 Lleiddo unig, wrth gwrs, a agau i chi o ddwyngor gwybod 24 yn gael'r Cymru yn 2022. Mae'r ffwrdd ystod, mae'r ffordd gweithio fydd gesh ingenuol Gymraeg a'r Ffwrdd Gweithiau Iolol ym Mhwylwyr Cywleddol. Maen nhw'n ei cwestiynau i ni i wronggau i Michaelu Llywodraeth, a chyfydiau preroddwydol Cymru ei chweithio ym 1923-24. I would like to welcome Shona Struthers, chief executive and Andrew Whitty, director of sector policy at Colleges Scotland. Good morning, and Karen Watt, chief executive and James Dumfie, director of access, learning and outcomes from the Scottish Funding Council. Nice to see you again, Karen. We have a lot of ground to cover this morning, so we would like to invite Shona Struthers and Karen Watt to make a short opening statement for a couple of minutes, if that's okay, before we move on to questions. Shona Struthers, you have up to three minutes. I shall speak quickly. Good morning, colleagues, and thank you for the opportunity to give evidence today. We are the membership organisation for all the colleges in Scotland, and I want to convey to you this morning three main points. Firstly, when I look back at the decade that we have just had, which was the start of regionalisation, it was in fact a period of huge change between 2013 and 2016. We had the post-16 act, which moved colleges into a regional model, making them more accountable and effective through reform governance, and they focused on giving businesses in the region the skills that they required. The act also led to the reintroduction of national bargaining, but essentially, alongside regionalisation, there were about eight or nine really substantial changes, which took place at the same time. There was a programme of college mergers moving the sector from 40 plus colleges to the 26 that we have today, operating in 13 regions, 10 single colleges and three multi-college regions. Colleges were reclassified as public sector bodies through ONS, and that meant that colleges could no longer carry forward surplus funds. They had to be placed in arms length foundations separate from the college. At that point as well, colleges could no longer hold reserves or borrow. College boards also fundamentally changed at this point, becoming more diverse with student and staff representation and college chairs publicly appointed and remunerated for the regional colleges and the regional strategic bodies. We also saw student associations have a new framework introduced. The funding model was replaced, it moved from sums to a credit model, and colleges really did become different organisations with new names, new brands, changes in their culture and new ways of working. There were some very big policy changes around 2014 as well, with the new youth employment strategy from the Scottish Government, the Wood Commission report and the reduction in the amount of international work because of immigration changes. All of those things together saw a huge change. We also, at that point, saw the first sparks of industrial action because of our introduction of national bargaining. A positive is that since regionalisation we have had nearly a million new qualifications, which I think is something that we should be really proud of as our sector. Colleges manage this enormous volume of structural change alongside the day-to-day work teaching, supporting students, recruiting, ensuring quality, negotiating with our unions and planning for the future. That is my first point. My second point, convener, is that we are working in a system that is not thriving but that still has the potential to thrive. Your colleagues in the Public Audit Committee heard recently from the Auditor General about the significant financial challenges facing the sector, and you have heard evidence on the industrial relations from students, from college principals, on attainment and on the skills landscape. The outcome of the Scottish Government's purpose and principles work is due next year. However, we are not standing waiting for that. We are making sure that we are working on that. In 10 years for regionalisation, we have had underfunding in the college sector. It is now very apparent and obvious, and we need that funding to ensure that colleges will deliver for the economy. Finally, my final point, looking ahead, you know that there is the fantastic work that colleges do, but I want to convey to the committee that we are in a system that is threatened if the investment is not available for colleges to deliver. We want our colleges to thrive, and we are willing to enable and we can deliver on government policies, but we need to make sure that we have sustainable and stable institutions to deliver that. I thank the committee members for the opportunity to give evidence to their inquiry about regionalisation and college budgets. I know that you have heard from a number of witnesses and have received written submissions from a wide range of organisations. I will be brief and focus on three points first. Colleges have demonstrated over the years since regionalisation that they are agile, responsive and flexible. Most recently in the wake of Covid, colleges showed an incredible amount of determination and creativity to keep students in productive learning as far as possible in hugely challenging circumstances. To re-engage those students who chose to defer their studies, SFC, in its role as the primary funding body, supported colleges in their efforts by introducing flexibilities into our funding, including student support funding, and by providing extra money to make sure that students could complete their qualifications through that time. Secondly, colleges play a huge role in reaching those furthest from the labour market and supporting social mobility. In 2020-21, more than a quarter of all college entrants were from the 20 per cent most disadvantaged communities across Scotland. While just over 40 per cent of Scottish full-time first-degree university entrants who came from those disadvantaged areas progressed from a college course. Of course, we support colleges to do that. We fund them, they are students. We provide over £100 million of public investment targeted in widening access and in inclusion. We have dedicated initiatives through our tackling child poverty programmes as well. Thirdly, colleges are really pivotal to delivering the national strategy for economic transformation. Their contribution to skills delivery is unarguable. For example, through the flexible workforce development fund alone, they already are engaging with more than 850 employers and 1,380 SMEs. They are working with SFC's investment in Scotland's innovation centres and through Intervace. They are developing entrepreneurial people and new market opportunities by bringing together lecturers and industry and business and finding solutions for some knotty problems and current challenges. I hope that it is clear from the brief introduction that Scotland's colleges are vitally important for Scotland's economy and social wellbeing. They are delivering in a very tight fiscal environment and very challenging budget settlements with increased staff costs and inflationary pressures. We will continue to work with colleges to ensure that they are financially viable and that they thrive individually and collectively and continue to deliver for Scotland's communities. I want to explore the issue of the funding model, but before I do that, and just for the purposes of clarity, for the College of Scotland submission, which is very detailed and appreciated, it talks about a reduction of £23.9 million in the core budget before inflation and rising costs—energy costs in particular—fine. It also goes on to talk about the Covid consequentials. There comes to the conclusion that a further reduction of £28 million has arisen on its baseline budget, given a total deterioration in the financial position of £51.9 million. Will you ever understand that the Covid consequential sums would be consolidated in future budgets? I don't think that we expected them to be consolidated, but I'm happy for Andy to pick that up. No, we were never given any reassurance or commitment that they would be reoccurring, although of course they were spent on items and expenditure that was going to be reoccurring. We understood them as one-off. Accepting, as you've just recognised, that it was a one-off. It is inaccurate, isn't it? It talks about a 51.9 per cent cut in the budget. A much more accurate description is the 23.9 million, isn't it? The positions colleges found themselves in coming out from Covid was that there were costs that they were incurring around mental health, digital poverty and foundation apprenticeships, which is what this Covid consequential money was used for, which are still costs that are ongoing. There are still elements that need to be covered. If they are not from Covid consequentials, they would need to come from their core budget. That would then mean that that money wasn't available to spend on other elements of college provision. That is why we do believe that it's right to be able to say that that is an effective cut, along with the fact that we didn't get inflation, as you said, the 23 million. We will probably agree to disagree on that point, but moving on to the college funding model. I'm interested to explore the viability of the model in the long term and just how serious the position is for Scotland's colleges, because none of us would want to see the colleges in Scotland get into the financial mess that many colleges have got into in England. The funding model, how viable is it long term? The way that the model has developed over the years, there has been additional funding put into the college sector, both in real terms and in cash terms, up until the year before last. At the same time, we have seen our cost base grow way beyond the income levels. That leaves you running effectively businesses with less and less flexibilities to run it, so you essentially don't have enough income to cover your cost base. I would say that some of the things that have exacerbated that have been our huge increase in our pay bill, which is a direct result of national bargaining, which is agreements that are made between employers and union colleagues. That has meant that our cost base is now predominantly staff and the bit that you've got left to pay your legal bills and your auditors and your utilities and so on gets smaller and smaller. We can't carry on as we are, because there is not enough, especially when you've got pay awards, as we're seeing at the moment. That just makes that. You've got left to run your organisation and to put front-line equipment for students to learn from. That gets smaller and smaller. We have to address the ability for colleges to be innovative and to bring in other income streams and, at the same time, to try to control the cross pressures that are just growing. If I could pick up the first question about budgets over time. If you look from a starting point of around 2014, since then, teaching funding has in the college sector increased by £126 million, so in cash terms a 32 per cent increase. If you look at that in real terms and we would use a GDP deflator, we would say that was roughly a £34 million increase in real terms, so about 21 per cent over that period of time. About half of that is an increase because of the payharmonisation process. You'll find that about £62 million of that was about payharmonisation and pension. Over that time, there has been additional income and funding into the college sector. The price that we have paid for our currency as a credit that we would give has increased by about 29 per cent. Roughly an increase of that magnitude over that period of time, but very specifically partly for increased places but also for staff costs. On the funding model itself, we would usually fund on a kind of volume price activity kind of model. We would fund for the amount of credits that we were putting into the system. For a little period of time, we almost set that aside in order to pay for the staff costs and the national bargaining. What we now need to do is look at whether that model is right for the future. I guess that's why we're working quite closely with the sector. It's why we did a national review in 2021, which asks some questions about whether the funding model was right going forward. It's quite complex and simple models are better, but we're trying to deal with the complex environment. What we have in our funding model is a range of indicators, such as predicting how many young people are likely to come out of school in a particular regional area, predicting how much in-work activity a college might want to do rather than how much we would fund for young people coming out. There are a range of local, regional and national indicators that go into it. I have to say that our model is relatively complex at the minute, so we are looking at it and we will look at whether it's quite right for the future. Can I pick up on the issue of pay harmonisation, because it strikes me that particularly in the early days of merger and regionalisation, there was a considerable amount of work done and a lot of money expended bringing pay levels into line. That's a legacy issue that's contributed to this quite substantially. To what extent has that contributed to the financial difficulties that the colleges face now? I think that it's actually significantly helped in that it has increased the value that we attach to the people who are at the front line of teaching and serving student communities. I think that there has been a parity across the college sector, so by necessity the national bargaining has enabled that kind of sense of equalisation across the staff base. I think that it has been immensely successful in bringing a range of equitable arrangements across the entire part of Scotland. The issue for us is that it is still true to say that most of a college's costs, if you like, are there for staff costs. If you look at that in the round, probably around 68 per cent of colleges' staff costs are actually based in their staff costs. That therefore means that when budgets get tighter, it is very difficult for a college not to go to that as their place of how do they balance their books and how do they look at their viability in the round. I think that it has been a success. I think that it has helped to bring salaries into a very esteemed profession and I think that it has helped across Scotland to make these jobs attractive and well paid. I want to pick up on that point, because we explored earlier in our evidence taking session about 70 per cent of some colleges' spend on staff. Just to get the SFC's view on that, given your overview of educational spend, do you think that that is an appropriate position that the colleges find themselves in, set against the position in universities and schools education? Is that level of spend on wages justified? Are you comfortable with that? I think that it is incredibly hard to have an absolute rule about this. I would say that it is definitely an indicator that we track because of course in times where there is significant public spending, then it is a positive that we can still see that kind of investment going into colleges. However, when times are more challenging, of course it is a risk that colleges will face. We do not have a set milestone or a set benchmark on this, we simply watch that. As I said, our average at the minute is around, it hovers between 66 and 67 per cent, but some colleges will be more. The question then becomes also, how can colleges generate other surplus activity and would that compensate or would that bring in additional funds? Of course, being classed as public bodies, that is slightly more complicated because while you might generate surplus, you cannot always retain it at the end of the year. Therefore, the model in and of itself does not lend itself necessarily to that kind of surplus generating activity. It is a risk, but the positive is that the Government has supported that kind of staff base and that those costs going forward. It is clearly a risk indicator for colleges. I think we need to give Shona Struthers opportunities to answer some of those points if she wishes to. I would just make two very quick points about the harmonisation that is referring to the lecturers. Obviously, with the support staff, we are going through a job evaluation programme, which is still on-going. It is where it is appropriate to pay the same money for the same job, then we have done that. My other point that I would make, and it has already been raised at committee, is that it is not just the total income that you need to look at in a proportion of staff. It is the amount of money that colleges have to run their colleges. The get-student funding, for example, has money in money out. It is the amount of money that colleges have to run their operations where some colleges are seeing high 70 per cent, nearly 80 per cent of their costs in staffing. That is where it is far, far too tight for any business to run with that amount of leeway that is not staff costs. I just don't recognise when you present that there has been an increase in funding in recent years. I would quite like you to repeat from what baseline you are talking about. Back in what is about 2011-12-13, there was a massive reduction in college funding. What is your baseline for your increase that you just mentioned? I have taken a baseline of 2013-14. You could take a number of benchmarks. I have taken that one largely because it is to do with the transfer of colleges into public bodies. Therefore, when we were looking at that, it seemed a rational approach to take to look at that as a baseline. If you look at it from a year-on-year perspective, if we take the budget settlement over the past few years, we have seen an increase in budgets. Again, we will always face a fairly fluctuating situation. What we try to do as a funding council is to minimise any instability in the system. For example, last year, I made this point to try to set out how we might smooth things occasionally. We did find an additional £9 million, for example, for foundation apprenticeships. That was not money that was already in the Scottish Government's baseline to us. We decided to not fund some non-core programmes to put that into learning and teaching, so we can smooth some of the ups and downs of colleges. In relative terms, that is tinkering when you compare it with 2010-11. Have you got the comparisons with that year? The amount of public money being spent per college student has dropped by 9 per cent from 2010 to 2012. I had hoped that the SFA would speak truth to power in that. In part, you are the voice of not just a higher education but the college sector. Talking about managing the slight fluctuations from year to year does not really represent the massive pressure that colleges are under. Derek Smeal said last week that there was chronic underfunding. The future includes a potential loss of 25 per cent of my workforce by the end of 2027. Is he right? Do not misunderstand me. I am not suggesting for a second that the sector is not under significant pressure. My point was about public money coming into the college sector to pay significant uplifts in staff and college pay bills over a particular period of time that led to a significant increase in funds. The question about whether or not the sector has pressures and is sustainable is a slightly different one. I would suggest that we look at this in a number of ways. First of all, yes, there are massive pressures and it is extremely difficult for colleges to manage the fluctuations in the budget. Over time, we will see some colleges needing to reduce. That may not just be about public funding. It may also be about demographic changes. It may also be what we are seeing as a slightly different demand for, for example, further education. The pressures that are coming from some of the competitive angles of young people, there are not as many young people. Therefore, you have seen a growth in the number of people going into higher education, a growth in the number of people going into universities. So, when we are looking at the pressures in the college sector, we are looking at it in the round. Staff costs, pensions, inflation, demographic changes and trying to work through with the college sector, what level of activity do they need and what level of funding have we got from government to distribute to support that? We continue to look at what you call fluctuations, but the big picture is a massive change in the last decade plus, massive change, where colleges have been diminished significantly. I am just not sure that we have voices that are making the case for further education to be a major part of the education system in Scotland. You have never answered the question about 25 per cent reductions for Derek Smeal. Do you think that that is right? Forgive me for not being specific, but we have just had projections in from every single college. I apologise to the committee. We have not been able yet. It came in at the end of September, so I do not have all of that to hand. Do you have any of it? Do you have a rough picture? I have a rough picture that there will be staff losses in the sector. 25 per cent more or less? I do not think that any college at this point today will be able to accurately predict that. I think that what they have is a general trend. I think that you will see some colleges and Derek's college may be one of those that is facing significant pressures. Do you think that 25 per cent might be right for Derek? I am not trying to not answer the questions. I think that Derek will have used certain assumptions going into his college. We are working with colleges just now about what is a realistic set of assumptions to plan for that far ahead, because right now we are still trying to work through what will the budget be even for 23-24? I know that Mr Whitty wants to respond as well. I think that what you are saying is that you do not broadly disagree with what Derek's assumption is and that you are not disagreeing with the fact that there are going to be significant cuts over the next few years. You do not know precisely which is why you do not want to say and you are nodding. I think that there will be a significant challenge for colleges to look at what amount of activity and how they can contribute to that. I think that the Government will be looking at it. As I have said on a number of occasions, the Government has already said that it is likely to be a flat cash settlement over the spending review period. That is real-term cuts. That means that, year on year, we will still be looking at is that flat cash or will it actually be a smaller budget settlement for us to distribute? That is fine. We will see Mr Whitty and then we can come back in. Audit Scotland figures reported that there are real terms that could have 9 per cent gone into academic year 2223. While, still over some of the past few years, on the income side, you could see a small real terms increase, the important thing is to look at the whole cost base. We have already started touching on some of the pressures of national bargaining and harmonisation of mainly the harmonisation costs. The cost base has increased and, while there has been significant money put in by the Scottish Government, it leaves colleges with a consolidated cost going forward for the staff costs, both on the lecturers side and the support staff side. I was going to make the point that Karen just touched on at the end that, looking forward, we have flat cash laid out in the spending review of May this year, which is an effective cut because of inflation, but we are already seeing a revisiting some of that. There is an emergency budget due later this month, I understand. All of those predications are on flat cash and the inflationary impact, which of course is huge at the moment. We do not really know where that is going to go, but if there was then further cuts or a revisiting of the budget, it makes it very difficult going forward because of that. The other element of that, and you will see it in the evidence that SPICE produced for this session, is just the difference in the cost per head or the price per head that is given to students in colleges, universities and other parts of the education sector. The college funding per head is the smallest that is provided across the educational landscape. I have a number of subs on that. Can I come back to PACE? Yes, if we go over to the supplementaries and come back to you for that one. Stephen Kerr first please. I am just going to follow on from Willie Rennie's questioning because my understanding is that the key to the future economy of Scotland is skills. For heaven's sake, what is the impact of what we are discussing going to be in not just in terms of the college sector but in terms of Scotland's economy? Shona? It is massive. The government is looking for an economy to be revitalised. You need a technical skilled workforce to deliver that and colleges deliver the skilled workforce. If you do not invest in the college sector, you do not get your skilled workforce and your businesses suffer. For me it is really simple and clear. The investment in colleges give a return and you get your skilled workforce and the economy grows and Scotland grows. I know that Andy has some specifics and detail around some of the opportunities that could be lost if we do not invest in those skills. I certainly want to hear those. We are all aware of the Scottish Government priorities around the economic growth and a fair economy, dealing with poverty and net zero. Shona made that a well-funded, adequately funded college sector is vital to deliver on each of those Government priorities. To give an example, it is the potential lost opportunity costs of not having the capacity to deliver the high-end technical skills that Shona has mentioned. These are all publicly available figures from the industry themselves or from the Scottish Government itself. The offshore wind industry projects investment of £6.3 billion per year from now to 2035. That is £95 billion with 40,000 potential jobs. That is to deliver 30 gigawatts of power. There is a further 10 gigawatts of power being planned onshore. With hydrogen, the Scottish Government predicts 10,000 to 40,000 jobs by 2045. In transport infrastructure there is £9 billion of investment by 2026, so just in the next few years. 25,000 skilled workforce just to replace those who are going to retire or leave the industry, not to then build the industry to where it needs to be. There is £33 billion of investment in energy efficiency, low-carbon heat. There is risk that Scotland does not maximise the opportunities of this investment if you have not got a college sector that can provide the skilled workforce that is needed in those areas. The lost opportunity cost of not funding adequately the college sector going forward is huge, not just for individual learners but also for communities but also for Scotland's economy. For helping to deliver one of the key priorities of the Scottish Government around net zero and the economy, it is vital that colleges have that ability to deliver the skilled workforce, that high technical end workforce that predominantly is going to be delivered to the colleges. We had Kate Forbes' economic plan, the transformation plan, which on the face of it is a very exciting prospect, but what you are basically saying, Shona and Andy, is that if the college sector continues to be on the receiving end of these cuts, including the flat cash settlement that is projected going forward, that there is an impossibility to deliver on that plan without the college sector being invested in, as opposed to being disinvested in, which is what is happening currently? That would be my view, and I think the element around NSET, National Strategic Economic Transformation, is that there are five themes in that, the five pillars in that, and the obvious one that your eye is drawn to when you mention colleges is about the skilled workforce, but colleges are needed to deliver each and every one of those pillars, not least the entrepreneurial landscape that is needed and required, not least the productive businesses. 44 per cent of learners in a college have an industry link as part of their course, for example. So that importance of the college sector for delivering that link to business is key, and for opening up those new market opportunities, again, one of the key elements of NSET. Shona, do you agree with my use of the word disinvestment? I think that the government does invest in the college sector. Negatively, though, apparently? So the flip side of that, if it doesn't invest in the college sector, then there will be consequences to that, and the college sector will not be able to help the government deliver its economic strategy and its net zero strategy. But the current projections are hardly an investment, are they? So if the investment is to go down, I mean you have heard some principles talk about reducing their staffing cohort. Every college is looking at how it can balance its books. It's in the public sector, they have to balance their books. So if every college is looking at how it has to restructure, take costs out, take staff out, that means the curriculum... Well that's not investment, is it? That's retrenchment. And the students are impacted. Okay, well it's very clear. Thank you, Stephen. Bob Dorr, you've got a supplementary on this theme? Yes, yes. It's specifically on the exchange in relation, I think it was Mr Whitty who spoke about the disparity of funding between colleges and universities. And the discussion has been around agile terms cut to the college's budget, and of course there's a projected flat cash across the entire further and higher education sector. But University Scotland came to this committee the other week, asked for additional £171 million. And Mr Whitty's already said that he thinks the funding landscape is not equitable between colleges and universities for those early years of a university degree. This often carried out in a college environment with 43% of all young people from a deprived background. Can we come to the question please? This is really important in universities going through the college sector, but getting less funding for it. Does Karen Watt from the Funding Council want to see more about that? And does Shona, or Andrew, want to see more about that? Because if University Scotland are coming here saying, give us £171 million more without any clue where the cash is coming from. And colleges are coming here saying, we'll just do our best in a tight financial environment. Should you not stand up for colleges? Shona, first perhaps? I don't recall saying we'll just do our best with what we've got. What I'm making a plea for this morning is for the committee to see the great return on investment that colleges are and to ask for that investment. That's what I'm saying. In terms of the funding per head for universities and colleges, I can provide that to the committee in writing. It's a Scottish Government table we're talking from. And colleges are the least funded per head of students from preschool to university. So why should college students be less funded than anybody else in education system? So when I fix some budget, should money be taken from universities and given to colleges to have that equity? I'm not advocating that at all. Thank you. Karen? So there's quite a lot in that. So just first of all to say, the government is still investing through us £675 million a year for college students to be supported. And every year the college sector has met that target of 116,000 full time equivalent students going through and being successful in a variety of different ways. So I don't want to lose the fact that there is a significant amount of public funding going into colleges and they are successful and they deliver and they keep delivering. Now the question about parity of funding is a complex one. So let me just take a couple of strands of that. First thing is to say that when we look at funding for different institutions, colleges and universities, we look at a number of different things including their different cost bases. So universities for example and a lot of universities are simply more, have a different cost base and are more expensive. They have different kinds of infrastructure, they have high cost medical clinical facilities, they have larger library collections, they have for particular provision, they have much smaller classes where they have specialist and quite focused tuition. Now, therefore historically what we have been doing is compensating slightly for that quite different cost base. Colleges again are all quite different so some colleges will have a higher cost base, they will have more technical facilities and they will run in a different way. But in general the cost base is not quite the same, therefore we have a slightly different funding arrangement for first year undergraduates and for example people going through a higher qualification at college. Now we did explore this in our national review, should we change the funding model to for example follow SCQF levels, so should we fund those students who are going through a higher national qualification at a college at the same level as the first two years of undergraduate roughly speaking. Now again, I think that that is part of the conversation for the future but is that something we should do? Now what we don't want to do is pull down the funding from university undergraduates to do that but again it's something we are exploring and we're willing to explore that more fully as we go through this funding review model. That being said we are still going to probably have a smaller pot to distribute, therefore we will have a really difficult choice about how much increase we could put into that level of funding per college student compared with others. But at the minute it's a recognition of the different cost bases and it is an efficient use of public funds and it is not the same for example around parity of esteem because those kind of parity of esteem issues are probably much broader than just the funding model but we are absolutely open to looking at that in the future. Can we go back to Willie Rennie as I said we would do? So we've heard that there's big cuts coming for the college sector over the next few years but we heard from Hugh Hall from Fife College two weeks ago where he said that we're not able even in those circumstances to determine our own future because the government can't make up its mind. So he set out the case. The clearance and stability review report was published in June last year. The minister responded in October but they're going to have to wait until summer 2023 before they get the statement of intent from the government. Why is it taking so long? Probably a question for government if I'm being honest. Oh absolutely. I think what they're keen to do is have enough consultative time to work with both college and university sector about quite a complex set of how do you set out exactly what you want for the public money that you're investing. That being said we did publish our national review in 2021. It was quite detailed. It was based on a lot of insights that we gathered from colleges and universities and we hope it is useful to government in coming to their conclusions about things. The other point I would say though is we are not waiting for some of that broader policy and principles work to continue to do the implementation of the review recommendations as they currently stand. I would also argue some of our recommendations to government in our review are utterly germane to the stability of the sector. We were very clear. We think it matters that colleges have multi-year planning assumptions and some certainty about budget. That in and of itself is probably one of the biggest issues about how a college can plan for its future. So that was part of our recommendation. We have also made a number of recommendations about engagement with employers where we would like to see government bring together disparate different strands of programs to invest properly in an employer engagement set of programs for colleges again. The best answer I guess on why it is taking so long is the government is trying to be consultative and open about taking a range of views before they come to a decision on that. You are smiling halfway through your answers there and I suspect that there is a bit of frustration from yourself. If you can get on and make an awful lot of decisions following the review then I cannot quite understand why government, especially when the college sector is under extraordinary pressures. What do we do about that? Why can't you relate to government that colleges want to get on and plan? I think we are collectively working through a range of things including the speed at which that intention is articulated, how we can influence and to be honest we are also working on a number of other things which don't require that. For example, the college capital programme is subject to co-creation and co-work with the sector. We are doing a range of things. We are very clear that it would be good to have that intention quickly enough for it to influence spending decisions within the spending review period. Last month and this month, we have had all the chairs and principals across Scotland together to chat some house discussions about what we do and how we come up with innovative solutions. We are working with the Government on the principles and purpose work, of course we are. We are also moving at speed because this is urgent. The college principals in front of us have said that they don't have a clue what is happening with that. Who is the Government consulting with? My understanding is that they are engaging with colleges Scotland, universities Scotland and a range of other stakeholders. I don't think that it has got to the point where they have written something in a form that is being forwarded. They have some draft material that they are sharing before it becomes more widely publicised. That is our understanding as well. We have had some workshops with Scottish Government officials with VP level. We are currently arranging one for with principals and with chairs to continue that discussion. That was due for 12 September, but unfortunately was cancelled due to the passing of the late Queen. That did impact when we were going to be meeting. Four college principals in front of us, I asked this question directly of them two weeks ago. They all said that they had no involvement whatsoever. It doesn't really feel like proper consultation. There is nothing written down. I want to move back to finances, if I may. I am glad that things have appreciated your most recent comments on that answer. I feel that at the start of the session we were a little bit indicating that the challenges seem to be about national bargaining rather than the overall reduction. I wouldn't like it to come out from the committee that looked like greedy staff. We have to recognise that there has been a significant reduction in resource from government to colleges over the last decade. I think that that has come out a bit more strongly in recent answers. We had the SQA in front of us a couple of weeks ago, and they said that colleges are very well placed to make up for lost learning, the significant lost learning in our schools. That is another headwind, isn't it, for colleges showing us others to make up in terms of the weight that has been added to colleges whilst there is resource being taken out? I think that colleges are many things to many people, which is part of what makes them so unique and so required and necessary in our societies. They lean into schools, work with businesses and apprenticeships, encourage people to go on from college and into university with articulation and so on. There are many different facets to colleges and the point that you make there is just one of them. We also have a large cohort with assisted learning needs. Colleges are quite complicated and they have a lot of different markets, but at the end of the day it is your technical, professional, vocational, skilled workforce that comes out from it. Those are young people who have had less learning in school over the past couple of years, and the SQA are telling us that colleges should make up that gap. Is that what has been experienced by colleges across Scotland? Our members are reporting to us about the loss of learning on two elements. First, there are colleges where the practical subjects of people were not able to be in, the learners were not able to be in and some of those were deferred, but the colleges have worked really hard to see a high percentage of those returned and returning to get the qualification. We are also seeing loss learning from school pupils coming in to the colleges. What colleges report is increased mental health challenges with some of those pupils coming in and also some challenges around social interaction where some of these people have missed out on that face-to-face social elements within school. Broadly, across society, there are rising mental health challenges. We see that reflected in colleges as well. That adds to some of your previous answers around the opportunity costs and other pressures that are coming to bear. Given what we have heard about 25 per cent cuts to staff in some colleges, I take that we are not going to get firm figures on that. I think that the committee would appreciate if there was some form of feedback from those written reports that carmots received from the colleges. Is it likely that the sector will look anything like it does now in three years' time, given those challenges and the funding cuts that are coming? First of all, I think that the college brand is extremely strong. I think that there is still an appetite in a lot of communities for kids to go to college. That is a hugely important driver around that. If we were looking longer-term at a recipe for financial sustainability, you might have a number of different things in there. One of the big benefits from regionalisation has been that you have now got colleges of scale. You have got colleges that are around different tables, different planning tables, different engagements. What I think our review last year described were possibilities around different relationships, not just between colleges but with universities. I think that what we might see over the next few years is a closer amount of collaboration on student journeys, on joining up curriculum, taking out potential duplication from some of the courses that might be there at the minute and making sure that there is a better set of pathways for people right through from school, college and into university. We might even see, as we are having some very, very early discussions at the minute, about partnerships between colleges and universities that get into conversations about, have we got the right organisational structure to make ourselves viable and strong for the future. That is just one element. I am not even talking about the M word. I am more likely— Why are you averse to the M word? I am not averse to mergers because regionalisation was about successful mergers. I am suggesting that there might be a menu of things that might shape the way the college sector works. I always think that there will be standalone colleges that are vibrant in some areas. I think that, for example, in some of the multi-college regions, we will see some differences emerging. We are already, for example, seeing three colleges coming together on their own volition to merge to create a stronger, more viable entity. You are describing there were possible mergers between universities and colleges. I suppose that I am looking at the kind of conversations that we are having just now. Colleges are exploring different kinds of relationships with universities, not necessarily mergers but more closer alliances, looking at efficiencies in the way services are delivered to some students. Some of that might look at different kinds of entities. You cannot really merge a college and university at the minute given the statutory basis that we have. If there was an appetite for that from the sector, we would clearly look at how one might think about that over time. It would challenge legislation, funding models and everything else. It would not be appropriate for every place. Michael Marra, you did ask about what it might look like in the future. I think that Karen is going down that avenue as well. I think that it is very useful, convener, because this is an area that I think has not been particularly well explored or exposed. As far as I can tell, there is no appetite in the sector for mergers with universities and colleges. I certainly think that it would be very, very difficult. Is this something that government is keen on looking at? I think that when I say that we are having some discussions with different stakeholders in the sector, they are taking what we suggested in our review from last year. When we published our review, we talked about different forms of collaboration along a spectrum. That might involve collaborating on particular projects where you could get better value for money. It could be around innovation projects where you are looking at that flow of skilled talent or equipment or better use of the infrastructure that we have already invested in in universities, innovation centres, interface places like that. Or it could be different kinds of relationships in a loose kind of federation. We have mentioned in our review a range of different possible options for the future, but that, of course, is also based on how we strengthen colleges as they currently stand. Shona Sturr, do you want to bring in on what is called the M word? Is that a word that has been used in the sectors that the sector is fearful of or welcoming of? I was just nodding to the convener to come in. When I speak to many of the college principals and chairs, what I hear from them is their discussions with other institutions. I know that many of our colleges are in deep discussions with universities for different courses and different ways of working. I think that that is really healthy. If you have the student at the heart of this, a really clear pathway for a student who may come into college with an expectation that that is the end of their journey to then see an opening that allows them to go on and finish their education at university, I think that that is a really healthy thing. I know that a lot of our principals and chairs are speaking to all sorts of institutions. They are speaking to businesses about setting up bespoke skills academies and so on. I think that that shows the reach that colleges have and what their aspirations are for our students, which is to take it as far as they can in terms of their skills and qualifications. I know that a lot of that work has gone on. For instance, Aberdeen is one of the areas that has been cited, the relationship between RGU and the local college, but I know that speaking to both of those organisations, Merger is so far off their agenda and they say a huge cost on that, but they are one of the more advanced. Where does the Merger issue come up? Mergers cost a lot of money as well. When you look back at some of the regionalisation, there were a lot of mergers that took place at the regionalisation point. It cost a lot of money. There is a merger going on in the college sector right now in the Outer Hebrides, so there are some changes still happening and actually I think that it is really healthy if a sector, the college sector does evolve and change because that means we are not standing still. Thank you very much. We are going to move on now to some questions from Ross, please, if that is okay. Thanks. A couple of questions around industrial relations for Shona and Andrew in the first instance. I am sure that you have seen in previous sessions as part of this inquiry, I have asked witnesses why they believe that we have had industrial disputes in seven of the last eight years within the sector. We do not have that in any other sector in Scotland. In the first instance, would you like an opportunity to comment on that? What do you think has brought us to the point where this has become essentially an annual occurrence? Thank you for that opportunity, Ross. My opening statement, I hope, conveyed to you the very many serious and significant changes that happened simultaneously at regionalisation. National bargaining was not regionalisation, it just so happened to be part of the act and it happened at the same time. I think that because of all the significant changes happening at the same time, perhaps certainly from the employer's perspective, there was a lot around national bargaining that the planning perhaps was not in place at the very beginning, having a vision, having a strategy, having clear funding, having clear outcomes. What we have done is we have evolved as we have gone along and I think that is probably with hindsight unfortunate because I think those that suffered the most were the students, the strikes that took place during exam time, I think it was very hard on the students. What you have now is a system that is set up where the employers and the unions come together and we negotiate and we try and negotiate with clarity about our funding envelope because it is really important that you negotiate within your means. I think that we have a healthier position now at a national level. I am not going to talk about the local level because I am not close enough to that but certainly at the national level things are improving and we have quite a lot of successes that we can call on in terms of negotiated pay agreements and terms and conditions changes etc. We are a few years down the line and it is certainly better than it was but it is something that is here to stay and so we are working hard to make a success of it. I recognise on one level that statement that things have improved because I have been involved at various extent over most of these years but even with improvements we have still seen national industrial action in almost every one of those years, every one of the last few years. If things are improving, why is there still national strike action every single year? I think that it is unions workers' rights to go on strike so that you have to respect that. It is also incumbent on employers to make sure that they make an offer that is a viable offer as well. I think that both sides are coming to the conclusion that you have to consolidate and you have to come together and find common ground because going on strike or not making offers that seem to be realistic is not in anybody's interest least of all the students. I think that there has definitely been learning on both fronts. I mean there is a Government's strathesk report which I know is due out relatively soon and in there the employers have accepted all of the recommendations for that so we are looking forward to just making as much of a success of this as we can, mindful of the funding envelope within which we operate. You have mentioned the latest lessons learned report and publication and that is still to come. Taking both that and any internal reflections within colleges Scotland, are there further changes that you would like to see to the NGNC framework? Is there anything structurally about the process that you think can be improved? Some of the evidence that we have received and a lot of the wider public discussion around that comes back to challenging interpersonal relationships between people who have been in the room on both sides for so long that issues have become entrenched. That is a cultural issue that there are ways to resolve. Are there any structural issues about the process that you think could result in improvement? On that point I think the employers have had much more of a turnover of negotiators than perhaps our union colleagues have. One of the things that springs to mind would be the introduction of an independent chair for the NGNC. That is something that we would welcome. It has been a chair that has been rotating between both sides. We do think that independence might allow issues to be solved more amicably and perhaps quicker than they currently are. That is something that we would be recommending as part of the Government's lessons learned. On the issue of pay specifically, recognising entirely that this would not free up the money that is required for the settlements that are claimed by the lectures or support staff unions is because the scale is totally different. Do you think that there is an issue in terms of urging unions, urging college staff to show pay restraint when there are a number of principals in Scotland to earn more than the First Minister and quite a number who earn more than the Cabinet Secretary for Education? I mean I think negotiations certainly in the NGNC are two way. It's the employer puts their case forward, the unions put the case forward on behalf of the staff they represent and you have to have a negotiation on that. I think that the negotiations are definitely improving. I think that there is more respect being shown and also we've introduced the accountability and the financial accountability into that discussion to make sure that both sides are cited on the financials so that when you are making an offer and whether it's accepted or not you can see whether it's clearly affordable or not. I mean I think you have an NRA, you have a negotiating machinery in place and I think with the time that's going on it's just improving each year. That felt like a bit of a side stepping on the issue of principal pay. Well principals are not part of the negotiating machinery so you can't confuse the two aspects. The negotiating machinery negotiates on behalf of those staff when they were at a local level, they were negotiated by the college and they got moved into the national so that's who is negotiated for. The senior staff are not part of the NRPA and they're not negotiated for. But you can understand surely why the workforce find it hard to stomach messaging around pay restraint from individuals who are on more than 150 grand a year, some far more than 150 grand a year. I mean I think boards of management have a governance responsibility and the payments that are made to senior staff are in the public domain so I think that responsibility lies with the board and I think they take their duties very seriously. One very brief question on the question of boards is a long-sining government commitment to enable permanent trade union representation on boards. Some boards have already got that but for the sake of consistency there's a government commitment there. Is College of Scotland's position in support of that? Do you think that that would help improve things? It's already in place to my knowledge. We've got two trade union representatives. The legislation hasn't gone through yet but the two trade union representatives are on boards alongside staff representation as well and student. So I think that makes for a healthy board as well because you've got all views fed in. Just one final question on boards, you might be aware of the evidence that Derek has already mentioned but you might be aware of the evidence that he gave specifically on that. Is there a College of Scotland view on the Glasgow regional board? Do you align with some of the views that have been expressed as already that it's pretty hard to justify why that actually exists at all? College of Scotland is the representative body for all colleges in Scotland. We take the members' views and we put forward what would be a collective view. Where you have varying views on something, College of Scotland would not be able to land on a specific view because there's variations. College of Scotland does not have a view on that. I appreciate that. Now can we move on to some questions around completion rates and we're going to start this section with Michael Marra, please. Thanks, convener. The rate of completion so that students are not getting to the end of their qualification is a matter of concern not just for this committee but I know that the Public Audit Committee has expressed concerns to us as well around this. We're looking at just under a third of students who are failing to complete their course. That figure is higher for those in deprived backgrounds, higher again for students with disability and significantly higher for students who have been through the care system. Given the financial settlement that we're looking at, how can we see those outcomes improving for those young people? I'll start with Karen Watt. No, it is an area of constant attention and some concern in some college performance. It is extremely difficult to look at the data that is around the pandemic. The figures that we're looking at and of course we collect this data on an on-going basis but some of the figures, not all of them but some of them relate to that period in time when we were just going into some significant restrictions and where some practical elements of study could not be completed. There were some issues about how we compare data from the pandemic and the pre-pandemic outcomes. I think that some of the qualifications that students have managed to achieve is testament to how colleges have worked through the pandemic period. I think that if you were to look at the difficulties of making sure that people who are often studying practical subjects got to complete them then we did a lot with colleges to make sure that that happened. Even from some of those things. I think that we would acknowledge the challenges and certainly the great work that colleges did in that period but those figures are worse for the pandemic period but they were pretty bad before the pandemic as well so we can move into that area. Of course. I think that what we're looking at is first of all when we look at completions and quality we are working with Education Scotland that look at the individual performance of colleges and there will be a report which I can make sure the committee gets which should be coming out in the next week or so which will look at their visits to individual colleges, what they have found which will go into some of the issues about what they found around particular performance indicators. We are also about to conduct a thematic study where we're going to take what we perceive to be some of the poorer performing colleges alongside some of the top performing colleges and look at some of the issues that lie behind them because what we think we need is greater explanatory power about what's going on behind those figures. In the figures there appears to be a significant gap between small colleges which have a better still not fantastic by any means completion rate and larger colleges which have a poorer rate. Given that you've just talked about the M word and possible bigger institutions and that might be a trend is that not something that would concern you students being lost in that process? Of course and I suspect that you might be able to get a more personalised approach in certain college settings. That being said some of the bigger metropolitan colleges will be dealing with communities that have more concentrated disadvantage and they may well be operating in a context where there is greater competition for young people to put it like that. You may well see some students who might ordinarily have been going through a college or going to university or going into a higher national qualification. Therefore there may well be an argument that some of the students that are now coming into further education courses may well be from areas that are more disadvantaged. They might have less cultural capital, they may struggle sometimes about the choices that they are making and also I think we need to challenge ourselves about the way we collect this information. So for example a young person comes through the door of a college and they get on a course and they decide actually after a few weeks it's not quite for them and in our system we are good at supporting that young person to take another choice. Actually that really matters. It matters that they have the opportunity, they've tried something, it's not quite right and you will find a college wraparound that person to suggest they might try and think about these other options that are there, keeping them in some kind of productive learning environment. Now for our stats, that may well look like somebody has started a course and has dropped out from it and we will count that in a particular way. So when I say we need greater explanatory power of what I think we are challenging ourselves through this thematic study is to say are we quite collecting the right data in the right way that allows us to get a better handle on is that actually a drop out or is that somebody who's making different life choices and a college is helping them explore a different, more successful pathway. I think that's very useful. Andrew Whitty. Yes, thank you. So the first point I'd make on this is that we take it very seriously, this issue. I think there's two elements to it. There's one nuance around the statistics and so I do want to make the point we need to be aware of and careful how they're collated. So if somebody, I think you've heard this evidence previously from some of the principles, if somebody attended a course for an hour and then moved on, that they're recorded, they switched to another course as has been said, or if they leave for work, that actually impacts the figures negatively even though that could be a positive destination. So that's one point just to be aware of around that. But there is work to be done on this. The thematic study that Karen outlined, I think we would support that because we need to understand what the issue is. And what's causing it so that we can find out what the solutions are to it. I would make the point that for many young people it's about the journey that they've travelled by that individual. And so in looking at this and what comes from this, what may be introduced or what policy changes are made as a result of any of that study, we do want to ensure we don't have an unintended conflict. That's the consequence of colleges impacting their recruitment decisions. So they only recruit people that they know are going to pass because one of the key cohorts, and it's just one cohort, but one of the key cohorts colleges help those most vulnerable, those furthest from the workforce, those that have taken a step forward on their personal journey as a result of being at college. So that's one of the key cohorts that we need to be aware of when we're looking at all of this. But all of these points for me that it needs a cross-agency solution, this is not just in the gifts of the colleges to solve, but actually it needs that cross-agency look at it in other ways. That's very useful, and my final question is relating. The committee has struggled in this area for a little while around comparisons to the rest of the UK, and Spice have produced some information for us in terms of the nearest comparable figure, and the system is very different. The nearest comparable figure for completion rates in England seems to be 89 per cent. Will some means of comparison go into that methodology that you're talking about in terms of production of it, and do you have any reflections as to why that gap, perceived gap, real gap, might be so big? I think, I mean, I don't get unduly technical about this, but we do have a range of technical things that lie behind how we make up these indicators, including whether we're talking about people who leave a certain college leavers as opposed to people who qualify and therefore go on to positive destinations. So I think we need to look at all of these definitional issues, but yes, how we set benchmarks is going to be incredibly important to understand where does improvement really need to lie, and what are the contextual factors that we take into account. Thank you very much, Michael Marra. Now Ruth Maguire, questions from yourself if you have some? On, we're still on the completion rates, yes. I think you've actually probably got it, convener, but I just wish to say that I think understanding what's happening with students seems key, and I think it's quite troubling that there could be that tension between particularly the widening access or adult returners. We surely have to understand why people don't complete and whether it's for a reason of success that they found good employment or a different course or whether it's that they're not affording to keep going, so I would welcome that work that's coming. That's great, thank you very much, and we have questions for yourself later on, Ruth, as well. Can we now move on to questions from Stephen Kerr around capital funding? Karen, you touched on this earlier, this strategic review of capital investment in the colleges sector, and I've got a couple of questions, which I'm sure you'll be able to give me some quick responses on. When can we expect to see the outcome of the review, the autumn? I should just qualify given that we're going into autumn 23. That is huge clarification. I was thinking it was imminent. What is imminent? It's another year. Right, let me clarify, so what we're doing is we will publish something soon, which is about how we're going to go about developing an infrastructure investment plan, which will be available in autumn 23. What we're doing over this next period of time is working very closely with colleges about every college will need to revise their own infrastructure plans. What we had at the minute was a baseline going back to 2017, and what we knew from that time was a funding gap of significant proportions. I'm trying to get the figure, I think it's 300, and at the time, £360 million was required, and that was an estate survey in 2017. What we have been doing is, over that period of time, we have had a capital budget of annually at the minute, it's around £30 million for capital maintenance, and for 2022-23 it was £72.6 million overall, and that included capital maintenance. It also included some specific funding for the new Dunfermline learning campus, and it was also some digital work. What we're going to be doing as we put together a more significant infrastructure investment plan is to look not just at the maintenance but at the whole college estate, including digital infrastructure, so that we're looking really holistically at what might be required for the college of the future, where does estate need to be rationalised, how do we understand now the needs of our college in going forward, and therefore we are working very closely and already have with colleges about how we understand this, how we get new plans from each college to enable us to understand the nature of the issue now, and then look at the kind of investment that's required, and whether there's a possibility of new types of investment that might be available to the college of the future. Right, so I want to come back to that. There's a very important point that you just raised. So what you said is the requirement, as it stood in 2017, was 360 million. Sorry, that was 2017, yes? 2017. That was 2017. So do we have any idea what the scale of this is now? I mean, maybe I can turn to... So the 2017 survey identified 260 million over the next five years, so that would actually take us to 2022. I think what you've seen from Audit Scotland reports is that the investment has fallen short of that, so historically it has been under investment in infrastructure. Yes, there are some good examples of colleges, and I hope people on the committee have had the chance to visit some of those, and there has been significant moneys into the sector for infrastructure. But there are also some very poor examples of a state where there's buckets catching water in areas where learners are having to be taught. But of that 360 million that was identified in 2017, just to be clear, that 360 million was to make buildings wind and water tight. It wasn't to gold plate them, this was simply to bring them to that level of wind and water tight. I would say so, yes, I think it could be described as that, yes. So I'd like to make the point that since then, so we'd call that backlog maintenance, so it's maintenance that he's doing, we've received a quarter of that funding of the 360. I think that's the Audit Scotland figures that's in their report. What investment as to where we are now then? This is going to sound like a much bigger number, I can predict. Well, what we've also had over that time is there's another type of maintenance called life cycle, which is essentially that needed to maintain a building in its current position. And we've had about approximately half the funding needed for that life cycle maintenance. So what that means is that more buildings start falling into the backlog category. So there is no figure since 2017, the 360 million is the latest. Are there any working assumptions about what that number might look like? I don't have any working assumptions of what that figure is. Given that the level of backlog funding and the level of life cycle funding, I would expect that to, well, it will have gone up. I think the work on the investment plan that Karen mentioned, and we have been working as a sector on the strategy with them. But one of the next stages is actually putting the pounds and pence to that and the investment plan. And I think that's going to be really key to allow Scottish Government to see where the need for colleges fits within, obviously, the pressures that they have across the public sector. So when are we going to see this number? Just to be clear, when we have invested our capital monies, it has been largely on high priority maintenance and 50 per cent of life cycle costing maintenance. So we distribute our budget to high priority and some of the life cycle maintenance because that is the money we have to distribute. So what we're doing just now is we're working with the colleges. Every college will need to update its own infrastructure plans because in order to refresh that information and to do it across the board, not just on backlog maintenance but on what might be required for the next five to ten years to bring some of the college estate into what you would expect. A student walking through those doors should expect to get in terms of digitally enabled net zero strategies. So every college will need to refresh that, expand the information that we get. We will be working with colleges and with other bodies like the Scottish Futures Trust to look at funding models so that when we put together the investment infrastructure plan, it is comprehensive, it is costed, it is clear what the options are for government and others to bring that investment into the college sector. What you're describing, would that not be done annually? Isn't this good housekeeping at the college level that they would have an annual inspection basically of what they've got and what they would like to have and be able to spec it up and put a number to that? I mean, you're making it sound like it's something they haven't looked at since 2017. That can't be right, surely? No, so some colleges will obviously have survey work on going, some will have survey work on particular buildings or to make sure that their life cycle maintenance is being prioritised in the right kind of way. But I think what we need is a more fundamental look at the infrastructure, so over and above that kind of yearly look at how do you keep what you've got in the right kind of frame of reference. We're not talking about replacing like for like. We're not talking about simple maintenance. We're actually looking strategically at an investment plan across the college estate, working with other partners, looking at where a college is already part of a community plan or a local authority or a school plan and looking at what does that mean across the piece for net zero targets, digital and the infrastructure across all of the capital investment. I'm hearing about all these great wonderful things you want to do for students, but if the buildings aren't wind and water tight, I think we're in some bit of a critical moment here that if we've got £360 million needed to make them wind and water tight. Years ago. We don't know now. I'm sitting here concerned that the lack of capital being provided to our colleges are not giving safe, wind and water tight warm buildings for our students to go and learn in. Should we not be doing that first before we start investing in net zero and all those? I'm just trying to figure out the prioritisation if you might comment on that. Of course, so every year we spend our capital budget on the high priorities and that will be where a building is not in a fit state or where there are some urgent repairs that are required. It will also be around critical infrastructure or repairs that a college has identified. I get that Karen, so we know you're spending money on those things, but all I'm saying is that your capital budget is not enough is what I'm trying to get. It's clearly nowhere near enough and I think we need to be looking and being much more critical around that element of things. Learning environment is key to completion rates. Business is coming and working with us. Investment all around the community is an anchor organisation. It's far more than the wind doesn't come through the windows. I completely understand the point, convener, and I think it is true to say that there is a massive mix of estate and quality. Our issue is that that is not equitable for every student, therefore. The point is that we do distribute the money to key priorities and we have some amazing buildings and some wonderful investments, but we would like to see that replicated right across the country. Those are the buildings that we get taken to for visits. I'm coming back to Stephen Kerr, if that's okay. That's a very good point, actually. To be able to make those judgments, which you're doing with a finite amount of money, you must know what the current value of the maintenance backlog is. You must have a universal view of what that looks like currently. What does it look like currently? I can't give you an absolute figure. As Andy was saying, it is actually very difficult at the minute to do that without some of these new pieces of information coming in, so hopefully we will be able to refresh that view of how much. I can ask you to share with us, even if you don't have it today, maybe you could write to us with it. The information that you were working from when you made your last set of allocations, because that surely would show us very transparently what it is that we're looking at. I'm going to move on, because I know that the convener will want to move on to someone else very shortly. You mentioned several times now options in terms of finance to deliver the strategy. What are you specifically thinking of there? Because colleges and public bodies are reliant on Government funding and they are not able to build up the kind of reserves that you might need to reinvest in your stock and to look at the capital requirements going forward. The first responsibility must be a Government investment responsibility. That means that we are looking at other strategies that the Government has about their Scotland-wide infrastructure and where we can. We're trying to dovetail with other parts of Government to see whether the budgets that are in place for digital improvements or for other kinds of improvements can be used for the college estate. The problem is clearly the kind of investments that are going into some of these loans are not the kind of investments that are well placed for public bodies. Are we planning to be working with the Scottish Futures Trust to buy? Are there investment models that would allow some different form of investment, which could be repaid over a long period of time, to refresh that and see what those might be? At this point in time, I don't think that I have the absolute shape of those, but I suppose what I would say to committee is that I think that we need to explore all possibilities. There was controversy in relation to the OECD report on curriculum for excellence that ministers had had beforehand and had materially interfered with the delivery of what was in the report. I'm coming to the point, convener. The point is that will the copy of the review that you're preparing come to us without having been put through any kind of filter in terms of the Scottish ministers? I suspect that we will be working with our board, the sector and the Scottish Government all along the way to actually create that document because we will be relying on a sense of what investment might be possible and what the Government's commitments will be. I am very comfortable about sharing material with the committee as we develop it. Thank you very much. Can we move now on to some questions from Stephanie Callhan on community learning, please? Thank you, convener. Andrew Whitty mentioned earlier on about cross-agency work, and I don't know maybe if James or anyone else would like to come in on this. I think that we can all agree that the importance of community learning and widening access is right up there. There's been a shift towards encouraging students to take up full-time college places, and I wonder if that's the best way to improve outcomes for young people from deprived backgrounds and with additional support needs. In fact, the reason I say that is because there are a range of training providers as well that also work with young people who are furthest from the labour markets, often with significant personal challenges in their life and they focus on the softer outcomes, confidence, motivation, self-belief, self-worth. On SQA qualifications to and delivering them, and many of those young people do progress to college. I suppose that either too many students are struggling to maintain full-time college places because they need a bit more preparation before they are able to sustain a full-time college place. Every college works with community learning development partners in their area to help them to develop those softer skills, which are also some of the skills that the college learners will be learning as they go. I talked earlier about that sort of distance travelled and for some people picking up those softer skills, picking up those life skills as employability skills is a positive route for them to be able to give them the confidence or the ability. Colleges will work with community learning areas around that. I think that the FTE of training that has been delivered, the full-time equivalent training that has been delivered in colleges has been maintained. Indeed, it went up slightly in 2021. Whilst we've seen a drop in the head count, the FTE has been maintained and that's related to an increase in longer duration courses. Some of the Government policy a few years ago focused on young people because of the high youth unemployment and they responded to that. We were supportive of that response and asking that colleges focused on delivery that led to recognised qualifications. The impact of that was more full-time learners, so that was an impact on that. Whilst the focus was there on young people, colleges never lost wishing and wanting and ensuring they also delivered lifelong learning to people of all ages during that time, even though they were supportive of the focus on young people. At widening access, colleges play a critical role in supporting students from a wide range of backgrounds, including those from the labour market. Over the period since regionalisation, colleges have become more significant regional players, able to form not just relationships at the level of provision but also strategic partnerships with local authorities, private training providers, universities and employers. Interestingly, on the part-time numbers particularly, there were almost as many part-time learners under 24 in the college sector in 2021 than there were in the full-time equivalent arrangements. I think that many of those part-time learners in particular were under 16, so they would have been engaging in college whilst also engaging in other learning, whether that be through school or other arrangements. I think that one of the other things that I would say in this space is that colleges have played a really significant role in supporting our overall ambition for widening access at a tertiary level. As Karen said in her opening remarks, 40 per cent of those students who go on to university who are SIMD-20 have done so having progressed from a college course. That is a fantastic illustration of the success of the college sector in widening access. You picked up on what I was going to ask you about next, about the part-time things. I am quite interested in what you are saying about community learning and working with training providers and the fact that that is on-going with people at college, but there is that difference in the fact that you can get that activity-based learning, group work, outdoor education and a focus on those kinds of things here. What kind of joint working are you doing on that? I think that much of that working takes place, as you might expect, within the regions, so in those spaces between institutions themselves and local authority partners. Community learning is at its heart about providing what people need locally in order to be successful in their lives and careers. Much of that scoping of the contribution of the college sector takes place in partnership with local authorities through community planning, partnerships and other spaces. The college sector also has a role in providing CPD to staff who work in community learning, and that is an important part of the contribution of the system at that level. More generally, we are really interested in the extent to which the provision that we fund is coherent, and through our national review we committed to not only look at that at a national level but to pursue a set of regional tertiary provision pathfinders. One of those is in the north-east and the other in the south of Scotland, and in both cases they are looking at the range of pathways available to learners of all ages and stages. As Andy mentioned, not just young learners have been a particular focus over the period since regionalisation, but have learners who need to upskill and reskill to be successful in their lives and careers. Shona Randy, do you want to comment quickly on any of those questions? Through regionalisation colleges, the economy of scale and regional scale and interacting with community planning partnerships and other bodies is in a strong position to help. Each college will work with the partners around community learning development and the work that is required for their region. That will help because of where its position college is. I am ashamed to have been plugged in for West Lothian College as I had a visit to last on Friday, if we have a really excellent example of that community anchoring and community learning. Can we move now on to questions from Ruth Maguire on the reclassification? Shona mentioned in opening some of the major changes that the sector had seen in ONS reclassification. Can you tell the committee a bit more about the longer-term impact of colleges being classified as public bodies? Colleges were brought under ONS reclassified to be public bodies around about the same time as all the changes that I mentioned in my opening statement. Many of the colleges tell me that it is constrained a lot of how they operate. They have to balance their budget. Some of them did have reserves before they were moved into the public sector. Those reserves were into arms-length foundations so they did not have reserves. Those reserves might have been used for, for example, capital investment. That is now gone. You are very reliant on the Scottish Government to provide your capital plan for you. If you had reserves' ability to speculate business-wise, to maybe seed-grow some investment in different markets, in different products, international, for example, a lot of that has been constrained because colleges right now are literally struggling to balance their books. All that headroom that reserves and the ability to borrow might have given you has been taken away. That headroom also allows you to be slightly innovative, to be more entrepreneurial, to go out and to bring in other income streams, which colleges still do because no college is 100 per cent funded. That ability to just be more entrepreneurial has been constrained and the headroom within colleges has been reduced. Our sector is aware that that classification is here. We did, through the funding councils review, ask for that to be reconsidered and the Government is clear on their answer on that. The college sector is working within the constraints of ONS. There are flexibilities that other public bodies have. One of your colleges spoke about the potential of carrying forward budgets. Are there specific flexibilities? I suppose that being able to use reserves might be one, but what specific flexibilities other public bodies have, recognising that the states might change? There are different classifications. I think that the classifications that colleges sit in do not allow that flexibility, but I'm happy to defer to that. Shall I pick up just a tiny bit more? Please do. I guess that the reclassification and the constraints that bring fewer cash reserves, the inability to borrow in that regard and possibly again that long term how you build up reserves to maintain your estate and reinvest. I think that we shouldn't miss sight of the fact that they are also therefore lower risk so they have less likelihood of having significant financial losses and they have access to funds to manage their cash flow, so we manage that with colleges on an ongoing basis. I also wouldn't want to lose the fact that we had very strong representations through our review on this about the fact that colleges are subject to democratic accountability through ministers and this Parliament because of the nature of their public body status. When it comes to flexibility, we recommended to government that they explore more flexibilities or push the boundaries of the flexibilities where they possibly could. We were very keen that we looked at flexibilities around the March financial year end so that we could support more reprofiling towards the end of July because the college year is longer and therefore it doesn't fit neatly into public body classifications and it doesn't fit neatly into the way that government manages its books and therefore how we need to work with colleges. The government is looking at those flexibilities just now. I understand that they have prioritised that to consider as part of our recommendations from our review so I am hoping that we will have greater clarity for colleges in the near future. One tiny other point is that in England we are watching very carefully how the ONS is looking at the status of colleges. A number of colleges have gone bust in England and have had either forced recovery or other kind of issues because they are not public bodies. They are non-profit distributing charitable other designations. The ONS is now considering should colleges in England be put into public body status. What we are watching very carefully is will they have any further flexibilities that we could explore in Scotland if that move goes ahead so we are looking at flexibilities across the piece. That is helpful. I think that it would also be helpful to understand, appreciating the financial challenges that we are all operating under and not diminishing those in any way, how helpful those flexibilities could be and what that would mean for college. It would be helpful to have that for the record. I don't know who would wish to. I think that any flexibility for a college at this point in time is very valuable. Whether or not it means that they have the full gamut of flexibilities that they might like is probably not going to happen but any flexibility would make a difference at this point. It is always helpful to know specifics, so we can in general terms say that flexibility is helpful. Can you say about what that might look like and what it would mean and what more could be done? The ONS designation is constraining on revenue and infrastructure, just not wanting to repeat the discussion we had a few minutes ago, but that has not been able to build up reserves. It limits the planning strategically. The areas that we want to be able to get to are within what can be done, within that envelope, within are there some changes that would allow to get to a position where colleges have the ability to plan strategically. I suppose that it is trying to get that structure that gives the maximum flexibility for colleges to deliver on all the priorities that we talked about earlier. It is looking at and exploring what could be possible within that. That has been looked at over the years. As Shona said, a specific designation of colleges is very limiting, but I agree with Karen that we need to see and keep a close eye on what is happening in England and how they may tackle it and is there things that we can learn from down there. I have a question on articulation, specifically, whether or not we think that enough progress has been made on articulation from college to university and what might be done to encourage further progress. I do not know whether you are Shona or Karen, but I am not sure what James looks like. Thank you very much, convener. Articulation has been a key area of national policy over the last decade. NSFC, in particular, has worked with colleges and universities to drive a focus on articulation. Over a number of years, funding articulation hubs across the regions of Scotland were collaborations between colleges and universities to drive a focus on particularly the question of advanced standing from higher national qualifications into degree level study. Through our review, we heard a range of voices from colleges and universities, which felt that, although that work had been hugely positive for learners and the system, there was a need for us to think again about the range of ways in which students access provision and become successful through the system. It links back to the question earlier about community routes into and through the system. We also recognise that the qualification landscape is changing. As part of our review, we recommended that we work with students and institutions to develop a refreshed set of access pathways and a refreshed set of institutional expectations to deliver those. That work will take account of the feedback provided by Sir Peter Scott, the First Commissioner for Fair Access, who will shortly demit office. It will also engage in the work being led by Professor Hayward on qualifications and assessment. The point in this is to bank the progress that has been made in articulation but also not to lose sight of the range of qualifications that learners use to access and progress through the system. Our broader set of fair access pathways will present us with that opportunity to set expectations across the qualification landscape instead of, as we have seen in articulation, focusing particularly on the HNC, HND into degree level and route. Does anyone else want to come in on that? Can we move on? We're okay to move on. We've got specific questions from Bob Doris on geographical area, if you don't mind. I'm conscious that the Scottish Funding Council has made some recommendations in relation to the Glasgow Colleges original board in the three assigned colleges about how they can work closer together and how structures can be changed. I'm also conscious that Derek Smeal gave evidence to our committee a few weeks ago talking about the Glasgow Colleges original board that has been highly transactional in its activities and massively duplicating the work of the Glasgow Colleges group, who I think he felt in other two colleges were locked up together thinking was a much more effective, strategic way of taking themed activities in the college sector and Glasgow forward. I'm just wondering, given the Scottish Funding Council made some recommendations in relation to Glasgow Colleges, the Government accepted those recommendations and the clear of the three Glasgow Colleges principles is out there. Where we are with that and whether the future for Glasgow Colleges original board is well intentioned duplication, we had merger earlier on, perhaps we could have no Glasgow Colleges original board. There could be a cost saving in relation to that. We did make recommendations to the Government on all the multi-college regions, the three multi-college regions. In Glasgow we said huge progress had been made and there had been a lot of very good joint work, but there were mixed views about how well GCRB as an overarching board had worked and the time was right to actually look at that again. In the intervening months between now and our review recommendations, GCRB itself has been looking at a number of different options. We decided to draw a line under that and to work with GCRB on a smaller number of options, which we are just appraising at this point in time before we make a recommendation. One of those options may well be that GCRB does not exist going forward. If it does not exist, we would still want a number of very important principles to pertain. We would still want one door access for students, so it was uncomplicated about how they accessed college provision in Glasgow. We would want really strong collaboration across the three colleges and we would want to make sure that ultimately that kind of regional perspective was being taken jointly. That is one of the options that we are definitely looking at. It is a little early at this stage, but by the end of this year we will be making a recommendation to ministers about next steps with the Glasgow region. The Glasgow Colleges Group sit in that process, because I know that there are representatives of the colleges on the regional board, but it was unclear whether principles were actually members or they did attend meetings. There was a great area about the influence that each college had within the regional board. Where does the Glasgow Colleges Group sit and how can the influence in that process? We have heard a number of very strong views about how that should work, but there is a view that the college principles themselves not being on the board of GCRB is a difficulty. They observe, their chairs are part of that, so the colleges are represented within that overarching board. Again, that is one of the things that we need to look at. What is going to make better outcomes happen and what is the best governance arrangement to make that happen? The Glasgow Colleges Group, the group of the three colleges coming together themselves, is really a principle-led group that is looking at the detailed operations between the three colleges. I know that some of the college principles feel that it is a good springboard for a potentially different option to look at for the way the three colleges operate. You said that you knew some of the principles and thought that that was a good springboard, but I specifically asked how they were specifically involved with the consultation and dialogue, how the Glasgow Colleges Group were specifically involved as an entity in that discussion. What is their input into it and how can they influence it? My understanding is that they are going to be very involved in the nature of this. Not only have they been involved all the way along with GCRB's review, but we will be engaging with that group as we look at these final options before we make a recommendation. We will make a recommendation with the involvement of the key players. That might not be easy because there are different views, both in the GCRB board, among the principles and with other stakeholders, but we need to get to a point by the end of this year where we are making a clear recommendation about how we move forward with the right kind of governance for the future. Glasgow MSPs should know before Christmas what the outcome of that is. We should be engaging with all stakeholders, including Glasgow MSPs, yes. We have a supplementary, if you do not mind, Bob Doris from Willie Rennie on the subject as well, please. I am intrigued by some of your language. It sounded like you are delegating responsibility for leading this reform to the Glasgow regional board. Tell me that is not the case. Are you leading this work or are they leading it? We are now leading this review of options. Are you okay, Bob Doris? That was really helpful clarification from Mr Rennie. We have a couple of sweep-up questions, if you do not mind. One from myself and one from Graham Day. It goes back to some of the stuff that we have heard that we need to try to make sure that we get coverage for our inquiry and budget scrutiny. Previous evidence explained that it is around the Covid funding and that colleges are still continuing to deal with the Covid impacts as we are looking forward. Would you have expected that the funding to at least be carrying on for a bit longer than perhaps we have had that cut-off and it has not been sustained any further? I was looking for comments on that given. Perhaps from yourself. Shona, first, if that is okay? Obviously, with a sector that is struggling to balance its books, additional funding would have been very helpful. That is sustained funding, because a lot of the things have been embedded. For example, the mental health counsellors that were put in place in colleges, that was a specific funding that was made available, not necessarily Covid, but mental health funding. There is no clarity on the future of that. That is just one aspect. I also think that the way that digital has changed the way that colleges run. A lot of the Covid monies were used to assist with that, to hand out laptops and so on, or to make sure that there were data allowances for students. Some of that have carried on as colleges have developed their offering post Covid. There are absolutely additional costs that are there that would be really helpful if we could have the funding to continue with that. Is that sort of detailed and mapped out? Is it quite obvious that that is there in the specifics? I am talking about that data allowance, because that is, as you said, not just a one-set cost to get the investment. Those specifics around mental health and digital poverty were included in our submission to the spending review head of the May announcement. It would not surprise me if they feature in our draft budget submission, which is still going through our governance process at the moment. The £5 million investment for the digital for colleges, universities and community learning providers, which is not just for yourselves, is there to address the current digital divide, but do you think that that is enough? No. Yes or no answers? Fine. That is good for concise. I like that. Does anyone else want to ask Andrew James? Sorry, convener, so you were picking up there around additional funding that flowed into the system, but one of the points we might wish to make around the current year funding and it is around learning loss, which members picked up earlier. As we have allowed colleges to claim additional credits this year from their core funding to ensure that they are able to direct additional support to learners who have had their learning experience disrupted due to learning loss elsewhere in the system. That is not additional money, but it is making sure that at the front end that learners who need additional support are able to get that and that colleges are able to claim that against their credit targets from SFC. That goes back to some of the questions that we got earlier on from the loss learning and the colleges that were being expected to pick up the slack on that. Can we move to yourself now, Graham Day? Many thanks, convener. I have two points of clarity from Karen Wat, hopefully at current. You indicated earlier that in determining the levels of funding that universities enjoy, you take account of the additional overheads, the cost space that they have, but do you also take account of their ability to generate income from other factors? The other point is that if you were to arrive at a decision where you were going to ensure that the funding per student afforded colleges was the same as university, whereas like for like provision, can you give us a ballpark figure of what that would be worth to colleges if you did that? Croms, not off the top of my head, my apologies. I wouldn't be able to give you that quickly at this point, no. Can you give us a sense of what differences it would make? Perhaps just what I'm saying, so we can do that, but for academic year 2022-23, the average level of SFC funded per place at universities was around £7,500 for colleges that's around £5,000. I'm talking about specifically where there is like for like provision being provided, and so there would be a number attached to that, a multiplier to the 2021. If it's helpful, it's looking at how many higher national students and how many undergraduates and provide the committee with some additional work on that. Thank you. Are you okay? Yes, perfect. My goodness. Thank you very much at the time. My goodness was looking at the time there. I want to thank you all for your time today, and that's the public part of today's meeting at an end, so we'll now consider our final agenda items in private. Thank you very much for coming along this morning.