Hansard

The dialogue that we have had so far this morning speaks again to the strong alignment across the Parliament and the committee to improve the system, which is working very well for many just now but could work even better for many others. I look forward to continued constructive engagement on that throughout the remainder of the bill process.

As this is quite a large group of amendments, I would be grateful for colleagues’ patience as I work through them.

Amendment 11, in my name, is a technical amendment that responds to SDS’s written evidence to the committee at stage 1. SDS raised the question whether the bill’s provisions limited training providers’ ability to generate any profit in the course of their business of providing training in the delivery of national training programmes or apprenticeships. The policy intention is that legitimate and proportionate profit is not to be prohibited, and the bill’s initial provisions were not intended to imply such limits. That is why we have lodged amendment 11.

My amendment 12 allows the SFC to limit managing agent fees. During the stage 1 evidence-taking sessions, managing agents set out how they used the funding that they received, with one outlining to the committee that they retained 40 per cent of it. That was, I know, of particular concern to Ross Greer; George Adam raised the matter last week; and other members of the committee have been interested in it, too. Indeed, Ross Greer’s amendment 51 in group 4 also addressed it.

There is a need for managing agents, and they are an established part of the skills system. I acknowledge that issues can arise from the proportion of fees that some of them retain when securing the delivery of training through subcontractors. As I want to ensure that as much public funding as possible goes to the front-line delivery of education and training. I have lodged amendment 12, under which the SFC must determine the appropriate percentage that a managing agent may retain and make that a condition for funding.

I think that that is a proportionate approach that balances the legitimate costs of managing agents with the need to use public money wisely. I believe, too, that it provides the flexibility to respond to individual contracts in practice in a way that putting a number into primary legislation simply would not have done. I therefore encourage members to support amendment 12.

I also want to address Ross Greer’s comments last week about the drafting of amendment 12. In his view, it is vague; I would argue, in short, that it is not. Its drafting shows a deliberate and clear intention. It just takes a different approach to Mr Greer’s amendment, and I hope that the member will be open to it.

Amendment 12 deliberately gives discretion to the SFC to respond to individual circumstances instead of setting a cap in primary legislation, which, even with the ability to change such a cap by regulations, would be arbitrary and inflexible. The amendment also provides that any subcontractors used to deliver training must comply with the criteria in the bill for what makes a training provider, and the amendment is deliberately framed to stipulate that no training provider is entitled to retain more than the “reasonable” fee. That framing is designed to close down the possibility of a provider getting around the restriction by creating some kind of artificial training scheme in order to pass along the funding or by claiming that a subcontractor is not a training provider in the true sense, thereby getting a higher percentage. For all of those reasons, I encourage members to vote for my amendment 12, in preference to Ross Greer’s amendment 51. I hope that that explanation is helpful to Mr Greer, too.

On amendments 30 to 33, in the name of Willie Rennie, I have listened carefully to what the member has said about them, and it appears that their purpose is similarly concerned with limiting managing agent fees. I believe that amendment 12 will do that in a proportionate way, without requiring additional complex regulations that might not allow for appropriate flexibility. In my view, the SFC is best placed to assess what is reasonable in the context of particular arrangements.

Therefore, I ask Willie Rennie not to move his amendments, but I am happy to engage with him further in our dialogue ahead of stage 3. I note that he has had engagement with SELECT on the provisions in his amendments, and I would be keen to hear more from him, in due course, about its concerns.

I support amendments 9 and 10 in the name of Jackie Dunbar. Her amendments ensure that the term “work-based learning” encompasses all the types of activities and learning that currently constitute foundation apprenticeships. I want to take this opportunity to stress that the use of the term “work-based learning” in the bill does not seek to diminish or devalue what we currently know as foundation apprenticeships. The Scottish Government remains committed to increasing the skills of Scotland’s young people through work-based learning; indeed, that is very important, as I argued in our previous session on the bill.

I listened carefully to the evidence given to the inquiry on graduate apprenticeships. Universities will be able to provide work-based learning as appropriate, and current and similar arrangements for graduate apprenticeships will be available. The bill simply adds options. For example, a university could deliver work-based learning and be funded to do so under section 5.

Graduate apprenticeships will be covered by the definition of “Scottish apprenticeship”, not the definition of “work-based learning”. Officials will be engaging with Universities Scotland next week, when there will be more discussion on that point.