Flexible workforce development fund: first year evaluation

2. Flexible Workforce Development Fund

This Chapter sets the scene for the evaluation and provides background to the development of the Fund and its governance, management and delivery arrangements. The information presented on the following pages includes a review of background information on the development of the Fund, including various guidance and other documents ^[1] .

Further contextual information on the role of skills and workforce development in a modern economy and on the Apprenticeship Levy is provided in Appendix D.

2.1 Background

The Scottish Government introduced the pilot FWDF in response to the strong support expressed through its consultation on the Introduction of the UK Government Apprenticeship Levy. It has been designed to help respond to the immediate skills needs of employers, and the new £10 million Fund was announced by the Minister on 16 ^th December 2016, and was officially launched in September the following year.

The new Fund aims to provide employers with flexible workforce development training opportunities to support inclusive economic growth through upskilling or reskilling of employees who will not benefit from the increase in apprenticeship opportunities. The main policy drivers for the FWDF are:

• supporting the needs of levy payers;
• supporting workforce development in line with the aims of the Scottish Government’s Labour Market Strategy, particularly in the areas of upskilling and reskilling workers, and consistent with the ambitions to raise productivity; and
• ensuring the Fund further strengthens college engagement with industry.

Key eligible criteria is that applicants must be levy-payers and the funds cannot be used for qualifications or training required by legislation.

Employers have the flexibility to train members of their workforce to bring greatest benefit to their business.

Within this, and in line with government priorities, employers are encouraged to give due consideration to specific priority groups such as: older workers; those in low skilled jobs; those working regularly with younger workers/apprentices; veterans/early service leavers; and those who identify as belonging to equality groups.

Tackling persistent issues in the labour market arose in the policy scoping phase for the Fund’s development, and the FWDF Project Plan specifies that the following themes should be considered as priorities for the Fund ^[2] :

• infrastructure investment:
  • work-place coaching and mentoring skills for those employees working regularly with younger workers/apprentices to sustain learning in the workplace
  • HR-related support activities deemed particularly important for SMEs constituting the supply chain of many of the larger levy paying employers; and
• specific skills gaps/issues:
  • unmet digital skills needs such as digital literacy
  • Big Data interpretation
  • communication/personal skills – this might be considered in terms of providing wider access to online support already available.

A range of guiding principles have subsequently informed the development of the Fund, namely:

• simplicity;
• minimal administrative burden;
• cost effectiveness of delivery;
• transparency; and
• responsiveness to employer demand.

2.2 Fund Governance, Management and Delivery

The Scottish Government is the high level governing body for the FWDF, and the day-to-day management and administration of the Fund rests with the Scottish Funding Council ( SFC). The delivery model for employer engagement and training lies with the college network in Scotland.

The SFC allocated the £10 million funding for 2017/18 based upon an estimate of the number of levy-paying employers in each region, with greater levels of funding allocated to regions with more levy-paying employers ^[3] .

The monies are to be used to respond to employer demand both at a regional and national level. As outlined and considered later, the SFC requires colleges to provide real-time data via an Online Portal reporting system, with information routinely shared with the Scottish Government.

The role of Scotland’s colleges is to work with levy-paying businesses in their region to identify their training needs and match them to their training offer, taking account of which training will likely have greatest return on investment – a training needs analysis is required to be undertaken, and the guidance suggests that this should be proportionate in nature.

If a college is unable to provide the training that an employer requires, colleges should broker contact with another college which is better suited to meeting their training needs. Employers may only work with a single college through the Fund, and those operating on a Scotland-wide basis or across more than one college region may submit only one application to the Fund at a college of their choice.

Colleges are required to develop a regional suite of training provision available at their college in support of the FWDF. The suite of training is to be developed in line with national priorities and be informed by wider intelligence ^[4] .

Guidance highlights that a list of possible provision be produced but should not be presented to employers as an exhaustive or prescriptive offer. This is in line with the ethos of the Fund – it is to be driven by employers who can access provision to meet their recognised skills gaps and increase productivity.

An application form is required to be completed and submitted to the chosen college, and is typically worked up with support from college staff. It captures information on:

• company details (name, sector, company registration details);
• details of training to be undertaken (timescales, number of employees, notional hours of study, qualifications to be gained, costs);
• details of skills gaps to be addressed;
• impact of training on productivity;
• course / delivery employer evaluation; and
• proof of levy-paying status.

An employer is eligible for up to £10,000 per year, and funds are allocated on a “first come, first served” basis until the college/region’s funding is exhausted. Any underspend of funds can be reallocated by the SFC to other colleges/regions with evidence of unmet demand.

The initial deadline for applications to the Fund was the 15 ^th December 2017, but has been extended a number of times – first to the 28 ^th February 2018 and latterly to 30 ^th June (deadlines for contractually committing and delivering training have also been extended). Essentially, deadlines have been set to enable SFC to meet its financial obligations to reconcile and report spend against the academic year 2017/18 allocation.

Based on feedback, the latest guidance from SFC is that “ all FWDF training associated with the AY 2017-18 programme, contractually committed by the end of June, must start before the end of September 2018” ^[5] . This has provided greater flexibility, and replaces previous guidance that all training required to be contractually committed by the end of June 2018 and that training must be delivered by the end of September 2018.