready for work; the individual learning account 200 programme; and the co-ordination of our partnership action for continuing employment—PACE—national redundancy service.
SDS plays a key role in our efforts to tackle youth unemployment, which is a continuing priority for the Government. Working with local authorities and others, it helps to ensure that all young people have the opportunity to stay in learning after 16, as that is the best means of improving their employability. Our priority is to ensure that every young person leaving school, college or university has the support that they need for as long as they need it to move into long-term sustainable employment. SDS will help us to deliver that.
This year, a record proportion of school leavers—nearly 87 per cent—achieved positive destinations. That is a remarkable achievement in such difficult times. Much of that success is down to SDS’s delivery of training. It delivered more than 20,000 modern apprenticeships in 2009-10, exceeding what everybody agreed was a testing target of 18,500 MA places. In doing so, it nearly doubled the previous year’s number of MAs. That demonstrates the modern apprenticeship programme’s role in delivering a strong economic recovery by supporting individuals and employers in Scotland and ensuring that Scotland has the skills that it needs for future growth and success. This year, SDS is again making available 20,000 MA opportunities. It has also extended its investment in the adopt-an-apprentice and safeguard-an-apprentice schemes until March 2011 to give every apprentice the best possible chance of completing their apprenticeship.
Next year—unaffected, as I have made clear, by the voluntary severance scheme—the Government will provide funds to support 34,500 training places. We plan to work with Skills Development Scotland to finalise the volumes for individual training programmes over the coming weeks. That represents the same number of places as Skills Development Scotland’s budget supported in 2010-11, which is an enormous achievement, given the scale of the constraint that we face on public spending.
Since the start of the recession, our national redundancy programme, PACE, has been significantly expanded through Skills Development Scotland and the service that it provides has been considerably enhanced in response to weakening labour market conditions. The First Minister recently announced a £300,000 package of skills and training support for Moray in response to the uncertainty that was created by the Ministry of Defence’s strategic defence and security review. Following the SDSR announcement, Skills Development Scotland moved quickly to increase its operational capacity in the area and has made it clear that its role is to lead a partnership initiative to assist people whose jobs will be affected. As part of the new funding package, Skills Development Scotland will provide additional training opportunities across the Moray community to supplement the support services already activated through PACE, but, of course, SDS has to make savings somewhere if it is to provide that level of service in Moray and throughout Scotland. That is at the very heart of the voluntary severance arrangements. Skills Development Scotland’s scheme will help to create a yet more efficient organisation, ensuring that scarce funds go where they are needed, to help people throughout Scotland.
The minister will now take questions on the issues raised in her statement. We have around 20 minutes for questions.
I thank the minister for the advance copy of her statement and, of course, welcome her to her new post.
According to the minister, this is all the fault of the UK Government—it is not.
Members: Oh.
Order.
Oh, dear. Some people seem to have got out of the wrong side of bed this morning.
At least we got out of bed.
Order.
Thank you, Presiding Officer.
The decision to cut 10 per cent from Skills Development Scotland’s budget is the choice of the minister’s colleague Mr Swinney. It may be asked why SDS has had to take a bigger hit than other departments. She says that SDS has a
“strong track record in getting maximum value out of public money”.
Oh, really. That will be why thousands of pounds were wasted on an abortive rebranding exercise, on hiring hypnotists and on letting the chief executive make a vanity video to address his staff. Strangely, there is no mention of the job cuts on the SDS website.
At the weekend, an anonymous Government spokesperson said that it was “ridiculous” that Labour was demanding a statement on this issue. What is ridiculous is that, at a time of record youth unemployment, the SNP’s budget decision means that SDS is cutting 9 per cent of its workforce, when it is a body that is supposed to be helping employers to create training places and Scotland’s young people to find a training place or an apprenticeship. The minister says that the scheme is voluntary and she guarantees that there will be “no negative impact” on service delivery. That is very brave.
How will those who volunteer be selected to avoid affecting front-line services? As it is clear that these job cuts will not save the £20 million required, which other services will be axed to make up the shortfall?
I thank Mr Whitton for his warm words of welcome. I would, however, have expected that a man of Mr Whitton’s vintage would have been far more charming and far less churlish. I am also surprised that Mr Whitton has leaped to his feet to defend a Tory Government in London.
I am interested to know what choices Mr Whitton would make. The voluntary severance scheme will save SDS £4.8 million per annum, which equates to 2,300 apprenticeships. Would Mr Whitton rather that we lose 2,300 apprenticeships? As he well knows, SDS has a track record of meeting all its targets, in terms of both providing training programmes and achieving efficiencies. The good news is that this Government and SDS will continue to provide 34,500 training programmes, which are necessary in these difficult economic times.
SDS will select those who apply for the voluntary redundancy scheme. There will be no element of compulsion. In fact, as of last night, there were 275 notes of interest for the up to 125 positions that will go.
I, too, welcome Angela Constance to her role and thank her for an advance copy of her statement.
She said that there would be “no negative impact” on service delivery. That will clearly be a challenge, when 9 per cent of the workforce will be gone within three months. She made at least two headline commitments, to 34,500 training opportunities and 20,000 modern apprenticeships. What other headline commitments on skills will definitely be met? With that information, we will be able to judge in future whether there has been a negative impact on the front line.
As I said to Mr Whitton, selecting which staff leave the organisation is an operational matter for SDS, which can ensure that operational capacity is not affected. I am sure that SDS will choose carefully the staff who are permitted to leave the organisation. I am glad that Mr Brown recognises that I have given an unequivocal assurance to the Parliament that 34,500 training places will be provided. I will continue to discuss the precise detail of that in the very near future with SDS. Mr Brown touched on Mr Whitton’s point that this Government is making a brave decision. SDS has a great track record, of which we should be proud. Although it is Christmas, and a bit of bah-humbug is going around, we all should, of course, have the confidence and good grace to recognise that, where SDS has had a success, we should celebrate it. It is that success that is giving our young people a leg up on the ladder of life; SDS is supporting them in taking their first tentative steps into adult life and the workplace.
My apologies to the chamber for being slightly late. I welcome the minister to her position and look forward to working with her on the shared agenda of upskilling Scotland and promoting recovery.
Obviously, considerable funds were invested in the setting up of Skills Development Scotland, with something approaching £20 million being invested only a couple of years ago. We have already had a number of changes and job losses and know now that more job losses are coming. If there is to be, to quote the minister, “no negative impact” on service delivery, does that mean that Skills Development Scotland, formed so recently, was overstaffed? If so, why was that workforce planning issue not tackled at the time of the merger?
In her letter to the Education, Lifelong Learning and Culture Committee, the minister talks of the 125 staff posts being selectively reduced. I hear what she said about that being an agency decision, but how will it be done? How can this new minister ensure that front-line services are not affected?
Is the Liberal Democrat party’s concern that there are too few or too many staff in SDS? I am not sure.
They want to abolish it.
Order.
I take a very close interest in the comments that the Liberal Democrats have made over the week. Indeed, I am aware that Mr Purvis would like to abolish Skills Development Scotland. Is he proposing 1,400 redundancies? That would certainly be a matter of concern to me.
Despite being in office for only a week, I am very aware that my officials in the Scottish Government remain in very close contact with Skills Development Scotland. They worked very hard to seek assurances from Skills Development Scotland that there would be no adverse impact on the provision of training places for our young people. I assure Ms Smith that I will continue to work closely with my officials and Skills Development Scotland to ensure that there is no adverse impact on the young people whom we are trying to protect from the worst ravages of a Con-Dem UK Government that is introducing slash-and-burn policies left, right and centre. I would be interested to know what Ms Smith’s choice would be. Would it be the £4.8 million savings that we are making from our service programme, or is she suggesting that we get rid of 2,300 modern apprenticeships, 130 police officers or 129 junior doctors? The choice is hers.
We come to open questions. If questions and answers are fairly brief, we will manage to get everyone in.
The minister has mentioned and is well aware of the importance of apprenticeships to the life chances of Scotland’s young people, to economic recovery in Scotland and to addressing the skills gap. In case Mr Whitton missed it, will the minister tell us how many apprenticeship places would be equivalent to the £4.8 million cost of not going ahead with the voluntary severance scheme and how that would fill the important skills gaps for young people in Scotland?
The member is correct to highlight the fact that not going ahead with the voluntary severance scheme would be the equivalent of losing 2,300 modern apprenticeship places. I grew up in West Lothian in the 1980s, when male unemployment ran at one in four. My father was one of the statistics. There is nothing dearer to me than ensuring that, despite the economic crisis in which we find ourselves, our young people and our workforce have every opportunity to secure their future and to fulfil their potential.
I warmly welcome the new minister to her post. The minister will be well aware that the community in Moray is facing devastating economic problems with the closure of RAF Kinloss and the possible demise of RAF Lossiemouth. Will she reassure me, in a spirit of Christmas generosity, that there will be no diminution of service by SDS in Moray?
I thank Mr Stewart for the sentiment that he expressed in his question. He is quite right to fight for his local area. The Government shares his concerns about the Moray economy. As I said in my statement, the First Minister recently announced a £300,000 package of support for the area in response to the Ministry of Defence’s actions. I look forward to working with Mr Stewart and other representatives of the Moray area to ensure that everything is done to support the Moray community at this difficult time.
Given the clear commitments that the minister has given in relation to service delivery, can she tell us whether there is scope for SDS to go further on efficiencies, or would any future reductions in SDS’s budget lead to service reductions?
The issues that Mr Brownlee raises are essentially operational matters. I draw his attention to the fact that SDS has already met historical targets, both for delivering training places and for efficiency. It is important to note that last year the target for modern apprenticeships was 1,850—a challenging target by anyone’s account, but one that was nonetheless exceeded. I will do my best to ensure that targets are met. I have given an unequivocal guarantee to the Parliament. Of course, if there is scope to go beyond targets, we will do our best to grasp that opportunity.
I, too, welcome the minister to her post. I have always enjoyed her sincere contributions from the back benches, and I wish her well in her post.
She stated accurately that the Liberal Democrats would have preferred to do without SDS and its £20 million set-up costs, with colleges having a stronger role. Can she confirm that the Scottish Government is reducing the revenue budget by 6 per cent over the next four years but reducing the skills budget by 10 per cent in one year? She said that there are 125 places in the voluntary severance scheme and that there have been 275 expressions of interest. Why do 150 more people than are able to leave the agency want to leave it?
Oh, Mr Purvis. I am beginning to wonder whether Mr Purvis also had his Christmas party last night.
The organisation will lose 125 full-time equivalent posts. There have been 275 notes of interest, which does not equate to 275 people needing or wanting to leave at the organisation’s request. For personal reasons of their own—which I could not possibly divulge—275 individuals have submitted notes of interest. With respect, I think that Mr Purvis is blistering the issue.
I highlight to the Parliament the good job that the SDS does, which is acknowledged even by the Lib Dem Scottish Borders Council—councillors who I am sure are well known to Mr Purvis. They have said:
“The concept of combining the various agencies involved in careers development, learning and skills development has been helpful, as multiple agendas have been replaced by a single strategy.”
Mr Purvis will be well aware of the cuts that are coming, courtesy of the Con-Dem Government in London. He may well aid and abet a Tory Government, but that is not my role or function.
The minister says that there will be no negative impact on the delivery of training places, and we should all welcome that. Will the delivery of training places and the workings of SDS be monitored during and after the voluntary severance scheme?
Ms White raises some practical points, and I am happy to give her all the assurance that she requires that we will be monitoring the situation very carefully.
I, too, welcome the minister to her new post. How many staff based in the Highlands and Islands does she expect to be offered voluntary redundancy, and what proportion is that of the staff who are based there?
I do not know the answer to that question, but I will endeavour to find out the information for Ms Grant. We are still at a very early stage and no one, as yet, has been selected for the voluntary severance programme. The programme was just announced on 16 December, and we have 275 notes of interest. It is an operational matter for SDS, but I would have thought that it will give careful consideration to the geographical needs of various communities the length and breadth of Scotland.
I, too, welcome Angela Constance to her post. Following the previous question, which related to geography, and on the subject of the skills range, will she ensure that the 35,000 training places include those that are necessary for the economy? I speak from my engineering background, in particular, and I am concerned that, as the recession eventually goes away, we have the right skills.
Mr Don makes a pragmatic point. We need a range of training and skills opportunities that will equip Scotland for economic recovery, and we have to consider the needs of every sector that serves this country well.
That concludes the statement and questions on Skills Development Scotland.
On a point of order, Presiding Officer. Would you reflect, in terms of the procedures of the Parliament, on the process that got us here this morning? A demand for an emergency statement was made by Mr Whitton last Friday morning, which was backed by the Liberal Democrats on Monday, as I understand it. At the start of the meeting this morning, there were four members of the Labour Party and two Liberal Democrats here. I would have thought that you would like to reflect on that abuse of process.
The fact that there is a statement and questions this morning is purely a matter for the Parliamentary Bureau. Whether or not members choose to attend is a matter for them.