 Ibu, feltho! The 22nd meeting on education. Our first item of business is an evidence session with college principals and deputy principals for our college regionalisation inquiry. Our first panel are representatives from colleges in multi-college regions, I would like to welcome Anne Baxter, Deputy Principal for Students and Curriculum at New College Lanarkshire, Sue McFarlane, Interim Principal and Chief Executive Officer of UHI Outer Hebrides College and Derek Smeal, Principal and Chief Executive of Glasgow Kelvin College and thank you all for your time this morning. Our session is hybrid today and on this panel, Sue McFarlane, is participating virtually. As you might be able to catch my eye, as I'm looking directly at you, but it might be best if you can put an R in the chat box and when you wish to speak and the clerks will be monitoring that and will bring you in when we can. The committee has a lot of questions this morning, so let's get started. I think first instance if we go to opening questions from my colleague Graham Day, please. Thank you, convener, and good morning to the panel. I just want to start by getting a feel from your views on the extent to which regionalisation has achieved its aims, what positives have come out of it and any negatives that have come out of it. Who wants to start, Derek? Yes, the spirit. I don't need to press anybody. It's interesting coming from a multi-college region. Perhaps we would start with perhaps trying to avoid the conflation between merger and regionalisation now. They were absolutely and extricably linked. There's no doubt about that whatsoever. However, in this particular instance, from my perspective, there were two parallel actions. For example, I can say quite clearly representing my other fellow principals in the Glasgow region that the concept of merger—we went from nine colleges down to three—was a positive process. It was a challenging process. There's no doubt about that, but there were many benefits that came out of that. If we separate the construct of the regionalisation, that is a slightly different perspective. We need to take my position on that or our view and my view in particular within that. It was perhaps a missed opportunity, and that is something that I could expand on in a minute or two. For example, the positives as far as merger is concerned. We certainly established institutions of size, volume of influence. There's no doubt that it resulted in improved working with our universities, both locally and nationally, and in some cases internationally. It certainly got us at the table in many aspects. We had the ability to get, over a period of years, I might add, some efficiencies of scale. However, as we have gone through the years due to not a static but a moving landscape, it is very difficult to discern and identify that. However, I am clear that over the period of time, over the past number of years, had we not merged, we would not be in the position that we were at the moment. However, I will perhaps touch on the future moving forward on that as well. From a regionalisation perspective, what I mean from a missed opportunity is that most regionals, or if not all, regions were established on the boundaries of local authorities, for example. I think that it has been said by some of the participants previously to the committee about the fact that that might not have been appropriate in all cases. When we have single college entities within a region, it may make sense. However, in Glasgow, I think that there has been a missed opportunity for regionalisation, because I think that regionalisation should be more than the local authority boundaries. I think that we are wider than that. For example, my colleagues to my left in North Lanarkshire, we know that there is a pattern of travel to work, of travel to study that goes much, much wider than the local authority, for example. We also know that there are cultural links within there, but probably more important is the economic movement and moving back and forth between North Lanarkshire, South Lanarkshire, Renfrewshire and East Dunbartonshire, for example. I think that the concentration and the focus there has been a bit of a missed opportunity. We are not focusing on that economic social entity there, but I think that there are still opportunities for the future. There are a number of areas where we have things right. I think that there has been a little bit of a missed opportunity where the focus has been purely on the construct of governance. For example, moving forward, I think that there has been a bit of an opportunity that has been missed there. The difficulties and challenges of moving forward, I must say, and there is one thing that I would like to get the opportunity to speak in more depth about, is what I would describe as the chronic underfunding of colleges, particularly when we are looking at the projection over the next five years. Also, as far as the governance of the region and the focus on the governance level, I would like to move to a much more focused approach, as far as the economy, communities and to get the benefit of scale of that economic region as opposed to the boundary of local government. Other colleagues, no doubt, will cover the funding issues. I would like to say that I think that regionalisation has brought many opportunities first. We are able to work collaboratively with our local authority, the NHS and the other colleges in the region. It is difficult just to say what the impacts have been of regionalisation, because there were many things that happened at the same time, such as the change of the profile of the students, which was part of the policy changes and other reforms, such as the implementation of the student association. At the point of merger and regionalisation, one of the legacy colleges did not have a student association in Lanarkshire. I think that that was a disadvantage. I really welcomed the role of our student association in the college life and the input that it made to the board. I just want to say that I was not in the college sector when regionalisation took place, so I came into it following this. However, I have a view on how it impacted on the UHI, having worked in the UHI pre-regionalisation. I think that it has brought many benefits. UHI is in a slightly different place because of its tertiary nature, but I have seen an impact in terms of the key hearings for its FE provision across the regional region. I think that what regionalisation brought in terms of the FE provision around UHI is a much more coherent approach to how the colleges within the UHI work together—more collegiate, more collaborative—planning FE on a regional basis, while retaining a focus on local. There were opportunities that we were able to benefit from, and we were able to plan for economic benefit across the region as the multi colleges. My colleague mentioned student association and a much more joined up, consistent approach to student support using Highlands and Islands student association. A number of things that we benefited from. My colleague also said that there were problems in terms of alignment with local authorities. The region is not particularly cohesive in terms of where colleges are aligned at local level and with sub-regions, if you like. I would like to pick up on the financial problems and other matters later on. I want to make the point that UHI is slightly different but still had some benefit from regionalisation. Thank you. That is helpful. Mr Day, you have some further questions. Thank you, Mr Kerr, convener. Derek Smith, you talked about the greater influence that Merlith colleges have had. Has there come parity of esteem with universities? Are you treated as a partnership of equals? Have you found that that sort of aspect has improved? That has certainly improved, but I think that there is still a journey as far as that is concerned. If I could give an example for Glasgow Kelvin College, if you would have asked me this question maybe 15 years ago about a relationship with the universities in London, one example is with Glasgow University where we have a direct progression of one year at the college, for example, and you get advanced standing at the University of Glasgow in either engineering or science. I would have said that that would have been almost impossible. It would not have been in my mind at that point. There is an example of that credibility getting to the table, having that influence and working alongside. Obviously, the Scottish Government policy has a lot to do with that as well, so there is no doubt in that example. Anne has mentioned, for example, certainly within the Glasgow region, working with NHS education, etc. That has brought a more coherent grouping of colleges. What I might add is something that we forget within the Glasgow region, which is quite unique, is that we have two quite large community-based colleges and a city centre college that serves slightly different purposes and slightly different strategies, but in the right place at the right time. However, by volume, it is just short of 25 per cent of all college education in all of Scotland, but you would expect that because of the size of the conabation. There is no doubt that, collectively, as the three colleges, we also work very, very closely. I think that this is an important point. The Glasgow colleges group with the three colleges are led by the three principles and a lot of the practical, operational and strategic advantages that we have gained over the years have come, not just collectively, of the Merge colleges. As I mentioned, we came from nine down to three, but also the three colleges that are working together. In your view and the views of anyone else on the panel, has merger and regionalisation led to the reduction in duplication so that the offering is more tailored? In the context of the relationship with employers, particularly SMEs, is the college offering now better tailored to their needs than it was previously? I believe that the general answer to that is yes. Certainly within talking about the Glasgow region, we have a curriculum plan for the whole of Glasgow that is dealt with. The individual colleges at that level work on a week-by-week, month-by-month basis, so there is definitely reduction in duplication. However, I would hasten to add unnecessary duplication, because certain duplication is necessary, particularly when you are delivering at the heart of communities. As we said, Glasgow is an enormous conabation with very different areas and communities within that. It is very important for me to say the reduction in unnecessary and inappropriate duplication, but what it has also done is provided very clear pathways for students from the lowest levels at entry right the way through to perhaps then progressing on to university. Just to pick up and to finally mention, for example, SMEs, for example, SMEs are obviously very difficult to get by definition a defined voice from SMEs, but, of course, we work very closely with FSB as many of the regions of colleges do. An example of the flexible workforce development fund, which only recently, last year, was then adapted to allow access from small to medium-sized enterprises. That was extremely successful from the point of view of Glasgow Kelvin and, in fact, to the point that we are actually oversubscribed from SMEs as a ports to levy pay companies. I believe that, working in conjunction with the other two large colleges, I think that we provided a very rapid service. I hope that that would continue. Again, yes, I think that the answer is there to supporting SMEs. Thank you. I want to follow up on some of the SME questions there, but I just want to check. Sue, do you want to come in on anything? No, you're okay, that's great. We've heard specifically from yourself, Derek, about the SMEs and how you do some engagement, but I'm interested given that the very diverse nature of our economy is what the other colleges are doing in terms of engagement with SMEs, because in rural specific areas, there will be more small businesses rather than the large businesses. I'm interested to understand what you're doing to seek to respond to your local skills needs specifically in your areas as well. In terms of those micro-credentials, we've been hearing about from businesses what your activities you're actually carrying out in your colleges as well. Perhaps I can take that question first to you, Ann. Thank you. I'd like to share something with you in relationship to that and also linking to the university. At New College Lanarkshire, we've been supporting businesses and innovation as part of our partnership model as part of our smart hub Lanarkshire. That's a partnership with our local authority North Lanarkshire Council, the University of Strathclyde and ourselves. It's a home for robotics and automation training, and it's a place for SMEs to come in to explore, to test, to undertake discussions with staff, where they meet and learn in support from one another. They have live demonstrations of co-bots, the small robots. From April to June this year, we had nearly 400 different people come in to undertake part of this training. That's one of the approaches that we take. As part of College Scotland event, taking place in the Parliament on the 5th of October, we will have that available for people to see. In addition, we have monthly meetings where we invite small businesses in to discuss their needs, plans for the future. Thank you, Ann. Sue, would you like to come in, please? Thank you. Higher and further education level. For example, at the college, we have an innovation hub, where small and medium enterprises, in fact any employers, are able to come and test out different processes that they wish to put in place and test out prototyping. It's an area where we encourage start-up companies to come along and access expertise of staff and equipment. We're working with our local hospitality SMEs, which is so important in the outer hebrides, and adapting our provision for shoulder-month training, working with them in terms of tailored courses and using things like the flexible workforce development fund to support our small businesses. We work across the university partnership around knowledge exchange, research and knowledge exchange, use of innovation vouchers to make sure that we're supporting our businesses through our research activity and patting on our knowledge to help improve their business practices. A range of things that we're doing with partners in collaboration, but also at local level for our local businesses. Bob, do you have anything that you want to come in? I can pick my place. Okay. No, that's great. Thank you for that. Stephanie Callaghan, can we move to questions from yourself now, please? Yeah, certainly. Colleges, convener, I've lost my page. So, I just have a couple of questions around student experiences. How, what progress has been made since college regionalisation with that? How has it improved it and what have the challenges been? I'm first to Ann, thanks. To Ann first, okay. As I mentioned, prior to regionalisation, one of our legacy colleges did not have student association and, as I said, it's really important that the voice and the needs of students are known by the senior leadership team and the board. So that has now been addressed, partly by funding that was initially established to take it forward. I think that the college life where students has improved, we are, we have a team now of learning engagement officers that try to ensure that we have a varied programme that will keep students engaged. So they've done things like gamification, where they support the learning process, organised activities, the organised freshers. So I think overall student experience has improved since regionalisation. Can I just ask, as we can follow up to that, around the challenges of it as well? We certainly heard in previous evidence that independence can be an issue, that some students felt that, yes, they were right at the centre of things and their voices were being heard, but others felt quite the opposite of that, really, that they couldn't actually see the things that they wanted to see and put forward their views. I suspect that that might have been a part of time. I certainly know that during the Covid experience for students where there has been less contact with others, where there's been less input on campus, many students and staff found that quite a challenging experience. I would hope that as we begin to restore back to where we were, that things will improve. I admit that there may be challenges, but it's something that we have to be alert to and certainly our Student Association are very able at making us know where things aren't as good as they could be. I wonder if anyone else wants to contribute there? It's very interesting. Again, I would reflect everything that Anne said over the period of time that has been recognition, which is very important for the Student Association. There have been brought front and centre and the formal structures, but probably what I would want to mention are the informal structures and the huge amount of work that I know colleagues are doing throughout the colleges in Scotland. We have direct representation, for example in the boards of management by the Student Association president at both college and regional level, and they are very proactive in that. One of the key elements of that is building confidence in individuals because the amount of information and the technicalities can be absolutely overwhelming to anyone within that position. We also have a way to have infrastructures in the colleges to support individuals. Although they are employees of the college, they are as independent as they possibly can be. To be clear the Student Association, our purpose is to ensure that they have that level of independence. The other thing that I might want to emphasise is that there's a lot of effort put into the informal. For example, I'll give you an example of my own college. I meet with the Student Association president personally at a informal meeting once every two weeks. It involves the union colleagues locally, staff and some key managers. It's an opportunity to build confidence and take ownership of decisions that are actually made. We make quite influential decisions and there's the opportunity to influence directly the principle, but they can also influence in the more formal structures of the boards of management. Different colleges do it in slightly different ways, but it's very important to recognise that there's a significant effort to support the individuals in informal means to build their confidence so that they can then challenge and put forward their position and support their learners. There's probably a whole range of examples that they could be given of how we encourage that engagement and build that confidence. I've only got a couple of things to add to what Anne and Derek have said, but what regionalisation has brought in terms of the student experience is a regional Students Association, which ensures that there's consistency of approach across the different colleges. We've worked with our colleagues in the Students Association to make sure that we have now a consistent set of student front-facing policies, for example, that we share across all the colleges, so that we've got a consistency of approach. We've got a regional Students Association, which has a model that has paid officers as well as elected representatives all sitting on our boards. That has to be underpinned by the quality of how we support that at local level. What we have from a regional point of view is ensuring that local consistency is there, and that's really important. That's all I've got to add to what colleagues have said. I think that there's work still to be done, and I think that there's the funding issue around how we support our Students Association. That's getting tighter and tighter. I think that that's actually been impacted at the moment in terms of what the Students Association can do, and that puts pressure on the partnership between the colleges and the Students Association around ensuring that not only informal support but more formal support and activity that students need, especially as we've come out of Covid and they're wanting to up the experience of an in-person student experience on campus, not just with their learning, but around their learning as well. We've heard some evidence from the SQA that there's a reduction in the assessment contents. That's a bit more about formal learning during their last two exam years at school. There has been a fear that the pupils are not as prepared when they come to further education. Is that something that you've seen or have experienced in your colleges and sooth nodding featheringly? We'll go to Sue first, if you don't mind. The funding has ceased in terms of dealing with Covid, but we're still dealing with the legacy of Covid with young people leaving school who are having to catch them up in terms of their learning and the skillset. We're putting in additional support around their learning, but there's also the little bit around the legacy on the social side of things. We're working hard with our student association colleagues to look at how we improved student experience and build that confidence that Derek spoke of, the social side of their learning. There are extra things that we're having to do to support in all ways, and yet the funding has disappeared. I think that there's not been enough tension paid to that aspect of things. Thank you, Sue. Does anyone else want to contribute? Just reflecting on Sue's words, one of the things that colleges do extremely well, but it has been extremely challenging. This will probably go on for another two or three years. Students have been affected or pupils have come from college in the transition. There is about building confidence, but it's also about the mental health, which is something that we obviously need to pay attention to. Again, that is under stress at the moment. Again, the big message that we're trying to get across is that we've had this great opportunity now. It's almost like we're coming out of a slumber. The students are feeling that. There's a positive vibe in the companies that I haven't seen. That noise in that background hasn't been there for almost three years. Many colleges comment on it and then they enter the college, but it's about putting the fun back in that learning and getting young people to enjoy their lives again. I think that the social aspect, community aspect of it is critically important. I think that it's a massive contribution to the improvement of young people's mental health as well and to the communities that they live within as well. Lots of nodding there. It's really great to hear. Thank you so much. I don't know if you want to say anything further, Ann. Just to say very briefly that the comments that are made are very reflective, but we felt it was important to have lots of fun at the start of term, so we actually haven't extended freshers. Freshers fortnight? Well, not quite a fortnight, but much longer than we would normally have, so it was very successful. That's great. I know that Bob Doris has got a question on this as well. Because, Mr Smith, you mentioned community involvement, I thought it was appropriate. That was one of the key aspects of regionalisation, was not to throw the baby out of the bathwater to make sure that colleges remain anchored in their communities despite the economies of scale and greater pool and reach that regionalisation can bring. Those that are least likely to apply to college are most likely to get involved in some localised community activity around the very localised offers of colleges. That clearly had shut down completely during Covid. How is that going just now? I might say a little bit more about the importance of the work in communities getting those least likely to apply to college in the first place, the pre-employability, the pre-training work that I think colleges do so well. How is that faring now? What are the challenges, maybe, Mr Smith? It's a very pertinent and very important question for ourselves, Glasgow-Kelvin College. Historically, we serve primarily the north and east of Glasgow, at very high levels of deprivation. If we look statistically at Glasgow-Kelvin College, by far our proportion of learners are from SIMD 20 and SIMD 10, for example. Getting back to the point, yes, we have some large campuses that are also right in the heart of the communities, but we had an excess of 40 learning centres where opportunities were given. They were completely shut down over Covid. The answer is that it's not recovering and coming back to the way it was. We're having to reinvent the situation. We look on it as an opportunity, however it's extremely challenging, especially in the current fiscal situation. The work that we do in the outreach, we take education to the communities. It is about, but I use it over and over again, about building confidence. It's to then give them enough confidence to allow them to enter the doors of our larger establishments and give them those learning pathways and going on. We've been very successful over the years. However, that work I would describe as high cost, but very, very high impact. It suffers at any point when we have contraction of funding or increasing in cost, etc. It's very vulnerable to that. However, to be clear, certainly from my own point of view, it is an absolute strategic priority for ourselves. We have had some success and what we've actually done is expanded within some of our larger companies, for example, in Easterhouse, to give more opportunities directly. We're taking certain education, for example, technology and engineering, and social care, and so on, and so forth, and health into those communities. However, as a major challenge, we're having to use digital resources much more effectively to maintain our net capture and availability to our students. Again, financially, that is a considerable strain. I would say in answer that there is a considerable way to go to re-establish that contact with the community. It's very, very challenging, but we're making a headway. That's very helpful. It's a high cost, but a high reward. It's important to put that on the record and the funding climate. I think that Sue was looking to come in to your first point. I'd love to hear from Sue, absolutely. Sue, over to you. Lovely. Thank you very much. Obviously, you can imagine that we operate in a very rural environment. Operating in the community is absolutely vital for us. We have a distributed model with a number of smaller learning centres, which Derek has alluded to financially. It's an expensive model, but in terms of reaching to our communities into the fragile areas of where we serve, it's absolutely imperative. We operate on the basis of the college and university in the community. It's not just about ensuring that there's online provision down there, but that is one way. We've extended our digital provision, but we have to have staff on the ground who have that connection with our local community, our local employers and the fragile learners who want to access learning and training in their local area. It's really important that that is not lost through the big economies of scale, especially in the more fragile communities. We run a series of employability programmes. We have, in all our centres, activity that just gets people into the centre to get some confidence about being there and interacting with small groups of learners and small groups of staff, even pre-formal learning, there's informal learning going on, community activity. It's just about having our presence and building confidence in using the college down there. That's the issue that we have to make sure that we're still cognising. Obviously, regionalisation has brought lots of opportunity around economies of scale, around breaking down duplication, but we have to make sure that that isn't lost in terms of the balance that we have in local presence. We're there for the communities, and I think that that's the wider role of colleges. It's not just about the learning, but it's about inputting into the fragility of some of our communities and making sure that we're providing different services that are linked to learning but not solely about learning. I think that that's the thing that we have to make sure that we protect, but that is costly. Talking about the digital side of things, I think that it's absolutely widens access, but it only goes so far. However, during Covid, what we found is that we were still able to engage with lots of communities through online events. We did Calis, we did community quizzes, that kind of thing. The colleges still have a real role to play in the social aspect of our communities, especially where the fragile learners are and where fragile communities are. Sorry, I'm starting to wait a bit. That's fine, thank you. Thank you. I wonder if I could come back and just... You've got one final question, is that correct, Bob? Yes. To Mr Speill, I was going to explore duplication, but Mr Dey's done that ample, I think. You had said the thing in answer to Mr Dey. I think you talked about Glasgow Colleges Group. Is there a distinction from the Glasgow Colleges Group and the Glasgow Colleges regional board? Obviously, I was looking through Jane McCusker's submission on behalf of all the Glasgow Colleges earlier in this inquiry, and there were mixed views on whether that was an additional required layer or whether that was duplication. Is there a difference between the Glasgow Colleges Group and the regional board? What are your thoughts on the mixed views of the regional board itself? I think that it's no secret that there are mixed views within the region. What I can say is that the views of all three colleges are absolutely in line. They don't always agree with the GCRB perspective. Glasgow Colleges Group are solely run by the Glasgow Colleges, so they're led by the three Glasgow principles, and we have a structure that is high-level operational, but also strategic in delivering policy, the strategy within the region. The GCRB is very much a governing body, quite clearly has very specific responsibilities. However, one of the issues is that it's highly transactional, it's transactional governance, and again the opinion of the three principles is massively duplicating the three operations of the college. One example, we have three principles and chief executives of the three individual colleges, but we work very collegially as part of the Glasgow Colleges group. However, none of us are members of the GCRB board, which I must say is a model, I find very strange, and it makes that connection between the GCRB board and directing the movement of the colleges within the region very challenging, and hence my reference to its very transactional and it has a lot of duplication within it. However, the actual progress that's delivered, or shall I say the powerhouse, the driving force behind that, again in the opinion of the principles, is the Glasgow Colleges group, so it's very distinctly different now. Mr Willie Rennie has a supplementary on this, and then we're moving to... I'm just puzzled by what you've just said. What's the logic for you not being on the board? What's the explanation? If I could say, I have perhaps taken a step back. I've been in position for three years now. I was appointed to the principal of Glasgow Kelvin College, and to this day I'm still astonished. I don't understand it. I can't answer that, I'm afraid. I've put the ministers to tell you. My understanding is that there was obviously a Glasgow Order, a Lanarkshire Order that defined the specific details and breakdown of the constitution of the board at the time. I wasn't there at that time. However, I believe that it was discussed at the time, and the decision of the board was that the chairs would not be members. I understand historically that it was within the gift of the decisions at that time. Do you attend meetings? Absolutely. To be clear, we attend meetings, we have good work in relationships with the executive team of GCRB, so there are a number of executive employees as the GCRB that support the board. However, for example, the executive director who is the executive member of staff who supports the chair and the work of the board is not employed with the colleges and is not directly involved in the work of the colleges. Do you attend the board meetings? I attend the board meetings every time. For example, at my college, I am a member of the board and I'm a voting member of the board because of my position. However, the executive senior team attend the boards and they're there to answer questions, reflect and give any advice when killed upon. My position as a principal at GCRB is to give information, evidence when called upon. I am not a voting member. Do you think that mistakes are made as a result? That is possible. I don't think that it is an appropriate model from my own position. Does it make any real difference? Okay, thank you. Now, can we move on to questions from the Vice-Covina Cogab Stewart, please? Thank you, convener. I just wanted to have a touch on finances. I'm just going to ask to what extent colleges have the longer term financial planning. Has that improved in recent years? What's the impact of that being? Derek Mackay, would you like to kick off? Looking back retrospectively, especially over Covid, for example, I think that colleges in general have the ability to forward plan, to analyse, to work very closely with the Scottish Funding Council and, most recently, the Government officers as well during the Covid period. I think that I'm using a Scottish Funding Council term when I talk about the emergency years. It was a term that was used. Now, that is not to suggest that it was chaos, quite the opposite. I welcomed the openness of the Scottish Funding Council, how they worked with colleges and the long way that that continues. So, from a positive point of view, I would say particularly over the past three years, the openness of the Scottish Funding Council. My connection with the Funding Council and the finance goes back quite a bit when it was a vice principal as well, but over the past three years, as I've been a principal, I've seen that improve significantly from the transaction level to the highest level of the Funding Council. That said, the restrictions in the fiscal environment are absolutely enormous. I made the statement there about chronic underfunding. Historically, over a period of time, funding has moved, but our cost base has expanded way beyond the funding base over a period of time, for example. That has generally, over the last few years, resulted in redundancies, mainly through voluntary severance, to get efficiencies and to deliver as best we can. That has been extremely challenging. To move on to the future now, we have become more sophisticated and more collaborative among colleges, at Collegy Scotland and with our colleges at the Scottish Funding Council. We have asked over a period of time for longer projected guidance from the Scottish Government, which they have recently provided. Obviously, we have got the three-year provisional allocation, but we have also had an extended projection of five years. However, that has been presented as flat cash for one of a better word. In reality, when we have now done our analysis now, I can only speak on behalf of my own colleague. We have gone through that analysis. The reason I use the chronic underfunding and, as we go forward, the impact of that, again, at this early stage, is likely to mean the reduction on my workforce by the end of year five, which is 2027 of 25 per cent. I am sure that everybody around the table could recognise that, if I reduce my workforce for 25 per cent, my college will simply not be the same place that it is now. Do not get me wrong, I am not suggesting that our productivity, our opportunities, would shrink by the same proportion because we will be driving. For those efficiencies, but it would be seriously impacted. There will be lots of hard decisions being made. To reassure members that we are not shying away from hard decisions, we just need to make sure that there is an understanding of what those decisions mean. Going back to the point that we were talking about, high impact and high cost, there needs to be judgment made going forward on that. What I ask is that we do not lose sight of that. We must understand that, if there is an inevitability to this, which we all accept that there must be, this is a worldwide situation, not just for Scotland, so we absolutely accept that. When I use the term that we need to address the chronic underfunding, there are many ways that we can address it. There is one simple way to gain more funding, to look at how it is distributed, or the other way is to accept what the future looks like in the future. At the moment, in my analysis, the potential of the loss of 25 per cent of my workforce by the end of 2027. Will that happen? Will that manifest at the moment? That is the projection and the advice that we are being given to analyse and project towards. Do the other two witnesses want to add anything to that? I want to come back in, but I just want to give you an opportunity just now. I cannot explain a lot about funding, because it is not really part of my remit, but I would not be an expert in it. Colleges have to start to use funding more imaginatively. There was additional funding available for national qualifications to maximise the benefit for our students, South Lanarkshire College, co-delivered staff, extra revision sessions that students could share, drop-in and share resources. That was how we tried to maximise what I thought was quite limited funding for the benefit of our students. I would repeat most of what Derek has said, but there are still opportunities for growth across the sector. I think that we have to do things a little bit differently. One of the reasons, for example, why UHI is involved in merge talks, is an opportunity to achieve the opportunities that are available for the colleges in wind etc. There are still opportunities to generate increased income, but the cost base has gone up so much. All our efforts have dissipated on keeping ourselves above water at the moment and the lack of investment to be able to make some of the changes that we require. We are running to keep up financially. As Derek said, we are predicting almost a 25 per cent reduction in our workforce over the next three to five years. That will have an impact, especially on rural economies. Anne talked about using income differently. We are under pressure and we need to take account of the fact that colleges now have competition through private training provided by local authorities. That has impacted on the college market. We have pressure on income sources in lots of different ways. We have the inability to invest in doing things differently. There are opportunities, but we are constrained in taking those opportunities. Audit Scotland recognised that the pressures were exacerbated by inflationary costs and rising costs. I am glad to hear that that has been mentioned. I believe that it was many years ago, in 2014, that the Office for National Statistics announced that, prior to regionalisation, colleges throughout the UK would be considered as public bodies. That means that it is like central government funding, but there is scope, because I was reading to have Anne's-length organisations that can be set up in order for you to generate funding, because I am aware that you cannot build up reserves. I would be interested to hear a little bit more about that, maybe even an example of where that has happened in order for colleges to generate funding. Derek? Perhaps I could come back. Again, talking in context of the Glasgow College, well, specifically Glasgow-Kelvin College, onS classification meant that colleges cannot hold cash reserves. That is the first element, so you are quite right. There was an element that what we could do if there was any surplus cash, it could be transferred into Anne's-length foundations. However, they are independent, as by definition, of their Anne's-length, and they have very educational pedagogic purposes that cannot be used for, for example, plugging holes in business models. However, I am not aware of any college having added to their Anne's-length foundation for many years, because the only way to add to that is to create a surplus. I am not aware of any college creating significant enough surplices to do that, so it is not a function that is available to us. In my own colleges, yes, there is still some funding that is available. However, the projection that I mentioned to you earlier over the five years, our alf will be empty within the first three years. Immediately we have to empty that alf to sustain other core development and to displace our expenditure elsewhere. That is one example. I cannot speak on behalf of any other colleges, but many colleges are now in a position where either they have no alf or there is virtually no money within the alf, or their alfs will be committed over the next three to five years and they will disappear, but you are absolutely correct that there is a mechanism. One of the difficulties within that is that it is not an accessible business funding, for example, to go through normal initiatives. The other thing that we cannot do is that we cannot borrow. There might be certain capital aspects of that. The one thing that is very difficult, we mentioned about innovation, and Anne was quite right. We need to think differently. I want to be very positive in my response to you. Colleges are innovative. We will come back with new ideas, but one of the things that ONS restricts you is that you cannot precede any funding or development in advance in that. At the moment, we are on a sustainability budget. If I want to create a new product and perhaps seek alternative streams of funding, be it public funding or commercial funding or privately funded, many colleges have no way of investing in that up front, and that is because they do not carry cash reserves to do it or the restrictions on their alf do not allow them to invest in those specific areas for commercial benefit, for example. It has to be for the benefit of the student. I am saying that it is shrouded by a lot of constraints within that. One position that I held a number of years ago was the chair of the audit committee student award agency for Scotland, which is a Government department. I gained a lot of experience there as we were transitioning through to ONS, but my reflection was that we got all of the disadvantage of coming under the ONS system, but none of the advantage of it. That would be my overarching conclusion. It is restrictive and it stifles the potential for innovation in colleges. I agree that not many of us have surplus to invest in our Anzledd foundations. We are carrying a deficit this year, which we had planned. We have a clear financial recovery plan to get out of, but that has been hit by the flat cash funding, the cost of living crisis and so on. Things are getting hard. One of the things that Derek said was that we have all the disadvantages of ONS and none of the advantages. One of the things that we really need as a college sector is for some flexibility around that breaking even by end of year. I previously worked at SQA where we were ONS, but there was some flexibility around the end of year position and carrying forward some of the balance to the next year. The colleges need that flexibility, and without that, this is just going to keep going year on year. We are not going to get out of this crisis at all. I have remarked on this before. I am just astonished that all of this is very managerial. The college sector has been cut for year on end. The college places have been reduced significantly for years, yet the presentation that you give this morning is very managerial and almost accepting of the position. I cannot understand why you are not more angry and secondly what you are doing to persuade the Government to change its mind on funding levels. I would not use the word angry, but I am certainly frustrated. I will perhaps go back to the point that I was making about the 25 per cent. That is the reality now of moving forward. In the past, we have been talking about mergers and regionalisation and efficiencies have been accommodated over the years. It has reduced the workforce. It makes it more difficult to be innovative. It makes it more difficult to progress. There was mentioned before about micro-credentials, for example. That is a really, really important element. We are really struggling to be able to free up staff, just monetarily. I am speaking very functional terms there, but there is potential—well, it is not potential—there are consequences to what we are actually talking about here. The biggest picture of campaign is, in our minds, is that our projections are saying 25 per year, 25 per cent of the workforce that will have gone. Again, without going into the detail, that puts stress. The first areas that will come under stress are courses that are not, in a business sense, in a model efficient, regardless if they are effective or impactful. I have to balance up to what is socially impactful and what is affordable and so on. I am very, very concerned about being forced down a road that I need to make decisions that I do not agree with or that I do not want to make professionally and have that impact. Absolutely, we are willing and we are able to work within those envelopes, but we must be clear on what the consequences of that are. Certain elements must be protected, the social elements of the community, and the going forward. However, it is an incredibly difficult position. I know technically that a public body cannot become my understanding and cannot become an insolvent. However, colleges could be put in a position where they are driven towards that, and the only alternative is to be clear is the reduction in staff. If I go back—I think that it is mentioned by the Auditor General—about the proportion of staffing funding, which is increased year after year after year. It is stated that 70 per cent of income is on average. To clarify that, that is 70 per cent of total income. However, for most colleges—I think that I am correct and saying for most colleges, certainly for my own college—it is actually 80 per cent of what I would refer to as accessible income or revenue, because not all that revenue that is quoted as 70 per cent of is actually accessible. For example, some of the student support funding, some of the childcare were simply custodians of it. In my college, it is in excess of 80 per cent of my accessible revenue that has to go on staffing. By simple mathematics, if that funding is cut, there is absolutely no alternative that that can come. The word efficiency is a euphemism for the downsizing of the workforce. However, to emphasise in a positive sense, we will drive for efficiencies. As Sue said, we will be working differently, but it will still have a huge, enormous impact. As an educationless professionally, I am extremely concerned. Again, the social aspect of it—we talked earlier about bringing the fund back, mental health and our young people taking it forward—there is a potential of damage for that, because we simply will not be able to deliver the number of opportunities and the breadth of opportunities, but also in the breadth of locations and geographies in our communities. I know that Sue McFarland is keen to come in on that as well. If we can go to Sue, thank you. Thank you. It sounds as though I am not directly answering, but I am. There has always been a knowledge that you go to the education sector and ask for something to be done. You will go to the school sector and will say, where are all the resources. You go to the university sector and will say, let me go away and think hard and long about that before getting back to you. You go to the college sector and say, when do you want it done by? In some ways, we are very angry, but we are victims of the fact that we just get on with it and we find solutions and move forward. That is what the college sector has been doing. We work in the constraints and we do the best that we can for our learners. There is anger and frustration, but we are absolutely tired out as well, because this is year on year. We have come to a perfect storm in just now, but we have been dealing with underfunding and lack of parity over steam for the sector for a long, long time. That needs to change, but I think that there is a tiredness around the sector. We are trying to be strategic, but there is anger. We work through Scotland's colleges, et cetera, but this is not new for us and this is the problem. Regionalisation has not solved the problem around funding, but we are in a perfect storm now. Please do not think that we are not angry because we are, but we keep getting on with it. Mr Graham Day has a small supplementary on this one. One of the luxuries that MSPs have in this place is to be able to call for more funding for things that have never happened to say where it would come. I very much commend your looking at the overall picture and the alternatives to address the issues that you have highlighted. Can I just take you back and tell you that as an alternative to more money, the upfront solution, you talked about the distribution model. Can I just be clear that the distribution of existing college funds is across wider education, and if so, from where would those monies be derived in the education budget? There is an opportunity to look at all those different categories in your absolute right redistribution, if we accept for things, and as we are discussing, there is a finite envelope. We know that within that. Schools, I am not expert enough or knowledgeable enough to probably presume to look in that aspect. It is a different environment. I would suggest that I would focus on the higher education or university and colleges. I think that there is a philosophical debate of the investment between colleges and universities. Our models are different. There are different strains in universities that colleges do not have and vice versa. However, I think that there needs to be a review of the equity of the core funding distribution between universities and colleges based on impact. That impact may come in various different categories, for example social impact, community impact and economic impact. If I might, for example, one of the things that we are very passionate about at Glasgow Kelvin and driving forward is the agenda to training the new workforce for a sustainable world. We have a number of specialisations. I will give you just one example to put that in context. It is HVAC, which is heating ventilation and air conditioning. That is all going to change. Definitely not just domestically, but for business over the next few years we are driving that forward. We are in the position to deliver that new workforce. Working with colleges and universities through innovation and taking the country forward, the new technology is absolutely essential. However, in my mind we are losing focus on what we will need to establish is a large group of highly trained individuals to deliver the new needs of the workforce. We are absolutely well positioned to do that. I am redressing and re-looking again about the distribution between university and college. I would say that between college and school there is a much more complex discussion and schools are a much more complex and different debate involved. However, I am sure that members have seen disparity per head of funding between schools, colleges and universities. I will not quote it off the top of my head because I cannot do that. That would be inappropriate on me, but it is quite startling. I know that you do not want to come back. I have got something specifically that I want to ask yourselves. You have mentioned about the expanding cost base that you are facing and that you have a clear financial plan to tackle the challenges that you are facing. I am trying to unpick and find out if that is one of the reasons that is behind the forthcoming merger that you are looking to proceed with. It is one of the reasons. We have a financial plan whether we merge or not, but merger is factored in. We see merger as being one way of improving our long-term financial sustainability, but it is not just about improving our cost base or economies of scale, etc. It is about working with our partners in a way that gives us a structure of framework that is sustainable to go and pursue and achieve the opportunities that we all think are common to the three colleges. On our own, we cannot really pursue because we are too small. We do not have the thought leadership role. We do not have the capacity with our staffing. By coming together, we will perhaps create bigger teams and ability to pursue new things. It is about growth as much as improving our cost base. For me, the merger is part of the financial sustainability. I think that we will find it very difficult to keep going on our own. Thank you for clarifying that. Following up on the figures that Derek mentioned, about 80 per cent of the accessible revenue having to go to pay for staff, I am going to move on to questions now from my colleague Ross Greer, please. I found Derek's evidence around the role of the Glasgow regional board really interesting, so I acknowledge that you are in quite a different situation across the UK. I would be interested in your perspective on what the Lanarkshire regional board does that the individual institutional boards could not do. I accept that it will do stuff that they do not do simply because it exists at the moment, but is there anything that it does that simply would not be possible to do on that individual institutional level? In Lanarkshire, the regional board is also the board for new college Lanarkshire, so there are not two separate boards in that instance. South Lanarkshire has its own board, so I am not sure if I could really answer that question that you are asking for because we do not have two boards that we work to. It is harder to disentangle that one, but the same debate comes up about whether that is an appropriate model of governance. Moving on to wider issues around industrial relations, I have a couple more general questions about that. First, one specific one around local dispute resolution process. There was an NGNC agreement a couple of years ago now, I think, for each individual institution to agree a local dispute resolution procedure. I think that, at this point, most but not all colleges have, so just before going any further to ensure that questions are being directed properly, could each of you confirm if your college does have a local agreed dispute resolution process with your unions? I can confirm that we do have a dispute resolution process. The one caveat I would say, however, is not to conflate that with recently there has been discussion from Unison, which is a more detailed process that Unison wished to bring in when colleges move into a position of dispute, for example, but there is a structure for resolution of dispute. The actual technical process is a big problem. Likewise, we have a process for dealing with dispute, but recently, with enhanced communication, we are dealing with issues much more quickly and much more readily. Yes, we have procedures in place. We do not have a written one with Unison, but that is being addressed at the moment, but we do with the EIS and with Unison, although we do not have a written procedure, we have a procedure that we have followed as legacy. In the interests of time, can we make sure that those are short and sharp? That is okay. One additional question on industrial relations. In seven of the last eight years, we have seen national strike action. Some of that has come as a result of individual institutional disputes that have escalated, others have escalated because of national bargaining disputes. Can each of you give a brief contribution on why it has escalated to national action so regularly? There is no other sector in Scotland where we have seen national strike action almost every single year in the past decade. Most of the disputes have been around pay, essentially, and many of the local disputes have been associated with the pressures of pay. Sorry to go back to the classic point, but I happen to be one at the moment of two principles that are on the national, as a negotiator on the joint group. Our restrictions have been and the hub of industrial action are all related to our inability to meet the expectations. For example, at the last resolution, the reason that went on for so long is that we got to a point of resolution in the end that was the absolute maximum that we could go on the affordability. Now we are moving into the learned realms, as they are saying, of almost impossibility. It is not technically possible for us, for example, to meet expectations that may be going on to five and six per cent within that. To be honest with you, as I have made the statement that chronic continuous underfunding has made that an extremely challenging situation. The vast majority of those pay increases will of course have been in part paid for in the reduction of the workforce. Is there anything— Sue wants to come in as well. I am interested in your experience as an NGNC negotiator. Is there anything about the structure of the NGNC from your experience as a negotiator that you would change, accepting that the lessons learned exercise is still not on-going but the Government's response is still yet to be published? I am quite new to it, so I was in the middle of the review. I think that I was looking at it from a new eye. There are opportunities to look at structurally how things can be done more effectively. I do think that there have been some cultural stereotypes within there that I think on the turnover of staff, perhaps alleviating that. There is no doubt that we, in general, as a group, and I certainly did accept the last recommendations of the lessons learned and the agreements that support taking that ford. However, one of the biggest problems that we have is that we are not in direct control of our budgeting quite clearly, which we would not expect. However, the constraints that we were describing are so tight that our ability to manoeuvre within that envelope is extremely constrictive. It makes that negotiation extremely difficult to the point that often resorts to industrial action. I just want to check now. Can we move to questions from Michael Marra, please? Thank you, convener, and thanks to everyone for the pretty concerning evidence that we have had so far today about a lot of real clarity, I think, for all of us in terms of some of the impacts. It has been very useful. I want to touch on some research that we have around completion rates that has been presented to us by our colleagues in the Parliament. There is a particular issue at the moment that seems post-pandemic, where pre-pandemic non-completion, of course, is around about 24 per cent. That has now risen to 28 per cent. I wonder what the sector was doing to try to deal with those issues. It is recognised throughout the sector that there is a pattern within it that the impacts of the college sector were very much locked down, even when society in general was not locked down. We know that there have been significant impacts. To answer your question directly, I think that I am touching the extension, for example, of bringing the students and welcoming the students back. When I did my welcome back to the staff, yes, there were a number of concerns within staff, but the big focus that I emphasised to them, the one thing that you must focus on no matter if you are supporting the students or you are teaching the students or whatever your role is, no matter how small you perceive it, is your all contribution towards the student experience. So, from the minute they walk into the door, this is a new life for them. It is post-pandemic. We are anecdotal at the moment because we do not have the figures in and I would not be quoting. The numbers of students and groups that are coming through appear to be quite positive, quite healthy. The preliminary feedback that we are getting for students is very positive. So, as far as their experience is concerned now, it sounds as if I am just brushing over that. The amount of work and investment in time and energy in that is enormous. I could give you a technical example of what we have identified at our college and I know that other colleges have done in the past as well, is the working together of the teaching staff, for example, the course tutor and the sently using data to identify, which we would say anybody at student that may be at early risk of withdrawal from the programme and much of the time that is to do with personal finance, situation, could be mental health and so on and so forth, to make sure that we get bespoked and direct responses to them as soon as humanly possible immediately to then give them the support. The other phenomenon that we are very well aware of is particularly in young people that then transition to college, they have a group of support amongst their friends and unfortunately if one individual waivers and withdraws, then the individual clicks in the head that they will then follow that. So, we are very conscious of that. So, it is absolutely up front to make sure when we recruit and we enroll, it is the right students getting on the right programme as quickly as possible. I know that it is classic at points but it is emphasising to make sure that systems and processes are absolutely up front and timely in doing that. That is the first step and the next step is obviously maintaining the quality and the continuous support for that student experience right the way through the programme. The information that we have would seem to indicate, I will maybe bring Sue in in a second if she has further comments on that, that there is this increase in non-completion related to the pandemic. It would seem to be a problem and it is great to hear that there is maybe some evidence that these things are being tackled. Those non-completion rates have remained, it would seem quite high, it goes far to say that it is very high for a very long period of time. I think that it is quite difficult to draw the comparison but the best information that we have would indicate that in England there is a far higher completion rate. Is that something that the sector recognises? If I could expand a little bit on my answer there is obviously when I have been responding I have been talking about there in reducing withdrawals so therefore retention. The reason I am doing that is because we know that retention is inextricably linked with the final success rate. So when we are talking about success rates and improving that quite clearly that is why I went for that point. One element that I am cautious and I must be honest with members, my knowledge and understanding of the statistics in England are not good enough to give you an expert opinion and the reason for that I am well aware that Scottish figures are based on FES which is Further Education statistics which I am very well versed on and very comfortable with. In universities you can compare England with Scotland because it is HESA. England has a completely separate statistical system and I have got to be honest I have no idea what the parameters of an English college declaring success or achievement compared to Scotland and if I could give you an example the Scottish programme is very black and sorry process is very black and white effectively if you have a student that attends for one hour in the whole year the role in the week the attend for one hour that goes down as an enrolled student so therefore they appear on an unsuccessful student there's a lot of debate and argument really that was an individual making a decision early on that is included in the Scottish statistic I have no idea if it is in the English statistic another example that colleagues will probably give you examples on students in programmes then gaining employment that is a failure as far as the statistic for the Scottish funding I don't know if that's the same in England another example is a student studying for example plumbing then gains employment and gets an apprenticeship they transfer within the same college to an apprenticeship programme and the original programme there are failure within that statistic now I don't know if that's the same in England so I'm loathed to make that direct comparison but there's obviously some connection there I find it difficult to reconcile the fact that I could have seen some of the English figures that are significantly higher my instinct might tell you there needs to be a deeper dive into that to understand that you can get an equivalence between the two but there's no denying we need to absolutely drive forward the success rates of our students and they have suffered significantly over the pandemic and at the moment we're at stage one of that that student experience and bringing that forward and ensuring they've got that face-to-face contact as well many of our students in particular FE students of which my college has a much larger proportion of FE compared to HE because of the nature of its college they have been disproportionately affecting and you can imagine if you're in a practical subject or a non-advanced subject you need that interpersonal contact if you're a more mature and steadied student that's on HNC the digital environment was either survivable or you could actually even thrive potential in that. Thank you, Sue. Thank you. I think Derek's touched on you know how we measure success and we've got very rigid KPIs that measure our performance and I think we need to have form our nuanced approach to that as Derek said it's seen as a failure if we lose students to employment now it's about impact and whether we can correlate you know what impact we've had in terms of their learning on their final destination and whether that is something that the college has contributed to rather than it just so happened to quit the course because they didn't like it and got a job regardless of their experience. I think there are two things there's retention which is one thing and how do we retain students because that's about their experience and why they want to stay with us or why they don't. I think there's the non-completion though which is for me it's the greater concern is people who stay with us right till the end and don't complete and I think the colleges have been a lot around that in terms of looking at cost design looking at flexibility of learning and we're doing a lot I think as a sector for those who do leave us to go into employment to be able to have flexibility of delivery that they can continue in their studies and gain their convocation but they've actually left the full-time costs etc so there's a number of things I think the sector have tried to do around flexibility of cost design, flexibility of delivery, it's about the student experience but I think underpinning that we do have a tap another look at how we're measuring success of our learners. The decline in completion rates is disappointing. SQA many of the warding bodies did allow us to make alternative assessment arrangements but for subjects that included health and safety, some practical skills, we were not able to use the alternative assessment methods and those students had to carry units over to the next year which has had an impact. Okay that's really useful as well I'm very specific I think and I have a last question on this area and I do have others on a separate area. This is around the widening access agenda I think Sue your points in terms of how do we measure success in this regard so one of the essentially my understanding of the widening access agenda is that this is judged by inputs in essence the number of students that are recruited rather than those who complete. Would we have been better talking or at least in addition talking about those that complete because when I've talked about non-completion it's currently sitting at 27 per cent for those in the widening access cohorts the lowest SIMDs that soars to 36 per cent. Now we understand I think collectively some of the reasons and the challenges around that but in terms of how we understand success would completion figures and reporting on completion figures for widening access be an appropriate metric to add. I think it needs to be reviewed and defined because for instance behind the suite of parameters you will be given might I say it depends on the question that's being asked and sometimes the standard set that you receive probably doesn't answer your questions and for example I know that there is a suite of parameters that sit behind some of the statistics that you're referring to that are more substantial that might be more helpful for example we do have the statistics it's per individual per head there are other statistics that are measured in credits I won't go down there but student volume of student activity and delivery that gives you a different picture and a different message so for instance in my college we have a very high proportional part time it can skew if you don't have the full breadth of information going forward there but there's no doubt that having clear definition if we have got policy questions to be answered we should have at a national level a clear definition of what statistics track that so for example we use perhaps we use SIMD as a as a major too broadly perhaps it needs to be broken down and there are lots of other data that sit behind that that we all collect but I would agree it I think it needs to be better defined to answer the specific questions and monitoring against policy can I quickly ask Stephanie Callaghan to ask a question that the other panelists may meet wish to contribute in response to Michael's question as well if that's helpful on this theme thank you thanks very much convener so just to touch on the on the wider issues around completion rates that Michael Madd has already mentioned there quite a short question from me I'm just wondering if there are actions that are specifically to address the issues around disabled students and care experience students being even less likely to successfully complete more likely to withdraw again it can respond within our analysis on a regular basis basis quarterly and obviously reported back to the the board of management for example through learning and teaching so it's monitored all the way through the process but what we also do is have a comprehensive process of dynamic operational planning so when we identify anomalies sometimes statistics are in a year in retrograde because you're looking back and then making adjustments moving forward but for example every single programme and every single course and I think it will be the same at all colleges have their course quality improvement tabulated down there and there is a requirement to look at all related issues be it for vulnerable groups or protected characteristics and then again so we look at statistically and we're talking about achievement rates yes we look at the breakdown of the protected characteristics for example and see how they are performing in comparison with the rest of the college we do it wider with the rest of the country as well when we're looking at it and that's looking retrospectively so the mechanism so the way that that's directly actioned is a college level there is an operating plan there's an evaluation a curriculum review within that but the expectation it will be the rest explicitly by programme that if a programme is identified that their cohort of students are perhaps following it and there are interventions that can be put in place so it's very I think we're actually quite sophisticated in the way we monitor and ensure some of it will be at an institutional level some of it will be local please I'm just conscious of the time and I know Sue wants to respond to some of these and perhaps Anne Anne first and then Sue okay thank you okay in support of fair work we need to ensure the increased prosperity and equity for all within our college community Covid has had an even impact on certain groups and one of the actions that we've taken in the colleges we've set up a new department for access and progression to support individuals furthest away from the labour market and to support fair access and progression so that's one of the actions we've taken in the last 12 months finally our last contribution from Sue thank you thank you very talked very much about how we monitor our performance against protected characteristics but it's important to know that we actually plan against those and you know we have two engagement strategies and plans we have widening access plans and although we've not been required over the last couple of years to formally construct these or report on these we do these as a matter of course in terms of our planning of you know how we support our students not just in general but for specific characteristics as well so there's planning there's monitoring and there's funding that we set aside to ensure that you know we've got the right guidance the right student support in place as well just wanted to mention that thank you no thank you very much and so we've clearly had a very packed session there and I just want to thank you all for your time and responding to the questions so in such depth and detail we found it really important so thank you for that we are now going to have a eight minute suspension to allow the change of witnesses okay so thank you very much okay thank you welcome back we will now take evidence from our second panel of witnesses this morning your microphone wasn't on you're okay I would therefore like to welcome Joanna Campbell who's principal and chief executive of Dumfries and Galloway college Neil Cowie who is principal and chief executive of northeast scotland college Angela Cox principal and chief executive of Ayrshire college and finally Hugh Hall principal and chief executive of five college as with our first panel this too will be hybrid as we have Angela Cox participating virtually Angela as you will not be likely to be able to catch my eye when you want to come in can I ask that you put a capital R in the chat box when you wish to speak or contribute and the clerks will be monitoring the chat box and I'll bring you in when I can so now I would like to move to questions and the first questions are from Graham Day thank you thank you good morning to the panel we've always gone through a process over the last decade which has involved merger and regionalisation I wonder if you could briefly give us your views on the extent to which those processes have achieved their aims what have been the successes and where is there still room for improvement in case shall I answer that first of all thank you for the invite to come along and provide evidence this morning and I welcome the opportunity to represent Dumfries and Galloway college in terms of the regionalisation processes as I said in my written evidence I think it's worked well in Dumfries and Galloway college and Dumfries and Galloway region from the point of view that it's increased our alignment to Scottish Government policy and it's provided us a greater focus on advancing opportunity for the people within the region that we serve and also supporting economic growth however there's two points I wanted to highlight to the committee where I feel that there's further work to do specifically within my region and the challenges of a rural economy are such that within Dumfries and Galloway region we are we have 95% of our business base our SMEs and therefore unlike other regions in Scotland there is no economy of scale we've got very diverse employer base and therefore I think I would describe the landscape as being slightly cluttered therefore there's still work to do in terms of regional coherence so for me that's an unfinished matter if you like within the regionalisation process and unlike other regions in Scotland the college is not always the focal point in the way that other regions operate and then the other aspect of regionalisation which have failed we still need to address and I know that in the previous evidence session you spent some time exploring that is the funding challenges particularly for rural colleges thank you good morning good to be here I've been at five college for five years as principal but priority that was the chair of fourth valley college for seven years and I was one of the regional leads that actually worked on the regionalisation programme under the then cabinet secretary so that gave me some insights into what was planned and also in a previous live work to the Scottish funding council what was one of the commissioning team back in 1992 when they created the Scottish Air Education funding council so i've got a wee bit of understanding of where we've come from I think regionalisation has achieved a kinds of scale I think it's increased opportunities for our colleagues our staff it's actually up to improve our offering for our local employers regional employers and the whole thing actually ran very smoothly it was delivered on time and we managed to as a piece of work that bringing together disparate organisations I think it achieved at same of creating new regional colleges it generated about 50 million pounds worth of annual savings in the process unfortunately all of those savings went back into the Scottish Government so the colleges didn't get the benefit of the savings which is rather unfortunate and the other thing for me which was the most damaging aspect of regionalisation was the decision to take colleges into public sector control and our on s of international statistics classification became that of a public sector so we certainly became part of Scottish Government financial regulations and so on with all the constraints and bureaucracy that accompanies that previously we had not freedom to operate in as much as we could do whatever we liked there were all the constraints that you would normally expect of a public life-funded organisation in terms of borrowing and so on but all of those flexibilities were removed on regionalisation I think colleges have been suffering as a consequence of that ever since the inability to borrow for example means that we are totally dependent on Scottish Government for our capital infrastructure financing the Scottish Government announced in 2014 that there will be two new colleges one in Falkirk one in Dunfermline but only now putting the foundations down in Dunfermline and it's been painful to say the least had we been a university the ability to borrow we would have been getting on with a lot of stuff like that so lots of bureaucracy lots of control lots of constraints so that's a real downside so upsides economy of scale and how we can work with employers the opportunities for our staff downside is is the straight jacket which is on s classification all the scotland college are welcome the opportunity to meet with the committee and share my thoughts it was interesting having been working with the college for about you know now 23 years I'm in a public servant for about 34 and very much grounded in the northeast as is my family and formerly a member of what was banned from buckham college pre-merger I got to see and understand exactly the kind of roll together you get when you bring two very big organisations into into a merge state and there are some things that you will lose and I think certainly I think the legacy colleges were very very different beasts and so therefore to actually kind of come together in one entity one culture one college took longer than probably we all anticipated nonetheless I do believe that we have achieved that and I think that we have through the three main campuses that we have been able to kind of keep going and we've established communities that we serve in slightly different ways there's some there's some genuine positive things that I think have come from from from the experience of regionalisation since 2013 I think that we've moved towards a more co-ordinated regional curriculum for the many of the former colleges to deliver in one way there certainly has been enhancement around regional progression pathways and I'd like to kind of name check the two universities that we we have particularly Robert Gordon University who we are quite closely aligned to in terms of progression and that seems to work really really well for a lot of our learners who wish to articulate degree programs but I would also say that we've got very very good relationships I think they've kind of forged in more strongly in terms of regionalisation for the two local authorities and the partner schools there in Aberdeen City and Aberdeen Shire and consequently I think that opens us up in better ways to be more accessible as a college for those pupils that are seeking to progress to us and from us and obviously into into the into university I think also there have been you know there are certain things around staff development more co-ordinated which has been really really helpful and again I think there's some benefits to the estate that we have had where others haven't for example we've been able to capitalise on the Fraserborough campus work that we had done pre-merger and add a stem centre to that which has been well used and similar similar the other things that I think have come as a consequence of regionalisation is strength in the regional relationships particularly around regional economic strategy around the activities of one you'll be currently aware of energy transition zone in Nessa and that is forming things very very well for our move towards energy transition and I think community planning has become more solid particularly in terms of Aberdeen City and that means that we're more joined up in terms of our more dominant planning arrangements for for the citizens of Aberdeen City. In terms of the drawbacks I don't necessarily have an answer to this but I expect the committee will want to explore this further as we as we talk. I think the student team has taken a hit and I think in particularly in terms of larger colleges that there's a complex set of discussions I think to be had around why that is still the case because that hasn't generally tended to improve and pre-merger the figures were certainly better in terms of where we were at in relation to some of the activities that my legacy colleges were involved in and I think something perhaps just briefly though the affinity to the college might have changed and be impacted as a consequence of regionalisation I think colleagues in the legacy colleges were very very connected to their own colleges having this new entity to to work with and promote and work within was a challenge I think for a good few particularly those in our rural centre at Fraserborough however I think that we've worked very hard as a leadership team to make sure that we are promoting that one college ethos and I think that that is working in terms of our enhanced engagement approaches particularly with our staff our students our stakeholders thank you. Angela, can I ask you to respond as well thanks? Yeah, thank you. Just for some context I joined Borders College six years ago after spending over 20 years in the English sector and I've been principal of Ayrshire College for just over two weeks now so my experience and examples will probably jump between the two but for me joining Borders College had a really clear regional focus being recognised as an anchor institution and being round the table with our local authority and other partners in terms of delivering on the priorities for the region was a real benefit I think to the socioeconomic disparity of the region. I think for me though we also need to recognise the importance of the travel to work and learn patterns depending on where you are and how that impacts on the economy so for us the economy in Edinburgh and Northumberland is just as important as the economy in the Scottish Borders and all colleges will have a set of unique skills and capacity that can add value to a national agenda if not international agenda so if I think of some of the unique programmes we have or I had in the Scottish Borders around performance sport, HND, downhill, mountain biking the only programme in Europe and we have more European students on that programme than we have and local students and if I look to air our unique sort of aeronautical provision where you shouldn't lose sight of that so that regional focus is very important but we're part of a bigger framework and that partnership working across that bigger educational framework in Scotland is critical and I think building on those foundations and colleges need to have increased autonomy and the ability to be agile to respond to the needs of the region and also those national economic priorities and a performance framework which is focused on impact rather than activity because sometimes the impact of what we do cannot be seen within six, nine and 12 months and I think that that's really important within that local region piece because often our focus is about community and engagement and not just about skills outcomes. One of the aspirations of regionalisation was that colleges would end up with greater clout and greater status in terms of the relationships with universities and I'm just wondering 10 years on to what extent have we achieved that, to what extent do we have parity of esteem and genuine partnership working between equals? Who would like to go first on that one? Graham, from my perspective I think we've worked well with our party universities. I do think that without attempting to try and cheat any business away from them, I think it's still seen as a bit of a gold standard that you progress to universities when I think actually in this day and age with the raft of qualifications that we have and the pathways that we have there are many options. I don't know necessarily nationally whether we've got that parity esteem with our university colleagues but I certainly think that as a regional player, Nesco does play alongside the universities and is supported to that end in ways that have probably elevated its status, I would have said, as a consequence of regionalisation. That's my perspective from my region. Anyone else? Joanna? Yes, I'm happy to answer that. My experience of working with universities is a particularly positive one. I think that we have better alignment, if you like, with post-92 institutions. Many colleges have extensive articulation arrangements with their local universities and further afield. Within my own specific context in Dumfries and Galloway, we are a partner on the Crichton Campus Leadership Group. The campus consists of a number of universities and the college, the college being the biggest educational institution not just in the region but in the south of Scotland. We are delighted to be one of the south of Scotland pathfinder programme of work. The specific project that relates to that is a piece of work that we are doing with University of West of Scotland, where we are looking to create a coherent learner journey from the senior phase of school right up to graduate level. I welcome that opportunity because it means that we can proactively plan progression from college to university that starts in the senior phase. Next year, we will be offering two specific programmes, one in cybersecurity and one in business, and that is to create an even greater higher education offer in the south of Scotland in recognition to the fact that there is a significant gap within the provision in the south of Scotland. Angela Constance indicated that she wants to contribute as well first, Hugh. That is okay? My experience in the Scottish Borders and Ayrshire is that colleges are seen with the same parity of esteem by our local authority, however, they are not seen in terms of parity, in terms of funding, where there is duplication, in terms of those higher-level technical skills, HNCs and HNDs, where universities are paid at a much higher level than colleges. I am not sure if that is a result of regionalisation, but my experience in Scotland around that partnership working is really positive. My example would be around the Edinburgh and South East City region deal, where four universities and colleges have worked together for over five years in terms of delivering on that deal and are now looking to where we go next and capitalising on the capacity and trust that has been established between those institutions. That is a really positive move. All of that will only become a reality if our funding and the controls that are put on college are relaxed so that we can respond to the opportunities that are there to work in partnership with our university partners. Over to you now, Hugh. I would say that the direct answer is yes, as has strengthened our relationship with universities. It has improved the parity of esteem, if you like, to put it that way. For me, there are two big issues at play here that get in the way of perfecting that parity. It is around funding. As Angela Sys said, the funding system in Scotland for tertiary education is a mess. It has been for a number of years. Everyone agrees that it needs to be sorted, but we have been talking about it for years and we have never actually done any about it. It is totally and utterly irrational the funding landscape, and it needs to be looked at as a matter of urgency. I think that there is also, for me, an issue where people associate colleges with further education, but colleges are actually further education and higher education. If five colleges, 30 per cent of our provision and growing is in higher education, and I think that people forget that fact. I think that there is still this notion that when you are a parent or a teacher and so on, the ambition is to get to university rather than to get to college. I think that a lot of the fantastic work that colleges do is not seen. We are not great at blowing our trumpet and saying all the wonderful things that are happening. We will get some fantastic students who, for one reason or another, will not go to university and want to go to the local college. They are often linked to vocational skills and they want to do a particular trade or something like that, or a modern apprenticeship and so on. Getting the message out there that going to college is as good as going to university in terms of what your future progression might look like, I was at the State Funeral on Monday at Westminster Abbey and I was sat next to a guy with a green uniform on and we introduced ourselves to each other. He was the chief executive of the North West Ambulance Service in Manchester. It was just phenomenal just having a chat with him. We had plenty of time to spare to chat. It transpires that he started his tertiary education in Carnegie College, a predecessor of Fife College. He did not do well at school. He had schooled in Edinburgh and did not do too well at school. He joined the NHS when he was 17, got a posting when he was in the early 20s to the Fife ambulance station. After a couple of years decided he wanted to study an HN, a higher national in management, went to night school, picked up his higher national, went on to Napier, got an MBA. He is now chair of the Ambulance Chief Executive Association for the whole of the UK. He is really inspirational stuff. A couple of weeks ago, I met a guy called Clive Bellingham. He came into the college. He is the vice president of the Institute of Chartered Accounts of Scotland. He went off to university, lives in Kirkwood, went off to university, did not like it, decided to come back home again, picked up an HN accounting at Adam Smith College, went on to become a Chartered Accounting, senior partner of the PwC, and is about to become the president of the Institute of Chartered Accounts of Scotland. Those stories are significant and there are a lot of them. We really need to get out there and actually tell the story. I think that when we do, then we'll start to get parity of steam. Thank you for those two. We had one of your students, Alex Bryson, one of our previous sessions. We spoke very highly of the support and the opportunities that he gets as a late for their education. Stephanie Callaghan wants to come in on a supplementary and maybe, Joanna, you might find scope to answer that one. Thank you. Fantastic story to hear from you there here. It's really great to hear, Joanna, about that planning for the progression from college into university as well there. My question is around how colleges are engaging with the local businesses and sectors to grow the curriculum, particularly in the key areas that link the research and commercial opportunities such as renewables, engineering, et cetera, there? I can answer that, Joanna. Going back to a point that was raised earlier, I think that regionalisation has allowed the college to be a key regional partner. Consequently, it means that we are more at the table now in terms of regional economic strategy discussions. In terms of our links to some of the employers that would be looking to facilitate, for example, energy transition activity, we can do that through the member organisations that we are affiliated to that would include, for example, energy transition zone, the regional economic strategy group, and the national energy skills accelerator. That gives us a conduit to some of the bigger players in terms of the industries that are quite common in the north-east. However, what we also do, I think, pretty effectively as a college is that through things like the flexible workforce development fund and through our activities, including our modern apprenticeships, offer, we have a lot of links into a lot of employers for the north-east. What we have seen, even though it took a big hit as you would understand through the Covid years, what we have seen is that we have grown that activity back. For example, modern apprenticeship numbers had dropped quite a bit during the two Covid years but have now picked up substantially and encouragingly. Similarly, our allocation of flexible workforce development fund and our spend of it is significantly higher than what was pre-Covid. Again, I think that what we are getting from a college perspective is that by and from employers. We are certainly getting the connections right in our region, and people are aware of what the college does and what it can offer. I think that that is encouraging when we are with the join. Do you want to say anything? Yes. Just to build on the point that Neil made, certainly over the last 12 months I have seen an increase in the number of employers that we have been able to support through the flexible workforce development fund. At Dumfries and Galloway College, we have had roughly a 25 per cent increase in the number of modern apprenticeship places that we have been able to provide employers with. Most colleges run a number of fora, if you like, where their employers are able to engage directly with the colleges. That allows us to develop a curriculum that responds to what the employer's immediate need is. One of the things that we are really keen as a sector to do is to support that move towards microcredentials. There is an agility that exists within college curriculum that our awarding bodies do not necessarily keep at pace with. What colleges are doing is that they are able to offer up-skilling and retraining provision, and I credit that and award it themselves. That is something that we are keen to do more of. If you have read the funding council's report, you will see that that is one of the recommendations. On Dumfries and Galloway region, we have been working very closely with our local authority. I mentioned the Crite and Campus Leadership Group as well. In response to the challenges around net zero, we developed Green Skills Academy a couple of years ago, and we have been working with employers and our local authority to look at training in specific aspects of that particular area. For example, supporting electric vehicle maintenance, looking at wind turbine operative training—lots of different offers there. The result of that is that we are now able to support the move towards a decarbonised economy. That features as part of the national strategy for economic transformation. I will go back to a point that I was going to make about parity of esteem. There were two aspects of that that I wanted to come back on. The college sector offers approximately 26 per cent of our intake. On an annual basis, they progress on to university study, so that means that a quarter of all students that come into the college sector every year are effectively doing year 1 and year 2 of degree. The reason why I am telling you that is that there is parity of esteem, but there is also duplication in the funding. There is an anomaly in the SAS fee that the colleges receive in comparison to the fees that the universities receive, and there is also overlap in that funding. If you are looking at efficiencies in terms of the public parts, there are further opportunities there. I will draw our attention to that. Angela Watt wants to come in and then we will move on to questions from Oliver Mundell. First of all, my experience in Borders is a very small college in the Scottish landscape. We work with around 500 employers a year. The vast majority of them are small and micro-businesses who really look to colleges to support their workforce development and innovation, although often colleges do not recognise innovation as it is. I am also a trustee or a board member of interface, and all the funding and measurements and focus around innovation sits within the university sector. As we progress, the need for our small and micro-businesses to be sustainable and grow in line with the end-set strategy, colleges need some capacity and funding to develop that innovation offer that we currently provide through our current funding mechanisms. In terms of renewables, a really good example of where colleges have been agile is that Borders College was given a significant chunk of community renewal funding to develop a sustainability academy. We were able to provide training for over 500 people over the last 12 months on sustainability programmes, a whole different range of programmes for individuals and businesses. The reason that was so important for us was because we were not constrained by a qualifications framework. We could develop short three-hour programmes, nine-hour programmes that could be online, that could be in person, and it was very tailored to what individual businesses and individuals needed. Without that funding, we would not have been able to do that as an organisation because our funding was all allocated through different funding lines. Colleges are a heart of economic development in the regions that we work with and listen carefully to employers across the region. It is one of the strengths of regionalisation. That has given us status and the ability to go in there and give a good offering to those employers. We also work with local authorities and direct economic development operations and so on, so that aspect is working well. The Government is pushing very hard on work-based learning, pushing things like foundation apprenticeships and graduate apprenticeships, which is quite an increase in the demand for modern apprenticeships over just the last year. Unfortunately, the funding landscape does not fit with the push for greater work-based learning. We are getting signals that the flexible workforce development fund is going to be reduced in the coming years, which seems counterintuitive. There is about £2 billion spent each year by the Scottish Funding Council and by Skills Development Scotland on colleges and universities, which is a core grant. The funding system has not changed in a good number of years. Skills Development Scotland is focused on apprenticeships and other work-based learning type activities. The funding council is core grant, which is related to legacy funding. I hope that, at some stage, someone will take the decision to bring Skills Development Scotland and the Scottish Funding Council together. At the same time, as we look at the whole funding landscape and have a funding landscape that aligns with the economic development needs of the country, there are not just simply legacy funding arrangements. Lots of nodding heads there. Can we now progress on to some questions from Oliver Mundell? Thank you. I thank the witnesses who have already touched on a lot of the topics that are of concern to me, particularly around the challenges that are facing smaller rural colleges. It is just a note from Joanna Campbell's written statement about the impact of flat cash, the pressures of inflation and some of the things that colleges have been asked to do. It is really just to ask how the kind of lack of funding is going to impact on your work over the next few years. I am sorry, I was speaking to my advice, Joanna. Sorry, I have missed that. The challenges of the rural economy are such that it is difficult to achieve the same efficiencies that you would find in the larger colleges and, predominantly, because we are dealing with smaller cohorts of students. However, in terms of the funding challenges going forward, we have flat cash for the next five years. I know that you had representation in the last evidence session with regard to that, although I would not want to put a quantum on what that looks like. From my college's perspective, what I can say to you is that it presents a significant challenge for us in terms of financial sustainability in the next five years. The need to work in partnership with other public agencies in the region is even greater than ever. In my introductory remarks, I spoke about a clittered landscape in Dumfries and Galloway region. Essentially, what I would like the committee to appreciate is that there is a need to drive greater financial sustainability by reducing overlap in that system, if you like, in my particular region. It is harder for a small rural college to generate additional income in the way that it is for some of the larger colleges, predominantly because of the employer—the make-up of the employer base that we are working with. A rural economy has lots of small employers that are not necessarily large employers where you would perhaps be having a whole cohort of modern apprentices. We are dealing with lots of individual businesses. That is another challenge that we have to address and we deal with. I am not sure if anyone else wants to come in. I am coming from the boarders. I would echo that, but what I would say in the very short time that I have been in Yershire College is that the real risk apologies in the current funding climate is our inability to do what we are brilliant at. That is around fair access and inclusive growth. Yershire College is a large college, but we have rural economies surrounding us and reaching out to those most vulnerable in isolated communities. That can sit within an urban setting but it will become increasingly hard because we will not have the flexibility in our funding to offer something bespoke to those individuals. There is a risk that everything becomes a bit mainstream. That is the richness and uniqueness of colleges in that we are inclusive organisations and we offer something for everyone within the communities that we serve. I am pausing, because I am not getting any eye contact with all of our arounds. I was just playing, if you want to see more. I will enter up for a second. We have a tight schedule this morning and we have four panellists, perhaps from questions going forward if we can direct them to specific panel members. If someone really wants to contribute, they can then catch my eye. Over back to Oliver Mundell. Thank you, convener. I just want to cut people off. The other question that I had came up in the previous panel in Glasgow was whether there have been significant mergers of colleges around regionalisation. Obviously, that is more challenging and I would say impossible in some parts of the country just because of geography. However, do you think that there is pressure within the system to look at what I would say was unsuitable mergers or significant changes within the structure of colleges to try to deal with budgetary pressures? I am happy to put that open to anyone. The financial outlook for colleges is not good. That is what everybody acknowledges. I am an accountant though, so you just give me a set of figures and I will come up with the answer that you are looking for. Colleges have great assets, brilliant people, infrastructure, terrific infrastructure and so on. What we need to do is to be able to maximise that. If our core funding is being cut, then allow us the ability to innovate, be creative and get out there and earn additional income, but we cannot do that because of the constraints of ons classification. If ministers want to help us to solve our financial challenges, then they can do that very quickly. The Cairns review had a number of recommendations, which I think would be very helpful if we accelerate taking those recommendations forward. It is disappointing that that report was published in June last year. The minister responded in October last year, and we will have to wait until next summer to get the statement of intent from the Government. We are in a crisis situation. We need the statement of intent now. We need the constraints to move to allow us to move forward. I think that there is also going to be some structural change. I think that it is almost inevitable. I do not think that there is a geographic issue where you can have campuses in far-flung areas, such as Merger going on to Highlands. They are very distant, rural areas. I heard at what university I will get campuses all over the world. I think that we will get models that we can look at, but I think that there will be further structural change. I think that it will come through the very strong relationships that colleges and universities already have. We are not talking here necessarily about mergers. There are different models that we can adopt. We can look to other countries how they operate their tertiary education system. You look to America, Japan and Australia. They have federal models of delivery. I, as a five college, will remain five college. You will not lose that brand, but I will be working with several other institutions, universities and colleges in the delivery. That gives you economies of scale. It helps tremendously in the removal of duplication. It brings your academic colleagues together to enhance the programmes that we provide. It gives you a much stronger seat at the table when you are talking to government and local authorities and businesses. There will be further structural change within the sector. I think that it will involve colleges and universities, but we need government to come out and exercise a bit of leadership and direction at this time so that we are not pushing further down the road for solutions at a point in time when we have already had to lose jobs and everything else. I am a believer that we should not be losing jobs. We should not be sharing jobs. Why would you want to do that? We should actually be growing the businesses that we have. Willie Rennie has a short supplementary. Why does the Government not get this? I think that you might want to put that question to the Government Minister. It is not for the want of asking, in my part. They feel that they need to take the time to do it, but that is a matter for questions. I really do want to underline the need for some urgency here. If we were a corporate, if we were any other business, you would be around the board table. You would be making decisions based on the evidence in front of you, and you would be getting on with it. We are not getting on with it. If the Government does not seize the opportunity. I think that there will be issues for quite a number of institutions around our financial sustainability. I think that there will be need for bailouts. I think that there will be job cuts that are perhaps very avoidable. I am hoping that none of that is going to happen at Fife College, because, regardless of what the Government is going to be doing, I am not waiting to be tellt. I am getting on with it, but I would find it much better if I had the Government alongside me working with me to come up with solutions. There are lots of options that we could be exploring, and we need to go on with it. We have been very progressive since regionalisation kicked in, and we have sought to meet national regional priorities as best as we could. The concern that we all have is that the day-to-day operations of our colleges are becoming trickier, because we are already very lean. Regionalisation saw that in terms of the amount of efficiency savings that we had to make in order to merge colleges together and embrace the regionalisation ambition. There is a national strategy for economic transformation. Fundamentally, there are some big asks in there, and I think that all the themes within that apply to the college. The skills one has been singled out as the colleges one, but it is not. I think that we fit into all of those themes, and to have that delivered within the 10 years of the proposed strategy is almost impossible to understand how that is going to be achieved in the current funding climate. I know that Michael Marra has some questions on that thread that will pick up ever so slightly in the future, but I am going to move to Colcab Stewart first, if you could direct your question to a member of the panel. Thanks very much. I went on the college finances of the previous panel, but a lot of that has been covered. My observation is that you will not be surprised to know that I have some sympathy with your position that you are having to work within a finite budget that is being impacted by the cost of living and inflationary. You cannot borrow, so I do know that that is a tricky situation to be in. However, you talked about the office for national stats that has created as a public body. I am assuming that by being a public body that increases the accountability that colleges have. I am just looking for solutions of moving forward. If you were to vary the business model or the funding model, how would you balance the accountability versus colleges having a little bit of extra space to be able to self-fund as well? I do not think that being non-ONS classified, if you like, so we still be a publicly funded body. For most of us, that equates to about 89 per cent of our funding coming from the Scottish Government. That comes with all manner of constraints and requirements and so on. The ONS classification is just a particular issue within Government accounting, and ministers took a very conscious decision back in 2014 to allow that ONS classification to take place. It was in their gift not to go down that road. I struggle to understand the benefits to the Scottish Government of having colleges ONS classified. No one has ever explained it to me. Any of the risks associated with governance and accountability are easily taken care of through the annual financial memorandum and accounting arrangements. I cannot see her downside. I can only imagine that it is philosophical, but if you are getting the opportunity to speak to ministers, maybe you could ask them the question, because I am puzzled. That classification does across the whole of the United Kingdom, though, does it not? It is not just in Scotland that applies. I understand that colleges in England are not ONS classified, but I could be wrong on that, but my understanding is that they are outside classification. Perhaps, Angela, you were worked south of the border before you came up to borders in the near future, just for confirmation. Colleges in England have a lot more autonomy and flexibility around how they generate income, take loans in terms of investment and retain any profits or reserves that they might have so that they can invest in future years. There is much more flexibility to operate as a business and plan longer-term than perhaps we are able to do in Scotland. I was just about to ask what the impact was of multi-year funding. Has there been maybe Joanna would like to come in on that? Obviously, we operate on an annual basis. Our funding is allocated on an annual basis, but if we were to move towards a multi-year funding arrangement, which of course is a college sector that we have been pushing for, then that means that we would be able to plan on a longer timeframe. It would mean that we were able to undertake pieces of work that lasted longer than perhaps one academic year. Going back to the point that you asked about declassification, for the college sector it means that we are able to reinvest those surpluses. Multi-year funding deals along with declassification would mean that we would be able to reinvest that into our estate. If you followed the most recent Audit Scotland report, you will see that there is a huge amount of backlog maintenance that the college estate requires. The ability for us to address that without investment is significant because multi-year funding deals along with declassification would make a significant impact on allowing us to be able to address that going forward. Thank you. I want to take us back to the statement of intent. It strikes me that it is in response to the review of coherent provision and stability and sustainability in the tertiary sector, but there is also a plethora of other documents and plans that have been or suggestions that have been produced in recent years. Can I ask if any of the four of you have been involved in discussions around what the statement of intent might include? Shaking heads? Shaking heads? No? No. No. Okay. That is useful and interesting. There is also my understanding that there is a group of an excess of 20 civil servants working around this area in St Andrew's house or some Scottish Government office somewhere, but there is also another group of civil servants working in the Scottish Funding Council working on this same area to try and produce some kind of… Do you have any insight into the process that might be following? You are all leaders in this sector. You all bring the experience to the table. Any insight into how the Government is making those strategic decisions? No. I think that it is quite concerning on those levels. I also wanted to put to a little bit of what we heard from the previous panel. I mean that we had a pretty concerning to say the least. I thought quite devastating evidence from the principal of Glasgow Kelvin College saying that he is projecting he is going to lose a quarter of his workforce as a result of the current cuts that are being brought through. Have you had the opportunity to feed those kind of headwinds if we could use that euphemism into the process about what might happen? Has there been any opportunity for you to input those kind of issues? We are all finalising our financial forecast for the Scottish Funding Council, which are due in at the end of this month. We have all been in the thick of it. That separates our budgetary arrangements and our plans that we have put to our board. That is a high-level view of what the next five years are going to look like financially. The Scottish Funding Council provides us with a list of assumptions in preparing those, which are totally and utterly removed from reality—inflation at 2 per cent, that type of thing. Under some pressure from the colleges, the finance directors of the colleges come up with a separate set of scenarios that we all felt were much more realistic. Given the volatility in the economies at the moment, it is a difficult thing to do to get any clarity around financial forecast. Those mechanisms are in place. Certainly, for five colleges, we have a third scenario, which we think is much more realistic than the other two. We have now finalised that. We will go to my board next week and go to the finance committee tomorrow afternoon to review it. We are still going through that governance process. I think that it has been appropriate for me to get into any detail on that, but one of the things that it looks at is headcount reduction. It also looks at other opportunities for growing your commercial income, to take out non-salary costs and so on. For all colleges, we want to minimise, if not avoid, reductions in staffing. None of us want to do that. It is very much a last resort, but it is too early to say what the percentages would be. It is going to be tough, which is why we have to think out the box. Work across colleges and universities will come up with scenarios where we will minimise the number of job losses. There will be people who will want to leave colleges because they get to an ageing stage where they want to move on. That is also an issue. When you look at the profiling of ages within colleges, 50 per cent of my workforce is over 50. I am not making an ageing comment there, but I am one of them. We need to understand that people will move on and so on, but we want to try to avoid job losses. Is it your expectation that those documents that you produce are as critical as they are, that they will inform the reform process that the SFC is undertaking? Is that your expectation? When we hope so, I think that when we put those scenarios down in black and white and we say that here are all the different issues that we are now faced with, the funding council will then take that to the Scottish Government and hopefully that will then underscore the degree of urgency about all of this and ministers will then make decisions on the back of it. As you say, there has been a lot of reports in the college and university. More reports than you can shake a stick at. We do not need any more time for deliberation. All of the evidence is there. What we need now is leadership and decision making. I will not repeat a lot of what Hugh MacDonald has said, but we need to be mindful that more than 70 per cent of the funding in the sector goes into pay. There is not an awful lot of room for colleges to make those efficiencies and within the current constraints to grow our provision. If the level of reductions or increase in costs are realised over the next three to five years, it is inevitable that there will be people losing their jobs across the sector. We have been set a list of scenarios from the SFC, which is based on flat cash but also public sector pay policy, which is at 2 per cent. Inflation is sitting at 10 per cent, so colleges will have to likely find some funding to support our pay claim if we are to give a pay claim at all. We have an increase in energy costs. We all have big buildings and expensive buildings. We deliver a lot of technical qualifications that are expensive to run. When I was leaving borders, our budget for construction and consumables had already been nearly used up for the year, just in the increase in resources for the year. There are real and immediate challenges there, but the scenario planning is difficult because what we have been provided from the SFC is at odds with where we think it will end up. However, when staffing is at over 70 per cent of our cost base, there is not much room for manoeuvre. Just to build on what you said, it is time to think outside the box. It is time to look across the post-16 educational landscape and ensure that we have value for the public purse. Certainly, in my region, there are a number of public sector agencies that are focusing on skills. From my point of view, colleges are at the heart of economic recovery and are best placed to focus on skills for their regional economy. For me, what I have been planning in that financial scenario is about creating headroom for growth. My operating budget is quite small in comparison to some of my colleagues who joined me on the panel today. Nonetheless, for me, there are significant savings that will need to be made going forward. 74 per cent of my costs relate to staff. The majority of staff costs are teaching staff, so there is very little room for me to reduce those costs even further. We are running a very efficient curriculum offer. We have flexibility in how we offer our programmes, but there is very little capacity to be able to respond in a way that does not mean that we will have to look at our workforce. I do not want to give a quantum on that, because that is an on-going discussion with my board and my senior team. I also want to come in. Please reinforce a message here. As other colleagues have done, we have done some modelling in terms of the SFR that is to be returned to the SFC. With the assumptions that have been given, if we take our own assumptions that include inflation, pay and other increases in things such as gas and electricity, it would quadruple what we are anticipating in terms of the possible deficit. We have already planned through volume 7 some reduction in staff at 2022-23, but that was on the basis of our original deficit position or balance budget of the deficit of far less. Consequently, if we are going to have to quadruple that loss of staff by four, that will be significant. I want to restate a point that was made earlier on in that that makes the day job far more difficult and, therefore, outcomes and support for learners will be challenged. However, if we are then to do the day job and meet the ambitions of, for example, the national strategy for economic transformation, that will be nigh on impossible unless there is some fundamental change in the approach to how colleges are funded. Michael, you have got one brief. I think that the current operational context is very important when we are reflecting on this. We took evidence last week from the SQA regarding the outcomes. I was keen to understand the issues of lost learning, so students who have had to produce curriculum, who have not had the experiences they might have had, and Robert Quinn said in response to one of my questions that I feel strongly that the college sector should be well placed to provide support. Has the SFC asked you to give any indication of what additional support you can provide to make up for lost learning? We had a quantum of our funding that was ring-fenced for deferred student places, so those were students who had not been able to complete their studies in the last academic year. We had that the year before as well. There has been a little bit of headroom to allow those students to complete. I guess that one of the difficulties that we faced over the course of the past two years was when dealing with the impact of Covid, we needed to respond very quickly in how we were able to allow our students to complete. Some of those students have elected to leave the college system to go out into employment. If I can, I am referring to the results this year. It is very relevant to some of the operating conditions that you find, but any indication that there is any form of resource or expectation of support for the cohort that is leaving school this year—we have just received their grades coming into college starting this week, class week—is that being quantified and measured by SFC? Is that being appreciated that you are being expected by the SQA to do that work? No indication? It can be a very succinct, yes or no answer. It is no from me, but my colleagues may disagree. No? No? Anangela, is that a yes or a no from you? It is a no from me, but I also want to add that it is not just a bit lost learning, it is about the development of social maturity and it is about dealing with the mental health fall out of those young people and adults, which will contribute to an increase in drop-out. We have a supplementary on the theme from Graham Day, please. Joanna Campbell said a moment ago that 70 per cent of your costs went on staffing. I think that earlier today we heard of another college where it was 80 per cent, but the latest figures available for universities, which are from 2019, suggest that the average spend on staffing is 55 per cent. Now, that at face value is quite a discrepancy. I was wondering from your position whether that is a light for light comparison, because you will accept that. That is quite a difference. Joanna. Yes, it is quite a difference, but colleges and universities are very different institutions from, if you look at their balance sheets. We do not have the ability to generate a surplus, as we have heard already. We also are not engaged in research activity in the same way that universities are, and therefore it stands to reason that our staff costs are going to be significantly higher. The other thing that I would add to that, from a rural perspective, over the course of the last number of years, as we have gone through harmonisation in terms of our pay for our lecturing staff, it is fantastic that we have been able to harmonise those terms and conditions. However, from a rural point of view, that has meant that our staff costs have gone up quite significantly in the process of harmonising those pay scales. That would suggest that it is their ability to create income that is the difference here. That is what is creating the discrepancy. Is that the case? I hope that there are a variety of reasons for that. When you take into account that most universities are research intensive, a lot of the costs would be associated with research and knowledge exchange projects that do not necessarily have a high staffing input. That could be one factor. The nature of the spending is right. If you look at the profile of the commercial revenues versus the publicly funded revenues of a university, it is statly different. However, you also need to walk around, as I suspect MSPs do, universities and colleges to see that they are very distinctly different in many ways. Much of that is to do with the fact that universities generate a lot of revenue from international students. In fact, that is where they make the biggest margins. It is not in research, but it is actually on international activity. However, as we mentioned earlier, they get a higher unit of resource for higher education than colleges do. That is anomalous, and I hope that we will be addressed. I am not suggesting for a minute that we reduce the unit income for universities. I think that that is a case of levelling up colleges so that we can provide the same facilities for a college student as they would get when they attend a university. There is a lot of unpacking to do in your question. I think that I want to go away and do some analysis that must be the accountant in me that is coming. Perhaps I should write back to the committee on that. That is fine. Maybe I should declare interest as the next employee of ICAS. Can I hand over now to questions from Ross Greer to the panel? I was really interested in what you said a couple of moments ago around the relationship between SDS and the funding council. Obviously, there was a pretty obscaving report about how dysfunctional that relationship has been recently, but it seemed that you were suggesting essentially a merger of those two organisations because of that overlap. Just to clarify, that would create quite a large public body. Are there specific functions of SDS that you think would better sit with the SFC or vice versa, or are you proposing that wholesale both organisations and all of their responsibilities, everything from the national career service to apprenticeships to university and college funding, should all sit under one public body? I have got to declare an interest here because I was the lead person at Scottish Enterprise. I was the chief financial officer at the point of creation of Skills Development Scotland, so I had a lead role because we took what was career Scotland and took it in. All sorts of other changes happened at the same time. I was particularly keen to look at the funding aspects of it, the skills aspects of it. It is that part where I think there is scope for much greater alignment, much greater convergence, a lot of creativity around the nature of the funding, much stronger work-based learning type activities and so on. I think that it is open to discussion about what we do with the careers aspects of Skills Development Scotland. I think that there is scope for the commons of scale by bringing the two organisations together, as well as making them more impactful and effective. It is all up for review. This has been talked about for quite a number of years, but I am not aware of any deep dive study to look at the real benefits that would come from joining those two organisations together. That deserves further exploration in this Parliament, whether it is by ourselves or perhaps the economy committee. I have a couple of questions across the panel on industrial relations. For the first, I would appreciate it if everyone were able to answer, because it is just a point of clarification. There was an NGNC agreement a couple of years ago around local dispute resolution processes. Having each college agree to that dispute resolution process, that is with the EIS. There is obviously a separate situation for support staff. I am aware that, at this point, a majority, but certainly not all colleges, have that local process agreed and in place. Can I just check with each panel what the status is at your institution, if I may go along the panel in person and then to Angela, if we start with you? Yes, we have that in place at Fife College. We are currently in discussions with our LJNC about a matter that has been raised under that circular, and we will go through the local arrangement before, and hopefully it will not be referred to the national committee. Do you have an indicative timescale for when you hope to reach a resolution on that? I cannot give you an answer on that at this committee, but we are not talking months, so it is more likely to be weeks. However, the LJNC is due to meet tomorrow, so that is why I cannot give you a firm answer on that. Ross, from my perspective to my knowledge, we have it in place. I was in an LJNC meeting very recently where we had agreed that it would be reviewed imminently, so that is in train. From Ayrshire's point of view, we have an LJNC agreement in place for both our trade union recently. Unison has raised some queries around that, and there has been an alternative model that has been put to Unison, and we have waited, but hopefully that will be resolved very soon. I will stay with you. My next question is, because I am interested in your perspective, having been elsewhere and now in the Scottish sector. In seven of the last eight years, we have had national industrial action. Clearly, industrial relations in the college sector are not what anybody would want them to be. Have you been interested in your reflections on that comparative to your previous experience elsewhere? Do you think that it is something unique to the Scottish sector that we can resolve, or is it unique to the time period that we are in and wider public finance constraints that we have ended up where we are? I can only go on my experience, and others may have different experiences depending on the colleges that they are in. Coming from the city of Liverpool College, there is obviously a huge focus on trade union involvement and negotiation, going through very big transformational change there, and I was involved in that trade union striking on more than one occasion. I have to say that my experience in Scotland is locally. I have had really positive and collaborative relationships with our trade unions. I have not experienced anything that would be out of culture to what I have had in my experience in the English sector, but I think that there is a little bit of a disconnect in terms of some of the national narrative and what is happening on the ground locally within colleges. It is something that we need to work through and it is to do with national bargaining and how our trade unions position themselves in terms of national bargaining. I want to distinguish between what is happening at national level and what is happening at regional level. I read the evidence session that Stuart Brown and colleagues gave and Stuart is a friend of mine. Some of the language alone lack of trust and some of the antagonism around that may be a feature of national bargaining from time to time. It certainly is a feature of the relationships that we have at a regional level, which I would describe as very cordial. We work very closely together. We give advanced sight of what is going on. There are regular meetings that take place on all of the big issues. Some of the stuff that we have been talking about this morning are financial forecasts and so on. I have a workshop on Monday with Unison and the EIS reps in the college where we are going to talk through all of the issues. Regionally, industrial relations are very positive and strong. Nationally, it did not get off to a great start when national bargaining was introduced by the Scottish Government. I think that there have been lots of bumps on the road and so on, some of which I would say are very avoidable. We need to learn the lessons of the past several years and maybe have a wee rethink around how we deliver on the national bargaining aspects. There have been several reports that you will be aware of that have been written on this, lessons learned and so on. At the end of the day, it is actually about people, and it is about getting people around the table who are committed to making things work for the good of the college sector. I know that Stuart Brown and other EIS colleagues have got that very much at the forefront, so I will share that aim to do what is best for the college sector and get around the table and work through some of the issues that we need to do. From my perspective, Ross, I would echo what has already been said by Angela Brown and by Hugh. It was pleasing to note within some of the submissions for this committee that Union College recognised that there was good practice, even though they were focused on where there was not. I think that it is not rocket science, but it is about positive relationship building. You are from the get-go when I came into post and I came into post on 20 December 2019, although I had worked with the college for many years beforehand. I sought to make sure that we had enhanced engagement practice across the college in terms of student body and in terms of our union colleagues. They were very much part in a consultative and progressive way about what it is that we sought to do as a college, particularly when it came to dealing with the pandemic. We have kept that and managed that through the pandemic and beyond it. However, I recognise and speak to colleagues across the sector that we are not all in the same place. Some of the things that we have set in motion, even though the legislation does not necessarily allow us to do it per se, we have had our union colleagues on the board represent for the past couple of years now. They get to see from the top and through the organisation exactly what we are planning and what we have input into that. Of course, we always know that we will at times differ in opinion, but we have at least created the kind of professional fora to allow us to have those conversations and hopefully get as few as it is indicated and get something that is fundamentally impactful for those people that we serve. Joanna Cymru Just to echo what has been said already, at local level, my experience of working with my trade unions is very cordial. We work collegially around some of the issues that we need to address together. Through the course of dealing with the impact of Covid, the trade unions were able to offer advice and support. We worked with them very closely in terms of what has happened in the past number of years with national bargaining. The funding that we received from the funding council as we went through that harmonisation process was very welcome, but equally, you could argue that it raised expectations going forward and has provided significant financial challenges for us as a sector. However, if we look at multi-year funding deals, that gives us more scope to be able to not have to spend—I will rephrase that—a scope to be able to work in a longer-term planning perspective with our trade unions around pay deals, etc. The single-year funding deals have exacerbated not expectations but challenges and have been able to afford what we can. Rightly so, our staff deserve the pay rises. Basically, we would like to be able to be in a position to give them, but there is an envelope that we need to work with in as well. There have been a number of lessons learned reports. The latest lessons learned report is still due to a response from the Scottish Government. Does anybody have any particular points that you want to see in the Scottish Government's response to that? Any proposals from them on reforms to the NJNC and wider change in the sector? Is there anything in particular that you are looking for? I await the Scottish Government's response with interest. That was a politician's answer. This is a question for Neil, Joanna and Angela on this matter. What are the key reflections and recommendations following the regional tertiary pathfinder pilots? Which one would like to go first? Joanna? We are still working through those projects. We have a programme board that has been established in the south of Scotland. We have three projects. One deals with a pathway between Dumfries and Galloway College and the University of West of Scotland. One deals with a digital skills hub, which we have been running for the past couple of years. The other one focuses on net zero. I am less familiar with the net zero one because it is a project between SRUC and Borders College. We are working on a very fast moving time frame. The deliverables are expected in March next year. We are making good progress with those. However, it is too early for me to indicate to you other than that it has been a very positive experience so far, but it is too early to comment on what the outcome of those is at this stage. From my perspective, the timescales are pretty well the same as Joanna is working to, but there are four key strands to the north-east Scotland pathfinder projects. That includes the continuation and development of the Nesculage EU strategic partnership, which will include joint planning and provision of programmes, the development of pathways and shared, possible shared services. When we say shared services, we are talking about more targeted services for engaging learners, particularly those that are more likely to become disengaged or be disadvantaged. The three main tertiary providers, the two universities and ourselves, will be involved in a health and care partnership. That will involve the promotion of pathways and work opportunities in health and social care professions. We will go into, again, a tripartite arrangement around energy transition, which is about skills provision for transition and emerging industries and our net zero ambitions for Scotland and for the north-east. The final one, which the college is leading on, is the review of the senior phase in the north-east and how the three tertiary providers can impact more positively in conjunction with the local authority partners and the partner schools to better effect and ultimately in terms of progression and attainment. There is one little thing that is in there that is quite important. It harks back to the Comforter Little report, which has been touched on slightly here. Within the Nesculage EU strategic partnership, there is an exploration of creating a one-stop shop for information around tertiary provision in the north-east and what that might look like for learners, employers, parents and other influences. I think that there is some really good work that has already gone on predating the pathfinder that will hopefully come to fruition in due course. In there, it is about how the articulation arrangements that are due in Nesculage EU have worked so hard to establish over the years for degree programmes can actually work for the apprenticeship family. We are also exploring how we can actually create homegrown qualifications that are fit for the employers within our region that will allow us to fast track what the skills deficits or needs are in those regions for our employers. That is alluded to in the Comforter Little report as well. I will not repeat what Joanna has already said, apart from the project with the SRUC in Borders College. It is actually around land-based and natural capital. It has a sustainability strand, but it is around that land-based provision in the south of Scotland, making sure that we have a single offer. It then moves to joint curriculum development and joint working around innovation and research in that space. I will not be involved in the pathfinders moving forward, but what I would hope would come out of that is that the sector is able to showcase how we work together using different types of models. There is no one-set way of collaborating and there are different ways in which we can work together to benefit our regions and national priorities. Willie Rennie has a supplementary question on that. It was on the trade union relationships just to finish off on that point. I understand that the relationships locally are good, but is that not because you individually do not have the power to give the trade unions what they are wanting? If that is the case, why collectively are you not able to do what you are doing locally? We do have the power to give the trade unions locally what they are looking for, because all sorts of terms and conditions and ways of working and so on, where we make decisions at a regional level that impact on the working conditions of their members. From that point of view, it is an effective relationship. In the past few weeks, I have been talking to trade unions, the IS in particular, around timetabling and class sizes and digital learning in all manner of different things. Those are all decisions that will be taken at the regional level. It works. I think that when you bring it up to the national level, one aspect of it is that often the people around the table—I have not been too closely involved in national bargaining—are not working as closely as you would work at a college level. I see my union reps in the canteen and it was walking along the corridor and I said, hello, and you have a relationship with them and you have an understanding of the communications flow and everything else. I do not know whether that is one aspect of the national bargaining machinery where it does not work so well because you do not have that chemistry, you do not have that regular communication. I think about how you can start to make that work. I know that people like Stuart Brown, so I have some ideas about how we can make those sorts of changes. It is taking people at the end of the day, and I do not think that we will be dismantling national bargaining anytime soon. There are a lot of benefits that flowed from it. As I said earlier, can we just sit round the table and make it work? I am Neil, and you want to respond to that. Again, I reiterate that it has been the huge reason that my understanding is that the Gareth Donnie, who has come into college at Employment Scotland, is attempting to build that way of working, because I think that it is about relationship building at whatever level. That is what is going to produce the better outcomes in the longer haul. Thank you very much, and I would like to thank everyone for their time today. It has been a very informative session. Thank you so much. That is the public part of today's meeting now at an end for those who have just walked in. I am sorry. We will now consider our final agenda item in private.