 I welcome everyone to the eighth meeting of the Public Audit Committee in 2022. Before we begin, can I remind members, witnesses and staff present that social distancing rules apply in the committee room? Can I also remind you that if you are entering or leaving the room, if you could wear a mask and similarly a face covering if you are moving around the room? The first item on our agenda is to agree to take items 3 and 4 in private. Are members of the committee agreed to that? Thank you. Agender item 2 is to look at the planning for skills report, which Audit Scotland produced earlier this year. Can I welcome our witnesses this morning to this session? Joe Griffin, director general of education and justice. Helina Gray, director of fair work, employability and skills. Welcome. Adam Reid joins us also in the committee room, the deputy director for skills. Helen Webster joins us virtually. Helen is the deputy director for reform, director for advanced learning and science in the Scottish Government. You are all welcome here this morning. Willie Coffey, committee member, is also joining us remotely this morning. Director general, before I begin, can I remind us why we are here and reflect on the evidence that was presented to us in the evidence session with the Auditor General back on 10 February? In his opening statement, the Auditor General said, We have found that slow progress has been made since 2017, with anticipated benefits not being realised. The Scottish Government has not provided the necessary leadership or oversight for joint working between Skills Development Scotland and the Scottish Funding Council, and there has been insufficient clarity on what it wanted to achieve and on what success would look like. We also found that progress by SDS and the SFC was impeded by lack of agreement between the two organisations about what skills alignment would involve. This was a section 22 report, a serious report. It is therefore extremely disappointing that we only received yesterday, late afternoon, a very dense 30-page document, which, as I understand it, is the new framework agreement that has been put in place. Part of the story of this is about leadership, governance. For us, it is about democratic accountability. I have to say that this very late arrival of an important document, which is entirely pertinent to the proceedings that we have this morning, a meeting that you have known about for quite some time, is just, frankly, unacceptable. In my view, it compounds what is already quite a bad situation. I hope that this morning we can address some of the fundamental criticisms that have been made over a fairly, which has gone on for five years. With that director general, I will invite you to make an opening statement. Thank you, convener. If I may, before reading the opening statement, I think that it is entirely right that I apologise for the late arrival of that document. As you say, it is germane to our discussions today. We should have got that to you earlier and I apologise unreservedly. I think that the team working on it intensively and at pace with partners designed to get the best possible product that was available and, in the end, that took them up to yesterday. It was, of course. There was no intention at all of any form of disrespect to the committee. It is a team trying to work at pace to finalise the document and to make it as fit for purpose as it needs to be. I do apologise, convener. Well, make your opening statement, then, director general. I would like to thank the Public Audit Committee for inviting me to give evidence today, alongside Helena Gray, who is here on behalf of Alan Mitchell, our director general for economy, Adam Reid and Helen Webster. I welcome the opportunity to discuss Audit Scotland's recent paper, Planning for Skills, following on from the Auditor General's evidence to the committee on 10 February. The committee will be aware that the Scottish Government published its national strategy for economic transformation last week. As set out in that strategy, the Scottish Government is clear that providing people with the opportunities to develop skills irrespective of who they are and where they live is a key driver of improved economic performance and wellbeing, which sits at the heart of the Scottish Government's economic and labour market strategies. Crucial to that, as the end set, the acronym for the national strategy on economic transformation says, is adapting the education and skills system to make it more agile and responsive to our economic needs and ambitions. Audit Scotland's report is helpful in informing our approach in this vital area. The committee will be aware that the Scottish Government and both agencies have accepted the recommendations and had already both anticipated and moved to respond to the issues subsequently identified in the report, putting in place new, stronger and simplified governance with a clear line of sight to ministers, as well as clearer definitions and measures for success in the shared outcomes framework that we published yesterday and to which you referred just now, convener. Scotland has one of the most educated and qualified populations in Europe and our skills base is one of the key factors in our ability to attract and retain inward investment. Understanding the operation of a complex and dynamic skills system is important to allow us to address labour market shortages, promote collaboration and complementarity and respond to the needs of employers in the private and public sectors. There are many things working well in the system but we are committed to making improvements and ensuring the best possible outcomes for our investment. I would like to thank the committee again for the invitation to appear today. The team and I look forward to answering your questions. Thank you, director general. Let me begin straight away by asking you something that we asked the Auditor General, which is the opportunity cost of this failure to get a co-ordinated skills alignment strategy together. Has the Scottish Government made any assessment to determine the cost to the public purse and the opportunity costs that have been lost through the failure to progress the skills alignment strategy? We haven't quantified that convener. The Auditor General said something similar in his evidence recently. I think that it does come down to the opportunity cost of setting and training a process that then proved to be really challenging. I think that it's important to say, however, that the specific scheme identified in 2017 was about aligning at a national and if you like, centralised level activities and investments between the two agencies. As that work has gone on, that hasn't prevented, in a really dynamic delegated system, lots and lots of partnerships and collaboration at local and regional level between colleges and universities involving local authorities, local employers. The system has not stood still. It has continued in that dynamic vein, but any time that the Government embarks on a project and that project proves not to be successful, that involves staff time and a commitment of time that we could have been spending on other things. The Audit Scotland report talks about the failure to build any kind of relationship in the shared endeavour between the Scottish Funding Council and Skills Development Scotland. In fact, one of the expressions used in Audit Scotland's report is that there were tensions between the agencies. That has gone on for at least four years. Those are, let us remind ourselves, two major Government-funded organisations. I think that the joint budget between the two is £2 billion of public money a year and yet because of tensions between the organisations, there has been a failure to deliver. Can you explain that? The vision in 2017 was a very ambitious one. It is trying to align at a national level all the work of two, as you say, big and sophisticated agencies delivering across a range of different functions. It involves co-ordinating the work of 45 different institutions, 19 universities and 26 colleges. That was something that presented a lot of difficulties. As a report sets out, there were challenges in sharing data, constraints on governance and issues around, in particular, the funding council's capacity to engage in that work. It is fair to say, as the Auditor General has done, that there are also disagreements between the agencies about how best to progress. Given the challenges and difficulties that the vision set us and the complexity of trying to make progress against that backdrop, it is possible, at times, that that develops into tension. Disagreement can be healthy in the system and people bringing different perspectives to bear can be a creative process. Tension, however, particularly if that is giving rise to a lack of progress, is not something that we would want to see. Heller and I met both chief executives earlier this week. I think that we were reassured by the state of the relationship now, here, in March 2022. We would observe on a range of really effective collaborative projects between the two organisations and their commitment, indeed, to putting in place this new way of working through the pathfinders and the framework, which they have both agreed to. I think that, for sure, there were challenges and difficulties, including in the relationship over the last few years. We think that it is in a better place, and it is partly in a better place because the overriding framework on the context that we have now set is one that is more likely to lead to success. It runs a bit deeper than that, does it not? I respect the fact that you are saying that these are things that have happened over a period of years, during which time you have not always been the director general responsible. However, the criticisms by Audit Scotland go so far as to say that there was a complete absence of strategic intent or a performance management framework to measure progress. Why on earth were these fundamental elements not put in place? I think that, to some extent, there is a strategic intent back in 2017. There is a vision of having a more aligned skills system and there are benefits attached to that that were described. I think that not having clear performance measures as part of that, that should have been there. We have now taken steps to rectify that through the outcomes framework that we have published this week. However, in any big project that you undertake, you need to set out a vision. The outcomes are attached to that, the outputs that will come from the work and a means of monitoring that. There were real challenges to being able to do that in 2017, but that should have been in place. I look specifically at funding for apprenticeships. Paragraph 14 states that, in October 2019, the Scottish Government instructed Skills Development Scotland and the Scottish Funding Council to implement a new funding and delivery model for foundation apprenticeships and graduate apprenticeships in response to the removal of the European structural funding. Paragraph 14 goes on to explain that funding for 2021-22 was intended to come largely from the SFC's further and higher education budgets and partly from the SDS budget. The report highlights that work on this instruction stalled as a result of Covid-19 and that work has resumed and supports the Scottish Government's skills alignment priority. However, the report highlights that sustainable funding for both foundation apprenticeships and graduate apprenticeships remain uncertain from 2022-23 onwards. Can you tell us what the Scottish Government's plans are for funding both foundation and graduate apprenticeships from 2022-23 onwards? I might invite one of my colleagues to speak to this in more detail, but the report is accurate. Because of the UK's exit from the European Union, there was a need to rethink the basis on which apprenticeships were funded. I hear the two that had been on the basis of the European structural funds. That was something that we had to approach in a time-critical way, given the timing of the departure from the European Union. As the report says, it was another big piece of work that came at a time when we had already set out a process around a skills alignment. The funding has now shifted to the Scottish Funding Council, and they and Skills Development Scotland work closely together in partnership in terms of saying what that needs to be and how they go on to deliver it. I might turn to one of my colleagues to pick that up, Adam. As you say, we needed to take forward new arrangements from 2021-22 and the two agencies worked in partnership to deliver the split arrangements, split delivery for foundation apprenticeships in 2021-22. Some of that was supported in that year through Covid consequential funding. As Joe said, SFC managed the delivery of graduate apprenticeships. From 2022-23, we are taking forward those arrangements, so split delivery for foundation apprenticeships. Clearly Covid consequential funding isn't available in 2022-23, so it's part of the core budgets that we are taking forward. Graduate apprenticeships remains as it was in 2021-22. We'll be reviewing arrangements for the delivery and the funding of foundation apprenticeships during 2022-23. There will be a review of foundation apprenticeships published soon from Education Scotland, and we will review delivery and funding arrangements off the back of that. All MSPs have been out this week or in last week looking at apprenticeships and seeing how it's a great pathway for kids rather than an alternative to going to university, so I would hope that there would be core funding in the future. Paragraph 1 of the report explains that Scotland's labour market faces a combination of skills gaps, skills shortages and skills under utilisation. It goes on to highlight particular gaps in social care, as well as the demand for new skills in digital and responding to the climate emergency. How are you, along with your partners, addressing the skills gaps? I might turn to one of my colleagues who is more versed in world of skills provision specifically. There are a number of ways in which ministers and the collaborative groups that we have get data on the labour market. There are a number of internal dashboards that the economists and the Government make available to ministers on a regular basis. There is a particular employers survey that we use, a sample of around 3,000 to 3,500 employers, which tells us something specific about the shortages. The other means of getting intelligence is internally through policy and delivery directorates informing us of the needs of places such as social care, for example, early learning and childcare as an example that is used in the report, of where Government teams flag up the need for further skills investment. The third area is the future thinking. Where are we going to need in the future? I think that there is a big thing there around climate skills. For example, as you say, Ms Dowey, which is the subject of one of the pathfinders, one of the projects that we are using to deliver results but also to explore how best to have collaboration. That is specifically about skills that are required for climate change being led by Skills Development Scotland. However, I may see if Helena Watt wants to add to that. I am delighted to come in. Thank you and good morning everybody. I think that, just to echo some of the points that Jo has already made, I think that there are some areas where we would point to success within Scotland. The employer skills survey that Jo has already flagged shows some marginal improvements in skills shortages and gaps. However, as the national strategy for economic transformation that was published last week sets out, Scotland, like many other economies, continues to face challenges relating to a number of different factors such as EU exit, an ageing population and inequalities in attainment. That is why the national strategy for economic transformation committed to a further programme of work around skills. It set out three specific projects. The first of those around adapting the education and skills system to make it more agile and responsive, the second around supporting and incentivising people and employers to invest in skills throughout their working lives, and the third around expanding Scotland's available talent pool. Underpinning each of those programmes is a really clear set of actions. We have committed to set out delivery plans and success measures for the national strategy for economic transformation within the next six months. There is a real focus on delivering the national strategy for economic transformation, and one of the chapters in the document sets out a renewed delivery and governance approach. We would see the work on skills alignment sitting underneath that and as part of that. Jo has already mentioned a number of specific pieces of work, particularly around climate emergency. In December 2020, we published a climate emergency skills action plan, and we are working with SDS and SFC to implement that and take that forward. As Jo mentioned, it is also a specific pathfinder under the skills alignment work. We are also working with businesses on a labour shortages action plan as well, which is working very collaboratively with businesses on how we respond to the challenges that we are seeing within the labour market. Are you doing any work on timescales to try and speed things up? One of the things that the pandemic showed us was that we could turn things on very quickly, remove the red tape and get the desired outcomes that we needed. Are we going in and putting in timescales so that the skills that we need will be delivered when we need them? We are talking about that in four years, so are we doing things timely? There is a real emphasis on moving at pace with the national strategy for economic transformation. As I said in the next six months, we have committed to setting out a much more detailed delivery plan, which will set out some of those really important milestones. Pointing to the point about pace, I would point to some of the activity that we are taking already through the national transition training fund, which is supporting individuals to retrain and upskill. I would point to those things that are being delivered this year, as well as the work that we are doing to further set out our approach around the national strategy. I think that I would go back to a comment that I made a little earlier on, which is that it is really important to realise that not all of this collaborative alignment activity needs to be and is being driven at national level. Some of it does, and we would absolutely recognise the benefits from doing that. We are very lucky, for example in our colleges, who are very agile institutions, who have really good networks at a local level, who talk with employers, who talk with the local authority, who talk with the health board, and they figure out more in real time what is required. Just this week, I was speaking with the chief exec at Dumfries and Galloway College, and she was telling me about a partnership that they are developing with the University of the West of Scotland around cyber skills, which is something that they have identified for that region. That speaks to a system, if you like, which has different levels of activity and is dynamic at the local and regional level, and for sure at the national level, we need to match that and be able to move at a pace that is commensurate with the needs of the economy. However, I just wanted to say that it is that complex system with different actions happening at different levels. At that point, I am going to introduce Willie Coffey, who has a question in this area, too. Willie, over to you. Thank you very much, convener, and good morning to everyone. It leads perfectly into my question, Joe. I was hoping to just localise it a bit in terms of the labour market, for example, in Anearshire. If I was to ask, is there an assessment of what employers' demands and needs are, and the type of skills that they are needing? For example, in Anearshire context, who would I ask for that, and where would I get it? Probably a number of places. Skills Development Scotland, for example, lead on regional skills analysis. I am fairly confident, looking at Adam and Helen, that they would have that for Anearshire. There will be key players in the Anearshire economic partnership space as well. I would expect the local authorities to have access to that kind of analysis. There are employers' groups that are looking at youth employment, for example, the developing, the young workforce infrastructure. I would expect that that to exist in a number of different places. I am just checking with Adam and Helen, if there is anything that they want to add. To confirm your point, Skills Development Scotland publish regional skills assessments for areas across Scotland. I think that the latest set of regional assessments were published in July of last year. They set out skills needs for an area based on looking at current data, but also future trends. They will discuss that with industry leadership groups as well and take that forward in discussion with institutions across the education and skills sector. My next question is, why are we still so short of a number of skills and that this is not a sudden thing as a result of Covid or anything, Joe? We are hopelessly short of software engineers. We are really short of people to go into the hospitality sector. I was visiting a business and commander who are really short of qualified electricians. Why are we continually saying these things if these strategies and plans are there? Who is joining it together? There is a whole alignment agenda. Who is putting that together to make sure that local businesses get the skills and the young people coming in to take the jobs that are there and available for people to take up? At local level, it needs to be the regional economic partnership with the key players around the table. We would expect them to have a sense of what the needs were and some sense of the success measures that would represent employee needs both in the private and public sector. If that is not succeeding, action needs to be taken because we need to have that alignment. To speculate for a moment, I will ask Helena to come in and be more expert in this than me. There is also an element of personal choice. There needs to be a clear desire on behalf of individuals to enter those sectors. That is where things like the career service, which is run by Skills Development Scotland, comes into play, particularly looking around skill leavers and the services that are there to enable people to reskill and make their decisions. Helena, do you know the system better than me? I am very happy to come in and build a little bit more on what Jo has been saying. I would point to the business action plan that I referred to earlier, which is a really focused action plan that we are working with businesses to develop, to build on that local data, to understand what the challenges that businesses are facing and to work with them on steps to overcome them. We do know that there are challenges associated with certain skill sectors and certain groups. I would not play the impact that Brexit and other factors have had on labour market shortages. We are working closely with colleagues to look at how we overcome the different barriers. Adam may want to come in a bit more and say more about the action plan. I will focus on the areas where we are making real tangible investment in addressing employer needs. Apprenticeships are a good example of where we look at skills needs assessments and other evidence and, in particular, work with employers. We have the Scottish apprenticeship advisory board, which has a very strong employer voice. It helps to design the apprenticeship system. That setup enables apprenticeships to meet the needs of employers. There are other investment programmes, too. Helen has already touched on the National Transition Training Fund, which we started in 2020, which has sought to address skills needs arising from Brexit and through the pandemic. There is also the flexible workforce development fund. We allocate up to £20 million per year, which specifically enables employers to go and access the training that they need for their business. My last query on the structure before I hand back to Dave Colleagues. The employer that I was talking to just the other day was talking about the lack of electricians and youngsters coming through where there is a competency in being electricians. He talked about the archiv certification, the ACA-Advanced Competence Assessment, and he was saying to me things like, when a youngster comes out of university with an honours degree in electrical engineering, they are not able to wire a plug in an industrial setting because they do not have that certification. Have we got the balance right? Do you think, colleagues, about the youngsters that are heading to university and the demands that are already there in the local jobs market, for example, if we cannot supply enough electricians to do the work that is sitting there waiting for them to do? That takes us back to some extent, Mr Coffey, to a discussion that we are having on the outcomes from schools and the need for the Government and others, society as a whole, to show an equal value to different routes that lie beyond school, and university is not going to be the be-all and end-all either for an individual or the needs of the economy in the society. Again, being on my travels in Borders College last week, I saw a fantastic class of people doing construction, and there are actually people already in the construction business but qualifying themselves to that higher level so that they will be even higher skilled and a greater asset to their employers. You can see through the college sector in particular that really close link between the cutting edge skills that we need and also the link to individual employers in this particular instance. I think that we have, through means like the graduate apprenticeship model as well, a very specific way of aligning employer sponsorship, study to graduate level and also those practical skills that are required. We think that that has great value and we are able to benefit those, but again, Helen, you are more expert in this area. Is there anything that you want to add? I do not think that there is anything more I would add beyond what Joe and Adam have already said in relation to apprenticeships and industry involvement in those more generally. I can come back later on on performance managing and reporting issues. Certainly, Willie, I will bring you back a little bit later on. Can I return as director general to the Audit Scotland report and one of the glaring failings that is highlighted in the report? This is as much as anything about weak governance. If I look at paragraph 24 of the report, it talks about a proposal to alter the framework from there being a joint SFC and SDS skills committee to the creation of an enterprise and skills strategic board skills committee. The report tells us that this did not happen because of the statutory requirement for the existing committee to be chaired by an SFC board member. No alternative governance structure was introduced at ESSB level, and the joint SFC and SDS skills committee has not met since August 2017. The SFC consolidated the joint skills committee with another of its committees, which has since become the SFC's skills access enhancement and learning committee. SDS does not sit on this committee. Can you tell us why the ESSB did not seek to set up an alternative governance structure and why the Scottish Government presided over that? This is an area where we have to hold our hands up and say that the errors were made. I think that you can see in the series of events that Audit Scotland describes a failure to a light on a really settled model of governance that could be commensurate to the scale of the challenge. There were points along the way where mistakes were made, and we would hold our hands up to that. The model that we have now devised—something called the Shared Outcomes Assurance Group, I appreciate many of the words of the same, but this is the new model that we have put in place, which meets every two months now with Skills Development Scotland, an SFC and other partners, chaired by Helena and our colleagues in advanced learning and science, as well as ministerial meetings with both agencies every six weeks to preside over the development of this framework. In other words, we have set out in the framework the projects that the two agencies are collaborating on. Those are the three pathfinders and the two elements that we want closer work on at national level. We think that in the framework we have set out much more clearly the activity, we have set out the success measures, and we think that the governance, which is a mixture of this official-level thing meeting every two months, and agencies coming together with ministers every six weeks now is the right model. We think that that will have more traction than the ESSB we are able to have. Again, I would not say anything other than that mistakes were made along the way prior to that. Whether they are errors or mistakes, they have been quite long-running errors and mistakes. That is why there are many aspects of the report that give the committee quite a good deal of concern. You said this earlier on, Mr Griffin, but could you, for the record, confirm that you accept the recommendations and the action plan set out in the Audit Scotland report? Yes, I do, convener. There are ways in which we have already anticipated the Audit Scotland report. We are talking about some of those as we go, in terms of governance, in terms of being clear about the outcomes, in terms of ministers' involvement in the proceedings. I have not mentioned the Covid pandemic thus far in the proceedings. It is fair to say that that was two years of significant disruption, of course, for so many people in public services that had its impact in this area. In the Scottish Government, there were changes at director level where people were moved to high priority posts in terms of responding to the pandemic. For the Scottish Funding Council, there was a really urgent and serious need to respond to some of the financial difficulties and pastoral and health concerns that were emerging from FE and HE. Skills Development Scotland was focused on ensuring that the skills provision continued during the course of really challenging circumstances. I am really clear on where errors and mistakes were made, convener. We absolutely accept the recommendations. I think that it is important to say that, in the course of the five years since 2017, the pandemic also did play a major role. Before I pass to Colin Beattie, the Auditor General was asked about that at the 10 February evidence session. He said that the pandemic is one factor, but it is not the sole factor. I draw the committee's attention to Exhibit 3 in the report in which we track the chain of events dating back to 2016 and 2017. I make the point that we can accept that there will be errors from time to time, but there seems to be a consistency of error and failure to deliver in the alignment of skills. I have not even spoken about the appointment of a permanent skills alignment director, which was a pivotal role that never really got properly filled. Colin Beattie is over to you. Fundamental to success is strong leadership, consistent leadership and absolute clarity as to direction. After the enterprise and skills review of 2016, the Scottish Government, SDS and the SFC all committed to skills alignment. However, the Scottish Government did not provide the necessary leadership to ensure progress. My simple question is why. What happened to leadership? Why was not the Scottish Government driving this, as was clearly intended in 2016? Where did the leadership go? Thank you very much, Mr Beattie. We accept the findings and recommendations that flow from that as well. It was a situation that we found very difficult. There was a level of ambition to ensure that alignment at a centralised national level, which threw up a lot of challenges. There were challenges in terms of data sharing. There were challenges in terms of the governance that we have touched on a moment ago. We have taken steps laterally to improve SFC capacity to be able to engage in those kinds of things. I cannot give you a clear explanation of why those things played out in that way, but clearly it did not lead to success in the way that we had hoped for and anticipated in 2017. However, the important thing for all of us and the teams in SDS and SFC is to roll up our sleeves now and to put in place the measures that we need to improve things and to get good outcomes and to learn the lessons from what went before. There is an aspect here that has been recurring. That is in connection with the sponsor teams and the support that they have given and their participation. Clearly, they were involved in 2017-18, and then it seemed to peter out. I know that the Scottish Government itself is doing a review of the whole sponsorship issue, but again, what happened here? Why weren't the sponsor teams sending up red flags? Who would they send up the red flags to? You are right that the whole issue of sponsorship is one that the Government is looking at. We are reflecting on whether there are changes that we need to make to our sponsorship arrangements. We have seen the benefit, for example, of having one minister, Mr Hepburn, who has oversight of both organisations. That is at the ministerial level. We are looking at whether having a single sponsorship team for both organisations might enable us to make progress. I cannot answer your question absolutely directly about the sponsorship team's activity between that period of time. I do not know if any of my colleagues would be able to do that. None of us were physically imposed at that time, I am afraid. However, I think that good sponsorship is important, partly for the ability, as you say, to be able to flag up that things are not working as they should. To learn lessons, we have to understand what went wrong. Here we have a failure in leadership. A failure would appear of the sponsor teams to properly engage and to raise the issues that were quite clearly there. I am surprised that we have not got that information, that this sort of investigation has not taken place. Otherwise, how do we learn the lesson? I would not particularly highlight the role of sponsor teams. The project that we set out on was inherently very ambitious. There were a number of challenges that became apparent really quite quickly. That has to be a matter for senior leadership. I would not particularly criticise the sponsor teams in that regard. I do not know if Helen O'Gray wishes to comment on that. If I may just come in on it with a couple more reflections, if helpful. I think that I am absolutely recognising the challenges and complexity that Jo has already referred to. We have been looking back to reflect and to learn the lessons. We obviously asked the Enterprise and Skills Strategic Board to have a role here. In hindsight, we recognise that their role is non-statutory and that they did not have a direct governance mechanism, but instead were relying on the support that they could provide through guidance and influence. I believe that in 2017, a group was created to oversee the implementation of the 2017 programme, which created that five-step model and responsibility that was then handed to the agencies to implement. As you will be aware, a skills alignment assurance group was established in 2021 by my predecessor with the support of the chair of the Enterprise and Skills Strategic Board. At that point, as you were saying, those red flags were beginning to be picked up and cause concern. The skills alignment assurance group was established in 2021 as a short-life working group to support the scoping and development of specific skills alignment projects and provide assurance to the strategic board and ministers. That group met six times in 2021 and has overseen the development of the three pathfinder projects. In discussion with the members of that group, because SAAG was a short-life working group to oversee the development of that, we have since moved now to the shared outcomes assurance group that Jo has already mentioned to now pick up that oversight, delivery and monitoring and bring clear roles and responsibilities to the process going forward. I think that, coming back to again that wider leadership point as well, as I have said before, the national strategy for economic transformation sets out that much bigger vision and we envisage that the shared outcomes assurance group will sit within that wider governance structure and delivery structure taking oversight right up to very senior levels of ministers. I am surprised that it seems to be a bit of a downplaying of the role of the sponsor teams. It says here in the Auditor General's report in paragraph 19 that, over time, the Scottish Government lacked clear oversight of progress. Would they not have relied to some extent on the sponsor teams to be giving feedback during that period? Who would have been giving them that feedback that did not happen so that they lost oversight? Sorry, Mr Beattie. I am just trying to follow you. Feedback to the people running the project? Feedback to the Scottish Government. It says that the Scottish Government lacked clear oversight. I would have expected that there would have been feedback to the Scottish Government from at least two sources, one being the overall management and the other from the sponsor team. I think that we would also look at the Skills Alignment Director. We may come on to that in questioning as well, but I think that there was progress that the Skills Alignment Director was able to make. I cannot give you chapter and verse in terms of what reports were made available to whom during this period. I suppose that, if the Auditor General was able to ascertain that the Scottish Government lacked clear oversight of progress, then it must be evident some place and identifiable as to why that happened. I think that I would come back to the challenges and difficulties that we found in putting in place a governance structure that works. If I take the situation now, I think that we have got something where it will become very clear, very quickly, whether things are on track or not. If I may just give you an example of that, the outcomes group meets again next week and we will be wanting to have reports from the three pathfinders that are telling us about progress—not least because this process and the Auditor General's report have sensitised us, in particular, to the risks and the challenges that are involved in here—we will be looking to see really clearly what progress we are making. Back at different points in this, we haven't had that level of clarity or assurance that comes from the governance. I think that it does come back to the governance and having that clearly in place just as the Auditor General says. The sponsorship team may have a role to play and I'm reluctant to single them out as an aspect that hasn't particularly functioned here when actually there's a bigger question about having in place success measures and governance that you can really rely on. Well, let's leave that aspect for the moment, but moving on to clarity of direction, purpose, outcomes, how are the various parts of the Scottish Government collaborating in order to agree the strategic intent and intended outcomes for skills alignment? Well, again, I think that formally it comes back to the process of work that we've been involved in for this outcomes framework. The outcomes framework sets out the areas of collaboration now that will lead us towards greater alignment. Again, it's the three pathfinders and the two elements at national level and that's jointly being jointly developed by the teams under my area and also that of Eleanor Mitchell and Helena Gray. So the teams have been working very closely on that as the latest expression of that. The teams then also alternate chairing the governance group that meets next week that I was referring to and there's joint work that happens under the auspices of the economic strategy as well with the three aims in terms of skills programs. Helena also sits as part of my wider DG family leadership team and reporting into the cabinet secretary of education and skills on the aspects that play into that. So I think there is good practical, frequent and consistent work that's done between the two teams and I think that the outcomes framework now is the overarching set of programmes that constitute the work that we need to do to improve skills alignment and we're working really well together on those. So just continuing on this, how does the Scottish Government plan to develop its letters of guidance to SDS and the SFC to reflect the expectations that are expected of them working together on skills alignment? So the letters of guidance are in their final stages, we expect them to be issued on the 31st of March and they will reflect both the ambition and the economic strategy and the outcomes framework and indeed will append the outcomes framework to the letters and be really clear about the activity we expect and the investment we expect each agency to make in taking forward the success of those measures. I don't know if either colleagues want to add to that but that's essentially the long and short of it, Mr Beattie. Given that those letters are due fairly soon, perhaps it might be possible to share them with this committee, that would be useful for us to see. Yeah, absolutely, yeah, delighted, yeah. So how are you working at the moment with SDS and SFC to agree how they will work together because there have been issues in terms of culture and the way they work? How are you going to agree how they'll work together to deliver the shared outcomes? Yeah, so as I said before, I think disagreement can be healthy in a system and that can be a creative tension but I think when you reach to the levels that the Auditor General is alluding to in his report, that's something that you wouldn't want to see within a system. There are really regular meetings, as I said earlier on, between the chair, chief executive, of both agencies and the ministers. We have a single minister now responsible for both agencies. They're meeting every six weeks. There are the bilateral relationships between SFC and the minister and SDS on a minister and I think they are on a fortnightly basis moving to monthly from April. There are, we attend, board meetings. I'm at the SFC board myself tomorrow but I think given that this framework and the projects that are sailed out in them are really the top priorities for that collaborative activity and understanding better alignment. It's really the governance that underpins out that I described earlier on. So the two monthly meetings of the group where both organisations are represented and also the coming together with the minister. I think what's different now is that we have those success measures that are clearly set out as well in the framework. So again, having met both chief executives earlier in the week, I detect that they're absolutely committed to that. I think there's a range of good collaborative activity that they have been undertaking. That's an on-going part of how they work. We mentioned the shift of the apprenticeship funding to the SFC recently. They need to continue working with SDS on the development of that. I think they are doing that effectively and there's a range of other areas where they collaborate. I think that we have now got that clear governance of the alignment process. We've got a minister responsible for both organisations and we've got a regular and consistent part of engagement both between chief executives, the chair and indeed both boards. Given the past history over an extended period of, perhaps I wouldn't call it a clash of cultures but certainly a divergence in views as to line of march for the future. How has that been overcome? Why is it different now? Have people changed? Have heads been knocked together? How has it been a result? I think partly it's overcoming or indeed moving away from some of the challenges that were there in the period after 2017. If we take data sharing as an example, that was something that was necessitated in the 2017 process but at a scale and implying a level of complexity that was really, really challenging and I think it did introduce difficulties into that relationship. So as an example, the SFC were asked to share around five million student records going back over the course of a decade and I think they found a way of being able to make that process work but it wasn't easy because there were issues around safeguarding. There was the ability of one organisation to be able to interpret the data from another for the purposes that they needed and you could imagine in the context of that overall process that giving rise to some difficulties along the way but I think the progress that's been made in something like data sharing which is in a much better shape when we're on the verge now of just signing off the latest annual review of that. I think you do understand each other's perspectives and I think there is now a positive basis on which to continue this collaboration. I think also being clear about the constraints of the alignment model in the way that we have and focusing on the three pathfinders and the two national projects rather than saying it must be everything all at once I think has further given that focus but the government it's incredibly important to us that people work effectively together you know this is as the convener said earlier on these are big sophisticated organisations it matters to us it matters to the chairs the boards and the chief execs that these are positive relationships I think we've now got the things in place that make that a much more likely prospect. Just one last question how is the Scottish Government ensuring that the objectives for skills alignment are consistent with other national strategies and plans for example future skills action plan and the coming national strategy for economic transformation? Thanks Mr Beattie so again the framework was very much drawn up with with those things in mind I may turn to one of my colleagues just to talk through it a bit more detailed and who wants to pick that up Helen? Yeah I'm happy to pick that up and Adam might want to say a bit more on the future skills action plan as well but but as I said before the national strategy for economic transformation really sets out that that bigger vision and those those three programmes underneath it and the shared outcomes assurance framework that we've already talked about really sits as part of that wider governance structure that wide vision underneath the national strategy for economic transformation so we're very much about ensuring that it is it is all aligned and and that skills alignment piece is at the heart of the work that we're doing for the national strategy for economic transformation as well Adam I don't know if you want to say anything about the future skills action plan in particular? Yeah so in in terms of the future skills action plan this was originally published in 2019 and one of the four aims in the action plan was increasing system agility and employer responsiveness so a direct alignment with the with the skills alignment agenda we're talking about here we are we are currently updating the future skills action plan to ensure it's consistent with the national strategy for economic transformation and other strategies. I'm now going to invite Craig Hoy to ask a series of questions Craig. Thank you convener and good morning Mr Mr Griffin. Before we go into some issues of oversight and governance can I just echo the convener's remarks about the late emergence of the shared outcomes framework? You have to some extent in this session cut the rug from under our feet because we haven't had time to study it but yet you are referring to it in almost like Chamberlain sort of saying here it is piece in our time between these two bodies. I think obviously looking yesterday at the announcement around the independent advisory report into education this is the sort of slap-dash last minute in a considerate way that the Scottish Government is operating it is really no surprise perhaps that we're increasingly seeing reports coming forward to this committee that identify serious and systemic failures in the operation and delivery and governance and oversight of key public services. Before I turn to the questions that I've prepared which I think to some extent are now in some respects redundant I just want to go back to the issue of leadership because I don't think you fully answered the question from Mr Beatty. Let's just look at the second key message of the report it says that the Scottish Government has not provided the necessary leadership for progress many obstacles remain and present risks to progress and the Scottish Government now needs to take urgent action to realise its ambitions for skills alignment. Don't forget we're talking about £2 billion of taxpayers' money here we're talking about two very large organisations SDS and SFC and I'm looking at exhibit one of the organogram here and at the top of the tree is the Minister for Further Education so are we talking in and I don't think you answered this in terms of this failure of leadership is this ministerial is it institutional or is it systemic or is it a combination of all three? Thank you Mr Hoy. Again because you raised it if I could reiterate my apology clearly the last thing I want to do is to undercut or undermine the ability of this committee to hold us to account in this session and I do apologise unreservedly for the later arrival of that document. I noted in his report the order to general said it isn't it isn't possible to be able to say this aspect was around ministerial this leadership this aspect was around official leadership the recommendations are directed towards the government and the government accepts those recommendations. I think certainly from a civil service point of view there are certainly things that we that we learn from this and I think we've we've spoken a little about Governments we may want to come back to that and around data around clarity of outputs and I think another thing we haven't touched on yet is some of the churn in terms of the staffing including at senior levels now in Covid exacerbated that I agree with the convener Covid is not the only reason there are other factors here we hold our hands up to that I'm not claiming that but there are for sure lessons in how the civil service needs to operate here. I think we are showing leadership at the moment I think the move to and again I appreciate your comments about the framework makes that so limited your ability to sort of cross-example me on that is is limited we'd be happy to provide further evidence in due course but with me I'll help you back yeah well indeed mr ho of course absolutely we'd be we'd be absolutely delighted to do that but I think that the the that is really our leadership response to this to this critique it is an attempt to reiterate the vision I think we set out really clearly the activities that are underway the success measures that are associated with those the outcomes we expect to see and I think we do now have governance that combines both the ministerial and the official level perspective bringing together agencies that meet on a regular basis that gives me much more reassurance that we're on firm ground if I could if I could maybe share with the committee one area where I think continued leadership will be needed and that's around pace so I think these pathfinders are all well and good they need to move to deliver things that are of real value and I think I personally will be in Aberdeen the week after next to meet with leaders from the northeast pathfinder to hear a bit from them about the pace that's involved we'll be getting reports to the outcomes assurance group when it meets next week we'll be scrutinising those carefully again and I also plan to visit colleagues in Dumfries to evaluate progress on the south of Scotland initiative so the report is quite right that leadership must be there it's an essential part of making a system work and and we are committed to doing that okay just to turn now in in some detail to governance and oversight I accept that you went in position when we go back to 2017 when the Scottish Government established the enterprise and skills strategic board the ESSB the view is that the of the general is that the SB lacks the authority to hold the skills agencies to account so then in 2020 the Scottish Government proposed the new skills alignment assurance group SAG to replace those governance arrangements and then in 2021 the Scottish Government wound up the SAG and then here in 2022 we've got the shared outcomes assurance group it does strike me to set an extent we've got more groups than the neuro vision and more directors than Hollywood here but this document may now be the the the one that that works so could you say perhaps just a little bit about looking back at that history what issues affected governance and what steps the government is taking is is this document the one that will get us the point that you have sufficient assurance that the governance the governance and oversight arrangements are in place thanks mr toy so let me ask Helena to to come in and speak to the ESSB history I think the things are interconnected and I think as the auditor general says governance is one aspect of this but so is being clear about what you're trying to achieve and it goes back to the framework where I think we do do that but it also comes back to having a sense of pace and being clear about what you want to do by then because otherwise the governance is a bit of a sort of abstract notion really you need to have a clear kind of roadmap which I think we we we now do in the governance is much better but Helen I think you've been looking a bit more at the history of this yeah happy to happy to come in again and I suppose really just to repeat comments that I made previously around the ESSB I think we're looking back on it now except that as a non strategy statutory body it it sort of struggled with that direct governance mechanism and instead had to rely on on other forms of influence and support and guidance I think that the ESSB chair did raise some concerns around how progress on skills alignment was being monitored and and as those were discussed then agreed with my predecessor to set up the and co-chair the skills alignment assurance group that was SAG that was established in 2021 as a short life working group to really bring some support to the scoping and development of the skills alignment projects and provide that assurance to the strategic board and ministers as I said it met six times in 2021 to do that and then as the pathfinders and the projects sort of commenced it that group wound itself up because it was a it was a short life group just to help with that that scoping and the decision was taken to move to the strategic outcomes assurance group that we've referred to previously with that framework those clearer roles and responsibilities now set up so obviously a slightly turbulent time but I think we now look to that assurance group to provide that assurance and clarity going forward okay obviously you would have looked at both the directorates and the SFC do you believe they've got sufficient internal staffing capacity to support the skills alignment activities that's probably one for me to pick up Mr Hoy so we have agreed with SFC to increase their capacity again I think that this is a reasonable finding from the order to general and talking to the chief executive just yesterday I know she has plans to recruit some 20 posts in the course of this year and another 10 after that and some of those posts will be people whose roles are directly associated with this process of skills alignment so there'll be leads for the pathfinders I've referred to there'll be investment in data analysts and investment in systems as well and one of the issues around data sharing was you know there's a need to improve and modernise the systems on which the data is being held as well so I think there's point about SFC capacity is also one where we've taken steps to improve the situation thank you very much thank you Mr thank you Craig can I now ask Willie Coffey to come back in he's got a series of questions about monitoring and reporting arrangements Willie thanks again to convener and hello to everyone again Joe I wanted to look ahead to ask you some questions about future monitoring and reporting of performance and during the discussion there I've had a wee look over the shared outcomes framework and there's a wee section near the tail end of it that talks about reporting and how you'll do it but it doesn't have a lot of detail I'm afraid to say paragraph 19 at the tail end of it says that reports will be produced in a kind of dashboard format that will be suitable to be provided to the minister and so on so could you tell us a little bit more about how you plan to report on progress against all the outcomes in some kind of format that is usable by for example members of this committee and anyone else that wants to have a look to see how performance is developing of course mr coffey I may invite Helen Webster to come in on issues been working on the framework and the group and been thinking about this I think the first thing I'd say is we're probably at a relatively early stage obviously the framework was just completed earlier this week yesterday and and it sets out the stage that we're at at the moment and I think we've got a much better kind of system here that goes on the national outcomes all the way through to specific indicators and the things that we want to measure as a result of these pathfinders we will get an update from the pathfinders at the assurance group next week but my understanding is certainly on the regional pathfinders they're not there yet in terms of being able to generate the specific success measures that we want to see again I'll refer you back to my comments about pace and I think there is a role for the government to ensure and show leadership that that pace is being there so when I have my discussions in the south and in the northeast as well these are questions that I'll be asking around the data sets that we will need I don't know Helen is there anything you'd want to add to that based on the work you've been doing? Thanks Joe. No I think that that covers it probably at a macro level so as Joe has said that the meetings that are now established at official level will meet every six weeks and then report into the minister in two weeks serial meetings with the agencies two weeks after that and we have in agreement with everybody that sits on the shed out from the assurance group mapped out a forward look of when we would look to do a deep dive on each of the projects that are captured within the shed outcomes framework and would be seeking papers and reports from the agencies on progress on that activity in advance of that meeting. The shed outcomes assurance group that is chaired on rotation by Helena Gray and by directors in advanced learning and science would then use that meeting to a deep dive on the issue in focus and interrogate against the reporting outcomes that agreed and then if there was anything that needed to be escalated that is where that accountability directly to the ministerial meeting follow. If I could add Mr Coffey in terms of intent I think your point is exactly right that the data that we want to collect here has to be meaningful it has to reflect action on the ground and improvements in a way that further align skill provision for all the reasons that we set out in 2017 and we irritated again in the economic transformation programme so that is our aim we're not there yet and I would certainly hope that they're also in a form and a format that could be accessible for example to to this committee so that is absolutely the intent we are not there yet we need to show leadership in ensuring that there's pace in behind that progress. That's appreciated Jo I mean I make the point really because a report that would go to would be tabled for a ministerial meeting would probably not be the same I would say as a report for members of the parliament you know constituency and regional members who are interested in their their own local part of Scotland and how this is developing and and I just finally say again that how will I be able to tabs on progress with this as a nearsher MSP over the coming years to see for myself whether I think you're making that progress so it needs to be in a readable and adjustable format for us too I think and I hope you'll take that on board and develop it in that way. Absolutely Mr Coff, I completely take that on board. I wonder as well if we could take away an action maybe just to write to you very specifically about Ayrshire and the ways in which you as a member can access the work that's happening at a regional level there already as I explained earlier on this is a dynamic system with activity at different levels what we're talking about here are measures to improve alignment being driven from the national but there will be plenty of vibrant work going on in Ayrshire as well and we can take away an action to write to you and share with other members of the committees it will be an example for others to see as well exactly how you would access improvement and data at the Ayrshire level as well. That's great, thanks very much for that. Thanks convener. Okay thank you very much I think that that concludes our questions for this session I think I said at the start it was a section 22 report it was a section 23 report but contains some trenchant criticism nonetheless and I think Sharon Dowery referred to the fact that this is apprenticeship week and there's been numerous references to last week's publication of the national strategy for economic transformation which did say a skilled population is key to business productivity and economic prosperity so it's for these reasons why this is important that we get these things right and we we do not preside over some of the pretty fundamental and I think systematic is a word that's been used wisely this morning failures. I suppose the only other point I would make is that we will of course have an opportunity to look at the shared outcomes framework document in due course and we shall do that and I'm quite sure the Auditor General will want to have a look at it as well and so the only thing I would say to you Mr Griffin is that we will do that and we may well come back to you with you know with further questions which leads me to my final point which is that if we'd known about the timing of this important document that's absolutely central to the discussions we're having this morning we could have rescheduled this evidence session so that we could have taken full account of it and I hope that that's one of the things that you and your team will think about leaving this meeting but if I can draw the meeting to a close and thank you Director General for your evidence this morning thanks to Helena Gray, Adam Reid and Helen Webster who joined us online and I would now like to draw the public part of this morning's committee meeting to a close. Thank you.