Coronavirus (COVID-19): measures to mitigate the labour market impacts - report
This report from a sub-group of the Enterprise and Skills Strategic Board contains recommendations for actions and interventions to help mitigate the expected rise in unemployment caused by the COVID-19 pandemic.
4. Identification and Assessment of Potential Labour Market Options
In response to the potential gaps in support, the sub-group and the private networks of each sub-group member identified potential actions that could be taken to address these gaps and help mitigate the future rise in Scottish unemployment.
In total over 50 options were put forward for consideration. A number of these extended beyond the remit of the sub-group and were put forward for consideration by groups including the Advisory Group on Economic Recovery led by Benny Higgins. Annex E provides a comprehensive list of all the options identified by the sub-group.
The options were grouped into broad packages and assessed against the criteria in Table 1 in order to come forward a concrete and actionable set of recommendations.
Table 1: Option assessment criteria
Criteria: Description
Affordable: Affordability of the option considering the current budget challenges and the expectation that resources should be maximised within the existing enterprise and skills system.
Deliverability: Given the need for urgent action, can the option be delivered quickly in order to mitigate the large rise in unemployment expected in the second half of 2020.
Value for money: Based on the range of current evaluation evidence, including lessons from past recessions, to what extent does the option offer value for money.
Private sector buy-in: For most options there will need to be private sector buy-in to avoid undertaking a range of training and support which will not result in people securing employment.
Annex F provides a summary of the sub-group's assessment of the options and this led to the sub-group identifying a set of priority actions to be taken forward immediately, important actions to be taken forward by other groups supporting the recovery, and actions to be considered by the sub-group over the summer. These are summarised within Table 2.
Broad categories have been used to identify the potential cost for each option based on the following scale: no incremental cost (up to £1 million); low incremental cost (£1 million to £2 million); medium incremental cost (£2 million to £10 million); and high incremental cost (£10 million+). This work was undertaken at pace with the agencies and further work is required to refine the cost estimates.
Table 2: Summary of Recommendations
Enterprise & Skills Strategic Board Sub-group - Framework for Action
Top Priorities for Immediate Action
1. Assistance to Support Employee Retention
Building on the Enterprise Agencies' recent experience of scaling up information and advice and delivering the Pivotal Enterprise Resilience Fund and Hardship funds, they will now also look to support businesses during restart and recovery with the aim of helping companies "Build Back Better" and minimise job losses. A process of continuous improvement is needed, working between enterprise and skills agencies, local authorities, sector groups and regional business organisations such as Chambers/FSB to ensure an agile response to support local economies. Greater alignment of enterprise and public sector support schemes is needed to ensure whole system approach and clarity is needed on the business engagement process and a clearer customer journey to ensure all businesses can access relevant support services. Given the scale of future demand, support will need to be prioritised for those with the greatest prospect of surviving and growth companies in key sectors identified by the Scottish Government. Achieving this will require shared investment and co-ownership with the public and private sector. Over the summer there is an expectation that the Scottish Government will be considering various incentive measures for retention and recruitment.
Action |
Cost |
Timescales |
|---|---|---|
Expand single portal helpline and website for businesses (findbusinesssupport.gov.uk) to enter the process for support, with appropriate marketing. Signposting to private sector intermediaries where appropriate. |
No incremental cost |
Immediate |
Work collaboratively with local government and the key national and regional business organisations, such as the Chambers of Commerce and the Federation of Small Businesses (FSB), to ensure an offer of support, informed by industry insight, which is integrated and accessible and tailored to meet business needs across Scotland. |
No incremental cost |
Immediate |
Enterprise agencies with relevant partners to support companies to identify funding needs, source and raise the right funding from the right provider prepare funding applications and pitches. Depending on demand, this may need to increase in scale. |
No incremental cost (Initially less than £500k to extend service to strategically important companies) |
Immediate |
Coherent offer to business on preventative measures to retain employees through upskilling and reskilling, recognising the unique challenges facing different parts of Scotland. |
Medium incremental cost |
|
Identify opportunities for Employment Growth schemes focussed on sectors and regions. |
Medium incremental cost |
Medium term as product requires development |
Identify new business opportunities that can be undertaken domestically via increased exports or substitution of imports through working with business/ILGs/sector bodies. |
No incremental cost |
Immediate |
Maximise the use of data and insight from industry partners and foster new improved channels to Industry Leadership Groups (ILGs). |
No incremental cost |
Immediate |
Support for the STUC's Scottish Union Learning should be increased and specifically targeted over the next 12 months to supporting workers to upskill and retrain in those sectors where there is a high risk of redundancies. |
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Inclusive Business Models with support for companies looking to shift their business to employee ownership or cooperative models. |
No incremental cost (to expand to 300 companies) |
Immediate |
Develop appropriate tool kit with services to enable businesses to consider innovative workplace practices consistent with the principles of Fair Work and enabling the adoption of efficient working practices.
Action |
Cost |
Timescales |
|---|---|---|
Support the principles of Fair Work First and encourage closer collaboration between the public sector, businesses and unions to understand, promote and deliver on the benefits of Fair Work. |
||
Manufacturing Adaptation Grant targeted at hardest hit sectors and companies diversifying into green recovery. Match funding for companies who can demonstrate support would enable them to be more resilient and attain pre-COVID-19 levels of productivity. |
Medium incremental costs (£5 million) |
Immediate |
Scottish Manufacturing Advisory Service (SMAS) will provide support to help companies review their business processes to achieve maximum productivity. |
No incremental cost (expand by 20% to 120 bespoke projects would cost £320k) |
Immediate |
Work with employers to co-design employment schemes to encourage shared investment in Scotland's workforce. |
||
Accelerate approaches to ecommerce for SMEs. |
Low incremental cost (doubling existing service to support a further 4,000 businesses with online tools costs £1.5 million) |
Immediate |
Business Creation and Diversification
Action |
Cost |
Timescales |
|---|---|---|
Financial support and advice for individuals facing redundancy or unemployment to start up their own business (including current advice packages from enterprise agencies, Chambers and FSB). |
||
'New Opportunity' diversification support to help business to adapt to the post-COVID-19 demands and rebuild competitiveness, targeted support at the more vulnerable companies operating in markets that have shifted or diminished. |
Medium incremental cost (£10 million) |
Immediate |
Expand Fair Start Scotland with funding support for start-up businesses. |
2. Assistance for Those Facing Redundancy
Scale up PACE to offer tailored support with a package of services co-designed by business i.e. skills assessment, job search and training advice to redundant workers and companies considering making redundancies, that maximises web resources, digitally delivered interventions and contact centre.
Action |
Cost |
Timescales |
|---|---|---|
Move to a model which focuses on tailored support for businesses of all sizes, that maximises web resources, digitally delivered interventions and contact centre assets (i.e. tailored support for businesses any size and universal support for individuals seeking support). |
Low incremental cost |
Immediate |
Reshape models of working across PACE and local authority, third sector and industry partnerships to secure commitment and flexibility to meet greater demand from employers of all sizes, and individuals seeking support directly (currently 18 PACE Partnership Boards). |
High incremental cost (£20 - £30 million annual cost of enhanced advice depending on intensity of 1 to 1 support) |
|
Invest in scaling up job search and job matching digital tools e.g. My World of Work, and strengthening linkages and signposting to E-DYW (latter is work in progress) and other partner sites. |
||
Further develop systems and processes for individuals' profiles to be matched to employers' opportunities e.g. creation of an online available people register (self-completion) of skills and capabilities. |
||
Adopt a supporting sectoral/regional specialist approach using local authorities' insights and intelligence. |
||
Scale up resources and frontline advisers, in partnership with business organisations such as Chambers/FSB and where possible, support from industry through secondments and volunteers, to enable individualised and tailored information, advice and guidance on Fair Work, upskilling/reskilling opportunities and support for moving back into employment. Expert advisors required for 50+ population and women to provide targeted advice and guidance, match to specific vacancies or advise on upskilling/reskilling opportunities. |
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Marketing and promotion of services to businesses and individuals to raise awareness of multi-channel and multi-partner support. |
||
Business Response Team provides a critical element of existing support to strategically significant companies who require assistance to restructure maintaining viability and jobs. Additional budget to augment very specialist skills would enable a more bespoke service to companies. |
No incremental costs (£500k to provide more bespoke service) |
Immediate |
3. Training to Enable Unemployed People to Transition into Employment
The Deputy First Minister made clear that the status quo is not an option as our skills and business support needs to change to meet the scale of the challenges we face. Given the scale of the challenge, all institutes need to be flexible and re-prioritise available capacity to help unemployed people transition into employment.
Apprenticeships and Training
Action |
Cost |
Timescales |
|---|---|---|
Implement a range of innovations and flexibilities that address physical distancing challenges while making it easier and more accessible, particularly in rural areas, for SMEs and micro-businesses to recruit and retain apprentices and trainees (allowing for different types of apprenticeships). SAAB will be fully involved in all implementation aspects for short life programmes. |
Continue provision of training provider grant support ca. £7m (per 3 x months) No incremental cost for most innovations |
Immediate |
Provide proportionate, time limited additional grant support for furloughed training providers (or those who can't operate) during COVID-19 period of 'lockdown' to ensure enough training resource post COVID-19. |
No incremental cost |
|
Re-introduce Transition Training Fund to support training as pathway to a job (building on oil and gas sector model). |
||
Work with employers to consider options for shared apprentice approach, removing admin burden on employers by transferring to SDS/FE college during crisis period. |
||
Relaxation of single employer status for short-life apprentice products to allow multi-employer approach or ease of transfer between companies for crisis period. |
||
Introduce Apprenticeship Pathway Programmes for those encountering difficulty finding employer-led programmes or employment as an apprentice. Student bursary or industry aligned training allowance to attract apprenticeship candidates until industry place available. |
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Extend period of off-the-job training (12 months), focusing on vocational learning aligned to competencies as part of the course where employers cannot accommodate work based learning due to physical distancing. |
||
Support expanded use of virtual learning environment for off-the-job training - Foundation Apprenticeship SQA Level 4/5; Level 6 in schools. |
||
Bursary or training allowance for furloughed employees in 'incubated' sectors to study short term courses. |
||
Explore 'group training' scheme approach to share training costs & HR support for micro businesses in partnership with businesses, Chambers of Commerce, FSB, Trade bodies and sectoral ILG's (in line with the guidelines in Strategic Board ILG review recommendations.) |
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Expand scale and support for Individual Training Accounts (ITA) immediately for key sectors (TBC from Economic leadership Group). |
Further and Higher Education Actions to Prioritise how the Sector Responds Now with a Focus on Flexibility
Action |
Cost |
Timescales |
|---|---|---|
Refresh catalogue of college, university and private training providers information on short, sharp courses and publish on a monthly basis by SDS and SFC as directory to facilitate retraining/training in line with market demand (with monthly course updates on My World of Work). |
No incremental cost (links to changes in My World of Work website) |
In progress |
Maximise the flexibility of college and university provision to meet the critical skills needs of employers and the future economic vision of Scotland, addressing key challenges and opportunities including; digital, automation, artificial intelligence (AI); the transition to a net zero carbon economy; health & social care; early years; construction; technical STEM-D. (consistent with AGER, SE/HIE/SOSE economic growth plans). |
No incremental cost |
In progress |
Short course accreditation and awards working with SFC, SDS, SQA and SCQF and professional awarding bodies. |
No incremental cost |
Developed in the short term |
FE and HE should deliver as a priority new blended models across more courses with high quality digital pedagogy to provide vocational, technical and professional skills training in light of physical distancing (building on the recommendations by the Advisory Group on Economic Recovery in developing Scotland's digital infrastructure). |
No incremental cost |
In progress |
In partnership, FE, HE and private training providers to consider a National Online Training Academy where learners would sign up to skills development courses which would focus on the needs of jobs in growth sectors or gaps in public sector provision. |
||
Scaling up of online learning from universities of high level skills for those in employment or those seeking employment targeted towards areas of critical skills demand from employers. |
No incremental cost |
|
Encourage co-design and collaboration of courses and join up across institutions to ensure maximum impact and a good return on public investment. |
No incremental cost |
Immediate |
Expand Flexible Workforce Development Fund (beyond levy payers) for college provision and repurpose 2020-21 funding short courses for transition; upskilling/retraining for workers made redundant; any remaining funding used for transition training for employees in sectors facing risk of significant job losses. (This allows £20M of funding to be repurposed quickly for the crisis following the commitment by Scottish ministers to increase investment in workforce development from £10M to £20M in academic year 2020/21). |
Medium incremental cost (£10m currently identified by SG) |
Could be expanded from Autumn 2020 and January 2021 if funding available. |
Expand one year post graduate study and Masters provision, prioritising those disciplines that match future growth areas in the economy. |
Medium/High incremental cost (additional £35 million could train 5,000 students or £10 million could partially fund 5,000 students, with the rest in the form of student loans) |
|
Roll out programmes such as Future Made for Success (industry linked scholarships for postgraduate study); virtual internships working in partnerships with business to solve critical business challenges. |
||
Industry led engagement to inspire young people to consider careers and training in key sectors backed up with support from education partners to develop key influencing strategies to attract students into these sectors. |
Skills Planning
Action |
Cost |
Timescales |
|---|---|---|
Local authorities and colleges/universities should work more closely together on regional labour market and economic planning development to ensure there is a skilled workforce to meet the demand from local businesses. |
No incremental cost |
Immediate |
Use of live data to identify existing and future skills demands (e.g. alignment of skills courses with R and D outputs and key growth sectors) including intel from ILGs. |
||
Monthly real-time labour market intelligence and data at national and regional level shared between SDS, SFC, local authorities and colleges and universities support the planning of additional or redeployed capacity aligned to the needs of employers and individuals. |
No incremental cost |
Immediate |
Skills Alignment programme and model to be utilised to analyse demand, provision and evaluation data on an ongoing basis. Up to date and robust labour market intelligence is shared monthly with colleges, universities and private sector providers as they seek to plan provision. |
No incremental cost |
Immediate |
Align new provision to regions and sectors that are assessed as high risk & high opportunity and work with Employer Led Groups, Chambers of Commerce, FSB, Trade bodies and sectoral ILG's/ILG bodies to identify regional/sector needs on an ongoing basis. |
No incremental cost |
Immediate |
Employers to co-design schemes (with funders, providers and learners) to support school leavers into sustainable employment and work with skills agencies to resource, plan and cohere the expansion of work-based learning in schools |
No incremental cost |
Immediate |
4. Helping Vulnerable People into Employment
Action for Young People
Action |
Cost |
Timescales |
|---|---|---|
Adapted delivery model for DYW. Move from a pilot to full implementation of funded DYW dedicated regional school coordinators delivered through budgets controlled by DYW Regional Groups to provide a dedicated, long-term link between young people and teachers with employers. Universal coverage across all secondary schools with funding channelled through DYW Regional Groups. |
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Enhanced DYW (Employer)/School/College relationship. Local authorities and schools will be focused on new learning approaches and maximising the number of young people spending time in a school setting. It will be vital for DYW, Scottish Government, Skills Development Scotland and local authorities to work in partnership to implement the roll-out of DYW Coordinators across Secondary schools and align this with the role of SDS Careers Advisers available to every secondary school delivering services that support young people in planning and making decisions for post-school that are informed by the needs of employers. Colleges will continue to underpin DYW across Scotland. |
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The new DYW industry co-ordinators will intensify employer long-term engagement in senior phase apprenticeships and maximise the 5,000 opportunities available to young people in S5 and S6 during 2020/21. |
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Accelerate alignment of DYW - Online portal and My World of Work to simplify and streamline opportunities for young people to find everything they need about their options, support, pathways and opportunities including support to develop their work ready skills. |
||
Increase support for schemes that mentor young people in developing business enterprise skills, with a particular focus on areas of deprivation. For example, pilot schemes based on Career Ready and MCR pathway - coordinated and promoted through DYW regional groups. |
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Short placement schemes re-introduced providing work experience for under 25s who have been out of work for six months to include essential employability skills, with employer subsidy. |
Action for Wider Vulnerable Groups, Including Women
Action |
Cost |
Timescales |
|---|---|---|
Public buyers should build on the existing practice of considering community benefit requirements in public sector contracts, by considering use of proportionate requirements in all contracts, regardless of value and, where relevant to the contract, focus such requirements on economic recovery and tackling inequality - specifically opportunities to tackle unemployment and to protect jobs. Young people and other vulnerable groups should be a target group for support. |
No incremental cost |
Immediate |
Consideration should be made for enhanced, tailored support for vulnerable groups, such as under 25s and disabled individuals, made redundant and women as they may require additional support from agencies (e.g. through more case management support). |
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Scottish Government to lead Social Security Scotland, local authorities, Skills Development Scotland, Third Sector and businesses to review additional measures to support threat to long term unemployed and vulnerable groups, covering: scale up the provision of key worker support for at risk groups; options to extend industry-led work experience programmes; best models for intermediate labour market programmes; and industry led schemes to support vulnerable groups into meaningful work |
High incremental cost (£33m already committed to Employability programmes including Fair Start Scotland) |
|
Colleges and Open University to focus on support for vulnerable adults and families through to access learning consistently across Scotland. |
No incremental cost |
Immediate |
Important Actions to be Taken Forward by Other Groups Supporting the Recovery
5. Ongoing Fiscal Support for Private Employers
Scottish Government must look at fiscal options directly or via the banks to minimise company failures of otherwise successful businesses. Furthermore, the Scottish Government must use its convening power to get banks, equity investors, creditors and other partners together to support the recovery.
- Preserve viability in key employment sectors through 'incubation' e.g. tourism (through banks; finance, government, agencies) and support furlough in these sectors for extended period (particularly apprentices and trainees).
- Financial rescue package for companies (deemed viable) under threat of failure. Government equity investment.
- Grant support to meet social distancing requirements.
- Clear process of assessment to determine level of support and whether responsibility of agency or bank intervention.
- Ensure companies know how to access any emergency available funding working with enterprise agencies other organisations on administration.
- Investigate merits of ProAct programme, modelled on the programme developed by the Welsh Assembly Government, that provides employers who are working at less than fully capacity with support to upskill and retrain those of their workforce on short time working.
6. Social Responsibility
Action |
Cost |
Timescales |
|---|---|---|
Public sector bodies need to lead on social responsibility. In conjunction with local authorities, employers and trade unions, prioritise schemes that provide opportunities for unemployed workers with the opportunity to work on projects of community benefit, linked to the net zero carbon transition and City Deal priorities, paid at the rate for the job and including accredited upskilling and retraining opportunities. |
No incremental cost |
Immediate |
Further Actions to be Considered by the Sub-group Over the Summer
7. Incentives for Employers for Employment of Trainees
Action |
Cost |
Timescales |
|---|---|---|
Scale up incentives for employers to retain and recruit trainee workers of all ages including: recent school leavers; FE/HE graduate support programme; Vulnerable young workers; and c. 37,000 apprentices currently in training. Carry out review of all training funds available to business to train/retrain young people and build in flexibility over the summer to review the sub-group's recommendations to ensure they support business and individual needs. This includes agreeing appropriate evaluation approaches and measures to better understand the impact of the different interventions. Support the restructure of UK Government's Apprenticeship Levy, recognising the Scottish Government's recent call for the scrapping of the levy. Over the summer there is an expectation that the Scottish Government will be considering various incentive measures for retention and recruitment. Employer Support Package Targeted % wage subsidy from Scottish Government for vulnerable groups Government job guarantees training £ direct grant for trainee retention Multi-employer trainee support scheme (admin support administered by SDS or Chambers) £ direct grant for 'adopting an apprentice' Incentive to accept trainee/apprentice transferred from failed company, especially SME and Micro businesses Short life product to introduce scheme to bring trainees in to workplace to complete specific business ask e.g. digital enhancement; web development Specific financial incentives for small/micro employers £ direct grant for training/ retraining in declining/hard hit sectors e.g. Hospitality and Tourism |
Modelling of volumes and interventions costs underway. UK approach would be cost neutral. Potential amalgamation of funds from Universal Credit/ skills and education budget 'Adopt an Apprentice' £5,000 per outcome |
Immediate |
8. COVID-19 Transition Training Fund (aggregate all programmes in single COVID-19 fund; TTF, ITAs, bursaries etc.)
Action |
Cost |
Timescales |
|---|---|---|
Reintroduce the Transition Training Fund to provide redundant workers with personal funding accounts to purchase access to appropriate training that will lead to a job now or a job that will be in demand in the future; Use labour market insights / Burning Glass/ILG intel to identify local economic opportunities. Apply a themed approach to training around exporting, new technologies, new modelling, energy transition. Focus on key growth areas to include; digital; zero net carbon; construction; health & social care; early years; technical; STEMD (link to SE/HIE/SOSE economic growth plans). Private training provision to accelerate immediate intervention response. Additional funding for STEM students (or incentives for future skills needed to support R&D tracked innovations). |
Typical cost of intervention is £2,500/£3,000 Ca.750,000 on furlough resulting a potential ca 250,000 redundant workers. 80,000 workers accessing TTF @ £2,500 = £200 million |
Immediate, with rapid scale up in the coming months UK funding/City Deals funding |
9. Maximise Graduate Apprenticeship Provision with Pathways to Employment, Focusing on Sectors and Jobs that will Support Economic Recovery
Action |
Cost |
Timescales |
|---|---|---|
Maximise Graduate Apprenticeship provision with the critical skills needs of employers and the future economic vision of Scotland, addressing key challenges and opportunities including; digital, automation, artificial intelligence (AI); the transition to a net zero carbon economy; health & social care; early years; construction; technical STEM-D. (consistent with AGER, SE/HIE/SOSE economic growth plans). Alignment of skill system to medium term sectors identified by Economic Recovery working group recommendations. |
Additional funding for Graduate apprenticeships. |
Immediate |
10. Further Business Creation and Growth and Demand Stimulus
Action |
Cost |
Timescales |
|---|---|---|
Continue to review employment growth schemes over the summer in light of emerging sectoral and regional challenges. Optimising the City Region and Regional Growth deals. |
Options Fed into the Advisory Group on Economic Recovery
The sub-group identified several actions which extend beyond the enterprise and skills system which would help support Scotland's recovery and therefore help mitigate the rise in unemployment. These actions were shared with the Advisory Group on Economic Recovery and are summarised in Box 2.
The sub-group is clear that the successful implementation of the actions will require collaboration across a range of delivery partners and stakeholders including not just the enterprise and skills agencies but also businesses, colleges and universities, the third sector and local authorities. We also recognise the need to be flexible and different solutions may apply in different parts of the country and in different sectors. will require sustained collaborative effort and communication among all partners.
Box 2: Summary of options fed into the Advisory Group on Economic Recovery
1. A time limited continuation of furlough scheme in some form for those most affected, such as tourism and hospitality.
2. Closer working relationship across the enterprise system, including Business Gateway.
3. Rescue & protect strong but vulnerable businesses by creating equity matching service/government funded body
4. Accelerate digital transformation of SMEs & micro businesses by investment in broadband infrastructure upscaling
5. Accelerate infrastructure investment for job creation and long-term competitive advantage e.g. Digital fast broadband across Scotland
6. Bring forward investment in green projects - such as £10-12 billion programme for retrofitting energy efficiency into homes - to create construction jobs and accelerate transition to net zero carbon
7. Capital investment programme to enhance job creation and balance Scotland e.g. Improved transport links
8. Explore import substitution - export more aggressively with focus initially on UK upscale opportunities
9. Tax/voucher rebate on R and D that has a commercial business case
10. Incentivise banks to support business start-ups and expansion in local economy -
11. Support to revisiting procurement criteria to increase weighting on domestic market provision
12. City Deals - accelerate known projects or repurpose some of funding to support initiatives that have job creation projects or support high risk businesses e.g. build outdoor covered public spaces for use by restaurants and bars to expand capacity during social distancing
While the focus of the sub-group was on identifying practical actions that could be implemented quickly, during its work a range of longer-term actions were identified. These included potential measures that could support the long term unemployed and groups most at risk.
Over the summer the sub-group will develop these ideas further and report back at the end of August. This will feed into the current review underway by the Scottish Funding Council on the current provision and sustainability of further and higher education in Scotland which is due to report to Ministers by the end of August. However, given the scale of the immediate challenge, SFC is working with colleges and universities to take action now around flexing provision to meet immediate demand.
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