Shortage occupation list 2020: call for evidence - our response

Sectoral evidence

Health and social care

137. In the UK as a whole, people born outside the UK account for almost a quarter of all staff working in hospitals and a fifth of all health and social care staff in the UK. And Health and Social Care workers born abroad made up 19% (818,000) of the workforce in 2018/19, compared to 14% of the UK population.

138. Furthermore, those born overseas account for 50% of the rise in Health and Social Care workforce between 2009/10 and 2018/19.^[44]

139. In Scotland specifically, there were an estimated 16,000 non-UK EU nationals and 10,000 non-EU nationals working in the Health and Social care sector^[45] in 2018, representing 11.2% and 18.4% of employment respectively. It is widely recognised that the health and social care workforce will be significantly impacted by Brexit and tighter immigration proposals.

Uncertainties around the impact of COVID-19 on workforce demand

140. The COVID-19 outbreak has had a substantial impact on the delivery, composition and demand for Health and Social Care services since its emergence early this year. The pandemic has also driven urgent and significant recruitment throughout the Health and Social Care sector, in Scotland, and the rest of the United Kingdom.

141. As a result, the Scottish Government are currently re-evaluating both short-term and long-term workforce requirements. In May 2020 we published a COVID-19 - Framework for Decision Making, entitled "Re-mobilise, Recover, Re-design".^[46] The Health and Social care workforce is likely to evolve, and Medical and Nurse Directors are currently working to determine clinical priorities aligned to NHS mobilisation plans for recovery.

142. This has two critical implications for this return on shortages within 'medium skilled' occupations for Health and Social Care:

• Uncertainty regarding the areas of shortage and future demand.
• The need for relaxed access to the international labour market.

143. The COVID-19 pandemic has created, and highlighted, areas of both acute, temporary, and sustained pressure on our health and care services. This includes community services, social care services, laboratory services, infection control, and public health. Our health system will continue to evolve to meet these needs, as well as demands associated with improvement to population health and wellbeing in the longer-term.

Key Roles for Key Workers

144. The response to the pandemic also demonstrated the sophisticated interdependencies within the health and social care system. The less visible, but no less celebrated, support workers, domestics, cleaning services, drivers, facilities and procurement workers have all been crucial components of our integrated COVID-19 response.

145. Of staff currently working in health and social care professions, 27% (44,925) would fall beneath the existing UK Government salary threshold (2020/21 Pay Scales). The enormous contribution of key workers, and the economic and social value that they bring to our Health and Social Care sector has received notable public recognition during this COVID-19 pandemic.

146. It has also illustrated the enormous value of international staff working across a broad spectrum of healthcare professions, often in frontline services, and occasionally at immense personal detriment, as described in Public Health England's report "Beyond the data: Understanding the impact of COVID-19 on BAME groups".^[47]

A review of occupations in NHS Scotland at RQF Level 3-5

147. ‘Medium Skilled’ occupations within NHS Scotland, are defined as those at RQF level 3-5, which fall beneath the proposed salary threshold (£25,600), but meet the minimum salary threshold for eligibility (£20,800). As shown in Table 5 below, Under NHS Scotland pay scales for 2020/21, this would include roles at band 3 and 4 that require a place on the Shortage Occupations List to allow entry under existing immigration rules.

148. At present, 41,305 staff, or 25% of the health workforce are employed in bands 2 - 4. This means that the current points-based system would exclude international candidates from a quarter of roles in NHS Scotland.

Table 5: Summary of NHS Scotland Pay Scales 2020/21

	Years' Experience	2020/21
Band 2	1	£18,600
	3	£20,606
Band 3	1	£20,700
	3	£22,594
Band 4	1	£22,700
	4	£24,973
Band 5	1	£25,100
	3	£26,970

Recruitment challenges reported for medium skilled occupations

149. A review of ‘medium skilled’ occupations (Band 3&4) conducted by our health and social care international recruitment unit in March 2020 lists jobs where health boards have reported recruitment challenges at bands 3 and 4 (Shown in Table 6 below). These shortages have been identified by combining data held on our national recruitment website (JobTrain), anecdotal evidence from territorial health boards, and a review of legacy recruitment data.

Table 6: Medium skilled health occupations in shortage

Occupation	Min Band - Max Band		In Shortage
Healthcare Science Assistant, Higher Level	3	3	Yes
Pharmacy Support Worker, Higher Level	3	3	Yes
Optometrist Entry Level	4	4	Yes
Occupational Therapy Technician	4	4	Yes
Podiatry Technician	4	4	Yes
Radiography - Assistant Practitioner	4	4	Yes
Speech and Language Therapy Assistant/Associate Practitioner	4	4	Yes
Speech and Language Therapy Associate Practitioner (bi-lingual)	4	4	Yes
Anatomical Pathology Technician (Mortuary)	4	4	Yes
Healthcare Science Associate Practitioner	4	4	Yes
Optometrist Entry Level	4	4	Yes
Pharmacy Technician	4	4	Yes
Theatre Assistant Practitioner	4	4	Yes
Theatre Practitioner Entry Level	4	4	Yes
Nurse Associate Practitioner (Community)	4	4	Yes
Nurse Associate Practitioner (Mental Health)	4	4	Yes
Dental Nurse	4	4	Yes

Vacancy data NHS Scotland

150. The following data summarises occupations with some of the high vacancy rates in NHS Scotland. It is based on the most recent record produced by our information services division (December 2019). This is likely to have undergone significant change during the COVID-19 pandemic.

Table 7: Median vacancy rate for all AHPs: 4.9%; median 3 month vacancy rate for all AHPs 1.5%

Profession	Establishment	Staff in post	Total vacancies	Vacancy rate (%)	Vacant 3 months +	Vacant 3 months + rate (%)
Pharmacy (Sept 19)	3447.6	3117.5	332.8	9.7	154.8	4.5
Physiotherapy	3230.6	2962.3	268.3	8.3	70.3	2.2
Occupational therapy	2436.6	2298.6	138.0	5.7	25.7	1.1
Diagnostic radiography	2206.5	2099.6	106.9	4.8	37.9	1.7
Paramedics	1592.3	1553.5	38.8	2.4	36.8	2.3
Speech and language therapy	994.5	953.5	41.0	4.1	15.4	1.5
Dietetics	848.6	787.3	61.4	7.2	10.9	1.3
Podiatry	646.8	615.2	31.6	4.9	15.1	2.3

Retaining existing health and social care roles on the SOL

151. Within its call for evidence the MAC committed to retaining roles in health and social care currently on the SOL which include:

• 2211 Medical practitioners (independent pay scales)
• 2231 Nurses
• 2442 Social workers
• 2222 Occupational therapists
• 2223 Speech and language therapists
• 3213 Paramedics
• 2212 Psychologists
• 2217 Medical radiographers

152. For medical practitioners, entry level salaries will now routinely exceed the £25,600 threshold. However, entry level roles in each of the other occupations listed begin at Band 5 and would fall beneath the existing salary threshold. We would expect these occupations to remain on the SOL, to ensure that they are not adversely impacted, particularly during re-mobilisation and recovery periods, where there are significant uncertainties about workforce demand.

153. Notable exemptions from the above list, where shortages have been observed, include physiotherapy, pharmacy and dietetics.

154. On 1 October 2019 the following roles were removed from the Shortage Occupations List:

2219 Health professionals not elsewhere classified:

• neurophysiology healthcare scientist
• neurophysiology practitioner
• nuclear medicine scientist
• orthotist
• prosthetist

155. We are not aware of evidence suggesting that the situation for these professions has changed significantly, and we were not involved in consultation prior to the removal of these professions from the SOL.

Settlement Threshold

156. It's important to note that for those occupations exceeding the salary threshold, but which do not feature on the SOL, they will be subject to the settlement threshold.

157. As of April 2019, the settlement threshold is currently the higher of the occupation specific rate (set at the 25th percentile of the full-time earnings distribution for that occupation) or £35,800. The Conservative Government, prior to the general election, set out a plan that this threshold should rise each year until it reaches £40,100 in April 2024 according to:

• £36,200 if the date of application for ILR is on or after 6 April 2020;
• £36,900 if applying on or after 6 April 2021;
• £37,900 if applying on or after 6 April 2022;
• £38,800 if applying on or after 6 April 2023;
• £40,100 if applying on or after 6 April 2024.

158. This high settlement threshold is exclusionary, and will create a barrier for migrants wishing to settle within communities, integrate into our Health and Social care system, and establish themselves in remote and rural areas, where vacancy rates are high, but opportunities for progression will be more limited.

Administrative and bureaucratic challenges

159. The proposed future points-based system is an exclusively employer led immigration model. It will require a significant expansion of the Tier 2 skilled worker route to accommodate applicants who would otherwise have been able to access employment by exercising free movement.

160. Independent employers within the Scottish health system, including pharmacy, primary care, and dental services, will now require sponsor status to employ staff through the skilled worker route (Tier 2). For these employers this will create additional challenges for recruiting staff outwith the UK.

161. When Tier 2 (General) was open to medium-skilled occupations, MAC Analysis suggests that it comprised between 24% and 35% of all certificates of sponsorship (CoS) used.

162. The UK Government Regulatory Policy Committee^[48] have identified the impact on small sponsors, as an area of concern, and have asked for reforms to streamline application processes and support employers to transition to the new system.

Impact of other charges

163. The Scottish Government and NHS Scotland welcome the removal of the Immigration Health Surcharge applied to all health and social care staff. However, the Immigration Skills Charge of £1000 per person per year, and additional visa costs, still comprise a considerable proportion of the proposed salary for migrants in 'medium skilled' occupations, coming into health boards beneath the £25,600 salary threshold.

164. Additional expenses associated with international recruitment, and the requirement for international marketing for an employer led system, will restrict NHS Scotland access to the international labour market.

165. These costs are applied at a flat rate and will deter employers from employing staff at lower salary levels. They will also increase the administrative burden on health boards undertaking international recruitment exercises, to meet skills shortages within the workforce, as free movement with Europe ceases.

Social Care

166. The absence of a "low-skilled" migration route will be particularly detrimental to occupations within social care, where salaries routinely fall beneath the proposed salary threshold.

167. The revision of the skills threshold to RQF3 qualifications is welcome, as the phasing in of a requirement for qualifications to this level will be completed for the majority of care workers in Scotland from 2020. The current headcount for the sector in Scotland is 204,610, making up approximately 7.7% of Scottish employment.^[49]

168. Roles in the sector require skilled and confident staff, and increasingly care workers are undertaking tasks previously done by nurses, using technology to provide care, and support individuals with complex conditions.

169. However, the proposed salary threshold of £25,600 will disadvantage care workers (SOC 6145) if they are not included on the SOL, as this does not reflect the average salary for social services workers in Scotland.

170. Recent analysis by the Scottish Social Services Council (SSSC) estimated that most care workers will earn less than the threshold for visa eligibility as currently set at £20,480. A Scottish Government and COSLA commissioned report by Ekosgen^[50] highlighted that it was these frontline roles which social care employers have experienced the greatest difficulty in retaining. It is therefore important to retain the flexibility that international recruitment can provide to be able to meet the demand for frontline social care workers. Over the next four years it is anticipated that demand for health and social care staff will increase: initial estimates suggest that demand will rise by as much as 10,500 WTE for social care staff.

171. One year on from the last call for evidence on the SOL and in the face of this increasing demand, the social care sector continues to face challenges in recruitment and retention. Data published by the Care Inspectorate and SSSC in January 2020^[51] shows that vacancy levels across social services are significant and increasing. 38% of services reported vacancies at the end of 2018, an increase of 2% points from 2016. This compares to the 20% of all establishments reporting vacancies in Scotland as reported in the last UK ESS.^[52] The rate of whole time equivalent (WTE) vacancies for all social care services in Scotland was 5.5%, down from 5.9% in 2017. However this was still higher than the overall vacancy rate across all establishments in Scotland of 3.1%.

172. Problems filling vacancies were reported by 47% of services at the end of 2018, up from 45% a year earlier. Significantly higher rates of WTE vacancies than the national average were observed in care homes for adults, housing support services, care at home services, childcare agency services and nurse agency services.

173. The independent sector appears to have the biggest challenge in recruiting staff.^[53]

174. The main reasons reported for problems filling vacancies include: too few applicants with experience (60%), too few applicants in general (58%) and too few qualified applicants (50%).

175. Latest figures show the stability index of the workforce is at 77.7%^[51].

176. The health sector has been reported by employers as most likely to attract staff to move from the social care sector, and in mainly rural areas the hotel and hospitality trade represented a key source of competition for staff. Scottish Care, representing the independent sector, found that 32% of care workers left for jobs in the NHS, possibly attracted by better rates of pay.^[54]

177. Work commissioned from Ipsos Mori showed that in 2018,^[55] 5.6% of adult social care and childcare staff in Scotland were from other EU countries. Non-UK EU workers were highly valued and wanted to stay in Scotland, however there was confusion about their residency status and concerns about future recruitment and retention.

178. Recruiting staff from the EU would not negatively impact on employers attracting UK workers as all staff are required to obtain the necessary qualifications for their role.

179. Employers, representative bodies and the Scottish Government have worked together to address the recruitment challenges in the sector including:

• Delivery of a national recruitment campaign aimed at frontline workers in adult social care, 'There's More to Care than Caring'^[56] ran for eight weeks in early 2020, to support recruitment into adult social care and to promote it as a career destination.
• Scottish Government has invested around £50 million over the last three years to support regulation and development of the social services workforce through our NDPB, the Scottish Social Services Council.
• The SSSC delivers a range of support for recruitment and retention of the workforce including resources on career pathways and promotional materials for schools, colleges, employment services and employers; management and promotion of routes into careers (Foundation and Modern Apprenticeships); and a network of Ambassadors for Careers in Care.
• The Scottish Government and COSLA have published the first Integrated National Health and Social Care Workforce Plan in the UK.^[57] It sets out how health and social care services will meet growing demand to ensure the right numbers of staff, with the right skills, across health and social care services.
• In 2016, Scottish Government and COSLA committed resources to enable adult social care workers to be paid the real Living Wage. This has since been extended to include sleepover hours which we expect to be delivered in all contracts.
• In response to the pressures placed on social care staff due to the COVID-19 pandemic, in April 2020 social care staff were to receive an immediate 3.3% pay increase, followed in May 2020 by a Scottish Government announcement of funding to ensure all social care workers receive enhanced sick pay if they have a positive COVID-19 test.

180. Looking to the future, around half of social care employers felt that they would experience recruitment difficulties;^[58] it is therefore crucial for the sector to be able to recruit from a wide pool of candidates, including non-UK individuals, and to do so in as streamlined a way as possible.

Impacts of the Future Immigration System

181. While social care, in the context of an immigration system, would not qualify for 'skilled migration' routes but is instead regarded as a "low-skilled" occupation, the Scottish Government does not consider social care occupations as "low-skilled". The UK Government proposals for a 'skilled migration' route do not take account of the social value of public sector, third sector and some private sector employment.

182. A migrant's financial contribution cannot be conflated with the overall value that individuals bring to Scotland. Migrants to Scotland working in health and social care roles make a contribution to Scottish society that greatly exceeds their net financial contribution. It is essential that financial information is not the only metric used to measure value within our migration policy. Any points-based system should account for the positive externalities of roles in health and social care, in our rural communities and across Scotland. Given its unique structure, there is a strong case that wages paid to care workers are an inadequate reflection of their contribution to societal welfare.

183. In its report on EEA migration of September 2018 the MAC advised that the salary threshold should remain at £30,000.^[59] The stated rationale behind the £30,000 threshold is that it the average level of household income at which taxes exceed benefits is estimated to be about £30,000. Analysis presented by the MAC indicated that an EEA national, aged around 20 and with no dependents, would only need to earn between £10,000 and £15,000 to provide a net fiscal contribution. This is supported by the Scottish Government's own analysis, which found that on average each additional EU citizen working in Scotland contributes a further £34,400 in GDP.

184. Whilst we welcome proposals to reduce the skills threshold to RQF3 and salary to £25,600, this will not serve to address recruitment challenges for this sector. Less than 10% of those working in "caring and personal service" occupations earn £25,000. No jobs below graduate level feature on the Shortage Occupations List and the majority of non-graduate roles within NHS Scotland and the social care sector would routinely fall below the proposed salary threshold, particularly for entry level roles.

185. The Scottish Government is also concerned about the absence of alternatives to Tier 2 arrangements for lower paid staff. Existing migration proposals do not provide suitable entry routes for lower paid roles in health and social care. Any proposals should take into consideration the benefits of continuity of service for the people who use these vital services. The design of our migration policy should promote long term security, and encourage migrants to transition towards settlement.

186. The existing route for new entrants is restrictive. Entrants have to be under 26 or switching from Tier 4. This would need significant expansion to meet the needs of health and social care in Scotland. The reduced salary threshold for new entrants of £20,800 would still exclude individuals entering the UK to work in band 2 or band 3 roles, which include: clinical support workers, healthcare assistants, pharmacy support workers, ambulance drivers, domestics, porters and security officers. A significant proportion of staff working in care homes, care at home and housing support are also likely to be below this threshold.

Early Learning and Childcare

187. The Early Learning and Childcare (ELC) sector has been undergoing a significant expansion in Scotland in recent years as the sector has been preparing to deliver the national commitment to increase the provision of funded ELC from 600 to 1,140 hours per year. The statutory duty on local authorities to deliver the entitlement from August 2020 has been suspended in light of the Covid-19 pandemic response. However, work is underway to establish a new timetable for delivery of the expanded entitlement, so there remains an imperative to ensure recruitment of skilled and qualified staff is as simple as possible for ELC employers and for them to be able to recruit from as wide a pool of potential candidates as possible. It is also not clear at this point what the impact of the Covid-19 pandemic will be on ELC workforce capacity, in terms of job losses and staff not being able to return to work, which could provide an additional recruitment challenge for employers.

188. Another challenge is the fact that 6.8% of the current ELC workforce are
non-UK EU nationals, which represents the second highest proportion in the social care sector.

189. Brexit outcomes remain uncertain and it is therefore unclear what effects it may have on the Scottish ELC workforce. Again, including RQF 3-5 roles on the SOL would increase the pool of potential candidates from which the sector can draw in meeting the challenges of expanded ELC. Whether that is replacing staff who are no longer eligible or willing to work in Scotland or recruiting the additional staff required for expansion.

190. The ELC workforce is registered with the Scottish Social Services Council (SSSC) under three categories of worker. Those roles and the relevant qualifications required to undertake them are:

• Support Worker:
  • NC in Early Education and Childcare at SCQF Level 6
    (RQF Level 3)
  • SVQ Social Service (Children and Young People) at SCQF Level 6 (RQF level 3)
• Practitioner:
  • HNC Childhood Practice at SCQF Level 7 (RQF level 4)
  • SVQ Social Services Children and Young People at SCQF Level 7 (RQF level 4)
• Lead Practitioner/Manager:
  • BA Childhood Practice - (RQF level 7)

191. If there was to be a salary threshold, the sector would instead support the consideration to lower the threshold to the minimum/living wage. This would allow many employers in the sector, who often pay the minimum or living wage, an additional pool of potential candidates to recruit from. The failure to acknowledge the impact of part-time working is also a key issue for this sector. The salary threshold should be adjusted where an individual is working part-time.

192. We support the change in approach of this commission to consider roles from RQF 3 and above, which thus includes the ELC workforce. However, there is a large variation in the salaries paid across the public, private and third sectors in ELC. Again, with many employers paying minimum/living wage, setting the salary threshold at this level would be preferable and allow every part of the sector a further route to recruiting additional staff.

193. Should salary thresholds remain, the ELC sector would benefit from a wide range of flexibility around these. Regional variation might allow thresholds to be set which would benefit, for example, rural and remote areas across Scotland. However, our view is that approaches that are designed to encourage and facilitate migration to Scotland, through tailored migration policies, are more likely to be successful.

Education

Primary and secondary education

194. The Scottish Government and the Convention of Scottish Local Authorities (COSLA) have previously submitted evidence to the MAC highlighting the challenges in recruiting teachers in Scotland.^[60] There are particular challenges in recruiting teachers to remote and rural areas.

195. The recruitment and deployment of teachers is the responsibility of local authorities in Scotland, who have the statutory duty for education expenditure. A workforce planning exercise is carried out annually by the Scottish Government, in partnership with other stakeholders, including COSLA, the Association of Directors of Education in Scotland, the General Teaching Council for Scotland (GTCS), teacher unions and representatives of universities to project the minimum requirements for the number of newly trained teachers. This draws on projections on pupil numbers, the relationship between teacher/pupil ratio and school size to produce an overall assessment of the demand for teachers, and an assessment of supply including those joining and returning to the profession, and those expected to come from overseas.

196. Furthermore, current EU rules make it easier from teachers from other EU countries to work here - EU Directive 2005/36/ EC on the Mutual Recognition of Professional Qualifications (MRPQ) allows for the straightforward registration of teachers qualified and registered in another European country. This Directive will no longer apply on withdrawal from the EU. The Scottish Government will however ensure that EU qualified teachers can continue to practice in Scotland post-exit from the EU.

197. Despite measures to increase the number of teachers from within Scotland, the sector faces significant challenges, which will be exacerbated by immigration changes. These serious ramifications on filling teacher posts would have a negative impact on the learning and teaching for all our young people and seriously impede our ambitions for closing the attainment gap and achieving excellence and equity in Scotland's schools.

198. In October 2016, the Scottish Government and the Convention of Scottish Local Authorities (COSLA) submitted evidence to the MAC, in response to the UK Government's partial review of the SOL (UK and Scotland only).^[61] That submission highlighted the challenges in recruiting teachers in Scotland and requested further subjects be included in the SOL; these included Maths, Physics, Computer Science, Mandarin and the Sciences.

199. Providing accurate data on the numbers of teachers from other EU countries working in Scotland is difficult. There are over 1000 teachers. Since 2016 the number of EU national applying to the join the GTCS as at 2019 stands at 691.

200. We have introduced Curriculum for Excellence which is designed to provide a coherent, more flexible and enriched curriculum from ages 3 to 18. The curriculum includes the totality of experiences which are planned for children and young people throughout their education, wherever they are being educated. Long term vacancies may affect a school's ability to provide a full curriculum.

201. We are maintaining the numbers of teachers from within Scotland, continuing to maintain student teacher intake targets and setting targets to train teachers in the subjects where they are needed most. Our recruitment campaign continues to help drive a 12% increase in post-graduate teaching applications to Scottish universities in 2018. We are committed to supporting Education Scotland's lead role in national support for professional learning and leadership development for teachers and head teachers, investing around £2m annually to fund the existing Into Headship, In Headship, Excellence in Headship and values-based leadership programmes. Since 2013 we have invested approximately £3.2 million to support universities to develop new routes into teaching to help address recruitment difficulties in the hard to fill subjects. This is additional to tuition fees and student support for these new routes. However, as with healthcare, increased recruitment in one sector merely increases pressure in other sectors, again highlighting the need for a whole workforce solution.

202. Nevertheless, there continue to be gaps, and universities are continuing to have difficulty meeting the student intake targets for teacher education. Early indications from university student intake figures for 2018/19 suggest that around 400 secondary places may be unfilled at this stage, out of a target of 1750. Any restrictions on the ability to recruit from EU and international countries would further impact on student intakes.

Recruitment Shortages

203. The outcome of the MAC review^[62] was that Maths and Physics were retained on the SOL and Computer Science, Mandarin and Science were added. Unfortunately, the MAC withdrew Chemistry from the SOL which has not eased the challenge in Scotland.

204. We included detailed information on teachers in our evidence to the MAC for their EEA report. While there has been some positive movement; the 2019 pupil teacher ratio (PTR) for all publicly funded schools is 13.6, the same as in 2018; the total number of teachers increased to 52,247 - up 288 from 2018.

205. In Scotland, teachers are split into two categories: Primary Teacher (ONS role 2315), and Secondary Teacher (ONS role 2314). However in Scotland teachers are required to be registered with the GTCS and there are only two categories, Primary and Secondary.

206. In relation to the existing subjects found on the SOL - Maths, Physics, Computer Science, Mandarin and General Science, we would also require English, Home Economics, and Modern Languages be added in secondary and would seek to include all primary teachers onto the SOL.

Priorities

207. The 2016 MAC call for evidence specifically focussed on teacher shortages throughout the UK. We would therefore propose that teaching remains in the wider UK SOL. However, if these were not to be included in the UK SOL we would wish them to be included in the SSOL, such is the range of pressures on teacher recruitment.

208. The ideal scenario would see the following roles incorporated onto the SOL or SSOL:

• Head Teacher, Primary (2317)
• Head Teacher, Secondary (2317)
• Teacher, Special Needs (2316)
• Teacher, Primary (2315)
• Teacher, Secondary (2314)

209. Whilst we would wish to see all teaching post included in the SOL, our specific priorities in primary would be all primary with Gaelic to ensure sufficient cover for remote and rural locations. For secondary, our priority would be the range of hard to fill subjects as evidenced by the vacancy and student intakes figures above.

210. The priority subjects identified by the Teacher Workforce Planning Process are:

• Art
• Business Education
• Chemistry
• Computing
• English
• Gaelic
• Home Economics
• Maths
• Modern Languages
• Physics
• Technological Education

Gaelic

211. The Scottish Government is committed to supporting our indigenous languages, including Gaelic. Our principal aim is to increase the number of users of language and education is key in delivering this aim.

212. We are seeing increased demand across Scotland for Gaelic education and to meet this demand we need to increase the number of teachers. Despite efforts to grow our own within Scotland there is a need to maximise the opportunities that exist to recruit Gaelic teachers from such areas as Canada or Ireland. At the moment, there remain difficulties in successful candidates from these areas being granted visas despite having a paid position. For the continued success of Gaelic education, it is essential that we are able to maximise the opportunities to recruit and therefore having Gaelic on the SOL list is a must.

Skills needed

213. In Scotland teaching is an all-graduate profession. All teachers in Scotland are legally required to register with the GTCS whilst teaching in a Scottish school. To be eligible for registration with the GTCS in Scotland you must have a relevant degree and a recognised teaching qualification at SCQF level 9 or above.

Reasons for Shortages

214. The hardest to fill posts in Scotland are in both Primary and Secondary Teacher roles. As we expand below, the Primary shortages are related predominantly to location issues and Gaelic whilst shortages in the Secondary Teacher role are centred around specialist subjects, namely Science, Technology, Engineering and Mathematics (STEM), English, Home Economics and Modern Languages.

215. Each year the Scottish Government undertakes a teacher workforce planning exercise to project the minimum requirements for the number of newly trained teachers and agrees the student intake targets with each individual university. Whilst primary student intake remains stable, our vacancy surveys indicate that there remain specific primary shortages in certain geographical locations, especially the North East of Scotland and more remote and rural areas. Universities continue to struggle to fill all of their secondary allocations.

216. Whilst universities continue to meet the targets for training primary teachers as we say above, the deployment of teachers at primary role encounters difficulties around specific locations, particularly in the North East of Scotland. In line with other public sector employment in Scotland, staff recruitment in this area is affected by the unique circumstances of the North East. Despite the decline in the oil industry, the strong private sector market means that there are challenges in housing public sector workers, including teachers, and there are higher than average costs of living - even before additional factors of cost associated with rurality and extreme rurality (such as transport) are addressed. The demographics and aging population in other areas of Scotland, e.g. Dumfries and Galloway, can also present a challenge in attracting younger teachers. Employers also find it extremely challenging to recruit Gaelic primary teachers.

217. The universities historically find it challenging to meet student teacher target intakes for key individual secondary subjects: STEM, English, Home Economics, Modern Languages and Gaelic. Intakes to university-level training courses, which are a prerequisite for access to the teaching profession, continue to be below the targets set (for individual universities) by the Scottish Government via the Teacher Workforce Planning Advisory Group.

218. The GTCS also highlighted 6 main reasons for shortages as:

• Perceptions on the increased challenges of being a teacher;
• Increased bureaucracy and workload across the teaching profession;
• Wider range of other opportunities available, particularly for women as a result of the equalities agenda opening up more career pathways for women;
• Working conditions, including pay levels;
• Attractiveness of appointments in teaching overseas; and
• Increased reluctance of "millennials" to commit to a lifelong, vocational career path.

Action Taken

Increased wages

219. The Scottish Government was the first to lift the public sector pay cap for teachers in the 2017/18 pay agreement. This awarded teachers 1% pay increase from 1 April 2017 with a further 1% uplift from 1 January 2018. Teachers in Scotland received the highest public sector pay award for public sector workers in Scotland for 2017/18.

220. Although shortages are recognised as a national issue, many Scottish local authorities highlight clear challenges in particular geographical areas such as the North East of Scotland, the island authorities, Argyll and Bute and Dumfries and Galloway, despite the existence of additional pay allowances for teachers working in remote schools or Distant Islands.

Investment in recruitment

221. The Scottish Government introduced the Teaching Makes People campaign in February 2017.^[63] It aims to increase the numbers of students undertaking PGDE secondary courses and attract career changer for hard to fill secondary key STEM subjects and English. To date, the cost of the campaign has exceeded £1 million. The Teaching Makes People campaign was widely advertised digitally through social media plus radio and cinema.

222. Scottish Government has also invested over £2 million in offering bursaries for key STEM subjects and English to further attract interest in undertaking PGDE courses to boost university intake figures. The second tranche of the STEM bursary scheme has awarded 109 bursaries of £20,000 each. The number of bursaries available has now been extended from 100 to 150 with an additional of £1 million.

Investment in training

223. There are two traditional routes available to prospective primary and secondary school teachers. These are a four-year undergraduate programme or a one-year Professional Graduate Diploma in Education (PGDE). Each programme combines theoretical understanding and practical school experience and leads to a Teaching Qualification (TQ) in primary or secondary education.

224. Intakes into teacher education programmes and the quality of this provision are key to the Scottish Government's ambitions for school education. In November 2016, the Deputy First Minister and Cabinet Secretary for Education and Skills announced plans for tackling teacher shortages by broadening routes into the classroom and speeding up the process for those wanting to join the profession, without compromising on the standard of teaching in schools. This range of alternative routes include:

• moves to get new teachers into the classroom more quickly for priority Science, Technology, Engineering and Maths (STEM) subjects;
• targeted help for former teachers looking to return to the profession;
• the development of teachers able to work in both the primary and secondary sectors;
• integrated routes combining post-graduate education with a trainee teacher's probation year; and
• more joint degrees in teaching and specialist subjects.

225. Annual spend across the whole range of teacher education is approximately £50 million. Within that total, an average of £1.5 million has been spent in each of the past two years on developing these alternative teacher programmes.

GTCS Intervention

226. The GTCS have highlighted the following actions to encourage more teachers into the teaching profession:^[64]

• Ongoing engagement with representatives of military personnel and registration of spouses who are teachers relocating to Scotland;
• Engaging with Scottish teachers teaching overseas to determine date of planned return to Scotland and preferred locations for teaching in Scotland;
• Ongoing engagement with other teaching councils worldwide to attract teachers to Scotland;
• Continuing to streamline the re-registration and Qualified Outside Scotland processes to make it easier for teachers to register and get into schools more quickly; and
• Continuing to publish positive articles in Teaching Scotland and elsewhere to present a positive image of teaching as a career.

Potential Brexit implications

227. There are currently 523 EU nationals registered with the GTCS, working as teachers in Scotland. The current permanent vacancy statistics show as in September 2018, 606 vacancies and should these EU teachers leave Scotland it would almost double the pressure on teacher recruitment.

228. These serious ramifications on filling teacher posts would have a negative impact on the learning and teaching for all our young people and seriously impede our ambitions for closing the attainment gap and achieving excellence and equity in Scotland's schools.

229. There was a drop in the number of registrations with GTCS by teachers from EU Member States in 2018. It could be assumed that this was a result of the uncertainty about what will happen with Brexit as the negotiations have progressed. The UK Government has already announced that those EU nationals currently living and working in the UK will be able to stay, however, it would appear that uncertainty about Brexit has already had an impact on attracting teachers to come and work in Scotland. The number of applications has increased over the course of the year but has not yet reached the number from previous years:^[65]

• 2015 - 128 applications
• 2016 - 159 applications
• 2017 - 185 applications
• 2018 - 178 applications

Higher education

230. Scotland's higher education sector is home to 4 of the world's top 200 universities and a total of 12 in the Times Higher Education World University rankings.^[66] Universities Scotland estimate that the sector generates around £7 billion GVA to the Scottish economy every year.^[67] Scotland's 18 higher education institutions employ 48,330 staff directly.^[68]

231. In 2018/19 EU citizens accounted for 14% of all staff in Scottish highereducation institutions (6,885 staff members), rising to 20% (4,800) of academic staffand 27% (1,640) of research-only contracted staff. There are 14,735 EU domiciledundergraduates at Scottish Higher Education Institutions. EU domiciled studentsaccounted for 15.6% of the postgraduate research students in Scotland. In 2017/18, more than 2,700 students from Scottish institutions benefitted from the Erasmus+ programme for study or work.^[69]

232. Staff from the across the EU and beyond add to the quality and diversity of the research base and are crucial to the research undertaken in laboratories. Access to the widest pool of talent from across Europe, attracted by quality research, has helped to strengthen the quality and impact of our research and international reputation.

233. Universities also have a significant positive impact on their regional - as well as national - economy. Universities Scotland report that Dundee University's role in the life sciences cluster, for example, supports around 16% of jobs on Tayside.

Salary Threshold

234. Russell Group analysis of HESA data shows that across all UK Government universities, 20% of staff are on wages less than £25,000.^[70]

235. Many roles within this sector would therefore not be eligible for recruitment through the new immigration system - unless they appear on the SOL.

236. We fundamentally disagree with the restriction of movement for researcher mobility and exchange with the EU. Inflows and outflows of international talent and investment are vital in supporting Scotland's position as a world learning research-intensive nation. Any reduction in freedom of movement with the EU compared to the current arrangements, including increased bureaucracy and costs for researchers, is likely to damage Scotland's dynamic, outward-looking and globally connected research base. Talent is not confined to established researchers and it is vital that new visa arrangements make adequate provision for the pipeline of younger global research talent.

237. It is crucial that international talent, including that from the EU, can be both retained and attracted. Any future immigration system must allow for researchers to easily transition between roles, to move easily from one visa category to another, or from one UK employer to another (sponsorship routes), without unnecessary process.

238. Additional costs must not be loaded onto EU researchers or their families. Adequate provisions on being able to receive dependents of researchers must be properly established within the system.

239. Many researchers are globally mobile and need to be able to move freely in order to collaborate with colleagues elsewhere. There should be no assumption within the visa system that the primary aim of incoming researchers is to reside permanently in the UK. Many will intend to be here for shorter or longer stays, with the intention to return home or to move elsewhere after a period, although some may wish to stay. Any UK visa system therefore needs to retain sufficient flexibility to support researchers' needs.

Recruitment Shortages

240. We have heard from Scottish Higher Education Institutes that fewer EU researchers have been applying for advertised vacancies. This was occurring even before the impact of COVID-19 and is clearly related to Brexit - the uncertainty on the level of EU R&I funding Scottish universities will have access to going forward, as well as the UK Government's proposals for the future immigration system.

241. It is clear that in the event of a 'no-deal' or 'limited' Brexit at the end of 2020, EU (and other) academics may look to relocate to the EU to protect their research funding and residency rights.

Skills Needed

242. Talented researchers - whether from Scotland, the rest of the UK, the EU or further afield - contribute much to Scotland. They also have the potential to win competitive research grants from public or private actors, reinforcing the competitive research in Scottish universities and other organisations, and often supporting posts for other researchers.

243. The barriers the UK Government are proposing to attracting global talent therefore make no sense.

244. In line with the UK Government's own ambition on retaining and attracting globally mobile research talent, the points-based system needs to be adapted and amended to maximise this. The UK Government needs to engage with the Scottish Government and Scottish Universities to ensure the strength and reputation of Scotland and the rest of the UK's research and university sector can continue.

Research

245. Scotland's international and excellent research base will be particularly disadvantaged by the UK Government's proposed points-based immigration System. Scotland has a disproportionately higher number of FTE researchers from EEA countries living and working here than the rest of the UK. We win a disproportionately higher share of Horizon 2020 funding than our population share, and collaboration with EU researchers matters to our research base. The research impact it generates is greater than with other international groups according to a recent report (SSAC, 2019).

246. For many researchers the issue of settlement in one place is less important than the freedom to move between different countries. Mobility powers collaboration which powers excellence. A points-based system including eligibility criteria including salary thresholds, qualifications, endorsements or licencing, fees and other barriers is completely out of step with the UK Government's own ambitions for the UK to remain and grow as a science superpower including attracting STEM talent. Specific barriers to the attraction of STEM talent within the various visa routes should be removed or minimised as far as possible.

247. The expense and the complexity of the points-based system for researchers and the UK Government's insistence on its commencement from 1 January 2021, on top of the challenges to movement as a result of COVID-19 and a potential "no deal" Brexit all coming at the same time will make the attraction of globally mobile research talent harder and thus economic recovery harder. The January 2021 commencement of the points-based system is also likely to impact negatively specifically on any final reciprocal mobility arrangements agreed with the EU for Scottish based researchers.

Shortage Occupation List

248. The workforce and skills gaps in the UK certainly reflect that international workers are required to continue to maintain the UK's performance and reputation in research excellence.

249. The current SOL includes occupations for Biological scientists and biochemists, Physical Sciences (in several fields) and Social and Humanities' Scientists as well as engineers, Information technology and communications professionals, Actuaries, economists and statisticians and in Scotland only Chemical scientists within the nuclear industry.

250. All the occupations listed above are still relevant and are currently only considered at the current skills level RQF 6. It is important to recognise the research technicians in these areas are vital to maintain the UK's reputation for excellence in research and innovation. All technicians such as; Laboratory technicians, Electrical and electronics technicians and Science, engineering and production technicians should be considered on the SOL from level RQF 3 and above.

251. As the Russell Group highlighted in their response on EEA-workers in the UK labour market MAC consultation in September 2018:

"EEA technicians are supporting a broad range of research programmes …. most notably across the STEM disciplines. They are also helping address the current skills gap the UK by training future technicians:

(a) Estimates suggest UK industry needs to recruit at least 70,000 new technicians every year to replace those retiring and to fill new positions

(b) Demand for STEM technicians is particularly acute."

252. The same argument could be made for EU workers (non-UK) in the UK at the moment. The initiatives in the UK to improve the skills pipeline for technical talent will not be enough to plug the skills gaps and as the Russell Group response suggests, "the UK will always need to tap into technical talent around the world to maximise benefit from innovation technologies developed overseas".

Impact of Brexit and COVID-19

253. A "no deal" (or limited) Brexit on top of the impacts of the COVID-19 crisis could lead to a significant downward spiral, concluding into a permanent loss of reputation and attractiveness of the Scottish research base as a world leader - as well as the rest of the UK. Uncertainty around future participation in European programmes, poorer reputation, a lack of funds and a new points-based immigration system all impact on the ability to travel to collaborate.

254. The combination of the hostile environment, ending of free movement, increased and new immigration barriers together with COVID-19 related financial problems may lead to Scottish Universities being unable to sufficiently retain and attract talent - particularly EU citizens who make up a significant part of their
full-time research staff.

255. This may be exacerbated by issues with talent training, due to research student projects being disrupted by COVID-19, and less funding available for postgraduate and junior post-doc projects, which in themselves may be harder to fill due to reduced interest from migrants.

Tourism and hospitality sector

256. Scotland's tourism industry is a key economic sector. Tourism delivers employment and enables economic development in some of our most remote locations, sustaining often fragile communities. Around 218,000 staff are employed in the tourism industry right across Scotland, in around 15,000 registered enterprises. It generates around £4 billion in Gross Value Added (GVA - the measure of the value of goods and services produced) and has experienced year-on-year growth in GVA and turnover in every year since 2011.^[71]

257. Within the Sustainable Tourism growth sector, 41.3% (90,000) of jobs were in restaurants and mobile food service activities, an increase of 13.9% on the previous year. Hotels and similar accommodation and beverage serving activities, represented another 21.1% (46,000) and 165% (35,000) of jobs in this growth sector respectively.^[72]

258. In his evidence to the Culture, Tourism and External Affairs Committee^[73] Professor Alan Manning, former Chair of the MAC, stated that "every job in the hospitality sector makes the UK a more low wage, low productivity economy". While this could be argued, in a purely academic and theoretical sense, such a position views the sector in a vacuum and ignores the multiplier effect created by the tourism and hospitality sector, through enabling tourists to visit and spend their money in the local economy. The sector directly influences Scotland's international profile and premium market image and provides major support to other key sectors such as food and drink, retail, transport and construction.

259. The tourism sector is characterised by small and medium-sized enterprise (SME) employers (businesses with 1-249 employees). In 2019, SME employers accounted for 66% of tourism sector employment - this compares to 46.6% across the Scottish economy as a whole.^[74]

260. Due to the existing challenges in recruiting to the sector, combined with the sector's high reliance on an EU workforce, the British Hospitality Association and KPMG report that the hospitality sector will be more heavily hit than any other sector by restrictions to the availability of EU citizens, like those proposed.

Contribution of EU workers

261. The tourism sector is heavily and increasingly dependent on workers from other EU countries. In 2018, according to the Annual Population Survey^[75] there were approximately 21,000 EU citizens working in tourism in Scotland - representing around 11.5% of all those working in the sector overall.

Skill levels of EU workers

262. It is difficult to directly measure the skills of the workforce across the tourism sector, and so qualifications are frequently used as a proxy for skills. The tourism sector has a relatively low qualifications profile, compared to other sectors.^[76] The number of jobs requiring no or low levels of qualifications are, however, projected to decline and the proportion of jobs requiring high-level qualifications are projected to increase. The share of jobs in the accommodation and food sector that require individuals qualified to at least Level 7 in the Scottish Credit and Qualifications Framework (e.g. in customer facing and junior management roles such as travel consultants, operations managers, and deputy hotel managers) is expected to increase from 29% in 2012 to 45% in 2022. At the same time, the share of jobs held by people with lower qualifications is projected to decline.^[77]

263. However, there will continue to be job opportunities in the sector for those with low or no qualifications. The industry argues that it is a sector based on people skills and individual drive and favours people working their way up from the traditional entry level positions.^[78] Workers from other countries also bring other skills that are valuable to the industry, notably language skills.

264. The lack of a so called "low-skilled" migration route coupled with the loss of free movement would, therefore, have a very significant impact across the sector, reducing the pool of available labour and leading to significant shortages.

Recruitment shortages

265. The tourism and hospitality sector already faces a challenge in recruiting enough workers to meet its needs, even with free movement. Brexit, continuing uncertainty and the lower value of the pound have already led to a decrease in the number of applications from existing EU member states, heightening the impact of staff shortages.

266. In 2018 the industry noted acute shortages across the sector, with a significant fall in the number of EU applicants (one hotelier noted a 24% drop; and the biggest recruitment company had seen the level of CVs held fall from 10,000 to 2,000 a month from the previous year).

267. It was anticipated that there would be a total requirement for 149,300 jobs in the sector between 2017 and 2027.^[79] The majority of these (90%) would be as a result of replacement demand, highlighting the often short-term and transient nature of some of the employment within the sector. Without access to the EU migrant workforce pool, the sector would not be able to satisfy this demand.

268. The ESS 2017^[80] continues to note that the hospitality sector has the largest demand for EU employees (33%) to meet vacancy gaps. It is evident that these challenges would significantly worsen if it was more difficult for employers to hire workers from other EU countries to work in the tourism and hospitality sector, restricting the growth of the sector and its contribution to Scotland's economy. Any restrictions on "low-skilled" and "unskilled" work will have a particularly detrimental effect, given the numbers of entry level roles in the sector that require few or no formal qualifications.

269. Analysis of the ESS 2017^[81] has found that employers in the Scottish 'hotels and restaurants' sector have already been experiencing a range of vacancies, skills shortages and gaps. These gaps and challenges would significantly worsen if the current proposals to restrict EEA migration are enacted, restricting the growth of the sector and its contribution to Scotland's economy. Any restrictions on so-called "low- skilled" or unskilled work would have a particularly detrimental effect, given the numbers of entry level roles in the sector that require few or no formal qualifications.

270. Roles that have been highlighted by the sector for inclusion on the SOL include:

• Specialist chefs (5434) - executive chefs, head chefs, sous chefs and specialist chefs;
• Waiting staff/sommeliers (9273);
• Assistant chefs (9272);
• Receptionists (4216);
• Reservations (7219);
• Porters and other hotel workers (9279).

271. Specialist chefs are currently included on the SOL and this shortage has continued despite this intervention. Anecdotal evidence from the industry suggests that the proposed reduction in free movement will impact on all levels of staffing across the tourism sector. While we are responding from a Scottish perspective, we understand that these roles have also been in shortage across the UK.

272. COVID-19 has had a particularly severe impact on Scotland's tourism sector, with significant potential redundancies across the sector and businesses facing closure or reductions in their operations. This is likely to have some impact on the shortages set out above. However, there is a risk that the COVID-19 situation may further restrict the available workforce as some EU workers may leave the country following lockdown, or may not return. The ability of businesses to access to the required workforce will be vital for the sector's recovery, and to allow it to return to desired levels of operation. Therefore, it is likely that as the sector's recovery progresses, these roles will still be required for inclusion in the SOL despite current reductions in activity.

Reasons for shortages

273. Prior to COVID-19, there were many existing vacancies in the hospitality sector that were hard to fill despite existing initiatives in place to attract workers. Scotland's tourism and hospitality sector is spread throughout Scotland. Around a fifth of those employed in the sector were working in rural areas. A British Hospitality Association (predecessor of UKHospitality) survey^[82] found that 60% of its members cited a lack of applications from UK citizens or a lack of interest by the local population as a reason for the number of EU citizens employed in the sector. Migrant workers are already, by definition, mobile for economic purposes and many roles are currently filled by workers from EU countries and further afield.

274. Many jobs in the sector could be characterised as so called "low-skilled", or requiring fewer qualifications, and would be particularly negatively affected by restrictions on so called "low-skilled" migration.

275. A survey of the sector in Argyll and Bute^[83] noted ongoing recruitment difficulties affecting between 40% and 50% of all businesses. Businesses surveyed reported both a lack of applicants and a lack of good quality applicants. Some of the issues identified included suitable accommodation and challenges getting people to relocate. For this reason, sparsely populated areas like the Highlands and Islands are disproportionately reliant on EU citizens who are willing to relocate to these areas and will be significantly damaged by ending free movement.

Action being taken

276. The ESS 2017^[84] found establishments in the Hotels and Restaurants were among the most likely to have taken steps in response to shortages, with 89% having done so. 50% of businesses had provided training towards nationally recognised qualifications.

277. Our new national tourism strategy, Scotland Outlook 2030, was published in early March 2020^[85] - shortly before the COVID-19 crisis struck. The new strategy focussed on four key themes: people, place, business and experiences, with the aim of making Scotland the world leader in 21st century tourism. The immediate impact of the crisis meant that work to develop a detailed action plan for the strategy was put on hold, with the outcomes of the strategy being reviewed in light of COVID-19, to ensure that they remained fit for purpose in the new desired normal for Scottish tourism. However progress has resumed with the new strategy, it is certain that people will remain at its heart, in particular the skills agenda and the need to promote fair work across the sector.

278. Scottish Government is supporting employment opportunities in the sector. In the most recent Programme for Government, we committed to developing a campaign to promote tourism as a career of choice. The timing of this will be reviewed in line with the impact of COVID-19.

279. In addition, around 3,000 Modern Apprenticeships are delivered annually within the Tourism and Hospitality Sector in Scotland funded by Skills Development Scotland (SDS).

280. The Springboard charity continues to deliver a range of initiatives supported by industry, SDS, local authorities and Developing the Young Workforce (DYW) groups, designed to promote the sector as a career of choice and support people into work in the sector. Springboard initiatives include the Future Chef programme, Hospitality Takeover days with schools across Scotland, and the development of a network of industry ambassadors trained to work with young people.

281. The industry (UK Hospitality) has stated that wages within the sector have also increased, due to competition, as a means of attracting workers to the sector. However, they have also stated that the increased payroll costs are impacting on the viability of businesses. It also noted that, while productivity was increasing in some city centre businesses, the nature of the sector, with SMEs the majority, seasonality and unpredictable demand, meant that staff need was harder to predict than for other sectors.

282. The Scottish Government has established a Tourism Recovery Taskforce^[86] to support the sector's recovery following the disruption caused by the COVID-19 pandemic. The taskforce will look at the sector's recovery needs as well as actions being taken by the UK Government and the development of a new domestic visitor marketing campaign.

Cultural and creative industries

283. Scotland's creative industries are a major economic contributor and help shape our cultural identity and international reputation.

284. They include industries with their origin in individual creativity, skill and talent, as well as those with the potential to create wealth and jobs through the development, production or exploitation of intellectual property. The Scottish Government defines the sector as being made up of 16 industries: advertising; architecture; visual art; crafts & antiques; fashion & textiles; design; performing arts; music, photography, film & video, computer games, radio & TV, writing & publishing, libraries & archives; software/electronic publishing and cultural education.

285. It is estimated that the creative industries in Scotland contributed £4.9 billion in GVA in 2017. In 2018 87,000 people were employed across the sector^87. While the majority of jobs are concentrated in Glasgow, Edinburgh and Aberdeen, Dundee and East Dunbartonshire also have higher than average share of sectoral jobs.

286. The sector is dominated by small enterprises with 57.6% of the 15,845 registered enterprises having zero employees (i.e. operating as sole traders) in 2019, and 30% in total had fewer than five employees.^[88]

287. Workers from other countries make a significant economic contribution to the sector. Artists from overseas contribute to our unique culture and world leading festivals, allowing Scottish cultural organisations, our screen sector and our creative industries to recruit the best talent from as wide a pool as possible. At the same time, free movement allows Scottish artists and cultural practitioners to take their work to audiences throughout the EU, exporting our culture and supporting domestic industry through touring and working in other parts of the world, and making it easier for such work to come to Scotland.

288. The culture and creative sectors are highly international in their outlook. Cross-border collaboration between artists and other creative professionals is fundamental to the free flow of creative and cultural ideas and expression and, ultimately, the continued development of the sector. The international nature of the sector is demonstrated in the high proportions of non-UK nationals across many sub-sectors. An immigration policy that made transnational cultural collaboration and exchange more difficult could have a significant impact on the vitality and strength of the Scottish cultural sector.

Contribution of EU workers

289. According to the Annual Population Survey 2018, there were 9,000 EU citizens working across Scotland's creative industries, accounting for 7.2% of employment in the sector.^[89] They comprise a large number of performers within Scotland's national performing companies - in recent years, as high as 38% of the performers employed permanently by Scottish Ballet and 21% of the Scottish Chamber Orchestra.

290. The highly specialised and expert nature of the roles and the skills required of each individual contributes significantly to each company's high international standing. Careers in these sectors of the performing arts are highly international and artists have a significant degree of mobility.

Skills needs

291. The potential impact of exiting the EU on skills needs for the creative industries was set out in the Creative Industries Federation's Brexit Report from October 2016.^[90] There are long-standing skills shortages within the creative industries that workers from other EU countries currently help to address. The current SOL includes 17 creative industries occupations, demonstrating that, even with free movement, there are already notably significant skills shortages.^[91]

292. Freelancers are of particular importance within the creative industries due to a range of factors including the time-limited nature of performance runs, productions and exhibitions; travel requirements for international touring and the high levels of innovation in the sector, which require people with specialist skills and the organisations who employ them to have high levels of international mobility. Yet freelancers from outside of the EU often cannot access Tier 2 visas, since, by the very nature of their employment, they lack a sponsor to support their application. Free movement is therefore an important route into the UK for the skills that freelancers bring - 6.2% of freelancers in the UK's creative industries are EU citizens.^[92]

293. With respect to students studying courses related to the creative industries, EU citizens account for a particularly high proportion of student numbers. In 2016, Glasgow School of Art, for example, had around 16% of its student body made up of students from other EU countries.^[93]

294. The National Performing Companies have suggested that the end of free movement could also have an impact on the career pathways from training into professional performance that currently exist. Students who train at the Royal Conservatoire of Scotland (RCS), for example, will often pursue a portfolio career working with both Scottish companies and companies from other countries. Similarly, international students at the RCS will develop connections in Scotland that support the rest of their careers. These international connections support the health of the Scottish cultural sector as a whole. Proposed changes to the immigration system will reduce the range of career pathways open to students in creative education in Scotland, potentially reducing the attractiveness of the sector as a whole.

295. The proposed lower salary threshold of £25,600 for the skilled worker route would continue to have a significantly detrimental effect on this sector, creating a barrier against recruitment from other countries and potentially excluding many highly-skilled professionals from the cultural and creative industries, given relatively low salary levels in the sector.

Recruitment Shortages

296. The following table shows the most recent figures provided for numbers of performers from UK, non-UK EU and the rest of the world employed by four of Scotland's National Performing Companies.

Table 8: Summary of performers nationalities employed by four of Scotland's National Performing Companies

	UK nationals	EU nationals	Other Non-UK nationals	% of EU nationals
Scottish Chamber Orchestra	22	7	5	21%
Royal Scottish National Orchestra	58	7	6	10%
Scottish Ballet	17	14	6	38%
Scottish Opera	145	6	1	4%
Total	242	34	18	12%

297. The current SOL includes:

• Artist (3411)
• Dancers and choreographers (3414)
• Musicians (3415)
• Arts officers, producers and directors (3416)
• Graphic designers (3421)

298. The sector has highlighted that these job roles still require intervention to manage shortages and therefore should remain on the SOL. If they are removed from the UK-wide SOL these should be included on the Scottish SOL. In addition to the companies currently referenced under Musicians (3415), the Royal Scottish National Orchestra and the Scottish Chamber Orchestra should be incorporated.

299. The culture and creative sector has been severely affected by the COVID-19 crisis. In many areas activity has stopped altogether, such as live music and theatre performances. This is likely to have some immediate impact on shortages in the sector, including the permanent loss of people in freelance, short-term and casual working arrangements. Access to the skills and talents that the sector requires will be central to its recovery. The international networks and links that are facilitated by the ability of EEA citizens' to come to Scotland to work in the creative industries will also be vital to the sector's recovery. Therefore, it is likely that as the sector recovers and activity returns to desired levels, it will be necessary for these roles to remain on the SOL.

Action Taken

300. There are currently efforts ongoing to address the existing skills shortages and gaps within the creative industries in Scotland. SDS worked with industry to publish a Creative Industries Skills Investment Plan in June 2015.^[94] This work sets out a number of actions to address existing skills needs. It estimates that each year between 2015 and 2025, the creative industries will need an additional 4,300 individuals entering their workforce to support growth. Given existing shortages, and the current significant proportion of EU citizens filling key roles in the sector, the current proposals will have a significant negative impact on the availability of skilled workers.

301. A key driver of growth in the creative industries has been digital. Sub-sectors of the creative industries with a particularly strong digital focus are amongst those employing the highest proportions of workers from other EU countries and many also have the highest proportion of skills shortages and gaps, such as in the games and software industries, for example. SDS have developed a separate Skills Investment Plan for the digital sector^[95] which sets out actions to address skills needs in support of that sector's continued development. As outlined above, a separate digital response will be submitted to this call for evidence.

302. The Scottish Government has published A Culture Strategy for Scotland^[96] (February 2020) which demonstrates the importance of culture to Scotland's prosperity and sets the future strategic direction of culture in Scotland. This includes supporting, developing and promoting Scotland's creative workforce, undertaking a status review of cultural workforce, ensuring that Scotland's culture reaches a wide audience at home and abroad.^[97]

Digital and technology

Economy

303. Scotland is home to a vibrant digital technologies industry with over one thousand companies engaged in a variety of activities from software development and IT services to digital agencies, games development and telecommunications.

304. The Digital Technologies sector in Scotland contributed £4.9bn GVA to Scotland's economy in 2019, accounting for 3.5% of total GVA. GVA per head for the tech sector is 40% higher than for the economy as a whole, making it a considerable contributor to Scotland's economy. Over half of employers (58%) recruited tech skills in 2018/19.^[98]

305. The digital and tech sector will be the second fastest growing in Scotland between now and 2029. In addition, it is expected to grow one and half times faster than the economy overall.

306. According to Tech Nation, Scotland's tech startup ecosystem is particularly resilient as it continues to attract investment and perform well. Last year, Edinburgh advertised 35,786 digital tech roles, making up over 22% of jobs in the region and underlining the strength of the capital within Scotland's economy.

307. Edinburgh had the highest median salary for digital technology jobs in the UK at £44,938. This is 17% higher than the median salary across all sectors in the city in 2019, the report showed.

308. GVA per head for the tech sector is 40% higher than for the economy as a whole.

309. People who work in tech businesses are more likely to be employed on a full-time basis (89%) than those in Scotland's workforce overall (66%).

Skills

310. The shortage of skills required to meet the demand for digital roles is restricting growth within the digital sector and the wider economy. The number of people working in tech professions has grown 9% from 2016-2018, illustrating continued demand for tech skills across all Scotland's industries.

311. Demand for tech recruits continues to grow rapidly. It is estimated that Scotland needs around 13,000 new people to work in tech every year.^[99]

312. There are currently 1,557 vacancies advertised for Edinburgh-based companies that require skills in emerging technologies, including data analytics, artificial intelligence (AI), blockchain and quantum computing. This is down from 2,666 in June 2019, a drop of 42%.

313. There has been a growth in demand for skills in AI and Machine Learning, with job advertisements increasing by nearly a third (33%) in Edinburgh and 44% in Glasgow in 2019.

314. 50% of respondents ranked Brexit as having a negative impact on having access to the skills requirements they need, with only 2% ranking it as a positive.

315. 75% of employers in the latest SDS Digital Technologies report, reported that having the right workforce with the correct technical skills as being an issue with 28% stating it as a significant one.

316. 58% also reported skills issues in terms of the necessary employability or work readiness skills.

Action taken

317. We have invested some £26m over the past 6 years in supporting businesses and individuals to develop their digital skills.

318. Over £12.5 million of this funding has been focussed specifically on delivery of the Digital Skills Investment Plan, seeking to tackle both immediate digital skills shortages and to boost the number of skilled individuals we have in the pipeline and in the workplace.

319. Our Digital Skills Group is a public sector partnership with companies such as JP Morgan, Hewlett Packard Enterprise, Cisco and FanDuel has delivered a range of projects to both respond to immediate needs of industry and broaden the future talent pool.

320. A successful and effective STEM strategy is helping improve awareness (and provision) of digital skills issues, qualifications and pathways across Scotland.

321. Due to COVID-19, we now have an even more critical need and importance to address the skills shortages and to build upon the digital economy of Scotland.

International Recruitment

322. According to a report by Ekosgen, 37% of businesses surveyed in Scotland had recruited Digital Technologies skills internationally, with 68% of those reporting Europe to be the top origin of recruits. Over half of those recruiting internationally report doing so to address a specific specialist skill or experience requirement^[74].

323. Almost half (48%) of business respondents reported currently having digital technologies skills shortages or gaps in their workforce. Of this group, 64% had issues in development and implementation, with delivery and operation (29%) and relationships and engagement (27%) also notable.

324. Employers felt the reasons for these skills shortages and gaps were mainly due to there being a lack of required skills in Scotland and too much competition for these skills. Employers use a variety of solutions to meet their recruitment needs and challenges including apprenticeships, internships, college and university graduates.

325. This illustrates employers' appetite to invest in younger and less experienced talent, however there remains more of a focus on university graduates as employers perceive them to be better equipped with technical skills and work readiness skills at this stage.

326. International recruitment is also being used to help fill gaps. 36% of employers have recruited tech skills internationally. The main drivers for this are a lack of UK applicants and the requirement for specialist skills and experience.^[100]

327. A more restrictive immigration policy would increase the existing difficulty in recruiting skilled staff in the sector, further restricting potential for growth. The labour market requirement for migration is projected to continue despite the labour market shock caused by COVID-19.

Impact of Brexit

328. 72.5% of respondents to the latest ScotlandIS snap poll on Brexit^[101] voted "Other" when it came to what would be preferential for their business with regards to either a No Deal Brexit/Extension. Of that 72.5%, 50% of respondents voted to revoke Brexit.

329. Only 13% of respondents voted in favour of a potential "No Deal Brexit".

330. 45% of respondents are not making plans for Brexit, the prime comment/reason for this is due to the ongoing uncertainty and lack of clarity.

331. 49% of survey respondents think that over the next 12 months the business environment for their company will get worse or considerably worse.

Digital Connectivity

332. Data on salary levels is not available at a regional level. The telecoms industry cite the commercial sensitivity around this.

333. Whilst Scotland does not have devolved responsibility over telecommunications, the Scottish Government has made a commitment to deliver 100% superfast broadband access across Scotland backed up by the substantial investment of £600 million in the Reaching 100% (R100) programme.

334. It is essential that the telecoms industry has access to a workforce with the range of skills to deliver both commercial and publicly funded digital infrastructure projects in Scotland, particularly highly skilled engineers.

335. Our Digital Scotland Superfast Broadband (DSSB) programme had to take steps to address a shortage of UK-based expertise, securing workers from Poland and Portugal in order to complete infrastructure build. Without access to these workers from other countries, the programme of extending fibre broadband access to over 940,000 premises across Scotland could not have been delivered.

336. Failure to supply the necessary workforce poses a significant risk to the R100 programme which is a vital investment in Scotland's national infrastructure.

Manufacturing and construction

337. Scotland has a long and proud manufacturing heritage and manufacturing is seen as a key driver of our future prosperity. Manufacturing covers a diverse range of activities from engineering to textiles and represents over 54% of our international exports at £17.6 billion.^[102] Manufacturing products accounted for 48% of business expenditure on research and development (BERD) in 2017 (£594 million).^[103]

338. While manufacturing has undergone a significant transformation in recent decades, with increased globalisation and greater use of digital technology, it remains a high skills and high wage sector, with earnings that are above the Scottish average. The sector employed 181,000 people in 2018, accounting for 6.9% of total employment in Scotland^[104] and contributed £12.0 billion in GVA to Scotland's economy in 2017.^[105]

339. The construction industry is another core sector of the Scottish economy, providing infrastructure to businesses across all sectors. It makes a major contribution to the economy, employing 143,000 in 2018^[106] and contributing £7.6 billion in GVA to the Scottish economy in 2017.^[107]

340. Table 9 below shows the levels of employment in the manufacturing and construction sectors for non-UK EU and non-EU nationals. Many workers from other EU countries in the manufacturing sector are employed in the 'manufacture of food products' industry: 32.4% of employment in that industry is made up of workers from other EU countries, employing 8,000 EU workers, accounting for 5.7% of all EU workers in employment in Scotland.

341. The construction industry would be largely affected by the future immigration proposals set by the UK Government and in context of this report.

Table 9: Levels of non- UK EU and non- EU workers in manufacturing and construction

	EU			Non-EU
Sector	Level	% of all in employment	% of all employment in sector	Level	% of all in employment	% of all employment in sector
Manufacturing	17,000	12.2	8.4	3,000	4.7	1.3
Construction	9,000	6.7	4.9	1,000	1.2	0.3

342. In 2017,^[108] 8.0% of employment in the manufacturing sector was made up of workers from other EU countries. The industry employed 16,000 EU citizens, accounting for 12.0% of all EU citizens employed in Scotland.

343. In 2017, 3.0% of workers in the construction sector came from other EU countries. Around 6,000 EU citizens worked in the sector, accounting for around 4.1% of all EU citizens in employment in Scotland^[63]. In construction, over a third of all vacancies were reported to be hard to fill for skills-related reasons.

344. Of the 143,000 employees in the construction industry (Annual Business Survey, 2018)^[68] in Scotland, 42,000 are categorised as being in 'skilled construction and building trades'. The Office for National Statistics (ONS) ASHE data for workers categorised as being in 'skilled construction and building trades' in Scotland includes:

• Steel erectors (RQF 3)
• Bricklayers and masons (RQF 3/Lower Skilled)
• Roofers, roof tilers and slaters (RQF 3)
• Plumbers and heating and ventilating engineers (RQF 3)
• Carpenters and joiners (Lower Skilled)
• Glaziers, window fabricators and fitters (Lower Skilled)
• Plasterers (Lower Skilled)
• Floorers and wall tilers (Lower Skilled)
• Painters and decorators (Lower Skilled)
• Supervisors (Lower Skilled)

345. Thus the majority of these roles lie outwith the scope of this commission and would not be eligible for inclusion on the SOL. Furthermore the 25^th percentile annual gross pay for a worker in the 'skilled construction and building trades' was £22,700 in 2018, while the median annual gross pay was £27,400.

346. Therefore even at the proposed reduced salary threshold of £25,600 the majority of roles within the construction and building trades would not be eligible for the future system and could significantly restrict the ability of Scottish construction firms to recruit construction workers at RQF level 3 or above.

347. Evidence from the Construction Industry Training Board (CITB)^[109] shows that in 2018/19, bricklayers, labourers/general operatives and carpenter/joiners are the top three occupations amongst construction workers in Scotland. This reflects the profile across the UK, although there are fewer site managers within Scotland. There has been an increase in the proportion of labourers/general operatives since 2015 (from 21% in 2015 to 27% in 2018/19) and these workers form a higher proportion of the Scottish workforce than across the UK.

Impact of Brexit

348. Manufacturing is a key part of the entire UK's economy, accounting for 10% of the total economy and 9% of total employment. It also has a higher productivity and wages than the average for the economy as a whole.

349. The reliance of other sectors on manufacturing for products and services means that any disruption to it would have a sizeable negative impact on the wider UK economy; and Brexit poses a significant threat.

350. A recent academic report by UK in a Changing Europe, Manufacturing and Brexit,^[110] found the effects to be significantly disruptive and negative, given the sector is highly integrated within the EU single market. The extend of this disruption is highly reliant on the outcome of the UK-EU negotiations.

351. Brexit scenarios by KPMG based on three possible outcomes: a 'hard Brexit' (trade and labour flows restricted); 'free trade' Brexit (trade is free, labour restricted); and a 'free labour' Brexit (trade restricted, labour free). Discounting the third given free movement will end at the end of 2020 places manufacturing industries in the top half of sectors likely to suffer negative impacts of Brexit.

352. These comprise metals, oil and gas, industrial products, pharmaceutical and biotech, food and drink manufacturing, and others.^[111]

353. Food and drink manufacturing is shown to be the most affected sector with restrictions on either labour or trade. Pharmaceuticals and Biotech similarly rank highly. Given the key role of both of these sectors in the UK's response to the COVID-19 crisis, the high levels of EU employees and typically low salaries, the UK would be significantly worse off and less able to respond to the crisis following the implementation of the new system and end of the transition period.

House Building

354. The Independent Short-Life Working Group on housebuilding sector skills employment report was published in May 2019. Evidence provided to the group highlights that the industry lost EU citizens over the last 2 years, particularly in the areas of bricklaying, joinery and site operatives. There were also reported regional 'hot spots' with an under supply of on-site skills, such as the Highlands and South East.^[112]

355. Skilled trades roles continue to have the highest density of skill-shortage vacancies (more than two in every five skilled trades vacancies were skill-shortage vacancies).

356. The sector has found the following roles hard to fill:

• Bricklayers (5312)
• Joiners (5315)
• Electricians (5241)

Qualifications for bricklayers and joiners are usually in the form of apprenticeships.

357. Electricians require professional body accreditation, in Scotland this comes from Electrical Contractors' Association of Scotland. The sector has so far struggled to maintain supply to meet the growing skills demand.

358. The sector had previously been supplied by mostly Polish labour but changing economic conditions, a weakening pound and the environment created around Brexit has led to a significant reduction in the Polish born workforce. The roles are now more commonly filled by Romanian citizens. Therefore the lack of a so called "low-skilled" route will significantly affect supply.

Logistics and Passenger Services

359. The logistics sector employs approximately 2.5 million people across the UK. It is estimated that 11% of these are filled by EU nationals including 60,000 HGV drivers and 120,000 warehouse operatives.

360. There are already issues identified by stakeholders around the availability of skilled labour in the logistics sector, with a particular concern around recruiting qualified HGV Drivers where industry estimates that there will be a UK-wide shortage of between 35,000 to 60,000 drivers by 2020.

361. Existing skilled labour shortages are likely to be exacerbated by the proposals for the future immigration system. For example, the logistics sector typically has a higher age demographic with the majority of UK HGV drivers aged 45 or over (approximately 99% of UK drivers are aged over 25). In comparison, the percentage of EU nationals working within the industry aged over 45 is significantly lower, and so a reduction in this part of the workforce could disproportionately increase labour shortages. Also, any proposals under the potential future salaries threshold could adversely affect the ability for EU workers to work in the UK logistics sector as the majority of posts available would not meet this threshold.

362. There are also concerns regarding other essential occupations across the wider logistics chain such as fork lift drivers, warehouse staff, mechanics, as they also currently have a high proportion of EU nationals working in these roles, where the majority of salaries are unlikely to meet the threshold. Detailed in Table 10 below is an approximate breakdown of EU nationals working within a number of areas across the wider logistics sector.

Table 10: Levels of EU Nationals Employed in the Logistics Sector in Scotland

Position	Total Number of EU Nationals	Percentage of Total Workforce
LGV Drivers	42,000	12%
Van Drivers	29,000	7%
Fork-lift Truck Driver	23,000	26%
Warehouse workers (non-managerial)	91,000	19%

Source: Repgraph analysis of ONS Labour Force Survey for Q2 2018

363. A number of other concerns have been raised by the Freight Transport Association, these include:

• 90% of logistics jobs are classed as "lower-skilled" and therefore would not meet the salary threshold;
• 88% of logistics jobs have a salary lower than the £30,000 threshold under the proposals by the UK Government e.g. the average salary for a warehouse operative and forklift driver is £21,000 and HGV Driver is £28,000; and
• Concerns regarding frontier workers within the industry; for example many touring hauliers employ EU nationals that don't live in the EU, they work under a UK contract and come to the UK to collect the HGV then travel around Europe for several months. There is a question mark over whether this practice can continue.

364. Similar issues to the logistics sector were raised in regards to the bus passenger services. Again there are concerns about the impact of a high salary threshold but these services are crucial, particularly in remote and rural communities.

Scotland's Rural Economy

365. Rural areas are home to one sixth of Scotland's population.^[113] The importance of migration in meeting Scotland's demographic and economic needs is felt in particular in our rural communities, where although numbers may be small compared to large urban concentrations, the positive contribution made by EU workers, and their families, can be especially significant.

366. Approximately one third of Scotland's registered small and medium-sized enterprises are based in rural areas, with some 49,000 businesses operating in a diverse range of sectors including agriculture and forestry, tourism, the manufacture of high-tech niche products and creative services.^[114] Many are reliant on straightforward access to a workforce that includes workers from other EU countries, in order to meet their current and future labour needs and would be disproportionately disadvantaged by any restrictions which meant they were unable to hire the labour that they needed.

367. Low unemployment in rural areas mean workers often need to be sourced from outwith the local area, driving the need for migrant workers. Scotland's unemployment rate is 3.5%^[115] but this varies significantly across Scotland: ranging from 1.9% in the Orkney Islands and 2.2% in Shetland to 5.4% in Dundee.

368. The impact of low unemployment is disproportionately felt on producers and industries primarily based in rural areas including agriculture, and food and drink. Data from the Federation of Small Businesses found that 1 in 4 (26%) of small businesses in Scotland employ EU citizens, rising significantly in rural areas, with 41% of small businesses in the Highlands and Islands employing EU citizens.^[116]

369. Some of the sectors in rural areas most reliant on non-UK workers include horticulture, dairy farming, fisheries and meat processing, often in casual and seasonal employment. On the 1 June 2019, there were 67,100 people working on agricultural holdings across Scotland. Worker-occupiers and their spouses made up 56%% of the total workforce; regular staff accounted for 31% and casual and seasonal workers 13%.^[117]

370. The section below sets out more evidence on the contribution of workers from other EU countries to primary sector rural industries. Primary sector industries are defined as agriculture, forestry and fishing: which (as of March 2017) employ more people in remote rural (15%) and accessible rural (13%) areas than in the rest of Scotland (0.5%).^[118]

371. Many roles within these sectors are below the skill level required to obtain a Tier 2 visa to work in the UK and are often seasonal. Around 9,300 seasonal workers were engaged in Scottish agriculture in 2017,^[119] particularly concentrated in fruit production. This sector has been an important source of growth within Scottish agriculture in recent years; with the value of its output growing to almost £140 million in 2018,^[120] and the volume of production more than tripled since 2003.

372. Providing comprehensive data on the contribution of seasonal workers from other EU countries to the Scottish agriculture sector is challenging, in particular given the short-term nature of their employment which means such workers are often absent from official statistics.

Horticulture

373. The EAG analysed the impact of a salary threshold by local authority area and found that remote and rural areas would find it very difficult to attract any migrants with this imposition - even the reduced threshold of £25,600 poses a significant barrier.

374. Regionally uneven population change represents an additional challenge. In Scotland while inward migration to rural areas has been less significant than to large cities, such mobility has helped to stabilise and even rejuvenate the local population age structure in many areas. It is important to note that this rural depopulation is a result of a legacy of outward migration. Even a minor reduction in inward migration to those areas will thus have a significant negative impact.

375. One of the sectors most heavily reliant on seasonal EU labour is horticulture. Taken together, horticulture and the potato industry account for £511 million of output in 2018.^[121] As above, the soft fruit sector in particular has grown across the UK and in Scotland: for example, Strawberry and Raspberry consumption in the UK increased by 150% and 123% respectively between 1996 and 2015, of which 70% was grown in the UK (according to figures from the UK Department for Environment, Food and Rural Affairs).

Business Concerns

376. The soft fruit and vegetable sectors are particularly reliant on seasonal migrant labour, with the vast majority of workers in the sector coming from overseas, and only a very small proportion (often only the business proprietors) are permanent British workers. The majority of businesses confirm that they have tried repeatedly over a number of years to attract local or domestic workers but with minimal success: reasons include the calibre and commitment of local recruits, who did not remain in the job.

377. The greatest demand for workers comes during harvest in summer and autumn (roughly between May and September), although there are other roles required earlier in the year.

378. It is estimated that up to 22,000 non-UK seasonal workers are employed on Scottish farms every year, the majority of whom come from other EU countries. 6,700 seasonal workers are needed annually in Scotland's soft fruit sector alone.

379. Many growers in the soft fruit industry in Scotland have expressed serious concerns about the proposed limitations on easy access to seasonal labour will have on their businesses, and indeed are already facing significant labour shortages, with 48% indicating their difficulty to harvest due to labour shortages.^[122] The tight timeframes associated with the harvesting of fresh food have led some to highlight the possibility of fruit going unpicked and 'rotting in the field'.

380. The evidence suggests that the need for labour could not be addressed by recruitment of local people alone, not least given the low unemployment that characterises rural areas.

381. In consideration of these numbers, even in 2017, the 2,500 visas for the whole of the UK of the proposed Seasonal Agricultural Workers Scheme (SAWS) pilot are shown to be woefully inadequate. In 2017, there were between 2,000 and 2,500 vacancies in Scotland alone.

382. These shortages occurred even with free movement enabling recruitment, with the UK Government ignoring the need for labour in roles below £25,600 a year these shortages will grow exponentially. Action is needed urgently to address this need. Without a "lower-skilled" migration route, the industry will be prevented access to reliable, seasonal labour. This will have a significant and detrimental effect, reducing the size of the industry and reducing domestic production in favour of imports. Given the demand across Europe for seasonal agricultural workers, there is a risk that the UK Government's approach is seen as unwelcoming.

Impact of COVID-19

383. The maintenance of food supplies has featured prominently in the COVID-19 pandemic in the UK - for example, with shortages of key products and urgent requests for labour.

384. Agricultural workers, whilst paid low wages and employed in precarious and demanding seasonal work^[123] are categorised as 'high and medium skilled' by the 2018 MAC report. The difficulty of recruiting labour into this sector has been highlighted by the COVID-19 crisis: the closure of UK borders and suspension of flights preventing the traditional movement of workers from the EU.

385. The recruitment challenge experienced by horticultural growers during the COVID-19 pandemic has exemplified the trend of UK-based workers not being suited or attracted to agricultural work. Schemes to adapt British volunteers (students and furloughed workers, for example) to replace this labour have largely failed: with a predominant lack of experience in the agricultural sector, only 13,000 (32%) of the enrolled 32,000 for the Pick for Britain initiative turned up for online interviews.^[124]

386. The NFUS estimate that domestic labour-matching schemes have had an average 10% success rate for growers.

387. Thus while the traditional recruitment of EU workers from e.g. Romania was fraught with many additional complications, including health checks, temporary quarantine and chartering of private flights to the UK, this was still considered preferable to the agriculture industry.

Dairy farming

388. The case is similar in the Scottish dairy sector. The Royal Association of British Dairy Farmers (RABDF) migrant survey carried out in 2016 found that 51% of respondents had experienced difficulty recruiting staff within the last 5 years, and 56% had recruited from outside the UK. The overwhelming majority of farmers (93%) said that the use of EU labour had been a successful option for their farm.

389. Migrant workers were not only recruited due to the insufficient levels of UK labour, also but because of their higher skill and qualification level.^[125] Half of the overseas workers employed by respondents in 2016 were highly skilled or mainly highly skilled in dairy.

390. Respondents expressed concern about the impact of Brexit on their ability to recruit and retain workers: 62% of respondents were concerned that Brexit would affect their ability to employ EU labour; 42% anticipated that retaining existing migrant labour would be an issue; and 58% were concerned about their unit's financial viability due to labour shortage.^[126]

Meat processing

391. The red meat supply chain in Scotland generates an annual output of some £2.4 billion GVA, and employs more than 33,000 people, with migrant labour playing a key role in the sector.^[127] Scottish abattoirs produce around 170,000 tonnes of beef, 26,500 tonnes of sheep meat and 25,000 tonnes of pig meat annually.

392. The role of non-UK labour is of fundamental importance in the slaughter and processing sector, including in veterinary inspection. According to Food Standards Scotland, across the UK 75% of abattoir vets are from other EU countries,^[128] and as abattoirs are unable to operate without a vet the contribution made by those roles to the meat processing industry in Scotland cannot be overstated.

393. This level is even higher in Scotland: Food Standards Scotland report that 95% of vets are EU nationals, and 45% of vets in the Government Veterinary service in Scotland non-UK EU nationals.^[129] Any future shortage of vets would jeopardise the health and welfare of Scotland's livestock.

394. In a survey carried out amongst members of the Scottish Association of Meat Wholesalers, 52% of the unskilled workforce, 44% of the skilled workforce and 16% of supervisory and management staff were non-UK nationals.

395. As with many sectors in the rural economy, recruiting the necessary labour from the local area is challenging, with industry citing both a lack of suitably skilled local labour, particularly in butchery, and many roles perceived as undesirable by potential workers (due, for example, to shift-working and unsocial hours, the work being physically demanding and a work environment that includes working in chills or areas kept cool for food safety reasons, and a need to wear specialist personal safety equipment).^[130] Low unemployment in rural areas associated with meat processing is again another factor limiting the local labour supply.

Sea Fisheries, Aquaculture and Seafood Processing

396. Around 15,000 people were employed in sea fisheries, aquaculture and seafood processing in Scotland in 2017, generating £1.06 billion Gross Value Added in the same year.^[131]

397. As of June 2019, there were 318 fish processing plants in Scotland. Processing is concentrated in the Grampian area (Aberdeen and Aberdeenshire local authorities),^[132] which makes up approximately 30% of all registered fish processing plants. Based on 2018 statistics from Seafish Industry Authority, the Grampian area provides 49% of the employment in the fish processing sector.^[133]

398. Dependency on non-UK nationals is higher in Scotland than the rest of the UK with case study analysis of Scotland's large processors estimating 58% of their workforce are EEA nationals^[134] versus estimates of 46% of the UK seafood processing workforce coming from other EEA countries.^[135] In some regions in Scotland this dependency is even higher, for example it is estimated that 70% of all staff in seafood processing in Grampian are non-UK nationals. Mixed species processing factories had the highest dependence on EEA workers, who represented 64% of those employed in the businesses. This survey focused on large processors only.^[136]

399. The sea fisheries industry is also highly dependent on overseas labour. A 2015 survey^[137] from 222 vessels, representing 15% of the Scottish fleet, 71.9% of the crews came from the UK, 8.1% from EEA countries, and 19.3% from non-EEA countries. Of those reporting EEA nationality, most came from six countries - Ireland, Latvia, Lithuania, Poland, Romania and Spain. Crews from non- EEA countries came from four countries - Philippines, Ghana, Sri-Lanka and Belarus.^[138]

400. Most of the surveyed EEA and non-EEA crews worked on Scottish vessels as engineers (charged with the running of the vessel and its equipment) and deckhands (working on the deck with the fishing gear and clearing and sorting catch).^[139]

401. Seafood processors and sea fishing businesses continue to face challenges recruiting UK nationals to work in the sector. Limited labour pools in many seafood dependent communities has increased reliance on non-UK people to fill jobs. In recent years many business owners in both sectors have cited potential business failure if overseas labour could not be accessed. The forthcoming end of freedom of movement for EEA nationals may lead to an increase in the reliance on non-EEA workers who tend to rely on transit visas in the sea fishing sector, with previously declared concerns by Scottish Government in relation to the use of transit visas. A few processors have suggested that there is some potential to shift to more technical solutions (more automation and use of robots) but this would require considerable lead in time and investment.^[140]

Impact of the proposed new system

402. Stakeholders in the agriculture sector oppose the concept of a salary threshold and the ending of free movement. Without a lower-paid, lower-skilled route for workers, agriculture and food manufacturing industries are likely to be significantly impacted, and business will be unable to maintain the current provision of food to UK consumers.

403. For the vast majority of roles within this sector, including those that can attract a salary over the threshold, academic qualifications are not a prerequisite. It is important therefore that any points-based system does not prescribe points to individuals based solely on academic qualifications. A pragmatic solution might be to apportion points for job roles within these sectors where the kind of tasks needing to be performed can be defined on the basis of 'manual' or 'technical' skills.

404. The proposals would be particularly disruptive for rural and remote areas of Scotland, as seasonal and temporary programmes would prohibit longer-term settlement of immigrants working in key sectors.

Recruitment Shortages

405. Commissioned research into the Seasonal Agricultural Workforce in Scotland^[141] in March 2018 showed that 9,255 international seasonal workers were employed on Scottish Farms in 2017, and highlighted that around 15% further vacancies were unfilled.

406. Stakeholders in the agriculture sector are particularly forthcoming in their opposition to the concept of a salary-selective, skills-based immigration system such as the UK Government intends from 2021. Without a lower-paid, lower-skilled route for workers, agriculture and food manufacturing industries are likely to be significantly impacted, and business will be unable to maintain the current provision of food to UK consumers.

407. The proposals would be particularly disruptive for rural and remote areas of Scotland, as seasonal and temporary programmes would prohibit longer-term settlement of immigrants working in key sectors.

408. For the vast majority of roles within this sector, including those that can attract a salary that meets the proposed threshold, academic qualifications are not a prerequisite. Therefore the current proposals which prescribe points-based solely on academic qualifications would not meet the needs of this sector. A pragmatic solution might be to apportion points for job roles within these sectors where the kind of tasks needing to be performed can be defined on the basis of 'manual' or 'technical' skills, or for inclusion on the SOL.

409. Our response to the previous MAC Commission on the SOL highlighted the following roles for inclusion:

• Managers and proprietors in agriculture and horticulture (1211) - RQF 4
• Veterinarians (2216) - RQF 6
• Farmer, crofter, herd manager (5111) - RQF 3/Lower-skilled
• Veterinary Nurses (6131) - RQF 3
• Farm workers (9111) - Lower-skilled

410. The extension of the SOL to consider roles at RQF 3 and above therefore includes both managers, veterinary nurses and some farmers (as above) but many of these will still not meet the necessary salary threshold (even at the 'discount'). Notably, Farm Workers and many farm, croft and herd manager roles would still be excluded and hence unable to recruit through the future immigration system.

411. Despite strong evidence of the shortages of workers within Scotland across agriculture and agri-food, the MAC have recommended removing agricultural occupations from the SOL in their most recent reports. The National Farmers Union of Scotland (NFUS) in their response to the MAC highlight their concern with this and the threats post to the sector.

Skills needed

412. Veterinarians are highly qualified and must be registered with Royal College of Veterinary Surgeons. Vets are required to maintain animal population health, to certify all meat produced and exported (abattoir vets) and to deal with communicable animal diseases (govt. vets). These are vital roles that are extremely reliant on EU citizens.

413. The work of Veterinarians in maintaining the animal health system is supported by Veterinary Nurses, these are essential roles that often fall below the threshold. Entrants require GCSEs/S grades or an equivalent qualification. Entrants must obtain employment at an approved veterinary practice to gain practical experience and tuition with an employer for a minimum duration of two years. Candidates must also pass professional examinations before qualifying as a veterinary nurse.

414. There are not formal qualifications for the agriculture and horticulture sector, however many managers have BTEC/SCOTVEC or SQA level qualifications. European migrants in agriculture management play a key role in managing the diverse seasonal workforce, in particular research evidence has shown that they often work managing other migrant workers drawing on common language skills, making their presence as important as the staff they manage.

415. Prior practical farming experience is normally needed for any managerial role and often preferred in all farming roles. Training is typically received on-the-job and via a variety of vocational qualifications in agriculture, including a variety of NVQs/SVQs in agriculture available at Levels 1 to 4, together with BTEC/SCOTVEC diplomas and apprenticeships in some areas.

416. Without skilled managers capable of communicating with seasonal staff the most profitable parts of the agricultural sector - fruit and horticulture cannot function. There is an especial dependency in the horticulture and fruit sectors on seasonal agricultural labour for the harvest as there is not a technological solution to soft fruit picking.

Reasons for Shortages

417. The rural economy has a long history of skills shortages with many vacancies proving hard to fill. The attractiveness of entry level jobs in the sector to the domestic working population has declined, whether due to pay, working patterns, perceived lack of job progress or seasonality of businesses. As a result, applications for the sector have declined especially among the domestic population. The growth in the sector has therefore been aided by free movement of workers from other member states in the EU.

418. The inherent rurality of employment in the sector and challenges around getting staff to relocate add to the recruitment challenges faced by the sector. EU citizens coming to the UK for employment are often much more willing to move to rural areas for work.

419. As with tourism and hospitality, as competition for labour increases, businesses may look to increase salaries and/or benefits, the additional costs associated may force others to pass these costs on to customers (impacting on competitiveness) and there is a risk that many will go out of business.

420. There has been an additional challenge faced in the last three years where existing and returning workers from EEA countries have been unwilling to return to work in Scotland: not only due to the weakened pound but negative perceptions due to the political environment, seen as hostile to immigrants (NFUS).

421. Veterinarians are highly sought after internationally and therefore the UK must remain competitive in attracting veterinary staff. The proposed non-preferential system for EU migration will damage the UK's competitive advantage and result in significant shortages of qualified vets, it is therefore vital that these roles are included on the SOL to ensure the UK is recruiting sufficient levels of skilled staff to sustain business need.

Action Taken

422. The agricultural wages legislation governs the setting of a separate and higher wage structure for wages for agricultural workers at all levels in Scotland. As a result research has shown that wages in the sector are higher than in England where there is not an agricultural minimum wage.

Environment and Forestry

Shortages

423. There are existing shortages within the forestry sector that are difficult to fill with the current domestic workforce and will be affected by the proposed changes in the immigration system.

424. Most notably shortages are prevalent within:

• Forest Management;
• Forest Machine Operators - the personnel who harvest and stack the trees before being hauled to the processors (9112).

425. In addition there are serious concerns about seasonal labour from abroad for work in forest nurseries, for tree planting and for the Christmas tree harvest:

• Tree planters (5112);
• Tree nursery labour - planting and lifting young trees and packing ready for distribution (9112).

426. Tree planters and tree nursery labour are seasonal jobs and much of this labour comes to the UK from Europe (and beyond) each year and on which we rely heavily. The tree planting 'season' can last 9 months over winter and through spring/early summer. Estimates are that this may impact on fewer than 200-300 people, but without them there would be insufficient labour to grow and plant the trees we need to meet national targets. All businesses report that they try to recruit domestic labour but they rarely take up the work, applicants are of low quality and often have high turnover.

427. Stakeholders and the Scottish Government therefore believe that these occupations should be included in the SOL, but additionally, that these categories of workers are granted the arrangements for seasonal fruit and vegetable pickers via the Seasonal Agricultural Workers visa.

428. Both the Scottish and UK Government have ambitious planting targets for new woodlands, without the labour to raise and plant the trees these targets will not be achievable.