We will move on to our next debate, the debate on the Economy, Infrastructure and Skills Committee report: regional skills partnerships. I call on the committee Chair to move the motion—Russell George.

Motion NDM7213 Russell George

To propose that the National Assembly for Wales:

Notes the report of the Economy, Infrastructure and Skills Committee on its Inquiry into: Regional Skills Partnerships which was laid in the Table Office on 10 October 2019.

Motion moved.

Thank you, acting Presiding Officer. I move the motion in my name. 

High-quality skills matter. They help people get high-quality jobs and better pay, and they are absolutely vital if businesses and the Welsh economy are to innovate and thrive. They are one of the keys to increasing prosperity for all, which is why I am deeply disappointed, not only with the fact that the Welsh Government's response misses the bigger picture that we set out in our report, but that the response itself is, in my view, superficially and carelessly drafted. Minister, you told us that you were going to carefully consider the recommendations of our committee, but I'm afraid there's little evidence of any careful consideration in the Welsh Government's response.

Our report explains that many people in Wales are caught in a low-skills trap. So, for Members who perhaps might not be aware of what that means, low-skills traps are cycles where employers don't want or need higher level skills to be profitable, which leads to weak demand from people to gain those higher level skills. The result can be mismatched workforces that have both low-skilled and over-qualified employees. These traps also have human consequences, seeing people trapped in low-quality jobs that have low pay, with little prospect of moving up the ladder.

I've been quite negative so far, so perhaps I'll move to something more positive. It is encouraging that the committee and the Welsh Government agree on some of the fundamental problems that need to be tackled. Firstly, we agree that if low-skills traps are to be broken, and they must be broken, we must tackle both the supply of skills and the stimulation of demand for higher level skills at the same time. Secondly, we agree on how hard RSPs work, but they also need to reform and strengthen, we also need to strengthen them, but they are being asked to do too much on a shoestring, and I think the expectations and the to-do list is racing ahead of the resourcing that they have. And thirdly, we also agree that there absolutely must be vast improvements in the data collection and analysis capacity of RSPs and better SME engagement. There is no substitute for good data and analysis in skills planning.

So, we agree on the challenges facing us, but it is completely evident that we do not agree on the way forward. In our recommendations, we focused on not only what needs to change but how that change should be delivered. We wanted practical solutions that offered the big changes needed if we are serious about breaking those low-skills traps. We set ourselves the ambition of being constructive, offering the Minister practical, helpful and grounded recommendations. So it was very disappointing that the Welsh Government spent £10,000 on an independent review of RSPs, a review that was commissioned after our inquiry had started. And if you read it, you’ll even see it uses the evidence that we collected from witnesses. So it is hard to reconcile this action by Welsh Government and its response with the respect it should have for an inquiry of this Assembly. 

But moving back to our report, I want to talk about three key themes that the report presents, and the Welsh Government's response to them. Firstly, we wanted to offer clarity and focus. We recommended giving the partnerships a new name, regional skills advisory boards, to reflect a new role as expert advisers. The point here was that the advisory roles be the thinkers, not the doers in a wider skills system. They were to advise not only on skills supply, but also on stimulating employer demand, which, as I've already said, is absolutely fundamental to breaking low-skills traps. Here, we are not alone in our recommendation. Professor Phil Brown, in his 'Wales 4.0' review, also recommended that RSPs play a role in stimulating employer demand for higher level skills.

But where we wanted clarity, the Welsh Government’s response has offered confusion. In its response, the Welsh Government accepted the recommendation on the advisory role, but then goes on to say that it rejects the point that they should advise on addressing the traps and it should not be their role to stimulate future employer demand for higher level skills. Who, other than a partnership already made up of employers and training provider representatives, is better placed to offer that advice? Whether the recommendation has been accepted or not, I don't think that's entirely clear. The response to this recommendation also provides an example of the carelessness apparent throughout the response from the Welsh Government, I'm afraid to say.

The Government explains that it rejects the rebranding to 'regional skills advisory boards' saying that the word 'board' implies decision-making powers. Then, what about the Wales Employment and Skills Board and the Wales Apprenticeship Advisory Board? Or, indeed, that RSPs themselves already exist as boards.

It doesn’t get much better in the Government’s response to our second key idea. We set out two ways of improving the ability of the partnerships to collect and use data to engage with businesses. These two ways firstly draw on the extremely valuable assets Wales has in our world-class research at our universities, and secondly, on the network of business contacts that our publicly funded apprenticeship providers have. Any business knows the value of a ready-made network of contacts and good consultancy. But the Government rejected the recommendation for a more formal partnership with universities, and I'm afraid the bigger picture was missed here again. Lost to, I'm afraid, a petty response patronisingly explaining that universities are already represented on the—as the Government response calls them—boards. 

It is frustrating to see that the point of this recommendation that RSP boards harness the expertise of our scholars and researchers flies so far over the head of the Welsh Government, and it does a disservice, I think, to our academies of researchers that work in our universities. It is clear to us that, with the £15 million Higher Education Funding Council for Wales fund intended to support university and business co-operation, there is a clear opportunity for universities to be helped to bring to bear their research expertise to strengthen RSP research.

Finally, we set out to empower our further education colleges to meet the challenges set out by the new boards, stepping back from micro-managing college curriculums to an extent that no other skills provider is subject to. Instead, we wanted to see colleges given the space to wield their considerable expertise and experience to respond to the advice of the partnership boards in innovative ways. When we launched the report, I visited apprentices at Cardiff and Vale College, and I was struck and impressed by the deep links the college had forged itself with local and regional employers.

This recommendation—one of the most important in the report—received one of the shortest and most dismissive responses, arguing that it would impact on a Welsh Government funding process that they themselves have changed several times in the last decade. That a change would upset a Welsh Government process is no argument for the status quo. Our colleges have close and deep business links. They help develop the transferable skills employers are crying out for, no matter what courses the learners are on. And they have a social mission that must be balanced with the need to respond to industry skills demand. We should respect their expertise and we should trust their judgment and, in return, we expect them to meet the challenges set out in future skills plans using that expertise and judgment. Once again, the bigger picture, that space for innovation, missed by the Welsh Government, in my view.

So, I'm sorry it's been a very negative response, but the response from the Welsh Government was a negative one to our committee report. But, I do hope that the Minister might be able to respond positively, ultimately, in the Government's response. It has proposed that it is not going to change a single thing about its approach, but I hope the Minister will take a different view in his closing remarks later on, and I look forward to Members taking part in the debate this afternoon.   

Adult learning, upskilling and re-skilling are key to forward thinking in a diverse economy. We all recognise the importance of providing people with the skills required by employers to gain good and sustainable jobs. It is a sad fact that the Welsh economy is facing serious skills shortages. Like other parts of the United Kingdom, the Welsh economy experienced a number of inefficiencies and skill mismatches in the workforce. The most recent employer skills survey shows that, where the skills gaps in existing workforces remain broadly the same, there was an increase in vacancies that were hard to fill because of skills shortages. As a result, employers face skills shortages when trying to fill vacancies. with skills gaps in the current workforce and the under-utilisation of skills. 

This report aims to identify some of the problems facing Welsh businesses and proposes measures to tackle those problems. Training and upskilling people is not enough. We have to provide people with the types of skills training that businesses need in Wales. One of the problems identified in this report is the low-skills traps. This involves a cycle of limited demand for highly-skilled workers, leading to a low-skilled workforce. This, in turn, places limits on innovation and growth, continuing the limited demand for highly skilled workers. The challenge identified in this report is to stimulate higher level skill demand from employers. If we do not do this, we risk replacing the low-skills trap with inefficient skill surpluses. If we are to ensure the workforce supply needs of businesses, there has to be greater collaboration between Welsh Government, industry and educational institutions.

I regret that the Welsh Government has rejected a proposal to rename regional skills partnerships as 'regional skills advisory boards'. Rebranding the partnerships would, in my view, make their roles in the wider skills system clearer. Regional skills advisory boards would have a clear strategic outlook and remit, whilst improving employers' engagement, data gathering and analysis.  

The report calls on the Welsh Government to work with the higher education sector to unlock the vast research capability of our universities. We need greater engagement between universities and employers. One of the great benefits of degree apprenticeships is that they are employer driven and designed to meet skills needs. Universities in Wales are keen to develop a wide range of degree apprenticeships. However, it is not enough for the skills system in Wales to simply try and keep up with changes. It must anticipate change and even help shape it.

This is particularly true in the field of digital skills. They're having a huge impact as new technologies are adopted, but change is moving at a rapid pace. The digital sector is developing at such a rate that education providers find it difficult to keep up. We face a huge challenge in ensuring that digital training is up to date. This is vital if we are to meet the demand for workers with digital skills, particularly in specialist areas, such as cyber security.

Presiding Officer, the Welsh Government must meet the challenges and provide our workforce with the skills it needs to realise our full economic potential. I believe this report sets out the practical and effective measures required to enable the Welsh economy to grow and thrive. Thank you. 

I'd just like to say, first of all, thank you to all the people who came in to give evidence because I thought it was a good cross section of society and it was interesting to hear their experiences of the regional skills partnerships. Some were pretty positive, others were not so, and I'm sure I'll go into that here today.

From our inquiries on the Economy, Infrastructure and Skills Committee, it's clear that an assessment of future skills needs is the gap that needs to be filled by said regional skills partnerships, and that's why we recommended in action 10 that Welsh Government should no longer request regional skills partnerships—or regional skills advisory boards, as we propose to call them—to make operational recommendations on learner numbers at further education institutions, even at the current sector subject level. Instead, Welsh Government should require further education institutions to have regard to the more strategic and intelligence-based reports that could be produced by the board instead. This, of course, would empower and incentivise institutions to respond to the issues identified in those reports. Along with the other recommendations, a stimulation of employer demand for higher skills can be created, beginning to close down the low-skill traps found in parts of the Welsh economy.

But despite the evidence and input provided to us on the committee by crucial stakeholders, it's very disappointing, as has been said, that the Welsh Government have chosen to reject action 10, stating that to move away from having the regional skills advisory board make operational recommendations to the Welsh Government would, and I quote,

'weaken the new strategic planning and funding process.'

Instead, they insist on focusing on learner numbers, and according to ColegauCymru, this approach is overly prescriptive and intensive, generating unnecessary work that does not lead to tangible gains. Through the new curriculum, there is a significant focus on building trust in leadership and capacity within the pre-16 education system in schools. The Welsh Government doesn't dictate their level of post-16 provision. Equally, Welsh Government is completely hands-off when it comes to higher education, too. Meanwhile, in further education, what is lacking is the independence and respect, I would say, to that particular sector. This doesn't seem right to me and it doesn't seem right to ColegauCymru. Why is it that an injection of micromanagement in course numbers is needed here unlike any other educational level? 

It's also particularly puzzling that the Welsh Government has rejected this recommendation as it's not only our report that concluded that planning activity should take place at a more strategic level, but also the Government's own commissioned report from SQW, which came to the same conclusion. On a related note, I do express frustration at the timing of the Government-commissioned report as it took place in March 2019, months after the Economy, Infrastructure and Skills Committee commenced its own inquiry. Arguably, an expense of £9,918 was wasted on a report that risked duplication rather than waiting to hear the findings of our particular committee findings.

Going back to the role of colleges and regional skills partnerships, the colleges' perspective is summed up pretty well by what David Jones of Coleg Cambria told us, and I quote:

'We can't just let universities crack on and do their own thing—because ultimately there's public money going into universities; that's where it's coming from at the end of the day—and then just focus on some sort of regional economy-driven planning just on FE and work-based learning. It's flawed if you do it that way.'

There must be a way for regional skills partnerships to collaborate in a more equal way across sectors. By no means did the committee receive evidence arguing for the abandonment of partnerships—but I did feel a sense of hesitancy in praising them outright when we did take scrutiny—but that a regional skills co-ordinating body was necessary and useful. So, that was the element that they saw fit to promote.

Another issue that the committee focused on is to what extent the partnerships truly represent the societies that they live in and how people can interact with those skills partnerships. It’s clear that they're not reaching their full potential. Some are business heavy, some are college light, and how does that reflect the societies they're living in? Some are very weak on gender balance and some are not very inclusive in terms of the diversity of the communities that they represent. There's also a lack of engagement with Welsh language aims, and of meeting the Cymraeg 2050 target. And we did question many of them about their relationship with city and growth deals: how do the plans of the growth deals align with the skills agenda of the regional partnerships?

There is more reason to move away from the top-down structure and move to a horizontal approach. And as further suggested by Universities Wales, improvement could be seen by wider engagement and specialised use of data. More work is needed to engage with the learner and graduate voice so that the experiences and motivations of those both entering and already in the workforce in Wales can be reflected. Steering their study is one thing, but dictating their study based on what the economy needs all the time may not suit what people actually want to do in their educational careers.

So, thank you for the support that we've had in this particular committee inquiry, but again, reflecting what the Chair has said, we're not as happy with some of the responses from Welsh Government and hope we can work positively from here on in.

Regional skills partnerships are in place to drive investment in skills by developing responses based upon local and regional need. Given that the Government says their remit is simply to provide statistics and information and not innovate operational work or advise, are they delivering as envisaged?

We understand there are three regional skills partnerships in Wales covering south-east Wales, south-west and mid Wales and north Wales. Each RSP produces and analyses labour market intelligence, engages with regional employers, advises the Welsh Government on skills provision in the light of the employer-led insight. In other words, this is the Government's attempt to allow industry to indicate skills requirements.

As has been mentioned by both Russell George and Bethan Sayed, in March 2019, SQW were commissioned by the Welsh Government to consider the consistency of the skills insight and intelligence that is gathered by RSPs and how it is used and presented, and also how RSPs contribute to, inform, and are informed, by the plans of the city and growth deals. The research took place in March and April, including consultation with RSP managers and chairs as well as wider stakeholders. It also took account of the evidence provided to the National Assembly's Economy, Infrastructure and Skills Committee into the regional skills partnerships, which, strangely, ran in parallel with this study.

We see the acceptance of action point 4 in that the Government recognise that the SQW report said that a more strategic role for RSPs was needed, and note that the Government are putting in place three-year regional employment and skills plans. According to the SQW report, at present, there is variation in the depth and breadth of direct contact with employers between the RSPs. However, as this is core to the RSPs' remit, and given that there is evidence of good practice in this aspect, is enough work being done to encourage cross pollination between RSPs?

There is no doubt that the idea of an industrial-led skills development strategy is a very laudable objective, but we have to make sure these aims do not become mired in an overcomplicated delivery structure.

Thank you very much. I call on the Minister for Economy and Transport, Ken Skates.

Thank you. Can I begin my response by thanking Russell George, the Chair of the Economy, Infrastructure and Skills Committee, and members of the committee for their extremely positive report on regional skills partnerships? I'm particularly pleased that the report acknowledges the important role of RSPs in the wider skills landscape in Wales. The committee recommended that RSPs have a clear and strategic outlook. I set out the regional approach to skills when I was Deputy Minister for Skills and Technology back in 2014, with the policy statement on skills. RSPs were established as a mechanism for regional employers and stakeholders to come together to discuss and also to agree priorities that, in turn, would influence the deployment of Welsh Government skills funding.

Over the last five years, the process has matured and a great deal of work has gone into refining the system. The three regions of Wales can set their priorities by engaging with partners, regionally and locally, and by drawing perspectives from regional business networks, thereby enabling a more granular, place-based approach and moving away from the previous, national, sector-led strategies. This is a fundamental aspect of the economic action plan.

RSPs are central to our new strategic planning system for education and skills delivery across post-16 education. I'm pleased that their annual recommendations for change have resulted in a more responsive and reactive skills system in Wales, as colleges and work-based learning providers align provision to meet regional economic needs. It is important for RSPs to continue to have the strategic role of advising Welsh Government of regional authorities, as set out in the regional outline plans. This is the primary mechanism for employers to influence the curriculum offer that is made by apprenticeship providers and further education colleges.

Now, to ensure that we have the right apprenticeship frameworks and employer-led input, we established the Wales apprenticeship advisory panel. RSPs inform the work of the panel, providing valuable regional insights based on employer-led intelligence. These achievements could not have been achieved if RSPs were decision-making bodies, which is why I'm not certain that RSPs should be re-badged as regional skills advisory boards. Our success so far has been built on the premise that RSPs act as independent voluntary partnerships rather than having decision-making powers in their own right. Both the SQW and Graystone reports acknowledged the strength in maintaining RSPs as arm's-length independent partnerships, rather than establishing them as quasi-Government bodies with decision-making powers.

But, I have listened to Members this afternoon, particularly the compelling cases put forward by Russell George and Bethan Sayed on actions 1 and 10. It's led me to believe that further consideration is needed in the new year, and I will undertake to do just this, particularly as Members feel that my responses were insufficient. The current approach gives RSPs a clear role in the Welsh skills system that is understood by partners and stakeholders. But, I will commit to review the governance and legal status of RSPs, as recommended by the committee report, during 2020.

The committee also raised the question of resourcing, and I agree entirely. We need to review the levels of resource across the three RSPs. Again, I will commit to undertake a thorough review of RSP resourcing in 2020. I can assure Members that we will consider the best approaches using the mechanisms available to implement changes and make improvements.

It's vital that we work with RSPs to improve the data and ensure that we have the best regional employment and skills reports possible. It's not just about formal reports. Soft intelligence is vitally important too, and I'm pleased that RSPs are actively involved in our regional employment response groups, which have been established to develop swift solutions across our regions for employers as a result of Brexit uncertainty. And we will commit to working with RSPs in this space over the coming months to implement change and to discuss how this is best achieved.

I'd like to thank the committee for reaffirming the importance of the Welsh language, which should be a consideration across all of our activity on a daily basis as we do business. I'll ask the RSPs to work closely with Coleg Cymraeg Cenedlaethol to ensure the Welsh language needs across the higher education sector are reflected during the development of their employment and skills plans. I'll also ask them to develop an approach to capture intelligence that supports our lifelong approach to enhancing Welsh language opportunities here in Wales.

In closing, I'd like to reaffirm my commitment to RSPs and strengthen the role that they have to play in Wales. The committee report has highlighted a number of areas we will need to consider over the next few months, and I endeavour to revisit those actions, particularly 1 and 10, with further consideration. I'm pleased we are already progressing in areas that continue to build the strategic role of RSPs, and I'm confident that we will be able to further enhance the skills system in Wales to promote economic growth across the regions of Wales in turn to improve our prosperity as a nation.

Thank you, Minister. I now call on Russell George to reply to the debate.

Thank you, acting Presiding Officer. Our recommendations and report were about re-energising the efforts, really, to tackle the low skill traps and give Wales the skills it needs. That was the purpose of our report, and my colleague Oscar Asghar highlighted the need to break those low skill traps. I think it's fundamental to increasing prosperity and creating high-quality jobs. That's what we need to do. We understand that this is possibly one of the most challenging tasks facing our economy. We didn't pretend at all, I should say, that our report will solve this problem, but we also thought that doing nothing will certainly not either.

I think also I should say that I thank my colleagues Bethan Sayed and David Rowlands for expanding on some of the points that I raised in my opening comments and covering some other areas as well. As Bethan stated, there is a lack of representation on the boards, and the committee's action 3 was that there should be more representation and gender balance, and it was disappointing that the Government rejected that aspect.

I think it's also important that I add to what Bethan Sayed said in terms of thanking the many stakeholders who gave oral and written evidence to our committee. I'm concerned that many of them—in fact, I've had feedback already—will feel let down by the Government's response, because they did spend a lot of effort and time putting forward arguments and evidence to us. We were disappointed not only with the original engagement with our recommendations, but also we were disappointed with the quality of the response, which, I'm afraid to say, we thought—I certainly thought—was poorly drafted and carelessly drafted. I think the committee, the Senedd and the stakeholders who gave us time certainly deserved better than that.

But I am very pleased that the Minister, having heard the discussion today, from me and other Members, has said that he's willing to look at this again. I thank the Minister for that sincerely. I think if we can look at this again, perhaps in the new year, if the Minister's happy to re-engage with the committee, we can re-examine, then, some of the problems and look at some of our suggestions and look at the Government's response and see if we can find some middle ground in that area. So, I am grateful for the Minister's response in that regard. I do thank Members for their time and contributions to this debate this afternoon.

The Deputy Presiding Officer took the Chair.

Thank you. The proposal is to note the committee's report. Does any Member object? No. Therefore, in accordance with Standing Order 12.36, the motion is agreed.

Motion agreed in accordance with Standing Order 12.36.