Meeting date: Thursday, May 18, 2017
Meeting of the Parliament 18 May 2017
Agenda: General Question Time, First Minister’s Question Time, Snaring, Partnership Action for Continuing Employment, Decision Time
- General Question Time
- First Minister’s Question Time
- Partnership Action for Continuing Employment
- Decision Time
Partnership Action for Continuing Employment
The next item of business is a debate on motion S5M-05630, in the name of Paul Wheelhouse, on partnership action for continuing employment, which is known to all and sundry, and to us, as PACE.
There is quite a bit of time in hand, surprisingly, so interventions are invited—whether Mr Wheelhouse wants them or not.
I call on the minister to speak to and move the motion. It says here that you have 14 minutes, minister, but you can make it longer if you wish.
Thank you, Presiding Officer. I will do my best to oblige and I am happy to take interventions, of course, to help with the passage of time.
The Scottish Government’s initiative for responding to redundancy situations—partnership action for continuing employment, or PACE—is one of our most effective interventions and is a service unique to Scotland, yet it remains low profile in the consciousness of the people of Scotland. One of the key aims of this debate is to raise awareness of PACE among any individuals who face redundancy, either now or at some point in the future. At the same time, it affords me an opportunity to recognise and praise the efforts of the PACE partners.
I also wish to ensure that members, who may receive approaches from constituents, are as well informed as they can be and are in a position to advise their constituents on the support that is available through PACE. I will therefore arrange for literature on PACE services to be distributed directly to members’ offices, which I hope will help colleagues in supporting their constituents in the future. We are also looking at increasing the range of marketing materials to ensure that there is a balanced approach between digital, social media, targeted communications and hard copy or print in order to raise general awareness of PACE and what it can provide.
Every year, regardless of the economic context, market changes and other factors mean that new businesses are born and existing businesses grow. Sadly, however, the converse is also true, as businesses end up in difficulties or ultimately cease trading. It is difficult to be definitive about the numbers of people who are affected by redundancy, as any figures are inevitably based on estimates. I can be clear that, between April 2016 and March 2017, PACE supported 15,167 individuals and 299 employers. However, we know that, although HR1 forms tell us where redundancy occurs for 10 or more employees, that does not capture the full scale of those who are affected.
PACE support varies and can be provided in a number of ways, from the provision of information to more intensive programmes of tailored support including one-to-one advice on careers guidance, interview skills, CV preparation workshops and benefits. Between April 2016 and March 2017, 6,500 individuals received intensive PACE support. That is key, as we know that individuals benefit greatly from that intensive support.
We are therefore keen to ensure that we continue to extend the reach of PACE to support as many individuals as possible, and particularly those who are not covered by the HR1 process. We want to ensure that small businesses that might be laying off one or two workers are aware of the support that is available to them, and I ask members across the Parliament to do their best to ensure that that is the case.
I very much welcome what the minister is saying. Does he agree that the great strengths of PACE include the fact that it draws all of us into the room, regardless of political affiliation—I have sat in PACE meetings with Lewis Macdonald, for example; it enables us all to make our individual contributions, with our contacts and knowledge; and it also involves United Kingdom departments, such as the Department for Work and Pensions, and thus casts the net as widely as possible? The debate might nonetheless identify areas where we can fine tune and continue to improve the process, but those are great strengths.
I am grateful to Stewart Stevenson for raising that important point. I will return to it later, but I put it on the record that members across the Parliament have made hugely positive contributions when situations have arisen in which, sadly, jobs have been at risk and people have ultimately faced redundancy. As Stewart Stevenson suggested, many members come to this place with backgrounds in the trade union movement, as employers or having been in management positions in the workplace, so they bring expertise and also local information, knowledge and context, which enables them to help the PACE partners to deliver better services to those who are affected.
I welcome the remarks that Stewart Stevenson made and thank him and other members for their work on the Fraserburgh task force, in particular. We all know of other high-profile examples such as the work in response to the loss of steel jobs in Lanarkshire, which was hugely successful, not least because of the wide, non-party-political approach that was taken by members across the Parliament to support those efforts.
We are very keen to extend the reach of PACE to support as many individuals as possible and to deepen the engagement with those accessing support, to ensure that they get the maximum benefit.
On 23 June 2009, we established the ministerial PACE partnership, which brings together 21 organisations and the Scottish Government to oversee a continuous improvement programme to enhance the operation of PACE. As part of that continuous improvement programme, we published research in October 2016 that indicated that, of those surveyed who had received PACE support, almost three quarters—71 per cent—had obtained employment, which was very encouraging. In comparison, the figure in the 2010 survey was 51 per cent. Clearly, that change reflects a number of things, including improvements in the labour market since 2010, which we should acknowledge, and the on-going evaluation and refinement of the support that PACE provides to ensure that the service is continually improving and working as effectively as it can.
It is important to emphasise our message to employers and their employees that our research and our experience make it clear that the earlier that PACE support can be provided, the more effective that support will be.
Our research shows that most clients are highly satisfied with the package of support that the PACE service is delivering. For the majority of individual PACE services, satisfaction levels sit at over 80 per cent. However, for clients aged 50 and over, there is a slightly lower satisfaction rate with the PACE package of support. Earlier this year, we therefore commissioned research to investigate the lower satisfaction rate. That qualitative research has highlighted some very useful insights from those who have gone through the process about the additional barriers that over-50s may face in the labour market—age discrimination and other factors—and the need to better tailor support for those who need more intensive support, in interview and CV preparation perhaps.
Would that include tailoring support for people with additional support needs, such as people with dyslexia?
That is a very important point, which we should not take for granted, regarding those older workers who went through an education system that failed to recognise or address the needs that they had at the time. They may well have gone on to work successfully, but they might have found, when trying to transition to a new career with a requirement to demonstrate digital or other skills, that they needed additional support. I will take Elaine Smith’s important point away with me and put it towards an action for the next evaluation meeting.
There was indeed much to digest in the research and—picking up on Elaine Smith’s point—we will look to improve our PACE offering for that important client group, to see whether we can make it easier for those who find it particularly difficult to re-enter the labour market. Despite in many cases having impressive experience to boast of, those people may not have formal qualifications to acknowledge that, or, indeed, they might lack confidence in the job market.
I stress that PACE is available for every individual affected by redundancy, no matter the size of the business or the number of employees involved. I would like to reinforce that point, because it is not well understood. We tend to talk about PACE in the context of large, high-profile employers that are being affected by redundancy in members’ areas, and we sometimes forget that, on a case-by-case basis, small and medium-sized enterprises may be shedding one or two jobs. Such losses are hugely important to the individuals who are involved, so those people should be aware that the same level of support is available to them.
Skills Development Scotland leads on the delivery of PACE support on behalf of the Scottish Government, in conjunction with key partners, including the Department for Work and Pensions and local authorities. There are 18 local PACE teams across Scotland, to ensure speedy and effective responses to redundancy situations.
Crucially, although standard information is issued to all affected, each PACE response is tailored, where possible, to meet the needs of each individual who engages with PACE. In some cases, there will be time for a planned programme of support to be developed. That is important because we have found that some individuals who have a high level of skills and qualifications think that the initial stage of PACE support indicates that that support is not relevant to them. For example, we have many highly qualified people who are leaving the oil and gas industry with a lot of skills who might think that the initial contact indicates that PACE’s services are perhaps not relevant to them. However, if they engage on a case-by-case basis, the approach will be tailored to their needs, to reflect their background and level of experience, to ensure that they have the best chance of securing gainful employment.
PACE encompasses a partnership of 22 different organisations. That is a strength, because those organisations bring many areas of expertise to the table. Is the composition of PACE regularly reviewed, however, so that if there are issues with different sectors, people with the appropriate experience can be brought in?
That is certainly the case. The membership of the group is evaluated and, as I understand it, we always keep an eye out for organisations that might add value to the process. Of course, we always have the ability to bring in experts to speak to us and to engage with the PACE partnership group by, say, giving a briefing on a particular subject that might be of importance to all partners. We also have the services of the office of the chief economic adviser to give us detailed breakdowns and analysis of issues, such as those affecting the oil and gas industry. If Mr Lockhart has any specific recommendations to make, I will certainly take them on board.
It is important to emphasise that this is a tailored programme of support to individuals, and there are really good examples of very sophisticated responses to individual situations. For example, some members might be aware that, in January, Ageas Kwik-Fit Insurance Services regrettably announced the closure of its Uddingston office, where 521 employees were based. Of course, that was extremely bad news for the local community. However, I must praise Ageas, which, as a conscientious employer, wished to do its best to support its employees in finding onward employment opportunities in the local area and, towards that end, worked very closely with the Scottish Government and our agencies.
Through our PACE initiative, I set up a working group to provide support that included Ageas, the Scottish Government, North Lanarkshire Council and Scottish Government agencies. Through that process, we identified more than 2,000 vacant roles within the locality of the site that were available to employees through four on-site jobs fairs that Ageas arranged and which 44 separate organisations attended. PACE staff worked closely with the company and its outplacement agency to deliver a tailored programme of support, which included 13 PACE presentations, 50 workshops on CV preparation, career management and interview skills and more than 200 one-to-one career planning interviews with a PACE Adviser. Around 450 employees took up the service and by the end of March 2017, when the site closed, more than 300 employees—or two thirds of the total—had already secured successful outcomes. I stress that PACE support continues to be available to anyone in the former Kwik-Fit Insurance Services team who might still require assistance. In that respect, a more general point is that, even after a factory or plant closes, support is still available to those affected.
Unfortunately, it is inevitable that some businesses will face such severe financial difficulties that PACE will have no time to provide support to affected employees prior to notification of entering administration. I therefore want to highlight the important role that the insolvency profession in Scotland plays in the Scottish economy, helping to rescue just under 1,000 businesses and saving nearly 22,500 jobs each year. I am therefore very grateful for the contribution of the Institute of Chartered Accountants of Scotland to the work of PACE, ensuring close collaboration with insolvency professionals to achieve a positive outcome for employees and other creditors in difficult situations and working alongside trade unions and stakeholders to achieve as good an outcome as possible.
The strong working relationship between PACE partners and ICAS promotes access to over 10,500 chartered accountants in Scotland who are often the first port of call for businesses requiring advice or who hold positions in companies that might face having to make redundancies. Collectively, ICAS chartered accountants and insolvency practitioners ensure that employers and employees can access assistance at an appropriate time. That is key to minimising the effects and risks of redundancy, which can have such a detrimental impact on individuals, their family life and the wider Scottish economy.
Turning to the economic outlook and the climate in which PACE operates today, I can say that, despite the significant challenges that continue to face the oil and gas sector, the Scottish economy has remained resilient through 2016. Compounding those challenges, however, is the heightened uncertainty created by Brexit, which has led to consumer confidence falling in Scotland, as elsewhere in the UK.
That said, it is vital to note that Scotland’s economy grew by 0.4 per cent in 2016 and that Scotland’s labour market has continued to show considerable resilience. The latest data to March 2017 show that our unemployment rate has fallen to 4.4 per cent, which is lower than the UK rate of 4.6 per cent, and that Scotland continues to outperform the UK on both female and youth employment rates. I am aware that the economic inactivity figures are less positive, but the fact that, at the end of quarter 1 of 2017, employment is 48,000 higher in Scotland than it was a year ago is a positive outcome. The 0.2 per cent contraction in the Scottish economy in the final quarter of 2016 stemmed largely from the continued slowdown in the oil and gas sector and its impacts on the wider supply chain.
We know that the headwinds affecting the Scottish economy can have varying impacts across Scotland’s regions. For example, the labour market data for January to December 2016 have shown decreases in employment in Aberdeen, Aberdeenshire and the Highlands. That is likely to have been driven by the fall in the oil price, affecting investment in the North Sea oil and gas industry and its supply chain.
However, there are encouraging signs that the situation is improving for North Sea operators and it is clear that the oil and gas sector has a long-term future, so we will work to support the supply chain in the interim to ensure that it can gain from future opportunities.
The oil and gas industry clearly remains vital to the economy of both Scotland and the UK, supporting 330,000 jobs across the UK, with 124,500 in Scotland alone. It has contributed about £330 billion in revenues to the UK Exchequer since production began.
Our £12 million transition training fund has directly supported more than 2,000 individuals made redundant as a consequence of the downturn in the oil industry, while a further 755 are being assisted through two procurement rounds to provide new employment opportunities, again through the transition training fund.
Examples of other headwind impacts are those on local authorities such as South Lanarkshire, Fife, Edinburgh and Glasgow, which have all been affected by the reduction in activity in the manufacturing sector. Authorities such as North Lanarkshire have been impacted by the tightening budget constraints in the public sector.
The labour market in Scotland is strong and resilient. The latest figures show that unemployment in Scotland is lower than it is in the UK as a whole and, since last year, employment in Scotland has, as I have said, risen by 48,000.
Scotland also has an innovative business environment and, since 2007, the number of registered businesses in Scotland has grown by 15 per cent to an all-time record level. It might not be immediately obvious, but through PACE we try to provide support to those individuals who, having perhaps received redundancy payments, are able to start a new business. Tailored support is, again, provided through Scottish Enterprise, Highlands and Islands Enterprise and business gateway services at a local level to make that happen.
The minister referred to people getting relatively substantial redundancy payments. I am not aware that PACE has previously done this, but will he consider whether, in particular circumstances, people who receive payments are in a position to receive advice about the best way to get the most bang for their buck from such payments? Will he—in asking this question, I am speaking on behalf of people who are a little bit older—look at how they might use that advice as part of their preparation for a retirement that might be disrupted and financially affected by the fact that they have been paid off at a point in their career when there will be limited opportunities for them to get a replacement job and further develop their pensions? It strikes me that, on the whole issue of payoffs, we have seen a lot of people, particularly from the oil and gas industry in the north-east, take the money and drop out of the system for long periods, when it might be in their long-term interest to receive good advice, so that they perhaps take a slightly different approach.
Mr Stevenson makes a fair point. A range of circumstances will affect individuals who are facing redundancy. Some people will be closer to retirement than others and, as the member points out, might be in receipt of significant funds as part of a redundancy package, so it would be useful for them to be advised on how to evaluate their options. I am aware that there is support in and around that area, but I will try to provide written information to all members about what support is available. I take on board Mr Stevenson’s point that that might be an area in which the PACE service is enhanced in future, if that is possible to do.
The economic outlook remains positive—and I have cited statistics to back that up. The main risk facing Scotland’s economy—I appreciate that this might not be an issue on which all members agree—continues to be the prospect of a hard Brexit. It is a concern that, this week, the Chartered Institute of Procurement & Supply reported that 45 per cent of European companies are looking to replace UK suppliers with European Union suppliers. Obviously, we hope that that does not come to pass, but it is important to recognize, and for members across this chamber to reinforce the message, that Scotland is open for business and continues to attract inward investment.
I will cite two examples in order to include a more positive message in today’s debate. We have seen £11.1 million of investment in the East Kilbride subsea development centre by German company TÜV SÜD; and the creation of 300 jobs in Glasgow through investment by global professional services firm Genpact. Therefore, investment continues to flow into the UK and, indeed, Scotland.
Although change is inevitable, regardless of the constitutional future that those of us in this chamber seek to pursue, the Scottish Government’s twin approach of growing the economy and tackling inequality will be at the heart of our efforts to meet the challenges that lie ahead and to seize opportunities.
As members may be aware, we have been undertaking the enterprise and skills review. Although the process is still to conclude, the benefits that we envisage from it are simplification of the enterprise and skills landscape; improvement in collaborative working and co-ordination; and improvement in the delivery of enterprise and skills support. We believe that all of that will contribute to the pattern of collaborative working that PACE has already established with its partners.
Our business support policies will continue to focus on ensuring that businesses can grow and thrive. To pick up on the point in the Labour amendment, we accept that it is vital that we work to help companies avoid situations where there is a risk of redundancies. On the Conservative amendment, we recognise the importance of engagement with United Kingdom ministers on their industrial strategy, and the Cabinet Secretary for Economy, Jobs and Fair Work has had positive discussions with Greg Clark in recent times on that theme. Therefore, we will support the Labour and Conservative amendments.
Our enterprise agencies, which are PACE partners, provide through their account management a range of early preventative measures to negate potential closure and alleviate difficulties. Operating on a confidential referral basis, work is rightly carried out behind the scenes.
Presiding Officer, I can keep talking if you want me to, because I have more material.
Just let me check that we are all awake. Yes, we are all awake—you can keep talking.
Thank you. If it helps, I will continue to talk.
The challenge is to encourage businesses to engage early enough to address potential difficulties before they become insurmountable. Scottish Enterprise and Highlands and Islands Enterprise have a broad and highly innovative range of tools at their disposal to support companies, including those experiencing difficulty. Those of course include grant support and a wide range of support options for businesses, including mentoring support and other means by which we can improve their performance. Scottish Development International can also offer invaluable support and advice to global companies that are exploring the range of opportunities available in Scotland.
Our support to companies is actively maintained throughout difficult periods to explore all possible options for retaining operations and jobs in Scotland. Regrettably, in some cases, that is not possible. Despite the best efforts of officials, local authorities, trade unions and other partners, no viable commercial future can be found, which may result in a closure situation and, sadly, job losses. Our focus then shifts to ensure that the affected workforce is given the support that it needs and deserves and to mitigate the economic impact on the surrounding area.
In cases where there is a business failure, a decision to close part of a business, or particular difficulties in a sector, the PACE response is usually sufficient. However, as Stewart Stevenson outlined, circumstances occasionally require the intervention of national Government. In those particular situations, there can be value in our intervening directly, and we have established task forces. I re-emphasise that those have been bipartisan in nature and positive in their progress.
I will discuss a number of those task forces in my closing speech. They bring together national and local politicians, local authorities, public sector agencies and company and workforce representatives such as trade unions to respond to challenges and, where possible, find positive outcomes in extremely difficult circumstances. By bringing people together to understand the challenges and what can be done to mitigate the direct and indirect impacts, we make connections that might otherwise not be made. That ensures that every avenue is explored, every potential source of support is considered and every possible solution can be delivered.
I have seen at first hand the excellent work that has been done in the Fraserburgh task force and the Fife and Longannet task forces. The latter two were set up to mitigate the impact of the closure of Tullis Russell paper makers in Markinch and the early decommissioning of Longannet power station. The success of both task forces has been clearly demonstrated. The Fife task force helped to achieve positive outcomes for 83 per cent of PACE clients during the task force lifespan, while the figure at Longannet was 87 per cent.
The Scottish Government is committed to creating a culture of fair work. That is supported by measures such as the fair work convention, which I will turn to in my closing remarks.
I am going to ask you to start closing, because I want to give other members a bite of this big cherry.
Excellent—I have done my job, Presiding Officer.
I believe that PACE is an excellent example of the Scottish Government working in partnership with our stakeholders and, where required, with colleagues in the Parliament to maximise benefit for individuals and communities and for Scotland’s economic growth. I thank all our PACE partners for their support in all our efforts. PACE partners include agencies that provide skills development and employability support and retraining and upskilling programmes directly at the coalface for people facing redundancy. They also include organisations that provide support to spread the message of PACE to their members.
Many members have contacted me about PACE support for their constituents, and I thank them all for their efforts. I would be grateful to hear members’ thoughts during the debate on how we can build on the success of PACE and make it even more successful for those who are affected.
That the Parliament recognises the important work carried out by the Partnership Action for Continuing Employment (PACE) initiative in assisting workers facing redundancy to find alternative employment and to minimise the time that people affected by redundancy are out of work; understands that the overriding goal of Scottish Government policy and the actions of its agencies is to work with employers and trade unions to support sustainable growth in good quality jobs; endorses the work of the Ministerial PACE Partnership, which brings 21 organisations together with the Scottish Government to oversee a continuous improvement programme to enhance the operation of PACE, and welcomes the continued involvement of the trades union movement in Scotland in its governance.
I have 20 minutes in hand, so I do not want members to panic and think that they are not going to get their time.
I call Dean Lockhart, who has a liberal nine minutes, although perhaps not as liberal as the minister had, unless Mr Stevenson intervenes again.14:54
Thank you, Presiding Officer. I suspect that it will be a conservative nine minutes, not a liberal nine minutes. I congratulate Mr Wheelhouse on extending his opening speech; I hope that he has not exhausted too much of his closing speech and I look forward to hearing his closing remarks.
This is a welcome opportunity to debate the work of partnership action for continuing employment, or PACE. It is also a timely opportunity to consider its work in responding to redundancy situations, how it functions and, most importantly, the challenges that it will face in the future.
We will support the Government motion this evening, and we will also support the Labour amendment. Our amendment to the motion seeks to do two things. First, it highlights the need for policy and Government agencies, including PACE, to anticipate and plan for the impact of rapidly increasing changes on many sectors of the economy, driven by new technologies, automation and other developments that could result in large-scale redundancies if policy makers do not plan for them. Secondly, it encourages the Scottish Government to follow the advice of leading organisations by co-operating with the UK Government’s industrial strategy to ensure that sectors and businesses across Scotland are fully prepared to meet those challenges.
Before looking at the future challenges that we face, I highlight the valuable work that is undertaken by PACE. As the national strategic partnership framework for responding to redundancy situations, PACE co-ordinates responses from 22 organisations across Scotland and the UK. Skills Development Scotland delivers PACE in conjunction with those partner organisations. There is a national team is based in Glasgow, which is supported by 18 local PACE teams across Scotland.
Every year, PACE supports thousands of individuals across Scotland during a challenging time in their lives when they face the prospect of redundancy and the loss of their livelihood. To deal with the different needs of individuals in those difficult circumstances, PACE provides a number of tailored services including one-to-one counselling, access to high-quality training and seminars on starting a business—we have heard that an increasing number of people who are affected by redundancy are choosing to open their own business, which we should encourage. PACE gives access to information technology facilities and helps people to prepare business plans to start a business. Historically, PACE has been targeted primarily at large-scale redundancies, but improvements in its service offering now mean that it can help more individuals and smaller companies in rural areas as well as larger companies in urban areas. That is very much to be welcomed.
PACE undertakes regular client experience surveys to get a sense of what is working and what can be improved. The most recent survey, from last year, pointed to a number of positive outcomes: three quarters of clients were satisfied with their interaction with PACE, and employment outcomes were generally positive—71 per cent had secured work after assistance from PACE.
Will the member give way?
The inevitable Mr Stevenson.
Would Dean Lockhart agree that it can also be useful to have in the room the employer who may be paying off. When we had a major pay-off in Fraserburgh, we were fortunate to have the company in the room, and one direct effect of hearing the ideas of people around the table was that the company modified its plans. In addition, the trade unions seemed to have gained an opportunity to better interact with the employer in a safe space and to come up with something that mitigated the worst effects. The clients are not simply those who are affected through their employment but, sometimes, the companies. We should not fail to recognise that there is always a benefit in having a safe space where the people, communities, companies and trade unions that are affected by the plans can work through solutions that may be better than the initial prognosis.
Mr Stevenson makes a good point, which we will come on to a bit later. That also feeds back into the need for PACE and the enterprise agencies to get involved in discussions earlier and, perhaps, to have a more proactive response; they should not just wait for difficult situations to arise but should address earlier in the process some of the problems that may ultimately result in PACE being involved.
The client experience survey found that 71 per cent of clients secure work after assistance from PACE. The majority of those people find work that calls for at least the same or a higher level of skill or responsibility, but a sizeable proportion—roughly a third—are able to secure work only at a lower level of skill or responsibility, and a proportion of clients who secure work end up with lower pay. Indeed, that applies to roughly 60 per cent of workers who have been helped by PACE.
In the difficult context of redundancy, those are positive results, and I commend the hard work of everyone in the partnership. There is always more to be done, and a number of recommendations were made as a result of the survey findings. For example, it is recommended that PACE enter the process earlier, as I said to Mr Stevenson. Given that PACE is a gateway to options such as starting a new business or retraining, it is important that vulnerable workers get help as soon as possible, so that they can explore all possible options.
There is also a need for more tailored support for older workers, as the minister said. Post-redundancy outcomes for people over 55 are typically poorer. As I think that someone said, a reason for that might be that workers of that age who are made redundant might start their own business or leave the workforce altogether—that might be behind the increasing levels of inactivity in the Scottish economy, because such people would not fall within the statistics.
It is also recommended that the services and reach of PACE are further promoted, so that support is available to everyone who needs it, whatever the size of the business or circumstances of the redundancy.
It is clear that PACE continues to play a constructive and important role in Scotland’s labour market. We are supportive of the work that PACE undertakes and the support that it provides. Our amendment to the Government motion reflects the need for policy makers to begin to plan for significant changes to the structure of the economy and working practices, which, if unplanned for, could result in significant redundancies in the economy.
Those challenges were highlighted in a report that the Institute for Public Policy Research issued last week, “Scotland skills 2030: the future of work and the skills system in Scotland”, in which the IPPR predicted that almost half the jobs in Scotland—more than 1.2 million jobs—will be at risk from automation and new technologies over the next 15 years.
The IPPR made a number of observations and recommendations. For example, it said that workers will need more career transition support and retraining during their working lives and will require not just one-off support following redundancy but a lifelong platform for career transition, given that by 2030 people will be much more likely to have
“multiple jobs, with multiple employers and in multiple careers.”
The IPPR concluded that, unless there is reform, changes to the economy that are driven by automation and technology could damage employment prospects for a number of sectors and leave whole communities behind.
In today’s Scotsman, Dave Watson, of Unison, writes:
“Unnecessary recording and reporting at work increases costs and places undue stress on staff. Coupled with new monitoring systems, workers are being turned into robots, before they are actually replaced by them.”
Does the member have any comment on that?
I am trying to work out the connection with PACE, but on you go, Mr Lockhart.
I have not read that article, to be fair, but I think that we must all recognise that best practice in the workplace is good management. Indeed, best practice is the only way in which the Scottish economy will remain competitive, given the increasing competition that we face from across the world.
The IPPR has identified large challenges, and I do not expect PACE, in its current form and with its current capacity, to have all the answers or deliver all the solutions. However, as a multi-agency partnership, which includes the enterprise agencies, Skills Development Scotland, trade unions and various industry bodies, PACE will, I hope, be able to play an active role in helping to formulate policies and strategies that anticipate the significant changes in the economy and workforce.
The changes that are driven by automation and new technologies no doubt represent a significant challenge, but they also present significant opportunities. If we can get the policy response right, we can capitalise on new technologies such as fintech for the benefit of the economy and the creation of new jobs.
That is why our amendment calls on the Scottish Government to follow the advice of leading organisations in Scotland and actively to participate in the UK Government’s industrial strategy. As part of that strategy, the UK Government has announced that it will invest £4.7 billion to be used across the UK in science, research and development and innovation in areas such as artificial intelligence, smart energy technology, robotics and 5G wireless. Significant investment in those key sectors will help the economy to capitalise on the opportunities that are available and, it is to be hoped, avoid the worst-case scenario of the large-scale redundancies that might be the down side if we do not get the policy response right. As Scottish Chambers of Commerce said yesterday, given the struggling economy in Scotland, we need
“a coherent industrial strategy for the UK”,
“must be fully supported by both the UK and Scottish Governments.”
To conclude, we are very supportive of the range of work that is undertaken by PACE and the support that it provides in redundancy and related situations. However, we must look forward and start to plan for the significant changes that will impact the structure of the economy and the nature of work in the future. To do so, we urge the Scottish Government proactively to engage with the UK Government’s forward-looking and ambitious industrial strategy and to take advantage of the trading opportunities that we have with the rest of the UK, which represents over two thirds of our trade.
I move amendment S5M-05630.1, to insert at end:
“, and encourages the Scottish Government to follow the advice of leading organisations to cooperate with the UK Government’s industrial strategy to ensure that sectors and businesses in Scotland are fully prepared for ongoing changes in the economy arising from emerging technologies, automation and other challenges.'”
I apologise to Ms Smith. Of course, she is quite right. I see in the Conservative amendment the word “automation”, so her intervention was absolutely pertinent.
I now call Richard Leonard—who is a liberal with a small l—to speak to and move amendment S5M-05630.2. You have seven minutes, please, Mr Leonard.15:06
What we are debating here this afternoon is a consequence of what happens when there is market failure or a shift in the market. It is what happens sometimes when there is a falling rate of profit; what happens when there is a corporate demand to boost share values or to inflate dividend payments; or what happens when there is a strike of capital and a company decides to disinvest and move work offshore.
What happens when redundancies are proposed? Throughout my working life, I have seen that, all too often, what typically happens is that workers—women and men, aged 50 and over, with 20 or 30 years of working experience—are tossed aside. Their job security and stability are gone and their occupational pensions are no more. Too many remain unemployed but uncounted, or in part-time work when they want full-time jobs. Some might be moved on to zero-hours contracts, which is a precarious form of employment that affects the youngest and the oldest workers the most.
Like the minister, in advance of today’s debate I made some inquiries about what had happened at the Kwik-Fit insurance call centre in Uddingston, where 521 working men and women lost their jobs in the past few weeks and have been desperately seeking alternative work.
Yesterday, I asked North Lanarkshire Council’s economic development department to tell me what had happened to those working people. It pointed to the co-operative work that involved the council and also the Scottish Government, SDS, the PACE team and Scottish Enterprise. It reported to me that, of the 521 people who have now lost their jobs, 44 were on either long-term sick leave or maternity leave. I am not quite sure what support workers who are on maternity leave get in a redundancy situation, so I hope that we can ensure that that is properly covered. It could tell me that 46 people were retiring or taking time out. I defer to Stewart Stevenson’s point that people need to have on hand, either through the trade union or perhaps channelled through the PACE team, access to independent financial advice about access to their pensions or other forms of financial benefit that they might have derived through their employment.
It was reported to me yesterday that 268 people had found alternative jobs, often in similar lines of work to that of the Kwik-Fit call centre. HSBC, One Call Direct, Sky and BT Local Solutions were among the destinations where people had found work. I have to say that no information was available about those people who had found jobs—about their rates of pay, or about their other terms and conditions of employment. There was also no information about the types of employment contract that they are now on. That is something that we need to consider. I will talk in a moment or two about the audit work that is carried out by IFF Research, for example, that looks at the outcomes of the PACE process. We need to be a bit more proactive in monitoring people’s destinations once they leave employment and understanding better the kind of employment that people are going into.
That is why I found that the latest PACE client experience survey, as it is rather grandly called, which was carried out by IFF Research and published in 2016, is so important. It gives us some insight into people’s journeys after they have been through the PACE programme and received the support that PACE offers.
The research report provides us with a profile. It establishes that, while 40 per cent of PACE clients are below the age of 45, one third are aged 45 to 55, a quarter are over the age of 55 and, as it happens, in that year’s report, two thirds of those were men. I am therefore interested to hear that the Scottish Government has identified those older workers especially as a group that might need additional support through the service that is being provided.
I was struck by the report’s profile of the people who have gone through PACE and the experience of those people having lost their jobs. In contrast to Dean Lockhart’s assessment, that caused me some concern. It provides something that the Parliament needs to consider. First, the post-redundancy experience of people was as follows: 18 per cent of them went into part-time work and many of them had previously been in full-time employment; one third moved from permanent contracts to short-term contracts or, worse, into a casual job, and that was a particular feature of those older workers who found it hard to move from one permanent job to another permanent job and were much more likely to be caught up in more precarious forms of employment. The findings of the survey and the research showed that those older workers were more than twice as likely to be in casual employment than those working people under the age of 45 who had been made redundant.
Something else struck me about the report. It goes on to make a comparison between the survey that was conducted in 2016 and a comparable survey that was conducted in 2014. This afternoon is a time for consensus and broad agreement, but it is important that we understand what those results show. The conclusions—Dean Lockhart touched on this in his contribution—are that in 2016, PACE clients were more likely than in 2014 to have taken jobs with lower skill requirements than their previous job. As many as 34 per cent went into forms of employment with a lower skill requirement, compared to 29 per cent in 2014.
I am grateful to the member for taking an intervention to help the debate, and I am interested in the points that he is making. We understand that the 2016 survey picked up a lot of people who were leaving the oil and gas industry, some of whom were very experienced and highly skilled. It is true to say that people might have had to go into occupations that require lower qualifications and are of a more temporary nature, but there are some encouraging signs that those who are in that position progress to better employment prospects in due course. I hope that that is encouraging for those involved.
My reading of the final part of the report, which was expressly addressed to oil and gas workers, is that it suggests that, with their particular skills, those workers are more likely to slot into forms of employment that give them a comparable application of their skill sets. I take the point, which has been well made in the chamber before, that the levels of remuneration offshore might not be matched by equivalent employment onshore, for reasons that everybody understands.
The report also talks about the lower levels of responsibility of the employment that people were moved into. For example, in 2016, 40 per cent of those who went through the PACE programme moved into jobs with lower levels of responsibility, compared to 32 per cent in 2014.
To address the point that the minister made, the report says in paragraph 1.25:
“the proportion of clients who had secured work with a lower level of pay than the job from which they had been made redundant has increased since 2014: from 52% to 58%.”
I will say one or two things about PACE as an organisation. In preparation for the debate, I checked the PACE website earlier today. Also, the minister made a point about the use of social media and what we can do to use such new forms of technology—new to me, anyway—to improve the quality of the service that is on offer. When I looked on the website, I noticed that there is such a thing as a PACE toolkit, which promotes PACE services and support. It covers the use of social media and gives advice to employers and employers.
If I can strike a serious note, under the heading “Example tweets”—I must make full disclosure that I am not on Twitter; I neither tweet or retweet, and I never have done—the tweet example that is currently on the PACE website says:
“Is your business downsizing? Check out the PACE partnership at Redundancy Scotland and see how they can help you.”
We should not be in the business of helping businesses to downsize; we should be in the business of defending people’s jobs and retaining industry. However, in fairness, and by way of balance, when I went on to look at the advice under the heading “Facebook”, which I do subscribe to, the question was posed in a much more constructive way. It said:
“Is your business facing redundancy? PACE advisers can provide free and impartial advice on the best ways of dealing with redundancy - from providing options to retain staff or managing debt.”
Will the member take an intervention?
Will the member give way?
I am sorry. You can all sit down, because Mr Leonard will have to close. You have done well, Mr Leonard—you were into 12 minutes.
I have so much more to say, as well.
My final point—
It will be brief.
My final brief point is that we should ban the awful language of downsizing and have more emphasis on staff retention.
I move amendment S5M-05630.2, after “good quality jobs” to insert:
“and, as identified by the Enterprise and Skills Review, to develop effective, proactive approaches to support existing jobs and industry to seek first and foremost to avoid redundancies”.
We still have some time in hand, so everyone in the open debate can have seven minutes. However, do not be naughty and go on and on. It is seven minutes.
I remind members that, if they have intervened, they have to press their—[Interruption.] Mr Stevenson, you are not paying attention. This is for you. If members have intervened, they have to press their request-to-speak button again, because it might not be on. You have done that, Mr Stevenson? Good man.15:19
Before I start, I would like to comment on Mr Leonard’s speech. Not being a Twitter user, he may not understand this, but he will find that the brevity, and hence the lack of full explanation, of a tweet may be a consequence of the 140-character limit, which does not apply to the more comprehensive text that can be put on a Facebook post.
Will the member take an intervention?
Do you really want to intervene on that?
Yes. It seems to me that “downsizing” is an especially long word with lots of characters in it, so all the more reason to change the vocabulary.
Good intervention, Mr Leonard.
I take back my comment. On you go, Mr McKee.
I remind the Parliament of my role as parliamentary liaison officer for the Cabinet Secretary for the Economy, Jobs and Fair Work.
Technological change is a feature of our modern economy. It drives progress and growth, but it also causes disconnects in business models and employment patterns. Jobs and businesses that were the foundation of employment in past decades no longer exist, and today’s young people will spend their careers in jobs that we cannot even begin to imagine. Change is something that we need to be able to manage and, where possible, leverage to our advantage.
Further and higher education that trains in-career flexibility—both in skills and in attitudes—is a key component of enabling our economy and our citizens to survive and thrive in an ever-changing environment. It is also critical that Government plays its role in supporting employees who are affected by the process of change at a time when that support is most needed.
The process of redundancy is both painful and stressful for the individuals concerned and their families. It is a process that I have been through twice so far in my career, and who knows what the future may hold? In many circumstances, Government is able to step in and turn a job-threatening situation into survival, or even an opportunity for growth. That, of course, is the first priority. The Scottish Government has been proactive in that regard and several recent examples can be cited, including saving shipbuilding at Ferguson Marine on the Clyde, the saving of the Lanarkshire steel mills, and the recent deal to save and develop the Lochaber smelter—a deal with huge potential for growth of the site and the employment opportunities that it offers. Such proactive Government intervention is critical.
In situations where rescue and recovery are not possible, Government has a role to play—a duty, in fact—to provide the individuals concerned with practical support to smooth their transition to new employment. In that regard, the Scottish Government’s partnership action for continuing employment, or PACE, is well placed to deliver, having demonstrated the value that it adds to the lives of individuals who are going through this difficult process.
PACE advisers help people to recognise their skills, explore their options and prepare for their next move. That can often involve highlighting to individuals the skills and abilities that they already possess and which can be leveraged in the job market. It can take the form of introductions to employers looking to recruit, or to other individuals in a similar situation who are looking to partner in new business ventures. It can open doors that an ex-employee may never have thought of. Change is challenging, but it can often offer opportunities and new pathways.
The form of support that PACE provides includes one-to-one counselling, comprehensive information packs, access to high-quality training, seminars on skills such as CV writing and starting up a business, and access to IT facilities—all designed to provide tailored support and advice to those who are going through the process of redundancy. PACE does that through its national service and through its local teams.
Raising awareness of the value that PACE can bring is important, both to employers facing difficult decisions and to employees who find themselves going through the redundancy process. I hope that an outcome of today’s debate will be to make the work of PACE more widely known and to increase participation in its services. We must not forget that, although the practicalities of finding new work are key, the provision of support around the emotional impact of redundancy provided by PACE is of huge value to many employees who find themselves in that situation. The uncertainty about the future that many people experience can often be a barrier to the positive attitude that is required to move on and find future opportunities.
Best practice calls for constant review of processes and outcomes, driving continuous improvement to develop and enhance services. The Scottish Government is focused on ensuring that PACE continues to improve the service that it provides. Regular client experience surveys are carried out and the findings are used to further develop the service. The most recent survey found that 71 per cent of PACE clients had secured work, an increase on the 51 per cent recorded in the 2010 survey, and of those who had secured work almost two thirds were now in roles that required the same or higher levels of skills or responsibility.
The partnership aspect of PACE is important—it brings together the Scottish Government, local government and industry partners, and draws on the different inputs that each can make to the service. It is also important to recognise that, in a UK context, PACE is unique. No other part of the UK has a programme that is comparable to the one that is offered by the Scottish Government.
While many factors affect the labour market, a proactive focus on helping individuals to get back to work, or to start up in business on their own, with the potential that that brings to employ others, can have a marked effect on overall statistics. In that regard, Scotland’s employment performance is worth highlighting. Unemployment in Scotland has fallen by 14,000 over the past quarter, and by a total of 48,000 over the year. Scotland’s unemployment rate is now at 4.4 per cent, which is a decrease of 1.7 per cent, and it is lower than the UK level of 4.7 per cent. In addition, Scotland’s employment levels are up: they have increased by 0.9 per cent over the year, and there are 41,000 more people in employment. Particularly pleasing is Scotland’s performance in youth unemployment. Our level is the fourth lowest in the EU, and our youth employment rate has gone up by 3.9 per cent over the year.
The work of PACE is part of a broader approach and strategy by the Scottish Government that involves intervening, where appropriate, to save or reinvigorate key sectors and businesses; creating the environment for business creation and growth; and proactively assisting individuals who find themselves at risk of redundancy. It is an approach that is delivering results, as Scotland’s employment statistics make clear, but it is one that we must continue to develop to further expand its reach and effectiveness.
Thank you very much, Mr McKee—you were right on the button.
I call Bill Bowman, to be followed by Graeme Dey.15:26
Thank you, Presiding Officer. I have been schooled by you not to overspeak, so I might struggle to do so on this occasion.
I can be gentle.
I refer members to my entry in the register of members’ interests; I am a member of the Institute of Chartered Accountants of Scotland, which the minister mentioned in complimentary terms. I found the minister’s opening speech very informative—he covered areas that it is not possible to find out about by reading the information that is available online.
Just over two years ago, members found themselves in broad agreement on the valuable work of the partnership action for continuing employment initiative. Back then, members paid tribute to the constructive efforts of PACE in helping those who had been made redundant to transition into new jobs or training. Two years on from that debate, I reaffirm that PACE has a positive impact.
I represent a part of the country where there has been a frequent need for PACE teams. Communities across the north-east are still struggling from the downturn in the oil and gas sector. The industry has moved from a long-term boom to a period of contraction—severe contraction, some would say. To survive at all, businesses have needed to restructure right across the supply chain, and that has involved some downsizing, to use Richard Leonard’s terminology. In that tough climate, redundancies have been unavoidable. According to the annual economic report from Oil & Gas UK, there are now around 120,000 fewer jobs in the sector than there were in 2014.
For those who have been made redundant during that period, PACE has been a valuable source of support. In particular, PACE and its 22 partners have played a crucial role in organising five north-east employment support events in Aberdeen. Those events have proved to be an ideal opportunity for employers to recruit from the highly skilled talent pool of former oil and gas workers.
On top of that, as has been mentioned, the 2016 client experience survey shows encouraging results. The good news is that 77 per cent of former oil and gas workers have secured work. Most of them have found new roles in different industries, with nearly half of them saying that PACE influenced their receptiveness to alternative employment opportunities in the north-east.
At a national level, PACE provides a service that is generally well regarded by its clients. Most important, the employment rate for all PACE service users continues to be high. Between 2014 and 2016, 71 per cent of those who used PACE services secured new jobs either before or after their redundancy. PACE has maintained consistently high levels of satisfaction, with around 75 per cent of clients expressing satisfaction with the relevance, usefulness and timeliness of its services.
Without a doubt, PACE continues to play a constructive role in Scotland’s labour market, and credit should be given where there is success. However, I sound a note of caution: celebrating the success of PACE is all well and good but, as Andrew Grove, the founder of Intel Corporation, warned:
“Success breeds complacency. Complacency breeds failure. Only the paranoid survive.”
Despite the general success of the PACE initiative, improvements can always be made—one or two have already been suggested today.
The member has triggered a memory for me of reading “Only the Paranoid Survive”, which is the autobiography of Andy Grove, who was the chief executive of Intel. He literally came in on a Monday morning and found that the memory business that he had on Friday had emigrated to Korea. His book was an object lesson in how really good-value leadership can lead to a company avoiding catastrophe. I hope that, like both Bill Bowman and me, other members will read Andy Grove’s book, which is one of the seminal works on how to handle change in business.
Of course, Andy Grove survived the Holocaust and then escaped from Hungary in 1956 at the time of the uprising, so he had quite an interesting—if I can put it that way—life.
On the improvements that could be made to PACE, one that has been spoken about is an improvement in the awareness and availability of telephone and online support. Another is earlier intervention by PACE, if that is possible in the legal circumstances.
Another improvement that has been mentioned is that there could be a focus on redundancy support for older workers, which Paul Wheelhouse has indicated he may look at. Those aged over 55 tended to have poorer rates of employment compared with those in the younger age groups. The findings in 2016 showed no overall improvement in post-redundancy outcomes for the over-55s, and some form of targeted support for older workers—and perhaps also for the groups mentioned by Elaine Smith—would be welcome. Therefore, although I do not wish to rain on the minister’s parade, there is room for improvement.
The work of PACE is perhaps not made any easier by the current Government’s handling of the economy. As things stand, Scotland’s economy is halfway towards a recession. I do not think that any sectors in the Scottish economy are presently experiencing growth. The Scottish Chambers of Commerce has warned that the Scottish Government’s high-tax agenda risks driving away investment at a time when it is perhaps needed most.
Some alarm bells are ringing and we have to hope that the Scottish Government is listening. However, it is perhaps not making things better with its insistence on holding a second independence referendum, which, as we know, creates economic uncertainty, which the markets do not like.
Scotland’s economic problems threaten PACE’s good efforts. Post-redundancy outcomes will not remain high if positive job creation falters. I know that the unemployment statistics have improved slightly but the question is whether that is a result of new jobs or people leaving the market. Those points, along with the Scottish Government abandoning its high-tax agenda and making business growth its number 1 priority, are my closing remarks.
I ask members to support the motion.15:33
I welcome the opportunity to debate the work of PACE in the chamber. As well as holding the Government to account, MSPs should find time in this forum to highlight the excellent work that is carried out by Government agencies. Just as we might criticise the performance of some of them, so we should be willing to offer praise where it is due and, in general, we are hearing praise from across the chamber.
I also welcome the debate because of it gives me the chance to bring to the minister’s attention a couple of issues that I have encountered in relation to PACE, both of which involve barriers that have been placed in the way of PACE assisting constituents of mine. I will come to those later.
Members will be aware of the wide-ranging impartial advice and support that PACE offers individuals who are facing redundancy. In my part of the country, eight employers and 226 individuals across Angus were supported by PACE advisers between April 2016 and March 2017. Several of the firms concerned had gone into administration, while some faced the challenge of redeploying staff.
Perhaps most significantly, six of the eight Angus-based employers that were supported by PACE last year operated in the oil and gas industry. Although the highest numbers of oil and gas redundancies are concentrated in Aberdeen city and shire, a number of my constituents in Angus have been affected by job losses. The transition training fund that was set up by the Scottish Government has acted as a vital support route that complements the existing services that PACE can offer individuals who have been affected by redundancies in the oil and gas sector.
As members will know, the TTF offers support, including training grants, to individuals who have been made redundant to help them retrain, upskill or gain accreditation or certification so that they can get a new job in the oil and gas industry, in the wider energy sector, in engineering or in manufacturing—wherever. To date, 122 TTF applications from Angus have been approved. The support that the fund offers to enable oil and gas workers to retrain or to rehone their skills has been invaluable in my area.
One example of PACE’s work in the county has been its engagement with GE Oil & Gas, which is located in my colleague Mairi Evans’s neighbouring constituency. In August last year, GE announced that 151 employees located in Montrose were at risk of redundancy as a result of the declining activity in the oil and gas sector. All the employees concerned were provided with the PACE “Facing Redundancy?” guide and offered the opportunity to attend support events. More than 60 staff attended the PACE presentations, at which individuals were given the opportunity to have a one-to-one discussion about their situation with a PACE adviser. All the redundant employees were eligible to apply to the transition fund so that they could relocate their skills to another sector, as many have done.
Of course, the success of PACE depends on co-operation from the firms whose employees are facing redundancy. From my experience, I know that PACE encounters a very mixed landscape. A few months ago, I and my MP colleague Mike Weir were invited to a meeting with a local firm with which we had engaged previously. The firm had bad news to give: some jobs were going and others were being relocated as the firm shut down its local operation. I highlighted the assistance that PACE could provide to the staff who would not be moving with the business and the response could not have been more positive.
However, the PACE team locally has come across difficulties in being able to reach out to other folk who may need its help. Last year, I got wind of redundancies at a well-known firm in my constituency. Not for the first time, my attempts to engage with the company came to nought. PACE called the firm to seek access to the affected workers, but it could not get past the switchboard. PACE staff were told to email a leaflet that, they were informed, might or might not be shared with the employees.
I am aware of another situation that PACE encountered in Angus of a firm that went into administration with no prospect of being sold on as a going concern. The PACE team approached the administrator to seek contact details for the staff who had lost their jobs, only to be told that they could not be passed on. I cannot remember whether the reason given for not sharing that information was data protection or the fact that the staff were no longer employed by the firm; either way, it was not going to be provided, and we had to use media outlets to reach out to those who were impacted. I am particularly exercised by that example. It strikes me that, when people lose their jobs, nothing should get in the way of their ability to access any and all help that might be available.
It is important to recognise that the PACE initiative was set up not only to help individuals, but to provide support to firms and employers. That aspect can sometimes be overlooked. PACE advisers can offer alternatives to redundancy and provide solutions to enable employers to retain some or all of their staff. In the many cases in which that is not an option, PACE offers employers impartial advice on how best to approach redundancies, encouraging them to sit down with employees to discuss the situation.
When redundancy situations arise, the priceless expertise and support that PACE advisers bring to the table must be recognised by employers. When firms are reluctant to co-operate with the PACE team, that can only have a detrimental impact on their employees and the families whom they support. For some firms, that might be down to a steadfast refusal to engage with external agencies. However, other firms may be oblivious to the fact that PACE can support them to secure the best outcome for all parties. Awareness raising is an issue that perhaps needs to be addressed.
As was touched on earlier, MSPs have a role in making sure that businesses in the areas that we represent understand the back-up that is available to them and to their employees. Sadly, that is going to become increasingly important in the light of Brexit. I note that the Tory amendment does not mention the B-word—I assume that it is covered by the phrase “other challenges”—but Brexit is beginning to have an impact. The other day, I was in discussions with the managing director of a firm in my constituency that will have to make people redundant. It is currently seeking to diversify in order to minimise the numbers concerned after losing two contracts completely out of the blue. One of those contracts came from a major company that is taking steps to downsize its own workforce because of Brexit. In addition, the subcontracted work that it placed in Scotland is now going to the far east. It is clear that there has been a knock-on effect and that Brexit is starting to bite, even though it has not happened yet.
I take this opportunity to thank the Skills Development Scotland team in Arbroath, which has done some terrific work for my constituents in Angus South and the wider Angus area. I urge firms that might face the unfortunate situation of redundancies in future to engage with the PACE advisers for the benefit of their employees and their organisation as a whole. I appeal to any of my constituents in Angus South who have been affected by the oil and gas redundancies but who have not yet come forward to contact their local Skills Development Scotland branch to check their eligibility for help from the transitional training fund.15:40
As the minister and other speakers have acknowledged, workers in the north-east of Scotland have had more experience in the past two years of large-scale redundancies than they have had for quite some time. The most obvious redundancies come from the downturn in the oil and gas sector, but the downturn has had wider impacts—the closure of restaurants and pubs, for example—and it has put significant pressure on the supply chain. There have also been separate pressures on employment in other sectors, such as fish and food processing, at a cost of hundreds of jobs.
PACE has been, and remains, important to the regional economy of the north-east, as it is to other parts of Scotland. Through my involvement in the Fraserburgh task force, I have seen both the strengths and the limitations of cross-agency working and the impact of major redundancies in a town where alternative employment is not readily available. I particularly commend the work of the Union of Shop, Distributive and Allied Workers, which represents the workforce at Young’s Seafood, and the efforts of North East Scotland College in enabling people to upskill in order to access other jobs.
A great deal of effort has gone into seeking to mitigate the impact of job losses and to reduce the number of redundancies in the area, and all concerned should take credit for that. As Stewart Stevenson mentioned, a partnership approach that involves all levels of government and members of all parties is valuable in ensuring that the widest possible range of expertise and experience is at the table. I acknowledge the role that Paul Wheelhouse has played in the work of that task force in recent months.
The closure of parts of the Young’s plant in Fraserburgh brought hundreds of job losses, but the impact of the oil downturn on employment in the north-east must be measured in thousands of job losses. The minister mentioned PACE’s role in relation to the oil and gas sector and in supporting individual workers. Alongside the usual PACE initiative sits the energy jobs task force, which also brings together a range of partners so that a more strategic approach can be taken. The work that has been done by that task force in a number of areas is to be welcomed.
The minister highlighted support through the transition training fund and other initiatives for workers in the oil and gas sector who have been made redundant. That support is very important for those individuals, but it is also important to put the numbers in context. As a result of the downturn, 120,000 jobs have been lost across the United Kingdom, and some 46,000 jobs have been lost in Scotland. They have not been lost only in the oil and gas sector, as we must include indirect and induced unemployment. Although it is clear that the help that has been made available has been important for the individuals concerned, it touches only a part of the wider problem. There is a lot of work still to be done to protect and secure the future of thousands of other jobs in the industry, the supply chain and beyond.
Unions that represent offshore workers rightly remain very concerned about the bigger picture. Pat Rafferty, of Unite the union, said in November:
“We are in the middle of a crisis, and unless there is action soon we could be approaching a point of no return. That would be devastating for the Scottish economy, particularly in the north east.”
Jake Molloy, of the National Union of Rail, Maritime and Transport Workers, said in February:
“Our big worry is getting through this next year—2017 doesn’t look any better than the previous two. If that’s the case, then this could be the tipping point for the North Sea.”
It is not only trade unions that are concerned. The 25th oil and gas survey from Aberdeen and Grampian Chamber of Commerce found that businesses believed that measures to address the crisis in the North Sea had not yet had sufficient impact. Of course, some of that is about macroeconomic policy, so important is the oil and gas sector to the wider economy. However, it is also about how Government can intervene early and proactively in order to avoid redundancies happening in the first place. Part of that is about making appropriate training accessible and ensuring that jobs in the sector are protected because, without properly supported training schemes, the sector could well end up losing many of its most experienced workers. Having lost one job, older workers might simply not be qualified to take another, and they need to be able to access training to allow them to do that.
As well as older workers, apprentices have been hard hit by the downturn in the past two years. Many firms ended apprenticeship schemes early, leaving young people without security with regard to their future careers. That is partly why there has been so much concern in the oil and gas industry about the Scottish Government’s plans for the apprenticeship levy. I know that employers have told ministers that it is vital that they know in advance how the money is to be distributed as that will help them plan their own apprenticeship and training schemes.
In December, the Government announced that some of the money would indeed go back into modern apprenticeships but that some would go to other workplace training programmes and initiatives. That caused some employers in the oil and gas industry concern because the money that they previously had to hand for training had gone into the levy, but then they learned that not all of it would come back. There are clearly issues there.
Although some oil workers want to move to another industry, many do not, so there needs to be full support for companies in the sector that are willing to retrain and reskill workers, and for those who are willing and able to continue to provide high-quality apprenticeships for young people entering the industry.
As the minister said, the transition training fund is important, too. I have previously expressed concern about transitions from offshore oil and gas to offshore renewable energy and the shortfall in mutually recognised safety and training qualifications between those two sectors. I discussed the issue recently with John McDonald of OPITO and Maf Smith of RenewableUK, and I am pleased to say that both sectors recognise the need to address the issue. I have also raised it with Lena Wilson of the energy jobs task force, because there is clearly still work to be done in such areas.
Paul Wheelhouse rightly agreed to extend the work of the Fraserburgh task force because he recognised that there was still work to be done there. I make the same point in relation to energy jobs and the oil and gas sector. I know that the energy jobs task force is moving from a monthly meeting schedule to a quarterly one, and that members of that task force are keen to contribute more and to do more to protect jobs going forward. I hope that the minister can assure us today that there is no intention to end the work of the energy jobs task force prematurely. The job is not done in the north-east oil and gas sector. Jobs are still being lost and contracts are being put on hold, and there is still work for PACE and Government agencies, working together, to do in addressing those matters. I hope that we can continue to work together in broad terms, on a cross-party basis, to ensure that that happens.15:47
I welcome the Scottish Government’s motion and commend the work of the 21 organisations that make up the ministerial PACE partnership. Along with the local teams, they have, through the work of the partnership, been able to offer support, advice and help to thousands of people who have, through no fault of their own, found themselves out of work.
Since the crash of 2008, redundancy will have touched nearly every member of Parliament; it may have affected members personally. As we have heard, it has certainly affected constituents, and it may also have happened to members’ family members or close friends.
Irrespective of who is affected, however, redundancy’s impact is almost always the same. There is a period of anxiety and grief, not just for the person who has lost their job but for their family and their dependents, and with that comes a huge knock to the person’s self-confidence, and a sense of humiliation and worthlessness.
I know something of that indescribable anxiety. I will never forget the night that I was phoned by a colleague and heard the terrible words that she said to me: “I shouldn’t be telling you this, but I wanted you to have time to prepare. Your name is on that list.” The days that followed saw me desperately trying to work out what I was going to do. We had just taken on a three-year mortgage and my wife was pregnant with our third child. My mobile phone contract was up for renewal and I was not even sure that I would be able to afford a new contract for the next two years.
At this point, I have to check my privilege. I have never known poverty—I have generous friends and a family to lean on for support, and I have equity in my house. However, at the end of that phone call I knew a new kind of terror that I had never experienced before. As it happened, the organisation managed the following week to bring in a funding grant that staved off that round of redundancies, but I will never forget the sense of desperation and sheer panic. It certainly helped to give me a certain empathy when, a couple of years later, I had to make a member of staff redundant. I did not have only the feeling of uncertainty about how we would get by financially: my job was my life—or at least part of it—and part of who I was, as a person. I was proud of what I did and it gave structure to my world. To have lost my job would have left me utterly, desperately lost.
I was incredibly lucky, but the worst that I feared has been a daily reality for all too many people at every level of employment and in every sector of industry since the meltdown of 2008. Had redundancy happened to me then, I would have almost certainly sought to engage the assistance of PACE.
As we have heard, through 18 local teams the partnership offers a fleet-of-foot response to redundancy in every corner of Scotland. The response consists of an holistic package of care and support—ably stewarded by staff from Skills Development Scotland and Jobcentre Plus—that addresses almost every aspect of the immediate aftermath of a redundancy and the fallout on individuals and their families. It offers essential assistance with the basics, such as sorting out benefits and household budgeting, while building important transferable life skills and offering technical advice in areas such as CV improvement and interview preparation, which are essential for rejoining the workforce.
PACE’s reach and focus cover vital elements of the dreadful impact of redundancy on mental health, too. PACE helps service users to cope with stress and anxiety while building resilience, in particular. I believe that that pastoral role gives PACE a hugely welcome humanitarian edge, which is vital when we consider that 40,000 suicides worldwide each year are linked to unemployment and job insecurity.
I want to acknowledge the work of PACE with the Scottish Government and partner organisations in their efforts to adapt to the landscape of redundancy in this country. The partnership was previously targeted at large-scale redundancies, which were a regular feature of the start of this decade, but as a result of reprofiling through the introduction of the national helpline and an improved website, the partnership teams are now far more readily available to individuals and small employers, particularly in rural areas, when there are redundancies. Reconfiguring in that way has helped the partnership to adapt to the change in economic outlook that has seen a decline in large-scale redundancies. Consequently, assistance has been offered to 4,500 individuals and more than 800 businesses. When we consider the context of the families and support networks around those individuals, we see that PACE’s reach is greater still.
I welcome the adaptive approach, so if I could offer one recommendation to the Scottish Government—and, by extension, to the partnership—on how it might adapt still further, it would be this: please try to do more for older people who are facing redundancy. Workers over the age of 50 who are made redundant find it harder than people in any other age group to re-enter the workforce, and many find themselves locked out of the labour market for the rest of their lives. It is essential that PACE teams engage with those workers at the earliest opportunity, and that they offer enhanced support, over and above the normal assistance package—in particular with training for IT literacy and with job brokerage.
That responsibility to older workers to some extent lies with us here in Parliament. We need to rise to the very real challenge of age-related workplace discrimination in our society, and we need to do so with the same vigour with which we greet discrimination against any other equalities group.
The motion is one around which all members should coalesce, so I am very grateful for the camaraderie and sense of unity on the issue. I thank the staff and organisations that are involved in the work of the partnership, and I thank the Scottish Government very much indeed for raising the subject in Parliament.
I call Angus MacDonald, to be followed by—I am terribly sorry; that member is not in the chamber. Angus MacDonald will be followed by—and neither is that member. I call Angus MacDonald, to be followed by Gillian Martin.15:54
I am pleased to be able to contribute to the debate on PACE. Ironically, this is one time when I have been able to trim down my speech to six minutes.
If one thing unites us as members of the Scottish Parliament, it is the drive to help and to represent our constituents, who find themselves in all manner of situations for one reason or another. I am sure that we all speak regularly to constituents who are at risk of losing their jobs or have lost their jobs, through decisions made to close sites, through businesses hitting hard times or through decisions by companies to move their operations elsewhere, which can leave a hole in the local economy and can leave workers, sometimes in significant numbers, looking for alternative employment.
As members will expect me to say, it has certainly been the case that residents in my constituency of Falkirk East have been hit by the threat of job losses. Most recently, more than 200 people in Falkirk district have been faced with that prospect due to the announcement by Franke—it operates the Carron Phoenix plant, which makes granite sinks and bathroom equipment—of its intention to consolidate and move its manufacturing operation to Slovakia. Carron, which has been operating for over 258 years in our area, is one of Scotland’s oldest manufacturing companies and is embedded in Scotland’s industrial heritage, so to say that its closure is a sore one is an understatement.
In such situations, it is frustrating that more cannot be done to save jobs directly. Given the skills level and length of service of some workers, they can find it daunting and difficult to know where to begin, especially if they are just starting out in the jobs market. Clearly that is when PACE kicks in. Partnership action by the Scottish Government, SDS, Scottish Enterprise and the local authorities, working together to prepare workers for the challenges on the path that is placed before them, has proved to be invaluable in Falkirk district and beyond.
Over 2016-17, the Falkirk PACE partnership has assisted with several redundancy situations, including the Carron Phoenix situation that I have mentioned, street-sweeper manufacturer Green Machines Sweepers UK and BHS. PACE has been instrumental in providing guidance to employees and agencies that have been involved with the companies in question. Over the period, 389 people have benefited from the support and advice that are available from PACE, and the feedback on that has been extremely positive. Most employers are impressed by the support that is available to them as businesses, which has enabled them to provide support for their staff at what can be described only as an incredibly difficult time.
Clearly, the earlier the intervention the better, in order to plan the support that will be required. Obviously, that is dependent on each individual circumstance. For Carron Phoenix, for example, a plan was initiated that provided employability workshops, futures fairs, support with literacy and numeracy, and self-employment workshops that were delivered by business gateway Falkirk. In addition, short vocational opportunities were identified, and accreditation of prior work-based learning was offered.
Similarly, my constituents who were faced with the early closure of Longannet power station benefited from PACE assistance. An on-site resource centre was established to deliver redundancy support services to all staff—including the considerable number of contractors on site—and advice on benefits, employability support, business start-up advice and support to access training all contributed to support for 370 people, 52 per cent of whom are employed full time, and 18 per cent of whom are economically inactive.
With regard to progress, however, there is light at the end of the tunnel. With support from the Scottish Government—particularly from the minister, Paul Wheelhouse, who recently met the Falkirk economic partnership to discuss progress on the Grangemouth investment zone—there is a positive vision within my constituency, so I want to take this opportunity to thank the minister for the help and encouragement that he and his officials have provided locally in recent months. The measures, when they are realised, will mean the expansion of the Falkirk tax increment finance initiative, which will enable a wider programme of assistance covering infrastructure provision, energy and enterprise growth to be put in place. I have no doubt that that will lead to further opportunities for people in Falkirk East—and across Falkirk district as a whole—who seek employment now or will seek it in the future.
Of course, in an ideal world, the support that is provided by PACE would never have to be called upon. However, with the economic uncertainty that is being caused by a number of different factors—Brexit was mentioned earlier—PACE can, at times when redundancy is inevitable, mean the difference between continued employment and an uncertain future in which the market and advice might be available but not necessarily easy to access. What PACE delivers locally and nationally is vital in such difficult situations; I am pleased with the work that is being done in my area to help and support my constituents as and when that is required.
However, it is not all doom and gloom. The unemployment situation has been stabilising. Numbers of unemployed people are dropping, and it is fair to say that Falkirk district has a positive outlook and an exciting future. During 2016, business gateway Falkirk assisted 283 start-up businesses in the Falkirk Council area. Moreover, tourism is the big new growth area for Falkirk district; it is generating more than £100 million annually and now employs more than 2,000 people locally.
In addition, the council document “An Economic Strategy for Falkirk 2015-25” details plans to create an investment zone of national significance at Grangemouth and, of course, Ineos is clearing about 250 acres of land, which will create about 200 acres for co-location sites, which is expected to attract up to 500 jobs—and maybe more.
Business gateway Falkirk forecasts that new business and the expansion of existing enterprises could bring about 550 new jobs in the next three years. The future looks good for my constituency. With the vision and the energy that the proposed new minority SNP administration will bring to Falkirk Council, the need for any future PACE intervention will, I hope, be greatly reduced.16:00
Sadly, there are few, if any, people in my constituency who do not know someone from the oil and gas sector affected by redundancy. For decades, it was a reliable and stable area of the economy not just for those directly employed by oil and gas companies, but for the tens of thousands of people working in the supply chain connected to the industry and for those businesses that benefited from the disposable income of the sector’s high-wage earners, which allowed much of the hospitality and retail sectors to flourish.
In the past two years, a decrease in the global oil price and the UK Government’s reluctance to offer loan guarantees to exploration companies has meant significant job losses in the sector. There is a pressing need to provide support to the men and women who are making an effort to upskill, to retrain and to find new ways to work in a very different employment landscape in my area.
PACE has been instrumental in providing such support. Last year alone, it helped more than 1,000 individuals in dealing with redundancy. In December 2016, it reported having more than 2,000 apprentices in training. That came alongside the fantastic news that out of more than 11,000 16 to 19-year-olds in Aberdeenshire, 93.2 per cent were in learning, training or work. The tangible difference being made to the lives of people who worked in the oil and gas sector and the new options being highlighted for constituents are developments that I welcome.
In March, PACE held an employment event in Aberdeenshire, bringing together 800 individuals affected by redundancy from the oil and gas sector and more than 50 exhibitors, there to speak about job vacancies and other opportunities to use the skills that the individuals have learned. Physically bringing together employers and their prospective employees is such a simple but effective way of giving people a chance to get back to work, and I commend PACE for taking the steps to identify opportunities such as that.
PACE brings together the many employment support agencies and programmes that are available to the people of the north-east. Thanks to the transition training fund, more than 400 new training places are available for people leaving the oil and gas sector to gain the skills that they need to move into other industries. The Scottish Government set up that £12 million fund to offer support with training grants and to help people to retrain, to upskill or to get accreditation or certification that would help them to get a different job in the oil and gas sector, the wider energy sector or the engineering and manufacturing sectors. Let us not forget that people who work in the oil and gas sector are some of the most highly trained people working in Scotland today. They have had to go through years of rigorous training—that often requires to be taken every quarter—and we must look at their certification to see how they can transfer into other disciplines.
Areas such as renewables, construction, teaching, road haulage, smart meter installation and rail are sure to benefit from the highly educated and skilled people who are trained to work in the oil and gas sector. The transition training fund and the energy jobs task force ensure that routes back to employment are created and communicated.
There is a myth that former oil and gas workers are not interested in readjusting to new types of work. In reality, people who are worried about their job or their future want to contribute to the Scottish economy, want to provide for themselves and their families and genuinely want the opportunity to work in a stable sector. Let us not forget that in the early 1990s a lot of those people had to take a pay or rate cut, or lost their jobs and went back into the industry later on. They do not want to go through that situation again, so they are keen to be redeployed in other areas of the workforce.
It makes perfect sense that we as a Parliament support the redeployment of skilled people into different areas of the workforce. I thank all the members who came to speak to SDS representatives from the transition training fund, who I hosted last year in Parliament. I know that a lot of members got a lot out of those conversations.
l have been doing some work to highlight issues of discrimination by certain employers against former oil and gas workers, which I have found out about from speaking to constituents. I have been working with Fiona Stalker, a local journalist with BBC Scotland, to draw attention to the issue. As a result of the publicity, many more oil and gas workers have been in touch with me to share their stories, and I hope that I have been able to help some of them.
More positively, as a result of a report on “Reporting Scotland” about our work, the Road Haulage Association got in touch with me and invited me to an open day that it was holding for oil and gas workers who have been made redundant. The association is using transition training fund money to put people through their heavy goods vehicle licence training and is working with employers in the road haulage industry to fill the many vacancies that they have. Since my afternoon with those trainees, who ranged in age from their early 20s to the over-60s, I have been able to put a few of my constituents in touch with the RHA to access the training, the latest being just yesterday.
Some employers I have spoken to in other sectors in my area have been wary of employing former oil and gas workers. Those employers have told me that they are worried that they will invest in people only for them to up sticks and move back into oil and gas when the industry recovers. However, the people I spoke to at the RHA recruitment day all said that they wanted to retrain and permanently move into a new sector. For a kick off, many of them want a life on land and more time with their families. They also want to work in an area that is less susceptible to market forces that are outwith our control. The RHA wants to recruit highly skilled people and it recognises that oil and gas workers are highly skilled in health and safety, problem solving and maintenance and that they are used to working in challenging conditions. I urge sectors where there are skills shortages to work with SDS and PACE and to follow the example of the Road Haulage Association.
A whole generation of people in my area have only ever worked in the oil and gas industry, and many of them have always worked for the same company. For example, a friend of mine, Neil Baillie, worked for Halliburton for 25 years and was made redundant on his 49th birthday. Neil has successfully moved into the social care sector. I encourage people to think more broadly and not just about engineering opportunities. They could perhaps take the opportunity to go into sectors where we really need people and where they could have a successful career.
I also encourage people to take advantage of the new routes into teaching that the transition training fund offers. It is hard to believe it when we hear some members of the Opposition speak about Scottish schools, but teaching is a great career, and many of my family members work in that area. We need science, technology, engineering and mathematics teachers with valuable industry experience to help to get our young people ready for the challenges of the century as it unfolds. In the Education and Skills Committee, we have heard testimony about how invigorating it is in the classroom when people move into teaching from industry.
It is incredibly important that the availability of the oil and gas workforce is harnessed by other sectors and that those sectors recognise the contributions that people in the north-east have made to the success of the oil and gas industry. I believe that my constituency will emerge from the downturn as a more diverse and adaptable region, and I welcome the efforts that are being made through projects such as PACE to help that to become a reality.16:08
Partnership action for continuing employment remains vital in our rapidly changing economy. I make my comments in the spirit of the ambitions of PACE. As oil and gas revenues continue to decline and economic conditions remain tough, it is important that we have a clear focus on getting people back into work.
I welcome yesterday’s figures, showing that UK unemployment rates now stand at a 46-year low. In the UK, 4.6 per cent of people are unemployed. Let us compare that to Spain, for example, where 18 per cent of adults are out of work, or Italy, where the figure is 12 per cent, or even France, where it is 10 per cent. One could argue that we are faring reasonably well compared with our European neighbours, but 4.6 per cent still equates to 1.5 million people, and 120,000 of them are in Scotland. There is always a duty on us to improve the employability of our workforce, so I support the work of PACE.
We want the Scottish Government to implement some of the recommendations in the most recent PACE survey. In particular, more can be done to reach out to and educate people on the options that are available to them when they learn of redundancy.
Redundancies and long-term unemployment can be challenging experiences financially and emotionally; it is not just the economy that suffers when people are not working—people suffer as well. Being out of work has a negative impact on people’s mental health and their feelings of social inclusion, self-value and self-pride. That is exaggerated when a person is out of work after redundancy from a job that they might have held for many years. As we live longer and healthier lives, our over-50s workforce has a wealth of experience that is often overlooked.
Admittedly, PACE has seen successes, such as high job outcomes for those using the service, and it is going from strength to strength, which is great to see. Three quarters of individuals who used PACE said that they were satisfied with the service that they received, which I welcome. However, at the Scottish Government’s most recent PACE conference, held in March this year, a number of important points were raised by audience panel members. One was the need to increase the earlier acquisition of basic skills to deliver job flexibility later in life. Another suggestion was to make local economies less reliant on large employers, for a more diversified economy. The million-dollar question is how we do that: what pre-emptive measures or precautions can be introduced early on? How do we attract newer, smaller, indigenous businesses to our towns? The notion of having one big local employer, which we often hear about, comes with huge risk.
Another suggestion is improved access to the PACE system. Enhancing PACE’s digital activity will be vital to engage with people. A move towards an enhanced and more immediate online service is important. For those who are not on social media or who do not have as wide access to the internet as others, we need to offer alternatives—for example, a phone call might be enough to help to alleviate the initial stress and fear when a person learns of redundancy and wants to talk to someone about their options. Nothing replaces face-to-face help, but I would like to see a marketing campaign that tells people where to turn as a first port of call. Many will immediately think of their local job centre and what benefits might be available. We should change the mindset: there is also the opportunity to go straight into another job if a person is suitably qualified and a job is available.
I want to see PACE work, but PACE alone will not be enough. The Scottish economy contracted in 2016’s final quarter. If it contracts again, we will be in recession and PACE will become ever more important in that environment. However, skills training is not sufficient without job creation. I am glad that Gillian Martin mentioned STEM subjects, because they create opportunities for career changes and can open doors in an ever-changing workplace. It is important to point out that 1,000 STEM teachers have disappeared from the profession in the past 10 years. I am not making a political point but demonstrating that if our workforce was equipped with sufficient STEM skills, workers could transition more easily from industry to industry. For example, could an engineer who worked in the oil sector make a career in renewables? I saw an example of that when the Rural Economy and Connectivity Committee visited a forestry company that desperately needed new recruits to work the machinery in which it had invested heavily. It was recruiting from warehouses where people drove pick-up trucks; those skills could be transferred, as they could be taught to use the complex machines that fell, strip and chop up trees.
In my local area, in Greenock, I have seen the town transition from having bustling business parks that housed companies such as National Semiconductor and IBM to today, when those big industrial parks lie barren and grass-covered—skeletons of an electronic heyday. The mood changes in a town when a big local employer closes; but those derelict sites should be places of opportunity. For a time, I worked in the city of Eindhoven, in the Netherlands, where the old Philips factories, which had closed down, are now buzzing havens for young entrepreneurs and tech start-ups. The mood of the city has changed; it is positive and upbeat. It has to be seen to be believed.
I should declare that I sit on the industry task force in Inverclyde for Texas Instruments, which is seeking to close or sell its assets. I have seen at first hand how getting people round the table who can help the workers really makes a difference. There are consensual discussions and the local employer is invited to participate. As Stewart Stevenson said, it is vital that the businesses themselves are at the table.
I make a final point in what has been a fairly consensual debate. PACE needs a top-down focus. I see that the finance secretary is not in the chamber today; I hope that he is listening. His focus should be on growing the Scottish economy, 100 per cent of the time. Businesses will always open and close—that will not change—but a flexible workforce that can transition from company to company or industry to industry is the key to mitigating the devastation that business closures can bring. Preparation is everything.16:16
I have relevant interests to declare: I am an unremunerated director of McQuick Ltd, maker of bagpipe covers, and I am a member of Unite the union.
When I was doing research for the debate, I came across this comment from the United States Conference of Catholic Bishops, which I want to share with members:
“All people have the right to economic initiative, to productive work, to just wages and benefits, to decent working conditions, as well as to organize and join unions or other associations.”
Work should provide people with security, a decent salary and stability, but for too many people their jobs are insecure, low paid and often threatened or undervalued. In-work poverty in 21st century Scotland is unacceptable, as I am sure most members agree.
Scottish Labour is committed to full employment as an economic and social goal, which means working to ensure that everyone who loses their job is helped back into work. The focus of today’s debate is on PACE, which works well to support individuals when the closure of a factory or business means that a number of workers face redundancy. As members said, and as we would expect, this has been a relatively consensual debate. Along with my Labour colleagues, I support the efforts and hard work of PACE, with the proviso that we should always strive to improve services and retain jobs.
The PACE survey found that many people who had used the service thought that it would have been beneficial if PACE had got to them earlier. The point has been made by other members. Of course, it is fundamentally important that trade unions and Government are given time to explore all the options in trying to prevent redundancies. As the Labour amendment says, the development of
“effective, proactive approaches to support existing jobs and industry to seek first and foremost to avoid redundancies”
The survey also found that most of the people who had used PACE had been successful in finding employment at a similar level to that of their previous employment. The slight down side was that people often had to take a pay cut, as we heard.
Of course, PACE offers a corrective measure, not a preventative one. It is, I suppose, a tool for damage limitation and perhaps it could be more proactive. I think that the minister said that that is being explored. The focus of PACE could go beyond continuing employment.
Given that pay in Scotland showed the weakest growth in the UK in 2016, albeit that there was still a real-terms increase—I should be fair and say that—we must consider the long-term effects of redundancy. Half the people who were surveyed by PACE were earning significantly less than they had earned in their previous roles. If jobs are leaving Scotland and are not being replaced by jobs at similar rates of pay, there is a net loss to the Scottish economy, which will have a major effect on workers and their families.
Although attention must be paid to addressing redundancy, we also need to consider how we retain jobs, particularly in parts of the country that might be losing out to the big cities. In the area that I represent, Central Scotland, we have recently lost companies such as Kwik-Fit, Airdrie Savings Bank and Tannoy. We have also lost many local government jobs, and HM Revenue and Customs jobs are under threat.
I ran a successful jobs fair with the help of SDS. I recommend the approach to members who are keen to try it; it is helpful to people in local areas.
In Central Scotland, many people with innovative ideas and inventions are trying to start small businesses. PACE can try to assist those who fall victim to redundancy to do that, with the help of the business gateway, but, historically, such services have been available only to those who are part of large-scale redundancies. We should do more to try to assist those who are interested in trying to start businesses. I was pleased to hear that moves are being made in that direction, and I note the interesting comments that Stewart Stevenson made earlier in the debate.
Bad practice by employers, particularly towards women who need time off for family and caring reasons, can cause stress and insecurity and can lead to redundancy situations, so it is relevant to the activities of PACE. Stories about that can be lost in the face of headlines about large-scale job losses, but they exist and we need to listen to them too and to take action.
I intervened on the minister earlier on the issue of people with disabilities, and I want to turn briefly to the specific concerns that people with disabilities have when they try to find jobs after redundancy. In particular, for people with learning disabilities such as dyslexia, the prospect of having to fill in a CV, face an interview and search online for a job can be very worrying and can cause a loss of confidence, which can make securing jobs harder. I checked with PACE advisers in Central Scotland, who said that there is not much that they can do at present, other than signpost people to other organisations and point to benefits that might help. There should be a clearer recognition of the issue so that we can tackle it appropriately. Perhaps more direct expertise in PACE would help. I was very pleased to hear the minister say in his response to my intervention that he has noted my point and will pursue it.
As the minister said in his opening remarks, as a model for continuing employment, PACE does not meet the needs of everyone, which is something that we must address if we are to continue to improve the service. If we can identify the individual concerns and needs of each worker earlier in the process, we can improve our response to redundancy.
PACE is a good Scottish initiative, and I very much welcome the continuous improvement programme to ensure that Scotland can be an example to the rest of the UK in how we value and utilise people’s skills to benefit both them and our wider society.
I will finish in the way I started, but this time with remarks that were made by Pope Francis in 2015:
“It makes me sad, when I see people without work, who do not find work and haven’t the dignity of bringing bread home—and it cheers me when I see that political leaders make great efforts to find jobs and to seek to make sure that everyone has a job.
Work is sacred, work gives dignity to a family: we must pray that work be not lacking in any family.”16:22
I welcome today’s debate on PACE. In 2015, the chamber praised the positive efforts of PACE in responding to redundancy situations. I know that since then, as we have heard in the debate, many improvements have been made to the service. I, for one, am particularly pleased to see that 80 SDS staff now work alongside jobcentre staff to enhance the work of PACE. A national helpline, a revamped website and improved information services have also increased the visibility and accessibility of PACE services for employers and individuals.
Those enhancements have enabled a change in the strategic focus of PACE, which was initially set up to target large-scale redundancies. Now that it has more dedicated staff and more accessible services, PACE can open its doors to more individuals and employers, particularly in rural areas such as my Dumfriesshire constituency where, in the past, small-scale job losses have not been seen as being as important as larger-scale ones in big companies in the central belt.
Such improvements have been very much welcomed, particularly last autumn, when Penman Engineering Ltd entered administration. It had been in operation locally since 1859 and was one of the area’s biggest employers. It was threatened with closure, and losing such a historic firm looked as though it would be a hammer blow to the local economy. Wave after wave of redundancies came, and the workforce shrank from 140 employees to a skeleton crew of 15. That was devastating news for our local economy and a deeply distressing time for the families who relied on the jobs at the site.
From the outset, PACE offered a quick and efficient response. Relevant assistance and guidance were immediately offered to all those who were affected by redundancy. Now that I have the opportunity, I particularly thank the minister for the advice and support that he gave me as a member during the first major round of job losses in my constituency. PACE really made a difference.
The service does not operate in isolation. It is a partnership of 22 organisations that co-ordinate a response to redundancy situations such as the one at Penman Engineering. As one of those partner organisations, Scottish Enterprise, which worked closely with the administrators, was vital in turning around the fortunes of Penman Engineering. The speed of the turnaround was remarkable. In September last year, the firm entered administration. In October, it started a search for a suitable buyer and by November new owners were secured. Since then, contracts have grown and the workforce has already risen to 67 employees. Every step of the way, every effort has been made to re-employ the old workforce. That is very important in a rural area such as Dumfriesshire where there are not all that many similar opportunities for those who have the particular engineering skill sets of that workforce.
It was undoubtedly true that the efforts of PACE and its partner organisations were constructive in Dumfries at that time just as they are across Scotland. That said, expectations need to be managed. Despite the general success of the initiative, it is possible for PACE to improve its redundancy support services. As we have heard from other members, the findings in the 2016 PACE client experience survey point towards a number of recommendations. A quarter of clients who used the PACE services felt that the introductory presentation and information guide came too late in the process. That needs to improve, because clients need to know how to access redundancy support as soon as possible. Further to that, awareness of the online PACE services and telephone helpline remains relatively low. If PACE is to satisfy the growing need among many for follow-up help, much improvement is needed in the promotion of the services. I hope that today’s debate goes a little way towards doing that.
Beyond improvements to the PACE client experience, the Scottish Government must also do more to drive investment, growth and business support. I must stress again that the good efforts of PACE are made all the more possible by the work of its 22 partners. I hope to see a 23rd partner very soon through the creation of a new south of Scotland vehicle that I hope will complement PACE’s work and tailor its services to support the specific and recognised local needs and economic challenges.
I also hope that a new vehicle will be able to work alongside the proposed borderlands growth deal that was announced today in the Conservative manifesto for the UK general election. That will help to create a stronger, more resilient and dynamic local economy. Through that, I hope that we can reduce the risk of future redundancies and deliver a broader mix of high-skilled and well-paid employment, particularly in traditional textile towns such as Langholm, where industrial activity has been in decline in recent years.
In closing, I wish to join Dean Lockhart in calling on the Scottish Government to follow the advice of leading organisations by co-operating with the UK Government’s industrial strategy. Co-operation is needed from all levels of government if businesses are to plan ahead for future trends in the economy. As Scottish Chambers of Commerce stated yesterday,
“Scottish businesses are competing on a global basis and need the co-ordinated support of all levels of Government to give them the edge to enable business to create high quality employment opportunities for all.”
Although PACE has been generally successful, the Scottish Government must do more to support the Scottish economy by co-operating with the UK industrial strategy, offering its full support to the borderlands growth deal, and delivering on the long overdue promise of a south of Scotland skills and enterprise agency.16:29
Bill Bowman introduced an Andy Grove quote to the debate and there is another quote of his that might be useful, which is:
“The ability to recognise that the winds have shifted and to take appropriate action before you wreck your boat is crucial to the future of an enterprise”.
There is also the well-recognised Dutch saying “Een schip op het strand is een baken op zee”, or, in English, “A shipwreck on the shore is a warning to the sailor”.
In Andy Grove’s autobiography, he talked about strategic inflection points, which are when something suddenly happens that one has not seen coming and one has to respond to it. That has happened many times in history. For example, when Fritz Haber discovered the importance of nitrogen fixing, that led to the end of the runrig agriculture system, the start of the enclosure system and the removal of many people from the land. That is why there was a workforce to create the industrial revolution, so we could argue that it was a benefit. However, I am not sure that it helped the people very much, as their lives were probably much more miserable in the city squalor that they experienced than in the rural area.
By the same token, McCormick’s reaper, which was invented in the 1830s, transformed the way in which employment worked in agriculture, as did Cartwright’s invention of the power loom in the 1780s, which threw many people out of work.
Division of labour has deskilled many people over the years—that is not new. Plato’s “Republic” referred to the division of labour, so the idea has been around for a long time. Adam Smith talked about it in “The Wealth of Nations” in relation to the manufacture of pins.
Those were the threats in the mechanical world; computers bring their own new threats. From the 1960s onwards, computers automated routine activities that were often done by large numbers of people in back offices. There was a move to the creation of new products that displaced existing products from markets and, with the advent of the internet, computers have threatened, and will threaten even more in future, our high streets as retail changes. The next big revolution—artifical intelligence—is with us now and will displace many intellectual activities.
I would like to share something else that Dave Watson said today in his article in The Scotsman. He said:
“Like all new technology, the robots probably won’t deliver all that they promise. In the meantime, human beings in the workplace deserve a bit more dignity and will deliver more without being turned into robots.”
Does the member agree that dignity of labour and dignity in the workplace are extremely important?
The member is absolutely correct. I have not read Dave Watson’s article, but I will make sure that I do so before the sun goes down behind the yardarm, or whatever it does later in the day.
I want to give a few further reflections about what happened in Fraserburgh, because that has been my experience of PACE and there are one or two things that are not process things that are worth looking at.
We got all the people in the room and the Government very generously provided tea, coffee and biscuits. There was a lot of genuine informal networking before the meeting, during breaks in the meeting and after the meeting that, I suspect, had as much value as the formal session round the square table in the leisure centre in Fraserburgh. It meant that people who had responsibilities could not escape the people who were affected by how they discharged those responsibilities, which was quite important.
The other thing with the Fraserburgh experience—although, as far as I am aware, we never discussed it—was that it appeared to work on a Chatham house basis. In other words, we were able to open up and talk about things in some comfort that what was said in the room would not be taken up and used outside the room to disadvantage the people who were present, although, as under Chatham house rules, we could later refer to the matters that were discussed.
I do not know whether the intervention in Fraserburgh, where hundreds of people were going to lose their jobs, is typical of how it works in similar major events. I thought that the soft things about how it worked in practice were driven by the personal characteristics of many people in the room.
The trade unions were there. At the first meeting, we had three or four trade unionists present, and Unite the union did an excellent job in representing the workers, but even they had a difficulty because the factory concerned has a huge, international, multilingual workforce, and there was support from translation services to help the unions to make better contact with many of the people who were not actually union members, for all sorts of historical reasons, but who nonetheless properly required the kind of support that comes from the trade unions.
Creating the opportunity for people in the room to be supported, so that they could support the workers, was a good aspect of that meeting. It was also good to have the company in the room, because the company was being run from Hull, with management decisions being made in Hull, and there was competition between the opportunities in Hull and those in Fraserburgh, with each location offering different things. Having the company in the room made a huge difference to its understanding of the future support that it could be given to develop its facility in Fraserburgh, and that ultimately protected the facility for the longer term.
Oliver Mundell might be interested to know that, because of where the meeting was held, we had both Highlands and Islands Enterprise and Scottish Enterprise in the room, and that was immensely valuable, because they each brought different things specific to their areas, just as I am sure the south of Scotland enterprise agency will do. It was just such a strategic inflection point that got us to the task force. It was the sudden and unexpected loss of the most profitable contract, when the purchaser took that business elsewhere, that created the need for the PACE response.
If anybody has learned anything from today’s debate, Richard Leonard has learned of the curse of the 140-character limit on Twitter. Let us hope that Donald Trump learns it sometime soon as well.
We move to the closing speeches. I call Richard Leonard.16:36
Listening to today’s debate reminds me that I went to meet Skills Development Scotland on 6 March, when I was told that the oil and gas workers training transition fund had helped 43 workers in Lanarkshire. Last time I checked, earlier today, 58 working people had been helped in Lanarkshire through the training transition fund. Although it is an issue that we need to tackle right across Scotland, the eye of the storm is in the north-east, and Gillian Martin, Lewis Macdonald and other members mentioned the importance of supporting workers who have been in the oil and gas industry as they seek alternative employment.
I am also reminded that the energy jobs task force produced a 10-point plan that required, or at least encouraged, employers in the oil and gas industry to look at non-labour costs, sabbaticals and ways of reducing hours—such as job sharing and job loans—rather than laying people off. The truth of the matter is that large and, in many cases, multinational corporations that are among the biggest and wealthiest anywhere in the world have made rather considerable profits down the years. If and when there is an upturn, I suspect that they will be the first people to complain that there is a shortage of suitably skilled labour available, so perhaps we should return to putting a bit more pressure on those companies.
The Wood Group has been mentioned during debates that we have held in this chamber over the past 12 months about the downturn in the oil and gas industry. According to my reading, around 3,000 jobs have been shed by the Wood Group over the past year or so, but that did not stop Sir Ian Wood and the Wood family rising in The Sunday Times rich list this year to an elevated position of wealth with an extra £160 million compared with the previous year. The Sunday Times calculated that the Wood’s accumulated wealth is worth about £1.6 billion.
I turn to the Scottish Government’s labour market strategy, which was published last year. On page 17, in a chapter entitled “Ensuring our labour market is resilient in the face of economic shocks”, it states:
“Usually the PACE response is sufficient, complemented by business support offered through the enterprise agencies or local authorities.”
I am not sure that we wholly agree with that analysis.
Perhaps that goes to the heart of something that we have not really debated this afternoon, but which we should all understand is an underlying issue. Time after time, members have come to the chamber with reports of threatened job losses in their constituencies and regions. That often happens—I direct my remarks at Dean Lockhart—at the start of the formal consultation period with the trade unions. There are sometimes good reasons why trade unions do not want PACE to be involved at an early stage, because the whole point of the redundancy consultation is to seek ways of avoiding redundancy or reducing it before considering how to mitigate it. We need to bear that in mind. The view on the Labour side is that sometimes sending in the PACE team as a response in those situations is, frankly, insufficient. We must look at ways of prosecuting campaigns to fight harder to retain existing jobs.
I am also bound to say that the decision of the Conservative UK Government to cut back the consultation period for large-scale redundancies from 90 days to 30 days has been unhelpful. It is a regressive move and one that should be reversed.
I have a couple of suggestions that I ask the Scottish Government to consider. One is whether it should provide more resources—or any resources—for trade unions to develop alternative plans in a situation in which closure is threatened. Another is whether—this is a current Labour Party proposal—workers should have a statutory right to buy the plant or workplace in the case of a closure or a transfer of ownership. A third is whether the Scottish Government should put in place an industrial strategy instead of simply relying on a defensive, reactionary approach when crises develop.
Although we will support the Conservatives’ amendment as well as the Government motion, that does not mean that we subscribe to the Greg Clark view of industrial strategy. In his foreword to the UK Government’s strategy document, he talks about pro-competition rules, flexible labour markets, less intrusive regulation and continued austerity. That is not a strategy that we would support; rather, we would turn to the one that Elaine Smith mentioned, which is built on full employment, patient capital investment and a planned approach to economic development.
Dean Lockhart rose—
Mr Leonard is just finishing.
As the Government’s motion spells out, the work that the PACE team does is important, which is why I say gently to the minister—I am not trying to point score—that cutting the grant-in-aid budget to Skills Development Scotland by £5 million this year will not help, and I hope that the minister, the Cabinet Secretary for Finance and the Constitution and the Cabinet Secretary for Economy, Jobs and Fair Work, who is back with us, will revisit that decision in the weeks and months to come.16:43
Today’s debate on PACE has largely been consensual. There is agreement across the chamber on the importance of PACE for those who face difficult times as a result of redundancy and on the achievements of PACE in getting people back into paid employment.
Recently, I was disappointed to hear news of the potential loss of up to 260 jobs at the Jabil manufacturing plant in Livingston. That is but one example of recent announcements that may require urgent action to be taken. Although it remains to be seen how many people will be affected following consultations and natural turnover, it is clear that PACE may have a role to play there.
Looking at the wider picture, it is important that PACE takes on board the recommendations that are given to it through the 2016 client experience survey. A number of members have made reference to the need for quicker engagement with clients. A quarter of respondents to the survey felt that the presentation and information service came too late for them. Paul Wheelhouse said that the earlier that assistance is provided, the better.
My ears misheard the minister at one point as talking about 2,000 bacon rolls when he was in fact talking about 2,000 vacant roles. I was pleased when I paid closer attention to learn that that was not the point that he was trying to make.
It was encouraging that Oliver Mundell spoke highly in his speech of PACE’s quick and efficient response at Penman Engineering in Dumfriesshire when that situation arose. We also heard from my colleague Bill Bowman in his erudite speech about the valuable assistance for those in the oil and gas industry. I hope that, in future cases throughout Scotland, others who are affected in this unfortunate way have the same experience of PACE being of assistance to them.
However, there is also a need for PACE to expand its services in two ways. The recommendations tell us that more needs to be done to tailor support for older workers aged 55 and over, who typically have poorer post-redundancy outcomes. My colleague Alex Cole-Hamilton, who is here with his trademark brown leather shoes, which coalesce with his suave blue suit, referred to the need for more coalescence. I echo that.
I thought that Jamie Greene painted a vivid picture of the emotional drain of being out of work. As he said, for younger people, a wider variety of skills can help, but for people of older years, who have perhaps been in work for decades, redundancy can be a very new and probably deflating experience. That, combined with worry over lack of opportunities for work towards the end of a career, can add to significant pressures on such individuals.
Perhaps by publicising the PACE online and telephony services better, which is another of the recommendations, those in the older age bracket can have better access to PACE, thus increasing post-redundancy opportunities. Likewise, younger people who are immersed in the digital world should benefit from greater awareness of the online services, which appear to have a high satisfaction rating among those who actually use them. Unfortunately, take-up has been somewhat slow. In the modern day, when the ability to use technology is vital in the workplace, more people should be encouraged to use those online services, which will in turn contribute to their skills development.
It is pleasing to note the successes of PACE, to which I have already referred—not just the fact that jobs outcomes are almost at three quarters but that 64 per cent of those new jobs require the same or higher levels of skill. It is clear from that that not just any outcome will do and I hope that PACE continues to improve on that good record in the coming years.
It is clear, however, that pressures are coming to bear on the questions that PACE deals with. As has been highlighted by colleagues, Scotland is falling behind the rest of the UK, with a real threat of the economy slipping into recession. Growth is sluggish at best in Scotland, with the economy contracting by 0.2 per cent in the fourth quarter of 2016. Although, as the minister has said, the Scottish economy grew by 0.4 per cent in 2016, the UK economy grew by more—by 1.8 per cent.
As Dean Lockhart pointed out, other significant challenges face all economies, not just the Scottish economy, as patterns of working and ideas and technologies develop, progress and change.
Richard Leonard mentioned concerns about insecure contracts. That is part of the picture and certainly in the gig economy that needs to be approached in a new and progressive way. Workers often have jobs that are set up in a very different way than has traditionally been the case and we are still only just learning, not just in Scotland but in the United Kingdom and in other countries, how to deal with those developments. Traditional working patterns have given way to more flexible and pragmatic ones and it is important that we keep pace.
This week, Theresa May announced that workers’ rights and protections are to be extended to people who are working in the gig economy, and I welcome that. It is vital that, as the structure of economies around the world changes, the UK is at the forefront of dealing with that change in order to maximise our potential while protecting jobs.
PACE alone cannot deal with all those developments, and we need a holistic approach. The UK Government has been consulting on its new industrial strategy to address those long-term challenges, and I join members in calling on the Scottish Government to seek to participate and co-operate fully in that work. All parts of the UK must work together on the strategy to ensure that we are stronger together, as we have been in the past.
I am obliged to members for their support for the Scottish Conservatives’ amendment.16:50
I thank members on all sides of the chamber for their genuinely constructive, intelligent and thoughtful contributions to the debate. As Gordon Lindhurst mentioned in his final remarks, I reiterate the importance of raising awareness of PACE to ensure that individuals who unfortunately find themselves facing redundancy are able to access the excellent support that is, as members have acknowledged, available through the service.
That is key, because the 2016 experience survey—as a number of members mentioned—suggests that people are looking for earlier engagement with PACE, and we know that earlier engagement has an impact. It is crucial that members reinforce the importance of PACE to employers as well as to the workforce so that they are aware of what it can do for them and so that employees can ask for the service from their employer.
In addition, employers need to know that the service can be very discreet and does not necessarily need to flag up that a company is in distress; it can be provided confidentially and without any bangs and whistles being fired off while the PACE team is going in. It is possible to help in that way, and I hope that—as members have acknowledged—we can try to avoid redundancies in the first place. The earlier we get in there, the more likely it is that we can do so.
The PACE partnership really is what it says on the tin: partnership action for continuing employment. It is a national framework that is underpinned by a diverse range of organisations working together to pursue a common objective. Gordon Lindhurst referred to Jabil, which is an important employer in the Lothians. Unfortunately, 68 staff have left the business, but—to reassure members who have an interest in the issue—we are engaging with the company through our PACE team. Only yesterday, we visited a business in Glasgow—Spire Global, which is involved in the space industry—which has employed people from Jabil in that sector. That is encouraging—the company is looking specifically for people who have the experience and skills, and who are coming from a clean-room environment in a semiconductor factory and know how to put together small cube satellites for use in space. There is hope for people that we can find jobs for them.
Through providing skills development employment support, PACE aims to minimise the time for which people who are affected by redundancy are out of work. As has been demonstrated through PACE’s work, we can make a real difference to individuals who are facing redundancy and—importantly—to their families.
Alex Cole-Hamilton and other members made some important points about the mental health impact of redundancy on people who are affected. Like Alex Cole-Hamilton, I have worked in an environment in which redundancy was a day-to-day fear, and I know the impact that that has on people.
The work of the PACE team can make a real difference to communities and to the Scottish economy. We need to continue to work together with our PACE partners to maximise the benefit that comes from working in partnership and to continue our efforts to enhance the operation of PACE through our continuous improvement programme. I reassure members that we very much intend to do that and to continue to reflect and improve as we move forward. I thank all the PACE partners for their engagement in the evaluation process and for being very open and frank about the changes that need to be made. A number of members highlighted the situation of those aged over 55, and I reassure them that our work will focus on ensuring that we tailor services to the specific needs of that age group.
On a positive note, our evidence shows that PACE is effective in supporting individuals, and it is critical—as I said—that we are able to provide that support as early as possible. As has been highlighted a number of times today, our research findings from October 2016 showed that 71 per cent of those who received PACE support went on to obtain employment. That is not ideal—obviously, we would like 100 per cent of people to get work—but I hope that it will give confidence to people who are affected by imminent redundancy that there is a very good chance that they will get work.
Although the outlook for the Scottish economy is promising, there lies ahead much uncertainty—as I stated in my opening remarks—regarding Brexit.
Does the minister acknowledge that a number of people who initially contact PACE drop out of contact, for all sorts of reasons, and that perhaps aiming for 100 per cent is overambitious?
That is a fair point. I know that great efforts have been made to trace individuals who have left employment, as in the case of Young’s Seafood. Mr Stevenson has highlighted the issue of large numbers of accession state workers who were working in the Young’s factory and who had moved on. Considerable effort was put into trying to track them down and ensure that help could be given to them.
Bill Bowman gave a largely constructive speech, but I will focus on the part that is of more concern to me—the points about the economy—and make some important points in response. First, it is not true to say that there are not growth opportunities in the Scottish economy, because a number of sectors are, thankfully, doing very well—for example, life sciences and fintech, which Dean Lockhart mentioned in the context of the financial services industry. I am extremely optimistic that fintech will be an area of the Scottish economy in which we will see significant growth in future years. The Government is working very closely with the industry through the Financial Services Advisory Board and Louise Smith’s team from the Royal Bank of Scotland to ensure that we deliver the necessary investment to support that sector’s growth.
We are investing in our future through the £6 billion infrastructure plan and a £500 million Scottish growth scheme, which we hope will be up and running this year. We are also making substantial investments in transport and digital connectivity. We are committed to reducing the burden of air passenger duty; I appreciate that that is not supported by all members in the chamber, but it is aimed at improving Scotland’s connectivity.
We plan to invest more than £1 billion in our universities in the current financial year and will support collaborations between universities, businesses and others through our innovation centres. We are establishing a board of trade and creating permanent trade representation in Berlin to add to our innovation investment hubs in London, Dublin and Brussels, and using our tax powers to support growth in the economy. On business rates, we have reduced the overall rates burden by around £155 million in the current financial year and have ensured that more than 50 per cent of all properties will pay no rates this year and that over 70 per cent will pay the same or less than last year.
Those issues will be familiar to members, but it is worth reiterating that we are not standing still. We are working through PACE, but we are aware that, as members said in the debate, we need to be proactive in trying to create the right business environment to sustain employment and prevent job losses in the first place. That is very much our focus. We might disagree about the method, but I hope that members will be reassured that we are very much focused on the task.
On the economic outlook and Brexit, I will focus on comments made by members during the debate. There were extremely good contributions from members across the chamber in relation to points raised by members such as Gillian Martin on the fate of oil and gas workers. I acknowledge the concerns that Gillian Martin raised today about those people coming out of the oil and gas industry. The irony, of course, is that those individuals have a high degree of experience and reliability and have demonstrated their capabilities over many years. It is a shame if there is any prejudice against them in the workplace. However, I can assure Gillian Martin that we are focused on trying to help individuals through the transition training fund and other means.
Some encouragement in that regard has been received from interrogating the work of IFF Research, which produced qualitative research on individuals who were less satisfied with the services that came through PACE. With regard to the many older workers who were struggling to find employment, we have heard from the Federation of Small Businesses that small businesses are looking for those older workers because they are reliable, highly skilled and experienced and less likely to jump ship than others might be. Those small businesses appreciate that older workers are looking for longer-term employment.
Angus MacDonald made very good points about support in Grangemouth and the Falkirk area. We are working with the local authority, local enterprise agencies and the local business community to support regeneration in Falkirk. Angus MacDonald rightly highlighted the tourism potential of the town of Falkirk, which has been transformed in recent years with the building of the Kelpies and other projects that have made Falkirk a tourism destination, although perhaps not for the first time. However, they have enhanced the view of the local area. I see that Michael Matheson, who is an MSP for a Falkirk constituency, is nodding in agreement, so I have won favour with him.
Richard Leonard made a very fair point about digital messaging through social media, and I will look at the point that he raised around the language of messages. There is the curse of having only 140 characters on Twitter, but that does not mean that we cannot look very carefully at the wording that we use. I give him a guarantee that I will take up that matter. He also raised a fair point about staff who have been made redundant while they are on maternity leave—they are invited to attend PACE presentations and to be involved in that process. Obviously, we need the collaboration of the employer to give us access to those individuals, but I reassure Mr Leonard that we are very much focused on their needs.
I am running out of time, so I thank all members for a very constructive debate and for the very good points that have been raised. I also thank my colleagues at the back of the chamber—the officials who are largely responsible for helping to deliver PACE—who will no doubt have noted down the many positive suggestions that have been made, for which I thank members. I look forward to working with them on a bipartisan basis to help all those in the future who are affected by redundancy.