4 Skills for Defence in Scotland
Defence Industrial Strategy
46. The current Defence Industrial Strategy (DIS) was published in 2005 and identifies:
...which industrial capabilities we need to retain in the UK to ensure that we can continue to operate our equipment in the way we choose to maintain appropriate sovereignty and thereby protect our national security.[48]
The DIS is clear that while the MoD will support a core workload in the maritime sector, additional work, not required to sustain key capabilities, may be undertaken offshore.[49]
47. The Defence Industrial Strategy also suggests that consolidation and down-sizing of industry will be necessary, saying:
To implement this strategy will require changes on behalf of both industry and Government. Industry will need to adjust to sustain the capabilities we need once current production peaks are passed. The Government, too, needs to drive forward improvements in the way we acquire, support and upgrade our equipment. Together, the defence industry and government have to change their relationship, working to ensure that our Armed Forces continue to have the equipment they need. Doing this will help ensure the UK defence industry has a sustainable and bright future. This will require continuous effort on both sides over the coming years as it will not be easy. However, by starting the process today, while workloads are high, we can avoid facing a crisis in a few years time.[50]
48. John Coles, Chairman, UK Naval Engineering, Science and Technology, told us that:
I think the DIS was a brilliant document actually because it laid out a strategy for industry to follow and therefore to actually see what they were going to invest in what was going to be core skills, and that is fairly clear in the documents, so I think what the industry has to maintain, whether it is in Scotland or the UK, is their core skills and the Ministry of Defence indicated what they will be. [...] Whether they come from Scotland or the UK or internationally it is difficult to say but what industry is going to be sustained is clear in the DIS and that gives a fairly clear indication of the things that are going to be done.[51]
Andy Leather and Nigel Stewart of BAE, also supported the view that the DIS was a useful guide to the capabilities that would be sustained in the UK and a valuable tool for sustaining the relationship between industry and the Government.[52]
49. An updated version of the Defence Industrial Strategy was due to be published in 2007. The Minister confirmed that there would be updates to the DIS but was unable to say when.[53] She told us that:
The decision not to proceed in December, which I took, was one which was welcomed by industry. They felt that we were not ready, they were not ready and we were not ready, to move ahead at that stage. Since then we have had significant discussions with industry about the way forward and the priorities for the next stage and what we should be doing when. [...] We have an NDIC meeting on Thursday and we will discuss further progress then.[54]
Skills base in Scotland
School leavers
50. Employers in the sectors we are examining in this report have given us differing views about whether they are generally satisfied with the quality of school leavers applying for jobs. Ken Munro, HR Director, Babcock Marine told us "I do think that the education system is capable if people apply themselves; people who do apply themselves come through it very well."[55] However, the Society of British Aerospace Companies Scotland expressed concern about the quality and skills of school leavers.[56]
51. When asked about how 'work-ready' Scottish school leavers are, Katie Hutton, Head of Operations, Skills Interventions Team, Skills Development Scotland said that they left school with the majority of the general skills required for work but there were still areas that employers had to provide training to cover.[57] Kevin Sweeney, Deputy Head of Govan High School gave us valuable evidence about the skills of school leavers. We were impressed by the range of work Govan High is doing to ensure their pupils are equipped to enter work or further education at varying levels of attainment.
Apprentices
52. Modern Apprenticeships involve study at college along with practical learning provided by an employer. Participants who complete a Modern Apprenticeship gain a level 3 qualification. Since 2002-2003, 529 Modern Apprentices have started with BAE Scotland. In 2007 Babcock recruited 50 Apprentices to work at Rosyth. This represents a significant increase in the number of apprentices. Ken Munro told us that "apprentice intake across Fife now is higher this year than it has been for some considerable time. Organisations are quite clearly gearing up".[58] Scottish Enterprise suggest that planning for the CVF programme has led to an increase in the recruitment of both skilled workers and Modern Apprentices.[59]
53. Although the evidence we received supported Modern Apprenticeships, there was some concern about differences in the way apprenticeships are funded in Scotland. Scottish Engineering claim that Scottish apprenticeships receive less funding than those in England. They say that "an exact comparison between England and Scotland leaves a disparity of as much as £3,893 per MA [Modern Apprenticeship]."[60]
54. In Scotland, colleges claim funding from the Scottish Funding Council. The colleges make an additional charge to the training companies of, on average, £1,150 which is paid out of the £9000 that the company receives to cover the cost of training an apprentice. There is additional money which goes directly to the college to cover course fees. In England there is a national rate of £11,743 to cover all costs for an apprentice excluding college fees and key skills payments. In addition, the five Scottish Core Skills do not attract additional funding, whereas in England and Wales the six Key Skills[61] are assessed separately and so receive an additional £865. Although this means that employers in England receive more money per apprentice, they have to pay all college fees, while in Scotland most college fees are paid directly to the colleges.
55. Vic Emery told us that "the way in which the funding is done is different but it is about averaging the same in England and Scotland."[62] Katie Hutton also told us that funding "will probably be commensurate"[63] for England and Scotland and that the higher amount given to English companies compensated for higher cost.
56. One area where Scotland does appear to be at a disadvantage is funding for mature apprentices. In November 2007 the Department for Innovation, Universities and Skills announced that spending on skills will rise to £12.3 bn per year by 2010-11 for England. This funding increase will increase the total number of apprenticeships from 250,000 to 400,000 by 2010-11 and some funding will be specifically targeted at expanding apprenticeships for adults aged over 25. Over the next three years £90m of this funding will be used to establish 30,000 apprenticeships for over 25s.[64]
57. While there is no upper age limit for apprentices in Scotland, guidance from Highlands and Islands Enterprise states that:
...the enterprise network has discretion, within its budgets, to decide appropriate levels of training provision and funding contribution, taking into account market priorities. Under a UK-wide government training guarantee, funding is prioritised for 16-17 year old apprentices."[65]
Katie Hutton told us that "£4,500 is paid per apprenticeship for those over 20."[66]
58. BAE told the Committee that they are designing and planning to pilot an accelerated adult modern apprenticeship for existing semi-skilled workers. They note that although they would expect to roll this out to the wider population they "would look to receive significant funding for this initiative which we believe is a 'medium/high risk' population, but one that will help us meet the resource challenges that we will face in the future."[67] SEMTA, the Sector Skills Council for science, engineering and manufacturing is also working with companies in the sector to develop an accelerated apprenticeship for adults with previous experience in the industry.[68]
59. We believe the Modern Apprenticeship programme is a valuable alternative to higher education and provides young people with a chance to develop practical skills. We are persuaded that, although the funding structure in Scotland differs from that of England and Wales, 16-19 year old apprentices in Scotland do not attract significantly less funding than apprentices in England and Wales.
60. We welcome the work that BAE and SEMTA are doing to develop apprenticeships for adults. However, we are concerned that apprentices aged 20 or older do not receive full funding. We believe that it is vital for Scottish industry to look at upskilling throughout the workforce, including mature workers who were not able to access apprenticeships as school leavers. We urge the Scottish Executive and Scottish Enterprise to consider increasing funding for adult apprentices.
Research and Development
61. We heard that the high level of skills in some areas was attracting companies to Scotland. Warwick Malcolm, Head of Public Affairs, SBAC told us that Spirit Aerosystems and Slingsby Aerosytems had moved to Prestwick in recent time. He added that, for Slingsby Aerosystems "the reason they have moved to Prestwick and to Scotland in particular is because of the availability of the skills that the sector has there and in Prestwick."[69] The highly skilled workforce is an important selling point for Scotland in attracting investment. Warrick Malcolm told us that, for the aerospace industry, "in Scotland it is our R&D and our skills that is the crucial thing to define us and separate us from the competition."[70] David Lockwood and Nigel Stewart both expressed the view that the facilities in Scotland acted as a showcase for Scottish skills.[71]
62. SBAC Scotland argue that although Scotland has, historically, been seen to produce good engineers this "should not prevent a realistic assessment of the challenges we face."[72] They add that:
...support in Scotland and the UK for aerospace, defence and naval research and development is simply not keeping pace with our global competitors. Annual DTI [now Department for Business, Enterprise and Regulatory Reform] & regional funding running at £45 million pa is a good start but is still well behind the £70 million minimum recommended by the government sponsored Aerospace Innovation and Growth Team (AeIGT). Approximately £30 million of MoD funding is identified as aligned with National Aerospace Technology Strategy (NATS) versus AeIGT recommendation of £90 million.[73]
Promoting employment and skills for defence in Scotland
63. One issue that has been raised repeatedly in the course of our inquiry is the work that industry does to educate students, parents, teachers and careers advisers about the opportunities available in the defence sector. Thales, BAE and Babcock have all given evidence to the Committee that they work with local schools. Thales states that they "provide financial support to schools within the immediate area of the site."[74] BAE have initiatives including schools road shows, engineering challenges, school visits to yards and invitations to launches but they told us that: "Despite our efforts we come across teachers, careers advisers, pupils and parents who still believe that shipbuilding is an undesirable industry/career to get involved in".[75]
64. We were also concerned to hear, in the evidence from Govan High School, that there appears to be a consistent bias in the educational system in favour of the academic and against the vocational. The systems of school assessment utilised by the Inspectorate were said to be particularly unhelpful in encouraging a parity of esteem for the different routes chosen by Scottish youngsters.
65. Scottish Enterprise expressed concern that the 'Make it in Scotland' roadshow, which aimed to promote manufacturing careers to all S2 pupils in Scotland, had been discontinued. We heard that this decision had been taken because 'Make it in Scotland' was not cost effective in terms of "the amount of money that was required to run it and, also, the amount of company time that the programme took, and the amount of time that it took school children away from doing what they are supposed to be doing."[76] A new programme 'Pathways to Gain' was launched on 12 May 2008 and is currently being evaluated.
66. Skills Development Scotland was formed on 1 April 2008. Hazel Mathieson told us that:
We are a new organisation that combines the functions of three previous organisations, which were the Scottish University for Industry, Careers Scotland and the learning and skills functions of both Scottish Enterprise and Highlands and Islands Enterprise. The key role for our organisation is the implementation for the Scottish Skills Strategy, Skills for Scotland, [...] We are aiming to deliver an integrated service of careers information, guidance, skills advice, brokering and training to individuals and businesses [...] the new organisation is a catalyst to try and bring a real focus for the delivery of skills and learning in Scotland.[77]
Katie Hutton added that Skills Development Scotland are due to start a project to look at their own delivery model at a local, regional and national level.[78]
67. Scottish Enterprise launched the Scottish Marine Technologies Training Project (SMTTP) in August 2007. It was designed to "coordinate the activities of the companies, further education colleges and various agencies in the recruitment, training and up-skilling the workforce needed to serve the anticipated needs of the shipbuilding industry."[79] Hazel Mattieson told us that the SMTTP is now a joint project between Scottish Enterprise and Skills Development Scotland.[80]
68. With Skills Development Scotland taking over some parts of the remit for Scottish Enterprise, we hope Scottish Enterprise will now be more proactive in working to promote Scotland. We heard from John Coles that Scottish Enterprise had been much less active in talking to key decision makers than some English Regional Development Agencies. He said that:
...in my time as an official I found other regional authorities [...] much more aggressive in pursuing their interest on programmes and pushing much harder on me and other officials about what was available and coming to talk to me about what they could offer. [...] I do not remember anybody specifically from Scotland coming to my desk and saying, "What about us?" I do not remember that but I do remember the others doing that and pressing quite hard.[81]
69. The Scottish Executive must ensure that industry continues to see Scotland as a good area for investment due to the highly skilled workforce. Scottish Enterprise also has a role to play in promoting Scotland to industry and working to develop existing Scottish industry. We are concerned that Scottish Enterprise has not been sufficiently pro-active to date and hope that the re-launch of Scottish Enterprise on 1 April 2008 will lead to greater success in promoting and supporting Scottish industry.
70. We urge all stakeholders, including the Ministry of Defence, Skills Development Scotland, the Scottish Enterprise and defence companies to work together to promote careers in the defence sector and support the work of education providers in widening access to skilled employment or further training. We urge the Scottish executive and local authorities to examine the apparent biases within the education system in favour of the academic stream and urge them to take appropriate action to boost the standing of vocational options.
48 Ministry of Defence, Defence Industrial Strategy, Cm 6697, December 2005, Forward Back
49 Ibid., p 75 Back
50 Ibid., p 2 Back
51 Q 236 Back
52 Qq 35 and 239 Back
53 Q 497 Back
54 Q 496 Back
55 Q 95 Back
56 Ev 107 Back
57 Q 556 Back
58 Q 69 Back
59 Ev 115 Back
60 Ev 112 Back
61 Core skills are communication, numeracy, problem solving, information technology and working with others. Key skills are these five plus improving own learning and performance. Back
62 Q 381 Back
63 Q 568 Back
64 http://nds.coi.gov.uk/environment/fullDetail.asp?ReleaseID=331175&NewsAreaID=2&NavigatedFromDepartment Back
65 www.hie.co.uk/HIE-Developing-Skills/HIE-ma_policypractice.pdf Back
66 Q 564 Back
67 Ev 95 Back
68 Q 569 Back
69 Q 218 Back
70 Q 220 Back
71 Qq 80-81 Back
72 SBAC Scotland, A Vision for the Future, p.16 Back
73 Ibid. Back
74 Ev 120 Back
75 Ev 95 Back
76 Q 578 Back
77 Q 519 Back
78 Q 539 Back
79 Ev 115 Back
80 Q 554 Back
81 Q 255 Back
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