Scotland's National Strategy for Economic Transformation - Delivery Plans October 2022

Programme 4: Skilled Workforce

Outcomes & Objectives

Context

It is clear we are in a period of significant economic challenge as we emerge from the impact of COVID and into a cost crisis, with expected yet unclear impacts on employment. At a time of acute labour shortages, historically low unemployment and soaring inflation, we have taken the view that we must prioritise wage increases over spending on employability, but this is not a decision we have taken lightly. The drive for Net Zero, the changing world of work, tightened public finances, global economic instability and the resultant rise in commodity prices and cost of living, only heighten the importance of equipping Scotland's people and businesses with the skills they need. These interrelated factors are creating some challenges across many regions and sectors of the economy, with clear implications for the education and skills system, mainly:

The pandemic had an unequal effect on the population, with women, young people, lone parents, older and disabled workers, minority ethnic people and those with no or low qualifications, all disproportionately impacted. In addition, pre-pandemic concerns remain around the quality of work, in-work poverty, underemployment and the rise of the gig economy, and the role each of these factors plays in compounding poverty and inequality.

The urgent need to decarbonise major industries across Scotland will also put new demands on Scotland's skills and education system, as whole sections of the workforce may need support to transition into new or altered job roles.

As technologies and jobs continue to change throughout people's careers, workers will need to continuously develop adaptive resilience and a diverse skillset, including digital skills, to remain competitive in the labour market.

As the population grows older, people are more likely to be working longer, with multiple employers and in multiple careers, and greater need for in-work engagement with the skills system to reskill or upskill in line with changing work demands.

Employer demand for workers has increased while the supply of permanent and temporary workers has fallen, bringing new challenges for industries and employers.

Development of a Skilled Workforce sits as part of the outcome expressed in Scotland's National Performance Framework as "we are educated, skilled and able to contribute".

The NSET Skilled Workforce Programme builds on work already underway to reform the education and skills system through: the National Discussion on Education, Independent Review of Qualifications and Assessment, Implementing the Careers Review, and Curriculum Development; work to explore and define the purpose and principles we want to underpin the post school education and research eco-system for future generations; review of Lifelong Learning, including evaluations of existing programmes including Flexible Workforce Development Fund and Individual Training Accounts, and the launch of the Independent Review of the Skills Landscape.

Given the scale and breadth of the challenges facing our economy and society now and in the coming period, supporting our education, research and skills system to continue to deliver national and local outcomes must be a shared endeavour across national and local Government, business, the third sector, and education bodies and institutions. We have seen how this can work in practice through initiatives such as the Young Person's Guarantee, a programme that has shown how the education and skills system, employers and the public sector can come together to deliver a joint aim – namely to provide every young person aged 16-24 with the opportunity of a job, apprenticeship, further or higher education or training. Employer engagement has been crucial in supporting the delivery of the Guarantee, with over 600 employers signed up to date. It provides one useful model for tackling the big challenges we face, including climate change and skills gaps across sectors.

Similarly, the partnership between business and the public sector to deliver the National Transition Training Fund (NTTF) through the pandemic and its aftermath was vital to the success of the scheme. In Year 1, the NTTF helped over 9,400 individuals upskill or retrain. In Year 2 (2021/22), the NTTF had a broader role to support the economic recovery; address the impact of EU Exit; and respond to demand for new skills to support the transition to net zero. The fund has been supporting sectors include Tourism and Hospitality, Digital, Advanced Manufacturing, Green Construction, Life Sciences and Adult Social Care.

We want to build on these examples, and others like them, to drive forward the actions in the NSET.

Projects

The overarching aim of the Programme is: to ensure that people have the skills they need at every stage of life to have rewarding careers and meet the demands of an ever-changing economy and society and that employers invest in the skilled employees they need to grow their businesses.

Given that the NSET is a 10 year strategy, we are prioritising activity based on impact, influence, time criticality, resourcing and affordability. The prioritisation and pace of delivery of the projects and actions within this programme may need to adapt to address the challenges of the cost crisis. This may include acceleration of activities in the short-run that support our resilience whilst providing the foundations for longer-term transformation.

To achieve this aim of the Programme, we have committed to 3 projects:

Project 11: Adapt the Education and Skills System to make it more Agile and Responsive to our Economic Needs and Ambitions

The focus of Project 11 will be establishing the purpose and principles for education and skills system reform and continuous improvement and ensuring that they align with our wider socio- economic vision for Scotland.

Through this project we will deliver key actions from the Scottish Funding Council's (SFC) Review of Coherent Provision and Sustainability, enhancing approaches to strategic provision and skills planning based on learning from pathfinder projects to enable a more responsive, coherent education and skills system. Through new analysis and collaborative skills pilots in the North East and South of Scotland, the Pathfinders are exploring how courses and programmes are currently planned in both regions, and how this connects to the needs of society and the economy. To ensure learners are armed with the information they need to make the best choices for their future, the Pathfinders will clearly set out available education and skills pathways from school, through to tertiary education, and employment. Insights from this work will be shared with partners across the system, and used to enhance planning and policy approaches in the regions and beyond.

The challenges of emerging from COVID-19, the impact of the cost of living crisis and the need to fill jobs in key sectors have further increased the need for a skills delivery landscape which can respond to the needs of industry, now and in the future, while also ensuring people can make informed choices about how best to train and upskill for rewarding careers. Reflecting the importance of this, the Scottish Government has recently initiated an Independent Review of the Skills Delivery Landscape in Scotland, focusing on the functions and remit of Skills Development Scotland. The Review will make recommendations about how the skills delivery public body landscape should be adapted to ensure that it is optimised for delivering the commitments and priorities in the NSET.

Reflecting both positive progress to date and the current labour market challenges, we will publish a refreshed Climate Emergency Skills Action Plan in 2023. The priorities outlined in the refresh will translate into the Green Jobs Workforce Academy, as the central resource, for information and access to training towards jobs needed for the transition to net zero.

In addition, we will continue to develop our approach to apprenticeships and work based learning. Our priority is to ensure that apprenticeships are of high quality and lead to sustainable employment opportunities. We are also working to entrench sustainability and green skills into apprenticeships in Scotland to ensure the system remains flexible and relevant as we transition to net zero. External review of apprenticeship provision was paused in 2020 in response to COVID-19, and the significant impact on apprenticeship numbers. Given the increase in apprenticeship activity in 2022 it is now appropriate to resume the external evaluation by His Majesty's Inspectors of Education. Furthermore, we are currently exploring an evaluation of Graduate Apprenticeships. An evaluation could consider the Graduate Apprenticeship frameworks that are available and how these might relate to demand and uptake in younger cohorts, as well as matching economic needs.

Project 12: Support and Incentivise People, and their Employers, to Invest in Skills and Training Throughout their Working Lives

Investment in skills over people's lifetimes is critical to our future productivity and success as the economy and labour market continue to evolve over the coming decades. McKinsey UK-wide analysis estimates that 90% of the workforce will require some degree of upskilling and retraining by 2030. Applying this analysis to the Scottish workforce would equate to 2.1 million workers requiring upskilling and 415,000 requiring retraining by 2030. Additionally, approximately 80% of the 2030 workforce have already left formal education and are in work or looking for work. This shows that in-work upskilling and retraining will be crucial for achieving a more skilled workforce.

This project commits us to developing a stronger, simplified lifelong learning system, including support targeted at those who need it most. Work has already begun with a programme of insights gathering underway including independent evaluations of our existing individual and employer-led training programmes. Following this phase of evidence building, we will be considering a number of options for simplifying and enhancing our investment in adult upskilling and reskilling. Throughout this work we will look to engage with key stakeholders, including business organisations, and are currently considering the options for conducting this engagement.

The Flexible Workforce Development Fund and Individual Training Account evaluations are due to publish in the Autumn at which point we will consider revisions as part of the lifetime skills offer for 2023/24. Early findings indicate that both programmes are performing well against initial policy outcomes and are seen as important programmes for skills support.

The Programme also includes a commitment to ‘develop a new Skills Pact to underpin our commitment to strong partnership working with both employers and unions. The Pact will focus on action we can take together to improve investment in skills and training and ensure provision better meets the needs of employers and employees. As part of this, we will work collaboratively with employers and unions to explore how we can increase employer investment in upskilling and retraining’.

We know from Chartered Institute of Personnel and Development and others that there is more to do to raise awareness of our skills programmes. We also want to do more to optimise business investment in skills training, alongside public funding.

Skills Pact is an opportunity to begin remedying these challenges, offering signatories both a forum through which they may more easily identify skills investment opportunities, and providing access to support through which they may more effectively plan their own workforce investment. Such forums could also be used to develop and improve peer-to-peer learning e.g. on a sectoral basis as is being undertaken at an EU level.

Project 13: Expand Scotland's Available Talent Pool, at all Skills Levels, to Give Employers the Skills Pipeline They Need to Take Advantage of Opportunities

The Skilled Workforce Programme has a clear focus on skills provision; however, given Scotland's declining working age population, it is imperative that we continue to attract and welcome workers and their families to live, work and study in Scotland. Project 13 will progress the actions from Scotland's first population strategy, 'A Scotland for the Future: Opportunities and Challenges for Scotland's Changing Population' that seek to attract and retain workers who choose to make Scotland their home, and to help overcome the labour and skills shortages facing businesses.

As a key commitment within the population strategy, we will launch a Talent Attraction and Migration Service in 2023. This service will:

• attract people from anywhere in the world to work in Scotland
• retain people already in Scotland who have chosen to move here
• serve individuals and employers
• support the public, private and third sectors
• help meet people's immigration advice needs.

Almost half of inward migration to Scotland comes from the rest of the UK (rUK) and the NSET highlights that a 25% increase in people relocating from the rest of the UK to Scotland would double net migration and add 100,000 people to Scotland's labour pool over the course of this strategy. Reflecting this, an Industry Advisory Group for rUK Talent Attraction has been established to share talent attraction expertise which will help to identify and develop effective approaches to attracting talent from rUK. Membership includes business representatives from the financial sector, space, life sciences and advanced manufacturing. This work will take account of the significant role that Scotland's universities play in attracting talent to Scotland, and explore how we maximise post-university talent retention of highly skilled non Scots- domiciled students. This work will be fully aligned with the development of the Talent Attraction and Migration Service which, once established, will take responsibility for talent attraction.

Immigration is reserved to the UK Government and the current UK immigration system does not meet the economic and demographic needs of Scotland's communities. The Migration Advisory Committee (MAC), in their report of May 2019, recommended the UK Government pilot a scheme to attract and retain migrants in remote and rural areas. Since then, the Scottish Government has worked with local authorities, key business sector organisations, and our Expert Advisory Group on Migration and Population to design a practical and deliverable rural visa pilot proposal for remote and rural communities. The proposal was endorsed by the Scottish Parliament and submitted to the Home Office by the Cabinet Secretary for Rural Affairs and Islands on 27 September 2022, calling on the UK Government to implement the proposed pilot, within the current UK immigration system, in collaboration with Scottish Government and partners.

The UK Government's Migration Advisory Committee is expected to review the Shortage Occupation List (SOL) in the coming months. Inclusion in the SOL increases the chances of securing a visa to work in the UK. We will work with business and other stakeholders in Scotland to develop an evidence-based submission to the MAC which addresses Scotland's needs.

The NSET includes an action under Project 13 to systematically address Scotland's labour market inactivity challenges. This action has been transferred to the Fairer and More Equal Society Programme in order that it can be progressed alongside transformation employability and fair work workstreams.

Measurement

Metrics for measuring success are currently being developed for the programme. These will be included in the NSET Accountability Framework expected to be published in Autumn 2022 and will also inform our approach with agencies. These metrics may include:

• Skills shortages reported by businesses
• Number of young people participating in education, training or employment
• Number of people with low/no qualifications
• Skills utilisation
• Job related training
• Levels of employer investment in the development of their workforce.

NSET Phase: Delivered by 31 October 2022

Project 11:

• Publication of the National Strategy on Adult Learning on 10 May 2022, setting out actions to ensure that individuals of all skills levels have the opportunity to increase their skills and learn throughout their lives.
• In response to the Scottish Funding Council Review, development and publication of the Purpose and Principles is underway; this marks the start of a wider period of change to ensure that our post school education, research and skills ecosystem is fit for the future.
• We published the Shared Outcomes Framework on 9 March 2022; the Shared Outcomes Assurance Group has continued to meet regularly (March, May, June, August) to oversee progress in implementation of the projects.
• Insights gathering and evaluations of existing programmes (Flexible Workforce Development Fund and Individual Training Accounts) to improve understanding of programme performance and the current upskilling and retraining landscape.

Project 13:

• Rural Visa Pilot submitted to the UK Government and Migration Advisory Committee on 27 September 2022.

NSET Phase: In Delivery

Project 11:

• We will publish the Purpose and Principles for the post school education, research and skills ecosystem in Spring 2023.
• Refresh of the Climate Emergency Skills Action Plan to be published in 2023 which will set the direction for the purpose and focus of the next phase of the Green Jobs Workforce Academy.
• Develop a Skills Guarantee for workers in high carbon sectors looking to retrain.
• We will drive forward the initial stages of the implementation of the Adult Learning Strategy.
• First Work Package of the Shared Outcomes Framework Regional Pathfinder project (led by Scottish Funding Council) on schedule for completion by end October 2022.
• Independent Review of the Skills Delivery Landscape to be undertaken between September 2022 and Spring 2023.

Project 12:

• Development of Lifetime skills offer which will enable individuals to gain the skills needed now and in the future to thrive in the labour market and to enable businesses to grow to meet their economic potential.

Project 13:

• Talent Attraction and Migration Service for Scotland to be launched in 2023, to attract, welcome and support people who choose to make Scotland their home.
• Programme of activity to attract and retain talent from rUK in development, informed and support for group of industry experts.

NSET Phase: Delivery Pending

Project 12:

• Development of a new Skills Pact that underpins our commitment to strong partnership working with both employers and unions. We will work collaboratively with stakeholders to identify how Skills Pact may most effectively operate on a regional, sectoral and national level and to explore how a Skills Pact could increase employer investment in upskilling and retraining.

NSET Phase: In Development

Development to begin

Project 11:

• Develop proposals for National Digital Academy focused around the provision of Scottish Credit and Qualifications Framework Level 6 qualifications.

Working with Stakeholders & Partners

Who are we relying on for delivery of the programme?

The successful delivery of the programme will require support from across all parts of the skills system as well as the Scottish Government.

The skills agencies, Skills Development Scotland and the Scottish Funding Council, will play an integral role in delivery. We will also be looking to colleges, universities, local government, employers, trade unions, the Community Learning and Development sector and the third sector, to develop solutions or to co invest to deliver. Engagement with business will be supported through the Business Organisations and Industry Leadership Groups.

Who are we involving and how (partners/stakeholders)?

To drive forward activity, we are utilising existing delivery arrangements that we know work well. For example, as the Green Jobs Workforce Academy continues to develop, the Climate Emergency Skills Action Plan Implementation Steering Group partners will provide expertise and advice. The Shared Outcomes Assurance Group will continue to monitor and report on a number of existing collaborative projects being driven through SDS and SFC. The transformative nature of the Programme may require new and innovative ways of working to be introduced. Crucially, we will be looking for ways to involve users of the skills system in the Programme as it develops.

Who and where will benefit (people, places and sectors)?

Through the education and skills system, we want to help those who want to work but are facing barriers to employment, to enter the labour market. Specific actions are aimed at supporting particular demographics. For example, our commitment to a Lifetime Skills Offer will help address in-work poverty and the Skills Guarantee will support workers whose jobs have been affected by the transition to net zero.

Governance

A Skilled Workforce Programme Board has been established:

• To provide leadership and strategic direction to those responsible for implementation of the actions within the Skilled Workforce Programme of the NSET.
• To consider how the different programme actions and linked polices are fitting together and consider the impact on the overall Programme aims.
• To consider the effectiveness of the management and governance arrangements in place to track progress, address issues of delivery and ensure a collaborative 'Team Scotland' approach where key partners are involved in both the design and implementation.
• To identify risks in the implementation of actions, provide challenge and advice, and agree on issues requiring escalation.

The Board will be co-chaired by the Director of Advanced Learning and Science and the Director of Fair Work, Employability and Skills. In addition to Government and agencies, the Board includes membership from employers and the education and skills system.

To support the delivery of individual actions, expert advisory groups or working groups have been established and will report into the Programme Board as and when appropriate.

The Skilled Workforce Programme Board will recognise and not duplicate the governance arrangements already in place for existing workstreams, for example, activity stemming from the Shared Outcomes Framework which is being overseen by the Shared Outcomes Assurance Group and the implementation of the Talent and Attraction and Migration Service that is being overseen by the Population Programme Board.

Delivery phased timeline

This timeline provides the pipeline of activity and planned milestones as it stands. As budgets become clearer and time progresses other projects and milestones will be added and timelines updated.

Phase 01: What we have delivered to date

Mar 2022

Published the Shared Outcomes Framework

Apr 2022

First meeting of the UK Industry Advisory Group on Talent Attraction

May 2022

Publication of the Adult Learning Strategy 2022-2027

Sep 2022

Independent Review of the Skills Delivery Landscape

Sep 2022

Rural visa pilot proposal for remote and rural communities endorsed by the Scottish Parliament

Oct 2022

First meeting of the NSET Skilled Workforce Programme Board

Phase 02: What we are already doing

Dec 2022

Publication of Flexible Workforce Development Fund and Individual Training Account Evaluations

May 2023

Recommendations from the Independent Review of the Skills Delivery Landscape

Aug 2023

Climate Emergency Skills Action Plan Update published

Dec 2023

Talent Attraction and Migration Service for Scotland launched

Dec 2023

An initial lifetime skills offer developed

Phase 03: What we are planning to deliver

As budgets become clearer and time progresses other projects and milestones will be added and timelines updated.