The next item of business is a debate on motion S6M-19027, in the name of Ben Macpherson, on the Tertiary Education and Training (Funding and Governance) (Scotland) Bill at stage 1.
14:57
I am pleased to open today’s debate on the Tertiary Education and Training (Funding and Governance) (Scotland) Bill as my first contribution to parliamentary business in my new role as Minister for Higher and Further Education. I thank colleagues for their kind welcomes as I move into the brief. I pay tribute to my predecessor Graeme Dey for his extensive work in the post, including on the bill.
I also thank the Education, Children and Young People Committee for its stage 1 report, and all the individuals and organisations who contributed evidence. Their input has been invaluable.
In that constructive spirit, I emphasise that I am highly committed to undertaking my responsibilities as minister with a very constructive approach, across the Parliament and across the country. In recent days I have been pleased to meet a number of MSP colleagues and some key stakeholders to discuss the bill, including those representing Skills Development Scotland and, from the business community, representatives of the Scottish Chambers of Commerce.
It is evident to me, in picking up the task on the bill, that there is strong agreement that we need to make changes in the skills landscape, including structurally. That message came through loud and clear in the evidence that the committee heard, with 80 per cent of people who responded to the bill consultation choosing reform over business as usual. Indeed, the committee’s report makes it clear that the way that we currently run and deliver apprenticeships needs to change if we are to meet the needs of our dynamic economy, secure investment, achieve net zero, enable our learners to fulfil their potential and make the changes that are required as we commence the second quarter of the 21st century.
I welcome Ben Macpherson to his new role. When he met Dr Liz Cameron from the Scottish Chambers of Commerce, did she express her strong opposition to the bill in the way that she expressed it to me? What did the minister say to her in response, and did he convince her?
My engagement with the Chambers of Commerce and with Dr Liz Cameron has been extensive over my years as an MSP, and I respect her and the organisation very much. It was great to meet her at such an early juncture. I am keen to listen to the business community’s thoughts, reflections and ideas, not just on the bill but on the skills landscape. I note that the Federation of Small Businesses has come out in support of the bill, so there are different approaches to the legislation among the business community. However, it is clear across the business community that we need to make changes, and I want to work collaboratively with it in the weeks and months ahead. I will meet Liz Cameron again shortly.
As I say, the understanding of why we need to change is largely agreed. The considerations about how to do so is where there are differing opinions. I respect those differing opinions, and I have appreciated listening to the reflections on the issue in recent days. I also look forward to hearing from MSP colleagues today.
I want to make it clear at the beginning, as I take up my tenure in this role, that I will not wait to pass and implement the bill before seeking to take initiatives to drive forward the skills agenda, because we do not have the time or the luxury of standing still. For example, I recognise the strong demand for the expansion of graduate apprenticeships, and the need to make the development process faster and simpler. The Government will therefore work at pace to implement changes to how frameworks are developed, from assessing demand to shaping content. That work will start imminently, in close collaboration with universities and employers. The bill will ensure that the streamlined process is effectively overseen by the SFC, which will be tasked with leading it. That is a good example of how and why structural changes must be considered as part of the reform of the skills agenda.
Does the minister accept that Universities Scotland and others have said that those changes could happen now, and that there is money associated with the bill that could be better used to deliver those improvements, support universities to deliver those graduate apprenticeships and deliver opportunities for the young people who access them?
I was pleased to speak with Universities Scotland yesterday, and I was pleased to see the support for the bill that it issued in advance of today’s debate.
Will the member give way?
I need to make some progress, but thank you.
At its core, the bill intends to make impactful changes to ensure that funding goes directly to where it matters most, supporting the skills, services and innovation that our economy needs to thrive. The bill is, of course, founded on evidence from James Withers’s review, and from Audit Scotland’s 2022 report. The Withers review was informed by extensive engagement with stakeholders, and it made a compelling case for change. That case for change has directly shaped the bill.
As a Government, we have kept engagement at the heart of developing the bill and, as I say, I intend to continue that proactively. Over the summer, ministers were out and about speaking to partners about the bill and how it can be shaped by those who know the system best, including a range of trade union organisations, business organisations and others who work in the economy. We have listened to their views on how we can make the most of this opportunity, and I am grateful that two of those organisations—the Federation of Small Businesses and the Scottish Training Federation—have come out in support of the bill, alongside Universities Scotland, which I mentioned, and Colleges Scotland.
The SFC has also undertaken its own extensive engagement on the bill, and its role in the consideration of the bill is obviously key. I want to be clear that the changes that are proposed in the bill would simplify the funding landscape and everything that would flow from that. The changes would require the SFC to evolve significantly in its structure, culture and role. The bill would not simply enable a merging of responsibilities. It would be a fundamental redesign of how we fund and govern tertiary education and training in Scotland. That enhanced body would lead to a unified, integrated sector that is better aligned to the needs of learners, employers and the economy, and a key part of that will be building strong, lasting partnerships with employers.
Apprenticeships must continue to reflect the needs of business and the wider economy, with significant input from, and collaboration with, business. It is important that apprenticeships are made more accessible to young people with disabilities and those facing other barriers. The bill also proposes putting apprenticeships on a statutory footing, which I believe is significant.
I want to address concerns that have been expressed about the risk of diluting apprenticeship funding. Let me be clear: we are absolutely committed to continuing funding for all types of apprenticeships. We have given careful thought to protecting the apprenticeship budget. Funding provided to the SFC under the bill would be used by the SFC only for that purpose. Funding allocations for further and higher education and apprenticeships are set in the Scottish budget process, but we will ensure that the funding priorities are clear.
In the evidence-taking process for the bill, we heard concerns about foundation apprenticeships. I reassure the Parliament that we greatly value the opportunities that they provide. The bill makes provision for work-based learning, which largely covers what is currently delivered through foundation apprenticeships. I am keen to work with the Parliament and stakeholders to address any genuine concerns about how those provisions will work in practice.
I appreciate that the committee raised reasonable and important concerns about costs in the financial memorandum, which I want to address directly. We have worked closely with SDS and the SFC to refine the figures and, with the latest information, I am pleased to emphasise that the upper cost estimate has reduced by around a third to around £22 million. Work is on-going to finalise costs, but I hope that the additional financial detail in the letter from my predecessor offers reassurance. I remain committed to keeping the Parliament updated as the analysis progresses.
Will the minister give way?
The minister should be starting to conclude his remarks.
We want to consider what improvements can be made to the range of different models for vocational pathways so that we can build on good practice and protect a variety of approaches, while making improvements where we can. In my closing remarks, I will touch on SDS staff, trade union engagement, sector sustainability, governance and widening access.
In conclusion, the bill has the potential to be an important step towards simplifying and modernising the funding landscape for tertiary education funding in Scotland.
I move,
That the Parliament agrees to the general principles of the Tertiary Education and Training (Funding and Governance) (Scotland) Bill.
I call Douglas Ross to speak on behalf of the Education, Children and Young People Committee.
15:07
I am grateful for the opportunity to speak on behalf of the Education, Children and Young People Committee about our scrutiny of the Tertiary Education and Training (Funding and Governance) (Scotland) Bill. I take the opportunity to warmly welcome Ben Macpherson to his new ministerial role, and I thank Graeme Dey for his many appearances before the committee and his input to our work.
It is quite an introduction to a new brief for the minister to have to lead a stage 1 debate during his first week. He will also be appearing before our committee next Wednesday. I assure him that he will receive the same warm welcome that we give to all his colleagues when they come to the committee. [Laughter.] That was not a joke—it was very sincere.
I thank everyone who provided evidence, either in person or by responding to our call for views, as well as those who gave evidence to the Economy and Fair Work Committee on skills delivery, which informed our report. Thanks, too, go to my committee colleagues for their work on the bill so far and to our team of clerks and researchers, as well as to members of the Finance and Public Administration Committee and of the Delegated Powers and Law Reform Committee for their work.
As the minister has outlined, the Scottish Government’s main objectives for the bill are to consolidate funding for the provision of apprenticeships and national training programmes; improve the operation and governance of the Scottish Funding Council; and designate private providers for student support.
On the consolidation of funding, the Education, Children and Young People Committee could see the benefit in streamlining funding to remove duplication and reduce bureaucracy. However, we repeatedly heard concerns about a potential reduction in the number of apprenticeships at a time when demand for many apprenticeships outstrips supply. Several contributors also pointed to a lack of growth in the SFC-administered graduate apprenticeship scheme in recent years. In response, we heard from the then minister, Graeme Dey, that apprenticeship funding will continue to be prioritised in the future, which the current minister has reiterated today. However, the committee urged the Scottish Government to provide more detail on that to the sector, in order to provide the reassurance that is evidently needed.
The minister stressed that the current system needs to be improved in terms of the agility of modern apprenticeships, the graduate apprenticeship model and the consistency of the vocational education offer across the country. In his response to our report, Graeme Dey stated that the bill will enable
“an increase in the range, quality and quantity of apprenticeships and work-based learning”.
He said that it is the Scottish Government’s intention to expand the graduate apprenticeship offer to
“cover a wider range of sectors and occupations”.
It is welcome that that work will progress immediately, and the committee looks forward to being kept informed of that progress. However, it would be helpful to hear more today from the new minister about modern apprenticeships, including the plans to develop a new delivery model and how that will be used to expand their availability.
The committee heard concerns that the Scottish Funding Council does not have expertise in modern apprenticeships or working relationships with employers and industry. In our report, we emphasised our belief that
“the voice of employers in Scotland’s skills system”
must be
“at least maintained if not strengthened by this Bill”.
It will be critical for the Scottish Funding Council to have the necessary skills and knowledge to cover not only its current responsibilities, which we all acknowledge are extensive, vast and under significant pressure, but those that will be added as a result of the SFC’s new functions should the bill progress.
We called for employers to be represented on the council and for there to be employer involvement in the SFC’s apprenticeship committee, which the bill will establish. We therefore welcome Graeme Dey’s determination to ensure that the employer voice is enhanced by the bill. In his response to our report, he stated:
“The SFC is developing proposals for the potential role, remit and membership of the apprenticeship committee”.
It is disappointing that, ahead of today’s debate, we did not have more information about how the apprenticeship committee will work, but I know that there is a commitment to provide that detail ahead of stage 2, which the committee and, I am sure, all MSPs will appreciate.
One of the most profound concerns for the committee is the lack of certainty about the costs involved in the bill, particularly given how significant they could be. I note that the minister took a number of interventions, but there was only a very short section in his speech about the main issue that the committee is particularly troubled by, so I think that we would appreciate more information. There is a lack of clarity about how many staff members it is proposed to transfer from Skills Development Scotland to the Scottish Funding Council; what the Transfer of Undertakings (Protection of Employment) Regulations—TUPE—implications would be; and, critically, what pension arrangements would be put in place.
The committee believes that the Scottish Government should have and could have done more work to accurately estimate the costs in advance of the bill’s introduction, and we believe that it was imperative that members had accurate costings for the bill ahead of today’s debate. I know that work has been done on that. The fact that the minister has said that the costs have been reduced by a third raises serious questions about how the initial costs were calculated and presented in the financial memorandum. The committee could not get to the bottom of that during our deliberations, either with our witnesses or with the minister and his officials.
I am not sure that we, as a Parliament, should be celebrating a massive reduction in the costs, because that clearly means that there was a significant error in the original cost and in the financial memorandum that was presented alongside the bill. It is hoped that the Government will reflect on that strongly because, as we work to determine future legislation in the Parliament, it must be with the most accurate financial information that is available.
I understand that there were significant issues with discussions and collaboration between Scottish Funding Council and Skills Development Scotland officials, but it was clear to committee members very early on that there was an issue. I believe that it should also have been clear to ministers, the Scottish Government and Government officials, and that work could have started on that at a far earlier stage.
We note the information that Graeme Dey provided in his response to our report—reiterated today by the new minister—that the range of potential costs has been substantially reduced, but the costs remain significant. The Parliament needs more detail on that as soon as possible, so I hope that the minister does not think that the response that the committee has received is the end of the matter. It is welcome progress, but we need more detail.
Because of the lack of detail about the scale of the potential costs that are involved in the bill as introduced, the committee was unable to make a judgment as to the cost benefit of making the proposed changes that are outlined in the bill. As such, we as a committee took the relatively unusual step, in relation to a Government bill, of not making a recommendation to the Parliament on the general principles and of reserving our position at this point.
I am sure and certain that committee members will listen intently and with great interest to the debate as we hear how the bill may or may not progress. If it progresses, we will seek more information from the Government as we move into stages 2 and 3.
I call on Miles Briggs to open on behalf of the Scottish Conservatives.
15:15
I welcome the minister to his role, as I did on Tuesday.
I also thank Graeme Dey for his constructive work on the bill both cross party and with the Education, Children and Young People Committee, and I wish him well in his new role. I also thank the organisations that have provided useful briefings ahead of today’s debate.
On Monday, I visited Leith academy. I know that the minister, as the constituency member, is a regular visitor, too. I enjoyed a tour of the school and a very constructive conversation with the headteacher, Mike Irving. I believe that the cabinet secretary is also visiting the school next week—
This morning.
Oh—this morning.
The work that the school is undertaking with young people in that part of the capital—especially those with attendance challenges—is exemplary, and I was really impressed with the school’s focus both on delivering positive outcomes and on making sure that we work to realise our young people’s potential.
That is why Scottish Conservatives want a radical new approach, with the development of a hybrid education—we want to give young people the opportunity to access college and take up an apprenticeship earlier in their learning careers. That has been missed from this bill, and I hope that we can pursue it at stage 2.
When Scottish ministers introduced the bill, we on the Conservative benches were open to the reasons and rationale behind it. It is worth reflecting on why the Scottish Government decided to legislate in this area. The independent review of the skills delivery landscape by James Withers in 2023 highlighted the need to focus on a new vision to meet the challenges of future needs. Principally, we need flexibility to be delivered across the post-school learning system in order to achieve genuine agility and to ensure that learners at all stages of life are accommodated.
Members from across the chamber will be hearing about or seeing the opportunities that apprenticeship schemes are delivering every week—they are critical to the skills that our economy needs now and in the future. I believe that they must be protected and nurtured, and not only so that we can grow and deliver more opportunities. We must ensure that we continue to fund those that are being delivered now.
Often, the key to success in the delivery of apprenticeships has been our fantastic college sector. Indeed, in his report, James Withers advocated
“a colleges and universities first approach”,
and I agree that there are opportunities to do more with the college sector in order to deliver them.
However, the sector itself has raised some concerns. For example, for every pound that leaves the Scottish Government, only 40 to 50 per cent is received by the colleges that undertake to provide the training for apprenticeship contracts in certain key sectors of the Scottish economy. As the committee heard, there is, in between the Scottish Government and the college, a managing agent that takes significant amounts of that funding.
I welcome the opportunity to streamline, and bring more money into, the college sector, and to deliver apprenticeships, even within the existing overall education and skills budget.
Will the member take an intervention?
Yes, very briefly.
Although some sectors might well value the delivery of the skills system through alternative provision, specifically private provision, is there not also a risk that they will see a reduction in the flexibility in what skills funding delivers, if it is given to the SFC?
Yes, and I will come on to that. That is, as the committee highlighted, one of the main concerns.
According to Audit Scotland’s report “Scotland’s colleges 2024”, colleges face increasing financial challenges and a lack of clarity on their role from ministers, which hinders reform and sustainability. Funding has decreased in real terms since 2021, forcing colleges to cut costs and staff. It has been well documented that, under this Scottish Government, we have seen the loss of more than 100,000 college places.
I have met representatives from colleges across Scotland, and they expressed real concern about the limits that college credits are putting on many institutions. Indeed, the waiting lists for people to get on to courses often mirror directly the skills shortages that face our local and national economies.
Therefore, I believe that we need a review of college credits and a more agile delivery of credits for courses that are clearly needed in our economy today, net zero being one of them. Many meetings are taking place in the Highlands, for example, to discuss that very issue. Colleges Scotland states in its briefing that
“there is nothing else on the horizon which would bring significant change to the apprenticeship landscape in particular: this needs reform and colleges can support more people to gain an apprenticeship”.
During the committee’s evidence taking, it felt as though the Scottish Government did not have a vision of where it wanted apprenticeships in our country to go. I feel that the bill has not provided a route map for a genuine transformation of the delivery of apprenticeships. Fundamentally, the Government has not answered the question of what is wrong with the system; after all, we are currently delivering 25,000 apprenticeships when, last year, the demand was for between 35,000 and 40,000, according to the number registered.
The potential loss of the apprenticeship advisory board, as Douglas Ross mentioned, would have represented a backwards step, so I welcome some of the changes that the Government has outlined in that regard. However, there is nothing in the bill that focuses on the skills shortages that our national and local economies face. There is also nothing about targets that will help achieve the skills, the jobs and, ultimately, the economic growth that we hope that they will drive.
We must acknowledge the significant and important contribution of private training providers, particularly in the delivery of certification and registration services. Universities Scotland stated in its briefing that
“The current operation of the framework approach for new GAs effectively prevents universities from responding”
as well. I welcome what the minister has outlined, and I am sure that he will provide more details on graduate apprenticeships to members.
I agree with the concerns expressed by the Confederation of British Industry Scotland and the Scottish Chambers of Commerce, which were mentioned by Willie Rennie, that the bill has the potential to dismantle what already works and leaves employers in the dark in relation to the future of apprenticeships and the wider workforce system.
As Scottish Conservatives believe that the bill requires significant amendment, we will not be supporting it at decision time this evening. As drafted, it is problematic and poorly costed, and I believe that it represents a missed opportunity to take forward a radical and ambitious new approach to skills in Scotland.
That said, we believe that there is an opportunity here for the new minister, and I hope that he will genuinely work with MSPs from across the chamber to try to fix the bill. He will find an open door from Scottish Conservatives if he wants to do so, but we cannot support the bill at decision time.
I call Pam Duncan-Glancy to open on behalf of Scottish Labour.
15:22
We have a proud history of skills in Scotland. Our people are among the most talented in the world, and we punch above our weight when it comes to our contribution to technology, science, healthcare and much more. That is down to the hard work of our people, our colleges, our universities, our training providers and our employers, which work their socks off day in and day out to ensure that we are a nation of innovators, pioneers and leaders. The truth is that they are doing that against the tide, because the Government has given colleges and universities—which are the real engines of skills and the anchors in their communities—a “burning platform”.
The Government has failed to connect education to careers or to match demand for apprenticeships with supply, and it has presided over huge skills gaps, while tens of thousands of young people are not in education, training or employment. Colleges are closing campuses, universities are shedding staff and courses, and employers cannot see where their apprenticeship levy funds go when it comes to Scotland. That is why it is being called a “burning platform”.
As I outlined in my opening remarks, there is a shared understanding that, across the chamber, we need to make improvements throughout the country. Does the member agree—I also say this in response to Miles Briggs—that the current situation with funding is very complicated and that we can achieve better outcomes by bringing provision together, creating coherence and collaborating to design things properly, using industry as well as providers?
I welcome the minister’s intervention. Forgive me, but I should have started by welcoming him to his place and congratulating him again on his new role.
Of course we would agree that making the system much easier, more flexible and more responsive is crucial. However, as many people who gave evidence to the committee have told us, we do not need lengthy legislation that restructures organisations and comes with a costly price tag of tens of millions of pounds in order to do that. That money could be better spent on the front line, and on delivering opportunity for all, now.
More than half of Scottish businesses report skills shortages. Only one in six employers in Scotland take on apprentices and many say that the apprenticeships do not feel relevant in their sector or that they are not available for their industry. Apprenticeship completion rates are not what they need to be, disabled people are not accessing them equally and the gender imbalance persists.
Meanwhile, the pipeline into degree-level work and integrated learning is far too small; there were just over 1,000 graduate apprenticeships in Scotland in 2021-22, compared with more than 43,000 degree-level apprenticeships elsewhere in the United Kingdom.
Scotland can and must do better. It is clear that the status quo is not working. Those in the sector are telling us plainly that the system is strained and that change is needed.
The bill before us does not meet the moment. It moves responsibilities between public bodies without a convincing plan to expand capacity. There is no plan for school or employer pathways to be improved. It delivers no additional training places and it will not help to deal with today’s pressures in classrooms, workshops and labs.
If we get this wrong, projects slow, costs rise and opportunity narrows. If we get it right, we can unlock growth, wages and living standards across Scotland. That is the choice that is in front of us today. I will set out where Scottish Labour stands on it.
We support the ambition to make the system more responsive. We share the goal of a coherent, demand-led approach that puts learners and employers first. However, we cannot support a lengthy, costly rejig of quangos over delivery of opportunity now. The Tertiary Education and Training (Funding and Governance) (Scotland) Bill is an organisational restructure that is pulling resource to the centre at a time when we should be using every pound and every ounce of focus for delivery on the ground in the regions of Scotland.
[Made a request to intervene.]
Presiding Officer, do I have time to take an intervention?
I can give you a bit of time back.
It would be helpful for me at this juncture to understand whether the parties that are opposing the bill today have a determination to work with the proposed legislation. Does the Labour Party think that there needs to be structural change in this area, or does it believe that we do not need to legislate on it? I would be grateful for clarity on that.
We are, of course, always happy to work with members across the chamber during the progress of any bill and to improve any piece of legislation. We will not support this bill at stage 1, as I will come to describe. However, if the bill passes, of course we will be prepared to work with others to look at ways to make it as good as it can possibly be, as we always will try to do.
Our approach to skills education starts with three simple principles. First, it should be industry led, delivered in partnership with education providers, and employers must have a genuine voice in its design and provision so that our education system matches people with the jobs of today and tomorrow. Yet, as has been mentioned, the Scottish apprenticeship advisory board, whose work has been a well-respected way of doing that, may or may not be wound down—we have no clarity on that. We also have no clarity on what its replacement could be, or a coherent plan to address key public sector skills gaps, such as those in the national health service or in education. Many of those sectors rely on colleges and universities being supported to deliver the skills that are needed in those sectors. We have to reform the system now.
Secondly, the system must be individually focused, flexible and dynamic. The bill will not make it so. Learners of all ages need flexible routes that value technical and vocational learning as much as academic pathways. That means having taster apprenticeships, to improve matching and to reduce dropout rates; teaching Scottish industry standards in the senior phase, so that pupils can see how subject choices connect to real jobs; and offering a digital skills passport, so that employers and other people can recognise skills consistently.
Thirdly, our skills system must deliver opportunity. To do that, we must expand, widen access to and speed up approvals for new apprenticeship frameworks. That will include empowering the speedy development of more apprenticeships, including at graduate level. Students want to earn and learn. Apprenticeships could be a faster route to solving our skills gaps and universities are ready to innovate with them.
All that would help now, and we could do it all now without a lengthy and costly rejig of quangos. We could be using this time to get people into jobs, which would give employers access to the skills that they need and give colleges and universities the money that could save them.
Colleagues, I do not doubt the intent behind consolidation, but Parliament has heard evidence that raises concerns about cost, capacity and risk during the transition. Unison said that the proposals are “fraught with risk”, and Unite the Union and the Public and Commercial Services Union said that they were not consulted properly. All that led the Education, Children and Young People Committee to the conclusion that it could not recommend the bill.
We need change now—urgent, practical, front-line change. The Tertiary Education and Training (Funding and Governance) (Scotland) Bill does not do that. It risks pooling resource and focusing on machinery, not delivery. Scottish Labour cannot offer our support for something that will not deliver front-line, tangible change now, especially when what is at stake is whether we will widen opportunity, close skills gaps and grow Scotland’s economy. Those aims are too important to divert time, energy and action from.
15:29
As colleagues have done, I congratulate the minister on his appointment. Ben Macpherson and I worked together on the Education, Children and Young People Committee not too long ago, and I am looking forward to working with him in his new position. As colleagues have also done, I thank Graeme Dey. I am sure that he was looking forward to the challenge of getting the Tertiary Education and Training (Funding and Governance) (Scotland) Bill through the Parliament, but he has escaped that and now has the far more interesting challenge of figuring out how the Parliament can get through 29 bills in the 66 sitting days that are left before dissolution. I do not envy him in that regard.
I make it clear from the outset that the Scottish Greens will support the bill at stage 1, primarily because we are excited about the opportunities that stage 2 presents. Colleagues will appreciate that I love a stage 2 process—I enjoy testing the patience of conveners as I try to maximise the scope of a bill and the potential for it to be amended.
However, I want to repeat the reasons for the bill’s introduction. There is misalignment and—this has not been touched on yet in the debate—a dysfunctional relationship between the Scottish Funding Council and Skills Development Scotland. In part, the bill represents an attempt to address a problem of culture through the statute books. That is difficult to do—legislating on culture is not always a good idea—but we have just been through a not dissimilar process with the Education (Scotland) Bill, to address issues of culture and relationships at the Scottish Qualifications Authority.
I am grateful to Ross Greer for giving way so early in his contribution. He is right on the point about culture, but would he acknowledge the points that Audit Scotland made in its 2022 report about the capacity of the Scottish Funding Council and its lack of focus on industry engagement? Is that a concern for him as he looks at the bill?
I am grateful for Mr Johnson’s intervention, because it leads me exactly to where I am about to go. As much as I have a lot to say about the functions and the performance of SDS and the Funding Council, Audit Scotland and James Withers made it clear in their reports that the core issue is a lack of clear leadership from the Scottish Government. If the Scottish Government was instructing those bodies to engage far more effectively with—to use Mr Johnson’s example—industry, they would do so. SDS and the SFC are not independent organisations. They are arms of the Scottish Government. They are public bodies. However, in both cases—more so in the case of Skills Development Scotland—they have operated far more independently than is appropriate if they are to be part of a system that is well aligned across the board.
I will quote from the James Withers report. In paragraph 4.17, he said:
“there must be a clear articulation of the areas that are a national priority. This goes beyond signalling ‘economic transformation’ or ‘net zero’ into a specific articulation, aligned to strategic policy intentions, of the sectors and occupations that will be critical to their delivery and their workforce needs.”
In essence, he was saying that the Scottish Government was not providing a clear direction to the public bodies involved or for the economy at large.
Ross Greer is arguing that SDS and the SFC are two arms of Government and that there needs to be a change of culture. Is it worth spending £22-odd million simply on changing that?
That is a fair question. I am not entirely convinced that it would cost as much as £22 million. For example, I think that some of the costs in relation to redundancy payments, pensions and so on have been overestimated, because they are based on pessimistic assumptions about staff not TUPE-ing over from one organisation to the other.
The bill presents other opportunities, which I will probably not now have time to address in my opening speech, but which I will cover in my closing speech. I am thinking in particular of the role of the Scottish Funding Council and how that relates to the situation that we have seen at the University of Dundee. The bill will be our last opportunity in this session of Parliament to consider whether legislative change is required in relation to how we oversee higher and further education institutions and whether the SFC has the means to do so.
I want to return to my point about Government leadership. Two documents have been produced in this session of Parliament that represented opportunities to provide such leadership, but those opportunities were missed. The first document was “Purpose and Principles for Post-School Education, Research and Skills”. I contributed to the development of that document and was excited about the opportunity that it represented, but it was a missed opportunity, because it did not provide the direction that colleges, in particular, were crying out for.
Upstream of that purpose and principles document, there was a far more fundamental issue with the national strategy for economic transformation. If the Government is to provide leadership to the bodies that provide the skills and training opportunities for the kind of economy that we need, it must make a decision on what kind of economy we need and what kind of economy we want. The national strategy for economic transformation is a document that is not strategic or transformative, because the Government has not taken the difficult decisions by saying, “Here are the sectors that we will prioritise. Our resources are finite. Here is where the greatest opportunity is. This is where the investment must be.” That is the direction that is, ultimately, required.
The bill is not perfect, and I will set out the range of reasons why in my closing speech and when discussing potential amendments. However, even a perfect bill would not be enough. There is a need for a clear economic strategy from the Government and for clear ministerial leadership. The Greens will support the bill at stage 1, because there are opportunities to make significant improvements before we get to the final vote at stage 3. We have no fixed view yet on how we might vote at that stage, because my hope is that, by that point, the bill will be very different. We want to take the opportunity to add to and change the bill.
I urge colleagues to come to stage 2 with the kind of ideas and proposals that we heard in the collection of evidence at stage 1 and that we will hear in this afternoon’s debate. This is an opportunity to get the level of alignment that we all agree is required in our skills development sector and that we know is required for our economy. It is also an opportunity for us to get far better value for money from what is currently being delivered. Ultimately, we are trying to meet the needs not just of our economy but of our society at large. The bill might not be the opportunity to do that, but we should take it one further stage to identify whether it is an opportunity that we should not miss out on.
15:36
We have quite incredible demands for skills from a variety of sectors that are desperate for good workers. The renewables sector, the defence sector—in which there will be significant growth—the housing construction sector and a range of others are desperate for skills. We hear regular complaints from those sectors on a variety of levels: that they are short of what they asked for, that there is a lack of transparency, that their management costs are very high and that many of them pay significant contributions to the apprenticeship levy but do not feel that they get their money back. We hear lots of complaints. That was epitomised in Audit Scotland’s report, which was very critical of the Government and the two agencies, the SFC and SDS. The report criticised them all for a lack of leadership, strategy and co-ordination on skills.
That is why I was attracted to the Withers report. It was a good report that set out a compelling case for the need for change. It set out the need for a single source of funding, simplification, regional and national planning on skills and the sort of careers service that the minister’s predecessor was particularly passionate about. He thought that the key to all this was having a careers service through which young people get the right advice at the right stage to ensure that they go into the right job or training opportunity. After the report’s publication, the minister took a very cautious approach in trying to get those agencies to work together behind the scenes. So far, so good.
However, the committee’s evidence sessions on the bill were an utter disaster. On the one hand, those who were supposed to be in favour of the reform were lukewarm, pretty insipid and uncertain about what they wanted. That included the Funding Council, to which we are supposed to be transferring the responsibilities. On the other hand, we had people who were strongly against the bill. Boy, were they strongly against it—passionately so. Some of them had a spell over other people, but, nevertheless, they were passionate about it. That set me back a bit and, like John Mason, I had to ask significant questions.
There are several questions for me. First, does the SFC have the headspace to take on the responsibilities? We have seen all the fires that are going on in further and higher education—at Dundee and at Perth this week—with college funding, with reinforced autoclaved aerated concrete and with international student volatility. Any one person or organisation would struggle to cope with all those issues at the best of times. Does the SFC have the headspace to take on this job, as well?
Secondly, does the SFC have as good a relationship with employers as SDS has? Whatever its flaws, SDS is recognised as having decent relationships with employers. Is it possible for the SFC to create those relationships in the same way and give confidence to the sector, so that people who might otherwise focus on the problems in the higher and further education world will be able to cope with the change?
A lot of what Willie Rennie has said is exactly what I am thinking, too. Does he think that the many SDS staff who will transfer to the SFC will give the SFC the good relationships with industry that it needs?
That could well happen, but SDS staff are pretty annoyed. I have met some of them, and they are pretty upset about how they have been treated. We need to get them in the right headspace to be able to contribute and make the change. That is possible, and the reform of the SFC board might improve the situation. It is a possibility, which is why my response this afternoon is nuanced.
SDS has a greater focus on employers, and it is SDS’s job to run modern apprenticeships, so there is a single focus in that regard. Do we want to remove that?
We then come to the costs, which are about £22 million to £25 million. That is a lot of money when things are tight. The figure includes costs of up to £8 million for pensions; £4 million for information technology; potentially up to £8.5 million for restructuring; and transition costs of up to about £5 million. Those costs are not insignificant.
Will Willie Rennie take an intervention?
I want to make a few more points.
That is quite a lot of money, and we have to work out what we will get in return. I have challenged a number of people, including those in the SFC, to give me some tangible examples of what will improve. I get vague answers about articulation and simplification, but I want an example. What cannot be done just now, with SDS, and what will be done with the SFC? The answers are all vague, and we need more than vague if we are going to spend up to £22 million or £25 million.
As the bill progresses—the Greens will vote with the Scottish National Party, so it will pass stage 1—we need to hear a more convincing case from those who are involved about what we will get for our money, because we are looking for a return on our investment.
Does structural change deliver the big bang that we are looking for to address all the concerns of employers that I set out at the beginning of my speech? It is over to the minister to get the system in order and ensure that he can convince members that it is all worth it.
We move to the open debate.
15:42
First, as is always the case, I thank the committee clerks, the witnesses and my fellow committee members for their work in scrutinising the bill to date. Secondly, I welcome Ben Macpherson to his new role as Minister for Higher and Further Education. I am looking forward to working with him to ensure that our ambition to give everyone the best start in life extends right through to college, university or an apprenticeship. I also pay tribute to Graeme Dey for his work as the former minister and thank him for all that he did while he was in post.
I know that a few folk feel that the bill is just about rejigging how things work behind the scenes, as they can already see a steady stream of well-educated, well-skilled young Scots coming out of our education system. Some have even suggested that the bill is a little bit boring, but they are wrong.
So often in the chamber, we talk about Scotland’s future and building a better country for the next generation. What we are doing today is about not just building a future for the next generation, but ensuring that they have the skills and knowledge to build their own future.
Let us take the example of the building industry—
Will the member take an intervention?
I will take an intervention from Daniel Johnson.
I am grateful to the member for giving way, but in her opening remarks, does she not demonstrate the exact problem? The skills system needs to become about more than just young people acquiring skills and entering the workforce. It needs to be about people who are already in work acquiring skills. Does she not in fact demonstrate the problem with the bill, in that it misses that point altogether?
The bill is about college, university and apprenticeships, and it encompasses everybody, not just young people. I was just—[Interruption.]
Sorry—would you like to come back in, Mr Johnson?
At the beginning of your remarks, you were referring explicitly and exclusively to young people.
Always speak through the chair.
I am at a bit of a loss about why that intervention was needed. I will always speak up for young folk.
As I was saying, let us take the example of the building industry. Just now, the funding to train architects and town planners comes from one organisation, the Scottish Funding Council, while the folk who turn that into reality—our bricklayers, joiners, sparkies and so on—have their apprenticeships funded by a different organisation, Skills Development Scotland. It makes sense to me that those should all be funded by the same organisation.
That is what the bill seeks to do. It will ensure that Scotland’s whole education and skills system works as a single, easy-to-navigate system. That is the principle of what we want to achieve. This is stage 1, which is about agreeing to principles, and I will be supporting that principle today.
Before I get any more interventions from members saying that the Education, Children and Young People Committee did not take a position on the bill and that I am the deputy convener of that committee, I will cover that point now. Let me start with the first point in the conclusion of the stage 1 report, which says:
“Apprenticeships offer valuable opportunities to learners and businesses across Scotland, and make a vital contribution to Scotland’s economy. It is clear from the evidence the Committee heard, that the current approach towards administering and delivering those apprenticeships needs to be improved.”
That is my starting point. It is something that was said by many of the folk that the committee spoke to when they offered their support—or their caveated support—for the bill.
One reason that our committee did not take a position on the bill relates to the cost benefit of what it proposes. What has changed? Graeme Dey, in what might have been one of his final acts as Minister for Higher and Further Education, responded to the committee’s report and offered a range of assurances. For those who do not fancy reading the full 53-page letter before decision time, I will draw out a couple of the highlights.
The first is that
“the higher cost estimate has been reduced ... by around a third”.
If we are basing our decision on cost benefit, cost makes a big difference.
On the benefits, I also welcome the comprehensive assurances in relation to apprenticeships. If I had time to read out that section of the response in full, I would, but I do not think that I do. It says:
“The Bill enables an increase in the range, quality and quantity of apprenticeships and work-based learning in Scotland”,
and there are commitments to working with and ensuring the involvement of employers.
There are also commitments to continuity beyond 2027 in many areas in which that was asked for, which will allow employers to make decisions about apprenticeships now, as—I hope—the bill progresses. I am happy to see a recognition of the demand to expand graduate apprenticeships. I am keen to see where that goes and what doors it opens up, not only for young Scots but for all Scots.
Therefore, I have been convinced. I recognise that there are issues that still need to be addressed and question marks over exactly how some things will work. This is not the finished article but, as I said, the principles are sound and today’s debate is about agreeing to the general principles of the bill.
Further detail can be given and scrutiny can, and will, happen if the bill progresses. However, that can happen, and the benefits of the bill can be realised, only if the bill passes stage 1 today. Let us make that happen. Let us move forward with a simpler funding system and make it easier for colleges, universities and training providers to focus on what they do best, which is delivering the high quality of education and training that gives the Scottish workforce such a strong reputation. Let us get the bill to its next stage.
15:48
I, too, welcome Ben Macpherson to his new position. Although he is well liked across the chamber—as was evident the other day, when we approved his appointment as a minister—I agree with Douglas Ross: I do not envy him having to pick up this particular bill. It is not the kind of present that someone wants to find when they get a new job, put their feet under the table and open the desk. To put it mildly, the bill is a bit of a mess.
I miss being on the Education, Children and Young People Committee—I enjoyed that committee. I particularly miss Willie Rennie’s contributions. He has just summarised rather well the report that the committee produced. It was kind of a “meh” sort of—
Will the member give way?
As ever, I am happy to give way to Willie Rennie.
The committee misses the member too.
I think that Willie Rennie is crossing a line, given that we are supposed to tell the truth in the chamber.
Setting that aside, the spirit that Willie Rennie conveyed when he gave his speech kind of covers how I feel about the bill. When we get down to it, there is a question about the bill and its associated costs that must be answered. We cannot dismiss it, given that we do not even really know how much the bill will cost. How can we possibly legislate responsibly if we do not know how much it is going to cost?
The key question is this: what will the bill improve? Evidence that was presented to the committee comes down to one thing: there seems to be a fairly unanimous opinion that the bill will not change anything. Jackie Dunbar is no longer in her seat to hear this, but if the bill does not empower learners or employers and if all that it does is move things around and re-badge a bureaucracy, I really cannot see the point of it. There is nothing in the bill that would achieve anything.
I cannot even see what the principles are. If we talk about simplification but do not actually simplify, what is the point?
I thank Mr Kerr for giving way and apologise that I could not give way to him during my opening speech.
Does Mr Kerr appreciate that the intention behind the bill is to ensure that the SFC will have oversight provisions and will therefore be able to flex and innovate to meet employer and business needs in a way that the system does not at the moment?
I want to use the time I have to talk about apprenticeships, because I really want to see a demand-led apprenticeship system in this country. There is a need for that—people are crying out for it—but it is not being satisfied. It is not the job of Government to determine what the economy needs; the people who do the business of the economy—those who head up organisations and businesses—should decide that.
In the time that I have left, I will look at SDS, which currently supports 40,000 apprenticeships and administers training programmes. Under the bill, responsibility for all of that would go to the Funding Council. What will be left of SDS? Why not go the whole hog and just collapse SDS? If we want to simplify and to reduce costs, we could just do away with SDS and find another way of taking care of what is left. I have previously suggested some radical adjustments to the Scottish education landscape, and here is an opportunity, but the Government is just standing blinking in front of it. If it is going to talk about simplification or streamlining, it actually has to do that—it cannot just use those words; it has to do what the words suggest. The bill will mean that we end up with one overstretched body—and we would be justified in asking whether the proposal is suitable for the task—and another body that is completely hollowed out.
Let us look at and properly learn from what people do in other countries where they know what apprenticeships are all about. I am not alone in reaching for the examples of Germany and Switzerland, where employer associations are totally embedded in the system and actively design and update apprenticeship qualifications.
The apprenticeship levy, which is absolutely a bone of contention, has been mentioned. People in Scotland pay the levy but do not see that money coming back in the form of the investment in apprenticeships that they need for the future of their businesses and our economy. In England, employers are all over the design of apprenticeship qualifications, but the bill seems very much to leave that in the hands of ministers and the Funding Council. The bill says that employers will be consulted, but they need more than to be consulted; they need to be in the driving seat. That is what a truly demand-led system looks like.
Disappointingly for me, I have run out of time. I have a number of questions that I would like to ask and, if I may, I will close with them.
Will the Government ring fence the apprenticeship money that goes into the Funding Council pot, and will that money come back out to fund apprenticeships? What about making a commitment that every penny that is raised in Scotland through the apprenticeship levy be spent on apprenticeships and training? We can calculate the amount, so let us not hide behind the idea that we do not know how much it is.
Why has the Government rejected international best practice models? I really do not understand that. Why would it reject success stories in favour of just another version of what we already have?
What about SMEs? Where will their voice be heard? There is learning to be had from other economies about them. The vast majority of people who work in the private sector in this country work in SMEs. Where will their voice be properly heard?
Mr Kerr—
There are lots of questions.
Mr Kerr, thank you.
I cannot see how anyone can vote for the bill today.
15:55
I will get the niceties over first, like everyone else. I thank Graeme Dey for his work and I say to the minister, Ben Macpherson, “All the best, mate.”
My original version of the speech was quite ragey, because certain individuals who gave evidence on the bill created an inner rage in me. Willie Rennie was quite right when he suggested that those who supported the bill were very “meh” about it and that those who were against it were extremely passionate in giving their reasons for that. It was one of those individuals who almost created my “George smash!” moment with his comments.
Ross Greer is right that the bill should proceed to stage 2 to allow us to look at other ideas and see how we can take it forward. The bill was supposed to declutter, tidy up and provide a better version of our skills systems. Currently, we have too many agencies tripping over one other, with too much duplication and not enough focus on the important people—those who are being trained. I get that. I support the Government on it, and that is what the bill is about.
During the stage 1 evidence, we heard many of those who are involved in the sector trying to come up with better ways of working and ensure that we have a robust process that can deliver. We then heard from Skills Development Scotland, whose views were made plain—and painfully—regarding its role in apprenticeships. SDS has delivered many apprenticeships over the years and has done a good job up to now, but we have to move on and see what more we can do.
While the committee was taking evidence, we heard from Skills Development Scotland’s Damien Yeates. Some may say that he had a positive story to tell us and some may add that it was a story about the delivery of key Scottish Government goals on training and skills. That would have been a sensible way forward, but it was not the one that Mr Yeates took. He came here to say that the cost of moving the staff and pensions across to the Scottish Funding Council would be more like £30 million. I do not know which fag packet that was written on the back of, but it shows part of the problem with the debate on the bill. Who do we believe? Which figures do we believe in this scenario?
It is important for those who we represent and those who are on the training schemes that we have clarity about the figures, and it is also important for those who work for Skills Development Scotland. The Scottish Government’s figures in the financial memorandum are illustrative, but somebody’s figures clearly do not add up. Somebody is at it and, from what I have heard, I believe that it is Mr Yeates and SDS. Others may come to another conclusion.
This is important, because of all the people who I mentioned, including the more than 200 staff who will be transferred, who deserve straight answers and not scare stories. As someone who has gone through a TUPE process when I worked in the real world, I know that what is being said at the moment is not what people want to hear when such a process is happening. They want to hear clear facts. I blame SDS, as much as anyone else.
The amount of money that we are talking about has been at the heart of major concerns. Does George Adam believe that the Government figures should now be subject to independent financial analysis to determine whether they show the right amounts, in order to move the process forward?
I will tell the member one thing: I believe that SDS has been part of the problem. We have an organisation not playing ball, fighting for its very survival in any way that it can and not giving the information that we need. That may be the reason why the Government is struggling to get the bottom-line figures that we all need. I ask SDS to get its head together, get into the game and make sure that we can deliver.
SDS talks up the risks. The bill is about taking apprenticeships out of SDS’s hands and putting them into the SFC’s. SDS can see its empire shrinking, and what better way is there to make folk nervous than by just flinging out a cost of £30 million? We are dealing with people’s lives and their livelihoods—those doing their training and those who work for SDS. Of course I suspect that it is a tactic from SDS; if you cannot win with principle, chuck in a scary number and hope that Parliament loses its nerve. I do not buy it, and I do not believe that anybody else buys it, but we need to ensure that the figures are solid.
It is not as if SDS has a clean record. For years, it has been referee and player—delivering training programmes while also shaping the system. It has handed out contracts to training providers that are also trade associations that represent employers while taking public money to train their workforce. That is a built-in conflict, and surely that alone is a reason for some sort of reform.
I have further concerns with trade associations providing training. When I asked questions about that at a committee meeting, we heard that 40 per cent of the money that SDS receives—public money—goes into back-of-house costs rather than into the training. That is in comparison to colleges, where more than 90 per cent of the money received goes into training. I have a concern about that as well. It is not right, and there must be another way of doing it.
At the committee meeting, Damien Yeates of SDS presented a narrative that suggests that SDS is the only organisation that is capable of delivering apprenticeship services effectively. He then doubled down, and throughout the meeting, dismissed the independent Withers review as only a point of view, despite it being an extensive and credible piece of work.
The Government is already considering some of the stuff in the Withers review, such as consolidating funding bodies, addressing system fragmentation, improving transparency and responsiveness, supporting parity of esteem and enabling better data and outcomes. If we get this right and deliver those things, that will ensure that we can build the economic model and that we have the right trades and people in the right place at the right time. We should go forward with the bill. There is much work to be done, particularly on the figures, but it is important that we get it and move on.
16:01
I welcome Ben Macpherson to his new post and thank the committee and all those involved in the scrutiny of the bill for their hard work. The bill is critical, because Scotland urgently needs an adequately funded and responsive system for post-school education and training.
Our further education sector is at crisis point and, in some cases, far beyond it. Although the aims of the bill are laudable, it is unfortunately yet another example of the Government failing to do the heavy lifting to create a bill that answers the big questions about our further education system. We—and, most importantly, our young people—need those questions answered.
The Government has yet again proposed legislation—as it has with the Children (Care, Care Experience and Services Planning) (Scotland) Bill—that fails to address the systemic issues that children and young people face in this country. It is absolutely shocking that one in 10 of our 16 to 24-year-olds are currently not in employment, education or training, according to the Government’s figures.
This bill was decried by unions as “fraught with risk” for apprenticeships, and running those risks does nothing for the young people who are being failed by a system that does not work for them. Creating a much larger Scottish Funding Council without adequate assurances about its ability to continue functioning properly does nothing for those young people.
Not only does the bill fail to deliver for young people but, at a time when further and higher education institutions are under so much pressure, the bill entirely fails to deliver the sustainability supports that the sector is crying out for.
The Government talks a lot about so-called positive destinations. The member referred earlier to the statistics about those aged 16 and 17. Does she believe that further work needs to be done to convince the Government that there is an issue with where young people are spending their lives and their time?
Absolutely. In my portfolio of climate and net zero, there are missed opportunities in retrofitting homes, which young people from every single community in Scotland could be leading on. That is not being addressed.
Will the member take an intervention?
No, thank you.
The concerns heard by the committee from Unite, the PCS union and UNISON that their members are being left in the dark about the ramifications of the bill are another damning indictment. We still have no clear answers about which workers, or even how many, would transfer between Skills Development Scotland and the Scottish Funding Council.
I acknowledge the difficulties that have been presented by Skills Development Scotland’s unwillingness to produce figures. How can we honestly be expected to back a bill that fails to provide those basic and fundamental facts? Without answering simple questions such as how many workers the bill will affect, the Scottish Government cannot seriously expect us to support the bill. Without those questions being answered, we cannot ask the bigger, better questions such as how the bill will enable our young people to thrive or support Scotland’s long-suffering further and higher education workforce.
A more responsive and coherent funding system for post-school education and training is an aim that we share across the chamber, and it is one that the sector has long called for, but the bill does not convincingly deliver that aim, and it potentially risks making matters worse for learners and providers.
If we are to have successful apprenticeships, it is vital that the expertise of trade unions and businesses is drawn on in delivering those apprenticeships. A bill that has such an important aim must be backed up with strong stakeholder support. If stakeholder support is heavily caveated, as was shown throughout the consultation on the bill, it will not truly meet the aims for students and learners, now or in the future. Those are the questions that the Parliament should be asking, and the bill does not come anywhere close to allowing us to do that. That is why Scottish Labour cannot support the bill.
16:06
I am glad to speak in the debate, and I welcome Ben Macpherson to his position. It is good to see him back in government.
I will touch on some of the briefings that we received today, but I am a bit concerned at the Tory and Labour position on the bill. At the Education, Children and Young People Committee, members decided to reserve judgment on the bill, yet today they have come out against it—there are committee members who have come out and said that today. They should work with the minister on the bill, rather than opposing its principles. The pragmatic approach that is being taken by Ross Greer and the Greens is a better one.
One of the briefings that we have received is from Guy Hinks, the FSB Scotland chair, who said:?
“One in five small businesses in Scotland was forced to reduce the services they offer customers in the last year due to staff shortages.”
We have been talking about what employers are saying, and this is what the FSB has said:
“Modernising the training system in a way that encourages smaller employers to hire apprentices would be an important step towards tackling the skills gaps, which are a big part of this problem.”
Mr Hinks added:
“We can’t afford to miss the opportunity the Bill offers to ensure apprenticeships in Scotland work for the country’s small businesses”.
Stephen Kerr made the point that we should hear directly from small businesses, and they are telling us that we should support the bill at this stage. Of course we need to work on this. Mr Hinks said:
“In order to do that, it is essential to listen and learn from the experience of small employers, including those who are hesitant to take on apprentices.”
Small businesses are at the heart of the Scottish economy. The Scottish Government is committed to streamlining and improving the frameworks for funding post-school education and skills, and the bill is part of that. As I think was mentioned by the minister at the start of the debate, the bill helps to ensure that the annual £3 billion investment in this area delivers the greatest impact for Scotland’s young people and learners.
As it has stated in its briefing, Edinburgh College believes that the bill should be supported and that work should be expedited to ensure that the recommendations of the Withers review are taken forward in full. The college stated:
“It is our view that perpetuating the ‘status quo’ position is not an option”.
Edinburgh College is probably the closest college to East Lothian. The south-east of Scotland is the fastest-growing region of Scotland: 84 per cent of Scotland’s population growth in the next 10 years will be in Edinburgh and the south-east of Scotland, with East Lothian forecast to grow by about a third. Edinburgh College stated:
“It is imperative that apprenticeship provision is expanded if we are to take advantage of the substantial economic opportunities”.
Other members have mentioned renewables, and that has already been pursued in East Lothian. Last year, Edinburgh College carried out its own skills survey research with regional employers. That is another example of speaking to business. The college stated:
“Lack of apprenticeship places in key disciplines was raised as an acute skills shortage issue.”
Skills gaps continue to cause issues for employers across the region, with 88 per cent of employers saying that some of their vacancies are hard to fill due to difficulties in finding applicants with the required skills. Where hard-to-fill vacancies are concerned, the main things that employers struggle to find are the specialist skills or knowledge required for the role, but employers also struggle to find applicants.
Paul McLennan is making the case for a demand-led or demand-sensitive system. The bill does not deliver that, but that is the reform that we need.
Both the FSB and Edinburgh College say that we need to support the bill at this stage. Mr Kerr and other members have raised issues, but they should work with the minister. Do not oppose the bill in principle at this stage, but work with the minister and listen to what employers and Edinburgh College are saying.
I also want to talk about Colleges Scotland. It commented:
“We support the Tertiary Education and Training (Funding and Governance) (Scotland) Bill because, although the devil is always in the detail, we see opportunities in apprenticeships being funded through the SFC, forming one collaborative funding model.”—[Official Report, Education, Children and Young People Committee, 18 June 2025; c 18.]
Those three organisations have come out and said that we should support the bill at this stage. I come back to the position of the Labour Party and the Conservative Party. They might have issues with the bill, but they should support it and work with the minister. They have heard the offer and heard what is already coming in support of that.
The bill places learners at the centre of the Government’s approach to the tertiary education system, and it is work that needs to be done—of course we realise that that work needs to be done. For the first time, a statutory framework for apprenticeships in Scotland will be established, which will introduce improvement while leaving room to develop future policy with stakeholders.
I joined the Education, Children and Young People Committee, but I missed some of the evidence that Mr Adam talked about, although I have listened to some of the discussions. The committee talked about reserving its judgment. I will come back to the point that both the Labour Party and the Conservative Party should work with the minister; they have heard the offer.
Importantly, work is already under way to invigorate career services, which are an important part of this, strengthen the skills approach with SDS and the SFC, reform apprenticeships and improve the qualifications offer.
Clare Reid of Prosper, with whom I have worked in different roles, emphasised that
“the bill is an important step in the reform of the skills landscape.”—[Official Report, Education, Children and Young People Committee, 7 May 2025; c 3.]
Prosper engages with employers quite a bit, and it supports the bill. I have talked about four organisations that support the bill at this stage.
Will the member give way?
The member is just winding up.
In recognising that apprenticeships provide vital opportunities for young people to acquire key skills, more than £100 million of this year’s budget will be allocated to modern and foundation apprenticeships. That is an important step in ensuring that Scotland has the most skilled workforce that can meet the opportunities that are in front of us now and in coming years. Work is needed on the bill, but we must support the bill at decision time and work with the minister going forward.
16:12
I join other members in welcoming Ben Macpherson to his new position. I wish him well in what are, I suggest, very challenging times.
I have always highlighted my support for education in all its forms. I have often said that education is the solution to health and welfare issues and, in fact, that it is the cornerstone of every portfolio. I absolutely believe that getting education right would pave the way to effective solutions to many of the current problems that society faces. Many of those issues have been created or at least exacerbated by the Scottish Government, which seems unable to create policy that is linked to need or create policy across portfolio.
The potential for apprenticeships in Ayrshire, for example, would demonstrate the point in question. In my region, there are many exciting opportunities in engineering and trades, along with all the soft-skill jobs that come with those expansions. Every engineering company that I have spoken to in the aerospace cluster in Prestwick airport is desperate to expand and develop its business. The common stumbling block is the availability of workforce. In fact, parent company investment in those businesses demonstrates the need for a consistent supply chain of people.
The chief executive of Ryanair flew into Prestwick to open its training academy and he met me specifically to speak about that recruitment prospectus. His position was that, although the company’s desire was to expand its aircraft maintenance facility at Prestwick because of the engineering crew’s experience, without sight of a workforce plan it has had to look at other facilities across Europe.
Woodward cited a similar situation. It has made a strong case for investment in expansion at Prestwick, but access to a consistent apprenticeship pipeline is a concern. A key point to note is that the availability of places is not the only obstruction in the pipeline. Many businesses would welcome the opportunity to recruit more apprentices but are hamstrung by the difficulty of accessing the resources that are needed to expand their facilities, grow their business and bring through more apprentices as a result. Although the bill focuses on reforms to the education system, in order for it to function as intended, it is vital that we look beyond the confines of the system and ensure that businesses are in the right position to provide those leaving the system with their desired destinations.
When Patrick Harvie was a minister, he introduced a bill to retrofit 1 million homes with heat pumps by 2030. I kept asking him where the heat pumps would come from, who would fit and service them and who would pay for them. There were never any answers to those questions, with the industry suggesting that it was 23,500 tradespeople short if it was to deliver on the Government’s targets. It is no surprise that the legislation was quietly slipped on to the dusty shelves that are marked “unworkable”.
Mr Whittle says that there were no answers to those questions. I presume that he did not read the workforce strategy for the green heat task force that the Government published?
Yes, I did, but it had no answer on the 23,500 shortfall in tradespeople.
We have fantastic tertiary education facilities in Ayrshire College and the University of the West of Scotland. They are able and more than willing to take on those challenges. Ayrshire College told me that 831 students were successful in an interview to apply for college-based programmes, including 400 applicants in engineering, 280 in aerospace, 171 in construction and trades, and 71 in health and social care. We desperately need those students in the workplace. That would be such a success story, if it was not for the fact that the college was unable to offer places to those students, in large part because of a lack of funding to deliver its programmes. The college does its bit in delivering for 56 students over its allocation, at a cost of more than £280,000 to the college. It has advised that, if the constraints on the contracted volumes were lifted, it is confident that it could increase new starts in engineering programmes from around 130 to more than 200 per year. What is the Government thinking? Surely, in sectors such as engineering, construction trades, and health and social care, which are crying out for new recruits, whether that is through apprenticeships or training places, we should be doing everything that we can to increase the intake.
Another piece of the jigsaw is to connect career advice in secondary school to tertiary education and local opportunities, because there is a disconnect. In the engineering sector, there is potential for 2,500 new jobs in Ayrshire in mechanics, engineering and all the soft skills that such expansion demands. Prestwick cluster, along with the XLCC development in North and East Ayrshire, will be fishing from the same pond. There are huge opportunities in the green and blue economies, which require retraining of the workforce and the development of a stream of talent in the sector. Where is the workforce plan? We cannot just will that to happen; we need to make a plan.
The Scottish Government must build the apprenticeship pipeline, not restrict it. I started by stating that education can have a huge impact on health inequalities, welfare, justice, the economy, the energy market, and the green and blue economies. I have tried to cajole, encourage and push the Government to join the dots to support our FE sector and match careers advice with fantastic opportunities in local communities. Surely there must be an element of logic.
In welcoming the Minister for Higher and Further Education to his new role, I urge him to consider what could be achieved if we recognise the opportunities in engineering, the energy just transition, trades, and so on, and connect those opportunities to education and careers advice. I have the greatest respect for Ben Macpherson. I know that he understands the problems. Will he be the minister who finally delivers the obvious solutions for our students and our businesses?
16:18
I welcome Ben, son of Pherson, to his new role. I also welcome the opportunity to reiterate and summarise the aims of the bill and to offer my support for it at stage 1. In a nutshell, the bill will reform how funding and governance work across the tertiary education landscape in Scotland. I believe that it represents a serious and timely effort to strengthen our system of post-school education, training and apprenticeships. It is about providing clarity, stability and fairness to learners, institutions and employers alike.
Although there are always areas for improvement in bills, I strongly believe that this one deserves support at stage 1 to get things moving in the right direction. We all know that the present system is complex and, at times, fragmented. Funding routes overlap, responsibilities can be blurred and reporting is inconsistent. Learners and employers alike often face confusion when they should face clarity.
On funding, the bill will place a duty on the Scottish Funding Council to ensure the availability of apprenticeships and work-based learning, and it will give ministers clearer powers to support training for employment. On governance, it will make important changes to how the SFC operates, and it will create a new apprenticeship committee to ensure that apprenticeships get the focused oversight that they deserve. On student support, it will clarify the rules for Scots studying at private institutions in the UK, putting those arrangements on a clear statutory footing. In short, the bill will simplify, strengthen and steady the framework for how Scotland supports learning beyond school.
The current financial pressures on colleges and training providers are very real. By embedding financial monitoring and sustainability checks in statute, we will help to protect institutions from sudden crises, thereby reassuring learners and staff that colleges and providers will remain stable and resilient.
At the same time, we must remember that Scotland’s future workforce needs to be adaptable. Our economy is changing rapidly, through digitalisation, the green transition and the ever-growing demand for lifelong learning. The bill must help to align post-school education with those wider priorities. Fairness is also at stake: Scots studying at private institutions should not face uncertainty about their support, and the bill will give them the clarity that they deserve.
That being said, no bill arrives in a perfect state. The committee’s task is to take away what we have heard in the debate, alongside the evidence of witnesses and institutions, and to further refine the bill’s provisions. There are a few key areas for us to focus on. First, we must ensure that reporting requirements are proportionate. Institutions must of course be transparent, but smaller or rural colleges must not be buried under bureaucracy. Secondly, we must strike the right balance between flexibility and prescription. Strategic alignment is vital, but local providers must retain the freedom to innovate and respond to community needs. Thirdly, we should seek greater clarity on student support rules, ensuring that eligibility and appeals are straightforward and transparent. Fourthly, governance reform must include the voices of learners themselves, and in particular those from underrepresented or disadvantaged backgrounds. Finally, implementation matters: we need a phased and careful transition, with regular review, so that the reforms strengthen institutions rather than destabilise them.
Our education system is one of Scotland’s great assets. It provides a bridge to opportunity for young people, a second chance for adults and a lifeline for communities that seek renewal. To keep that bridge strong, we must ensure that our funding and governance systems are not just fit for purpose today but resilient for tomorrow. In my judgment, the bill can provide that foundation. It will put apprenticeships and skills on the statutory map; it will give the Scottish Funding Council a stronger framework; and it will ensure fairness for learners and do so with an eye to sustainability and accountability.
There is polishing to do, and I will work with colleagues from across the chamber to make improvements to the bill at stage 2. However, its rationale is sound, its intent is clear and the opportunity that it presents is one that we should not squander. Let us seize this chance to provide clarity where there has been confusion, stability where there has been fragility and fairness where there has been doubt. That is what the bill sets out to achieve, which is why I support its principles at stage 1.
I call the final speaker in the open debate. John Mason, you have up to six minutes.
16:23
I was not expecting to get as long as six minutes, so I will certainly be prepared to take interventions along the way.
I agree with much of what has been said already. I, too, offer my commiserations to the minister on his being thrown in at the deep end on the bill.
Overall, I am supportive of the bill’s aims, because it will somewhat simplify the public body landscape in Scotland even though, as Stephen Kerr has pointed out, it will not reduce the number of public bodies. It could be argued that the Government might have gone further by abolishing Skills Development Scotland altogether.
It seems that there is scope for developing the apprenticeship landscape, including by rolling out a wider range of graduate apprenticeships, as well as foundation apprenticeships, which seem to be strong in some parts of the country but not in others.
As we took evidence at committee, I and others had concerns about the one-off costs for the bill—especially the pensions figure, which was shown in the financial memorandum as being between £1 million and £23 million. I am pleased to see that the upper limit for that has now been reduced to £8 million.
However, at the same time, considerable new costs are appearing. Information technology system costs are up from nil in the financial memorandum to £4 million, and SDS restructuring costs are up from nil to between £4 million and £8.5 million. I find it remarkable that such substantial costs did not appear in the financial memorandum at all. It makes me wonder whether it would cost less if SDS were just to be merged with the SFC and, therefore, took on its existing IT system.
I return to the point that I made in my speech, which was echoed by Miles Briggs. The finance committee was not able to do a full report and asked the education committee to look specifically at the finance elements of the bill. There have been massive changes, but there are still further questions about its financial aspects. Therefore, does Mr Mason think that the updated financial memorandum—and the new figures from the minister—should go back to either of those committees for further scrutiny?
Even some of the new figures that we have from the Government, which are dated 19 September, are provisional and are still estimates, so I absolutely agree that somebody needs to look at them in more detail. That is very much a theme that I want to emphasise.
From a Finance and Public Administration Committee perspective—Mr Greer and I are still here—we have repeatedly asked for an improvement in the quality and detail of financial memorandums, yet, once again, we see significant costs not appearing in the FM at all.
Most of the members of the finance committee are visiting Lithuania this week so, perhaps fortunately, members listening to the debate are not having to hear the same message from all of them.
As the education committee’s convener and other members have said, the one-off costs were a major factor in our not endorsing the bill in our report. Although it is now only £21 million, that is still a lot of money for internal restructuring that is not affecting the front line.
I am particularly intrigued that SDS should now come up with intentions to restructure and potentially make a number of staff redundant. That suggests that it has not been operating very efficiently until now. However, the Government paper on revised costings, which apparently quotes SDS, says, among other things,
“This efficiency will diminish.”
I do not know exactly what that means. It also says:
“SDS has identified that there is likely to be the need for restructuring after the transfer has completed and taking at least three years involving headcount reductions which might cost £4 million to £8.5 million”.
We certainly need to know more about that.
The Government says that it wrote to SDS and the SFC in June, asking them to develop a plan for staffing arrangements. That seems a bit late in the day. In its response to the committee report, SDS argues that it has been as helpful as it could have been all the way along, but, as George Adam said, it still appears that it has been dragging its heels a fair bit.
Having said all of that, I welcome the Government’s letter of 19 September. Although it does not represent the final picture, it is a lot more specific about costs than what we had before.
My view is that the SFC needs to be much more proactive about monitoring the health of our universities. From the evidence that we received, it seems that the SFC has largely been passive and has waited for universities to report any problems that they faced. That is fine for an institution such as Queen Margaret University, whose principal, Sir Paul Grice, we heard from. However, it has certainly not worked at the University of Dundee, where it seems that some senior figures did not understand their responsibilities let alone flag up problems to the SFC or anyone else.
Going forward, I want the Funding Council to be much more proactive in that regard. It is true that universities are independent institutions and are not in the public sector. However, if something goes wrong, as it did at Dundee, they clearly expect the public sector to bail them out, so we need to pick up such problems earlier on.
Overall, I am prepared to support the bill at stage 1 and will vote for it at decision time. However, this is the second time this week that we are being asked to give a bill the go-ahead when we are still very much in the dark about the details and the actual costs—the other instance being the Schools (Residential Outdoor Education) (Scotland) Bill introduced by Liz Smith. I am not at all happy about that way of doing things, where we head into stage 2 with so much uncertainty. I am not guaranteeing that I will vote for either bill at stage 2. I, for one, will look for a lot more certainty to emerge before then.
You rose to the challenge of completing your speech within the six minutes admirably. We move to the closing speeches.
16:30
In opening, I laid out some of the general principles that the Scottish Greens subscribe to in relation to the bill, but there were specific points that I did not have time to get into, so I will do that now.
The first is on data sharing, which came up very often during stage 1—it is something that John Mason and I are familiar with from being on the Finance and Public Administration Committee, and it is a recurring issue in the public sector. There are huge limits on the sharing of public information—information that belongs to the public but is not available to them. I have taken to doing a litmus test when I am trying to get a sense of whether a public body is effective at sharing information and making its public data available—and that is simply to check whether its website is copyrighted. The Scottish Government leads by example on that; it operates an open government licence. Any information that is held on its website, other than the Government’s logo and brand, is freely available for others to use as they see fit.
Both the Scottish Funding Council and Skills Development Scotland have copyrighted websites. They are restricting access to even the most basic information that they have. Is it any wonder that they cannot communicate with each other effectively when they have taken the unnecessary step of copyrighting their websites? That is an issue on which some clear ministerial direction would be of significant benefit.
The David Hume Institute has estimated that north of £2 billion in value is lost to the Scottish economy every year due to the sheer volume of public data that is not available to the public. That makes processes more inefficient and more costly, and it makes public bodies’ costs much higher than they need to be because those bodies are not sharing that information with one other. That is an easy problem to solve, but it requires a bit of ministerial direction.
I recognise the upset felt by a number of individuals in Skills Development Scotland about what is proposed here. In many ways, it feels familiar to the upset in the leadership of the Scottish Qualifications Authority during the process that we went through to replace it. I absolutely believe that far more substantial trade union engagement than originally took place is essential. I believe that more substantive engagement has taken place since the unions gave us their initial views, which I welcome.
I urge some self-reflection on the part of senior management at SDS—far more self-reflection than we heard at stage 1, in particular when it was confronted with the outcomes of Audit Scotland’s review of SDS’s work and its relationship with the SFC. There was simply no engagement with the pretty scathing judgments that Audit Scotland came to.
There is one striking example of where leadership at SDS would have resulted in far more effective delivery and better value for money; it relates to the share of apprenticeship funding that goes to managing agents, which George Adam and others mentioned. We heard in evidence from one trade body that it takes 40 per cent of the funding per apprenticeship; that funding goes to the trade body acting as the managing agent. That is 40p in every pound that is not going to the apprentice or to the college. I have heard elsewhere that the figure is above half in some cases, and is potentially as high as 60 per cent.
I believe that in England, there is a cap on how much money the managing agent can take. SDS could have taken such action long before now, but it did not; however, the bill is an opportunity for us to take action. All the money that the managing agents take means less money going to the apprentice, less money going to the college and less money for the businesses that are involved in the system. The bill is an opportunity for us to get far better value for money, which would align with the Government’s medium-term financial strategy.
The bill is also, let us be frank, an opportunity for us to maximise the amount of money that is going to our colleges in what is otherwise a really squeezed financial situation. John Mason posed the question to me whether it is worth £22 million. That is still one that I am wrestling with. There is the question whether the one-off cost is worth it for potential significant recurring value, better alignment, better value for money and more effective use of the money that is being spent.
I recognise that the bill splits opinion. I respect some of those with whom I disagree but who are arguing on the basis of quite specific concerns. However, I am not at all convinced by the argument that some have made that, if the system is not broken, we should not fix it. Audit Scotland and Withers have shown what is broken about the system. I respect those who believe that we can fix it without the bill, but some of the voices who have contributed to the debate outside the Parliament to argue that everything is absolutely fine should reckon with the fact that it simply is not fine—that is not the case. I think that that is why the Federation of Small Businesses says that the bill is a way to align the apprenticeship system with the needs of our economy.
I will briefly pick up on a couple of things that have been mentioned in the debate. Willie Rennie was right to say that Skills Development Scotland has a good relationship with employers, but I would caveat that by saying “with some employers”. If you are a member of a trade body that got its foot in the door some time ago, you have excellent access to SDS and you get what you need from it. If you are not from one of those sectors—particularly if you are a small business that is not from one of the sectors that has an assertive trade body that has its foot in the door—you have a very different experience of Scotland’s apprenticeship system.
Willie Rennie and John Mason both mentioned the £4 million cost for IT that has suddenly emerged late in the process. I am deeply suspicious of that figure and the motivations that might have been behind it. I cannot understand for the life of me how, when no new functions are being created and some systems are simply being moved from one organisation to another, there is a £4 million IT cost. Again, those organisations are both arms of the same Government. That cost does not ring true at all.
As I think I have made clear, the Greens are not completely sold on the bill, but we think that there is a significant opportunity with it. We do not want to miss that opportunity, as it is the last one of the parliamentary session. We want to see more alignment in the system, more access to apprenticeships for small businesses and far better value for money. The bill could do at least some of that.
Our list of amendments is growing, and I look forward to speaking to the minister about them. That is why we will vote to progress the bill to stage 2 to give us a final opportunity to see whether we can get such alignment and value for money before the dissolution of the Parliament at the end of this session.
16:36
Two points were made in the debate that united everyone in the chamber, the first of which was the welcome of the new minister. At times, it felt like the front step of the Caledonian hotel, because so many welcomes were issued, although I think that the minister will need to reflect on the fact that most speakers went on to commiserate with him on the job that is in front of him. He can make of that what he will.
I also agree with the more fundamental point that was made, which is that there absolutely is a need for change in the skills system. It needs to do an awful lot more. The issue is whether the bill will deliver that and whether it will provide clarity. Our fundamental objection is that there is a real risk that, without a road map and a vision, the bill will deliver a change in form without providing any clarity around a change in function—and let us be clear that it is the function that we need to change.
I intervened on Jackie Dunbar, and I ask her forgiveness for pressing her on a point that maybe I did not make clearly enough. A number of members who articulated their positions on the skills system made the assumption that the skills system is about young people almost exclusively. That is precisely where the change needs to happen. The skills system is vital for young people because it gives them the right start in their careers; however, given the changes that are happening in the economy, the change that we need to see is a skills system that is just as much about giving people who are already in the workplace the ability to upskill and reskill as technology changes how they do their jobs and makes certain industries and sectors obsolete. The need to make that change to the system has become equally important, but, frankly, I do not see that in the bill. As I said to Graeme Dey in private—and I will say it again to Ben Macpherson if we have the opportunity to speak together—the Government badly needs a route map, whether it is in a green paper or a white paper, because we do not have that clarity.
There are other fundamental objections to the bill. If it is going to be effective, a skills system has to include the voice of industry not just as a consultee or as part of on-going engagement, but at the heart of its governance. Stephen Kerr rightly pointed out that the systems in Germany and Switzerland have exactly that. The bill will scrap the Scottish apprenticeship advisory board without providing any clarity on its replacement and, critically, without putting industry’s voice at the heart of the system’s governance. To articulate clearly what I mean: that will leave out the voice of not just employers, but of trade unions and wealth in the shaping of the system’s content and direction. For that reason, we have a major problem with the bill.
A number of members have raised the issue of the board. I appreciate that my predecessor gave reassurance on that to the committee. I am happy to give an undertaking to Parliament now that I will follow up on that issue and give further reassurance and information on that important point.
I am very grateful for that, because that is absolutely central.
The other issue is the question of whether the Scottish Funding Council is the right vehicle—the right custodian—to take the system forward, given both the SFC’s track record and its other challenges. Ross Greer was absolutely right to delve back into the Audit Scotland reports and some of the other work that was done. Indeed, I did the same thing. The genesis of what is being proposed was in the enterprise and skills review that was undertaken in 2017. There are voices that say that we need to get on with it, but the urgency has been created by a lack of urgency on the part of the Scottish Government for almost a decade.
Furthermore, it is clear from the work that Audit Scotland did that there were some issues between SDS and the SFC. Maybe the bill will sort those out. However, Audit Scotland also made the point that structural change was not necessary. The Audit Scotland report was explicit in saying that there needed to be changes in ministerial direction; more importantly, it said that ministers needed to provide clarity and oversight in holding the two agencies to account. We can amalgamate them, but, unless the Government provides oversight and direction with a view to guaranteeing delivery, we could well end up having the same problem with a single body that we have with two.
Willie Rennie made the very important point that the current situation has not arisen in the absence of other considerations. We have a university funding crisis, which the Scottish Funding Council is having to look at urgently. Does it have the capacity to take on board a very significant merger?
I would go further than Willie Rennie. It is not only a university funding crisis that we face. Many of the speakers in the debate treated skills funding as a problem that needs to be solved, but that issue is dwarfed by the colleges’ budget. Part of the problem is that colleges’ spend is incredibly rigid. Anyone who has taken any time to look at the credit funding mechanism for colleges will realise that it is simply not structured to help the skills system. Today, we should have been debating how we fix colleges’ funding and how we make sure that colleges’ funding helps the skills system instead of debating how we merge the skills system with college funding. I think that the debate that we are having is the wrong way round.
The point that Daniel Johnson is making goes to the heart of the lack of parity of esteem in the different directions, which the bill does nothing for.
Absolutely. We need to have a clear framework for how people can study at university and acquire skills and apprenticeships and how they can study at college and do the same thing. Critically, graduate apprenticeships, which are the only part of the skills system that the Scottish Funding Council has been responsible for, have been static for a number of years. Moreover, the Government does not provide those figures on an annual basis—we are well behind England and Wales in that respect.
The Economy and Fair Work Committee, of which I am now the convener, held a number of evidence sessions on skills, and the voice of employers was pretty clear. At best, they were confused by the proposed change, and, at worst, they rejected it outright. Paul Sheerin of Scottish Engineering said, “Don’t do this. The things that we need to do are too urgent, and this will be a distraction.” We should listen to organisations such as the CBI, the Scottish Chambers of Commerce and Scottish Engineering. We need to stop and rethink the bill, because unless we are clear about what we want to achieve and we have a road map, structural change may well be costly and get in the way of the very thing that we are seeking to achieve.
16:43
It gives me great pleasure to close this stage 1 debate on behalf of the Scottish Conservatives. I, too, warmly welcome Mr Macpherson to his ministerial post, and I thank Graeme Dey for his work in the role.
When James Withers published his independent review of the skills delivery landscape back in 2023, his message was clear: Scotland’s skills system was too fragmented, too bureaucratic and too confusing for learners and employers alike. He called for a single funding body, for simpler pathways and for more money to flow directly to the front line, where it could support apprenticeships, colleges and young people.
The Scottish Conservatives agree with that vision. Reducing duplication and slimming down bureaucracy are not just tidy governance but financial prudence. The argument that money is restricted is well rehearsed in this chamber, and we are often asked to highlight budget cuts that we would make. If we truly want to release funding to help people back into work and to help them into apprenticeships and positive destinations, that is an avenue that Conservative members would strongly support our going down.
The bill that the Government has introduced does not live up to that ambition, however, and risks being a missed opportunity. It will create upheaval without offering a clear plan, as was mentioned by Daniel Johnson; it will transfer responsibilities without identifying transparent budgets; and it will leave unanswered questions about costs, pensions and staffing.
Let us look at the record. Data from His Majesty’s Revenue and Customs shows that employers have paid at least £875 million into the apprenticeship levy since 2020. At this time, the Government has spent £704 million on apprenticeships, so there is a missing amount of £171 million. That money could—or should—have gone into training opportunities for young people. Meanwhile, 60 to 80 young people chase every apprenticeship place, and businesses tell us that the demand is closer to 40,000 places each year than the 25,000 that are actually delivered. The point was well made by my colleague Brian Whittle. It is shocking to hear that 831 students, who all wanted jobs in sectors that were crying out for more staff, were prohibited from taking places due to a lack of funding. If evidence is needed of the issues that we are facing in our tertiary education system, there it is.
If the bill was truly aligned with a vision for Scotland, we would see those levy funds transparently channelled into apprenticeships, bureaucracy stripped away so that more money would go straight to training rather than being swallowed up in overheads, and a system built around learners and employers rather than institutions and ministers.
I thank the committee for its work on the report. However, the report states that, collectively, the committee was not able to make a recommendation on the bill at stage 1 and that it reserves its position on the general principles of the bill. The report warns the Government that the committee does not know the full cost of the proposals. That has been well debated today. The pension liabilities for staff transfers could run to tens of millions of pounds, yet no figure for them has been offered. The Scottish Funding Council is already overstretched. Doubling its size overnight, with the risk of duplication that doing so would bring, is reckless without clear resources and a path forward. We believe that the principle is right, and the ambition is shared, but the execution has been found wanting.
Going back to the contributions made in the debate, I say thank you very much to the minister—I am delighted to hear that there will be collaborative work as the bill progresses. To Mr McLennan, I say that, as the bill progresses, we will be open to working to improve it at its further stages. As Mr Briggs stated, our doors are open.
I also welcome the minister’s comments on collaboration with businesses, which we agree is absolutely essential. I have previously mentioned in the chamber that Fife College had to cancel a full year-long social care course due to a lack of care home and business buy-in, based on funding. A lack of joined-up processes is adding to the issues that are before us, and we must address that.
Bill Kidd commented that some “polishing” is needed. I could ask him to tell me what it is that he thinks needs polishing, but that might be a bit flippant.
Miles Briggs asked a good question about why we are delivering 25,000 places when 40,000 are needed. If we do not answer that question, are we sure that we are fixing the problem?
Ross Greer pointed out the dysfunctional relationship between the Scottish Funding Council and Skills Development Scotland, saying that the Government should step in to address that. Is legislation the right way to do that? Legislation is about making a fundamental change to structure; perhaps we should be looking at legislation to do that.
Stephen Kerr highlighted, quite eloquently, that the whole process should be demand led, and I certainly agree with that.
The Withers review gave us a route map to a simpler, fairer and more effective skills system. We should be seizing that opportunity, cutting bureaucracy, reducing duplication and putting money where it matters—into apprenticeships, colleges and places where people will drive forward Scotland’s economy. The bill does not do that. It risks confusion, cost overruns and lost opportunities. Unless it is significantly strengthened, we will not support it. The Scottish Conservatives will continue to champion the principle of reform, but one that works—a system that is simpler, leaner and built to deliver opportunity. That is what Scotland deserves, and it is what we will fight for.
16:49
First, I emphasise my thanks to all colleagues for their thoughtful and robust contributions and to all those who contributed to the stage 1 evidence and report. I genuinely appreciate the feedback on the bill and, in my concluding remarks, I will respond to as much as possible of what has been said today.
Taking all that into consideration, with all the constructive criticism respectfully acknowledged, I maintain that the bill could be an important and impactful step towards reforming Scotland’s post-school education and skills funding system, and I believe that Parliament should consider it further by passing the stage 1 motion today.
As many members, including Paul McLennan, emphasised, many stakeholders are supportive of the bill. With respect, I say to colleagues in the larger Opposition parties that, by not voting for the bill today, they would in effect be voting against legislating in this area before the end of the current parliamentary session.
Will the minister take an intervention on that point?
Will the minister take an intervention on that point?
Yes.
I call Daniel Johnson.
I apologise to Pam Duncan-Glancy. Does the minister recognise that Audit Scotland was clear that the Government does not need to legislate in order to deliver the reforms, which could be done without legislation? To say that we would be voting against legislation may be correct, but it is not correct to say that we would be voting against change.
I challenge that. I acknowledge the points that the Audit Scotland report makes. However, a number of points that were made in the debate by Opposition members—including the member to whom I am responding—would require to be addressed by legislative change. I say that in good faith, in that, if the bill passes stage 1 today, I want all members to really engage on it as we move forward together.
For learners, providers and employers, the bill has the potential to make funding simpler and more flexible and transparent so that the system meets Scotland’s growing demand for a variety of skills. The bill will lay the foundation for a stronger future for apprenticeships, as Bill Kidd set out; reform Scotland’s post-school education and skills funding system; and consolidate responsibility and funding for apprenticeships in the SFC. It will thereby strengthen the SFC’s governance powers, too, in order to provide more effective oversight and institutional sustainability.
The bill will enable better monitoring of the sector’s financial stability, which John Mason raised. I know that that is of great interest to many members, and I would look to work on that issue ahead of stage 2 to strengthen the system further. It is also worth noting that the SFC would not be constituted as it currently is if the bill was to pass—that is worth bearing in mind.
The bill will provide a statutory definition of “apprenticeship”, as I said in my opening remarks. Crucially, in my view, that will help to build much better parity of esteem between career paths—which George Adam, Stephen Kerr and Daniel Johnson rightly highlighted as a priority—thereby boosting confidence for employers and learners alike.
I emphasise again that the bill is the product of years of listening, gathering evidence and responding to a clear call for change, which has been expressed by members across the chamber today. The Scottish Government has been listening, and I commit to doing so even more, starting from today. I have been listening carefully in the chamber, and I will respond to some important points that members raised.
The convener of the Education, Children and Young People Committee raised the issue of modern apprenticeships. We will work with stakeholders to consider the delivery models for modern apprenticeships, including funding, over the next few years. I am happy to share more detail on that with the committee and with Parliament in due course.
The convener rightly emphasised the situation with SDS staff. I will take a moment to acknowledge the significant and valued contribution of those staff and what they have done over the years in building Scotland’s apprenticeship programme, particularly through their leadership and employer engagement, which I have experienced at first hand as a constituency MSP. The bill aims to build on that strong foundation, and the Government is committed to doing that by transferring apprenticeships and national training programmes to the redesigned funding body in April 2027, if the bill is passed.
Others have raised the important question of trade union engagement. I agree that unions must be meaningfully engaged at every stage. They have a pivotal role in shaping the changes that are needed to implement the bill, and we want to ensure that their voices, and those of all staff, are heard. That is why we have established a regular forum with trade unions to discuss implementation. We will continue to engage with the public bodies involved, their staff and the unions at every milestone, should the bill progress and be enacted.
The convener and others raised the issue of costings. I appreciate that issue. The figures that my predecessor provided in a follow-up to the committee’s report are refined ones. I commit to continuing to engage with the committee through the bill process and to probing the costs further. We need to provide reassurance about implementing IT and pension transfers, because there are two pension schemes in play. I take those points on board.
Ross Greer talked about the need to consider the bill as an opportunity for alignment and better value for money. Willie Rennie asked—rightly—what cannot be done in the current situation that the bill will enable to be done. If the bill is passed, the SFC will have oversight of all provision and will be able to flex to employer and business needs—as many have emphasised the need for. It will enable innovation of the right provision for the need—whether that is a short course or an apprenticeship. The bill will provide that breadth of options.
Will the minister take an intervention?
I will, if I have time to do so.
I understand that point in principle, but we need tangible examples. Everything is theoretical just now; we need something more tangible.
I appreciate that that is the call to me. I have tried to give that to the Parliament at a high level today, but I am enthusiastic about following up on that as we progress.
Others raised points about SMEs. The FSB has stated its support for the bill. We need to ask ourselves whether SMEs are being catered for properly in the current system. That is one of the strong reasons for progressing with consideration of the bill. It was either Sarah Boyack or Brian Whittle who asked questions—this is relevant to what I said in response to Mr Rennie—about how we provide focus to specific skill areas. That is exactly what bringing all the provision together is intended to enable.
Will the minister give way?
I am sorry—I am pressed for time, otherwise I would do so.
To answer a question about SDS staff—I should have done so earlier—should the bill progress, around 150 to 180 people will be expected to move from SDS to the SFC.
Will the minister give way on that point?
I am afraid that I need to make progress.
The committee highlighted widening access and the use of free school meals data to measure that. Ross Greer referred to the use of data. I am keen to make progress on that and I am cautiously optimistic that the bill provides an opportunity to make appropriate provision for data sharing. That is another reason to continue to consider legislating in this area.
A vote for the bill is a vote for significant change that will put learners at the heart of a system that works for them and, in turn, for employers, the economy and our society. It is a vote for cutting through bureaucracy, improving funding flows and maximising public value, and for a better-joined-up system, with colleges, universities and training providers all playing a vital role in delivering high-quality, future-ready education and training. It is a chance to create a more efficient, more innovative and truly collaborative system.
Let us act together to take the bill forward and support our learners and employers to better serve our people and our economy. For all those reasons and more, I ask the Parliament to support the bill.
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One Scotland, Many Voices