Flexible Workforce Development Fund (FWDF): evaluation

Executive Summary

Introduction

This executive summary presents the findings from an evaluation of the Flexible Workforce Development Fund (FWDF). The evaluation covers Year 1 (academic year 2017/18) to Year 4 (academic year 2020/21) of the Fund.

The evaluation, undertaken between December 2021 and August 2022, comprised:

• Secondary research, including a review of FWDF documentation and data provided by the Scottish Government, Scottish Funding Council (SFC), and Skills Development Scotland (SDS). This included a review of the evaluation of the FWDF pilot year, FWDF application forms and guidance notes, raw data from colleges and The Open University in Scotland (OUiS) via SFC and from SDS on employers/employees supported and training provided, SFC Further Education Statistics (FES) returns, and published policy/strategy documents.
• Primary research, including telephone and video-conference interviews with 45 organisations (60 individuals) between January 2022 and March 2022. This spanned partners, colleges, OUiS, independent training providers and wider stakeholders. 203 telephone interviews with Levy-payer and Small and Medium Enterprise (SME) employers between April 2022 and June 2022 (undertaken by Research Resource as part of this project) and 173 responses to a SNAP online survey of employees that participated in training supported by the Fund. The employee survey was live between May 2022 and June 2022, and the survey link was distributed by employers directly to their employees.

Main findings

The FWDF was established by the Scottish Government in September 2017 to provide employers with flexible workforce development training opportunities.

The FWDF aims to support inclusive economic growth, address skills gaps, and boost productivity through the upskilling or retraining of employees for whom apprenticeships are not an appropriate route to address their training needs.

This evaluation found that the FWDF is largely working well and is delivering against its purpose. The guiding principles that underpin the FWDF were found to have been substantively achieved and remain relevant to the FWDF today.

The Fund was universally considered by all stakeholder groups consulted in this evaluation to be a much needed and valued intervention. The evidence collected found that it has benefited the intended audiences. There were, however, some contrasting views in that independent training providers report that they have had limited involvement and benefit.

The evaluation evidence found there to be a clear and strong continuing rationale for the Fund. Not only for the role it can continue to play in supporting inclusive economic growth, but also in supporting COVID-19 recovery. Almost all of the 203 employers surveyed as part of this evaluation have current skills gaps/issues and identify the main drivers of change as keeping pace with changing customer expectations, digital innovation, and COVID-19 recovery. This reinforces the need for a continued focus on workforce development.

The Levy-payer employer strand of the FWDF was found to be firmly established. Around 1,350 unique Levy-payer employers, an estimated 31% of Levy-payer employers in Scotland (Sources: College employer data provided to SFC; SDS employer data; UK Business Counts and Employment) have been supported, and the total number supported has increased in each academic year when compared to the pilot year (see Table 4.2). The number of employees supported has also increased, from around 9,000 (2017/18) to around 27,000 employees (2020/21). While there has been repeat business, there is a large proportion of Levy-payer employers who have not accessed the Fund. The factors emerging from this evaluation appear to relate to limited awareness of the Fund or the funding cap not being considered appropriate.

Year 4 saw an increased budget, and the Fund was extended in reach and scope. As in Year 1 there was also a considerable underspend in Year 4. The recent changes are still in their relative infancy and delivery has been affected by COVID-19. Training providers in this evaluation report that good progress is being made. Over 900 non-Levy-payer SMEs, an estimated of 0.5% of SME employers in Scotland (Sources: College/OUiS employer data provided to SFC; UK Business Counts), have been supported to date, and more than 2,000 employees from SMEs have been supported with workforce development.

Recommendations

The recommendations, drawn from the evidence and insight collected in this evaluation, are generally light touch although it is the EKOS view they would offer some improvements to the Programme.

1. Establishing multi-annual funding for the FWDF and greater flexibility in delivery milestones. This would provide greater lead-in time and better security and stability for longer-term planning and delivery on both the supply and demand sides of the Fund.

2. Consideration could be given to creating a single FWDF "pot" for employers. This could provide a standardised offer for all employers, and greater flexibility, including the potential for increased investment for SMEs. The inbuilt flexibility of the Fund to reallocate additional budgets to those colleges/regions with evidence of unmet demand should also continue.

3. The training needs of employers are not always going to be able to be addressed by one training provider. While it is appropriate for the college network to be the main provider of FWDF training (this is in line with a key objective of the Fund), this should not preclude employers from accessing training from other providers if it offers the best solution for them. It should not be one or the other. From the evaluation it would seem that some colleges and employers are not aware there is flexibility to enable employers to access different/multiple training provision via the SDS option, where a college could be one of the providers, and so there is a need to clarify and communicate this more widely to ensure there is a shared understanding.

4. The capacity and commercial focus of the college network varies in terms of their ability to administer, market/promote and deliver the Fund. Among other things, the administrative burden has increased since the Fund was opened to non-Levy-payer SMEs. Consideration could be given by the Scottish Government and partners to how this could be addressed in some way (e.g. support with administration costs, funding at a national level for marketing, streamlined reporting).

5. Increase awareness and understanding of the FWDF among both Levy-payer and non-Levy-payer SME employers and among business-facing organisations and advisors. There is a continuing role for all parties to play in marketing and promotion of the Fund, including at a national level.

6. Consideration could be given by the Scottish Government to exploring access to a list of Levy-payer employers with HMRC to see whether HMRC would be willing and able to promote the FWDF to Levy-payer employers.

7. The £5,000 annual funding cap appears to be appropriate for non-Levy-payer SMEs. There could be merit in keeping a "watching brief" on this, as delivery to this cohort of employers has been limited to date, and some are relatively large employers.

8. The evaluation found that the annual funding cap of £15,000 for Levy-payer employers is not attractive to all employers. There may be merit in keeping a "watching brief" on this and retaining flexibility to increase the funding cap where appropriate. The evaluation of the FWDF pilot year recommended that the funding cap could be changed from £10,000 to a scale of between £10,000 and £25,000.

9. There needs to be a more effective way to support large multi-site employers. The Scottish Government and partners could review possible options with a view to implementing a solution.

10. Some training providers are currently engaging with employers on how best they might utilise FWDF development funding for new training provision. This should be encouraged across the college network/OUiS, and the findings communicated and shared widely among partners. This new element of the FWDF also needs sufficient lead-in time both from a development and delivery perspective.

11. From an equalities perspective, the evaluation found that disabled workers and minority ethnic workers continue to be under-represented in participating in the training delivered. It is important that employers accessing FWDF are aware of the importance the Scottish Government places on taking action to address inequality and meaningful discussions should take place with employers on this.

12. Consideration could be given to exploring of ways to further streamline both the application process and the range of information/monitoring data required to be provided to the SFC and Scottish Government on the employers and employees supported.