Addressing the labour market emergency: Scottish Government response

Executive Summary

The Enterprise and Skills Strategic Board sub-group (ESSB) recognise the strength of the Scottish education, skills and employability provision to support people to acquire the skills needed to succeed in the labour market and the existing support for businesses to survive in the COVID-19 crisis.

Many of the recommendations point to the need to develop services and increase support available to enable Scotland to respond to the anticipated increase in demand in the coming months as the UK Government Job Retention Scheme (JRS) ends.

Across four themes, the ESSB set out recommendations for immediate action which the Scottish Government broadly endorses. We have already taken action, and in the main sections of this paper, we highlight the work already underway that responds to the recommendations and the actions we plan to take in the immediate future.

Section One addresses the range of business support available through the enterprise agencies and partner delivery bodies such as Business Gateway. Key actions include:

• The £2.3 billion direct package of support for business put in place since April
• The continued development of the findbusinesssupport website and helpline to offer advice on business support
• A £62 million Energy Transition Fund to support businesses in the North East in the oil, gas and energy sectors as they grow and diversify

• Investment to support increased digital capacity in our small and medium sized enterprises (SME)
• The redoubling of efforts through Scotland’s export growth plan, ‘A Trading Nation’ to identify export opportunities.

In the coming months, we will ask our enterprise agencies to work with companies, and partners including local government, to identify what more can be done to maximise the employment impact of services and support, and to take forward action accordingly. We will also work with the enterprise and skills agencies, equality groups and other key partners to initiate early feasibility planning for a Centre for Workplace Transformation.

Section Two considers the recommendation for an increase in scale and structure of the long established and successful Partnership Action for Continuing Employment (PACE) approach to helping those facing redundancy in Scotland. In July, the Cabinet Secretary for Economy, Fair Work and Culture set out our intention to invest further in PACE, in line with this recommendation.

Alongside this, a Ministerial PACE Activity and Resources Group is working quickly to agree how we will implement change to meet increasing demand for redundancy support as a result of the economic crisis.

In the coming weeks and months, we will implement the changes agreed by the Ministerial group to enable us to respond to an anticipated increase in demand for support as businesses restructure following the closure of the Job Retention Scheme.

Section Three sets out recommendations for change to and enhancement of Scotland’s skills system, alongside proposals for new training provision to support people to transition to different sectors where their job is at risk. Key actions now underway to implement these recommendations include:

• Working with partners to protect existing apprenticeships and to enable more employers to participate
• Re-purposing the Flexible Workforce Development Fund to respond to the current labour market challenges to enable employers to adapt to a post COVID-19 delivery environment
• Providing, through the Scottish Funding Council (SFC), £6 million funding for the 2020/21 Academic Year for the provision of short reskilling courses.

In the coming months we will review our Labour Market Strategy to ensure a coherent package of education, skills and employability support is in place to respond to the future labour market challenges. This will include working with partners to consider and implement, where feasible, the recommendations for change to apprenticeships including pathways to apprenticeships, shared apprenticeship models and group training.

As announced in July, we will also bring forward proposals for a COVID-19 Transition Training Fund focused on helping those in sectors where there is the greatest risk of job losses.

We will also take forward the actions on our Sustainability Plan for colleges and universities to address existing resource constraints within the system, the scale of the external shock caused by COVID-19 and the outcomes of the SFC review into achieving sustainability within the sector.

Section Four sets out the action we will take to implement the recommendations of the ESSB to support young people and other groups more adversely affected by the economic downturn. Key actions underway now include:

• Building on our award winning Developing the Young Workforce Programme
• Investing £33 million in employability services this year, including No One Left Behind
• Extending Fair Start Scotland (FSS) services for a further two years to March 2023 to provide support for unemployed people with disabilities, health conditions and other barriers to moving into fair and sustained work
• Reviewing with partners all Employability services to protect provision for those accessing employability services.

In the coming months, we will invest at least £50 million to support youth employment including delivery of the Job Guarantee and additional investment in Developing the Young Workforce.

We will also publish an updated No One Left Behind Implementation Plan setting out our continuing commitment to the transformational change in the delivery of employability services and the key actions to be undertaken in the coming months and years.

Finally, we will write to invite public sector buyers to focus community benefit requirements on activity that will aid economic recovery and tackle inequality.

Next Steps sets out how we, alongside the Enterprise and Skills Strategic Board, will monitor progress to implement the actions we will take to tackle rising unemployment and also develop proposals to measure impact.