09:30
We move to agenda item 2, and I welcome our witnesses. From the Scottish Government, we are joined by Neil Rennick, director general education and justice, and Shirley Laing, director for lifelong learning and skills. From the Scottish Funding Council, we are joined by Paul Devoy, interim chief executive officer, and Jacqui Brasted, director of strategic transformation and skills. From Skills Development Scotland, we are joined by Damien Yeates, chief executive officer, and James Russell, senior director of transformation. I invite Neil Rennick to make a short opening statement.
I am grateful for the opportunity, along with colleagues, to give evidence on the audit of the post-school education and skills reform programme. I welcome Audit Scotland’s scrutiny of the programme, and I accept the findings and recommendations, which reflect a point in time of an ongoing programme of reform.
Paragraph 17 of the report identifies five projects that comprise the reform programme. Progress has been made on each of those since the initial evidence was gathered by Audit Scotland in February and March and since the publication of the report in June. That includes the completion of the audit of post-school qualifications in May. In August, student support functions were successfully transferred from the Scottish Funding Council to the Student Awards Agency Scotland for the start of the new academic year. Work as part of the simplification project to bring together responsibility for funding for post-school provision under the SFC by April next year is on track. Good progress is also being made in response to the specific recommendations made by Audit Scotland, building on work already in progress with the refresh of the programme from January this year, following a gate review 0. That includes the development of a comprehensive programme delivery plan and ongoing work on an evaluation framework.
I want to express my appreciation of the work undertaken by Skills Development Scotland, the Scottish Funding Council, the Student Awards Agency Scotland, Scottish Government and others for the continuing progress of the reform programme, with the ultimate aim of simplifying and strengthening the post-school funding and skills landscape, supporting people at all stages to develop the skills, knowledge and attributes they need to fulfil their potential and contribute to Scotland’s society and economy.
Thank you for your opening statement, Mr Rennick. It contained a lot of policy language. One of the issues discussed in the report is that the Scottish Government has failed to effectively communicate its reforms to stakeholders. This morning, there is an opportunity for us to explore issues in relation to the reforms and for the Government and its partners to effectively communicate the reforms. You said that you accept all eight of the report’s recommendations and that progress is being made on meeting those. There are six recommendations for the Scottish Government and two additional recommendations for the Government to work on with partners at Skills Development Scotland and the Scottish Funding Council. The report was published in June and the recommendations were to be completed within six months, so will all the recommendations be actioned by the end of the year?
Progress is being made on each of the recommendations, with the aim of meeting them within the timescales that Audit Scotland identified. Obviously, work will continue long beyond that, because this is a long-term programme. For example, the simplification programme and bringing together responsibility for post-school funding, which I mentioned, will happen from next April. Therefore, the answer is yes on the work to be completed by the end of the year, but it is part of ongoing work beyond that.
You mentioned that progress is being made on an overarching delivery plan. In June, the Auditor General was unequivocal when he said that the post-school education reform programme completely lacked a clear delivery plan. What specific progress have you made since June to finalise the delivery plan?
It is important to say that it was always identified that the project would have a number of phases and stages over time. It started with the work on simplification, which was intended to open up further opportunities to deliver reforms.
Shirley Laing can provide an update on the plan.
I am happy to do that—please forgive my croak.
The recommendation has been completed. We have developed a comprehensive delivery plan for the Scottish Government-led parts of the programme, alongside which we have refreshed our RAID—risks, assumptions, issues and dependencies—log for the programme.
I have a general question about how the reforms are being communicated. What is the primary objective of the reforms? Are they about saving public money or improving learner outcomes?
The “Purpose and Principles for Post-School Education, Research and Skills” set out the high-level aims of the programme, which included simplifying the landscape, given the challenges that existed with identifying sources of funding. That has been part of the work that we have been doing, although it is not an end in itself. The intention is to allow people to make better choices on the opportunities to engage in learning, training and acquiring skills, and to support wider economic and social benefits from the reforms, including through the provision of funding for teaching and research.
Obviously, there is a high-level vision map, but the Auditor General’s report says that there is a lack of basic baseline metrics. What outcomes are you trying to achieve for learners? What specific, concrete benefits do you have in mind?
Obviously, we are operating in an environment that is constantly changing. The needs of the economy, the demands of learners and the context, both in the United Kingdom and internationally, are changing all the time, and we are having to adapt to that. Following the passing of the Tertiary Education and Training (Funding and Governance) (Scotland) Act 2026, we have been progressing work, along with our analysts, on measures that can reflect the progress that we are making with the programme.
I will bring in Shirley Laing to talk about that.
As the committee will be aware, we developed a vision, benefits, outcomes and outputs document as a first iteration some time ago. Now that a refreshed programme scope and overall delivery plan are in place, we can look back and identify appropriate measures for success.
We have developed a theory of change or a logic model for what that will look like. There is a cross-organisational group that is made up of members from across the organisations. With our analytical colleagues, we are looking to take forward that work with a view to publishing an evaluation framework in the spring. The measures that will be required to track progress will be gathered from a number of sources, which will include monitoring and management information from individual projects; data, graphics and statistics that we already have; and primary research with stakeholder groups that is designed to fill the evidence gap. We want to establish a baseline for where things are at as of now, in advance of the transfer of the national training programmes from SDS to the SFC next April.
Did you say that you will implement the evaluation and monitoring framework by the spring?
We will publish it in the spring. It is due to be put before the next meeting of the cross-organisation post-school education and skills reform board on 2 December. At its most recent meeting in September, the cross-organisational board saw the logic model, but we want to bring forward the next piece of work, which is the key evaluation framework.
We will explore those issues further.
At this point, I will bring in Mr Kirkwood.
I will concentrate on the governance issues rather than the detail. In the “Key messages” section on page 3, paragraph 2 of the report talks about programme planning and paragraph 3 talks about risk management. Programme planning pops up every time somebody appears before us. It would appear that public sector projects cannot really manage programmes very effectively—that is a frequent criticism. It is interesting that Shirley Laing mentioned the RAID log, because that issue came up when you were last here, Mr Rennick. One thing that concerned me a bit at that time was that you said that a RAID log was not necessary for that particular programme because the risks were all captured in project-level RAID logs. That is not how a programme RAID log works; everything must be escalated to the highest level.
Shirley, is the RAID log that you are using now a programme-level log, or do you use a set of project-level logs?
Each project, as you rightly say, will manage risks. However, our internal programme board—that is, the Scottish Government programme board; each organisation will have its own internal mechanisms—has its own RAID log, which has been refreshed.
As part of the new structures that we have put in place following the gate review 0, as well as bringing in the internal programme board, we also have the cross-organisation post-school education and skills reform board. The latter board operates at the strategic level. For the Scottish Government, we have our IPB at the tactical level and operational boards at the project level. Different organisations will have their own variations.
At the previous meeting of the cross-organisation board, we started to discuss the risks to the system. What do we need to look at across the totality of the system? What does that mean for us in the cross-organisational space, and what does it mean for the individual organisations? Dialogue on that continues; that work is still developing. However, we came up with a list of overarching risks or areas that need to be considered, and we are working through the escalations. By way of example, at the previous IPB, just the other week, a risk was flagged to us. It was not escalated for action, but one of the projects wanted us to be alert and alive to an issue that was pretty hot on its risk register, in case it needed to be brought forward to us for action.
We have really tightened and refreshed all that, and we now have much greater clarity around the escalation processes.
You now have a programme-level RAID log. Are the project-level risks visible to the programme board?
They are, where they need to be escalated. Where they can be managed at project level, they are.
Are you using traditional red, amber and green ratings?
Yes, we are.
Okay. That is good.
Paragraph 3 on page 3 says that
“key public bodies such as the Scottish Funding Council and Skills Development Scotland were not part of the Post-School Education and Skills Reform Programme Board.”
That seems to be a serious omission. Why were they not in the programme board from the start?
I can come in on that one as well. There have been a number of iterations of the programme board. Initially, policy colleagues in the lifelong learning and skills directorate were discussing the pieces of work that became the projects in their very early stages. We then sought to bring in colleagues from across the Scottish Government where we felt there was relevance, including from the economy directorates, to provide something akin to a non-executive director role on the board.
When we reached the point at which the Tertiary Education and Training (Funding and Governance) (Scotland) Bill was going to go through Parliament and we were on a firmer footing regarding exactly where things were headed, that was the appropriate juncture at which to bring in colleagues. We first brought in colleagues from other agencies in September last year to take that forward. Then, as part of the gate review 0 work, we felt that we needed to further clarify the roles, responsibilities and what was appropriate. That was when we established the cross-organisational board. We changed the titles again and took that forward later. The board has continued to include the chairs and chief executives of the relevant organisations.
That was not a deliberate exclusion of partners; rather, the issue was identifying the appropriate time to bring them into the conversation in a helpful way.
It is important to say that engagement with chief executives of the organisations and with the individual organisations was happening at the same time, even if it was not through that particular board.
There was informal communication without the matter being formally communicated.
Yes.
Okay, that is good.
Paragraph 4 states:
“The full financial impact of delivering changes required by the Tertiary Education and Training (Funding and Governance) (Scotland) Act 2026 is still unknown, with staff and digital system transfer costs still to be confirmed.”
Those seem to be fairly significant financial risks to the project. Do you have any handle on the magnitude of those problems?
09:45
At this stage, part of the main costs relates to the simplification programme and the transfer of staff. Paul Devoy can say more about that.
I have looked at those numbers very closely since taking up my post. The additional costs—based on the current costs to SDS and what it would cost to transfer staff—are around £15.6 million. That is predominantly made up of pension transfers.
A piece of work has been done to understand the most appropriate way of ensuring that the staff who are—under the Transfer of Undertakings (Protection of Employment) Regulations—TUPEing from SDS into the Funding Council have their pension rights protected. That is an estimate at the moment.
When the actuarial calculations are done in April on the value of the SDS pension scheme versus the civil service pension scheme, that will be reconciled, and we think that that number will come down, but I cannot give you a precise number at the moment, because that calculation has not been done.
The TUPE cost will not be greater than £16 million—is that what you are saying?
Yes.
That is fine. The other big issue is that of the digital system transfer. I have been an information technology professional for many years. I have been involved in Government projects, and they are horrific in general. Have you any handle on how much that transfer is likely to cost?
In conjunction with the transfer and the merger of SDS and SFC, you will also have a transformation programme coming in to reflect your new funding model. Will those elements be done in two tranches, or will you try to do everything at once?
The objective is to do an as-is transfer. We have been working extremely closely with our colleagues at SDS on the safest way of making sure that, from day 1, there is no detriment to the service that is delivered to apprentices, training providers or employers. That has been our number 1 priority all the way through.
We will make sure that the system is 100 per cent working as-is, but you are right that, once it comes over, we will need to consider what the digital transformation might look like over the coming years. We have an indicative number of around £5 million for the project, but that has to be fully costed. We will do that over the coming period.
I have to say that that sounds very low, based on my experience of Government IT projects.
At the bottom of page 7, the report says that the Tertiary Education and Training (Funding and Governance) (Scotland) Act 2026 includes
“a requirement for a National Funding Strategy with the ability for ministers to set funding priorities”.
That is a big opportunity for SFC to change the entire landscape of funding for education. How hard have you grasped that opportunity so far?
You are right. We see four main benefits of the 2026 act. The first is that there will be an ability to make better choices about where the money can go. When you can see learner demand, employer need and national priorities together, you are more likely to put investment where it creates the greatest value.
The second is that there will be fewer artificial boundaries. Apprenticeships, colleges and universities can collaborate as an ecosystem. Bringing funding together makes it easier to create pathways between them and from tertiary education to work.
Thirdly, less effort will be spent servicing the system itself. Organisations having different rules, reporting arrangements and processes consumes time and money without necessarily creating value. Greater consistency means that more attention can go on teaching, learning, skills and outcomes.
Fourthly, and probably most importantly, there will be a system that can adapt rather than merely administer. Scotland already has extraordinary assets in its people, colleges, universities, research and innovation. The prize is connecting them, so that investment can respond more quickly as the economy changes and turn those strengths into greater economic and societal value.
I have talked to several tertiary education institutions over the past few months, and I have constantly heard about inflexibility in funding, particularly in relation to graduate apprenticeships, but in general, there are artificial walls between colleges and universities and between those and external learning providers such as the Workers Educational Association.
It is difficult to see education and lifelong learning as a continuum. It is a series of steps but each step is one that someone might not take—rather than building up education over time, they may decide not to take the next step.
I have heard a lot about microcredentials, which is where qualifications can be built up out of possibly hundreds of small qualifications. Is that part of your study?
We are lucky that we have an expert on that sitting to my left, so I will ask Jacqui Brasted to answer that question.
Microcredentials have huge potential, in terms of both using funding more efficiently and supporting people who are furthest from education and employment with small steps back towards that, where doing a full course might be quite intimidating.
We are doing a number of things on that at the moment. We are developing a microcredentials framework to help to ensure that the value of those credentials and the number of credits are recognised and that there is a standard on that. As part of our public service reform initiatives, we are funding a number of projects on modular learning and microcredentials in institutions in a variety of sectors, and we are trying to identify ways in which we can overcome some of the barriers that we know exist. We are looking at practical ways to do that. Those projects run until the end of March, after which we will bring together the results to produce an overarching report, to put the learning on that out into the world.
We have been talking to institutions in other countries about their approach. I sit on an Organisation for Economic Co-operation and Development group, and that is one of the issues that comes up a lot. Many people are grappling with the same problems, so we are sharing information and understanding how others are doing things. We are trying to do this as efficiently as we can. I agree that there is great potential, and we will explore that and try to maximise it.
That is encouraging, and it is good to hear.
Exhibit 2, which is on page 12, is a high-level exhibit describing the phases of the project. I spent many years as a test manager in software and, when I got stuff like that as a project plan, I would send it back straight away. There is almost nothing there that is quantifiable or testable. How will you know when you achieve any of the aims? The exhibit refers to “Changes to structures”. Those are easy to make, but how do you know whether they are the right ones? It also refers to
“Implementation and resourcing of new processes”,
and to things being better, simpler and improved. None of that is quantitative; it is all qualitative. How will you know when you have achieved what you have set out to achieve?
The work that Shirley Laing mentioned on the evaluation framework is looking at that. It also links with the work on skills planning. If we are better able to match up the skills needs of the economy and society with what the post-school education system delivers, that will give us confidence that the changes are having the impacts that Paul Devoy mentioned.
Part of the work that we are doing is making sure that we can monitor whether that is having an impact. Obviously, we start from a strong place in terms of levels of tertiary education in Scotland, which are high by UK and international standards, but we need to ensure that that matches up with our skills needs in the economy and in the public service and wider society.
When is that strategy likely to be published?
For the logic model and the evaluation approach, that will be in the spring. As I said, the logic model went to the cross-organisational board in September, and the board is due to meet again on 2 December, when it will see the evaluation approach. We will want collective sign-off, with a view to publishing in the spring.
A lot of cross-organisational work is going on. In that space, representatives from the different organisations form the analytical group, which is driving that work. We will bring the paper to the cross-organisational board.
Thank you.
On page 4 of the report, the opening statement in key message 4 is:
“The reform programme has not been adequately resourced.”
Do you agree that it has been underresourced?
Obviously, we constantly review the resources that we have available internally in the Government for projects and consider that against competing demands across our policy responsibilities. We have grown the internal resourcing. It initially started with around 18 staff, which has grown to 28 in Shirley Laing’s area, which reflects our recognition that we needed to expand the capacity. Obviously, it is not just those 28 people who are working on the issue. We have staff working on skills planning and on other parts of the work with universities and colleges on future sustainability. A wider group of staff is working on those areas.
We are always trying to get the balance right between where the resources are and where those resources are likely to have the biggest impact. In dialogue with Shirley-Anne Somerville, I feel that we are in a place where we have the necessary resources to take forward this stage of reform. That will change as we move into the next phases, in terms of where the best place is for that capacity. That will include looking at the outcomes from the work with universities and colleges and considering how we take that work forward.
Recommendation 5 is to develop
“a resource plan, mapping programme and project activities”.
You have already outlined some of that, but can you confirm whether a resource plan is in place, as well as the programme plans?
We are developing a workforce plan based on all that, which we will keep under review.
Are you developing that only now?
It is for the next stage. As part of the refresh that we started in January, we wanted to revisit the programme scope. We wanted to ensure that we had the overall delivery plan in place and then, on the back of that, to ask, “Given where we are now, what workforce plan is required for the next phase of this complex 10-year programme of work, and how do we take that forward?” As Neil Rennick said, it is very much about having the right people with the right skills in the right place at the right time.
Up until this point, we have been pretty creative in how we have done that, so I am hugely grateful to the colleagues who are sat on either side of me, because we have memorandums of understanding with both SDS and the SFC. Some of the team members who are embedded in our skills team have come from SDS, and the SFC has shared expertise as we have worked through parts of the programme. We will continue to look at the programme as we proceed, because this is very much about how we reform the totality of the system. Although the Scottish Government leads the charge on that on behalf of the Scottish ministers, our partners are fundamental to how we achieve that reform, and we want to ensure that we use the skill set across the landscape as we progress that work.
We reviewed the staffing position last year, which was when I agreed to the expansion of the team working on the programme.
Okay, but what matters is whether a proper resource plan is now in place. It is fine to be creative in using existing staff, but a resource plan would identify the key requirements and key skills that are needed to deliver the programme, rather than simply relying on being creative. It tells you what you need to do the job.
Absolutely. To be clear, we are drafting a workforce plan, which is based on where we currently are with the Scottish Government parts of the programme, and that will be presented to the internal programme board shortly.
Okay. How soon is shortly?
I think that our next meeting is on 12 November, and I am pretty sure that the plan is on the agenda for that meeting.
Okay. In the audit report, the overall cost is estimated to be £26 million, but a full resource plan is still not in place. How do we know what the total cost of the project will be? What are the latest estimates?
The £26 million figure was based on a forecast that was set out in our outline programme business case in November 2025. Most of those costs related to the simplification work, which included areas such as the pensions piece that Paul Devoy has referred to. As colleagues have said, as the work continues and we gain a better understanding of the requirements, we will revisit those costs and refine them. The £26 million figure reflected the estimated cost at a particular point in time, and we continue to keep it under review as the programme progresses across the range of projects. The projects were at different stages of maturity when the initial costing was undertaken, so we need to keep a close eye on those costs, and that is what the IPB will do as the programme progresses.
So, you cannot give me a current estimate against that £26 million.
I do not have a current estimate to hand, but I am sure that colleagues can let us know where we are, because the bulk of the figure was in the simplification space.
I can take you through some of the numbers that we have put together. As I said in my previous answer, £10.8 million of the overall figure was primarily due to pension and staff transfer costs. Another £4.8 million was made up of essential programme management costs, taking the total to £15.6 million. There are additional responsibilities arising from the 2026 act, which we have costed at £2.4 million. The indicative costs that I mentioned earlier for system development and so on are another £5.2 million, which takes the total to £23.1 million. As I said, some of those numbers will shift, because the pension figure relies on actuarial calculations.
That is right, but the previous estimate for the pension shortfall was £8 million. I cannot quickly add up the different staffing costs, but it seems to me that the figures have already increased compared with what was reported previously.
Yes. Just to clarify, the bulk pension transfer is likely to be £4.5 million, but the increased contributions to the civil service pension scheme over four years amount to another £4.8 million, so the £4.5 million is the central number between the £1 million to £8 million figure that was quoted previously.
10:00
I know from speaking to finance colleagues that their advice is still that the costs will be broadly in line with what was in the financial memorandum for the legislation when it went through.
Okay. The pension shortfall payments are different contributions. That was all identified in the original financial memorandum as well, so you are saying that it is broadly in line with that?
Yes.
Okay, that is good.
I will jump across to Skills Development Scotland. Paragraph 78 of the report sets out that Skills Development Scotland
“does not have clarity about its future role”.
What was the basis for saying that you did not have clarity on what your future role would be? Where are we with that now that the project has evolved further?
Discussions are ongoing with the Scottish Government on the future role of Skills Development Scotland. Our new chair will meet the new minister this afternoon. We had good discussions in advance of the May election, and we have had further discussions with the Government since then. That decision is not settled yet, but, as I said, discussions are ongoing.
So, as far as you are concerned, your future is still uncertain. The future direction is still uncertain.
Well, it is not confirmed yet, Neil, is it?
No. Wider work is being done to look across the whole landscape of public bodies as part of the public service reform process. However, I am greatly appreciative of the work that Skills Development Scotland has done and continues to do. It continues to innovate in areas such as careers and providing people with access to information about skills opportunities. I recognise the uncertainty that this process has caused for staff, and I am glad that we are moving to a position of greater clarity for those staff who will transfer over and bring their skills to the Scottish Funding Council.
Clearly, Skills Development Scotland still has a really important role to play in relation to careers. I get the opportunity to travel across the country and meet colleagues who are performing that role. However, we do not yet have a final decision from ministers on the full landscape of bodies.
That is the problem. I am assuming that those are two different issues, because there is the wider public sector reform process, which we know is ongoing, but then there is the programme of work that we are discussing today. Within that programme of work, does Skills Development Scotland now understand what its role will be in terms of the programme that the audit covered?
The staff are very focused on apprenticeships and the businesses that support them. With regard to the staff who are transferring, an extensive programme of consultation has taken place. We have identified 130 full-time equivalent staff who will transfer over. Thanks to colleagues at the Scottish Funding Council, Paul Devoy and other senior members of the Funding Council have undertaken extensive engagement with those staff, so I think that the staff are very reassured and they understand the process that is under way. I think that we are confident that there will be a seamless transfer of staff, functions and systems from SDS to the Funding Council by the end of March next year, with everybody ready to go on 1 April.
For example, the contracting for all new-start apprenticeships for 2027-28 is likely to go live today; that represents a joint effort between the two organisations, and programmes will novate over on 1 April 2027. With respect to those staff who were unsure about their future, for those staff who will transfer, there is absolute certainty and there has been strong engagement with our trade union partners and with all involved, so that is very positive. All the other staff have remained very resilient. They are aware of the discussions that we are having with the Scottish Government and they are aware of the wider reform agenda, but they are keen to hear what role they will play as part of the future landscape.
One hundred and thirty staff is quite a big number to TUPE across. How will it be identified what key resources are required and who the right people to transfer are? I hope that those 130 staff will know what their new role will be and how they will fit in.
I want to reassure the committee that this is an as-is transfer, which means that, if someone is performing a role currently, that role will transfer over. If, in the future, there are to be changes, that will be discussed in the future and not now. It is a full as-is transfer—that is really important. There is a lot of expertise on TUPE transfers, and you are right that there will be very careful discussions about who is and who is not in scope. Helpfully, under TUPE, it is set out clearly that that is about the percentage of a person’s work that is aligned to a specific function. There is an open process in which all staff are invited to nominate themselves for a potential TUPE transfer if they think that they are in scope, and, if they think that they are not in scope, they can contest that. There is a full and transparent programme around all that.
As you can imagine, many roles lean into different functions. However, we think that about six FTE more than our total current resource will transfer over, so that provides reassurance that, in the totality of the resource, there will be sufficient people to run this as an as-is programme from 1 April. There are a small number of marginal areas in which the roles might be at 20 per cent of current functioning, which means that they will not transfer over. However, Paul Devoy and I have had discussions about the ability for SDS to provide a call-off contract in specialist areas for a period of time if the SFC has any difficulties in managing things.
Mr Kirkwood talked about the transfer of processes and systems and process maps, and a large amount of work has gone into ensuring that there is a transparent understanding of how the programme is running. It is as though we are giving somebody a car, but we are also giving them the driver, so they do not have to work out how to run the car. In the past six months, we have seconded six full-time staff into the Funding Council to support the transition; everybody is committed to making it a success.
I repeat that it is not a case of staff worrying about themselves; they are genuinely keen to ensure, in the current climate, that we maximise the apprenticeship opportunities for young people and that the 11,000 or more businesses that support apprenticeship opportunities do not miss a beat in how the programme is run.
I have a question for Mr Rennick. Did you recognise the comments in the report about SDS’s uncertainty about the future? Have any steps been taken to have positive dialogue on that?
Shirley Laing and I have had extensive engagement with both Damien and the SDS board throughout this period. We have talked to them extensively about the process, and we have heard directly about areas in which further information and clarity on the programme have been required. I am hugely grateful for the work that Damien and his colleagues have done in working with the Funding Council to ensure that the transfer can happen effectively.
Was there SDS input in drawing up the programme?
The programme could not have been delivered without the input of SDS and the engagement that it has had with the SFC and the wider programme.
Thank you for the thorough answers that you have given so far. I was going to begin by asking about staff resourcing and costing, but that has been thoroughly covered already—thank you for that.
Damien Yeates has spoken about apprenticeships. On page 31, from paragraph 85 onwards, the report talks about the reform of the apprenticeship model. I was glad to hear about the progress of the review of modern apprenticeships and that the new apprenticeship contracts are going live today. That is good. The report mentions the redesign of foundation apprenticeships and the establishment of an apprenticeships committee by April 2027. Will you give me more information on that, including whether that is on track?
All that work is under way. Joint teams involving the Scottish Funding Council and SDS are taking forward that work, with responsibility, ultimately, transferring to the Funding Council. I will hand over to Paul Devoy, who is leading on the establishment of the apprenticeship committee and might be able to give some reassurance.
Actually, Jacqui Brasted is leading that work, so I will pass over to her.
It is like pass the parcel.
Over recent months, we have done a lot of work with the Scottish Government and SDS on the apprenticeship committee. We have worked with key stakeholders, including the Scottish Apprenticeship Advisory Board, and employer groups so that we can provide the Government with advice on how the legislation can be translated into what the apprenticeship committee should do and what its membership should be. We received ministerial advice on 1 October, and we have developed standing orders.
Yesterday, we announced our new board members. Dr Jacqueline Hall, who is the head of apprenticeships and skills at BAE Systems, will be the first chair of the new apprenticeship committee. For those who do not know her, I note that she is hugely respected in the sector and knows a vast amount about apprenticeships. For a number of years, she has chaired the SAAB sub-group on standards and frameworks, so she is an excellent appointment for taking forward that work. She will ensure a stable and safe transfer of the national training programmes, and she has a desire to make future enhancements. From that point of view, we are really pleased to have her in that role.
The recruitment process for the remaining members of the committee will go live imminently. Dr Hall will be part of that process, as will Diane Greenlees, the director of national training programmes at SDS, who will be transferring over. We are looking to have members of the committee in post by the beginning of January and to then provide an induction. We are planning a joint meeting with SAAB members before the end of SAAB’s term, so that they can share their experience with members of the apprenticeship committee before it gets up and running from 1 April. We are on track for all that.
We are grateful to SDS colleagues who have supported that work and to stakeholders who have given their time to provide views on how things could work most effectively.
That is really positive.
At paragraph 87, the report states that the Scottish Government has said that its work on graduate apprenticeships
“has not received buy-in from employers.”
Can you give more detail on how that work is going? Are we getting more buy-in?
We know that there is a lot of demand for graduate apprenticeships, and some institutions are increasing the number of those. The Government’s target is that there should be 8,000 graduate apprenticeships over this parliamentary session, and we should be on track to deliver that.
One of the challenges has been the number of apprenticeship frameworks. We are working with Universities Scotland and the Scottish Government to understand how we can develop more frameworks in a faster and more flexible way, while ensuring that standards are maintained, which is important. I hope that there will be more frameworks and a more streamlined process.
We will engage further with employers to understand what is preventing some of them from offering apprenticeships, because part of the challenge in meeting the Government’s target over the parliamentary session is finding enough apprenticeship places. We know that more people are wanting apprenticeships and that there is an appetite among institutions to provide them, so we need to identify and unlock the issues.
The apprenticeship accelerator grant might help with that, but we are also considering other options. In the next couple of months, there will be a workshop at which we, with Scottish Government and SDS colleagues, will put on the table all the ideas on how to grow the number of apprenticeships. We will consider the art of the possible and talk to employers about what the issues might be and how we can solve them.
When I have spoken to businesses about taking on apprentices, they have said that they need more help with the costs involved. Businesses are keen to take on apprentices, whether they are at foundation, modern or graduate level. Could you elaborate on what help is being provided to entice businesses into providing apprenticeships?
I think that the apprenticeship accelerator grant might help, but I will pass to my Scottish Government colleagues to give you information on that.
10:15
The first thing that I would point to is the 10 per cent uplift that ministers announced to the modern apprenticeship contribution rates for 2027-28, which will apply both to new starts and to those in training across the system, and recognises the need to take that forward.
As for the apprenticeship accelerator grant, we committed in the programme for government to developing that over the course of this Parliament. Work on it still has to get under way, but the commitment is there.
That is great to hear, and it is good to get it in the Official Report.
Perhaps I can flip the question round and ask about those who are coming into apprenticeships. Are you seeing the sort of demand that we want? Are schools encouraging people to see them as a valid pathway? After all, a university education has been seen very much as the gold standard for the past 20 years or so, but it does not suit everybody. Are schools buying into apprenticeships and actually offering them as a pathway?
Perhaps I can offer a view on that. I think that we have really crossed that threshold now, and demand at all levels is unprecedented. A couple of weeks ago, we were talking to SSEN Transmission, and it is getting 65 applications for every opportunity.
The challenge now is on the demand side and how we support businesses. About 11,000 businesses in Scotland support apprenticeship starts every year; 90 per cent of them are small and medium-sized enterprises, but 50 per cent of that 90 per cent—in other words, 45 per cent of the total—are microbusinesses, which have felt the pain and burden of tax in taking somebody on. There is also the matter of business rates and so on. Those are real issues, but their commitment to providing such opportunities is phenomenal. I should also remind the committee that an employer spends £10 for every £1 of public money it gets, so the balance of investment sits with them.
Therefore, I think that you are following the right line of questioning. We now need to find a way of supporting and encouraging more SMEs to put those opportunities in place, because, if we are creating this demand in young people—and in the parents and carers who advise them—it is best if we can create those opportunities as they transition from school.
I would also say that the Scottish programme is performing really strongly compared with England, and we do not want to lose that. Paul Devoy, Jacqui Brasted and the team at SFC are in a great position now to build on that and take forward an expansion programme.
The new minister’s announcement of the 10 per cent uplift in contribution rates is huge. Do not underestimate it—it amounts to about £8.8 million—but it has also landed extremely well as a signal. Given that we have had no movement in contribution rates for nearly 20 years, the move has been very welcome.
I think that the direction of travel is positive, and demand from young people exists; we just need to get behind it. Relatively speaking, I would say that our businesses are doing a brilliant job, with 11,000 every year committing to around 25,500 new start opportunities. That is pretty good.
That is excellent to hear. Thank you.
Thank you, Dawn. I call Miles Briggs.
Good morning, and thanks for joining us today.
I want to return to Dawn Black’s question. Given all the reform that is going on, where are we with the delivery of apprenticeship numbers? We have not really heard any figures on that. The information that we have is that there was demand of between 35,000 and 40,000, and 25,000 apprenticeships were delivered. Where are we with regard to the coming financial year?
In any given year, Skills Development Scotland triangulates a number of sources of information. We gather labour market information on where employers are currently signalling demand; we look at past provision and evidence on where we actually delivered; and then we speak to colleges and independent training providers. When we triangulate all of that, we tend to get demand statements in the region of 30,000-plus. Some of that might, of course, involve replication of demand, but we are then confident that we can put out in the marketplace the maximum number of apprenticeship opportunities that the funding will allow.
However, that raises risks with regard to whether businesses can stand up and meet those opportunities. For many years now—excepting the Covid period, which was difficult—we have, generally speaking, hit our target of providing up to 25,500 apprenticeships. The year before last, we went marginally over that number, whereas, last year, we were under it by around 600 places. I would say that that was still an incredible achievement, given the cost pressures that businesses face. This year, at the end of quarter 2—that is, the end of September—we were on track. Compared with the same time last year, we are ahead of profile. As you can imagine, we track progress on a daily basis—our IT systems allow us to do that. We watch the position very carefully.
The committee is right to be concerned about the fact that there are significant underlying pressures on businesses, which is affecting their ability to recruit young people. We cannot be complacent about their continuing to be able to offer those places. However, the committee can be assured that, in the past year, we have maximised all the funding available for employers who want to recruit 16 to 24-year-olds. There should be no business out there that wanted to recruit a 16 to 24-year-old as an apprentice that was not funded to do so. It is a very important programme.
With all that is happening in the wider environment, you will be aware of the Milburn review. We are very aware of it. The provision of pathways for young people into good-paying jobs is extremely important, and apprenticeships offer an absolute guarantee of that. There is a completion rate of 80 per cent, and 92 per cent of those who complete an apprenticeship remain in sustained employment 15 months after doing so. It is a really good, high-quality programme.
That is encouraging to hear. I am probably in a unique position on the committee in that I am the only member who was a member of the Education, Children and Young People Committee in session 6, which oversaw the parliamentary consideration of the Tertiary Education and Training (Funding and Governance) (Scotland) Bill. One of that committee’s greatest concerns was that, when such service reform is undertaken, institutional memory is lost in translation, and people wait to see what the end product is before they take up an opportunity, so it is good to hear that the numbers are still on track.
I want to ask about employer engagement, which was another of my concerns when I was a member of the Education, Children and Young People Committee—indeed, it was an issue that I tried to address by lodging amendments to the bill. The Audit Scotland report says that a round-table meeting between ministers and employers took place in December 2025. Is that the last time that ministers considered employers’ needs?
There was another round-table meeting, which involved the previous minister. If memory serves, I think that that was in June this year.
It is important to say that the communication on the programme and the various projects is not done purely through ministers. Our SDS and SFC colleagues who have been engaging with businesses, providers and others deserve huge credit.
As has been said, a balance needs to be struck in the communication. As well as assuring existing providers and students that the funding will continue to be there for the training or qualifications that they are already engaged with, we need to assure them that the potential exists for reform to respond to their needs.
If it would be all right, it might be helpful for SFC and SDS colleagues to say a little about their engagement.
Largely, the team that manages apprenticeships in the SDS works with the SFC on a daily basis. Paul Devoy and Diane Greenlees attended the Scottish Training Federation conference, and they go to Confederation of British Industry, Institute of Directors and chambers of commerce events. There is a unified process of communication to businesses to reassure them that our priority is not ourselves but business and apprentices.
The new minister’s quick decision to increase modern apprenticeship contribution rates by 10 per cent was a really steadying influence, and the Government’s commitment to providing 150,000 apprentices over the parliamentary session is a signal of growth and expansion. Those big messages, along with the day-in, day-out meetings and engagement that Paul Devoy supports, have gone down well.
To build on what Damien said, early on in this role, I had an opportunity to attend the Scottish Training Federation conference, at which I did a co-presentation with Diane Greenlees, who works at SDS, to assure delegates of the importance that we place on this area of activity. Jacqui Brasted has been leading on a series of other engagements with employers, which she can describe.
During the later stages of the passage of the 2026 act, we did a lot of engagement with employer and employee groups and industry bodies to understand their concerns and provide reassurance about how we would take things forward. As I said earlier, we have been working with them on what the apprenticeship committee should look like and ensuring that it has a majority of employers on it. It is really important that that voice is strong within the committee.
We have also been working over the summer with the Scottish Government and SDS, doing some consultation around the apprenticeship committee draft guidance, which is now final. We and SDS have also been providing updates on where we are with the wider context as part of that work. We are developing an employer engagement strategy to go forward across all of our work. We are looking at building on what we and our colleagues who are transferring over from SDS already do, and looking to embed it much more across the wide breadth of our policy responsibilities. We are looking to do that and we have engaged with a great number of those bodies through that process, which has been really helpful in understanding where they are coming from.
That is helpful. One of the key messages from employers has always been that we should not make this complicated.
Yes.
The strategic business forum was established in August 2025. How often does that meet? Where does decision making sit with regard to where we will prioritise the opportunities around apprenticeships? That was one of the key themes in the report. I am not quite sure that we have seen that reform really get to a point where employers, such as SSE, can say the numbers that they need, and then the sector delivers them for industry. Who would be the lead in engaging with businesses on that, with the delivery moving from SDS to the Funding Council?
Skills Development Scotland obviously still does work around the assessment of skills needs across various sectors.
James Russell is involved in the project, and I will hand over to him in a minute. The setting of national priorities and strategic direction is firmly understood to be the role of Government. Under the new skills planning model, Skills Development Scotland is committed to providing Government with labour market information, which could be on local and regional economies, as well as on sectors. The Government will set its priorities and interrogate what it sees by way of demand and gaps. It will engage with the Scottish Funding Council to set provision priorities, and the Funding Council will commit to that work, based on Government direction.
With regard to the flow-through of that model, SDS has a long history in the development of skills action plans and regional skills assessments, which have been derived through employer engagement and employer insight about their future skills and workforce needs. Our role in the skills planning project is now the development of skills needs assessments, which is step 2 in that model. As part of that, with the SFC, we have co-designed with employers what the skills needs assessment framework should look like and what the intelligence base should tell the world and the education system about what is needed. That co-design process went through the project mechanism for agreement with Government and approval to move to the next stage. Following that project, we are now taking forward the piloting and testing of elements of that new approach to skills needs assessment with the construction, engineering and digital sectors. In fact, today, a group of digital economy employers are coming together to start to test out how we bring that intelligence to bear. Employers have a really strong voice in saying what they need from the system, and the mechanism of the new skills planning model creates a flow-through to show how provision flows into that space.
If it would be helpful, we could write to the committee and share some information about those pilots, to reassure you that this is not just talk, but practical output.
That would be helpful.
One of the questions that is raised in the Audit Scotland report is about how this programme links with other Scottish Government priorities around the economy, net zero and public service reform. From my point of view, you absolutely cannot deliver any of those priorities without skills and qualifications playing a role. Shirley Laing and I are engaging closely with our economy, net zero and public service reform colleagues to make sure that those connections are made, and that was reflected in the letter that the previous Minister for Higher and Further Education wrote to the Parliament in February, setting out the priority areas for skills planning. That dialogue is continuing within Government, but is informed by the expertise of colleagues and through engagement with business as well.
10:30
I have two further questions. One key risk that is referred to throughout the report concerns the financial unsustainability of the college sector, and the delivery of apprenticeships goes hand in hand with that. What are your thoughts on that aspect? We will look at other reports from the Auditor General on financial sustainability, but it will be critical to delivery in future. We have many institutions that are at huge risk of failure and bail-outs. One key understanding from this report is that the future delivery is based on our college sector being in a strong place.
Yes. It is an important point that the programme and the report do not sit in isolation. The report mentions the other work that we are doing with universities on their future success and sustainability. In parallel, and linked to the work on the college sector of the future, in the current financial year, which is 2026-27, additional funding was provided to colleges—it was around a 10 per cent increase. The purpose of that was partly to allow time for us to progress that work with colleges.
I have to give huge credit to colleges, both for the work that they have done over the past few years to make sure that their offer to students is better linked to regional and local business and economic needs, and for the partnership working that has taken place between colleges and universities. On Friday, I saw a fantastic example of a joint project between the University of the West of Scotland and New College Lanarkshire, which is providing opportunities for undergraduate degrees in that area that would not otherwise be available. There are positive examples of the sectors working together in that way.
We are supporting a lot of transformation projects with colleges. For instance, there is a federation agreement between Edinburgh College and Forth Valley College so that they can work collaboratively. There are lots of good examples of innovation and change that will help the college sector to thrive in future.
Finally, during the passage of the Tertiary Education and Training (Funding and Governance) (Scotland) Bill, I raised the issue of transparency on apprenticeship funding. Data from His Majesty’s Revenue and Customs shows that, between 2020 and 2024, which is the most recent period for which we have figures, £875 million was raised from Scottish employers under the UK-wide apprenticeship levy scheme. Research shows that the Scottish Government has spent just £704 million, when you take into account the money for graduate, foundation and modern apprenticeships as well as the funding of Government quangos. How is the Government tracking that funding? There is £171 million that businesses in Scotland have paid towards apprenticeships that has not been spent on apprenticeship schemes. Where is the transparency on that?
The apprenticeship levy comes under a reserved power, and the money is collected by the UK Government. It does not come to Scotland specifically badged as being from the apprenticeship levy; it comes as part of the block grant to the Scottish Government. Like all other money in the block grant, it is for the Scottish ministers and, ultimately, the Scottish Parliament to decide how that is allocated to different areas. There is no direct link between the levy and the money that goes to apprenticeships.
The figures that I have for this year are that around £194 million of investment is going into modern, foundation and graduate apprenticeships from the Scottish Government and the Scottish Parliament. As I say, there is no direct link between the levy and the funding, or transparency on that, because, like almost all other funding, that goes through the block grant.
We have heard about the demand. Is there a problem with not being able to meet the demand, which is clearly higher than what can be met, purely because of funding? We need transparency for employers, perhaps from the Scottish Government and the Treasury, on where that money should be allocated to deliver what it was originally levied for.
There is clearly a desire from ministers for more modern apprenticeship and graduate apprenticeship opportunities to be available.
Obviously, we have a great ambition to increase that opportunity. We want every pound that we have to work as hard as it can, and we also want to remove bureaucracy where we can. We are building on a great system that SDS has created, and we are looking at what we can do to improve that and increase employer engagement with it.
We have just covered the importance of communication and engagement with employers. The Auditor General’s report also talks about the need to improve communication and engagement with learners and students. What will be done in that regard?
The role of colleges in delivering positive reforms is clear—Mr Briggs covered that as well. However, colleges are under a huge amount of pressure, so communication and engagement through colleges will be challenging.
There are a number of different routes through which we engage with colleges and students about the programme. For example, a tripartite group involving the Scottish Funding Council, the Scottish Government and colleges looks at flexible opportunities. The communication is not just between the Scottish Government and others; it is part of the programme. The chief executive of the Student Awards Agency wrote to you about its work in taking on responsibility for the funding of further education, and there was significant engagement and reassurance with colleges and students about that transfer. We reassured them that, as part of that transfer, the current funding would continue, but possibilities would be opened up for future dialogue and reform.
I want to follow up on Mr Brown’s questions about estimated costs. Paragraph 69 of the report says:
“savings are estimated to be realised by 2030 but have not yet been quantified.”
Obviously, you are doing updated work on the costs. Is the work on the savings happening at the same time? Is there an idea of when we might see quantified savings that are expected to be made by 2030?
That is part of the work that we are doing on how bringing together the funding and simplifying the landscape can provide opportunities for better and more efficient use of the resources.
Being new in my post, I have taken every cost line through a challenge process, which has involved some of our non-executive directors, too. We will be looking at how we can create an efficient and effective system, with an absolute focus on how we support economic growth, how we support learners to take advantage of the opportunities that they need to access and how we can make the whole ecosystem work for Scotland’s economy.
Thanks for that. On policy alignment, we have talked a lot about net zero, public services and the economy, and the Auditor General’s report talks about the need to demonstrate how the reforms support and align with the wider policy objectives. The number 1 stated policy objective from the First Minister is tackling child poverty, and the Scottish Government is legally required to reduce such poverty to under 10 per cent by 2030. How will the reforms align with the Government’s stated policy on child poverty?
From our point of view, widening access and opportunities is an absolutely crucial part of delivering long-term change on child poverty. There are also some fantastic examples of colleges working with local communities, supporting parents and students and helping people to access opportunities. Last year, ministers announced funding through the raising income through skills and education—RISE—programme, which Shirley can talk about.
As part of the third tackling child poverty delivery plan, we announced £22 million of additional funding for the RISE programme in colleges, as well as the flexible workforce development fund and the training access fund. That is all in recognition of the fact that the targets relating to tackling child poverty by 2030 are income-based targets. If you are going to take kids out of poverty, you need to put money in the pockets of parents and give them the opportunity to get into good, fair work. As Neil Rennick has said, there is work going on around those additional programmes, which are a holistic, whole family support piece to get folks into employment. Each and every day, colleges offer support to students of all ages to skill them up to get into work.
Colleges are doing excellent work to upskill people in order to get parents into work. We can recognise that colleges play an important role, but, when we are talking about aligning with wider policy, how do the reforms make a significant and tangible difference in terms of tackling child poverty? It comes back to the point about evaluation and framework, because we need to see some clear milestones, targets and outcomes on that aspect. We can talk about great examples, but we need to be clear about what will be achieved in that regard.
I will defer to Neil Rennick in a second, but I am the former director for tackling child poverty, so you have touched on my passion subject here. My take is that the work that we are doing through the reform to make the system simpler makes it easier for learners to access learning. Earlier, we touched on microcredentials and issues around upskilling and reskilling people to get them back into the workforce if they have been out of it for a while or whatever. All those elements will assist. Making the system simpler and more flexible, agile and responsive to economic need is all about making sure that learners can access the skills they require to get a job in the economy as it looks now. That, in turn, puts more money in their pockets, which lifts families out of poverty.
I will mention one specific example of what we are doing. Paul Devoy said that one of the intended benefits of the reform is to improve the articulation of people moving through the system in terms of gaining skills and qualifications. We know that people who particularly benefit from that are those who are least likely to move on to higher education from school. The alternative pathways that we create for people are an absolute driver of tackling child poverty and creating opportunity. Is that a fair outline, Paul?
Yes, I agree with that 100 per cent. As someone who came from that background, I can absolutely vouch for that being the case.
I think that every member of this committee would agree with the aspiration, but what is key is having a delivery plan to do that and having measurable outcomes to track its progress.
As members have no more questions, I thank all our witnesses for their evidence this morning. I now suspend the meeting to allow for a changeover of witnesses.
10:42
Meeting suspended.
10:48
On resuming—