 The next item of business is a statement by Jamie Hepburn on independent review of the skills delivery landscape. The minister will take questions on the issues raised by his statement thereafter, so there should be no interventions or interruptions. I call on the minister for around 10 minutes. Presiding Officer, there are few areas in government that are as important as equipping people with the knowledge and skills they need to thrive in life and the world of life. It is key to our vision for delivering a strong resilient economy in society as people and their wellbeing at its heart. Today I am announcing our intention to initiate an independent review of the skills delivery landscape. Scotland performs well in post-school education. The most recent available data show that compared to EU countries, Scotland has a highest share of population aged 25 to 64 years with at least tertiary education. The Scottish employer perspective survey shows that the majority of employers are satisfied with the skills levels of those moving to work from education. In 2021, 68 per cent found school leavers recruited to be well or very well prepared. The figure rose to 78 per cent for college leavers and 80 per cent for those transitioning from university. That speaks to the fact that the foundations of our system are strong. It speaks to the work of our universities, colleges, training providers and community and learning development sectors. It speaks to the dedication of those who are in training in post-school education and the educators and trainers who support it. It speaks to the commitment and partnership working of our skills agencies, Skills Development Scotland and the Scottish funding council. Presiding Officer, I always know that the challenges ahead of us are significant. Demographic change, digital transformation and automation, shifts in sectors of our economy and the need to work towards net zero speak to the need of a skills system that meets the demands of an ever-changing world. We need a system that is simple, people focused and built on effective collaboration across sectors and regions between the public sector and business and across our public bodies. Members will be aware of the work under way to improve Scotland's school education landscape and following the Scottish funding council's review of coherence and sustainability, the development of the purpose and principles for post-school education research and skills development. Before I move on to the details, I want to explain why it is necessary that we complete this picture with a review of the skills delivery landscape. The National Strategy for Economic Transformation gives us a real opportunity to put in place an economic system that works for people and places across Scotland. Priority projects will adapt the education and skills system to make it more agile and responsive to economic needs. They will support and incentivise people and their employers to invest in skills and training in their working lives. They will expand Scotland's available talent pool to give employers the skills pipeline they need. Our system needs to respond to the increasing numbers of people we expect will require upskilling and reskilling. As I have laid out, it needs to adapt to shifts in our economy and workplaces as a result of digital transformation, the demographic change of an ageing population, an ageing workforce and the imperative to respond to the climate emergency and work towards net zero. So, too, must we support employers who have welcomed EU workers now struggling post-Brexit to fill vacancies. This is disproportionately impacting on sectors such as health and social care, tourism and hospitality, agriculture and food and drink. The report by the Auditor General in January this year on planning for skills focused on progress and better aligning skills in education provision to the needs of the economy now and in the future. This report laid out how government and our partners could do better in collaboration. We have heard, we have reflected and we have acted. We have published a shared outcomes framework that sets out the detail of the collaborative project that has been undertaken by SDS and SFC. Along with my regular engagements with both agencies by LATV and collectively, I have established a shared outcomes assurance group to oversee progress on implementing them. This has helped to identify areas where we believe further clarification about roles and responsibilities is desirable, to ensure that duplication and unnecessary complexity in the landscape are removed, to ensure that we are creating the right conditions for collaboration and to ensure that we are creating a system that is more straightforward for people and employers to access. I am acutely aware that government must provide the leadership to ensure that our skills delivery public body landscape remains effective and efficient. As a role I embrace and I am committed to driving forward with. I am also aware too of the importance of making decisions based on evidence. That is why I am asking for independent advice on how the landscape could be adapted to deliver maximum benefit for Scotland's employers, places and communities but above all for Scotland's people. I want to be clear from the outset, those who work in our agencies can be assured that this is a review about what we need and in the future it is not a review of performance to date and nor is it about seeking to remove or replace SDS or the SFC. SDS was established in 2008 and over the last 14 years has delivered key government priorities in relation to Scotland's apprenticeship programmes, national training and employability initiatives, sector and regional skills planning and the national career service. I greatly value the work they do. In my recent visit to Inverness with the strength of the partnership work they undertake at a local and national level taking a specific problem in the hospitality sector, SDS has worked with industry, the local development and the young workforce group and local schools to put in place training support for young people to move into jobs. That is exactly the type of activity we need to see more of. I am grateful to all staff for their working commitment and to the leadership of the board and senior management teams at both SDS and the SFC for the work they do day in and day out to support the many successes of our skills system. They have my sincere thanks. We know that we face significant challenges in the economic, social and institutional context which have emphasised the need for our approach to skills planning and workforce development to be more clearly embedded in and aligned to our wider education system. We recognise the need to ensure our post-school skills and education provision is part of a single holistic ecosystem which can respond effectively to the needs of industry and learners while also delivering wider societal benefits. The purpose and principles for post-school education and skills will help to drive this vision. This equally applies to the need to support the transitions learners make through the senior phase, on-going work and educational reform and the careers view will help to deliver this alignment. To achieve this end we must have the right structures, governance, responsibilities and balance of capacity across our public bodies. It was with this ambition to join up resource to the best effect that I am initiating this independent review. Its purpose is to make recommendations on how the skills delivery public body landscape could be adapted to drive forward our ambitions in the national strategy for economic transformation and our response to the SFC review. This is a review that will not have an exclusive focus on Skills Development Scotland alone but will give particular consideration on its interface with and role within the wider skills system. The review's terms of reference are being published today and will be freely available for all members of this Parliament and anyone else interested to see. The review starts with no preconceived notions nor predetermined outcomes. It will be independently led to ensure that this exercise is robust and informed by evidence that it gathers. I am pleased to set out the parent today that I have appointed James Withers to lead this review. James Withers will be known to many of us being as he was until recently the chief executive of Scotland food and drink. He is a wealth of experience and industry that will bring objectivity, creativity and rigor to the review. James's remit will be to engage widely with stakeholders across the skills and education landscape including of course the staff of our agencies to inform his recommendations and to report to Withers by Spring 2023. He is not being asked to revisit work already done. This review will take account of and not seek to duplicate wider reform recommendations and review work that is already underway including the outcomes of the new report or those arising in the Hayward review nor will it look to revisit the steps we've previously set out for taking forward recommendations of the SFC review of coherence and sustainability and the career review that Graeme Smith has been leading on. James will focus on areas such as the design and delivery of apprenticeship programmes regional and sectoral skills planning and employer engagement in how SDS and the SFC interface with one another to ensure we achieve a more aligned skills system. He will look across the public body and related advisory landscape to deliver recommendations which will ensure that the wider skills delivery public body and advisory landscape are equipped to respond to the needs of our society and economy. We start from strong foundations but looking ahead there is more to do if we continue to aspire to deliver world-class support and interventions across the wider skills landscape. The skills delivery review will be an important step in ensuring that we have in place a public body landscape that supports an agile people-centred system helping individuals to improve their skills to reach the potential and ensuring employers can access the skills they need to flourish. Thank you very much indeed, Mr Hepburn. The minister will now take questions on the issues raised in his statement. I intend to allow around 20 minutes after which we will need to move on to the next item of business for members that have not already done so. Those wishing to ask a question should press the request to speak buttons as soon as possible and I call firstly Pam Gosall. Thank you Presiding Officer and I thank the minister for advanced sight of his statement. It is vital that we ensure Scotland's young people are equipped with the skills our changing economy will need in the coming years. In June, the Enterprise and Strategic Skills Board called existing skills structures too complicated. 10 per cent of Scotland's working age population have low or no qualifications. 23 per cent are economically inactive and businesses are increasingly short of skills. On top of that, there has been a £53 million cut to the employability spending. Given all of that, I have hoped that today's statement would outline bold reforms to the Scottish Government's approach to skills delivery. Instead, we are looking at a mere rearranging of the deck chairs. This review will need to bring about real structural changes in order to see genuine improvements. Can I ask the minister, with the independent adviser not reporting to the ministers before the next spring, what is the Scottish Government putting in place now to address the array of skills shortages that employers are already struggling with? Will he ensure that this review finally tidies up the confusing array of different bodies that currently make up Scotland's skills sector? First of all, I thank Pam Goswell for her questions. I agree with much of what she had to say. Of course, she referred to the comments of the Enterprise and Skills Strategic Board. Part of the rationale of this review is to take head-on and consider some of the complications that people report around the system that we have in place just now. That is the purpose of the review, to come forward with recommendations. I am surprised to hear that she has suggested that it is in some way a timid approach and that it is about rearranging the deck chairs, because as far as I am aware, given that I have appointed them, I am not yet aware of having received the recommendations from James Wethers. I am not going to second-guess what he recommends to us before I comment on them. Some of the points that she makes about attainment are, of course, issues for concern. We want to make sure that we are doing more to support those who have not achieved the level of qualification that they require to get ahead in life. Let us also reflect on the successes of our system. Let us reflect on the fact that in 2021, 95.5 per cent of school leavers were in education, employment training three months after the end of school year. That is a record high since consistent records began in 2009. It is reflecting the fact that the level of tertiary education qualification here in Scotland is among the highest and indeed the highest of any European country ahead of the rate of the UK. Overall, let us reflect on the fact that we have the fourth lowest youth unemployment rate in Europe ahead of the UK. Let us not talk down where we are, but let us recognise that there is more to be done. That is the purpose of this review. I look forward to seeing what it recommends and then we will consider how to move forward from there. I thank the minister for advance sight of his statement. At a time when we are experiencing both labour shortages and real wage suppression, I think that measures to look at how we maximise the talents and capacities of our people, but most importantly, maximise their wages is critically important. There are long-standing and enduring criticisms of the regime in Scotland around flexibility and the responsiveness of the skills regime. Indeed, in January Audit Scotland stated that there needed to be urgent action. My one criticism above all else is to whether or not this really represents the urgent action that Audit Scotland was calling for. Three key questions. First of all, I would just like some clarity on the scope of this review. The minister applauded the performance of SDS and SFC. There is certainly the implication that the scope and footprint will be looked at. Is this a precursor to a merger of institutions within the education and skills sector? Secondly, I welcome the appointment of James with us. He has a depth of experience in food, drink and agriculture. I would ask how those with experience of the skills and education sectors and other industrial sectors will be drawn into this review. Finally, how will flexibility be looked at in this review? Many businesses report that they find it difficult to access skills that very often it is a one-size-fits-all. Even implementing new apprenticeship frameworks can take up to three years. How will flexibility be reviewed and looked at in the scope of this work? Will those areas be within the scope of work? Again, as I have just said to Ms Gosland, I am not going to second-guess what James Withers will come forth and recommend, but he is able within the parameters of the terms of reference that we have established to look at those areas to set out recommendations to ministers to consider how we can make improvements to the system. Similarly, I have heard and know that there are concerns about flexibility, the adaptability of our system. Again, that is part of the reason for the rationale for having this review. Candidly, yes, the Audit Scotland report is part of the catalyst also for taking forward this review. I do not want him to be under the illusion that this is the first piece of work that we have taken in respect of the review. I referred already to the shared outcomes assurance group that we have set up, working to a shared outcomes framework, which is designed to make sure that skills in Scotland and the Scottish Founding Council are working much more collaboratively. A lot of work is under way, a lot of good work is under way and we will be happy to share more information about that. In terms of drawing on others with the experience of industry and so on, that will be absolutely incumbent on James Withers to do that, but I am not going to give this an independent review and I think members would directly expect it to be an independent review. It will be for him to determine how to do that. Of course I have expectations that he reaches out to all those with an interest on these matters. Perhaps the most fundamental question he asked is, is this a precursor to the merger? I can have a very straightforward and simple answer, no. Paul McLean to be followed by Sue Webber. Thank you, Deputy Presiding Officer. During the summer, I travelled and visited many businesses in East Lothian. The thing that came up all the time was labour shortages. The ONS recently forecast that 1.3 million people had left to UK workforce due to Brexit. Scotland's percentage share would be between around 105,000 and 125,000 in context. That is around about 2,500 people have left in East Lothian. Can I ask the minister what analysis or how much this issue will be carried out in regards to labour shortages and the skills delivery outlook in Scotland? That will form part of the consideration. Indeed, that already informs our considerations around the skills system. We already look very closely at what the labour market information is, what the trends within it are indicating, as well as understanding the wider social demographic changes that are taking place as well. Things like the Scottish Employer Skills Survey, sectoral and regional skills assessments from SDS are important in that regard. That can help to inform the review that James Withers will take forward. We are also making the point that we have not rested on our laurels. There is other work underway. There is already a group being established, which I will be chairing with various ministers with skills, to ensure that we take a cross-government approach to those matters. One of the things that we will do as a group is to carefully consider any findings from the review. A recent Audit Scotland report highlighted the Scottish Government's inability to settle differences between the Scottish Funding Council and Skills Development Scotland. At the committee yesterday, it was even suggested that the two organisations might be merged. The minister has stated that this is not about seeking to remove or replace SDS or SFC, and the independent review appears to focus very much on the interface between the organisations. So not wanting to prejudge the outcome of this review, can I ask the minister, does he agree that the skills landscape is currently confusing within a different array of agencies that fail to properly integrate with each other? Will he ensure that the review changes this? Can indeed, if James Withers recommends wholesale change, it will indeed be implemented? Minister. You will hear me repeatedly saying that I am not going to pre-empt what the recommendations might be. You will need to see what the recommendations are, reflect on them and then move forward from there. In terms of the point that Ms Webber makes around the failure of the system to integrate, I wouldn't say that there is a failure to integrate. I would say that it could do it better. That is something that we have recognised. We have recognised that across a range of initiatives that we have taken forward. Again, part of the purpose of this review is to consider precisely that question, how can we continue to improve the alignment of provision between different agencies, between different employers? Fundamentally, I think that we will get more for our economy, our society and above all for our people that we can achieve that aim. Jackie Dunbar to be followed by Colin Smith. Thank you, Presiding Officer. As the minister will be aware, one of the Auditor General's key recommendation of the skills planning report was providing clarity on the governance and oversight arrangements of skills alignment activity. How will this review achieve this? Minister. Well, that goes to the very heart of what the review is going to look at. That is at the core of what it is trying to do. As I said, we have already taken steps to address governance issues, oversight issues at Ministerial and Official Level. I have referred to the shared outcomes framework that we have established for both agencies to work towards. The shared outcomes assurance group is making sure that that work continues in the positive direction. I can say that that is happening, but of course the review can look at how we can build on that. We can further support this work. My recommendation for the review is that the recommendations that it makes will help to further clarify the delivery landscape and I look forward to receiving those from James Withers in due course. Colin Smith to be followed by Secretary Nick Allan. Thank you, Presiding Officer. When the Scottish Government's Enterprise and Skills review reported that it recommended the creation of a new vehicle to meet the enterprise and skills needs of the south of Scotland, where the enterprise body was delivered, the skills element was largely dropped and remained with Skills Development Scotland. Will this review properly recognise the regional variations that often exist when it comes to our gap in skills gap and whether the roles of our agencies should actually be strengthened to deliver those skills programmes in local areas that actually meet the needs of the local businesses and workforce in those areas? Minister. On Mr Smith's latter point again, that will be for James Withers to consider as part of any recommendations he wants to make working to the terms of reference that we have published. What he will also be able to do is draw on the strength of information that exists already. One of the great areas of work that Skills Development Scotland undertakes is the regional skills planning that it looks at. Of course, very much in line with the agenda of alignment, one of the pathfinder projects that is being undertaken by the Scottish Funding Council, looking across the range of academic institutions is actually in the south of Scotland area, with the south of Scotland enterprise agency being fully involved as part of that process as well. The direction of travel is one that I very much agree with. Tally is very neatly with our alignment agenda. In terms of any recommendations that James Withers wants to make, then that will be for him as part of the review. As I say, I look forward to seeing what he has to say. Stephanie Callaghan to be followed by Willie Rennie. Thank you. Can the minister outline how the independent review will assess the progressive green skills development across schools and higher education as we are moving towards transforming our economy in society? We have those set out in the climate emergency skills action plan. We need to ensure that we achieve the mix of skills and job specifications that we need to thrive in an 80 economy. In terms of the issue of around assessing progress, I think that it should be clear that yes, of course, there needs to be an assessment of how we best go around fulfilling the mission of ensuring that people are provided with the skillset that they need to contribute towards moving towards net zero and the climate emergency skills action plan is very much part of that. In terms of assessing progress, I think that it should be clear and I think that it is important to be clear that this review is not about measuring performance or progress to date. It is looking ahead about ensuring that we have the right structures, Governments, responsibilities and balance of resources across the system to deliver our ambitions and, of course, one of the key ambitions we have is net zero. We have to take people with us in that regard and make sure that they have the skills for that task. Willie Rennie, to be followed by Audrey Nicholl. We support this review. It is needed, but it should not take an audit Scotland report, which is heavily critical of the Minister's lack of leadership in this area to stimulate some action. We are five years on from when it was agreed that the agencies and the Government would work together to sort out this agenda. Five years, so we need urgent action. Yesterday, college principals delivered a really stark message. They said that there were going to be real-terms cuts to college budgets with drastic cuts to staff numbers. How does the Government deliver any skills agenda with that dark future for colleges? Minister. In terms of his point about this, it shouldn't have taken a report from what it's got to prompt us into action. First of all, that's not the only thing that's prompted us to consider undertaking this review, which I'm very glad he welcomes. I have to say, if we hadn't done this, I would rather imagine Mr Rennie saying that you're not responding to the report of Audit Scotland. In terms of the recommendation that we made five years ago with the best one in the world, I'm sure that Mr Rennie is aware of some of the fundamental challenges that we have all faced in governance being no different in that regard in having to gear its attention towards responding to other situations such as Covid-19. But the work contingent, there's good work underway, and this review is fundamentally about enhancing that, making sure that we have before us a system that can be that flexible, responsive system that Mr Johnson spoke of, which I think fundamentally is something that we all want to see, and colleges are going to be a key part of that. Audrey Nicholl, to be followed by Ross Greer. Thank you, Presiding Officer. As the Minister knows, the renewable opportunities in the north-east will require a workforce with skills and qualifications across a wide spectrum, including STEM, and I welcome the focus that will be given to sectoral and regional skills planning within the forthcoming review. However, historically, girls and women have been underrepresented in STEM courses and careers. Therefore, can I ask the minister to confirm what consideration will be given within the review to address this issue and ensure that both the STEM and energy sectors are diverse and prosperous? Minister. Of course, that's an outcome that fundamentally I think we would all agree with us being important. We know that this is an important sector. We know that it requires skilled labour. In that sense, no sector can afford to overlook any cohort of the population in that regard. The issues that Ms Nicholl identifies are important ones. As I have set out in my statement, the context of this review is about adapting to the challenges of the future labour market. The review will look at how we can better ensure that we have in place a public body landscape that supports an agile people-centred system helping individuals to improve their skills to reach their potential. In that regard, it must reach out and make sure that those underrepresented areas of our labour market can be properly supported. I wouldn't want it to be thought, though. There isn't work under way. Education Scotland already looks at this as an area SDS is working to an equality action plan for apprenticeships. There is also an issue of the Scottish Apprenticeship Advisory Board. There is work under way, but, as we move forward, it will continue to be of that most importance. Ross Greer to be followed by Alexander Stewart. Thank you. This is a welcome review and I particularly welcome the emphasis on meeting the skills needs of the net zero agenda. Can I ask how that will be taken forward in the review? For example, will environmental NGOs and think tanks who might have substantial needs to contribute in this area but have not necessarily been the usual suspects in skills consultations in the past be involved and have the ability to contribute? Minister. I am not going to set out and steer James Withers in terms of how he takes forward the review, but what I can say is that there is that explicit reference as to the imperative to respond to the climate emergency to make sure that we are reaching our ambitions, fulfilling our ambitions in respect of the net zero targets that we have. We have to make sure that people have the skillset to achieve that. There may well be organisations that James Withers reaches out to. I am sure that he will be watching this statement and the questions being asked and taking on board what every member is also contributing today. Alexander Stewart to be followed by Co-Cup Stewart. Minister. Will the review look at improving skills support for small and large businesses? Will the Scottish Government consider introducing an export monitoring scheme as we have previously proposed? Minister. Well, on the latter, I am of course happy to consider any proposition. That will not form part of this review. I should be clear. In terms of the needs of small employers, they are of the utmost importance. There has already been reference to some of the complexities that are sometimes reported in the system. Small businesses in particular will often report that. I am alert to that. I am acutely aware of that. That will be part of the considerations that I am sure James Withers will be giving as he takes forward his review. Fundamentally, what we need is a skill system that is geared towards supporting our social and economic ambitions, supporting employer needs and, above all, supporting the needs of our people. Co-Cup Stewart. Thank you. The minister recognised the great progress that has been achieved by our skills agencies, both SDS and SFC. What assurances can the minister provide that the review on us today will not impact on the excellent service delivery of our skills agencies? That is an important question. I am glad that Co-Cup Stewart has raised it. First of all, hopefully I was clear enough. If not, I will be clear again. I am enormously grateful for the leaders and staff who work in both SDS and SFC. Indeed, in our wider skills system. What the review is about is how things could look in the future, how we can make improvements. Fundamentally, people out there can be assured that, in terms of the work of the agencies, it is business as usual. They will continue the good work that they do. The work of the agencies does not stop. They will continue what they do, day in, day out, and that is delivering for people in Scotland. We are running a little ahead of schedule. There is a lot of interest in this. I am intending to invite each of the members that have pressed their buttons and wish to ask a question to do so, but they will need to do it briefly and the responses will need to be brief too. First, Paul Sweeney to be followed by Stephen Kerr. Thank you, Deputy Presiding Officer. The minister has stated that this review will not look at the performance of Skills Development Scotland and the Scottish Funding Council. Why has he chosen to exclude these agencies from the scope of the review that has been a disaster in Scotland for the past decade and in the past year alone? Minister. Maybe I was not clear enough that the agencies are not out with the scope of the review. The fundamental point I am making is that it is not a performance review. It is not reviewing the performance of the agencies. There are other mechanisms by which we can review how they have performed and we can hold them to account for that purpose. Fundamentally, what this is about is looking ahead to ensure that we consider better interaction between the agencies and improve our skills system. It is not about looking at what has gone before, it is about looking ahead and what we will need in the future. Stephen Kerr to be followed by Michael Marra. The minister will know that Scotland's employers want transparency on how the apprenticeship levy is spent in Scotland. Will the review include that element? Will that be part of it? Will the voices of business, small and medium and large and the college sector and the apprenticeship levy be heard in this review? Those voices will be an essential part of James Wither's consideration in terms of the apprenticeship levy. He may well be looking for that clarity. I would just like clarity in terms of how it is raised. Of course, the levy was implemented with any form of consultation, any form of interaction unilaterally by the UK Government. Frankly, right now, standing before you, I could tell you who pays the apprenticeship levy if we want some more transparency. Maybe that should start with the UK Government who can let us know who actually pays it and then we can get on to them. I'm very briefly Michael Marra. The Audit Scotland report was very clear that this is about lack of leadership for ministers. Why does it fall to Mr Wither's to provide the leadership and what are we paying the ministers for? Minister. I thank Mr Marra for that very constructive question. I would turn it on its head if I was to stand up here unilaterally and announce what we might be doing. I think that the very first question Mr Marra would be asking me is what was the evidence that we took to make these decisions. James Wither is working for ministers to make a series of recommendations. Ultimately, it will be for ministers to make those decisions, and Pamp told us to account for them. Thank you very much. Indeed, that concludes the item of business. There will be a brief pause before we move to the next item of business.