Scotland is facing a growing delivery deficit in skills, with little progress being made to meet the needs of a rapidly changing economy. That’s the warning from the think tank Our Scottish Future in a new report published today.

The report, Agile Skills for a Changing Economy, calls for an urgent reset that cuts out bureaucracy and which delivers the skills that individuals and employers need. Pointing to a Scottish Government-led culture of “drift and dysfunction”, the report identifies multiple government-commissioned skills reviews, all of which had no obvious outcome due to an over-concentration on the organisational structures of the public sector rather than practical, frontline skills support.

Agile Skills follows up Our Scottish Future’s report Fixing Broken Government, published on 3 December, which set out how government in Scotland has become mired in a cycle of announcements rather than achievements. Agile Skills illustrates how that has happened in one important policy area.   

The report identifies five funding streams worth millions of pounds which have been abolished or redirected. This is in addition to industry concerns that, while larger employers in Scotland contribute around £270 million a year through the UK Apprenticeship Levy, up to £171 million of this levy funding has been absorbed into the wider Scottish Government budget over recent years rather than being used to fund workforce development – leaving Scotland’s skills system weaker, and those who rely on it worse off. 

The gap between skills supply and demand is being exacerbated by a funding crisis in Scotland’s colleges sector, a shortfall of around 8,500 funded apprenticeships, and a severe lack of flexibility in providing new apprenticeship opportunities to meet changing industry needs. 

Ahead of the pivotal 2026 election, the report urges all parties to commit to an urgent skills reset and a lifelong learning guarantee, ensuring individuals gain employability skills such as problem-solving, teamwork and communication throughout school, college and university, alongside training that builds professional knowledge and can adapt to the changing needs of industry. 

To get there, Our Scottish Future recommends:

• An immediate investment of the full Scottish proceeds of the Apprenticeship Levy and the forthcoming Growth and Skills Levy into skills development – a move which would release around £50-60 million per year back into Scotland’s apprenticeship system

• The development of an agile skills ecosystem, quickly responsive to changing employer and individual needs.  This should devolve initiative within Scotland: nationally, the government should oversee changing skills needs and ensure mechanisms for delivery are in place; regionally, and at enterprise-level, civic and industry leadership should be empowered to plan and deliver training; and individuals should have access to financially supported pathways to develop skills, including a ‘Right to Learn’ for employees.
•  A suite of new products, delivered by the Scottish Government, which incentivise businesses, learners and job-seekers to upskill and retrain throughout their careers. These could include new entitlements to lifelong learning, and a new technical ‘S-Level’ co-designed with business and aligned with regional industrial strategies which provide a pipeline for rapidly expanding Scottish enterprises. 

The researchers behind Agile Skills for a Changing Economy, Alastair Sim and Daniel Turner, bring decades of experience in regional economic policy and tertiary education. 

Report co-author Alastair Sim said:  “Scotland cannot secure its future prosperity without equipping people with the skills they need throughout their lives. But the Scottish Government’s  fixation with fiddling around with public sector reorganisation is holding the nation back from having practical policies that help people and enterprises to get the skills they need quickly.  A lifelong learning guarantee, backed by government support for upskilling and reskilling, is essential to ensure everyone can access education and training that prepares them for a rapidly changing economy. Without this, future economic growth risks being lost.”

Daniel Turner added: “Scotland has talked about skills for long enough. The next Scottish Government needs to turn words into action. That begins with delivering existing commitments, putting individual learners, businesses and regional leaders in the driver’s seat and releasing more money to where it’s needed today. And it means preparing the ground for deeper reforms, so that empowered, confident communities across Scotland can thrive in the years ahead.”

Our Scottish Future was launched by the former Prime Minister, Rt Hon Gordon Brown in 2019 to campaign for a prosperous and inclusive Scotland in the UK, supported by both UK and Scottish policies, and for change to make people’s lives better. 

Read the report here.

A major new report from the think tank Our Scottish Future, Fixing Broken Government, drawing on interviews with senior public servants, says Scotland’s system of government is broken and not delivering for the people of Scotland. 

Based on extensive, non-attributable interviews with senior public servants working across Scottish Government, multiple local authorities and Scotland’s extensive network of public bodies, the report finds that government is failing at both ministerial and official levels, concluding that politics and presentation have increasingly eclipsed effective policy-making and delivery. 

It suggests that government in Scotland is characterised by short termism and excessive central control, with damaging consequences for economic and social wellbeing. The report makes radical recommendations for change so that the post-2026 Scottish Government, of whatever political complexion, can be more effective. 

The report, authored by Our Scottish Future’s chair Professor Jim Gallagher – himself a former senior civil servant in Edinburgh and Whitehall – finds that Scotland is performing worse than the rest of the UK on some of the most important measures of national wellbeing:

• Overall economic growth has lagged behind every region except the North East of England consistently since 2010
• Life expectancy has been falling more in Scotland than in England, and is now sitting at a ten-year low; and waiting lists and waiting times in Scotland’s NHS are substantially longer than pre-pandemic levels. 
• Educational attainment has overall decreased, and educational inequality widened, according to the internationally-recognised PISA measures – with significant declines in maths and science, especially among the poorest pupils. 

The report includes stark observations from public servants about what’s wrong and needs to be fixed. For instance:

“The government is no longer an externally facing institution beyond face value engagement; it is more concerned about stakeholder management than genuine co-design.”

“The requirement to avoid alienating any public support for the SNP and independence stymied politicians’ willingness to think about any idea that might require substantial short-term unpopularity.  That grew and grew from 2010 to 2014 and it’s never diminished since then, it’s become an established way of thinking.”

“People would get hung out to dry if they actually took action and called out stuff that they saw going wrong or highlighted areas where they saw stuff that could have gone better… this sent a powerful message that you cover your own back. You don’t actually do what’s necessary for the broader organisation.”

Professor Jim Gallagher, Chair of Our Scottish Future and the author of Fixing Broken Government said: “Despite high levels of public spending, Scotland is not much healthier, wealthier or wiser. Public services are struggling, with no plausible strategy to reform or improve them, and some spectacular delivery failures on issues such as the deposit return scheme and the ferries fiasco have cost the public purse – and the Scottish public – dearly. On top of that, a fiscal crisis is looming.

“What is most striking from our conversations with a wide range of senior public servants, all with first-hand experience of working with or in the Scottish Government, is the consistency of their views. 

“Everyone we spoke to, indeed just about everyone in Scottish public life, knows we have a big problem. Government struggles to deliver for the people of Scotland. Politics has overwhelmed public policy. Announcing has increasingly replaced governing. Delivery and implementation are faltering, and reform and modernisation of public services has stalled. Politics is at the root of the problem, but the civil service machine itself is also struggling to perform effectively.” 

The report describes a government system hampered by over-centralisation, with a weakened local government, a reluctance to make difficult policy choices and poor coordination across an inflated number of directorates. One senior interviewee described the Scottish Government’s influence on public services as a “cold, dead hand”, while almost all spoke of a culture where presentation consistently outweighs implementation. 

Looking ahead to a landmark 2026 Holyrood election, the report sets out a series of practical recommendations to repair Scotland’s system of government. It calls first for a swift, short-life review during the pre-election period to prepare clear advice for any incoming administration on how to govern more effectively and improve the capability of government in Scotland. 

Beyond that, Our Scottish Future proposes rebuilding regional government with a core focus on economic development, resetting the relationship between ministers and public bodies to give them genuine independence to get on with their jobs, introducing legal limits on the number of ministers and special advisers, and reviewing the management structure within the Scottish Government.

Finally, the report argues for a new approach to public sector reform and the creation of a stronger central financial function, akin to a Scottish Exchequer, to ensure more effective financial accountability of ministers.

Professor Gallagher added: “As we look ahead to the 2026 election, there is a real chance to reset how Scotland is governed. Many of the changes needed are obvious: resetting the relationship between ministers and officials, sharpening priorities and focusing less on making multiple announcements, and more on getting fewer things done, well. 

“Scotland has talent and commitment in its public service. What we need now is the clarity and leadership to make government work effectively for the people it serves.”

Our Scottish Future was launched by the former Prime Minister, Rt Hon Gordon Brown in 2019 to campaign for a prosperous and inclusive Scotland in the UK, supported by both UK and Scottish policies, and for change to make people’s lives better. 

Read the full report here.