Post-school education and skills reform legislation: consultation

Chapter 3: Governance of the Scottish Funding Council

The purpose of the SFC is to secure coherent, high quality further and higher education by colleges and universities and the undertaking of research among those bodies. The SFC’s functions are set out in the Further and Higher Education (Scotland) Act 2005 (“the 2005 Act”).

Both proposals 2 and 3 set out in chapter 2 would result in a significant change to the SFC’s purpose and responsibilities. They would also affect the purpose and responsibilities of SAAS and SDS too. Unlike SDS and SAAS, however, SFC is established in legislation (the 2005 Act) so we have to make sure that any changes to SFC’s purpose and responsibilities are properly reflected in the 2005 Act. That’s why this chapter only considers the Scottish Funding Council.

The SFC Board

The SFC is made up of members, including a Chair, who are appointed by the Scottish Ministers. These members operate as a Board and have collective responsibility for the proper conduct of the SFC’s affairs. The members are not appointed as representatives of individual organisations.

Members’ skills, knowledge and experience

If the SFC’s purpose and responsibilities are changed, then we need to make sure that the SFC Board includes people with the right skills, knowledge and experience to oversee any new responsibilities.

The 2005 Act sets out the specific skills, knowledge and experience that Scottish Ministers are to consider when appointing new members^[3]. These are primarily related to the provision of fundable further or higher education both past and current; industrial, commercial or financial matters; and both current and past research.

The societal and technological context for post-school education and skills, research and innovation has changed considerably since 2005. It may be beneficial to consider revising the skills, knowledge and experience detailed in the 2005 Act to reflect these changes.

Numbers of members

The 2005 Act also sets out other requirements about the SFC Board, such as how many members it should have and how many need to be present to make decisions (called the quorum). The 2005 Act requires there to be 13 to 16 members, including the Chair and Chief Executive^[4]. SFC has the power to set its own Board procedures, including any quorum^[5].

Term of membership

The 2005 Act specifies the length of initial appointment term and number of reappointments for SFC Board members. The members (including the Chair) may be appointed for a single term of up to four years with the option for Ministers to extend that appointment for a single further term of up to four years. This does not provide sufficient flexibility to allow for effective succession planning nor to respond quickly to pressures or temporary challenges.

Regulated public appointments, which include SFC Board appointments, are regulated and monitored by the Ethical Standards Commissioner. In addition, they must comply with the Code of Practice for Ministerial Appointments to Public Bodies in Scotland, issued by the Commissioner, which sets out the principles and processes to be followed by the Scottish Ministers in making the appointments. The Code of Practice limits the total term of office of a board member to eight years, alongside other requirements such as conducting a fair, merit-based and transparent appointment process.

Proposals for change

The Scottish Government is seeking views on making changes to the governance arrangements of SFC.

We are proposing to amend the provision in the 2005 Act to provide greater flexibility for Board appointments by removing the four year limit to the term of appointment and the restriction on reappointments. We are also proposing to update the skills, knowledge and experience requirements for new Board members. An important part of this would be ensuring that SFC Board membership had an appropriate understanding of the range of apprenticeship provision.

We are interested in your views on any improvements to strengthen the governance of the SFC in carrying out its current role and improvements to allow SFC to carry out an expanded role (under proposal 2 or 3 in chapter 2) effectively. We are interested in your suggestions for the skills, knowledge and experience needed for the SFC Board to be effective in holding SFC to account and scrutinising its performance.

Tell us what you think

Q5. Should the 2005 Act be amended to remove the restrictions in respect of Board appointments?

Q6. If SFC takes on responsibility for all apprenticeship funding, what additional skills, knowledge and experience should be considered for SFC Board members?

Q7. Do you have any other comments or suggestions for governance of the SFC Board or other aspects of SFC governance?

(You might want to consider, for example, ensuring equality and diversity of members etc.)