Enterprise and Skills Review: report on Phase 1

Skills Provision and Economic Success

Vision: The recently published Labour Market Strategy makes clear our ambitions to deliver a labour market where there:

• is a skilled, productive and engaged workforce capable of meeting the needs of employers;
• is equality of opportunity to access work and to progress to ensure everyone is able to maximise their potential;
• are fulfilling, secure and well-paid jobs, where employees' contributions are encouraged, respected and valued;
• is low unemployment and high employment; and
• is an economy that supports a sustainable working population and can retain and attract new talent to meet our wider economic and social ambitions.

Guiding principles: The skills and learning systems contribute to our economic success by supporting people to get the skills they need to participate in the labour market and by ensuring our employers are supported to build and develop the workforce they need to succeed. Building from this strong base, we need to better meet the needs of learners, colleges, universities, business and employees by:

• focusing on an efficient learner journey toward and into sustained employment, with funding mechanisms aiding that journey; and
• supporting learners' progression at each stage of that journey, even as they switch between types of learning and institutions.

Current strengths and successes: Scotland already has a high-performing skills system by many measures:

• a strong performance on post-secondary qualifications with one of the highest rates in the EU;
• our college reforms have seen the emergence of a network of regional skills and technical education hubs focused on the needs of the region's learners and employers;
• five universities in the global top 200; and
• the scale, impact and ambition of our Modern Apprenticeship programme has grown significantly over the past decade in partnership with employers across the economy.

The review has highlighted the importance of good quality labour market information to better drive the planning and procurement of skills across the system. Skills Development Scotland has made good progress in recent years with the development of Skills Investment Plans and Regional Skills Assessments. The Scottish Funding Council, having responsibility for funding both further and higher education, has been in a unique position of being able to think strategically about the learning system as a whole, using this information to help meet the needs of students as they progress through their learner journey.

Challenges and opportunities: Building on this, the first phase of the review has concluded:

• that we need to enhance significantly the use of information across the system to ensure that learners have a wide range of high quality options that are informed by the needs of employers;
• that we should consider the types of partnerships necessary to improve our responsiveness to regional skills needs, starting with the alignment of the two skills agencies;
• the move to more joined-up governance of the skills and enterprise agencies should be replicated at an operational level, with much closer alignment across the system with the planning and provision of learning and skills;
• the importance of understanding better the most effective balance of our skills investment to maximise the return in terms of productivity and labour market inclusion; and
• the need to consider how we invest to ensure the most effective support for, and contribution from, those in work, always mindful of changing external factors.

Action: In order to contribute to increased productivity, we want to make sure that learners move as effectively and efficiently through their learning toward employment. To support this, we will start to take forward the following improvements with our agencies over the coming months:

• We will align the functions of our skills agencies to better join up how learning and skills are planned and provided to learners and employers.
• We will conduct a comprehensive review of the Learning Journey focused on sustained employment, with significantly enhanced use of labour market information in skills planning at its heart.
• We will review the effectiveness of our investment in learning and skills to ensure we have the right balance of provision across age groups and sectors and maximise its contribution to productivity and inclusive growth.