Chamber and committees

Good morning and welcome to the eighth meeting in 2022 of the Public Audit Committee. Before we begin, I remind the members, witnesses and staff who are present that social distancing rules apply in the committee room, and that they should wear face coverings when entering, leaving or moving around the room.

The first item on our agenda is a decision on whether to take items 3 and 4 in private. Do members agreed to do so?

Members indicated agreement.

Agenda item 2 is an evidence session on the report, “Planning for Skills”, which Audit Scotland produced earlier this year. I welcome our witnesses, who are all from the Scottish Government. Joining us in the room are Joe Griffin, director general, education and justice, Helena Gray, director, fair work, employability and skills, and Adam Reid, deputy director for skills. Helen Webster, deputy director for reform in the directorate for advanced learning and science, joins us remotely. Willie Coffey, committee member, also joins us remotely.

Director general, before I begin, I will remind us why we are here and reflect on the evidence that was presented to us in the evidence session with the Auditor General for Scotland on 10 February. In his opening statement, the Auditor General said:

“we have found that slow progress has been made since 2017, with anticipated benefits not being realised. The Scottish Government has not provided the necessary leadership or oversight for joint working between SDS and the SFC, and there has been insufficient clarity on what it wanted to achieve and on what success would look like. We also found that progress by SDS and the SFC was impeded by lack of agreement between the two organisations about what skills alignment would involve.”—[Official Report, Public Audit Committee, 10 February 2022; c 2.]

This is a section 22 report, which is a serious report. Therefore, it is extremely disappointing that, only late yesterday afternoon, we received a very dense 30-page document, which, I understand, is the new framework agreement that is being put in place. Part of the story is about leadership and governance; for us, it is about democratic accountability.

I have to say that the very late arrival of an important document, which is entirely pertinent to this morning’s proceedings—a meeting that you have known about for quite some time—is, frankly, unacceptable. In my view, it compounds what is already quite a bad situation, and I hope that, this morning, we can address some of the fundamental criticisms that have been made over a failure that has gone on for five years.

Director general, I invite you to make an opening statement.

Thank you. I will begin by asking you a question that we asked the Auditor General, which is on the opportunity cost of the failure to get a co-ordinated skills alignment strategy together. Has the Scottish Government made any assessment to determine the costs to the public purse and the opportunity costs that have been lost through the failure to progress the skills alignment strategy?

The Audit Scotland report talks about the failure to build any relationship in the shared endeavour between the Scottish Funding Council and Skills Development Scotland. In fact, in its report, Audit Scotland said that there were “tensions between the agencies”. That has gone on for at least four years between, let us remind ourselves, two major Government-funded organisations. I think that the joint budget for the two is £2 billion of public money a year; yet, because of tensions between the organisations, there has been a failure to deliver. Can you explain that?

It runs a bit deeper than that, does it not? Those things happened over a period of years during which you have not always been the director general responsible; I respect that. However, the criticisms by Audit Scotland go as far as to say that there was a complete absence of strategic intent or a performance management framework to make progress. Why on earth were those fundamental elements not put in place?

Please do.

Certainly—I will bring you back in a bit later on.

Director general, can I return us to the Audit Scotland report? Weak governance is one of the glaring failings that is highlighted in the report. Paragraph 24 talks about a proposal to alter the framework from there being a joint SFC and SDS skills committee to the creation of an Enterprise and Skills Strategic Board skills committee. However, the report tells us that

“this did not happen because of the statutory requirement for the existing committee to be chaired by a SFC board member. No alternative governance structure was introduced at ESSB level, and the joint SFC and SDS Skills Committee has not met since August 2017. The SFC consolidated the Joint Skills Committee with another of its committees, which has since become the SFC’s Skills, Access, Enhancement and Learning Committee. SDS does not sit on this committee.”

Can you tell us why the ESSB did not seek to set up an alternative governance structure, and why the Scottish Government presided over such a situation?

The Auditor General was asked about that during the 10 February evidence session. He said:

“The pandemic is one factor, but it is not the sole factor. I draw the committee’s attention to exhibit 3 in the report, in which we track the chain of events dating back to 2016 and 2017”.—[Official Report, Public Audit Committee, 10 February 2022; c 12.]

Again, I make the point that we can accept that there will be errors from time to time, but there seems to be consistent error and failure to deliver in the alignment of skills. I have not even spoken about the appointment of a permanent skills alignment director, which was a pivotal role that was never properly filled.

Thank you very much. That concludes our questions for this session. I think I said at the start that it was a section 22 report. It was a section 23 report, but contained some trenchant criticism nonetheless. Sharon Dowey referred to the fact that this is apprenticeship week and there have been numerous references to last week’s publication of the national strategy for economic transformation, which said:

“A skilled population is fundamental to business productivity and economic prosperity.”

For those reasons it is important that we get these things right and we do not preside over some pretty fundamental—“systematic” is a word that has been used wisely this morning—failures.

The only other point I would make is that we will of course have an opportunity to look at the shared outcomes framework document in due course, and we shall do that. I am quite sure that the Auditor General will want to have a look at it as well. We will do that and we may well come back to you with further questions, Mr Griffin. That leads me to my final point: if we had known about the timing of this important document, which is absolutely central to the discussions that we have had this morning, we could have rescheduled this evidence session so that we could have taken full account of it. I hope that that is one of the things that you and your team will think about after leaving this meeting.

I will draw the public part of the meeting to a close and thank the director general for his evidence. I also thank Helena Gray and Adam Reid, and Helen Webster, who joined us online.

I will now invite Craig Hoy to ask questions.