Closing the skills gap: 'If we want a joined-up system we need to join it up'

When Anthony Burns started working for Central Belt clothing rental and repair business ACS almost two decades ago the company had a strong pipeline of staff. Skilled workers from Poland were in ready supply, filling roles that allowed the company to expand from its original focus of supplying men’s rental suits to retailers across the UK into women’s fashion rental, warranty repairs and clothing upcycling. But then the pipeline dried up.

“We had a really great talent pipeline over the years that came from Poland and had skills specific to the fashion industry,” Burns says. “That started to dry up due to a number of reasons, including the pound starting to suffer against the euro and also Brexit.”

With no obvious pipeline of homegrown staff to fill the void, ACS was forced to take drastic action, setting up its own training centre to ensure staff who were not being taught relevant skills prior to coming on board could learn them on the job. As of 2020 the company is certified as a Scottish Qualifications Authority Centre that can offer nationally recognised qualifications such as SVQs, with staff gaining qualifications in everything from textile care and cleaning processes to quality control and logistics.

Skills Development Scotland, a non-departmental body of the Scottish Government, gave ACS the financial backing needed to set the centre up but, while Burns says it has been a huge boost to the business, he does not believe it should be up to individual organisations to plug a skills gap that cuts across all sectors of the Scottish economy.

“What we have managed to do, by having innovative ways of recruiting staff and training them, is turn a challenge in terms of getting arms and legs on site into one of our best assets,” Burns says.

If we want a joined-up system we need to join it up

“We know as part of our strategy where we are trying to grow and what skills we need to realise that growth. […] It’s difficult for a lot of businesses post-Covid and post-Brexit to get staff, full-stop, but particularly with the skills we need around the circular economy, they aren’t being taught at school. We’ve worked with schools around UN sustainable development goals and how that relates to ACS and how we can work with school kids to change their relationship with fashion and show them there are well-paying jobs [in the sector]. 

“There should be a better approach to this, though. There’s an obligation on us to do some of it but there should be more support. […] It would be good if the Scottish Government looked at how school kids are taught about repairing and mending and keeping items in circulation as it’s something we’re all going to have to do more of to realise net zero. Colleges need more programmes to support industries where circularity is going to be prevalent and there should be more support for businesses like us to train apprentices so school kids who aren’t going to university but want skills and want a good job can train on the job.”

For Chris Brodie, director of regional skills planning and sector development at Skills Development Scotland, the issue Scottish businesses are currently facing is that skills shortages are going hand in hand with labour shortages, meaning the overall gap is proving difficult to close. A lack of inward migration in the years since Brexit and Covid has drastically reduced the pool of people available to fill roles in the labour market, which has been exacerbated by the fact that almost a quarter of working-age people are, for a variety of reasons, out of work and not looking for a job, he says.

“Before we get onto talking about skills shortages there needs to be a focus on growing the labour pool – if we don’t do that, we will just shift people between employers who are hungry,” he says.

“Inward migration is a really effective way of bringing different types of skills into the economy. The biggest attractor of talent into Scotland is Scottish universities but we are really disadvantaged by [UK Government rules on] how long they are able to stay here to use those skills in the economy. The Scottish Government wants a different migration system for Scotland and I understand why that ask is there.

“Skills shortages are also there but they are made worse by the overall labour shortages. Skills shortages can be about the economy changing and growing and there being a lag in people understanding where the jobs are; it can be about the economy changing and not having the right tools to support people to upskill and reskill. It can also be caused not by skills. Housing is probably the best example. You can have people with the skills and willingness to do the job in somewhere like Inverness or Stornoway but if the availability of housing or choice of housing isn’t there that becomes a block to people taking up opportunities.” 

Whether it is due to skills shortages or labour shortages, the end result is the same – there are not enough people with the rights skills in the right places to ensure the Scottish economy can reach its full potential.

This is nothing new. In September 2019, just a few months before the coronavirus pandemic turned the world of work on its head, the Scottish Government released its Future Skills Action Plan, in in which it noted that Scotland’s labour market had strengthened over the preceding 10 years, that the workforce is “more highly qualified than ever before”, and that the increases in employment had been mainly in jobs classed as highly skilled.

Higher and further education minister Graeme Dey is to update parliament on the government's plans for skills delivery shortly | Alamy
However, it also said that “looking beyond these positive headline trends there are challenges for our skills system”.

“Skills gaps tend to be more prevalent in Scotland than the rest of the UK, there has been a steady decline in employees in Scotland receiving job-related training over the past 15 years, and there are persistent sector-specific skills gaps – for example, manufacturing – affecting Scottish businesses,” the report said.

“Despite some data pointing towards increased employment in highly skilled jobs, analysis by the OECD found that employment growth in OECD countries and the UK between 2010 and 2017 was driven by sectors with below-average productivity and average wages. Compared with pre-recession trends and international competitors, Scotland’s economic growth has been slower and lower than the euro-area average since the Brexit referendum. This is forecast to continue.”

By 2021, when the 2020 edition of the biennial Scottish Employer Skills Survey was released, things had not significantly improved. Fieldwork for the survey, which is conducted via phone interviews, took place between October and December 2020, meaning the results must be viewed through the prism of Covid.

However, while the proportion of businesses reporting skills-shortage vacancies had fallen since 2017, more than a quarter of companies that were actively recruiting said they had at least one role that was proving hard to fill due to a skill-shortage issue while the overall skill-shortage vacancy density – skill-shortage vacancies as a proportion of total vacancies – remained largely unchanged from 2017 at 21 per cent.

With report after report producing the same findings, something had to give. And so last year the Scottish Government commissioned former Scotland Food and Drink chief executive James Withers to lead an independent review into Scotland’s skills and training system. His report – Fit for the Future – was published this summer and did not make for comfortable reading.

Indeed, Withers found that the current skills system is failing to deliver – it is failing both employers and potential employees – because it is so fragmented there is no clear vision of what the gaps are, who should fill them or how they should be trained to do that. He recommended a major shake-up of the way people are prepared to enter the jobs market, noting that he “does not believe that the current landscape is working to best effect for those who use and rely on its services”.

In total Withers made 15 recommendations, five of which he said were key. These include moving responsibility for national skills planning away from Skills Development Scotland and the Scottish Funding Council and into the Scottish Government; establishing a new funding body that has responsibility for all post-school learning and training funding; and “substantively” reforming Skills Development Scotland to focus on the development of a national careers service that will “embed careers advice and education within communities, educational settings and workplaces across Scotland”. 

Speaking to Holyrood not long after the report was published, higher and further education minister Graeme Dey said he “recognised very much some of the direction of travel [Withers] was setting”, adding that the report provided “a fundamental opportunity to do something different and more effective”. The Scottish Government has already committed to developing a new national funding model for colleges, universities, apprenticeships and training, and has said responsibility for skills planning will be centralised. Dey said that would be part of a package of “widespread reforms”, but full details are yet to be unveiled.

Against this backdrop, when he appeared in front of the Scottish Parliament’s Education, Children and Young People Committee earlier this month, Withers indicated that unless his recommendations are implemented in full the skills system will not end up being fit for the future at all. As well as the five top-level asks, his review includes 10 “operational recommendations” aimed at building an “integrated post-school learning system which has skills development fully embedded within it”. They are all interlinked, he said, and cannot be cherry-picked from by government.

What we have managed to do is turn a challenge in terms of getting arms and legs on site into one of our best assets

“Cherry-picking elements of the review would worry me if it was driven by what felt like the most expedient or easiest [thing] to do, although I don’t have a sense that is where the government is going,” he told the committee.   

“The reason I positioned my findings as a coherent whole is because what I was seeking to do was to try to build a more coherent system. My over-riding observation, which surprised me in a way, was that I was expecting to see complexity and fragmentation but the scale of the fragmentation in the system did surprise me, having spent nine months inside the system. If we want a joined-up system, we need to join it up.”

While the government is yet to set out its full response to the review, Withers said that – somewhat counterintuitively – that has given him confidence that it is giving his recommendations due consideration. “I’m heartened by the fact some time has been taken to look at this rather than [there being] a rush to agree all recommendations,” he told the committee. The government’s response is expected imminently, however, and, while he will not confirm what it will be, Dey says he is broadly supportive of what has been suggested.

“There is much that works well in the current skills delivery system,” he says. “The proportion of college leavers going on to positive destinations is now at a record high, according to the most recent figures. However, the Withers review on the future of skills delivery and the [related] Purpose and Principles for Post-School Education, Research and Skills report set out the clear need for change so that we have a lifelong education and skills system in place which serves the needs of learners, employers and our future economy. I am supportive of the broad direction of travel set out in the reviews and will update parliament in the coming weeks on how we plan to take that forward.”