National Strategy for Economic Transformation Delivery Board minutes: May 2023

Attendees and apologies

Present

• Barry White, Co-Chair, Former Chief Executive, Scottish Futures Trust

• Ewan Aitken, Chief Executive, Cyrenians

• Douglas Millican, Former CEO, Scottish Water

• Nora Senior, Former Executive Group Chair, Weber Shandwick and past Chair, Enterprise and Skills Strategic Board

• Roz Foyer, General Secretary, Scottish Trade Union Congress

• Ellis Watson, Former Chief Executive, DC Thomson Media Group

• Audrey Cumberford, Principal and Chief Executive, Edinburgh College

• Gillian Docherty, Chief Commercial Officer, University of Strathclyde

• Sir Simon Lister, Managing Director, BAE Systems Naval Ships

Apologies

• Jamie McGowan, Managing Director, Essence of Harris
• Uzma Khan, Vice Principal Economic Development and Innovation, and Deputy Chief Operating Officer, University of Glasgow
• Colette Cohen, CEO, The Net Zero Technology Centre

Supporting Officials

• Gregor Irwin, Director General Economy, Scottish Government

• Aidan Grisewood, Director for Economic Strategy, Scottish Government

• Gary Gillespie, Chief Economist, Scottish Government

• Colin Cook, Director for Economic Development, Scottish Government

• Richard Rollison, Director for International Trade and Investment, Scottish Government

• Richard Murray, Deputy Director NSET Delivery and Finance, Scottish Government

• Lewis Hedge, Deputy Director Fair Work and Labour Market Strategy, Scottish Government

• Adam Reid, Deputy Director Skills, Scottish Government

Items and actions

Welcome

Barry welcomed everyone to the sixth meeting of the NSET Delivery Board. He noted apologies from Jamie McGowan, Uzma Khan and Colette Cohen and also that Ellis Watson would join the meeting at 13.50.

Barry informed members that Jamie and Colette had asked to step down from the Board and he put on record his appreciation of their contribution to the Board's work, in particular Jamie's contribution on Housing and Colette on the Green Economy. Barry noted the intention to operate as a smaller board going forward.

Members noted the establishment of the New Deal for Business Group, of which Barry is a member, and the strong read across to NSET.

The minutes of the previous meeting on 29 March were agreed and the Action Tracker noted.

 NSET Delivery - Progress so far

Aidan introduced the session, noting the forthcoming NSET Annual Report and the opportunity to align with the Government's Policy Prospectus. The importance of considering the prioritisation of NSET was also highlighted, including what actions should be stopped, and the need for the Delivery Board to provide this scrutiny.

The Board were asked to provide any comment on the annual report to the NSET team by 2nd June.

Each of the Programme SROs set out the Acheivements, Concerns and Opportunities for their respective Programmes before opening up for discussion with members. The following key points were noted in discussion:

Programme 1: Entrepreneurial People and Culture, SRO Colin Cook

• given the substantive discussion on Entrepreneurship at previous Delivery Board meetings, members felt it appropriate that there is time for issues raised to be progressed and for Entrepreneurship to return to a future Board meeting
• despite the funding challenges, entrepreneurship remains a key priority and work is underway to identify ways to support entrepreneurship to make a real impact
• the link between techscalers and community wealth building was highlighted
• more needs to be done to drive the communications narrative on Entrepreneurship and Skills
• it was highlighted by the Board that Mark Logan, as the Chief Entrepreneurial Officer, is driving this programme forward and so the Delivery Board should focus on ensuring the programme is properly supported and considering the cross-cutting connections with other programmes

Programme 2: New Market Opportunities, SRO Richard Rollison

• the green economy opportunities will remain a key area of the Board's focus. Prioritisation and funding are key with the biggest uncertainty around these elements out with Scotland's control e.g., US Inflation Reduction Act, EU Green Deal, grid connections, and Contracts for Difference (CfD) awards 
• members would welcome the opportunity to hear from the Enterprise Agencies and the Scottish National Investment Bank (SNIB) on work to support the programme, particularly the pipeline of investment needed for ScotWind
• there is a limited window of opportunity and Scotland is competing with other countries who are better resourced. There is significant risk that capital investment shifts in response to initiatives such as the US Inflation Reduction Act and the EU Green Deal without a UK equivalent
• given the scale of the economic opportunity, the Board will look for reassurance that there is capacity to deliver the full economic benefits from both wind and hydrogen and how the Board can help support this
• specifically, the Board focus on those areas that the Scottish Government and wider public sector do control and making sure we maximise these opportunities e.g., encouraging investment, consenting etc
• the importance of insuring training is in place to support future job opportunities from ScotWind and hydrogen was recognised, with on-going maintenance of offshore wind providing a further economic opportunity
• overall, the economy is re-setting after experiencing a number of shocks and so change is happening very quickly, with firms having to adapt their business models in light of labour market shortages and rising interest rates

Programme 3: Productive Businesses and Regions, SRO Colin Cook

• recognised that this is a wide-ranging programme and the Board agreed that it should capture AI to a greater extent given its rising importance and potential impact on the economy in the coming years
• it was noted that Scotland's AI Strategy was published about two years ago and there remains significant concern around ensuring AI is trustworthy and ethical
• AI will mean rapid workforce transformation with large scale upskilling issues around ensuring people remain actively employed in the economy. Business will need support through the transition
• it was suggested that the Edinburgh Futures Institute could help advise the Board on AI
• concerns were raised on funding pressures for a range of activities around digital economy/adoption of technology and what role the Government should be playing in this space
• a full review of the scope of this programme is required to clarify prioritisation of actions to improve productive businesses and regions, and this is to be brought back to the Delivery Board for consideration e.g. formal inclusion of housing supply and what actions are being pursued and progress on regional economic development following the publication of the regional economic policy review

Programme 4: Skilled Workforce, Adam Reid on behalf of SRO Stephen Pathirana

• need to consider the interaction between the work of the Delivery Board, Programme 4 and the James Withers and Professor Hayward's Reviews. Also, the link with the Professor Muir Report. There is an opportunity for the Board to increase its engagement on the skills agenda as these reviews conclude, are published, and action plans developed
• Audrey emphasised the need for a cohesive and revised skills system, the year ahead is already largely set, so need to act for future years. Members noted the need to be clear about the skills system Scotland needs to deliver NSET and that simply building on the status quo could be a lost opportunity. Barry and other members noted that there in an impression that the current system is under significant strain
• in terms of priorities, members encouraged focusing on four or five key actions and would welcome the opportunity for a further discussion given this is a critical moment in time and in light of ongoing financial challenges
• on links with business, members reflected on feedback from employers on the challenges they are experiencing filling Skills Programmes and Apprenticeships, and skills shortages, particularly in engineering and green skills. They highlighted the need for a model that involves more co-development with business and cited the Scottish Union Learning Model
• members questioned the absence of qualifications in the NSET Skills Programme and the need for them to be included going forward. It was also noted that more short courses are likely to be required and it is essential that qualifications can be understood by employers
• it was noted that more young people now leave education with no qualifications. Good work had previously been carried out under the Youth Guarantee Scheme, but members were concerned that momentum could be lost as a result of the move to mainstream the activity
• there was no common view on the precise skills the economy will need in twenty years, but what is essential is closer engagement with employers to better match provision and funding to have a skills system that responds to the future needs of industry
• in summarising, Barry underlined that, following the reviews, the Board wants to be clear on the plan, what actions are being prioritised and resourced

Programme 5: A Fairer and More Equal Society, SRO Lewis Hedge

• it was highlighted that a number of early quick wins have already been completed, and we now need to look at the remainder of the ten-year strategy and firm up the next steps for the programme
• members noted key issues around endemic low pay, record levels of zero hours contracts (the highest area within the UK), constraints of devolution and, in some respects, underutilisation of the levers that Scotland does have (e.g., procurement)
• no common understanding among business of 'wellbeing economy', although members noted it can be summarised as 'Fair, Green and Growing'. Similarly, 'Fair Work' means different things to different people, and it was noted that many progressive businesses are already adopting strategies which closely align with what the Scottish Government means by a Fair Work and Wellbeing Economy. The Board agreed the need for clearer articulation of these concepts so that business understands what they mean and how they can align their business models to them
• members noted the review of the Scottish Business Pledge and the need to think about how to tackle the 9% in the Scotland currently not receiving the Real Living Wage. Action was agreed to specifically look at how Scottish public procurement is supporting the adoption of the Real Living Wage
• further work is needed to sharpen the definition of Wellbeing Economy/Fair Work and how this is communicated with employers. This needs to be part of the discussion when we consider prioritisation of the programme going forward and Gary Gillespie offered further information to help inform this 

Programme 6: A Culture of Delivery, SRO Richard Murray

• it was noted that this is not a policy programme but about the 'how' of delivery, in particular building on the work of the Enterprise and Skills Strategic Board
• much of Programme 6 activity is focused on monitoring delivery with key concerns around the fiscal situation and how to shift the dial on performance
• going forward, activity will focus on maximising the Board's impact in key areas of focus and building on the relationship with the New Deal for Business Group

NSET Delivery - the year ahead

Barry welcomed the opportunity to acknowledge everything the Board had achieved in its first year and noted the proposed changes to the operating model set out in the Board Paper.

Members welcomed the proposals, in particular the suggestion that there would be a mix of shorter virtual meetings focused on progressed of the delivery programmed as a whole with a number of longer (three hour) in-person meetings which would allow for more detailed presentations and discussions. Dependent on the subject matter it was also suggested that this would provide more opportunity for different agencies of Government and industry stakeholders to be invited to support the discussion.

Board members want to provide challenge and support on the key areas of NSET. This may be best done by some work between meetings, building on the role of the subgroups of Board Champions. This could allow members to drive progress in targeted key areas and then return to the Delivery Board for update including any issues for decision.

Specific areas of focus were identified by members for the Board follow-up through a set of deep dives over the coming months, including Green Economy, Productivity (modernisation), Fair Work, and Skills.

Introductory session with Neil Gray, Cabinet Secretary for Wellbeing Economy, Fair Work and Energy

The Cabinet Secretary thanked the Board for its work over the last year. He underlined the importance of NSET, particularly given the current economic context and tight fiscal environment.

He emphasised that budgets are a real challenge, and so it is critical that we focus on where we can make the biggest impact to grow the economy, which is why prioritisation of NSET is so important.

The Cabinet Secretary also took the opportunity to emphasise the alignment of NSET with the priorities set out in the recently published 'New Leadership - a fresh start' policy prospectus. A Mandate Letter will soon be issued to each Cabinet Secretary, setting out the priorities for the next financial year, and it was emphasised the key role the Board can play in supporting delivery of these priorities. It was noted that NSET is the right vehicle to deliver on these priorities.

The Cabinet Secretary outlined the cross-government nature of his role, highlighting economic growth priorities across all areas of government. He noted that critical to this is building strong relationships with Business across all areas of Government, which will be hugely helped by the recently established New Deal for Business Group.

Forward look and any other business

Barry thanked members and invited them to feedback any final comments on the draft Annual Report by the end of the following week. He confirmed that the next meeting would be held on 21 June and would be a shorter, one hour meeting held virtually.

Actions

• secretariat to circulate information on the New Deal for Business Group
• secretariat to set-up sub-groups between Delivery Board members, focused around the Champion topic areas identified and to share updated Terms of Reference
• secretariat to set-out the programme of future meetings, including deep dives
• members to provide final comments on draft NSET Annual Report by 2 June