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.
