Official Report 1208KB pdf
Good morning, and welcome to the 15th meeting in 2025 of the Education, Children and Young People Committee. The first item on our agenda is to hear oral evidence on the Tertiary Education and Training (Funding and Governance) (Scotland) Bill at stage 1.
We have two panels of witnesses with us today. I welcome our first panel: Clare Reid, director of policy and public affairs, Prosper; and Professor Nigel Seaton, fellow, Royal Society of Edinburgh. Good morning to you both.
I will kick off the questions. What is the problem that the bill seeks to address and does the bill address it?
I am not sure that I would characterise it as a problem, but, as the information that has been provided with the bill indicates, the regulatory regime is quite complex, and regulatory regimes that are simple will probably save money and facilitate future reform. The bill is quite a technical measure, but it is a useful technical measure to prepare the ground for future reform.
Should the reform have been done before now?
You can always look back when good ideas emerge and say, “Well, what a pity that we didn’t do it before now”. This reform could have been carried out earlier, but, nevertheless, I welcome it now.
You will have seen some of the criticism of the bill from others, including those whom we will hear from today, but do you think that it is a good and adequate bill?
I think that the purposes of the bill are good. As you will have seen from the Royal Society of Edinburgh’s submission, we have some concerns about the implementation of it, and we see the possibility of a further reform in one area. We have commented on the bill, but, overall, we are supportive of it.
I would concur with that.
In our submission, you will see that we are broadly supportive of the bill. We see it as one step in a process of reform of the skills system. We welcomed a lot of the recommendations of the Withers review. As has been alluded to, the skills funding landscape is perhaps more complex than it needs to be, and the principles of making it more accessible for learners and more responsive to employers are good ones. There maybe needs to be more detail on how the bill is constructed and how it achieves that, which I guess we will come on to, but we certainly welcome it.
In your submission, you speak a lot about what your members feel. You have to give a balanced view of the overall picture, but are some of your members particularly positive or particularly concerned about the bill?
There are aspects of it that they would like to be clarified. Some of the issues that have come to the fore are about the bigger-picture skills landscape. To give a bit of context to our submission, I would say that the big theme and one of the biggest issues that is coming through from all employers that we work with is the need for support for all types of lifelong learning and for skills. The two areas on which we are engaging most with our members are housing and skills. Putting a bigger focus on skills is critical, but our members would possibly say that we need to see that in the wider context of the need for more support for a more diverse range of learners and for a more diverse range of workplace-based learning.
Similar to my comment to Professor Seaton, I note that housing and skills are not new issues. They have not just come up in recent weeks or months; we have been debating them in the Parliament for many years. Do you think that we have failed to make adequate progress in those areas, if your members are still raising them as key barriers to progress?
That was not something that we asked our members, so I cannot comment on that.
It is certainly the case that the needs from the landscape are changing all the time. At the moment, we are engaging with members on issues such as the big wave of investment in transmission, in construction and in renewables in the north of Scotland. That is bringing a whole new set of demands and a requirement for a responsiveness in the workforce that perhaps was not there a few years ago. The wider landscape is changing a lot of the time, but I am not in a position to comment on your specific question.
In your submission, you say:
“Many employers do not believe that the Scottish labour market will be able to support the delivery of their future business plans and are facing immediate impacts with potential delays on their critical projects.”
Do you think that that issue will be resolved through the bill and, more widely, through what you heard in the programme for government yesterday?
First, the additional college funding that was announced yesterday is welcome. Secondly, as I said, the bill is an important step in the reform of the skills landscape, but it is not the only thing that is required. We have encouraged people to have a wider conversation about how lifelong learning is delivered, how we encourage a shift in mindset towards lifelong learning and how we properly fund the sector. To the extent that the bill is looking to simplify funding, make it easier for employers to access funding and, as Nigel Seaton highlighted, perhaps make some savings in the way in which funding is delivered, the bill is an important step.
Professor Seaton, did you find that there was a great deal of enthusiasm about the bill? Was there much knowledge of it? When you asked your members for their views and opinions, did you find that the bill really got people motivated to get involved?
As I said, the bill is quite technical. It is probably perceived as being quite low key across higher education and across tertiary education in general.
Should we seek to change that?
I am probably stepping into the territory of committee members, but it might be quite hard to get a high level of enthusiasm for bills that are quite technical and that will have quite an indirect impact in reducing costs in the medium term, facilitating reform and delivering greater coherence. Those are exactly the kinds of things that I am interested in, but I think that the wider tertiary education community, perhaps understandably, regards the bill as a facilitative measure. Perhaps that is just what it is from our perspective.
I thank the witnesses for the submissions that they sent us in advance, which were really helpful.
Professor Seaton, you note in your submission that “key metrics” could be used to determine success. What metrics should be used to show whether the bill has been a success?
I do not think that we have a view on the precise metrics that should be used, but I will outline what we mean. In the end, all of this is about the learners—any reform to tertiary education funding, regulation or governance should, in the medium term at least, have an impact on learners. My suggestion is that the metrics should include primarily the impacts relating to opportunities and clarity for learners. They should certainly focus on learners rather than on institutions.
Regarding helping with the landscape, you mention that
“smaller, incremental changes such as alignment of approaches and processes could facilitate a smoother and more manageable reform process.”
Could you give us a bit more information about that?
We are making a general point that integrating activities that have been under different umbrellas will be a major project, and it is not necessarily obvious that the way to do that is to make a big transformation and then work out everything within that. Quite naturally, this point has not arisen in our discussion of the bill, but, should the bill be passed, there will be a need to construct a project that will consider the right way to do that. We think that some sort of incremental approach should at least be considered.
Should that be done as well as the bill or instead of it?
It should be done as well as the bill. We are supportive of the bill. The bill gives the desired outcome in relation to organisational change and a direction of change in relation to the impact on learners, but project planning comes in after that.
Clare Reid, do you have any comments on those questions?
We did not comment in our submission on the key performance indicators or measures per se, but we highlighted two points. One is whether the transition is perceived to be smooth. That would be based on the experience of both learners and employers, and whether they feel that business as usual is being disrupted, and whether, on the measure of employer engagement and satisfaction, employers feel that they are seeing more responsiveness or feel that their views are more represented as part of the process in addition to the views of learners.
Do you think that the bill as drafted will increase the likelihood that more people will undertake apprenticeships?
That is a great question; we hope so. Prosper is very supportive of the whole apprenticeship family, and we have seen huge success in the take-up of graduate apprenticeships in particular, so we would be keen for that to be a more mainstream option.
I also go back to my earlier point. Whether an individual employer decides that an apprenticeship is the right thing for them slightly depends on the circumstances. You will see in our submission that we have highlighted the need for more flexible forms of funding in addition to apprenticeships in order to respond to the needs of some employers who are not in a position to take on apprentices.
The answer to your question is yes, but it is a wee bit more complex than that. We would like the bill to be a step on the road to having greater responsiveness to learners and employers, and greater flexibility in responding more quickly to changing skills needs and bringing forward more lifelong learning options.
Would anything in the bill need to change to make that happen?
Some of our recommendations are more about governance and the proposed apprenticeship committee. We have recommended that the proposed committee’s remit be broadened to include all types of skills and learning, and that it should have greater representation from regional employers as well as national representation from trade associations and skills bodies. We also recommend that there should be a stronger statement of the Scottish Funding Council’s duties to engage meaningfully with employers and learners as part of that. Our recommendations are more about the detail of how we make that happen in practice than the broader aspects of the bill.
My final question is on graduate apprenticeships. Do you think that there is anything in the bill that would help to increase the numbers of enrolments in graduate apprenticeships, or should anything be done in that regard outwith the bill?
More broadly, increasing awareness would help. Something could be done, perhaps not in the bill itself but outside it, to build more awareness of graduate apprenticeships as an option, and there could be more funding to support that type of learning.
As opposed to other types of learning in higher education or in addition to those?
In addition, so that graduate apprenticeships would become a more mainstream option alongside other types of apprenticeships and learning.
Sorry—I said that that was my last question, but I have a brief follow-up. Have any of your members described what they think the implications of that would be and what would need to happen for them to be able to do that?
Are you asking specifically about graduate apprenticeships?
Yes.
No, we have not seen that in evidence from our members, including in the evidence that we have collected on the bill. Part of the reason is that much of the broader evidence that we have had from our members is about the reality of what they are seeing in the workforce. The workforce is getting older, and it is quite diverse; the First Minister spoke in the Parliament last week about inactivity and the people whom we need to help to bring back into the workforce.
There is a desire among our members for a system that has a number of different career pathways and ways to support learners, whichever stage of their career they are at and whichever industry they are trying to get into. All the apprenticeship options are a key part of that, but they are not the only part of the bigger solution.
From some of the evidence that we have had, we get the impression that the relationship between Skills Development Scotland and business and industry has been quite good, but there is some nervousness in some circles that that will be disrupted. For example, the UK Fashion and Textile Association said:
“Historically, the SFC has been more focused around research and academia but if also taking over from SDS they need to hit the ground running in terms of being employer facing.”
Is there a concern that the SFC will struggle to have as good a relationship with industry as SDS has had?
Either of the witnesses can answer that.
09:30
I do not think that there is a specific concern about the SFC’s abilities or capacity, but given that it has historically had more engagement with the university sector than with employers, we have made recommendations about the structure of the apprenticeship committee, how meaningful engagement happens and the skill set of the board. On-going and meaningful engagement with employers will be a key part of that.
One of my colleagues will ask you more about the committees later on. I was asking more about the general relationship.
I suppose that there are two concerns. One is about making sure that the SFC quickly takes on the responsibility to be more engaged with and to have a really good understanding of both sides. Organisations such as ourselves and others will be very happy to enable that, either through that committee or through other functions.
There is also a concern that a shift towards more work-based learning erodes the focus on or support for the research and innovation side, which tends to be more linked to the universities. It is about maintaining the balance: bringing new skill sets into the organisation while not eroding the expertise that is already there.
Okay—thanks.
Professor Seaton, you said that simplifying the landscape is a good thing, and I am certainly in favour of that. Are there risks to doing that? The SFC’s staff numbers will grow dramatically. Will it be hard for it to get right the balance between the university-college side and the apprenticeship side?
I think that the SFC will succeed if it realises that that will be hard to do. I am sure that it will realise that that is hard, because it is integrating a different stream of work, new responsibilities, changes in governance, a new committee and cultural change. We all know that cultural change is important, but it is quite hard to describe cultures and to get them to change. It certainly must not feel like a bolt-on of a new activity.
Making all such changes is quite difficult. I know that the SFC will recognise that and I am sure that it will focus as much on the cultural change as on the organisational change. If it does that, I think that it will work fine.
A lot of staff will be moving from SDS to the SFC, but that might not change the culture of the whole organisation, or is it inevitable that that will happen?
No. Making cultural change is probably the hardest thing to do in leadership. As I said, it is hard to describe and it is hard to change. In a sense, it changes itself. I am sure that SFC will have in mind the need to mainstream the new activities so that, after a while, they are seen as being absolutely core and as natural a part of the SFC as the activities that are undertaken now. I am sure that the SFC will recognise that it is a challenge and that it will rise to it.
The SDS submission makes interesting points about the proposed new definition of an apprenticeship in the bill. Essentially, is it based on—it is certainly aligned with—the one that the Scottish Apprenticeship Advisory Board settled on in 2019.
However, there have been quite a few developments since then. The board has done a lot of work on the definition of an apprenticeship to make sure that there is alignment with Scottish Credit and Qualifications Framework Partnership qualifications, for example.
That concern about the definition has not particularly been reflected in the submissions from external organisations that I have seen—the focus is much more on the definition of a private provider. I would be interested to hear whether the RSE or Prosper have a view on the definition of an apprenticeship and whether you think that what is in the bill is adequate to capture that, or whether we should take a more comprehensive approach or perhaps set more specific standards?
We have not had any feedback on that; the issue has not been highlighted to us. It might be too technical for some of our members. We would be content with the recommendations of SDS and others who are perhaps closer to some of the detail of how apprenticeships are structured.
Is that the same for RSE?
I do not have anything to add.
In that case, I will come back in on later themes, if that is okay, convener.
Good morning, and thank you for attending. The responses to the call for views were generally supportive of the proposals to move support for further education students to the Student Awards Agency Scotland. What do you see as the main impacts of that change?
Just to clarify, are you asking about student support moving to the awards agency?
Yes—to SAAS.
I guess that the main opportunity is about streamlining, bringing everything together in one place and making it more accessible and clearer for learners to understand where the support is potentially coming from.
Did that answer your question?
I wanted to know whether you feel that there are any positive or negative impacts of streamlining the process so that it is under one body.
In our original response post-Withers, we suggested that everything should come under the SFC, but we are equally content with the option that has been settled on, because it still brings consistency and clarity, and it is potentially less disruptive than bringing everything under the SFC.
Professor Seaton, do you have any views on that?
I am conscious that I said something similar before, but straightforwardness is a virtuous thing. If the process can look as integrated as possible to an outside observer, especially to learners who might benefit from it, that will make it easier for them.
Okay—thank you.
My question is for Clare Reid. Some, although not all, of the businesses and business organisations that I speak to are pretty angry about what is happening. They think that they are going to lose two things. One is business or employer involvement in the organisation that is responsible for the funding. Secondly, because they see that the university and college sector is under financial stress, they think that funding will be diverted away from apprenticeships. I am puzzled as to why your members are not reflecting that wider concern that I am picking up.
The concern about the university sector is part of the concerns about maintaining support for further and higher education, as both are critical parts of our skills system. The specific question whether bringing the funding together will divert it away from one has not come up, other than the point that I have made about the committees, which I know—
That has not come up with your members?
That broad point has not come up, but our members have been keen to ensure that the employer voice is there to ensure that work-based learning, which comes back to apprenticeships, is represented. To be honest, one of the biggest themes that came across was about the pace and scale of the changes. Our members see the potential disruption of the changes and are concerned about how long they might take to be put in place and what will happen in the interim. Our members really want support on adapting skills now. They want the upskilling programmes for the renewables sector, the construction sector and the defence sector now. Probably the main thing that has come across is just the—
Do they see the process as a bit of a distraction?
It is potentially a distraction. It might be a good thing in the long term but, in the short term, it is not addressing any of the other questions that they have about starting to upskill people. The issue is not only about funding; it is about changes that the process will potentially allow.
One thing that came out in our research was that the evolution of the apprenticeship system has been welcomed, but there are areas where it could go further and faster and be more agile and responsive. For example, we have just done a big piece of work on housing and construction, and there were quite strong views in that. People asked why apprenticeships have to be a certain length. Could they not be shorter? Could apprentices not have more time with an employer, which would help to make the process shorter? Could apprenticeships be more modular? Could they be quicker to adapt and respond to changes in the construction sector and to modern methods and so on?
Some of the frustration was about how our members can get their views across and how quickly the system responds to those. However, that is a question for how the system operates now and for the SFC in the future.
You would have thought that the people who are in charge of the organisation—the decision makers; in other words, the critical people who consider such things—might be slightly distracted by such a big change.
The challenge is for smaller employers. A lot of the really large employers are working with Skills Development Scotland. For example, we ran a skills summit—
I am sorry—I am talking about the people in SDS who would be transferred over. Surely they would be distracted by thinking, “Will I have a job next month?”, “Where will I be?” and “What will my terms and conditions be?”, instead of focusing all their efforts on trying to do the things that you are talking about.
That has been a concern since the beginning of the Withers review, but it is acknowledged that it is an option for the system to change, and that some of the change that could come could be beneficial. The pace at which change is happening has been quite slow. Meanwhile, the world has moved on.
Working with the enterprise companies and Skills Development Scotland, large employers have made big investments to put in place training programmes that will happen sooner rather than later, which might not be accredited. The people who are perhaps losing out in the short term as the change takes place are smaller employers, who are no longer able to benefit from the flexible workforce development fund.
Nigel, you are not responsible for the Funding Council, but you have a significant background in and significant knowledge of that sector. With the fire that is going on in higher and further education funding—I am referring to the likes of the situation at the University of Dundee—do you think the SFC has the headspace to be able to do this?
It is important—particularly given the circumstances that you have mentioned—that any such change is properly funded. I am not necessarily talking about more money being provided to the organisations; rather, I am talking about people being required and empowered to make the change. When people are busy, you cannot just go to them and say, “We’re having an organisational change. By the way, could you think a bit about cultural change?”, because they will be busy doing other things.
As you have pointed out, the workload in certain areas of the Funding Council’s work will have increased because of what is happening in the organisations for which they are responsible. If the bill is passed and implemented, a discussion will need to be had about who will do what in the organisation and the associated cultural change.
My other observation is that the process will not be quick. With any such change, there is a risk of declaring victory too early. People think that, because they have a new organisational chart and new processes, that is it, but it is not it. The process of making this change work will be a long one—I guess that it will take several years—and people need to have the time to do it. It is possible, but it is not possible if everybody who is responsible for making the change is working like mad doing something else.
I will come back on one of those points. Does that not slightly push against what Clare Reid expressed a desire for, which was pace, in order to make sure that we can get on with dealing with the substance rather than the structure? If you are saying that the process will take time, does that not undermine the solving of the very things that Clare wants to solve?
I agree with Clare that the change process should be undertaken as quickly as possible. However, with such changes, there is a risk that the changes that are most evident, which are those to do with organisational change, changes of responsibilities and new jobs, are seen as being the end of it. That is an important milestone, which allows you to start doing things in different ways. I agree with Clare about that.
However, there is also the question of what follows from that, which is the process of producing a culturally integrated organisation. We have discussed many of those topics already. That involves making sure that effective employer representation is ingrained in what the SFC does, rather than employers simply being represented on a committee, which will take longer.
I would say that there needs to be rapid action by people who are empowered to take it and have the time to do so, as well as recognition that the process of getting it all done will not be a quick one.
Earlier, you made a point about the need to have the proper resource to get the right people with the capacity to deliver the change. From your knowledge and experience over the years in various sectors—the public sector and the university sector—do you think that that is going to happen? From what you have seen before, do you have much confidence that the process will be properly resourced in that way?
09:45
Having worked in different organisations, mostly in higher education—this is a general comment, not a comment about the SFC—I see that there is a tendency for people to be expected to do something new and to be involved in a change process as well as doing their day job.
That is natural, because the skills that they need to reform the way in which things work in their area of expertise are the same, more or less, as the skills that they need to do their day job. I would even go so far as to say that the most natural thing is for that not to be properly resourced, because that is the way that it happens in those organisations.
As I said, I am not commenting specifically on the SFC, but organisations in which I have worked, even at senior level, were looking back and saying, “We should have resourced that better.” It is difficult and tricky to do that in a situation where public funding is scarce and there are other priorities, but not doing so is a well-trodden route to incomplete, or not very successful, implementation. The SFC will need support, and will have to proceed in a way that empowers and allows managers to do what they need to do to make it work.
I am rambling on a bit now, but that is a common pitfall, and the SFC will need support to ensure that it does not fall into that pit.
You both started the session by being quite positive about the bill, but you are getting more negative as you give your answers. Is that a fair representation of where this is going?
We are responding to the questions. The devil is in the detail, and with any activity like this, it is quite hard to achieve the desirable objectives in practice. As we talk more about where the disadvantages and difficulties might lie, you are perhaps picking up a slightly more cautious tone, but that does not change the fact that we are supportive of the bill.
I would not disagree on that point—I do not feel any more negative—but you are asking the right questions. Organisations are made up of people, and that is often where implementation falls down, but that does not mean that having the right strategy, and—as Nigel Seaton said—viewing the bill as instigating a long-term cultural change and having a plan for that, does not help to mitigate some of the risks where things can go wrong when such integration happens.
On that point, have the bodies that will be involved, and indeed the Scottish Government, learned enough from past mistakes? Professor Seaton, you said that history is littered with examples of where more funding and better resources could have been allocated. Are we in Scotland—the Government in particular, and the bodies involved in the bill—good enough at learning from the mistakes of the past?
I will make a couple of comments. First, I do not think that any organisation anywhere is good enough at learning the lessons; I cannot think of any exemplar organisations that always get it right. I am sure that we in Scotland collectively, including the Scottish Government and all the organisations operating in Scotland, are in the same category, in that we can always look back at the past and learn lessons, and do things better in the future.
I understand your answer, but we are scrutinising a bill, and you, as our first panel of witnesses, are saying that funding and resourcing are concerns. You are saying, from your vast experience, that there is a legitimate concern that the bill, if it is passed, will not be resourced properly and that we will meet the same pitfalls as we have in the past. What can the Government or these bodies do to reassure you that this time it will be different, or is it impossible to get that reassurance?
The reassurance comes in the doing. I do not want to give the impression that I think that the record in Scotland is worse than elsewhere; it is difficult everywhere.
In connection with that, and in relation to my earlier point about resources, I am not necessarily suggesting that the SFC would have to be given additional resources for the bill, but those will have to come from somewhere. There might be things going on in the SFC, or things that are currently going on in the relevant part of SDS, that are less urgent or important, and which could be postponed to release resource for implementing the bill. I am not simply talking about adding more resources to the organisation, but in one way or another, that issue will have to be handled.
I will follow on from Willie Rennie’s line of questioning. In its submission, Skills Development Scotland specifically said:
“the SFC is empowered to fund apprenticeships, however it is not legally required to do so”.
There is a concern that it could go either way: the SFC might focus too much on colleges and universities and not enough on apprenticeships, or vice versa. Does there need to be something in the bill—such as ring-fenced money—to direct the SFC a bit more in that regard, or can we leave it to the SFC to get it right in the doing, as you said?
I think that you should leave it to the SFC. We mentioned employers’ concerns. I have spent most of my career in higher education and have heard those concerns in similar contexts. People who are running colleges are worried that universities will receive too much of the funding, and people who are running universities are worried that colleges will get too much of the funding. It is natural for people to be concerned about that, but ring fencing funding would disempower the SFC to do what it needs to do in order to implement public policy. The SFC needs to keep everyone on board and ensure that everyone feels as though they are being treated fairly, which is a challenge, but it must have the authority that it needs to take decisions. From time to time, that will involve moving resources from apprenticeships to colleges, from colleges to apprenticeships, and from apprenticeships to universities, or vice versa, in furtherance of public policy. That is what the SFC should be doing. I would not ring fence anything.
Ms Reid, are you as relaxed about that as Mr Seaton?
I tend to agree. I made a point at the start that, in the long term, our members would like the system to be agile and responsive to a changing workforce and changing industries. The system needs to have options that meet the needs of learners as well as those of employers at different points in time. Rather than mandating one type of qualification or learning pathway over another, the system needs flexibility. That said, we support all parts of the apprenticeship family, but I agree that, as the workforce changes over time, we need flexibility.
Another aspect of financial sustainability is that the SFC needs to identify at-risk institutions. My understanding is that it already has that ability, but that that will now be put into statute. The committee has looked specifically at the University of Dundee, where the SFC did not seem to pick up quickly that there was a problem. Does the bill go far enough in that area, or do we need to do more?
My reading of the bill is that it is not specific about how that should be done. I admit that, until I read the bill, I had not realised that financial oversight was not a statutory responsibility but, clearly, it should be—that would clean it up. It would then become a question of designing the regime. I am not an expert in that, but lessons can clearly be drawn from the institution that you mentioned. There are other examples and lessons to be learned from England. The funding arrangements there are somewhat different, but without capped student numbers, the fluctuations in income, although large in Scotland, are much larger in England, so there is quite a bit of experience there, and I am sure elsewhere, of identifying and dealing with universities that are in financial difficulty. The design of the regime will be important, but the RSE certainly supports the change and making such oversight a statutory responsibility.
Do we leave it to the SFC to work out the regime? There seems to be an expectation that colleges and universities will come to the SFC to say that they have a problem, although, clearly, some of them have not done that in the past. On the other hand, the universities are saying, “You shouldn’t be interfering in parts of our work where the research is separately funded.” It seems to me that we need a balance somewhere.
Yes, there needs to be a balance. I am going beyond what we have discussed at the Royal Society of Edinburgh. At the moment, it is about answering questions and reporting. It is not simply a question of waiting for universities or colleges to say that they are in difficulty. There needs to be a regime in which the SFC can ask tricky questions and expect those questions to be answered, as well as institutions going to the SFC to say that there are difficulties.
That relates to the question about giving recommendations, which is in the same part of the bill. The critical thing is that one should give advice and ask tricky questions always in the context of institutional autonomy. Of course, autonomy is not the same as independence. Universities and colleges are very far from being independent—they are highly dependent on the funding and regulatory regime of the SFC—however, they should be free to take their own decisions within that regime. Inquiries into finances and the making of recommendations should be done in a way that informs the SFC to give advice where it is needed, but at the same time does not unnecessarily impinge on the abilities of the university to operate autonomously within that framework.
The problem is that if they are autonomous and make the wrong decisions, they come back to us and want to be bailed out.
That is the problem. As I say, this goes beyond the discussion that we had on this topic at the RSE. Financial monitoring must be sufficiently intrusive, if that is necessary to get the required information. There has to be an ability to constrain universities. Autonomy is based on the idea that universities operate within the framework, and the framework requires the university to remain solvent and fulfil its obligations to the Scottish people and to the SFC. If they are not doing that, there needs to be some sort of intervention.
Does the SFC have sufficient powers, or is it more a question of how it uses the powers? The Educational Institute of Scotland feels that the SFC has not used its powers as much as it could have done. Is that more about attitude and culture?
The change is important, because it makes monitoring a statutory responsibility, but it is a change that reflects what is already a generally understood responsibility. Therefore, the change will primarily be in the practice, not in the effect of the legislation.
Thanks. Ms Reid, do you have anything to say on that?
I agree with a lot of what Nigel said. We would encourage the effective resourcing of part of the SFC to allow it to deal with that matter specifically, in the way that Nigel highlighted. That could involve reallocating some of the staff who are being blended, in order to look at that issue in particular. One of the consequences of undertaking greater scrutiny and asking for more information is the question of what you do with the resulting information. You need to be prepared for how that monitoring function will work and how you resource it internally.
Our main bit of feedback was that monitoring should not be a distraction from the other changes that are being made and that, where possible, resource should be allocated to address the issue.
Has that been the problem for the SFC in the past? Has it just not had the resources to do the work?
With regard to Nigel’s point, monitoring has perhaps been less of a pressing issue, given some of the challenges that we have seen in universities more recently. I agree that, culturally, it has become much more apparent that there is a need for that scrutiny. Therefore, I imagine that it will change in the future.
Thanks.
Thank you both for taking on board the background to the different questions that you have been asked, including many on the SFC.
I hope that my question is not as difficult as it sounds. What is your assessment of the bill’s proposals to change the membership of the SFC, including the terms of reappointments and in relation to the skills and experience of members, and to introduce co-opting powers for the SFC?
We support the change, which is necessary. There has to be more diverse representation on the board to reflect the broader focus of the Scottish Funding Council. The Royal Society of Edinburgh also supports the possibility of co-opting more members so that broader skills can be brought in for a period if that is necessary.
As you will have seen from our written response, we have a concern about the tenure of the SFC board roles. Rather than being unlimited, we would wish them to be limited, which we regard as good practice. That is a reservation but, in general, we support broadening the skills mix of the SFC board.
10:00
We agree, but there are a couple of points to make. It would be helpful for any new appointees to have a skill set around financial due diligence and so on. One concern was about the intention, not necessarily to expand the size of the board, but to increase its diversity, and we wonder whether that would be a little restrictive in terms of bringing real diversity of insight from employers and learner representatives, for example, on to the board. We encourage a bit more flexibility around that.
Concern was expressed about funding for colleges being squeezed by the fact that the SFC has traditionally had more support for universities, but the alternative is also a risk in relation to focus. One of our proposals was to ensure that someone with research and innovation experience chairs the board’s research and knowledge exchange committee and is also the vice-chair of the main board in order to retain that expertise and link to the university sector.
That is very positive. Thank you very much indeed.
Good morning. As we have touched on, scrapping the Scottish Apprenticeship Advisory Board, as the bill proposes, presents many questions. I go back to a point that you made, Clare Reid, on further involvement from regional employers. How would you see an apprenticeship committee, if one is established within the SFC? What role would industry play in that? I have specific concerns in relation to where private training providers who provide certification and registration would sit in that structure. I put that question to you again. What is your understanding of what that structure would look like?
It is for the SFC to design and request views and feedback on the specific make-up of the committee, but we support it in two senses. It perhaps needs to look beyond just apprenticeships—I make that point again—and it needs to be representative of a range of employers, which could be key employers in different regions around Scotland. It is likely to reflect key sectors in Scotland. It may also include representation from key skills bodies and key trade bodies. We would like to get that kind of diversity, and we would certainly like to ensure that there is regional representation. As I mentioned before, Skills Development Scotland is doing some work in the north of Scotland. There are huge economic opportunities and associated skills needs connected to all that activity. That is a great example of the elements that we would need to ensure are properly represented in any make-up of a new committee. We would need to ensure a diversity of some of the large employers but also the key regional representatives. Prosper has regional committees; it is about the kind of structure that ensures that a mix of locations, sectors and particular key skills areas are represented.
Could another approach be to look at reforming SAAB? Any potential transition period raises concerns, and some of the things that you suggest could be included and taken forward by reforming SAAB, rather than almost throwing the baby out with the bath water as we transition. I take on board what you say about the economic opportunities that are coming, but we know about those and we see that different sub-committees have been working on some of that already. Those concerns, which I think that we are all hearing about, are taken forward without a completely new organisation having to set up the expertise.
Do you mean not progressing at all with the reforms that are proposed in the bill? I am not sure that I understand the question.
The Scottish Apprenticeship Advisory Board is to be shut down, but we have no details of what will replace it. It has a key function in looking at the skills that we should be developing and having a voice about those.
The problem on the table is that we have 25,000 apprenticeships when 40,000 could have been delivered. Focusing on why that is, and the resources needed, seems to have caused a completely new restructuring, which will not necessarily help to deliver a solution to the problem of resourcing for apprenticeship places.
All that I can do is share the view of our members, which is that we welcome a committee that includes looking at apprenticeships, but we would like it to have a broader perspective on skills and workplace-based employment and we would like it to be representative of all the areas in the Scottish economy in which there is demand for skills. A reconstitution of the advisory board into something that reflects where the Scottish economy and skills are going is not necessarily a bad thing. However, we would welcome more detail and the opportunity to input ideas and feed back on it.
The bill has no targets or minimum levels of rights, either for apprentices or for employers. Is that something that your members have highlighted and fed back to you on?
Would you mind saying that again?
The bill does not include any targets for apprentices or set minimum levels for service agreements, for example, for either apprentices or employers. Have your members raised that aspect?
We have not had any feedback on that. It goes back to the earlier discussion about retaining flexibility. There is demand for apprenticeships, but it is key to have the flexibility to adapt both what is there and the mix of learning pathways, in order to respond to what employers need.
I have some questions on what the bill says about the designation of private providers. On one hand, we heard in our call for views that there is potential for the bill to encourage growth in the number of such providers. On the other hand, some concern has been expressed that perhaps the bill is not as clear as it could be about the checks and balances that the providers would be subjected to in relation to student support. Do you have views about that?
We did not get feedback on that from any of our members. Primarily, we got feedback on the non-private providers.
We had some discussion about it. The definition of a private provider was not clear from the bill, but it was clarified in the explanatory notes that were provided. We had that doubt, which was resolved when we saw the notes. Our principal concern was one of definition.
Speaking personally, if the objective is to open opportunities for apprenticeships in a range of subjects and for a wide range of students, then it is probably a good thing to have a broad definition of a private provider that might be able to contribute. It did not come up in discussion at the RSE.
Do you have any thoughts about the concern that there is a lack of clarity about the responsibilities of those private providers to the students?
That did not come up in discussion at the RSE.
Okay. Thank you.
Good morning. I have the pleasure of asking you this question: is there anything else that should be in the bill or that we should consider? We have talked about a lot of things today—we have gone from one end to the other. Is there anything specific that either of you believes should be in the bill, or is there anything else that you want to say before you go?
The RSE submission briefly mentions the role of the tuition fee that SAAS provides to universities. It is part of the funding of an institution for teaching activity rather than student support, and it now sits within SAAS. It is a smaller proportion of the total university funding for teaching than the other funding that comes directly from the SFC. In the RSE’s view, however, it is, if not anomalous, an unnecessary complication for the funding of the teaching activity to be split between SAAS and the SFC.
Our proposal is therefore that, as the pieces are moved around from place to place and from public body to public body, consideration should be given to moving the tuition fee element of university teaching funding from SAAS to the SFC. At first glance, that would not change anything—it would change only which organisation is responsible for it. However, integrating the responsibility for those two elements of funding for university teaching would facilitate future reform, should that be desired. That is one further element that we saw as an opportunity for changing responsibilities within this set of public bodies.
The only point that I would make is one that I have made already. We should think about all types of work-based learning, not just apprenticeships, as our needs as learners change, and we could have an ambition for more lifelong learning as part of what the change can bring for all learners in the workplace.
That is where some of the confusion comes in. Joe FitzPatrick and I were talking about this earlier. We come from backgrounds where, if someone has been an apprentice, they have a trade and people say, “Oh, he’s okay—he’s got a trade.” Someone who is a lifelong learner does not have the same kudos among those from our background as someone who has gone through an apprenticeship.
That is understandable, and there is still a strong desire among many learners to undertake apprenticeships. As we have said, we have seen a big increase in demand for graduate apprenticeships, so we could certainly have many more of those.
We are certainly not advocating for not enabling people to be accredited for their learning. I guess that it is about recognising that the workforce is changing—
There is more flexibility for the employers to get what they want—is that what you are saying?
It is about providing more flexibility for employers and learners. A lot of the shifts in thinking, including in the university and college sectors, have been around different ways to learn and to enable learning that allow for different styles of learning and enable people to meet the different needs of employers. For example, for work on a building site, there is a specific structure to the way in which an apprenticeship will happen, but it is very different for someone who is undertaking an apprenticeship in a service-based organisation or in healthcare, for example.
There is a lot of evidence that younger people are learning via YouTube, so there is also informal learning. The ways in which people are learning and the ways in which jobs are being learned—the type of workforce that we have and the ways that they will learn—are all changing. We need to be mindful of that and ensure that the system is supporting great qualifications, including apprenticeships, and that it is also flexible enough to allow for other, equally important types of learning, which could be already accredited or are yet to be developed.
The Prosper submission discusses how apprenticeships work in England, particularly with regard to the flexible workforce development fund. Given that we have different approaches across the UK, are there models, or examples within models, that we could adopt from other parts of the UK that would benefit how we deliver apprenticeships in Scotland?
One big change that is coming is the growth and skills levy. The intent that has been set out for that is about making the apprenticeship model more accessible to small and medium-sized enterprises and thinking about how it can be more responsive to local need and future proofed, given how quickly skills and employers’ needs are changing.
There are some really good principles in there, so we have encouraged the Scottish Government, when it comes to think about the subject, to respond to that and consider how it might bring forward such a scheme in Scotland. There are opportunities to address similar principles in a Scottish scheme.
Professor Seaton, do you want to come in?
That is quite a distance from my area of expertise, so I do not have anything to add.
I thought that you might have had a wider discussion about that when you were discussing the bill. Did you look at examples elsewhere in the UK or wider international examples?
Do you mean in connection with apprenticeships?
Yes.
I regret to say that we did not.
I know that there is only so much time for fellows to discuss such things.
10:15
I have a slightly different question, if that is okay. We have heard about various different models. What does the panel think the role of colleges is in all of this?
It is a short question, but it could have a very long answer. It is welcome that the bill creates a spectrum, from apprenticeships to degrees and higher degrees, and includes the idea of lifelong learning for people of all ages. Sorry—I am waffling slightly.
Colleges are central to the provision of skills, as that is understood in apprenticeships, and also to preparation for higher levels of study—with people potentially going on to university—through higher education programmes such as the higher national certificate and the higher national diploma. They are particularly important in facilitating social mobility among groups who are underrepresented in higher education. I see colleges as being integral to the whole thing, if that makes sense.
I absolutely agree. You will have seen in this document and in other skills papers that Prosper has put forward that we support a strong college sector and a strong university sector as part of an education system. They are critical to the provision of vocational education, and some fantastic schemes have come up recently. I was looking at the work that is being done in Forth Valley College on welding and virtual welding. Colleges play a really strong role there.
We have been looking at examples around the country, and colleges are key partners in some of the partnerships between Skills Development Scotland, local employers and training providers. The university sector is sometimes also involved, but it is often the colleges, particularly with shorter and more focused courses. They are absolutely critical.
Thank you, both, very much. You have kicked off our evidence session on the bill. We will have further sessions today and in the future, which I am sure you will be keenly interested in. Thank you also for what you submitted in advance of your answers today.
I suspend the meeting for about 15 minutes.
10:17 Meeting suspended.
I welcome our second panel of witnesses today on the Tertiary Education and Training (Funding and Governance) (Scotland) Bill. We have Martin Boyle, chief operating officer at the Scottish Funding Council; Damien Yeates, chief executive of Skills Development Scotland; and Catherine Topley, chief executive of SAAS. Thank you for your time.
We will go straight to questions. I am not sure whether you were all here for the earlier session but, in answer to my first question, the witnesses told me that there is not a problem, but they would answer the question anyway. I will stick with the word “problem”, because I do not believe that, in the final year of a parliamentary session, a Government would be dealing with an issue if it did not think that there was a problem to solve. What problem does the bill seek to solve? Does it solve that problem?
I will go to you, Mr Yeates, just because you are looking at me.
The SDS board has been grappling with that question. The board has identified two significant opportunities and risks. One is about Scotland’s workforce. We have the immediacy of skills shortages today, but the likelihood is that those skills shortages will be exacerbated. Over the next 10 years, we can see that £230 billion-worth of spend could come into Scotland via shipbuilding, building out the electricity transmission and distribution grid, construction of offshore and onshore wind and so on. We need 1.1 million workers to unlock that £230 billion, so the chair and the board are very pressed about the immediacy of that issue.
The second issue is about the value of our higher education sector, which is in significant crisis and needs urgent attention. We need to develop a long-term strategy to protect the value of that sector in driving forward the economy.
In its submission, the SDS board questioned whether it makes sense to spend potentially £30 million on transition costs to move £100 million—a single apprenticeship fund—from SDS to the funding council, when today we have pressing issues that need attention and focus. In that regard, it almost feels as if the purpose of the bill or what it was intended for were conceived in a time past, and that events have overtaken that.
I led the merger of SDS back in 2007 and 2008—
I was going to ask about that later. There are a number of questions about financing and transfer of staff and suchlike, so we will come back to that.
Right. I will stop there.
I will bring in Ms Topley on the opening question.
SAAS is an executive agency that sits within the Scottish Government. The purpose, certainly looking through our lens, is about the student journey. I heard the first part of the meeting, where there was discussion of institutions and organisations, but at the heart of this is the student. We must remember that the original direction that Mr Withers set out was about how it feels for the student and how the student manages the landscape of learning and funding. My understanding is that the aim is to ensure a more streamlined approach for the student.
We have a complex funding environment for post-school education, and the bill tries to simplify that by removing artificial barriers between vocational skills-based training and academic training. You could argue that academic training involves a lot of skills-based training, so they are all sort of the same thing.
Bringing the funding into one place will allow us to have a more holistic view of learner and employer demand and respond to learner and employer needs more efficiently and effectively. For students, it will bring funding for student support into one place, which will again simplify that for all students.
To paraphrase what was said to me earlier, is it the case that there is not a problem and that this will just be a reorganisation, or is there an issue that the bill seeks to tackle? I seem to be getting conflicting answers at the moment.
The issue is the complexity. Things are in different places and there is not one view of the whole picture.
Is this bill the answer to that issue?
The bill will address some of it. However, the Scottish Government has a wider reform of post-school education on the go at the moment. There is a skills planning project—for want of a better word—which is an on-going piece of work. There are also reviews of the careers services and of apprenticeships. There are lots of different things happening at once and all that put together should help to simplify things and allow for things to be better targeted.
It is difficult for me to get my head around this. Some £2.2 billion already sits with the Scottish Funding Council and we are saying that moving 3 per cent of the funding will achieve a miraculous reduction in the complexity of the system. It just does not seem to add up. Apprenticeships—
What is your response to that, Mr Boyle?
There are two different places that fund skills. If that were all to be put into one place, it would surely simplify the system. That one place would have a view of all parts of the system. One part of that would be having a view of apprenticeships. We already fund—
But it would be a very small proportion of the funding that would move.
Yes, it would be a tiny part.
Yes. Sorry—Mr Yeates.
The difference with apprentices is that they are not quite students, are they? They are employees of the companies that are developing their skills and that pay their wages. They typically pay £10 for every pound of public money that they receive. It is a different journey into the system compared to a typical student journey through college and university. There are more than 11,000 small to medium-sized businesses that contribute by offering places, so there is a natural complexity in supporting a young or an older apprentice through that system, which requires careful management. It is distinctive from a typical student journey.
Therein lies the difference. Are we moving towards a wholly academic, institution-focused system, or are we managing to get a balance? Most of what we hear from industry is that there is a recognition of the excellence in our colleges and universities but that there is also a need for workplace skills, and that we need to support employers to invest in the workforce for the future. It is a distinctive offer. We need to bring it all together.
Given the amount of money, which is about 3 per cent of the funding, I go back to the finances. Our estimate is that it could cost up to £30 million just to transition the £100 million in Transfer of Undertakings (Protection of Employment) Regulations transfers. That feels like a lot of effort for small gains when, today, there are significant skills shortages and a pressing crisis in higher education funding. The question is, what will the bill do to ensure that Scotland will have the workforce to unlock £230 billion-worth of investment? What will the bill do to give confidence to the university sector that it can thrive and continue to disproportionately contribute to growth in the Scottish economy? Both those questions feel unproven at the moment—that is for sure.
I do not want to speak for the Scottish Government, as I represent SAAS as the chief executive. I joined SAAS two and a half years ago, having come from working in the justice sector for nine years. On my arrival, I found that this is a very complex environment.
Although I do not disagree with Mr Yeates, my perspective is that education has evolved. A student is not just a student; they do not just go to school. However, neither does an apprentice just work in the workplace. The bill is intended to move towards a more bridged version of that.
You are right about the funding landscape being extremely challenging. When money is moved between several organisations and landscapes, it is difficult to know how and where to prioritise that funding and those organisations. The simplification of that funding in the bill allows a cleaner line of sight, which allows ministers to deploy it and deliver for the public.
Another question that I put to the previous panel was whether that should have been done before now. I have heard their answers, and I accept them. Of course, we can always look back with the benefit of hindsight, but were there insurmountable blockages before that prevented the achievement of what the bill seeks to do now, or, given what you have said, Mr Boyle, about the complexities and other issues, is there a good reason why we are only doing this now, in 2025?
I think that, from what you have said so far, this is fairly straightforward. Mr Yeates does not agree with that, and certainly his board does not agree with that. Why are we looking at this now when we did not in the past?
Things have moved on during the past few years; there has been a bit of evolution. We took on the funding of graduate apprenticeships and half of foundation apprenticeships in 2021. When the European social fund ran out, we were able to step in and secure those two funds. Universities continue to deliver and grow their graduate apprenticeship offering, so we are already on that road. This is just the next step in completing that journey.
Damien Yeates, you led SDS during the merger in 2007 and 2008. Do you want to give us some examples of what you experienced during that merger and some of your concerns that history may repeat itself?
Detail on that was written up by Audit Scotland in its good practice guidance. Structural change of itself seldom brings the benefits that we think it will, but we certainly want to have a clear sense of the measurable benefits that we are going to deliver and be accountable for. We certainly want to know the cost, and we want to be able to express the cost benefits of all of the work. The rationale for structural change should be very compelling.
I led the merger of SDS back in 2007 and 2008, and it was a challenging exercise. It took about three years to get through the process. It cost the taxpayer a lot of money, and in effect, we are now heading into almost a demerger. It feels like we are not learning the lessons of the past. Structural change is not an end point. The end has got to be what it feels like for the individual and the business. If we cannot express that clearly, and if we cannot deliver that within the tight fiscal envelope that we have, it will be difficult.
On 8 April, Professor Graeme Roy, the chair of the Scottish Fiscal Commission, said that we are now not on a trajectory towards only a £10 billion deficit in public finances—we are on a trajectory towards a £14 billion deficit.
In SDS, every pound of public money is a prisoner. We have been running a transformation programme during the past four years, and our budget has gone from £243 million to £202 million. We have reduced our headcount by 18 per cent, we have reduced our property costs by 50 per cent and we have reduced most of our back-office costs by between 30 and 40 per cent. We are working incredibly hard to reduce those costs so that we can protect the investment in apprenticeships. It feels like we are putting all of that effort in and, because of one bill, we could lose £30 million in transition costs simply to move £100 million to another agency. Will doing that impact the workforce and the skills shortages that we have, and will it impact the crisis in higher education? I do not think so.
Thank you for the information that you have submitted in advance. I found it useful.
My first question is on foundation apprenticeships. They have played a key role not just in widening access to work-based learning but, in particular, for students and young people from socioeconomically disadvantaged backgrounds, and for others who might not otherwise have had a direct route into high-quality vocational pathways. In the evidence received by the committee, there have been concerns about how the new structure could manage the relationships between the organisations involved. Damien, could you set out the nature of SDS’s current relationship with schools in delivering foundation apprenticeships? What infrastructure and partnerships have you got, and what will be needed in the future?
10:45
SDS, with the support of the Scottish Government and the First Minister, launched foundation apprenticeship some years ago.
We took the model from the Swiss system; it would be worthwhile for the committee to get a view on that system. Typically, between 56 per cent and 60 per cent of young people in Switzerland start their senior phase as apprentices, which is quite remarkable, given that the country has a population of about 8 million. According to the Organisation for Economic Co-operation and Development, Switzerland produces the most gross value added of any economy among the OECD countries.
It was on a visit to Switzerland that we were wondering how we could infect the senior phase of school with a better appreciation for the world of work, with it being more than just an experience for which pupils would get an academic tariff. The foundation apprenticeships are benchmarked at Scottish credit and qualifications framework levels 4, 5 and 6, which are equivalent to senior phase qualifications.
SDS, through our career services, has annual partnership agreements with every school in Scotland—that is more than 360 schools. As the committee will know, we work intensively with industry through the Scottish Apprenticeship Advisory Board, the industry leadership groups and a range of local and regional economic partnerships. We have a rich network of employers, and we have terrific relationships with local authorities. We typically have greater demand, and a supply of places, for foundation apprenticeships.
The stand-out regional local authority is probably Aberdeenshire Council, which has the most remarkable programme in Scotland. Of the 2,500 foundation apprenticeships that we support, nearly 800 are delivered in Aberdeenshire annually, with a completion rate of more than 80 per cent. It is a phenomenal programme, but it requires effort every year. It involves a different group of students and employers each year, so we have to put a lot of effort and engagement into it, but it has been a highly successful part of what we deliver.
What can you say about some of the outcomes for the students who have gone through that programme?
The outcomes are phenomenal. At a basic level, it is daunting for a young person to choose a career path, and the foundation apprenticeship offers a low-risk opportunity for them to see whether they want to be a technician or do the accountancy framework, or do construction or whatever. They will then at least have substantive experience with an employer of what that might look like.
The foundation apprentices typically complete 90 per cent of the first year of an apprenticeship, so if they get into an apprenticeship after the FA, they accelerate through the learning.
At a soft skills level, there are testimonies about confidence building, ability to communicate and a better appreciation for the world of work. In addition, with regard to widening access, the scheme is phenomenal. It gives people an opportunity to try something out at much lower risk.
Beyond that, one of the lessons that we took from Switzerland was the social support that comes from people in the workplace who want to see young people succeed. The scheme there attracts mentors in workplace, who say, “Oh gosh, I remember when I was that age—how can we help them and move them on?” It is a phenomenal programme.
Thank you—it is helpful to put those comments on the record.
I have a question for Martin Boyle. What kind of relationships does the SFC currently have with local authorities and schools?
On foundation apprenticeships, our relationship is currently through the colleges—it is the colleges that have relationships with schools and local authorities. The colleges deliver at least half of the foundation apprenticeships in Scotland, and they engage schools, local authorities and others around the frameworks.
We are absolutely committed to FAs. As I said, we took them on when ESF funding ended. We did not get any funding for that; we had to embed the programme into the core funding that was already there, and we have continued to deliver those apprenticeships.
Thank you—I appreciate that.
I am sorry to do this, but it is important that we try to tease out this question. Damien, what are your views on that particular structure?
It was really tricky. The development of the innovation involving foundation apprenticeships was supported through European structural funds, so Brexit was a disaster in that respect. We needed to mainstream foundation apprenticeships sooner. A decision was taken that half the funding would be provided through the Funding Council and half through SDS, but I cannot see a reason for that. We could have continued with all the funding coming to SDS, with the integration of the apprenticeship family being maintained.
There is a risk in that regard. Local authorities are very anxious, because we have a direct relationship with them, and I know from our engagement with the Association of Directors of Education in Scotland and the Convention of Scottish Local Authorities that they are quite anxious, because they see such apprenticeships as a high-value pathway for pupils in the senior phase, particularly given the world that they face right now.
If the committee were interested in the outcomes from the different approaches, would we be able to access them?
Absolutely.
I appreciate that. Thank you.
I would like to go back to the convener’s initial line of questioning on the premise for the bill and the reform, which Damien Yeates and the SDS board, in essence, reject. However, in 2022, Audit Scotland published a scathing report on the lack of skills alignment. The report partly criticised the lack of leadership from the Scottish Government, but the stand-out criticism was of the inability of SDS and the SFC to work together. The report’s third conclusion was clear:
“Current arrangements are unlikely to achieve the ambitions for skills alignment at the pace required”.
Could you reflect on that Audit Scotland report? We are three years on from the report, so have the issues relating to communication and lack of consensus between SDS and the SFC been addressed?
I think that they have. Events have overtaken Audit Scotland’s report. The Funding Council and SDS, with the Scottish Government, have made tremendous progress on skills planning, which was, I think, the nub of the issue.
In any situation in which public funds are highly constrained, there are pressures that pull on those funds. That is healthy, because we always try to achieve balance in how funds are spent.
We are very close to an announcement—I think that it will be made in the coming weeks—on our revised approach to skills planning. There are three partners. When a pound lands with the Scottish Government, it has no attachments, but the Government’s priorities create the attachments for that pound. The new approach will position the Scottish Government as the lead organisation in defining the national priorities, and it will set those priorities for SDS and the Scottish Funding Council. The Funding Council will then commission provision through the colleges and universities, and SDS will commission provision through the apprenticeship programme.
As I said, in the next two or three weeks, there should be a formal announcement from the Scottish Government on the new arrangements that we have been working on for the past six or seven months, which are supported by the minister and his senior officials. The arrangements build on improvements that were made after the Audit Scotland report, so we were not in a standstill position.
I reassure the committee that there has been a lot of work in that area and that a lot of progress has been made. I am confident that there is now a much clearer understanding of where the policy priorities need to be set and how the agencies need to work together to deliver the Government’s priorities.
Martin Boyle might want to comment on that, too.
Before he does, I note that that is all very welcome, because the committee has, in the past, been critical of the Scottish Government’s lack of clear leadership and direction on the skills agenda but, as I said, that was only part of Audit Scotland’s criticism. The other part was about the lack of an effectively functioning relationship between SDS and the SFC, with poor communication, a lack of consensus and so on. Reaching consensus is obviously easier when both bodies receive the same ministerial direction. However, that aside—because it sounds as though the announcement in the next few weeks will provide a clear ministerial direction—have you addressed the issues that Audit Scotland raised about what was a dysfunctional relationship between the two bodies?
“Dysfunctional” is probably too strong a word. There was a difference of opinion in relation to the balance of spend.
Yes—that is fair.
There has been terrific engagement across both organisations in support of the skills planning work. We both seconded in staff, and they have worked as a cohesive team, so I am absolutely confident.
I also make the point that there is nothing like a financial crisis to create a real focus. We do not have time to be going in divergent directions. We have very specific challenges in front of us. I have a huge amount of respect for Martin Boyle and his team, who are working day and night on the situation at the University of Dundee, which the Funding Council continues to work incredibly hard to support. We have nothing but the utmost respect for the SFC and the work that it does.
Martin, what is your response to Audit Scotland’s reflections and the progress that has been made since then?
I cannot disagree with Damien at all. I do not recognise some of what Audit Scotland said at the time. Day to day, lots of my colleagues and lots of Damien’s colleagues work quite happily together on apprenticeships—graduate apprenticeships, foundation apprenticeships, modern apprenticeships and so on.
As Damien mentioned, once it has been delivered, the skills planning work could be a big game changer in how we ensure that the right skills are delivered. The work on that is being done by the Scottish Government, SDS and us, with others being brought in as required.
It is a great question, because it comes back to the convener’s question about what we are trying to fix. I think that the work on the skills planning methodology and what will, I hope, be announced in the coming weeks could be a substantive part of addressing the original challenge. In fact, the bill is now superseded by the events that Scotland is facing and the work that has been undertaken across Government and the two agencies.
Thank you. Unless anyone has anything else to add on that, I will ask just one more question, because I am conscious of the amount of time that I have already taken up.
Damien, you have touched on the issue of TUPE costs for staff. Given that what we are talking about will largely be a transfer from SDS to the SFC, do you feel that you have had clarity from ministers—I want to find out whether Martin Boyle feels the same way—on the operational arrangements for the transfer of staff and the expectations regarding costs, the TUPE element, terms and conditions and so on?
There is a lot happening, so I would not be hypercritical of anybody, but we are certainly at a point in time when a lot more work needs to be done. I think that we are all committed to doing that work. As things stand, the supporting evidence around the bill is very immature, and the same is true with regard to where we are with the development of an implementation plan, a risk assessment, an equality impact assessment and a cost benefit analysis.
We are at a point in time when there is still plenty of time to invest to get the evidence that we need and to get to a good position with regard to ensuring that committees such as this one have oversight of that. However, there has been very little detail so far.
Is there anything that could and should be in the bill that would offer further clarity in that respect? I also want to get Martin’s view on that. Obviously, things such as equality impact assessments should not be in legislation, but is there a lack of clarity in the bill on the specific issue of staff transfer?
I think that the bill is underdeveloped. I know that there is a balance to be struck between primary legislation and specifics but, at the moment, the bill is very high level. It simply enables a funding move, but what that will enable is very unclear. There is a time horizon of 10 years. From talking to businesses, I do not think that they can wait 10 years to get the people they need to drive the economic growth that they want to make. I was talking to Scottish Power Energy Networks, which is investing £25 billion in the grid. It is about to triple its workforce, but it cannot get workers. I do not think that it will cut the mustard to tell that company that it will take 10 years to work through the shifting of 3 per cent of the budget, and that we will work out what to do in due course.
I agree with Damien Yeates. We have to balance what is in the bill and the need not to tie our hands going forward, so that we have the opportunity to work through various issues at various times through a framework that comes from a much higher-level bill.
11:00
Are you perhaps looking for further clarity to come off the back of the bill in the form of secondary legislation? Should a lot of the clarity around the operational aspects of staffing come from ministers rather than being set out in legislation?
It is not for legislation; we need to get it from ministers. As Damien Yeates said, we are working on those aspects and discussing them. There is regular engagement on those issues.
The most credible report that I have seen recently on apprenticeships is from the OECD, which reviewed the Scottish apprenticeship programme and made some really valuable recommendations. The bill should take account of those recommendations, but I do not see that anywhere in the bill at the minute. That is an opportunity. There is a middle ground between having primary legislation that is very high level with absolutely no detail and having something specific.
Thanks very much, both. That is really useful.
It is interesting that you raise the OECD report, which I have seen. You have had meetings at ministerial level and, I presume, official level. In those meetings, have you asked why some of that report’s conclusions and deliberations have not been included in the bill?
Yes—the SDS board has consistently advocated for that. Members have a lot to contend with and get their heads round but, just so you are aware, I point out that the Scottish apprenticeship programme is the best-performing programme in the home nations by a distance. Our completion rates are at 76 per cent; in England, they were at 54 per cent in 2022-23. The figures do not bear comparison.
The OECD report was about taking us to the next level. It said that the Scottish programme is “remarkable” and that the innovations in foundation and graduate apprenticeships have created
“one of the most flexible apprenticeship programmes”
in Europe. However, the report said that the next steps are around ensuring that industry is central and plays an even more substantial role in the programme than it does now, and that the protections for apprentices and commitments from employers that you see in other countries should be enshrined in statute. In total, the report has about nine or 10 recommendations, which are absolutely worth considering and taking forward.
Our board is in a position in which funding is constrained. There are no two ways about it: there is no new money. More than that, our money’s purchasing power is reducing every year, because of wage inflation and so on. The untapped area that our SDS board looked at was that employers in Scotland annually invest £4.1 billion in workforce development. Across the UK, the figure is about £44 billion, which is based on a study that McKinsey did for the Confederation of British Industry. Much of the £4.1 billion investment is spent almost in spite of the £3.4 billion that we invest in post-school skills. The SDS board is saying, “Is there a way that we could empower industry to co-invest, particularly with colleges?”
Just now, the SFC and us are involved in a programme of work that is under way called workforce north. Simply put, the Highlands and Islands are looking at £100 billion-worth of investment coming into the region in the next 10 years. The region has the most pronounced workforce reduction of any in Scotland, so we have to get around the table and sort that out today.
Over the past three months, our chair has led a mission for the Deputy First Minister in the Highlands and Islands. We have worked with all the major employers, Cromarty green freeport, the local authority, Scottish and Southern Energy, Highlands and Islands Enterprise and the University of the Highlands and Islands, which culminated in a workforce summit at the Kingsmills in early April. We are seeing whether we can get more of the £4.1 billion that employers are investing and considering whether they could invest alongside colleges. The combination of that would expand our programmes in a way that we have not seen before.
For example, in Glasgow, BAE Systems spent £12 million building an engineering academy to de-risk the workforce supply. If we had matched that with public money, we could have built a regional engineering academy to supply engineers not just for BAE Systems but for the wider greater Glasgow area. Going forward, the real prize will be in rolling up our sleeves, engaging with industry and getting it to co-invest with us. A big push would be reinvigorating colleges to do more of what they were traditionally very good at, which was technical and vocational skills. In recent times, the policy shift has pushed more output towards higher education, but the opportunity is in reinvesting in the college network—and more of that money might come from the private sector.
Before I go to Jackie Dunbar, I want to know whether you have had any explanation from ministers or officials as to the reason for not supporting the recommendations in the OECD report. Is there anything that prevents them from taking on those recommendations? Has that topic been raised with the other panel members?
Not with me—no.
Not with me.
As I did with the first panel, I will ask a couple of questions about college student support. Some responses to the call for views raised concerns about the ability of the SAAS systems to cope with further student support responsibilities. My question is for Catherine Topley. How confident is SAAS that it can deliver not only the existing responsibilities but the new ones?
SAAS has a really complex landscape. We do not only deliver for universities; we also do nursing and dental bursaries, for example. The short answer is that SAAS is extremely confident, because our systems are already working on different programme lines, as I would call them, to cater to different student needs. We have the ability to take on additional programme lines with colleges, whether now or in future. We also have a fantastic team, which understands student needs and the college sector. Our team members engage with colleges, schools and universities, so we constantly do outreach, we understand what the needs are, and we constantly adapt our systems to ensure that they are fit for purpose for those needs. We are very confident.
Martin, what is the SFC doing to ensure that there will be no problems with the responsibilities that will be passed to SAAS?
We have been working with SAAS since day 1. Our teams are engaging with SAAS, and SAAS colleagues are learning how we deliver the student support system for FE students in colleges. We hope that that will be a seamless transition.
Our intention is to commence those responsibilities in March—sorry, not March. My team will be laughing at me at the back of the room, thinking that March would be far too soon. Our intention is to take budget responsibility from 2026 onwards. As we have said, the transition will take around a year; we will spend a full financial and academic year working hand in glove. Our teams are already working hand in glove on that—we have a plan, and we are engaging with colleges. We have spoken to a few colleges and provided them reassurance that nothing will change and that it will be a seamless transition. In other words, it will be an as-is change. However, we are also engaging with colleges to identify any quick wins—that is, anything that they would like us to look at and that we can do as part of the transition.
You have touched on the other question that I was going to ask. Concerns were also raised around the model of delivery for further education student support. Some responses said that colleges might have less flexibility in delivery. What are your views on that? How will the delivery of the support change?
As my colleague Martin Boyle said, we are doing a teach-in. It is a lift and shift approach—we will continue to pay colleges as they are currently paid by the SFC. In doing so, we will streamline the funding for students, so that it is in one place—that is the objective. Our objective is not to change funding but to ensure the streamlined delivery of the funding.
Over time, we want to ensure that, if there are opportunities for improvement, colleges reach in to us and we reach out to them to capture those. We would base our continual improvement programme on that process. However, we are certainly not looking to make any radical changes such as changing the allocations that colleges currently receive.
So you do not see any changes to the way in which colleges deliver.
We see none. We will not be taking the role that they currently have in the college environment. SAAS will be making the payments, just as the SFC does currently.
Martin, have you anything to add?
Colleges do a good job at the moment. The staff on the ground know the students and can ensure that support is targeted towards the right ones. As Catherine Topley said, that approach will continue, which we feel is important. Some college students come from difficult backgrounds, in particular those who experience financial hardship, so, for them, being able to engage locally with someone about funding is vital.
I want to move us on a little, to talk about financial sustainability and monitoring, on which the bill would introduce powers. I will start by setting the scene. Currently, about 84,000 young people in Scotland are not engaged in employment, education or training. More of them come from poorer areas than from other areas. Will the reforms that the bill proposes contribute meaningfully to addressing the immediate skills shortages that Scotland’s key sectors face?
From my perspective, if we were to put all the funding in one place it would give us an overview that would enable us to target money in the right places and towards the right people. Once the skills planning function is delivered, with all the funding in one place, we will have a much better idea of which skills are needed and where, which will enable us to target money to ensure that colleges, universities, private training providers and so on are all focused on delivering what students across Scotland need.
Colleges currently do a great job of getting people out of poverty or out of not being in education, employment or training. They give people chances to learn by taking short, sharp courses and to look for things that they might want to do. We want to ensure that colleges keep doing that and continue to inspire people and engage with them.
I will give an example from a reception that was held last week, which I know some members attended. I know that Mr Rennie was there—I think that he was the only person from the committee that I saw. We heard from a young lady called Meghan, who had had a really difficult background. She had been taken into care and later ended up at college. She had started doing an apprenticeship but had realised that she could go further at college so she did courses leading to an HNC and an HND. She wanted to work in residential childcare so that she could go back and do things better than they had been when she had been in care. She finished her college courses and will receive an honours degree this year. She spoke really well, not only about her experiences but about the importance to her of having her college’s support.
That leads us back to questions about student support, what colleges are for, whether they can deliver end-to-end care and look after people, in particular those with a background of being in care, and how they can contribute to widening access.
If the bill were to be passed and all the funding were to go to the SFC, how big a priority would apprenticeships be on the scale of your work more widely? We have touched on that aspect already, but I would like to hear about it in the context of the 84,000 young people who are not in education, employment or training.
We support all forms of post-school learning, education and training and we are committed to all forms of provision. We are already committed to graduate and foundation apprenticeships.
Going back to the skills planning work, we would have to ask where we would need to focus our energy and our resource. We would still be very committed to apprenticeships. We see the value of apprenticeships and what they deliver, and we also see the value of the work done by colleges and universities. We would have to take a wide view. I have heard many people saying that the Scottish Funding Council will not focus on apprenticeships, but we absolutely will do.
11:15
From your perspective, Damien, is the bill the solution to the skills shortages that we have just now?
Both your questions remain to be answered. The question about financial sustainability has not yet been answered and I do not think that it will be answered by spending £30 million to move £100 million. That just does not add up. It is a really pressing issue because we know the pressure on the university sector and I can imagine that it is probably replicated in the college sector, although I have not seen the annual report that the Funding Council may be due to publish soon on the financial sustainability of institutions.
I am going to come to that.
I do not think that we know the scale of that. I know that the Funding Council is putting a lot of effort into sustainability, particularly for the University of Dundee. The bill focuses on a 10-year horizon, but we do not have 10 years.
We have all the intelligence about skills shortages. We know exactly where the jobs are needed and where the investment is coming from. We need to get on with it and that must be done urgently. The committee might want to have a look at the workforce north mission, which represents an example of immediacy and urgency and of the need for industry to collaborate with the public sector on what I would call a generational opportunity. Never in our lifetime have we seen anything like £100 billion-worth of investment coming into the Highlands region. That could be a massive opportunity to repopulate, grow and develop the whole region for the benefit of Scotland, but the bill just does not speak to that.
You make an important point about the long-term sustainability of the sector.
This question is for Martin Boyle. The bill gives powers to the SFC to make recommendations, issue guidance and monitor the financial stability of the post-16 landscape. To what extent would that improve your ability to identify risk and could the proposals be further strengthened?
We already give a huge amount of advice and guidance. We collect a lot of data and evidence from colleges and universities and we engage with them all the time. In particular, we engage quarterly with universities and colleges on financial issues. We get reports from them, scrutinise them and are really focused on future financial sustainability. What is in the bill may put what we currently do into statute, but we are already all over that.
Is there anything that you think we could do in legislation that might, for example, have highlighted some of the concerns that we see across the sector at the moment, particularly in Dundee?
There is currently an independent review of what has happened at Dundee. I know that you have talked about Dundee a lot. The independent review will get to the bottom of what happened there and we will take on board any lessons learned from that.
Based on our discussions with universities, we are pretty sure that what happened at Dundee is a one-off, but we have to wait for the independent review. Once we get that, if there are any lessons that we could put into the bill, that would be useful, but, at the moment, I do not think that we could add anything to the bill that would have changed what happened there.
On the idea of Dundee being a one-off, the publication of the reports on the financial sustainability of colleges and universities has been delayed. They are normally due in January, so can you explain why the reports have been delayed and when they will be published?
We will publish those reports in the autumn. A couple of colleges delayed the publication of their accounts, which meant that we could not publish in January, so we decided to bring both reports out together and to publish them in the autumn. If we had published in March or April, the data would have been out of date. We will get much more up-to-date information in the coming weeks and that will inform our publication in the autumn, around September.
There obviously is significant interest in the financial sustainability of the sector, not least as part of what the bill might do, but also in general. I do not think that anyone can escape the concerns that have been raised around this.
Is there any indication that you could put at least some information in the public domain on the financial state of the sector, even though you might have been waiting for a couple of colleges to complete their accounts?
We wanted to publish the full report. We want to publish a report that covers all the colleges and universities, not just a subset of them. We publish at a sector level, so if some of those were to be left out, it might not show you the best picture.
Do you think that, with the new responsibilities on top of those current responsibilities, the SFC will be able to scrutinise the sector’s financial sustainability to the level that is required?
The short answer is yes. We will inherit—I am not sure whether that is the exact word—staff, who would move from SDS.
With regard to our new responsibilities, a whole team of people from SDS will come and do that work. That will not change how we currently support our universities, except that we might be able to do more because we will have a bigger staff base and we can focus that staff base on what is important at the time. We might focus more on apprenticeships or on colleges and universities. With more people, we have a better chance to focus on the right space.
My final question on this area is about the colleges. Colleges have said that they are concerned about some aspects of the current model for funding. In submissions on the bill, they have asked whether there will be a no-detriment principle in the way in which funding is distributed in the future. Are you considering that?
The Scottish Government has asked us to look at our funding model. It has evolved a lot over the past couple of years. The funding model evolves all the time because things change—training changes and the way that people learn changes. We do not want to put massive shocks into the system of how colleges are funded. If we make changes, we have to phase them in over two or three years. However, our funding comes from the Scottish Government, so it is up to the Government how things are done—the quantum of funding and how much is to go to colleges. However, we are committed to supporting colleges and to keeping them delivering the great work that they do.
Okay. Thank you.
Willie Rennie has some questions on the back of those points.
I am interested that you do not want to deliver massive shocks into the system at a time when you are transferring massive sums from one organisation to another, but I will leave that to one side.
Your colleagues spoke to the committee before about Dundee university. Our concern at that point was that they were not telling ministers the truth about the financial situation—or it might be better to say that they were not being frank with ministers about the dire situation in universities. Is it not a concern to you that, following that, we will not be publishing the financial sustainability report for our universities and colleges until months later? Might not that feed into our anxiety that you are not being frank with ministers?
We already share lots of information with Scottish Government ministers through our finance committee papers and other papers. At the time that the issue at the University of Dundee started, I was the SFC’s interim chief executive and I talked to the minister regularly. Nothing was kept from the minister—absolutely nothing. I told the minister everything that we knew, and we continue to do that. We deal with issues a lot, but we deal with them in private.
Why do you not publish that?
Publish the report?
Publish the stuff that you have told ministers.
A lot of it is published, but we talk to ministers privately. It is about policy decisions and policy development. We will publish our financial sustainability report, so it is not—
It will be months late.
That is because institutions were late in delivering their accounts and we wanted to wait for updated financial forecasts that will be bang up to date. We will not get old data that is out of date—we will get data that is absolutely current.
Frankly, our concern is that the system is not responding to the crisis, and not just in Dundee, because Dundee is not a one-off. I think that it has been subtly acknowledged that there is a wider problem with the sector, but our concern is that you are not helping to expose that wider problem by having a public debate. Your having had that private discussion with ministers means that we are not able—not just months delayed—to have that urgent debate about the future of our universities, which are under extreme stress.
Not just in Scotland, but across the United Kingdom and other places, universities are under extreme financial pressure because of how many students are going to university. Earlier, Professor Seaton said something about how variations in the numbers of students make a difference to the financial sustainability of universities. I do not know—
Do not worry; that is fine.
What was the predicted date of publication of the financial sustainability report?
Do you mean when it would originally have been published?
When were you planning to publish it, had those two colleges confirmed their accounts?
It is usually published some time around the end of January.
You are now saying that it will be September.
Yes.
Have the colleges signed off their accounts?
As far as I am aware, yes.
What is the reason for the delay from May to September?
We are about to get more financial forecasts from them that we use to build the reports.
Are you now going to take a year out? If you publish a financial sustainability report in September, will you also publish one next January?
There is no reason why we would not publish one next January if we have all the information to hand.
I just find it quite puzzling. You have set a bad precedent. If any college now drags their heels with signing off their accounts, you are basically saying that they can hold you to ransom and that nothing will get published until they have finished their accounts.
I do not think that is the case. There have been a few—
Mr Boyle, you have been very clear to the committee that the only reason that a report that is important for ministers and crucial for the Parliament and the committee, which scrutinises this area of policy in Scotland, has been delayed for nine months because two colleges had not signed off their accounts. Do you not think that, in future, colleges that do not sign off their accounts would see that as a means to delay the report further, given that that is the only reason that you are giving us for a nine-month delay?
I do not think that the colleges have any particular interest in delaying the reports. It is not as though they thought that they would delay the report. That is not the purpose of it. I understand that part of the reason why the reports were held up was the questions that Audit Scotland asked and the issues that it had.
So it is not just the colleges signing off their accounts late. Is Audit Scotland telling you not to publish?
No. Audit Scotland was part of the reason why the colleges were late. It was not just that colleges decided to be late.
Right, so Audit Scotland was part of the reason why colleges had not signed off their accounts in these two cases.
Yes.
They are now signed off.
As far as I am aware, yes.
You are trying to explain to me why, when you have all the details in May, the reports cannot be published until September, and why there is not a risk—I do not put it any stronger than “a risk”—that it will happen again in future years.
I am not trying to avoid the question, but it might be better if we write to give a better explanation of the issue and explain why we have done what we have done. We are trying to get to a place where we are giving committees, the public, ministers and so on access to the right information at the right time.
I am sorry, Mr Boyle, but getting a report in September that was due in January is not giving the committee the right information at the right time.
It will be much more up to date.
If you had published the report originally in January, the information that covers May to September would not have been included in January’s report, so it would not have been up-to-date at that point. I do not know why you cannot just publish it now.
I will go back and speak to my colleagues, and we will have a discussion about whether we should publish the report now.
That would certainly meet with my approval, although I cannot speak on behalf of the committee.
11:30
Have you had any intelligence about why there was a delay in the publication of the accounts of a couple of colleges? I think that you said that Audit Scotland was involved. Is there any other information that you can give us about that?
I am happy to include that in the written answer that I provide to the committee. I do not have information about that to hand.
In response to another question from Pam Duncan-Glancy, you said that you had read the reports that there were concerns that there would not be a focus on apprenticeships if the transfer to the Funding Council goes ahead but that that will not be the case. Given that you know that there are concerns about that, although we take you at your word, we need more than that. What is your evidence that there will not be a lack of focus on apprenticeships in future, given that you know that that is a concern of a number of people outwith the committee?
It would be hard to provide hard evidence—
In fairness, that is why I asked the question. It is useful that you have told us that it is not the case that there will not be a focus on apprenticeships—that is now on the record, and it will be in the Official Report—but given that you know that people are worried about the issue, what substantial evidence can you provide as an example of why people should not worry about that? How can you confirm to people that the move from SDS to the SFC will not result in any dilution in the focus on apprenticeships?
I can mention a number of things in that regard. As I said, we inherited foundation apprenticeships and graduate apprenticeships a few years ago. Graduate apprenticeships have grown over the past few years. Universities such as Glasgow Caledonian University have doubled the number of graduate apprenticeships, and they want to provide more. We have recently worked with various colleagues to develop a new graduate apprenticeship framework in operating theatre practice, where there was seen to be a massive skills gap issue. We have delivered that.
In the past few years, we have pushed forward on graduate apprenticeships and foundation apprenticeships, so—
Despite knowing all that and knowing the Funding Council’s record in achieving that, people are still worried that, when you take on the proposed extra responsibility, there will not be the same focus on apprenticeships. That is what I am trying to get at. Even with your past record, people are still concerned about that issue.
From what I have read in Official Reports of previous committee meetings or in people’s submissions, many of the comments have been along the lines of, “The Funding Council’s focused on universities and colleges, not on apprenticeships, so it will continue to have that focus.”
I do not see it that way. We are bringing two organisations together to create a new organisation that will deliver the full range of university, college and apprenticeship provision, and our focus will be on all three. We will have a whole new culture, structure and staff base. We will bring in many people who have years of experience of working on apprenticeships at SDS. That will continue—there is no reason for it not to continue.
I want to pursue the subject of universities a little more. You talked about having discussions with universities, and you also talked about scrutiny. The words “discussions” and “scrutiny” strike me as being slightly different. Discussions involve sitting around the table and having a chat about things, whereas scrutiny is a much more proactive process that involves going into places and looking at things. Will you say a bit more about your present relationship with universities and colleges and whether you think that that might change in future?
We have discussions, and we also carry out scrutiny. With regard to scrutiny, we get lots of information from colleges and universities on a variety of timescales, whether monthly, quarterly or annually. We have people whose job it is to scrutinise that information, to look for issues and to ensure that the rules—including the Scottish public finance manual rules—are being followed.
We also have an outcomes framework, which we discuss with universities on a quarterly basis. We talk about risks, financial sustainability and their current outlook. As part of that engagement, we discuss issues not only with our part of the funding system but with the whole system. We talk about international students for example. Indeed, we talk about any issues that universities or colleges have, and we use that information to engage with our board or with ministers on what issues those institutions are experiencing. There are two parts to that.
There are many other discussions. We talk to Universities Scotland and Colleges Scotland, we meet the unions and we have various forums where we can go and engage on issues. We also have a scrutiny role and are very much ensuring that the sector will continue to thrive.
The University of Dundee has been mentioned today. The committee has discussed the issues there. When did you pick up on the serious problems at Dundee?
I go back to my previous answer. There is an on-going review into what happened at Dundee.
I am not asking what happened; I am asking when you picked up that there was a serious problem.
We picked that up when it started to emerge from the senior team at Dundee and they informed us.
I think that that was around November, which means that, despite all the scrutiny and discussion, you had not picked up on the problem any more quickly than the university court. Is that correct?
Yes.
Okay.
As I understand it, a lot of what you have been doing falls under your normal guidance practice, some of which will be put into legislation in future. Will that make any difference, or is it just a case of formalising what is already happening?
It just formalises what happens already.
Mr Yeates, you have mentioned the figure of £30 million umpteen times already. Am I right in thinking that a lot of that is to do with pensions? I know that the Finance and Public Administration Committee, of which Mr Greer and I are also members, will be looking at that in more detail, but the issue has been mentioned so I would like to touch on it a little. Will you clarify where that big figure comes from?
It comes from the TUPE obligations. As we understand it, there would be a TUPE transfer of staff from SDS to the Scottish Funding Council. There would be a number of elements to the transition costs and we could write to the committee about those.
Specifically on pensions, the civil service pension is much more generous than the SDS one, which leads to two effects. There is a requirement to pay into the civil service pension in order to allow staff from SDS to transfer across. All the staff who are in scope are members of the local government pension scheme and it is our view that 100 per cent of those staff would choose to transfer because they would have to pay less into the civil service pension scheme, where the benefits are greater.
Is it the case that those staff are in a poorer scheme and would be moving to a better one, which means that there would be more costs in future? Is there also a backdating element?
Actuarial assessments show that a pension plan receiving new entrants typically requires an up-front payment, so that is where the vast majority of the cost would come from. Individuals who transfers would effectively attract a significant payment in order to be admitted to the civil service scheme.
Would they not be admitted as if they were new employees starting on that date?
No. Their funds would transfer from the local government pension scheme into the civil service one and the scheme would then require an additional payment to cover the risks that they bring in.
If someone had worked for 10 years in SDS, would that be treated as if they had worked for the Funding Council for 10 years?
Yes; they would effectively have to buy those benefits. It is a complex area to assess and manage.
I accept that.
There is also a secondary benefit, which is that the running costs for the pensions of those staff who have transferred from SDS would be between £2.3 million and £2.4 million more going forward than if they were in SDS.
I will leave that for my colleagues on the finance committee to dig into.
My next question is for all of you. One argument in favour of the bill is that it would simplify things by putting everything under one umbrella, which might help us to align the tertiary education system with the national economic and social goals. The need for investment in the highlands has been mentioned. This is a general question, but would simplifying things mean that we could take a much more joined-up approach that could be tied in with the national economic and social goals, the national performance framework and all those things? Would that be easier?
I think that it would. It would give us an opportunity to take a view across the whole piece and ensure that we are targeting funding and resources to where they are needed.
Okay. Ms Topley, I realise that I have not asked you any questions. Do you want to comment on that? Would that give us a more joined-up approach?
Yes, it would. I will give you some context. Student funding has gone from £441 million to £912 million since 2006. The ability to put funding in one place rather than across several places would allow us to look at things with a wider perspective to ensure that we are targeting that funding appropriately.
Mr Yeates, if it is all more joined up, surely we are going to boost the Highlands and Islands more.
It beggars belief, does is it not? In a sense, the £2.2 billion is already joined up—it is sitting in one place. What is happening today and tomorrow to ensure that that will align? As we have heard, the reality is that there is severe pressure on that budget to sustain what we already have.
I can reassure the committee that the £100 million that is spent on apprenticeships is absolutely aligned with economic need and is absolutely driven by the key sectors in the economy.
The challenges that we have with the apprenticeship programme are not to do with the administration of what we have but to do with what we cannot fund. There has always been a sense, which the committee and the Parliament have shared, that young people might not be aware of the benefits of or that they do not understand the opportunities for apprenticeships. However, 60 to 80 young people apply for every apprenticeship place, and demand is upwards of 40,000 places from business. The £100 million is like the loaves and fishes. We cannot meet current demand.
We can fund 25,500 apprenticeships annually. We have been able to protect that number because of the steps that we have taken through our transform 27 programme, including by reducing our headcount by 18 per cent. The overall turnover of the business is down from £243 million to £202 million, in order to protect that £100 million on apprenticeships. However, that amount of funding does not deliver the scale of what industry wants or and what young people and others who want to undertake an apprenticeship—
Would the counter argument not be that, if it is all under one umbrella, and we have, for example, young people doing university courses that do not lead anywhere, the SFC would have the ability to switch some of the money into apprenticeships? In that way, it could be a better thing for apprentices.
It could be, but would you pay the money to achieve that when it is all under the same umbrella? It is all under the umbrella of the Scottish Government at the minute, and this is just about directing where that money will go.
Three interactions does not represent complexity to me. It is very easy for the Government to say, “We hold the pounds; the priorities are X, Y and Z; and therefore we commission the right agencies to do the right things.”
There is a future focus to this. Much of what we need to do by way of reform is to work out how we engage industry to co-invest in workforce development at a rate and pace that it has never had before. The prize is achieving that. Simply moving money from SDS to SFC will not achieve that. It requires a lot of effort to engage and facilitate that.
I am not arguing with that. I just feel that your evidence today and your paper are designed to undermine the bill and to paint it as being as awful as it possibly can be. For example, your submission says:
“we believe that the timelines for current reform means that any benefits or unintended consequences of this programme will not be understood for a decade.”
Surely that is overstating the case.
That is what is described in the bill. That is what the board found astounding—that it was presented that it would take 10 years to deliver the benefits—
It says “we believe”, which suggests that it is your view.
The SDS board has presented that view. The view is based on advice from the Government about the timeframe for the benefits realisation. The submission from the board is positive, in the sense that it is focused on economic growth, on unlocking £230 billion and on protecting our high-value universities sector. Those are the pressing issues. Will this bill deliver benefits for those opportunities and challenges? That is the question.
11:45
Mr Yeates, the Withers report was pretty scathing about the SDS. I will give you a few snatches of the commentary. It refers to “competing narratives”, “duplication”, “lack of clarity”,
“lack of leadership and effective governance”,
and “harmful, false division”. A particularly critical bit is the comment that the SDS
“doesn’t always appear that it makes decisions or demonstrates behaviours which are focused first on public service delivery or the needs of learners. This dynamic is acting as a blocker for partnership working, joined-up thinking and delivery across the public sector.”
What is your response?
The response from the SDS board was very clear. The board had a number of engagements with James Withers, who told the board that his report was opinion-led. He did not take any evidence. To be fair to James, he said at the outset of undertaking the report that he would not take account of performance or finances. His report is an opinion, but it does not bear scrutiny against the evidence.
When you look at what the organisation does and what it achieves, the scale of the partnerships that it has and how it goes about its business, it is ironic that, in the year that James published his opinion piece, the European Foundation for Quality Management awarded SDS the 7-star award for excellence. It was the first public body in the UK to get a 7-star award. The EFQM is evidence-led.
The board felt very frustrated at how the Withers report came to be. The board presented to the Scottish Government the opportunity to use UK Cabinet Office methodology, which was used in the Taylor review and is an independent, evidence-led approach.
As I said, to be fair to James, he absolutely accepts that the Withers review is an opinion piece. It is his opinion.
That is pretty dismissive of a Government-sanctioned report that has been embraced by ministers and has been implemented in legislation. Can you really call it an opinion piece?
That is what it is. If you look at the evidence that was submitted and review all the submissions, very few of the submissions to the report were brought into the report.
You do not accept any of the quotations that I have read out.
Absolutely not. I do not recognise them.
Okay.
Mr Greer made a point earlier about the Audit Scotland report—which, again, was very scathing. Do you think that that is not relevant any more?
The Audit Scotland report was a very specific and technical piece of work, which required two agencies to engage with the Government on a range of data sets. Since the Audit Scotland report was published, the two agencies and the Government have got together to work more intensively on how to drive out the differences. I expect that, in the next two or three weeks, there will be an announcement from the Government on the way forward and on the strategic direction. That speaks to the positive and constructive engagement that goes on.
What I hear from some employers and other people is that you are quite a difficult organisation to deal with.
We work incredibly closely with the Scottish Apprenticeship Advisory Board, which represents industry. We work with the industry leadership groups. More than 11,000 businesses support apprenticeships, year on year. The programme has grown from 9,500 apprenticeships in 2010 to 25,000 apprenticeships. That would hardly be achieved by an organisation that is difficult to work with.
If you look at the ```, you will see the turn-out of employers who work with MSPs and others to extol the virtues of the programme. The range of partnerships and engagements is second to none.
I admire your certainty but, as you might imagine, we have doubts. We have differing reports from various people whom we respect because we have dealt with them in other spheres, and they all say broadly similar things. However, you are certain that you are fine.
What I would say is that I have evidence. Opinion is opinion—we can all lead with opinion. We undertake extensive surveys across apprentices and businesses, both quarterly and annually, and we constantly listen to what we are being told. What you are saying to me does not resonate with what I hear.
You can see why we have a problem. Authoritative people, whom we respect, are telling us one thing, but you are telling us another—there is no coming together at all.
Again, I think that what you have heard so far are opinions.
Those people have practical, tangible experience of your organisation, and they are telling me the opposite of what you have said.
Beyond today’s meeting, I would be happy to sit down and understand any of those opinions. I am very keen to follow up any issues with the committee. If we could learn anything from that, I would absolutely take it on board.
We have the bill to consider, though.
Yes, but, up to this point, I have not had any engagement from you on that.
Okay. I will come to my question for SAAS in a minute, but first of all I want to turn to the Scottish Funding Council. You say that you will prioritise apprenticeships, but let us consider the power that universities—and, to a lesser extent, colleges—hold versus that of the individuals and smaller companies who benefit from apprenticeships, and let us also compare the scale of the funding. If there were a crisis in some part of the other areas for which you are responsible—in other words, colleges or universities—you would surely be under enormous pressure to take funding from apprenticeships to plug that hole. Knowing the balance of power across the various areas that you fund, you cannot tell me that apprenticeships will not be vulnerable if there are problems elsewhere.
I just do not see that happening.
You are saying that you just do not recognise that power imbalance.
I recognise your view that colleges and universities are in a strong position, but the bill provides that we will have an apprenticeship committee as part of our board. That will be influential. Colleagues have already mentioned the skill sets of the various people who sit on our board. We do not currently have a college or university committee.
Yes, but you are all about colleges and universities.
Yes, but we will have a specific apprenticeship one.
We also get a clear letter of guidance from Government, as does SDS, which will say, for example, “We want you to deliver 25,500 apprentices.” If we are told to deliver a certain number of apprenticeships, that is what we will do. We might even deliver more.
Again, you can understand our concern. Let us imagine that you put back in a relatively small amount of money—say, 50 per cent of the apprenticeship funding will be put back in with the remaining 50 per cent. It is not quite the 3 per cent that you mentioned, Mr Yeates, but we will take that. You can see, then, how the apprenticeship aspect might be dwarfed by the rest of the sector and how it might be possible to siphon off money elsewhere when the pressure is on.
We should also remember that colleges already fund a lot of apprenticeships; our college funding pays for many of them. That funding is not being squeezed to cover other things—it is still all being spent. We will deliver what we have been told to deliver.
Who within the Scottish Funding Council will be in charge of the apprenticeships programme? The chief executive who is currently responsible spends all his time focusing on apprenticeships. When matters are transferred to the SFC, will the chief executive there, with all her authority, power and influence, be in charge of them?
She is the accountable officer, so she will ultimately be responsible for them.
What proportion of her time will she devote to apprenticeships? Surely you must have an idea of how she will divide her time in relation to an issue that is so important for the country, albeit that it involves a relatively small amount of funding.
We have a chief executive and a team, and we are going to take on a number of staff. Various figures have been quoted, and the number has still to be determined, but it will be a huge amount of staff. We will have massive support for apprenticeships in the organisation. Moreover, we will be advising the chief executive, who will focus her time on the current issues and on where it is needed.
If there is a fire or a crisis in apprenticeships and, at the same time, another university gets into great difficulty, where will the chief executive spend her time?
Seriously, you would need to ask her. She is—
You are here to represent the Funding Council. Surely you must have discussed those things.
I do not think that we are far enough down the road to comment on structures, other than to say that we will get more staff. I cannot say how the chief executive will spend a third, or whatever, of her time—I would just be making it up.
You have heard Mr Yeates say several times that the transition cost is £30 million, which is much more than what the Government is saying the cost is. Why have you not challenged that figure? Do you agree with the £30 million?
Today is the first time that I have heard that figure, but—
Again, you are taking this on. They are going to be your costs.
Yes, and those are discussions that we still have to have.
You still do not know what the figure is, but surely you must know whether or not Mr Yeates is right. You will have seen his evidence paper. All of this is making me believe that you are not ready for this. There is so much—
We have already had this discussion. We do not yet know exactly what is in scope. We are trying to engage with SDS and the Scottish Government to get a sense of what is in scope and we are still having those discussions. Once that is done, we will have a much clearer idea from working with SDS of what is in scope and what the costs are. I have been told that the Government got all the costs from each organisation.
Okay. I will move on to SAAS. Earlier, Professor Seaton made a point about the tuition funding going to SAAS, as it is basically teaching funding. Is that not right? Tell me why you disagree with him.
I disagree, because the funding goes with the student. The SFC does not fund all students at all colleges and universities, because there is a mixed bag. If you will remember, I said earlier that, if you were a student 20 years ago, all you were was a student; however, that is not the landscape that we have in Scotland any more. Therefore, the tuition fee is for the student, not for the university per se. Yes, it supports the student, but the student can transfer, and they can also have fees from SAAS that the SFC will not know about. Placing the funding for the student with SAAS means that it is all in one place, and we can then ensure that all the payments are made to the universities and colleges as necessary. That would be my view.
Are you satisfied with that, Mr Boyle?
I am satisfied with that answer. In our initial response to the consultation, we said that it would be useful to bring all university funding together. We would see that as including the tuition fee, but I understand what Catherine Topley is saying, too. It might make things simpler if it were all in one place.
The university tuition fee has been £1,820 since 2007—it has not changed. Take the money and roll it into the funding for universities, and we can move on. It takes some of the bureaucracy away from universities and from SAAS. I do accept, though, that not everyone pays.
It would also be an opportunity for people to pay for some of their tuition. Moving forward, we would have to have that discussion and engage with the question of how we ensured that someone who had already been to university paid a contribution their second, third or whatever time around. After all, many people do more than one degree.
You have taught me something today, Mr Yeates. Any time I see an independent report that I do not agree with, I will say that it is an opinion piece. That will be my defence, and I hope that my colleagues will back me up when I use it.
James Withers has said:
“The skills system is not fit for the substantially different future approaching us. We need a radical rethink or the job opportunities that arise from a changing economy risk being lost; a repeat of the 1980s.”
That is quite damning, and I know, too, that his report backs the merging of SFC and SDS. Surely that would be a way forward and would achieve what all of us want, which is to ensure that we give people opportunities to get jobs. When I asked a question about that earlier, I was politely told that it was an old-fashioned ideal that apprenticeships were the big thing, and that there is now greater scope in the educational landscape to find ways of delivering that sort of thing. Is that not what this is trying to do?
Again, I thank you for teaching me that lesson, Mr Yeates—that is, simply to diss every single report that comes in with that argument—but surely you take on board something of what Mr Withers has said.
12:00
The outlook for public finances in Scotland is hugely challenging. Coupled with the scale of the generational investment that we have coming to Scotland, we are being presented with an enormous opportunity and challenge at the same time. You will not hear from the SDS board that things need to be the same—that is absolutely not the case.
But that is what we are hearing from you today—a very strong argument for things remaining the same.
No, I do not think so. The SDS board’s submission talks about the need for an urgent response to grow Scotland’s workforce. We need a rapid expansion of technical and vocational education to meet the jobs that, as you have hinted, are coming down the road at a pace and scale that we have never seen before. If you speak to the utility companies about the investments that they are making, you will see that this needs to happen soon.
Things will not be fixed by the investment that the Scottish Government is putting into the system at the minute. That will have to happen through deep collaboration and co-investment between employers and the public money that is available, and it needs to coalesce around the priorities that are straight in front of us, which are about how we grow the workforce in order to unlock that economic ambition.
Among the recommendations that we make in our submission is the need to rebalance policy and to ensure that the percentage of people progressing to higher education is rebalanced towards a growth in technical and vocational education. We also recommend that we engage industry and employers much more substantially in supporting and directing the system, so that more of what we deliver in technical and vocational education is industry led. There is also an ask of industry to co-invest—that is, to invest in the colleges, to invest through additional revenue streams and to invest in potentially seconding lecturers into colleges.
This is a national endeavour. The SDS board submission does not so much diss the bill as ask what we need to do today and tomorrow to get to a place where we can guarantee that we will have the workforce to drive that economic growth. The most pronounced part in that respect is in the Highland region.
But one would argue that, if you streamlined the organisation and had just one organisation doing the delivery, you would still be able to do this. The report came to that conclusion.
I guess that that is the point of contention. The work that SDS and its partners have put into the Highlands and Islands workforce north mission is nothing to do with shifting money. It is about intensive collaboration with industry and then getting agreements to ensure that flexibility on provision aligns with that growth in technical—
I do not doubt the skill of the people who work for SDS for one minute, but most of that talent will be transferred over to individual—
No. I guess that that is partly the challenge. This is taking a component of SDS—it is not taking all of SDS. The employer engagement team, the regional skills team and the careers teams are not transferring across. The integrated nature of what SDS does and its deep engagement with industry represent an opportunity when it comes to reform.
Equally, we have heard today about similar connections with the SFC and other organisations, and the Withers report expressed doubt that SDS was engaging to the level that it should be.
If all of that is true, why do we have the level of skill shortages that we have today? Given the extrapolations that highlight the need for 1.1 million workers, we would still have to be doing something, even if we did not have the skill shortages that we have today. More of the same will not take us to where we need to get to.
So the proposal is not the same.
It is simply about moving money.
I think that we will agree to differ.
Mr Boyle, I want to follow up a couple of your answers to Willie Rennie. Let me see whether I have got this right. You do not agree or disagree with the £30 million transition cost that Skills Development Scotland believes that the bill would involve, but are you honestly saying that you have come to the committee as a representative of the Scottish Funding Council without knowing what the cost of taking on the proposed new responsibilities will be?
I am sorry—I did not quite hear all of the question. There was some background noise. I think that you said—
I will say it again. You have neither agreed nor disagreed with the £30 million figure that SDS has suggested will be the transition cost, but surely you have not come to the committee that is scrutinising the bill to say that the Scottish Funding Council does not know what the cost of taking on the proposed extra responsibilities will be.
As I have said, we have not yet had that engagement with SDS to enable us to clarify that. The Scottish Government—
I am sorry, Mr Boyle, but you are appearing before a parliamentary committee whose job it is to scrutinise the bill. This is our first evidence session on the bill. You prepare for these sessions. You said earlier that you were the interim chief executive of the Scottish Funding Council; I presume that people in that organisation told you that you would be asked questions about this, that and the other, and that one of them would be about the cost of the bill—that is, how much it will cost, if the bill is put into law, to transfer people across from SDS and for the SFC to take on the responsibilities in question. As a representative of the Scottish Funding Council, which is an agency of the Scottish Government, are you saying that you have no clue whatsoever of the cost of the proposed legislation, if it is passed?
We still do not know how many—
Is that a yes? You have no idea of what the cost will be.
The blunt answer is yes. Sorry—I want to make sure that I answer the question right. I do not know exactly what the cost will be, because we have not yet engaged with SDS on how many people will come to the SFC, what the numbers will be and what will be transferred.
But you know that SDS has done that work, because it is saying that the cost will be £30 million. You know that.
Well, I know that now.
Yes, but that is not a secret—that has not been revealed by Mr Yeates only today. Did the SFC did not scrutinise that figure?
I have not seen that figure.
Is it the case that no one prepared you for this session by saying—given that you were to be on a panel with SDS—“You might hear that SDS believes that the cost will be £30 million. Here’s how you should respond to that”?
Until we know exactly what will be transferred, we cannot know.
So are you saying that SDS plucked that figure out of the air? Can it not know?
There are different views on the TUPE costs. Given all the different costs, it is an exceptionally complex picture. Until we know exactly what is going on, how can we—
But because it is such a complex picture, the committee needs to be able to scrutinise it. I feel that you have come to this meeting ill prepared to allow us to challenge and scrutinise the Funding Council’s response to the proposed legislation. The question about funding is a basic one that is asked by every parliamentary committee. Frankly, I am shocked that the SFC has been unable to prepare you to answer questions about the financial implications of the bill.
We have prepared. The answer is that, until we engage with our colleagues at SDS—
When will you engage with SDS—when, as parliamentarians, we pass the bill?
We would engage tomorrow.
You say that you would do it tomorrow, but why did you not engage with SDS yesterday? Is SDS refusing to engage with you?
To be fair to Martin, the scope of what might happen could be determined by the bill, which members could require to be amended.
Of course.
So there is—
I am sorry, Mr Yeates, but we need to watch the time. The committee is currently considering a bill—the Education (Scotland) Bill—big amendments to which could be made this evening that would change how much that bill will cost.
However, SDS has given us a ballpark figure for the cost of the Tertiary Education and Training (Funding and Governance) (Scotland) Bill—it has said that it will cost £30 million. Mr Boyle, the fact that you have not been able to provide even a rough calculation of what you think that the bill will cost is something that I would like you to take back to the Funding Council.
We have tried to engage with SDS, but SDS wants to wait—Damien should answer on this, rather than me—until it gets more clarity from the Scottish Government on what is in scope and what is not in scope. We have tried to engage on many occasions, but we cannot scrutinise a ballpark figure. I cannot turn up here and say, “The cost is going to be between this and that”, unless we know exactly—
Yes, you can, because that is what all other witnesses do. For example, when we have the Scottish Government in front of us, it will give us ballpark low and high figures. That is then scrutinised by the Finance and Public Administration Committee, which some members of this committee are on. That is exactly what witnesses do, bill after bill, time after time.
We have to make progress. Also in response to Willie Rennie, you said that you did not accept that there could be pressures between funding for university and colleges and funding for apprenticeships. It is only a few months since the Funding Council found an additional £10 million for the University of Dundee. There was a Government announcement in the chamber that there would be £15 million and that went up to £25 million, £22 million of which went to Dundee university. That was its request. The SFC was able to find £10 million for that. How can you guarantee that there will not be similar requests in the future that will mean that the SFC has to find sums of money, and that those sums of money will not come from apprenticeships?
The money for universities comes from the university budget.
No. This was funding that the SFC had not spent—that is what we were told when we had the SFC’s director of finance in front of us. We were told that it was a general underspend that would have been returned to the Scottish Government. What if there is a general underspend in the apprenticeship budget and there is another call for £10 million for universities, as we have just had for Dundee? Are you saying that, even if you have not spent all your money on apprenticeships, you will not provide that money to struggling universities or colleges?
There would be so many processes to go through to make that happen.
So it could happen.
I cannot see it happening.
If the SFC has to return money to the Scottish Government, which would have been the case with the £10 million that it then gave to Dundee university recently, why will things be any different if some of that money comes from an underspend in apprenticeships?
If we had an underspend on apprenticeships—which I cannot see us ever having—that money would be returned to the Scottish Government. We do not have the ability to spend it on universities.
Well, you do, because you have spent a £10 million underspend on one university just this year. This is not hypothetical—it is exactly what the Funding Council has done in the past couple of months.
I do not really want to open this up, but we have a budget for universities and colleges and SDS gets a budget for apprenticeships. That is voted on by the Parliament. The Parliament decides—
You are saying that there will never be any—
We cannot swap that money around. We are not allowed to swap that money around.
Why would you not want to get into that?
Get into what?
You said that you did not want to get into that. Why would you not?
I did not want to go into so much detail. It is more about the detail of how the Parliament works.
I am not particularly reassured that, if there were a repeat of what we have seen at Dundee university and there were a rallying call for funding to save an institution from going under, and if the SFC had not spent all of its money on apprenticeships, that money would not then go towards a struggling institution, as it did recently.
The money for Dundee came from the university sector—it came from the university budget.
It came from the Scottish Funding Council’s underspend that would have gone back to the Scottish Government.
It was from the SFC underspend on universities.
I want to go back to the question about annual reporting on the financial sustainability of the higher education sector. For clarification, is it correct that you have received the information about new financial forecasts that you have been awaiting?
I do not think that we have received it yet. We will receive it very soon. That is why, if we published the financial sustainability reports now, they would be out of date.
I raised the matter with the minister during education portfolio questions on 24 April, and the letter that he sent to me on 30 April said that the analysis would be received in June, which would then allow you to update your information. Is that still—
Yes.
So “very soon” is June.
Yes—next month.
Why would it then take until September for the reports to be published? That is the question that most of us would ask. Once you have received those forecasts, the work will have been done on that.
I say again that we will come back to the committee with an answer on that.
There are 19 higher education institutions and 24 colleges, and we have to scrutinise them all. We do a lot of work on that and we might have questions. We go back to the colleges and universities with those questions, and that happens over the summer period, too. To make sure that we deliver, I would say that that will take until September, but I am more than happy to go back and get more clarity on that and to make sure that we meet the needs of the committee.
12:15
I fully understand your internal processes. However, we are currently in a very different space, with lots of different organisations, including Edinburgh university here in my region, coming forward with major cuts to their institutions and job losses. That information needs to get to us almost live so that politicians and all of us can scrutinise that situation.
I want to move on to governance questions. Responses to the call for views highlighted a lack of clarity on the proposals on board reappointments, on the skills and experience of council members, and on co-opting provisions. Can you outline further details around that and around the setting up of that, which you have said is planned?
Around what the—
The apprenticeship board.
The bill says that we will have an apprenticeship committee. We already have a skills committee, which looks after a range of skills but also foundation apprenticeships and graduate apprenticeships. How an apprenticeship committee would operate is still a matter for agreement, but it would have to take on all the good stuff that currently goes on. Can we improve it? Currently, the Scottish Apprenticeship Advisory Board looks after apprenticeships. Could we have an apprenticeship committee that includes employers and other people?
We looked across the whole skills remit, which includes the skills that come out of university, college and apprenticeships, and the high-level skills that this country really needs. It cannot all be about apprenticeships. Professor Sir Anton Muscatelli has said that if the Scottish Government wants to deliver its economic strategy, we need more high-level graduates in the economy. We need more apprenticeships and more high-level graduates. The issue is how we get a committee together that looks at all of that in the round and that is able to advise Government on all of it at once and to say to Government, “We need more money here and more money here.” It is not a case of moving some money from one place to another. We need more money to deliver the skills that the economy needs.
The responses to our call for views highlighted concerns around a lack of representation of employers in industry. Have you read those responses? What is your take on how you would ensure that that works?
We already engage in a number of spaces with employers and industry. Our board also includes employers and people who have been working in industry; it is not a board full of people who are academics. Earlier in the meeting, Clare Reid said that she would meet us soon. We have meetings arranged with a number of bodies, including the Scottish Training Federation, Prosper and some others, to have an initial discussion about how we might move ahead on that.
We are involved in lots of things. We are involved in the Highlands and Islands initiative that Damien Yeates has talked about a couple of times. We are involved in many other initiatives around Scotland, and so are our colleges and universities. Our colleges engage with employers every day. That is their job—to meet the needs of the local economy and the local population. They are out there talking to employers, local government and so on.
I will bring in Ms Topley in relation to the concerns about the winding up of SAAB, which I also raised with the previous panel. The bill does not provide detail on what will replace it; that is all up for discussion. I have concerns about that. A lot of people who submitted evidence to the committee said that we could lose a lot of good value by doing that. What are your views on the questions that I have put? Is there another way of preserving what has been going on and improving the provision of advice? We are all acutely aware of what is needed in relation to the skills shortages, but the bill will not necessarily be the answer to that problem—it might simply shift organisational responsibility.
Professor Seaton said it best: the bill allows for the change in the law. It is a very instrumental piece of work, but the devil is in the detail. From my perspective, for this to be successful, it is really important—in fact, it is critical—that, in relation to what Damien Yeates has in place and what the SFC will inherit, there is a complementary journey that ensures that there is a transition of knowledge, information and approach, but which also takes into account the views that others have represented of what is currently missing.
We do not want to replicate what is currently happening if there are gaps in it, and it is clear that there are. We want to build on what is good and ensure that we take that part forward. I am not sure that we need legislation to do that; we need assurance that the Government, the minister and the two agencies have heard the concerns and that they will approach the new SAAB, whatever that looks like, in a way that ensures that all the views have been captured. The terms of reference for that will be fundamental.
You said that you have been at SAAS for two and a half years. Do you fear that things will be lost in translation? We are hearing that none of this work is happening. I am not sure that I have heard a commitment on where the responsibility will sit—will it sit with the board or with a subsection of the board? You are doing a lot of important work, which could potentially be lost.
There is also the 10-year projection—we do not have time to wait 10 years for the system to deliver for our economy. It should already be delivering.
Some of the really pertinent issues that the Government faces are always going to be trailing, whether that is in education, health or justice. As public sector organisations, we have to get better at changing more quickly.
You asked whether I have confidence. I am a senior civil servant who just happens to have moved portfolios—well, it did not just happen. My confidence comes from the fact that I know that there is a team in the Scottish Government that is now set up to look at the issue. I know that team, and I think that it is a very good, competent and credible team that will pick up that work. That is where my assurance that that work will not be lost comes from.
Mr Yeates, do you have anything to add in answer to that range of questions?
We are always incredibly obsessive about improvement, developments and so on. However, at the heart of the challenge at the moment, particularly in relation to apprenticeships, is the balance of spend. That is a really challenging issue. If 60 or 80 young people are applying for an apprenticeship and 59 or 79 are not successful, that is not good. If 15,000 businesses are looking to offer apprenticeships but they do not have funding, that is not good.
I herald the incredible work that the employers do through the Scottish Apprenticeship Advisory Board. They do that free of charge. They have a technical expert group, they have reviewed more than 11 frameworks and they give a significant amount of time. They advise SDS on what we contract for in apprenticeships. They are incredibly valuable.
As I said before, there is a missed opportunity to engage more of industry and more employers in the system so that we unlock more of the £4.1 billion spend. That money is not coming together with the public money in the way that it might.
We are tight for time, so I will keep this as short as I can. We have had some responses to the call for evidence about what the bill says on the designation of private providers. What are your thoughts on that?
SAAS is responsible for the private providers. As you have heard in evidence today, some of what is in the bill is a result of work that was already under way. SAAS has already undertaken a project with Education Scotland in relation to full-time private providers, to ensure that a robust process is in place to protect the student and the public funds. Likewise, SAAS is doing a similar piece of work for part-time private providers.
Are you confident that what the bill says—or what regulations might say—about the private providers’ responsibility to the students is clear enough, or does more work need to be done?
Yes, I believe that it is clear enough. There will always be some businesses or organisations that are successful and others that struggle. Our approach to the bill aims to ensure that students are protected through such processes. We have already managed a couple of instances where organisations have been challenged, and our primary responsibility is always to ensure that students can complete their courses. The bill aims to do that, and I am really happy with it.
I have a final question for Mr Boyle. The bill would potentially take a function from SDS into the Scottish Funding Council. In several of your answers, you have mentioned that you have previous on that, in that you have taken on extra responsibilities before. What have been the levels of growth and improvement in the graduate apprenticeship programme since the SFC took it on?
The number of apprenticeships has gone up from about 1,150 to about 1,500 over the past four years. There is demand for more places, but the Scottish Government currently has a moratorium on developing new frameworks, except in urgent cases such as the operating theatre practitioner scheme that I mentioned earlier. A review of the graduate apprenticeship scheme is currently being conducted to ensure that it is meeting all the policy and other requirements. Once we get the chance to develop more schemes, there will be lots more opportunities.
At the same time, universities are also pushing ahead if they have to. The University of the West of Scotland is introducing a work-based learning degree in town planning, because there is a massive shortage of town planners in Scotland. Much of the stuff that Damien Yeates mentioned about energy issues for the future will need planning permissions and so on. Universities are already on top of that—they are recruiting people to meet Scotland’s needs. Therefore, although we have a specific graduate apprenticeship scheme, other initiatives are going on as well.
You cited the success of the graduate apprenticeship scheme, in that the number of places on it has gone up from 1,150 to 1,500, but you also acknowledged that industry demand is for far more. Are you saying that you are currently being constrained from doing that because of the moratorium?
We are being constrained a bit just now by the inability to produce new frameworks unless they are vital.
If it were not for that moratorium, would the numbers be higher?
They could be higher. Lots of employers want to take part, but we also have to balance the student demand and what universities are able to offer in terms of being cost effective. There would be opportunities to do more in that space, and some providers—Glasgow Caledonian, the University of the West of Scotland and others—are keen to do so.
Is the success of graduate apprenticeships not a compelling enough reason to override the moratorium?
The Scottish Government—
I am sorry—you gave an example of an area in which you could do something in spite of the moratorium.
Yes.
Is that not an example of an area where you could make a case to do something in spite of the moratorium?
Which one?
Expanding the graduate apprenticeship scheme.
Yes, we could do that. We are engaging with SDS and the Government on what is required. If frameworks are needed urgently, we will push them through.
There are sufficient frameworks at the minute, but our evidence is that there is easily demand for between 4,000 and 6,000 graduate apprenticeships. That has been well understood for a long time. There is a challenge in getting a substitution effect, but I think that the benefit would be huge.
I cite the example of the University of Glasgow’s degree course in software engineering, which is phenomenal. Its work with the financial services sector has been pretty unbelievable. For the benefit of members, I point out that its graduates are typically paid between £22,000 and £25,000 per annum, and they contribute £2,500 in tax every year. They are very productive within their first year. In fact, British Telecom outsourced some of its graduate apprentices very early on in its programme. In addition, no student debt is created, so it is a win-win situation. If we are to address the shortages of critical skills in our economy—for example, in the construction, engineering and health and social care sectors—we will need to expand the programme urgently.
Thank you all very much for your evidence today. I will briefly suspend the meeting to allow our witnesses to leave. The committee will then move into private session to consider its second agenda item, after which I will suspend the meeting until 5.45, at which point the committee will again sit in public to continue its consideration of the Education (Scotland) Bill at stage 2.
12:29 Meeting continued in private.17:45 On resuming—
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Education (Scotland) Bill: Stage 2