Enterprise and Skills Strategic Board minutes: December 2017

Attendees and apologies

In Attendance

• Nora Senior, SB Chair
• Lorne Crerar, Highlands and Islands Enterprise
• Bob Keiller, Scottish Enterprise
• John McClelland, Skills Development Scotland
• Russel Griggs, South of Scotland Economic Partnership
• Mike Cantlay, Scottish Funding Council
• Steven Heddle, CoSLA
• Jeanette Forbes, PCL Group
• Wendy Alexander, University of Dundee
• Gerry McCusker, Dog Digital, Chair of BIMA Scotland
• Liz Cameron, Scottish Chambers of Commerce
• Poonam Gupta, PG Paper Company
• Audrey Cumberford, West College
• Sara Carter, University of Strathclyde
• Charlotte Wright, Highlands and Islands Enterprise
• John Kemp, Scottish Funding Council
• Paul Lewis, Scottish Enterprise
• Damien Yeates, Skills Development Scotland
• Gary Gillespie, Scottish Government
• Dominic Munro, Scottish Government
• Simon Coote, SG Secretariat
• Gillian Dolan, SG Secretariat

Guest Attendance

• Linda Hanna, Scottish Enterprise

Apologies

• Karen Betts, Scotch Whisky Association
• Scott McLarty, Spirit Aerosystems
• Grahame Smith, STUC

Items and actions

1. Welcome and Introductions

Nora Senior (NS) Chair of the Strategic Board welcomed the members to the first meeting of the Board.

2. Introduction from the Chair

NS outlined the task ahead for the Strategic Board, including the need to find common goals, the intended destination the Board would like to reach, adopting new approaches and building a collaborative environment.

NS confirmed that the main objective of this meeting would be to build understanding on the economic environment, the work of the Agencies, the work carried out by the Implementation Board and to shape the agenda for the January meeting.

3. Conflicts of Interest

Simon Coote (SC) offered advice on the approach Members should take to consider whether there may be a conflict between their duties on the Board and their other interests.

NS asked if any Members wanted to declare a conflict of interest at this stage, and no Members declared.

Action: Secretariat to provide advice to members around declarations.

4. Economic Insight and Future Analysis - Paper SB (13.12.17)(01)

Gary Gillespie (GG) set out information on the shape of the economy and the challenges Scotland faces, as well as offering some insight into particular assets in Scotland.

This led to a discussion where the following points were raised:

• Where there are gaps in the data the SB should ask the analytical unit to consider.
• Other countries (eg. Norway and Ireland) have a different demographic so would be helpful to reflect on the extent to which demography drives growth and how inclusiveness can support it.
• The validity of comparisons with Ireland – their development model focussed on inward investment, the offer of a skilled workforce, low corporation tax, and connections with countries such as the US to bring in investment.
• It would be interesting to find out the factors behind Canada’s decline in the OECD rankings.
• Explore how Scotland could capitalise further on its strengths in university R&D.
• Growth in low value sectors and how there is a different structural element in more successful countries. Scotland is looking for high-value growth and needs to avoid competing on the basis of low wages and find better ways to deliver more inclusive growth.
• Regional variations and the importance of capitalising fully on existing assets, for example the agricultural and land management sector in the South of Scotland.
• Questions about whether there are lessons to be learned from things we have already been doing.

Members then agreed that it would be beneficial to hold on to the insight provided from this discussion for future meetings to help maintain focus.

Analytical Unit

GG set out the purpose of the Analytical Unit. It currently consists of 3 people and has access to 70 analysts. There is a need to think about how the Unit will be staffed.

The SB should advise what it needs from the AU in order for the Scottish Government (SG) to meet its commitment to resource, e.g. scale, use of agency and SG capacity, etc. It was pointed out that the Implementation Board and the E&S Review took a view on this.

It was noted that there is economic analytical capacity across all the agencies which are currently focused on their own areas. There is scope to share more widely. Legalities of data sharing to be advised.

Issues were raised around the data which is currently available and that some data availability runs 12 months out of date.

SG is currently looking at options for real-time data. The AU, once in place, should be able to provide some real time data for a number of economic indicators. Behavioural data doesn’t tend to change rapidly and so there is less need for real-time data. There is a need to prioritise which data the SB needs

It was agreed that a small sub-team would be established to prepare a proposal for the Strategy Day .

Action: Secretariat to set up a small working group to inform the approach to the Strategy Day development

5. Agency Presentations

Skills Development Scotland

Damien Yeates (DY) presented on behalf of Skills Development Scotland (SDS); he covered areas including:

• the Skills Planning Model;
• investment and impact;
• Modern Apprenticeships;
• strategic imperatives;
• understanding and measuring impact;
• a comparison of labour markets;
• the assimilation of talent into the workforce;
• lessons from top OECD countries; and
• duplication and collaboration.

There was discussion around the assimilation of talent into the workplace – other countries do the learner journey seemingly more efficiently and people emerge more ready for work.

Core skills are a valuable commodity, so the combination of workplace and academic learning can develop more comprehensive skills.

Germany was cited as an example of good practice in terms of business nurturing talent.

There is inefficiency in the system, for example 50 per cent of students with an HND start university in 1st year and not 2nd year.

Scottish Funding Council

John Kemp (JK) presented on behalf of the Scottish Funding Council, he covered areas including:

• SFC’s ambition
• funding;
• Outcome Agreements and enhanced focus;
• Research and Innovation developments;
• Productivity and ROI;
• gender imbalance;
• Inclusive Growth and the Widening Access Commissioner Report
• doing things differently and collaboration; and
• preparing for the longer term.

JK outlined that the learner journey takes a long time and that the system is keeping people in education longer than may be needed, an area that could be addressed.

The UK Industrial Strategy was seen as a good opportunity to work together.

There is expected to be significant change to the workforce’s requirements in the next 15-20 years, and so there is a need to prepare for this where it can be predicted.

South of Scotland Enterprise Partnership

Russel Griggs (RG) presented on behalf of the South of Scotland Economic Partnership, advising that the partnership is in its very early stages, that the current system was not working optimally for the area and a single body is the right way forward. Over the next two years the partnership will develop with a view to generating cohesion over the needs of the areas of the south of Scotland.

Highland and Islands Enterprise

Charlotte Wright (CW) presented on behalf of Highlands and Islands Enterprise, covering areas including:

• geographic context;
• HIE’s focus on productivity, Inclusive Growth, Sustainability and Service Delivery;
• national priorities with a regional delivery;
• income and impact;
• progress against measures;
• what works well and what could work better;
• challenges faced; and
• collaboration

The members discussed some of the challenges in the rural areas - the retention of people, what the initiatives are to support this, and rural wage issues. It was noted that part of the role of the SB will be to signpost into Government the impact of policies on the initiatives being pursued by agencies such as HIE.

Scottish Enterprise

Paul Lewis (PL) presented on behalf of Scottish Enterprise, covering areas including:

• priorities for SE;
• key areas of responsibility to deliver inclusive economic growth;
• programmes of activity;
• income;
• progress against targets and impact measurement & contribution to growth;
• where SE do things well and where there is room for improvement; and
• collaborative working

Members discussed the SB acting as a catalyst to bring regional partnerships together and how this was a good thing to feed into the Strategy.

Action: Secretariat to share all slides with the Members

Reflections Following Agency Presentations:

• The gender gap – would like to see collectively how we encourage more women into business, including looking at the financial barrier – how we can entry be made easier;
• Innovation, collaboration and inclusion are key words;
• Ideas – looking at whether we might emulate what the best performing economies are doing and having a global mind-set;
• Consider the question: what do we want Scotland to be?
• Look at achievements made and build upon them including what else has been set in motion by the Enterprise and Skills Review;
• The Skilling Report and others drew international comparisons for the E&S review -
• We can benefit from prioritising which areas should focus on up-skilling.

6. Implementation Board Draft Proposals – Paper SB(13.12.17)(02)

Linda Hanna (LH) updated the members on the work the Implementation Board carried out over the summer, covering the Draft Strategic Plan and associated draft Performance Framework. The intention was to provide some early areas of progress, particularly in relation to collaborative actions that could be pursued. The Implementation Board (IB) were not seeking to tackle some of the big questions, but looking at things that can be done now within the current system more collaboratively and better.

The process of developing the draft plan has driven agency collaboration in a positive way.

The IB had foreseen that in the coming year the SB would develop a plan, and saw merit in pursuing some tangible, short-term, collaborative actions in the meantime.

LH also highlighted the importance of wider issues to the vision of the Board which lie outwith the immediate remit of the agencies.

LH also spoke about the draft planning process which had been developed to aid the Board’s consideration around how it would go about developing a Strategic Plan.

There followed a discussion during which the following points were raised:

• In relation to the proposed performance framework, there are various frameworks already out there and a risk of a confusing landscape.
• The early slides in the Interim Plan set out the level of ambition and that is what the SB need to be thinking about. The Strategy Day should be used to identify and discuss the ambition areas, with work streams examined once those ambitions have been agreed. Once have level of ambition then can look at workstreams.
• Some of the actions in the interim plan are already progressing, some aren’t. Some are higher level ambitions that the board can flesh out, some are for agencies to pursue without input from the Board.
• The interim plan was intended as a means of continuing progress, while the Strategic Plan was developed.
• There was a question about the key themes in the draft – are these the right categories for the SB to be considering? The themes were based on the other plans of SG, e.g. the Inclusive Growth Framework and are not prescriptive to the SB.
• There is a need to send a signal around co-ownership and embedding a culture of collective leadership. The actions are operational but there is a need for agency boards to embrace them.
• It was agreed that SB welcomes and supports the Interim Plan in terms of collaborative activity amongst the agencies – what is set out is a positive direction of travel, and already demonstrates collaborative activity.
• The Board would welcome feedback on progress of the actions identified in the Interim Plan.
• It was agreed that the Interim Plan should be shared by agency Chairs with their boards and invite feedback on the areas of activity.
• SB was not able to endorse the IB’s proposed governance structure, but agreed the themes remain valid. In terms of the governance and advice structure, SB wanted to identify and explore issues and then agree the optimum structure
• SB should consider where the UK Industrial Strategy fits in and how it should be linked.
• Bob Keiller (BK) has been chairing a meeting of the CEOs to make sure that the cultural change and collaboration is being actively pursued.
• SB should be aware of issues such as Inclusive Growth, place-based initiatives and areas outside the E&S system such as gender and infrastructure so they can take them into consideration and feed views back into government
• One of the headlines of the E&S Review was that people did not perceive a collaborative landscape, so what will have changed two years from now as a result of the plan?
• It was noted that agencies are waiting to put their strategies together in a way that is steered by the SB.

Action: Agency chairs to take the Interim Plan to their respective boards to review and provide feedback. Agencies to provide updates on collaborative activities progress

7. Strategic Board: Terms of Reference (TOR) – Paper SB(13.12.17)(03)

SC spoke to the paper provided, advising Members that this draft had been prepared using the same basis as that of the Implementation Board, and that the aim was for Members to provide input to further develop it.

Some points raised in discussion were:

• The need to articulate the ambition in a way that isn’t about the first quartile target but about what will be different
• The need to ensure the language is accessible
• Including timescales
• Recognising targets but explaining what will be done differently to get there and what knowledge will be tapped into.

Action: Terms of Reference will be considered in light of discussions at the Strategy Day

8. Early Areas to Focus – Paper SB(13.12.17)(05)

It was agreed that much of this had been covered (as noted) in the earlier discussions, but other key areas to consider included:

• Aligning agency business planning cycles.
• Agencies keen to agree on an annual business plan with a five-year outlook.
• There is a need to tie in SG strategic guidance from sponsorship teams (e.g. co-ordinated issuance of guidance letters).
• In future, SB will be identifying priority ideas which will then help guide the agencies, supporting them to align business planning timescales. In time the SB Strategic Plan will come in to play and its timing will need to work with the agency planning cycle.
• SG and agencies agree to work towards a harmonised planning cycle, with a proposal to be developed by SG during January. SG will aim to ensure that a system is put in place to help the agencies align (eg. Sponsorship, letters of guidance etc).
• As this is a transitional period the SB needs to consider what the strategic priorities are and how it can look to influence current planning cycle stages.

Action: SG to work with agencies to develop a proposal in January for revised SG guidance procedures which will support an aligned agency business planning system

9. Communication and Engagement

NS spoke of internal and external communications, and how it was important to have a consistent message. NS will be writing a piece to share with agency staff. She invited the members to provide their thoughts on comms and advised that that as the SB will be travelling across the country there is an opportunity to line up events with key local stakeholders.

Action: Secretariat to support NS to finalise and share her media piece with the agencies

10. January Strategy Day

NS informed the members that she would look to develop a structure for the strategy day and consult with some Members and that there may well be more benefit from having a facilitator.

Action: Secretariat to work with the Chair and a sub-group of Members to develop the agenda and arrangements for the strategy day.

11. Board Dates

Members were asked to let the Secretariat know if any of the proposed future Board dates are unsuitable.

12. AOB

BK offered the suggestion that other partners in the system could be invited along to the SB meetings to help inform the SB. It might be worth developing a calendar of stakeholder engagement around the meetings.

NS closed the meeting by saying she was encouraged by the discussion, thanking the Board.