Future skills: meeting the demands of the Scottish workforce

“A strong economy with growing, competitive and innovative businesses is essential to supporting jobs, incomes and our quality of life,” Nicola Sturgeon declared, as she delivered her 2018-19 Programme for Government.

“We will also take action to ensure that the population has the skills that we need to make the most of current and future economic opportunities,” she continued. “We will listen to the views of the business-led Enterprise and Skills Strategic Board and work with others from industry including the trade unions to set out our strategic approach in early 2019 to deliver a skilled and productive workforce for the short, medium and long term.

“We know that this is not simply the role of government and our agencies. Instead we must continue to reinforce co-operation and harness the ingenuity of our businesses, trade unions and workforce.

“Following discussions with key stakeholders, we will establish a national retraining partnership, working with trade unions and employer bodies. It will have the aim of helping workers and businesses prepare for future changes in their markets by enabling the workforce to upskill and retrain where necessary.”

The commitment to skills training is both ambitious and admirable, building on a number of initiatives already in place to try to boost employment, create positive pathways for young people and plug the skills gap.

But it also comes at a time of growing uncertainty, with no clearer picture about the ramifications Brexit will have on industry and education than we had this time last year – other than the fact the picture is a bleak one.

Analysis from the Scottish Government, which was published at the end of last year, revealed that Brexit could cost the equivalent of £1,600 for each person in Scotland by 2030 compared with continued EU membership.

Sturgeon described Theresa May’s deal as “damaging to the people of Scotland”, adding: “Perhaps worst of all, it will take away opportunities from the young people of Scotland and from the generations to come.”

Earlier this month, the SNP’s education spokesperson at Westminster, Carol Monaghan, echoed these concerns.

She warned that the UK Government was in danger of ripping away rights and opportunities from students, unless it followed the EU’s lead in committing to fund the Erasmus+ programme beyond March.

The warning came after the European Commission issued a guarantee that, in the case of a no-deal Brexit, current Erasmus students will be able to complete their stay without interruption “provided that the United Kingdom honours its financial obligations under the EU budget.” 

Monaghan pressed Education Secretary Damian Hinds to end the uncertainty and commit to further funding in 2019/20 for students currently studying, and planning to study, in Europe in the event of a no-deal Brexit.

Universities UK also voiced concerns that thousands of students would no longer be funded for their studies abroad after 29 March this year, with EU students on Erasmus+ programmes in the UK also facing the prospect of having to fund their studies themselves or return home.

The Erasmus+ scheme was worth nearly €21m to Scotland in 2017. The programme aims to promote and modernise education, training, youth work and sport across Europe, and gives students from a variety of backgrounds the opportunity to live, work and study in other European countries.

Monaghan said: “Whilst our EU neighbours take steps to safeguard learning opportunities for students, the Tory government, in contrast, is in danger of ripping away those rights and opportunities due to its damaging and ideological Brexit plans.

“The Erasmus+ programme is a unique scheme that has allowed students from the UK and the EU to travel, study and experience new cultures. It has opened avenues to disadvantaged students who otherwise would not have been able to afford studying abroad.

“Scotland has received €60 million funding across 700 individual projects from the Erasmus+ scheme since 2014 – this cannot be put at risk by a careless Tory government intent on putting party interests before the interests of the country.

“The UK Government must now urgently follow the EU’s lead in taking steps to protect the interests and opportunities of students. As the clock ticks down to Brexit day in March, the Education Secretary must commit to funding all 2019/20 Erasmus+ study abroad placements beyond March and in the event of a no-deal Brexit.

“A Tory-driven Brexit is already hitting the economy, businesses and jobs. It is high time the chaos and instability came to an end so that our future generations are able to benefit from the rights we have shared and enjoyed with the EU.”

The Scottish Government has also had to step in to help mitigate the impact of the “unwelcome” apprenticeship levy, which was introduced by the UK Government in April 2017 to all UK employers with annual salary bills of more than £3m.

It launched the Flexible Workforce Development Fund to support the upskilling and reskilling of Scotland’s existing workforce following the introduction of the apprenticeship tax.

And in summer last year, it announced that a further £10m would be invested into the fund to extend the pilot.

The extension of the fund, which is part of a range of support for employers subject to the apprenticeship levy, means that funding available to eligible levy-paying employers has risen by £5,000 to £15,000.

Announcing the extra cash, Jamie Hepburn, Minister for Business, Fair Work and Skill, said: “The Scottish Government has been clear in our opposition to the UK Government’s apprenticeship levy.

“To help employers with the impact of this unwelcome UK tax on Scottish levy payers, the extension of our £10 million Flexible Workforce Development Fund will continue to support investment in workforce skills and training opportunities.

“Available to support all employees of all ages and across the private, public and third sectors, I would encourage all those who are subject to the apprenticeship levy in Scotland to get in touch with our colleges to learn more about the opportunities available to them to improve and diversify their skillset and benefit from new training opportunities.

“The Scottish Government will continue to support investment in skills and training to meet the changing needs of employers, the workforce, young people and Scotland’s economy.”

The workforce in Scotland is relatively stable at the moment. According to the latest Labour Force Survey figures, published by the Office for National Statistics last month, the current Scottish employment rate is 75.3 per cent.

In 2018, the unemployment rate across Scotland reached a record low of 3.6 per cent, a decrease of 6.6 percentage points since 1992.

The youth unemployment rate was 8.4 per cent in 2018, which was lower than the UK rate of 12.1 per cent. Since 2002, the Scottish rate has fluctuated, with a sharp increase post-recession when it peaked at 24.8 per cent in 2011.

While the low unemployment figures are good news, it has been claimed that an unwanted consequence could be more skills shortages – unless the UK Government could quickly implement a new immigration system after Britain leaves the EU.

Liz Cameron, chief executive of the Scottish Chambers of Commerce, told The Times: “We are mindful that job vacancies are also rising, with many businesses reporting difficulties in finding and hiring the skills and talent they need.

“[The] announcement by the Prime Minister to scrap the proposed fee for EU nationals to register on the settled status scheme will be welcomed by the businesses across Scotland who are worried about the prospect of losing valuable workers from the European Union in a post-Brexit environment.

“The UK Government must deliver a future immigration system that helps, rather than hinders the ability for businesses to invest, grow and support the economy.”

Figures published in August last year on school-leaver destinations also revealed some positive news, with 91.8 per cent of 16 to 19-year-olds in education, training or work.

The Scottish Government exceeded its 27,000 target for apprenticeships, with 27,145 people starting Modern Apprenticeships in 2017-18.

The Skills Development Scotland statistics also showed that the Scottish Government’s commitment to increasing apprenticeships to 30,000 by 2020 is on course to be met.

This year’s target of 28,000 starts includes Graduate Apprenticeships as part of the formal target for Modern Apprenticeships, with there being around 900 graduate opportunities, up from 278 starts last year.

Hepburn said: “Apprenticeships are a fantastic way for all employers to invest in their workforce and provide the skills the economy needs now and in the future. I welcome these statistics which show that once again we are exceeding our annual Modern Apprenticeship target.

“We are funding more apprenticeships in Scotland than ever before, and with a record 27,145 new Modern Apprenticeship starts last year, we are on track to achieve our ambition to deliver 30,000 new apprenticeship starts by 2020.

“We are continuing to enhance the apprenticeship opportunities available to provide the right balance of skills to meet the needs of employers and the economy, including prioritising higher skilled apprenticeships and STEM occupations.”

A number of businesses are playing their part, too, in the drive to equip Scotland’s workforce with the skills required by industry.

One new training opportunity was announced last month by Openreach, which is hiring more than 220 trainee engineers across Scotland.

The trainees will be taught the skills needed to expand, upgrade, maintain and install services over Openreach’s national broadband network.

And in Edinburgh, school pupils are being taught construction skills in an initiative aimed at boosting recruitment in the sector.

Infrastructure company Balfour Beatty is co-funding a project with the University of Edinburgh that aims to inspire the next generation of specialists working in design, engineering and the built environment.

Pupils at Castlebrae Community High School in Craigmillar will take subjects including maths, science and technology while learning about the latest practices demanded by the construction industry.

The pupils on the programme will acquire real-world, practical experience and employability skills as a key part of the course, which brings industry professionals into the classroom to support teachers.

A Scottish Government spokesperson reaffirmed its commitment to “ensuring Scotland has a skilled and productive workforce, both now and in future”, stating it is “central to our ambitions for our labour market and economy”.

“This year’s Programme for Government recognised the importance of skills to improving Scotland’s productivity and economic growth,” said the spokesperson. “We will build on this by establishing a National Retraining Partnership with employers and trade unions, and publishing a Future Skills Action Plan this year.

“We have raised Skills Development Scotland budget to £215 million in 2019-20, an increase of £22 million and over 11 per cent from last year, and are working with them, alongside the Scottish Funding Council, to provide a more systematic approach to addressing skills gaps and improving the contribution our skills investment makes to the Scottish economy.”