Seòmar agus comataidhean

We have covered the point about what the bill does and does not do. At all times in my engagement with all the affected agencies’ staff, I have made the point that I want to hear their thoughts. I have heard directly from them on how engagement works currently and what could be done differently.

There has been a mixed bag of responses, and I accept that some people have expressed concern. Overwhelmingly, the feedback has been constructive and their point of view has been to say, “Well, you know what? We could have done this, or you might want to look at that.”

I will give an example of that, if I may. One of the things that exercises me is that I am not sure that the current apprenticeship offering entirely captures the needs of small and medium-sized enterprises, which are the lifeblood of this country. There are two conflicting statistics—forgive me if I get them the wrong way round—but SDS says that 92 per cent of its apprenticeships are with SMEs, but the Federation of Small Businesses says that 83 per cent of its members have never had an apprentice. That statistic troubles me. There is a disconnect there.

One of the issues for small businesses that was brought home in a series of pilots in 2015, I think, is the hassle for small businesses and the grief that they say they would face around human resources and training and so on. It all becomes too much for them to take on apprentices even when their business needs it for succession planning. It was actually a staff member who came to us and suggested a possible solution, and we are looking at that.

I absolutely accept that there will be concerns, as has been expressed to the committee. I have been open with the convener about what we will do in response to that. I have been as open as I possibly can be. I have met staff members at a session who then met me at something else and said, “I did not feel that I could raise the issue on the day, but I just wanted to say.” That has all been taken on board.

I absolutely share the concern that you are telling me that the committee has about it. I totally share it.

The reality here, from my perspective, is quite concerning. I will give the committee a couple of examples, because the evidence that you received certainly caught the interest of the college sector. I talked to a couple of colleges about this, and the numbers are really quite stark.

One college, for example, gets 48 per cent of the £8,700 that was referred to to the committee. However, it then draws down, over a three-year period, £16,000 of credits in order to deliver the training. Plumbing is a particularly intensive course; it can sometimes be one to three or even one to one, as it goes through.

Another college that I know of gets 46 per cent of the £9,500 that it is pulling down. In this instance, circa £5,000 of the money is retained, and college credits are utilised to deliver the training. I am really uncomfortable about that as a use of public money.

The managing agents will tell you that they do lots of good stuff, and CITB is doing some really good collaborative work with us. I do not have a black-and-white view of it. The English system is quite black and white—for example, it caps the amount of money that managing agents can retain.

That has been quite unhelpful, and it means that I have not seen the specifics of the issue that you raise. However, I figured that you would ask that question.

I understand the argument that is made around the principle of remuneration for senior staff, particularly in the university sector—I think that that has been the biggest challenge from the point of view of the University and College Union. However, it is difficult to legislate to address that issue.

It is a fact that some of our larger institutions are competing salary-wise with multimillion-pound businesses for the very brightest and best. However, I absolutely recognise the concerns that trade unions and others have raised about remuneration packages and the increases that have been offered.

Earlier, I referred to a meeting that I had a couple of months ago with the university chairs of court. I would be wrong to go into too much detail, but I took the opportunity to point out to them how the increases were viewed out there. You are absolutely right about institutions wanting more public money at a time when they were offering large remuneration increases, particularly to principals but also to others. I read some of the media stories, and I have made it clear to them that they are expected to exercise restraint and self-awareness going forward. That is probably as much as I can do currently, but we need to see that play out.

I apologise if I did not convey this well enough. For several months, the Government has been doing extensive work with stakeholder groups on skills shortages. As you know, there is a distinction between skills shortages and workforce shortages. We cannot magic up people, but we can ensure that people with the right skills are available.

We have been looking at drilling down into some of the assertions that are made. If I say to you—you will have heard this number—“We are short of 3,000 welders”, your question becomes, “What kind of welders, and where?” If we are short of engineers, the same question applies. We need that level of intelligence to help to shape the future. That applies not just to our apprenticeship offering but to our whole approach to tackling some of these issues.

We are going forward armed with that information, which is being developed through detailed work from particular sectors. That has proven to be really helpful, and it is driving an immediate response through our colleagues in the economy directorate. The skills and economy directorates are working closely together on things outwith the bill in order to deal with some of the short-term problems.

In the longer term, there are economic priorities, and we will have the opportunity, through the new arrangement, to feed that into our planning. An example is childcare, which is a critical sector. If we do not have enough childcare in the country, we are not accessing the entire workforce. Other sectors include planning and construction—all the obvious things. However, there are other critical elements to the economy that we need to protect, although they might not involve huge numbers.

I know that you have taken an interest in stonemasonry, and that is a good example of what I am talking about. We will always need stonemasons, so how do we ensure appropriate access to stonemasonry apprenticeships, in the interests of the economy and our young people? In relation to the careers work, how do we encourage young people into those pathways?

On the apprenticeship model, we need to ensure that the funding that is available for some of those disciplines reflects the cost. As you know, one of the reasons why there has been a reduction in the number of stonemasonry apprenticeships, for example, relates to the cost that has to be incurred by whoever provides the training. We therefore need a model that takes account of those elements of the costs, too. That is another piece of work that will inform what we do as we go forward.

That is a very good and fair question. The bill will not, in itself, achieve any of that, as that is not what it is about. The bill will enable things.

Let me talk about the bill in the context of the other work that has taken place in order to address some of those issues. We are doing a lot of work on skills planning, because we need to ensure that we provide the apprenticeships that are needed for the economy and to give sustainable long-term employment to the very people that you are talking about. We are doing an extensive piece of work that goes right the way back to the careers offering in the country, because we need to improve that—we need to support people into making the right choices.

There are also individual workstreams on foundation apprenticeships and graduate apprenticeships. Bear with me, convener, as I want to explain those in a bit of detail. An assessment is being done on the effectiveness of foundation apprenticeships and on the wider vocational offering in schools. You heard evidence about the excellent foundation apprenticeship offering that is available in Aberdeenshire. However, that is not universal—it is nothing like universal. I visited another part of the country, where a business told me of its experience. The local authority provided it with three foundation apprentices, none of whom were remotely interested in the work of that business. That is a waste of resource and it is a waste of time for the young people concerned. At times, there is an element of local authorities using foundation apprenticeships as a means of getting disruptive young people out of classrooms, regardless of whether they are being placed somewhere that suits their interests and talents. We are considering that closely.

That is set alongside the vocational offering. For example, New College Lanarkshire is doing a fantastic piece of work with its local authority in which they are delivering higher national certificates in sixth year at school. We are looking at that in the round with a view to getting the offering into the kind of shape that it needs to be.

On graduate apprenticeships, a workstream is well under way, which is being led by the principal of Glasgow Caledonian University. I charged him with the task of coming back to me with a more wide-ranging model that would be better aligned with the needs of the economy. He has been given a blank sheet of paper to get on and do that for us.

That is an example of the opportunity that the bill presents. As we take apprenticeships into a different setting, we are interrogating every aspect of how they are currently delivered and how they can be made to be better than they currently are. I have had many conversations—including with stakeholders who have expressed concerns to the committee—about the opportunities that will arise from the proposed move.

SDS has made it clear that it does not think that there is an issue here—it does not think that there is a problem to fix, particularly when it comes to the delivery of modern apprenticeships. I think that there is a problem to fix—I hear that loud and clear from stakeholders. We have spent a lot of time engaging with stakeholders since the Withers review came out.

I will give some examples—several of which have been raised with the committee—of things that the bill will enable us to tackle through the work that is already well under way. Phiona Rae of Tullos Training said that a bureaucracy had grown up around apprenticeship delivery. I have heard other training providers, particularly private providers, say that. We will explore that.

The committee has heard about how managing agents operate, which involves the retention of a sizeable proportion of the moneys that are contributed to training. Again, that is an issue that we have been heavily involved in looking at, because it troubles me.

The fact that we have a process whereby the apprenticeships that are allocated can run over more than one year, in a one-plus-one model, ties our hands with regard to our ability to be more agile. A case in point is the fact that we have identified a pressing need in the economy in relation to engineering, but if we wanted to be able to pivot a little to focus on that in the next year, under the current model, we could not—our hands are tied.

That has been quite unhelpful, and it means that I have not seen the specifics of the issue that you raise. However, I figured that you would ask that question.

I understand the argument that is made around the principle of remuneration for senior staff, particularly in the university sector—I think that that has been the biggest challenge from the point of view of the University and College Union. However, it is difficult to legislate to address that issue.

It is a fact that some of our larger institutions are competing salary-wise with multimillion-pound businesses for the very brightest and best. However, I absolutely recognise the concerns that trade unions and others have raised about remuneration packages and the increases that have been offered.

Earlier, I referred to a meeting that I had a couple of months ago with the university chairs of court. I would be wrong to go into too much detail, but I took the opportunity to point out to them how the increases were viewed out there. You are absolutely right about institutions wanting more public money at a time when they were offering large remuneration increases, particularly to principals but also to others. I read some of the media stories, and I have made it clear to them that they are expected to exercise restraint and self-awareness going forward. That is probably as much as I can do currently, but we need to see that play out.

I absolutely share the concern that you are telling me that the committee has about it. I totally share it.

The reality here, from my perspective, is quite concerning. I will give the committee a couple of examples, because the evidence that you received certainly caught the interest of the college sector. I talked to a couple of colleges about this, and the numbers are really quite stark.

One college, for example, gets 48 per cent of the £8,700 that was referred to to the committee. However, it then draws down, over a three-year period, £16,000 of credits in order to deliver the training. Plumbing is a particularly intensive course; it can sometimes be one to three or even one to one, as it goes through.

Another college that I know of gets 46 per cent of the £9,500 that it is pulling down. In this instance, circa £5,000 of the money is retained, and college credits are utilised to deliver the training. I am really uncomfortable about that as a use of public money.

The managing agents will tell you that they do lots of good stuff, and CITB is doing some really good collaborative work with us. I do not have a black-and-white view of it. The English system is quite black and white—for example, it caps the amount of money that managing agents can retain.

I said earlier that we have strong foundations to build on. We do, and we should recognise that. Some of the very people who have established those strong foundations in apprenticeships will move across to the SFC. Thanks to Frank Mitchell, the SDS chairman, I have had direct conversations with those people and have set them two immediate challenges. The first is to look at what they would do differently if they were not working within their current framework and if we let them run free. That is a bit of an exaggeration, but you know what I am getting at. We asked what they would do differently.

The second challenge is a question about what impediments or perceived impediments there are to being able to deliver the vision that they believe would be better. We are awaiting feedback from them on that.

Some of what the OECD report suggested featured in Withers. There are elements that we have taken on board. However, we cannot sit back and say, “Well, the OECD said we are doing well, and we are doing better than England. That is good enough.” I do not think that it is. I do not think that a one-in-four dropout rate is good enough. I am not apportioning blame to anybody in particular in relation to that, but we should all aspire to better.

I absolutely share the concern that you are telling me that the committee has about it. I totally share it.

The reality here, from my perspective, is quite concerning. I will give the committee a couple of examples, because the evidence that you received certainly caught the interest of the college sector. I talked to a couple of colleges about this, and the numbers are really quite stark.

One college, for example, gets 48 per cent of the £8,700 that was referred to to the committee. However, it then draws down, over a three-year period, £16,000 of credits in order to deliver the training. Plumbing is a particularly intensive course; it can sometimes be one to three or even one to one, as it goes through.

Another college that I know of gets 46 per cent of the £9,500 that it is pulling down. In this instance, circa £5,000 of the money is retained, and college credits are utilised to deliver the training. I am really uncomfortable about that as a use of public money.

The managing agents will tell you that they do lots of good stuff, and CITB is doing some really good collaborative work with us. I do not have a black-and-white view of it. The English system is quite black and white—for example, it caps the amount of money that managing agents can retain.

It did not, but one might also argue that the university court did not really spot the problem coming either. As I have said to the committee before, I am committed to a process whereby we look at what comes out of Pamela Gillies’s report, as the committee will. We are engaging with the sector more widely to look at whether we can, through stage 2 amendments, do anything to improve the governance arrangements in relation to not only the SFC’s oversight but the court’s local oversight.

I will offer an example of one of the things that we have been looking at. We have looked at the possibility of getting ahead of the game by monitoring the cash reserves of the universities on a bi-monthly basis. It would, potentially, give an earlier signal of any emerging issue if their cash reserves were going down—although it is not straightforward, as a number of universities operate revolving credit facilities.

A number of conversations are going on around what better governance would look like to support both the individual courts and the SFC, if that is necessary. Perhaps more powers are needed to compel the provision of information, but we need to wait and see what comes out of Pamela Gillies’s report on Dundee.

I met the chairs of the court a couple of months ago. They are doing a piece of work, not just in Scotland but across the United Kingdom, on improved governance opportunities and things that we could do better, and they are going to come back to us with recommendations. We are absolutely committed to that work.

I do not accept that the blame for what happened in Dundee lies at the door of the SFC, but let us see what Pamela Gillies says.