A new report has criticised the Scottish Government for a lack of progress on workforce planning, to ensure those entering post-school education are able to access the skills they need for modern job roles.

‘Urgent action’ is needed to ensure a policy commitment made over four years ago – to align skills taught with what is required by employers – is delivered in practice through a range of government initiatives.

Audit Scotland said government had not provided the ‘necessary leadership or oversight for joint working’ between Skills Development Scotland and Scottish Funding Council in delivering those aims.

That is despite the Enterprise and Skills Review of 2017 which set out a more integrated approach but has been hampered by overlapping lines of accountability between different ministerial portfolio areas.

There was also ‘insufficient clarity on what government wanted to achieve and what success would look like in practice’, the Planning for Skills report revealed. In addition, SDS and the SFC have not been able to agree how integrated approaches to skills planning should work.

Current arrangements are unlikely to achieve the Scottish Government’s ambitions for skills alignment at the pace required, the 18-page report said. And the Scottish Government should clearly set out its strategic aims and objectives for skills alignment, and how progress will be measured. It should also agree with SDS and the SFC how they will work together to deliver shared outcomes.

Stephen Boyle, Auditor General for Scotland, said: “The Scottish Government recognises that workforce skills are central to inclusive and sustainable economic recovery and growth, but it has not provided the leadership needed to deliver on its skills alignment agenda. As a result, the anticipated benefits have not been achieved and opportunities for more efficient and effective investment have been missed.

“The Scottish Government now urgently needs to set out what it intends to achieve and how it will measure progress, as well as clarifying the governance and oversight arrangements for skills alignment activity.”

The technology and care sectors were cited in the review as being among those where skills gaps persist. Although the review mentioned factors including Brexit and Covid, there are also concerns that a domestic shortage in computing science teachers – and a lack of focus on computing in schools – is hampering efforts to close it in tech sector.

Together, SDS and SFC spend £2bn every year on training and post-school education – money that funds courses at college, university, training provider and employer level – although the review was unable to determine how much is spent on skills alignment activity. Although SDS and SFC collaborated well to implement some actions from the Enterprise and Skills Review, the report noted that progress was impeded by a lack of consensus between the organisations on what skills alignment should involve.

Furthermore, the process of appointing a skills alignment director by the Scottish Government initiated in February 2018 did not see a permanent role created until August 2019, a delay which ‘limited the extent and pace of progress’, and which was further exacerbated at the onset of the pandemic in March 2020 when much of the work was ‘paused’. That director – who according to a job advert for the role was paid between £82,750 – 94,684 – then tendered their resignation in February 2021.

The review notes: “The Scottish Government decided the post should not be re-filled because its context had evolved. While the SFC supported that decision, SDS was disappointed that the post was not retained to help maintain the momentum of skills alignment. SDS staff working under the direction of the skills alignment director returned to their previous posts.”

In December 2020 a Skills Alignment Assurance Group was established, but to compound matters it was also wound up in December 2021, barely a year after it was formed.

The review concludes: “Many of the obstacles that have prevailed during the past four years remain significant challenges and present risks to progress. The Scottish Government therefore needs to take urgent action if it wants to realise the expected benefits of the revised approach to skills alignment at the pace required. This will include setting out its strategic intent for skills planning and alignment, and the outcomes it wants to achieve, and providing the necessary leadership to address existing challenges and drive progress.”

Scottish Liberal Democrat economy spokesperson Willie Rennie said:  “The Scottish Government have had five years to boost skills but this report shows they are stuck in a rut. 

“Nicola Sturgeon needs to get a handle on her government’s flailing agenda. We need to ensure that young people have the skills they need to get ahead in life and those who find themselves out of work have a chance to retrain and try again. 

“For years Scottish growth has been sluggish but the pandemic has meant that there is more urgency than ever in getting the economy firing on all cylinders. 

“Scottish Liberal Democrats have set out plans for delivering a high-wage, highly skilled economy. The SNP seem trapped in the 20th century.”

Jamie Hepburn, minister for youth employment and training, said:  “I welcome the recommendations that Audit Scotland have made and the Scottish Government and our agencies accept them in full.  I will update Parliament in due course on how we will continue to work towards an ever more aligned skills system that is responsive to our social and economic needs.

“Good progress is being made to drive recovery from the challenges of the pandemic; we have invested more than £1bn in 2021-22 to support jobs and equip our workforce with the future skills it needs.  The Scottish Employer Skills Survey 2020 shows the proportion of organisations reporting a skills shortage vacancy down to 3% in 2020 from 6% in 2017, and a reduction in the percentage of employers reporting skills gaps within their workforce over the same period.

“Progress has been made in improving collaboration between SDS and SFC with more robust Scottish Government leadership, governance and accountability arrangements now in place. But I recognise more has to be done and I will be working closely with those partners who have a critical role to play in ensuring these positive trends continue.”