Enterprise and Skills Strategic Board minutes: September 2019

Attendees and apologies

Members: 

• Nora Senior (Chair), 
• Lorne Crerar
• Lord Smith of Kelvin
• Mike Cantlay
• Steven Heddle
• Jeanette Forbes
• Audrey Cumberford
• Sara Carter
• Gerry McCusker
• Scott McLarty

Other attendees: 

• Karen Watt (SFC)
• Steve Dunlop (SE)
• Carroll Buxton (HIE for Charlotte Wright)
• Gordon McGuinness (SDS, for Damien Yeates)
• Dominic Munro (SG)
• Liz Ditchburn (SG)
• Simon Coote (Secretariat)
• Richard Rollison (SG)
• Sam Anson (SG)
• Richard Murray (AU)
• Aileen McKechnie (SG)
• Karen Jackson (SG, for Rob Dickson)
• Linda Murray (SE, presenting item 5)
• Katrine Feldinger (SG) and Charlie Smith (SE) (presenting item 7)
• Maggie Wightman (Joint SFC and SDS Skills Director, observing)

Apologies: 

• Russel Griggs
• Grahame Smith
• Wendy Alexander
• Liz Cameron
• Poonam Gupta
• Frank Mitchell
• Damien Yeates
• Charlotte Wright

Items and actions

Introduction from the chair 

The Chair introduced and welcomed Lord Kelvin, Richard Murray and Maggie Wightman to their first meeting. She also welcomed Richard Rollison, Karen Jackson, who was covering for South of Scotland Economic Partnership, Gordon McGuinness attending in Damien Yeates’ absence and Linda Murray, who would be presenting later with Steve Dunlop.

The Chair updated the Board on some of her recent engagements including with Scotland Europa, SEPA, Universities Scotland and the Scottish Cities Alliance. 

She also covered some recent meetings with Ministers, including the First Minister – highlighting points she had discussed, including the need to make sure agencies are aligned to mitigate Brexit and the need to keep momentum up on collaboration. Ministers are keen to look at Industry Leadership Groups and UK Government funding channels currently not being explored so there is work underway focusing on ILGs. The Chair highlighted that the approach and impact of these groups varies greatly, and that she is keen to work to galvanise them and highlight best practice. 

The Chair then set out the route to securing new members for the Board, explaining that she is working to ensure the Board secured suitable people.

Minute of last meeting

Approved subject to some minor amendments being made. 

Fair Work and Skills - update from SG

Fair Work

As Mr Hepburn was unable to attend, Dominic Munro addressed the Board on the subject of Fair Work on his behalf. The Board have asked for Fair Work to be described in a more accessible way, and is keen to see common language, to understand what it means as an embedded concept or process.

Fair Work First brings conditionality into the services of the agencies - for example, conditions on grants requiring commitments to skills and training for the workforce, no zero hours, gender pay gap and real living wage. The Fair Work implementation plan sets out how it will be rolled out up to 2020 and Ministers are clear that SG and agencies should lead the way.

South of Scotland legislation requires a Fair Work approach from the new agency and the Enterprise Partnership is already looking at applying criteria to grants etc too. 

Audrey Cumberford explained that she was using Fair Work as the hook upon which to hang her work building a collaborative culture across the agencies – she had had a number of productive meetings with HR staff from all five agencies as well as SG Fair Work policy officials.

It was pointed out that there was a need to measure the business response to the Fair Work agenda – it was suggested that there was a role for AU in measuring the sentiment. Case studies would be a powerful way of engaging businesses – the concept needs to be led by example.

SFC’s Outcome Agreements with Universities are driving Fair Work - half of Unis are already signed up to being Fair Work employers. There was a huge drop in zero hour contracts in the sector

Action:

• a paper for December with a narrative around FW, developing ideas for how business sentiment is going to be measured and plans for how companies who are outwith the system are going to be engaged.

 Future skills and learner journey

Aileen McKechnie the updated the Board on the SG’s Future Skills Action Plan (FSAP) which has picked up the recommendations of Strategic Plan, and becomes the vehicle for taking it forward. SG are testing propositions in the plan with stakeholders, including at the NEF in December. Following this phase 2 will nail down the actions in 2020. 

Aileen also gave an update on the Learner Journey work to accompany the paper the Board had received. 

• the programme requires system wide change and leadership. The programme has already achieved in areas including My World of Work, the national Learner Journey campaign, and mapping outcomes, etc
• the Board was interested in how it can help drive system leadership, champion the programme and challenge some parts of the system including government. The Board was also interested in implementation timescales, and what the elements are that are holding the work back
•  the Board recognised the structural and funding inflexibilities that exist. There is a need to put the work in the context of a rapidly changing world of work and careers, and a system where a much larger range of learning methods will exist
• there is a need to envisage the future system and work back from there. This work should feed in the evidence and data, including from the AU, and then look at what the levers and options are for Ministers

Action:

• the agencies should articulate the future system they envisage – taking demography, capacity etc into account

Spending review proposals

The Chair thanked the agencies and others involved for all the work that has gone in over the summer to allow the Board to consider proposals at this meeting. 

Expansion of apprenticeships.

This proposal is in line with the Future Skills mission to accelerate work-based learning.

The recommendation represents a significant breakthrough and has resulted from strong collaborative working.

Overall it is not cost neutral – there remains a gap of £2m for local government costs.

The Board queried what industry’s contribution should be.

There is a need to generate more evidence – there is evidence to support the assumptions in the recommendation but there remains the need for some more detailed modelling.

Skills alignment

The Board recognised the value of increasing the number of HND and 6th form students going straight into year 2 of degree courses.

The Board agreed that a removal of the volume targets would support the flexibility the system needed and that SFC and SDS should do more detailed modelling to support  transitioning away from volume targets, informed by the future system model.

Regarding this work, the Board asked if the processes within SG, AU and the agencies could be better joined up. The Skills director was seen as having a key role to play in that.

Action:  

• Maggie Wightman should bring skills alignment back to the December meeting (NB – it has since been agreed it would be best to bring this to the January Strategy Day)

Business Models and Work Place Innovation (BMWI) with upskilling/reskilling

This was seen as necessarily a combined contribution as the areas were mutually supportive, with BMWI agenda relying heavily on upskilling and reskilling.

The Board discussed a test case currently underway between the Financial Services sector and colleges to design the system required to meet the sector’s skills needs.

The proposal was focussed on the skills element but should be closely linked to the single entry point and the work on diagnostics to inform business support.

Build business dynamism and ambition across Scotland 

This recommendation was supporting the implementation of the new target operating model for business support, including the single online portal.

The proposal anticipates savings being realised over time but would require an initial investment.

It was suggested that a strong case being made based on the project’s outputs and outcomes would help deliver the new model.

Efficiency through collaborative working 

The proposals show the direction of travel but this was seen as an important area which needed to be further developed.

Shared services may not result in major cost savings, especially initially where a cost will be involved, but greater collaboration and partnership working is likely to lead to greater efficiency and effectiveness.

Proceeding with incremental efficiencies should progress to finding ways to make improvements across the system.

It was recommended that an area that should be considered was the future of the public estate.

Maximise place-based potential through increased regional equity in Scotland and move Scotland from climate emergency to climate opportunity:

The Board agreed that these areas were more thematic but were worth including to the cover letter as a general direction of travel in accordance with Ministers’ ambitions.

It was suggested that the agencies should consider how they build these themes into their performance frameworks.

Collective effort to drive trade, investment and talent attraction in a post-Brexit environment

This was viewed as important but had cost implications that would require redistribution of funding from across the system so further work was required.

Action:

• Secretariat to circulate a revised letter and annex taking the Board’s comments into account

Future of the Missions 

Future Skills - the Board’s role following publication of the Future Skills Action Plan

The Board’s main concern was to ensure the work around the FSAP is being joined up across SG and the agencies, and that there was visibility around implementation timescales.

The Board agreed the work was now at implementation stage – so the mission should close down. The Board should now concern itself with supporting the implementation of the FSAP.

Business creation and growth 

Gerry McCusker updated the Board: The BCG mission is largely operationalised now. The campaign around entrepreneurial ambition is being absorbed into business as usual. The campaign is part of wider work - primarily Scotland CanDo and ScotlandIsNow, and the Board should monitor these. Other areas of the mission should be supported by SNIB. 

The Board agreed the mission had largely been operationalised – so the mission should close down.

The Board should now concern itself with evaluation, and monitoring progress against targets and milestones.

Business Models and Workplace Innovation

Scott McLarty and Gordon McGuinness updated the Board: There is good progress on Joint working teams, and the mission is progressing well, particularly on the skills side. Scott highlighted the need to ensure the business support side also had good momentum, for example the work on diagnostics to inform business support. 

The maturity of workstreams varies so the Board agreed to stick with mission and hear a report at the December board. 

Action:

• Scott/Gordon to update the Board at its December meeting. (NB – it has now been decided it would be best to bring this to the January Strategy Day)

Implications of Brexit

Linda Murray and Steve Dunlop introduced a discussion on preparations for Brexit.

The main areas of focus are readying a suite of grants and loans alongside awareness campaigns for business and direct technical and business support. Loan guarantees are being set up by UK Gov.

The whole system is moving to deal with the shock and the agility of the system will be a key factor. There will be a need to be clear what the system needed to stop doing in order to meet the challenge.

The whole financial sector needs to be the bedrock but it will not support businesses that are not going to be viable post-Brexit.

A focus on rural 

Lorne Crerar presented to the Board on work of the National Council of Rural Advisers (NCRA) and the contribution that rural Scotland is making to the national economy. 

Scotland’s rural economy accounts for around 27% of Scottish GDP and there is growth in the rural economy – improved connectivity is a big opportunity.

There is work underway to develop rural outcomes, indicators and actions that are embedded in the National Performance Framework and National Economic Strategy.

The Skills Action Plan for Rural Scotland has been published which will be of interest to the Board.

There was a request to ensure adequate rural representation on the Board to hold HIE and others to account.

Trading Nation Update and plans for an Investment Growth Plan

Katrine Feldinger and Charlie Smith presented, focussing on the collaborative development of the forthcoming Investment Growth Plan.

The project wants to move quickly into delivery. SG are pulling all parties together aiming for a Team Scotland approach to develop an joint understanding of the role Foreign Direct Investment should play.

Universities and oversees campuses have a key role to play.

There was a request to keep the Board updated.

Analytical Unit update  

Richard Murray presented an update on the work of the Analytical Unit.

A key project is measuring the impact of post-school education and training, and tracking the returns. It is recognised that returns also include social benefit so a separate strand is underway to capture that.

In relation to the performance Framework dashboard, It was reassuring that CBI have developed a set of indicators and these are in line with the Board’s own.

Over the next quarter the AU would focus on:

• the annual report for Board’s strategy day in January 
• accelerating work on innovation
• the work on productivity, which is drawing on international best practice.

A sub-group of Sara, Grahame, Scott and Nora would work with the AU to inform its work plan, and the Chair was keen to consider the benefits of an external group of economic advisors

The Board were content with the funding arrangements proposed for the AU. 

AOB  

There was no AOB.

List of actions: 

• a paper for December with a narrative around FW, developing ideas for how business sentiment is going to be measured and plans for how companies who are outwith the system are going to be engaged
• the agencies should articulate the future system they envisage – taking demography, capacity etc into account
• Maggie Wightman should bring skills alignment back to the December meeting (NB – it has since been agreed it would be best to bring this to the January Strategy Day)
• Secretariat to circulate a revised letter and annex taking the Board’s comments into account
• Scott/Gordon to update the Board at its December meeting. (NB – it has now been decided it would be best to bring this to the January Strategy Day)