Meeting of the Parliament

Meeting date: Wednesday, October 25, 2023

Official Report 1160KB pdf

---

Skills

The next item of business is a debate on motion S6M-10922, in the name of Daniel Johnson, on ensuring that Scotland’s skills system is fit for the future. I invite members who wish to speak in the debate to press their request-to-speak button.

15:32  

The skills debate has never been more prominent nor more important. That is not just because of recent publications and reports in Scotland. When we look globally, we see demographic change, which means that we need to do more with a smaller and ageing working population. Net zero and technology mean that the pace of change that is required in terms of people’s skills and qualifications during their working life has never been more rapid. Global economic change means that there is an emphasis on securonomics, on the resilience of individual economies and on a move away from the globalisation of recent decades, so we will need to be more self-sufficient in skills and across a number of economic areas. That is why the skills debate is so important.

I gently comment to the Government that the information in my motion comes from reports that it has commissioned and that the figures are ones that it has published. I would argue that there is consensus on the analysis not just between politicians and business but across the parties. Therefore, I wonder why the Government is seeking to amend my motion to obliterate all those observations and comments.

I believe that consensus is possible and that we need constructive discourse, albeit critical at times. We need to be frank in our reflections on our system in Scotland. If we look at the raw numbers, we see that the number of apprenticeship completions is down in 2022-23 compared with 2015-16, the number of graduate apprenticeships is largely flat and small relative to the number of people doing university degrees, and the number of employers and providers that are providing apprenticeships is down by a fifth.

We also see blockages in the system. Some 800 apprentices who started in 2017-18 have yet to complete their apprenticeships; we have year 5 and 6 apprenticeships, which should not be possible. That is down to blockages in assessment and in the ability of those apprentices to get recognition for the skills that they have acquired.

Key issues are also being raised by employers. According to the British Chambers of Commerce, some 70 per cent of respondents said that skills shortages are impacting their businesses and their profitability. There are problems with throughput in the system and serious challenges for businesses because of the system’s inability to provide the skills that they need.

The Office for National Statistics reports that barely more than a quarter of workers are also in in-work training. Flexibly provided training is not available for most people who are in work. The Withers review has been useful in that context. It provides analysis on which I think we can all agree—in part, if not in full—and some ways forward. However, I do not think that all its recommendations are of equal priority. It provides both functional recommendations and structural ones, and I think that some of the functional recommendations might be more important than the structural ones.

Our issue with the Government is not just that it has been largely silent in the six months since the Withers review was published but that it has been silent on some areas and overly specific on others. In its document “Purpose and Principles for Post-School Education, Research and Skills”, the Government essentially commits to a single funding structure and a consolidation of the qualifications and frameworks, yet it is silent on the functional issues.

The points that James Withers highlights on flexibility, a digital passport and putting the vocational and skills regime on a commensurate basis with the other qualifications are critically important. Embarking on costly and time-consuming structural reforms could get in the way of those measures.

I also note that the proposal in the Conservative amendment on putting the skills regime on a commensurate basis is of critical importance. We would vote for that amendment were there not pre-emption involved.

Even if those structural reforms were correct, I have concerns about the capacity of the organisations that would be required to assume additional responsibilities to adopt those functions.

The Scottish Funding Council has not done as much as it could do to progress graduate apprenticeships, and there are huge challenges in the tertiary education sector. The Scottish Qualifications Authority has a huge task ahead of it if it is going to on-board the recommendations of the Hayward review. I am not clear whether it has the ability and capacity to assume additional functions from the skills regime.

In the meantime, the overspecificity in those areas and the lack of clarity in others leave a huge cloud over the whole system. We have organisations in limbo, structures such as the Scottish apprenticeship advisory board essentially condemned and Skills Development Scotland looking as though it is going to be dismembered, but we have no real clarity as to what will happen.

A consensus is possible, and I look forward to future Government debates in which we talk about flexibility and additional pathways. I urge the Government to have those debates, because that is how we build consensus and a plan.

To conclude, I will alight on a quote from Jimmy Reid. In 1972, he said:

“To unleash the latent potential of our people requires that we give them responsibility. The untapped resources of the North Sea are as nothing compared to the untapped resources of our people. I am convinced that the great mass of our people go through life without even a glimmer of what they could have contributed to their fellow human beings. This is a personal tragedy. It’s a social crime.”

Jimmy Reid was right then, but I think that he is even more right now. The failure to provide a clear plan for our skills system will continue to let down people and ensure that they do not realise their potential.

I move,

That the Parliament notes the findings of the independent review of the skills delivery landscape, particularly that skills delivery has lacked clear leadership and direction, and substantial structural change is required to ensure that the skills system is fit for the future; regrets that Modern Apprenticeship starts are lower than in 2015-16 at a time when 70% of businesses are reporting skills shortages; is concerned that the proportion of people in employment who participated in job-related training is lower than it was in 2007; notes that net zero targets will require a step change in workforce skills but that the Scottish Government has only allocated 15% of its Just Transition Fund; considers that it is 21 months on from Audit Scotland’s conclusion that urgent action was needed on skills from the Scottish Government and that it is therefore disappointing that no reforms are yet planned; believes that Scotland urgently needs a vision for a flexible and responsive skills delivery system that is fit for the future, and calls, therefore, on the Scottish Government to set out its response to the review of the skills delivery landscape before the end of 2023 and to bring forward legislation on skills reform, as referenced in its Programme for Government, within the parliamentary year.

I call the minister to speak to and move amendment S6M-10922.2.

15:39  

I genuinely welcome Labour bringing this debate, although it is brief, to the chamber because it gives me an opportunity to outline the work that has been undertaken in response to the Withers report thus far, ahead of my giving a fuller update to Parliament, subject to the agreement of the Parliamentary Bureau, in the coming months.

Like Daniel Johnson, I welcome James Withers’s report, which makes a compelling case for change and is an important moment in moving us towards an education and skills system that delivers for our future needs. Not long after the report was published, as Daniel Johnson highlighted, we published “Purpose and Principles for Post-School Education, Research and Skills”, which was clear about the outcomes that we want to see from the system in the short, medium and long term.

In that document, we welcomed the direction of travel that was presented by the Withers report and set out some of our initial priorities for reform. However, we were also clear that we needed to take time to consider the practicalities and implications of implementing change, and to listen to constructive and knowledgeable views. I therefore do not accept the idea that the Government has not moved quickly. It has moved at the right pace and with purpose, and it will continue to do so. When James Withers has appeared before committees, he has welcomed the measured approach that has been taken to considering his findings.

We must also be clear that we do not start from scratch. There is already much that is positive, but Withers was a review about future needs and how we meet them.

Will the minister take an intervention?

I am sorry, but I do not have time. I apologise—I have five minutes.

Withers found that there is confusion and duplication in our public body landscape but, even if our current system was perfect, the world around us is changing and we cannot afford to stand still. Since June, my officials have been working on the priorities that are set out in “Purpose and Principles” to establish the appropriate governance and approach to implementing change. Alongside that, I have engaged widely in gathering views and developing my understanding of the challenges that organisations face, and how those are impacting on their staff and, ultimately, the learners.

Those conversations have helped me to be clearer on the steps that are needed to bring about improvement and on the prioritisation of those steps. That process will continue as we narrow in on the potential routes to reform. The programme for government already commits us to updating Parliament on our plans for reform of the public body landscape and our response to Withers, but I have been engaging directly with Opposition parliamentarians. For example, I have met Liam Kerr and Willie Rennie to hear their views and, next week, I will meet Daniel Johnson. I hope that those interactions demonstrate my commitment to the widest possible engagement and to trying to find the consensus that Daniel Johnson referred to.

On net zero, it is clear that a step change is needed in our workforce if we are to deliver on our ambitions and meet our emissions reduction targets. That is one of the key reasons why we accept the recommendation that skills planning should move to the Scottish Government so that there is greater coherence and impetus behind that objective. We need to ensure that every part of our education and skills system can match people with the available opportunities and that we can put in place the relevant pathways. We are doing what we can in the area. The Government has already committed £500 million over 10 years to our just transition fund, including more than £10 million for skills-related interventions. It has been deeply disappointing that the United Kingdom Government has not matched that investment.

I have heard loud and clear the concerns that James Withers expressed about funding, which have been echoed by others, recognising the complexity and the fact that the multiple streams are confusing and inefficient. That is why, as part of the programme for government, we have committed to leading the development of new funding models to simplify the funding landscape and ensure that we get maximum return on our investment. That will be all the more important, given that we find ourselves in the most challenging financial situation since devolution.

To be clear, neither Withers nor “Purpose and Principles” was commissioned because of budgetary pressure or to respond to public sector reform, but that is the context that we are now in. The Labour motion does not mention the join-up with wider education reform, but it is crucial to see the reviews as part of a package of reform and, therefore, it is right that they are considered and presented to Parliament in that manner. We need a simpler and more efficient system that is more easily understood by learners and users and which equips young people to make the right choices for themselves and to make the fullest possible contribution to our society and economy.

The reforms that are being taken forward and the steps that we are taking to implement them will move us closer to that ambition. We will continue to move forward in close collaboration with colleges, universities, trade unions, industry and other stakeholders. I add to that list the staff in the potentially impacted agencies. Not only is it the right thing to do to engage with them, as I have done, but it has already fed into our thinking on the provision of a national careers service and how we help to make apprenticeships more accessible to small and medium-sized enterprises.

I move amendment S6M-10922.2, to leave out from “particularly” to end and insert:

“which it accepts set out a clear case for change; agrees that the skills landscape must fit the needs of the people of Scotland to ensure that everyone can fulfil their potential; understands that the Scottish Government will set out a full response to the independent review in the wider context of reform of the education and skills system, as set out in the Programme for Government 2023-24; agrees that it is right that the Scottish Government engages fully with stakeholders before setting out its full response, including education institutions, industry and trade unions; recognises that the Scottish Government’s ambitions for a just transition will be supported by the delivery of the Green Industrial Strategy; acknowledges that funding is being provided to support up to 25,500 new Modern Apprenticeship starts in 2023-24; welcomes the many areas of success in the skills landscape at present, such as the proportion of school leavers in a positive destination nine months after the end of the school year standing at its highest level since comparable data was first gathered; recognises that effective utilisation of the skills system will be vital in ensuring that Scotland has the workforce skills to meet its ambitious net zero targets and the wider needs of the future economy; welcomes the Scottish Government’s £500 million Just Transition Fund and the £75 million allocated in the Fund’s first two years, which includes £11.2 million on a package of skills-focused interventions; acknowledges that this is a 10-year fund, and that the Scottish Government is acting to support workers now, and in the future, with the skills needed to deliver Scotland's just transition towards net zero; expresses deep disappointment that the UK Government has repeatedly refused to match the Scottish Government’s Just Transition Fund, and calls, therefore, on all parties in the Scottish Parliament to work to secure a matching commitment from the UK Government.”

15:44  

I welcome this debate on the future of the Scottish skills agenda, although it is a pity that it is taking place in Opposition time and that it is so short. A wide range of issues need to be addressed in relation to skills, including funding for universities and colleges, funding for apprenticeship schemes and the future of the agency landscape.

It is disappointing that the Scottish Government has not allowed time for a full debate on those vital issues, which are key to our economy’s recovery. Having listened to the minister and Mr Johnson, I suspect that there is more common ground on the matter than there is ground on which we disagree, so a full debate on such issues would be welcome.

We agree with every word of the Labour motion. When I read it, I did not realise that it was lifted from Scottish Government publications, but that does not stop me endorsing its wording. As Mr Johnson said, we have a short addition to it, which I hope that members will look sympathetically on.

The motion does not specifically mention the Withers review but, as others have said, we all owe a debt of gratitude to James Withers for the work that he did in preparing his independent review of the skills delivery landscape, which was published back in May. I endorse Daniel Johnson’s call for the Scottish Government to formally respond to the review by the end of the year.

There are really important issues on which we need to make swift progress in order to meet the demands of industry. I will give one example. Yesterday, I met the Civil Engineering Contractors Association, which raised with me its concern about the difficulties that its member companies have in securing appropriate funding for apprenticeships. The construction sector needs to attract a large number of younger people to fill vacancies that are being left by an ageing workforce. The industry has highly attractive pay and conditions but, without public support, many smaller and medium-sized employers are struggling to afford to take on apprentices. Skills Development Scotland runs the flexible workforce development fund, which is supposed to provide funding for such apprenticeships, but many employers find it extremely difficult to access that funding in practice.

The Construction Industry Training Board made similar points in its briefing for the debate. It also highlighted important issues relating to the transition to net zero, which we all support. People who are currently employed in construction and other trades will need to be retrained if we are to meet those challenges, and that will require a stepped increase in the support that is available.

My amendment mentions parity of esteem, which James Withers highlighted in his report. When he appeared in front of the Economy and Fair Work Committee last month, he told us that, in relation to the funding of higher and further education and training more generally,

“Apprenticeships have been the poor relation.”

He told us that he

“would like to see universities having the freedom to utilise the core funding that they get from the Scottish Funding Council to deliver degrees through either apprenticeships or full-time study.”—[Official Report, Economy and Fair Work Committee, 27 September 2023; c 32-33.]

He said that we should not see those routes as separate and distinct; both should be part of the same main stream. His view was that there needs to be greater flexibility to use the total amount of funding that is spent in Scotland on skills—£3.2 billion—including using it to fund apprenticeships.

In that regard, we need much greater clarity on the apprenticeship levy. I hear from UK-wide employers that, south of the border, there is much more transparency about accessing the apprenticeship levy and how employers can get their hands on the money. In Scotland, our share of the levy goes into the block grant, so it is difficult to identify how much of that money goes into funding apprenticeships. Not surprisingly, many businesses feel frustrated that they have to pay the levy but are not able to get anything in return. The Scottish Government needs to be clear and transparent about what happens to those funds, and it can address that in its upcoming budget. We need clarity on the apprenticeship levy—on exactly where the money goes and why it is not currently reaching the front line. That is the point that is made in my amendment, which I have the pleasure of moving.

I move amendment S6M-10922.1, to insert after “skills shortages”:

“; supports the principle of parity of esteem for different learning routes, but regrets that there is considerable unmet demand for apprenticeship places due to the shortage of public funding available; believes that this should be addressed in the Scottish Government’s forthcoming Budget for 2024-25”.

15:48  

We will support the Labour motion, but I give credit to the minister following the Withers review. He has engaged in a positive fashion, and the omens are good for a good policy in the future.

However, the Government’s recent record on skills has not been positive. To be frank, the previous minister did not seem to be too interested in the whole area. We have been waiting for more than five years for skills landscape reform, but the then minister acted only after he was criticised by Audit Scotland for a lack of leadership. Although we have the Withers review, we do not have the Government’s formal official response, so it could be even longer from the initial start point when the landscape review was supposed to be undertaken before we get any change.

The world is changing fast. We are going through a new green industrial revolution. While we wait a long time for the reforms to come, the world is moving on, and I fear the consequences of that.

It would be wrong not to mention colleges today, especially following this week’s report from the Fraser of Allander Institute, which said that college graduates will boost the economy by £52 billion over their working lives. Shona Struthers was right when she said this week that that report

“quantifies the huge return on investment”

from Scottish colleges. However, the crucial bit is that she was puzzled that there

“isn’t a decisive move to invest more, and gain more”.

She said that

“in fact, investment is falling sharply”.

In other words, the college sector delivers billions and could deliver more, but the Government is cutting millions. The symptoms of that are strikes, the threat of compulsory redundancies and the loss of opportunity for potential students. We need to invest in the college sector if we are to get the proper return that has been promised.

There is much to commend in the Withers review. It brings clarity for employers, training providers and students about roles and responsibilities, and it gives intelligent control over how the money is spent.

For students, there is a new careers service, which the minister thinks is a central piece of the Withers review, to be led by the newly reformed Skills Development Scotland. The aim would be to cover not only those who choose a non-university career trajectory but those who go into higher education, so that everybody gets the best advice.

For employers, there is better, clear advice from a single source through Scottish Enterprise, which is long overdue. There would also be more systematic involvement of employers in skills planning.

For everyone, there is a single source of funding that brings together education and skills under national and regional planning to set out immediate and future skills needs. There would be parity of esteem to use the Scottish credit and qualifications framework much more effectively.

There are questions about the role of the employers group—the Scottish apprenticeship advisory board—which I will meet tomorrow. However, the devil will be in the detail of subsequent decisions on policy and funding.

Simplification can sometimes mean a lack of sophistication, with some losing out. For example, although it does not quite state this, the Withers review implies that the flexible workforce development fund should end and be brought under the main central funding arrangements. As Murdo Fraser highlighted, some employers might lose out as a result of that simplification and lack of sophistication. We therefore need to ensure that the new system takes account of all those needs.

Bringing together funding for higher education, further education and skills will mean little if there is not a transfer of funds between those different functions. However, that transfer will be fought fiercely by those who are defending already-shrinking budgets. We must address the simplification on that front, too.

Those matters are difficult, but we must have such discussions—with much more time—if the reformed skills landscape is to be fit for the future.

We move to the open debate.

15:53  

If we want an illustration of the lack of leadership and urgency from the Government in facing up to and tackling the skills shortages that we face today, and which will become even more profound in the future, it comes from the treatment of Scotland’s colleges, as Willie Rennie highlighted.

A week never passes without local businesses telling me about the acute labour and skills shortages that they face. Those businesses are desperate to recruit, upskill their staff and take on apprentices. However, when I speak to my local college in Dumfries and Galloway, it tells me that its Skills Development Scotland apprenticeship contract for 2023-24 has been cut by 13 per cent. At a time of peak demand for apprenticeships, crucial areas for the local economy, such as construction and engineering, have waiting lists for apprenticeship places at that college. It is the economics of the madhouse.

It was bad enough that the budget that was agreed in February meant a real-terms cut of £51 million for colleges, which would have led to a 10 per cent reduction in activity levels at the college in Dumfries, but the decision to axe a further £26 million has meant brutal cuts in colleges, with courses axed not because of a lack of ambition from our colleges or a lack of demand from students or employers but because of a lack of priority on skills from the Government. Where is the SNP’s green fair work agenda when those cuts mean that colleges are now embarking on compulsory redundancies? Where is the fair work agenda when college staff are having to take industrial action to fight for a fair deal for last year, never mind for this year?

I have lost track of the number of times that ministers have stood up in this chamber and told us that there will be no strike action in the NHS because of their interventions or that their actions settled the teachers dispute, but when it comes to college pay, the perception of college staff is that Government ministers have been posted missing. I do not know whether the minister has been on a picket line and spoken to college workers; I have been on many. If he had been, he would know that none of them wants to be on strike.

The workers’ demands are not unreasonable; what is unreasonable is the real-terms pay cut that they have been offered, the funding of that inadequate pay offer on the back of sacking staff and the lack of intervention from the minister to broker a deal. That says all that you need to know about the lack of priority that the Government is giving to our colleges.

Our colleges are the powerhouse of our economy and skills at every single stage of the learning journey, whether that is in relation to new qualifications for school leavers or upskilling and retraining those who are already in the workplace. James Withers’s review of the skills delivery landscape described that role as absolutely “pivotal”, but it is being held back by Government cuts and by funding bodies that do not properly recognise the additional costs of delivering college courses in rural areas, where skills shortages are often most acute. The role is also being suffocated by the cluttered landscape in which it operates. When the Government eventually gets round to responding to the Withers report, I hope that it will heed the calls for stronger leadership and direction from the Government and—crucially—heed the recommendations that would see far more focus on our colleges as key anchor institutions that drive the skills agenda forward.

I will end on a final plea to the minister to take a more interventionist role in brokering the deal between college staff and colleges, so that they can get back to the job of delivering the figures that Willie Rennie highlighted, which strengthen Scotland’s economy.

15:57  

The roll-out of the Scottish Government’s 10-year just transition fund is in its first years, and the substantial structural change that Labour’s motion calls for is already under way. It is vital that there is a focus on being smarter about skills delivery by ensuring that it matches industry needs. That is exactly what is happening in the north-east.

In year 1, the just transition fund has supported initiatives throughout our region. For example, £1 million was awarded to the National Energy Skills Accelerator for its pilot energy transition skills project. NESA is a partnership between Robert Gordon University, the University of Aberdeen and North East Scotland College. The energy transition skills project is aimed at determining the exact skills that are required to meet the needs of the net zero energy transition from now until 2030 and developing targeted training, upskilling and reskilling for people who are impacted by redundancy or who are transferring from oil and gas, with a focus, of course, on retaining jobs in the north-east. The focus is on matching skills development to the exact needs of low-carbon industries.

In the words of Professor Underhill, who is NESA’s chair and the University of Aberdeen’s director of energy transition:

“This work will help prepare the education pipeline for the anticipated surge in key skills requirements and lay the foundations for upskilling and re-skilling to benefit sustainable energy careers for existing workers and future generations.”

Five million pounds has also been awarded to OPITO to deliver an energy skills passport, which will streamline the transfer of skills and address the lack of recognition of cross-sector skills. That will allow oil and gas workers to prove that they have the recognised qualifications and training that are needed to access new clean energy jobs.

The passport is also key to streamlining reskilling by identifying specific skills gaps and targeting training to those gaps, which will allow workers to be reskilled faster and more workers to be reskilled with the same resources. Pat Rafferty, Unite the union’s Scottish secretary, said on behalf of the Scottish Trades Union Congress:

“the passport will … help identify to all stakeholders where there are skills gaps and shortages which can shape appropriate policy responses so that we can deliver a Just Transition and net zero economy.”

I recognise that that work is in progress and that there is some stickiness about the passport. I hope that ministers will be able to ensure that those difficulties become unstuck and that that works the way that it should.

Skills delivery cannot be restricted to reskilling today’s workers. It is vital that tomorrow’s workers who are currently in our schools and colleges come into the workplace with skills for the future. That is happening in the north-east with the just transition fund and the energy transition zones partnership with North East Scotland College, which is developing the advanced manufacturing skills hub at the Altens campus in Aberdeen and working in schools throughout our region.

With such excellent early work by the just transition fund, it is vital that Labour and the Tories in Westminster commit to matching the Scottish National Party’s £500 million just transition fund. It might be a little bit late, but it is not too late. Better late than never.

16:01  

I am delighted to contribute to this debate on the importance of Scotland’s skills landscape to its future economy. I will support the amendment in the name of my colleague Murdo Fraser.

As someone who took an unconventional journey through the various stages of the education system, I have long been an advocate of the idea that one size does not fit all and that different people suit different pathways. For example, I have two boys. One of my sons took the more traditional route through higher education and is now a doctor. My other son is training to be a mechanic through an apprenticeship. However, it is disappointing that there is still so much more work to do to achieve parity of esteem between different pathways such as those.

For many young people, an apprenticeship is an ideal way to learn on the job. That type of learning is supported by more than 12,000 employers in Scotland. However, demand for apprenticeships is outstripping supply. Earlier this year, the Scottish Government left training providers and young learners in limbo because of delays to apprenticeship funding. That is despite confirmation from the Scottish Training Federation that demand for apprenticeship places has never been higher. That failure to provide enough apprenticeship places is undermining the crucial role that they have to play in Scotland’s future skills landscape.

A report from the Fraser of Allander Institute that was released this week provides a fresh look at how important colleges will be to Scotland’s economic future. It highlights the point that highly skilled college graduates benefit the Scottish economy by around £8 billion in total. The study also found that a single year of college graduates has the potential to increase labour productivity by more than 0.3 per cent. Those are only two of many benefits that our college sector can offer our economy. However, that sector has struggled for years due to continued underinvestment.

I also highlight the point that there is a significant gender divide in apprenticeships, with female apprentices entering lower-paid work on average compared with their male counterparts. I hope that the minister will be able to set out in his closing remarks what he is doing to close that gap.

The Fraser of Allander Institute put it best this week when it said:

“Colleges sit at the forefront of ‘skilling up’ the nation through its diverse and extensive selection of further and higher education courses.”

Without taking full advantage of that pathway, Scotland cannot have a skills system that is fit for the future. Our colleges are capable of delivering the skills that our country needs, and the onus is now on the Scottish Government to deliver the funding for apprenticeship places that is clearly needed.

I fully support Labour’s motion, and I hope that members will support Murdo Fraser’s amendment, which calls on the Government to ensure that everyone who wants to pursue an apprenticeship is able to do so.

16:05  

It is a pleasure to follow Pam Gosal in this debate, because she highlighted an issue that is so important—the fact that there are unconventional routes through education. There is not one system that works for all our young people, all our people in work or, indeed, all our older people. The need for flexibility sits at the very heart of the reasoning behind today’s debate.

I echo what Colin Smyth and others said in their contributions about the importance of colleges and the need for, if not intervention or urging on the part of the Government, its facilitation of settlement of the current dispute.

All the discussion about skills talks to an issue that is so important to Scotland—the public finance picture. The Scottish Government’s medium-term financial strategy, which was published in May, estimated that there would be a funding shortfall of £1 billion in 2024-25, which would rise to £1.9 billion by 2027-28. The updated fiscal framework might have reduced that headline figure but, as we have heard, the Fraser of Allander Institute estimates that the cost of the First Minister’s announcement on council tax will come in at some £417 million.

It is in that context that we need to have a Government that is focused on economic growth and creating more well-paid jobs. That will be achieved through the dissemination of skills, whether that involves reskilling, the newly skilled or the pointing to skills for our young people and those who are already employed. That way, we can achieve an increased tax take to fund the public services on which we all rely. I welcome the minister’s commitment to matching young people to skills, but perhaps that could be extended to matching people who need to be reskilled to the correct and proper level of skilling.

I also welcome the announcement about the simplification of funding streams, because the current landscape has created a situation in which our SMEs and other companies find it almost impossible to support people through an apprenticeship, which so many of those who run our SMEs went through when they were younger.

Addressing the skills shortage in our economy is our fundamental strategy for growth. It would be a good Government that was serious about growing the economy and addressing the skills shortages, but we have a situation in which many sectors that are integral to our growth are not planned for at all. That is particularly the case when it comes to our digital skills. There is a widening of that gap, and I can see no bridging that will cover it in the near or the foreseeable future.

As a result, do we have the ability to develop a resilient domestic supply chain? We do not. Let us look at the capital projects that are being held back by staff shortages. I welcome the briefing paper from the Construction Industry Training Board, which points out that the lack of a construction skills plan for Scotland, with a clear overview of existing delivery arrangements for upskilling and reskilling and specific funding programmes, is a significant omission from the skills delivery landscape.

Time is short, but it is worth pointing out that the independent review reported that there has been a lack of clear leadership and direction on skills delivery. There is an opportunity for the minister to change that, but that failure lies in a succession of Government ministers who have neglected that responsibility and who have not acted in the way that a good Government would have done. We are now paying that price.

The question of why it is taking so long for the Government to respond to the report is pertinent, because time that is spent waiting for a response from the Government is time wasted for our young people and those who are seeking change. We have heard about the benefits in the north-east, but we need to see those across the whole of Scotland.

We have a falling birth rate and an ageing population here. Our way round that is to support those people who are coming into work and who are in work to reskill. That is how we can build an economy that works for all of us.

16:09  

I thank Labour for securing the debate for the chamber.

The motion calls for “structural change”, and that has been committed to, I believe. However, I always have some reservations about too much emphasis on structures. Given the cost involved, there are other factors at play.

One factor that we need to take cognisance of is the emphasis that we as a society place on university education. Absolutely, we should enable every person for whom university is the right choice to get there, without fees or other barriers. However, university is not the right route for everyone, as other members have said. We need to get that message across to our young people, their families and wider society. Modern apprenticeships certainly are the right route for many, and that route often opens up a career and a way of earning more money, as well as providing more satisfaction, than university would.

Society needs a mixture of people with a mixture of skills. In my case, I decided to train as an accountant, and I needed to go to university to do that. However, currently, we find that some young people decide to go to university without much idea of what job they will do at the end of the course. That is disappointing for them and for us as a society. I would argue that we need to get the balance right between young people studying a subject that they would like to do and the longer-term career that they are looking to have.

James Withers’s comments on parity of esteem were excellent. As he says, the way we talk about different pathways is

“fundamental to achieving parity of esteem.”

I reassure John Mason that the points that he is making are perfectly valid and are informing a lot of our thinking around the national career service, in order to address those issues.

That is great, and I am reassured by that.

James Withers goes on to say:

“different pathways are simply different: not better, not worse, just different.”

We want to

“consign to the dustbin the outdated view that studying at university is somehow a ‘better’ kind of success.”

We should be proud of our university sector, but there are multiple potential pathways available. Learning happens in schools, colleges, universities, workplaces and elsewhere. We need more of a single integrated system—I agree.

It is unfortunate that Labour’s motion refers to skills shortages but does not mention Brexit. With the best will in the world, neither Scotland nor the UK will ever produce exactly the goods and services that we need. We always need to import and export. In the same way, however good our education and training system is, a flexible international labour market, as the EU provides, allows our people to take up opportunities in other countries and allows others to come and take up opportunities here.

The Government is taking time to consider the Withers review recommendations, and that is right. Withers makes 15 recommendations, some of which are more radical than others. Specifically, recommendation 5 proposes the establishment of a single national funding body, and I have certainly warmed to that proposal. Scotland is a relatively small country, and we should be able to run things in a simpler fashion compared with larger, more bureaucratic countries. My inherent feeling would be to support such a simplification. My only real concern would be to ensure that such a body would operate on the parity of esteem principle and would not favour universities over colleges and modern apprenticeships.

An important point that I make in passing is that we should recognise the skills of migrants.

On the Conservative amendment, I welcome its support for parity of esteem, but I also note its point about

“the shortage of public funding”.

That strikes me as slightly ironic, because the Conservative party is the party that wants lower taxes, which would inevitably mean a greater shortage of public funding—[Interruption.] I am sorry, but I do not have time to give way. As usual, the Conservatives do not suggest where the money should come from.

To finish on a positive note, 93 per cent of school leavers are going into positive destinations. Although we always want to improve those destinations, there are lots of positives in the present Scottish system, and we should not be afraid of celebrating those.

16:14  

I am grateful for the opportunity to speak in the debate. I thank the Labour Party for bringing such an important issue to the chamber. In my view, it is an issue that has been neglected by the Scottish Government. Let us face it, the SNP Government has been in power for 16 years, and skills development has been too far down its list of priorities for a generation.

We have good opportunities in the green economy, the blue economy and the rural economy. We talk about the need for a just transition away from oil and gas. The SNP and the Greens trawl out mandatory world-leading targets, pat themselves on the back and head off to the wine bar—job done.

I have always said that the Parliament voted for renewable targets to be set with the understanding that a route map to achieve those targets would be delivered. Case in question, minister Patrick Harvie introduced a bill to retrofit a million homes with heat pumps by 2030. It is a great idea, but who will fit them and service them, and who will pay for them, given that they need to be fitted to homes with good insulation and underfloor heating?

Brian Whittle makes points about delivery on emissions targets. Why is it that the Conservatives oppose every measure that comes forward in the Parliament to deliver on those targets?

If the minister had been listening, he would have heard that I said that that was a great idea. As I said, who will fit and service those heat pumps, let alone pay for them?

The construction industry told us that it will need an extra 22,500 tradespeople and engineers by 2028 for it to have any chance of hitting that Government target. That would mean that they would have to be in training now. What an incredible opportunity for our pupils or for those who are looking to transition from the oil and gas sector into the renewable sector, but that obvious first step to meet the world-leading target of weaving a green economy into our education system has been overlooked by the minister. Not one person in the industry whom I have heard from believes for one second that the target will be hit. It is empty rhetoric, and the Government blames everyone else for its failures.

Thirteen per cent of our working-age population is economically inactive, and the majority of those people are inactive due to poor health. In fact, poor health—not just being economically inactive—is the biggest drag on our economy. The way to deal with that huge issue is through investment in our education system. Education has always been the solution to health and welfare. It gives pupils confidence, resilience and aspiration by showing them what the renewable economy could offer them and what they could in turn do for the green economy and for Scotland.

What an opportunity we can offer pupils in our schools, students in our colleges, people who are transitioning from the oil and gas sector, and engineers and tradespeople in our rural and blue economies. The Scottish education system should be at the forefront of delivering global net zero ambitions.

Remember this: some of the people who will pick up the baton and run with those ambitions by 2045 are currently in primary school or even pre-school. We should be enthusing them and encouraging them into these sectors. We should ensure that there is an understanding of the huge variety of skills that are required for future generations, but, unfortunately, we have a Government that cannot join up the dots and make the connection between setting targets and delivering a route map.

If we get that right, Scottish health, welfare and justice and our economy will benefit hugely. However, if we continue along the road down which the Scottish Government has been taking us for the past 16 years, we will slide further behind the curve when we should be leading. Scotland deserves much better.

16:18  

Our economy is changing—indeed, it has to change. Living in the midst of a climate emergency, as we are, it has perhaps never been clearer that business as usual, whatever the sector or industry, is not an option. Underpinning that economic transformation must be a skilled and supported workforce that comes from and sustains resilient, co-operative and compassionate communities. Education and the skills development of our workforce and communities are vital to achieving our ambitions across all aspects of our lives.

I thank James Withers for the work that he undertook for the independent review of the skills delivery landscape in Scotland. That wide-ranging review and its recommendations are challenging and thought provoking. I appreciated the Economy and Fair Work Committee evidence session that we had with him recently, and I know that those conversations will continue.

As we have heard, the Withers report warrants a dedicated and detailed response in its own right, which is forthcoming. The structural and operational recommendations speak to important issues such as the need for more strategic working, policy coherence and empowerment of regional and local partners and workforces.

Of course, specific skills are needed to ensure that we deliver the just transition that we want. We need skills in energy but also in areas such as affordable net zero housing. As we have just heard, the construction workforce that is needed for retrofits is a nice example of the urgent need for targeted Government intervention. We must work with industry to ensure that we have the in-work learning opportunities that our workforces will need.

I have one further comment to make on policy coherence—perhaps on strategy coherence, too. We will not meet our legal climate targets, nor will we achieve the just transition or creation of the clean, green economy that we want, if the different components of work do not join up. Agencies and industry are calling for that, too, so I am hopeful that the green industrial strategy will provide coherence, alongside the updated climate emergency skills action plan and just transition plan. We need to identify skills-balancing opportunities and accelerate investment in skills, as we have already heard from other members. The fair work agenda, which was highlighted by Colin Smyth, must be central to that coherence.

I highlight another important area that we cannot overlook as we create the strategic landscape for our future economy: that of gender inequalities and occupational segregation. I am grateful to Close the Gap for the conversations that I have had with it about that. Occupational segregation is all too apparent in our labour market. Women are concentrated in low-paid, undervalued and increasingly precarious jobs. They are often low-carbon jobs, but they are overlooked when we talk about net zero skills and jobs.

The skills system in Scotland reinforces patterns of occupational segregation, as does the modern apprenticeships system. Women are vastly underrepresented in the energy sector and in green jobs more widely, and sectoral skills shortages are correlated with occupational segregation. Such labour market rigidity must not be sustained.

As we look to reform the skills landscape in Scotland, I hope that we will take seriously the opportunity to get rid of gendered patterns of skills acquisition and employment, so that we do not further entrench occupational segregation and gender inequalities across our workforces in different sectors.

I appeal to the minister and to all members in the chamber that we take seriously the calls not to be gender blind as we undertake reform of our skills landscape; that we take seriously the calls for genuine political leadership for that work to happen, and for it to happen at pace; and that we heed the calls for strategic and policy coherence within and across sectors. If we get that right, it will make so much easier our ambitions to create and sustain an economy that cares and provides for everyone.

16:22  

This afternoon’s debate has been fascinating. There has been a fair degree of consensus—well, in parts. In the first instance, we all accept that there is a clear case for change regarding how we further develop and improve our skills landscape.

It is of course right that, as we navigate any change, we take the time to fully engage with industry, trade unions and educational institutions. Some members in the Parliament who would wish to see the Scottish Government act more swiftly to consider and implement recommendations would also be among the first to complain—and rightly so—if there was not full engagement with industry, unions and the education sector. Let us do so timeously but meaningfully, and let us get any required changes right.

Covid has been devastating. However, the Skills Development Scotland website shows that there have been 25,447 modern apprenticeship starts from April 2022 to March 2023, and that modern apprenticeship starts are now 91 per cent returned to pre-pandemic levels. That is positive and, as SDS said, it shows

“employer demand for critical skills.”

The challenge is to ensure that we deliver the right skills and training at the right time to support our businesses and our workforce; that is what the review is all about. The skills review is crucial. However, Skills Development Scotland also confirmed that figures show that the number of apprentices in training currently across the country—despite some of the doom and gloom that we have heard today—is at its highest-ever level, at around 39,000.

It is important that we ensure that the needs of our school leavers and the workforce more generally are met when we implement changes to the skills landscape. We have solid foundations to build on, with 93 per cent of school leavers sustaining positive destinations. Many are in education, training and employment.

It is also encouraging to see the increase in the percentage share of individuals who start a modern apprenticeship who have a declared disability or care experience or who come from an ethnic minority community, although I note that members have raised concerns about gender segregation and the need for more women in those roles. The crucial role of apprenticeships as a pathway into highly skilled employment for those from our most deprived communities is clear, with the largest share of apprenticeship starts—24 per cent—coming from our 20 per cent most deprived areas.

The review talks about how the funds in the system are often fragmented and are not always used as effectively as they could be. I note that one example that was used was colleges, which often have to balance their sustainability between a mix of core funding via credits and bolt-on funding such as through national transition training funds and the young persons guarantee. I was therefore interested in recommendation 5, which would establish a new style of national funding body that would have responsibility for administering and overseeing the delivery of all publicly funded post-school learning and training. That is an interesting idea. It would leave a clear line of sight between ministerial priorities and policies and public funding. It also links to recommendation 6, which would redesign the process for implementing the funding of all learning and training provision. We must look at the position of colleges in that context. They are in a tight financial predicament and are making redundancies. They need investment and sustainability. If recommendations 5 and 6 are to mean anything, they must deliver for Scotland’s college sector.

16:26  

I echo Murdo Fraser’s opening lament by noting that, in closing a debate as important as one that is about ensuring that Scotland’s skills system is fit for the future, I have a mere four minutes to hit the main points. As many members have said this afternoon, this is perhaps the key issue that we must address if we are to sort out Scotland’s economy and give our young and not-so-young people the skills to succeed in the Scotland of the future as well as the Scotland of the present.

I commend Labour for using its Opposition debate time to move a sensible motion, which we shall support. However, I find it nothing short of appalling that, despite Audit Scotland’s conclusion that the Scottish Government needed to take urgent action on skills almost two years ago, despite the Withers review’s conclusion that skills delivery has lacked clear leadership and direction, and despite the substantial structural change that is recommended to ensure that the skills system is fit for the future, the Scottish Government has failed to bring such a debate to the chamber and give us proper debate time, just as, as Daniel Johnson pointed out, it has been largely silent since the Withers review.

This afternoon, we have heard that we all agree that Scotland urgently needs a vision for a flexible and responsive skills delivery system that is fit for the future, but we will not get to that by slashing around 150,000 college places since 2007, especially when, as Willie Rennie said, the Fraser of Allander Institute reports that college graduates will benefit the Scottish economy by around £52 billion over their working lives. We will not get there by seriously underfunding our further education sector and then, as Colin Smyth said, whipping a further £26 million away from it. We will not get there by failing to be transparent about funding from the apprenticeship levy and, as Pam Gosal highlighted, by delaying funding to training providers and learners, or by making it difficult to access flexible workforce development funding, as Murdo Fraser said, or by simply accepting a situation in which there are 350 fewer science teachers, 300 fewer maths teachers and 65 fewer physics teachers in 2022 than there were in 2008.

However, we have heard that things such as parity of esteem between further education, higher education and apprenticeships, as demanded by the Conservative amendment, will help. Increasing and properly funding the number of apprenticeships will help, alongside clarity and transparency around the levy. Offering every adult access to skills funding through a right-to-retrain programme will help. Taking note of the recommendations in the Withers review, such as ending the duplication of bodies and the creation of a targeted skills development board that directs funding and opportunities to industries and areas where there is a workforce shortfall, will also help. As Martin Whitfield said, we need more urgency and more action.

With regard to what will help, Brian Whittle also made a key point. We have so many opportunities in areas such as the green, blue and rural economies, but those are often stymied, due first to an obsession with headline-grabbing targets that are not underpinned by a delivery plan, and secondly to a highly concerning tendency to engage in silo thinking instead of the cross-cutting vision and oversight that is required. For those reasons, Parliament should vote for the motion in Daniel Johnson’s name and for the amendment in Murdo Fraser’s name.

16:30  

I think that one thing on which we can all agree is that this is a very important debate. I welcome the fact that the Labour Party has brought it to the chamber as its topic of choice.

The importance of skills was brought home to me just before I came to Parliament for this debate today, when I visited the national robotarium at Heriot-Watt University. I was admiring that amazing state-of-the-art facility that is going to prepare Scotland for the rest of the 21st century by looking at the role of robotics and artificial intelligence, and it reminded me how quickly our society, our economy and the world are changing. That is why this debate is so important.

Scotland has two key windows of opportunity. We have the net zero and energy transition, which will bring great jobs and wealth to this country, and we have the high-growth sectors such as the tech sector, which represent another massive window of opportunity. Getting the skills right for the future is therefore vital.

We are at a crossroads. If we take the right road, we have big prizes to win and secure for our country and its future, in particular the future of our young people. That is why the Scottish Government commissioned the Withers review of Scotland’s skills system: because now is the time to undertake a review and fix the system over the next few years. We have to get that right if we are going to capture those prizes of the future.

The reviews that we have undertaken have highlighted that there is widespread confusion about current public body roles and responsibilities, and they have recommended reform. That is what we are debating today, and what the Scottish Government is now considering. We have accepted the basis of many of the recommendations made by James Withers. We have to take the time to get reform in this area right, because it is so important. I welcome—as I am sure that all members do—the minister’s commitment to work to build consensus and speak to members on all sides of the chamber.

What that means, in the face of the fast pace of change in the Scottish economy and the global economy, is that we need a skills system and an education system that is agile and flexible, in which our colleges and universities in particular are able to upskill, reskill and deliver lifelong learning in a genuine, meaningful way. It is said that while people today may have three or four jobs in their lifetime, tomorrow it will be three or four careers in a lifetime. That is why we need a system that is agile and fit for purpose.

I am grateful to the minister for giving up some of his time. Would he agree that it is important that, in a marketing sense, we ensure that pupils at school understand the opportunities that will be available in the future economy?

Yes—of course that is important. We have to talk about what is happening in our schools as well as in the further and higher education system and in the wider skills landscape.

I absolutely believe in parity of esteem. As someone who left school and went to college; went into work and did part-time college study while I was at work; and then left my job to go to university, got my degree and went back into the workplace, I know that there is no wrong path, as we say in the #NoWrongPath campaign to persuade young people that there is parity of esteem. That has to be an outcome of the changing landscape and the policies in this country as we move forward, with regard to people’s impressions of what they can get out of the skills system and the education system in Scotland.

I will pick up quickly on a couple of issues that members mentioned. Pam Gosal and Maggie Chapman mentioned the debate around gender issues in relation to apprenticeships in particular. I point out that the Scottish apprenticeship advisory board created the gender commission to develop recommendations that offer real practical solutions to help to address the gender imbalance across all our apprenticeships. The Government was given recommendations on that important issue, which are now being taken forward and considered.

Brian Whittle and other members said that we are not training people for the net zero industries of the future. However, a lot is happening in our colleges and universities. Earlier this year, Scottish Renewables found that almost 22,000 students in Scotland are taking courses relating to renewable energy—that number is up by 70 per cent since 2019.

Will the minister take an intervention?

No—the minister is just about to conclude.

Colleges are training people to install air-source heat pumps and other equipment. A lot is happening. I hope that we can work together to build consensus and a skills system that delivers for Scotland and our young people, and captures those massive economic prizes for the nation.

I call Pam Duncan-Glancy to wind up the debate.

16:35  

It is a pleasure to close the debate for Labour today. We brought today’s debate before Parliament because the stakes to get skills right have never been higher, and my colleagues Daniel Johnson, Martin Whitfield and Colin Smyth highlighted just how high—there are yawning skills gaps and shortages of apprentices; families are struggling to make ends meet; the economy is declining; and public services are starved of cash.

Although I recognise that both ministers offered to engage widely on reform, I am yet to be convinced that the pace of change is sufficient or that there is the necessary breadth of the vision to create and spread opportunity for all.

Spreading that opportunity starts with education. When education is valued and nourished, it creates and spreads opportunity all through life: in school, when we learn about the world around us; in college and university, where we learn to live and work in it; and in the workplace or our community, where we learn to apply it. The opportunities that education can bring are endless, and the skills that it builds are crucial.

I welcome the minister’s comments and those of others, including Brian Whittle, that the entire education system matters in relation to skills, but I remain disappointed that, at least until now, the area seems undervalued and deprioritised by this Government. Cuts are swathing, and inequality is holding back progress. Nowhere is that seen more obviously, as we have heard, than in science, technology, engineering and maths—skills that are widely recognised as the accelerating forces for future economic growth and to meet the challenges of tomorrow. It is also, consequently, where the well-paid jobs of the future lie.

To create a Scotland where opportunity is for all, we have to smash every glass and class ceiling that is in the way of pursuing those skills for the future. Economics, the law—and, yes, Jimmy Reid, as we have heard—all tell us why opportunity must do that. Yet, as Bob Doris, Maggie Chapman, Pam Gosal and other colleagues have noted, women and girls are underrepresented in those subjects and sectors and are routinely denied opportunities to build skills in them.

There are many reasons for that, but they start in the early years of children’s lives, when they get their first real exposure to the building blocks of skills that they will need, take an interest in and then excel at. As the Institute of Engineering and Technology reports, not focusing on STEM from an early age limits choices later in life, too, including for girls, and the data shows it. We know that girls are far more likely to study highers in art and design, French, fashion, food tech and childcare, and boys are more likely to study computing science, physics, engineering and graphic communication. We know that gender stereotypes continue into the workplace, as colleagues have said. Sixty per cent of people who work in care are women, yet women represent only 30 per cent of the STEM workforce. Of that number, 70 per cent leave, and only 12 per cent of the remaining women reach managerial levels. We have to use every opportunity to expose all young people to the broadest of skills, including in STEM, if we are to address skill shortages in key sectors and ensure that we take everyone with us.

Will the member take an intervention?

Is it possible to have the time back?

No.

Okay—I will take a very brief intervention.

I thank the member for being so generous with her time.

Does she agree that the creation of the BAE Systems applied shipbuilding skills academy in Glasgow is a key example of how we can promote STEM across genders, classes and different groups in our communities?

I thank my colleague Paul Sweeney for that intervention and I absolutely agree with that. The creation of the academy is a shining example of what we can do when we innovate to address skill shortages in Scotland.

We also have to address the fact that exposure to science, maths or computing often does not happen until a child picks them for their qualifications at the age of 16. Those opportunities should be open to them much earlier and aplenty throughout their school career. We must be innovative in how we do that. We need to teach children that maths is useful and introduce them to real-life examples of science and technology early and often. Too often, schools in richer areas offer that exposure more than others, so we must spread that opportunity if we are to build the skills of the future. We have to smash that class ceiling.

If we want more pupils to access opportunities, including in STEM subjects, we also need a teaching workforce that is appropriately equipped. However, we are not there yet. As Liam Kerr has noted, there are far too few teachers in STEM. Numbers are plateauing and targets are missed, and the Government must urgently address that.

We also have to create parity of esteem in vocational and academic skills, including through apprenticeships, as Murdo Fraser has pointed out. That is why we will also support the Conservative amendment today.

As Colin Smyth, Willie Rennie and others have noted, further education is crucial. That is why it is disappointing that this Government has left the sector crying out for help and struggling for cash. It is not just key for skills development; it is key for addressing inequality, too. We have to change the way that we think about education and skills, the decisions that we make about them and the money that we allocate to them. We cannot keep saying that they matter and then do more of the same. The Government has a lot of work to do, and it needs to prioritise it. This matters.

It is about skills, jobs and the economy, yes, but it is also about spreading opportunity. That is why we brought today’s debate. We have to smash the class, glass and stepped ceilings to do it, so that aspiration and opportunity are available to all. That is what is possible, what is needed and, crucially, what a Labour Government’s mission will be. I urge the SNP Government to match that ambition so that Scotland can, once again, be a land of opportunity for all.

That concludes the debate on ensuring that Scotland’s skills system is fit for the future.