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The 2005 act gives the SFC the power to arrange for efficiency studies in order to improve economy, efficiency and effectiveness in the management or operations of any fundable body. The bill as introduced gives the SFC powers to make recommendations to fundable bodies following an efficiency study.

Amendment 13, in my name, will require the SFC to consult the relevant fundable body before publishing any recommendations that it has issued to the body following an efficiency study. The amendment responds to a concern from Universities Scotland that the SFC had sole discretion with regard to whether to publish recommendations, which could cause certain issues to arise. For example, publication of some recommendations could raise issues for staff or creditors, and it is possible that the SFC might not be fully aware of that possibility. The requirement will give the institution the opportunity to point out any issues before publication. I hope that members agree that that is a sensible addition to the provisions and that they will support amendment 13.

Staying with efficiency studies, amendment 132, in the name of Miles Briggs, would provide that efficiency studies that are carried out under section 15 of the 2005 act may also include consideration of the extent to which the needs and interests of staff are being met, including in relation to fair work principles, which apply to grants that are made to and/or by public bodies. I support that aim, but the second limb of the amendment, as drafted, does not work. I am content to support the amendment and hope that Miles Briggs will be content for me to make any necessary changes at stage 3.

Amendment 14, in my name, will enhance the powers of the SFC to monitor the financial sustainability of post-16 education bodies, and it has been lodged in response to recent issues at the University of Dundee. It will enable the SFC to secure the carrying out of independent examinations into financial sustainability. The provision will also require the governing body to provide such information and make available for inspection any accounts and other documents as may be reasonably required for the independent examination. I anticipate that that information might be used when the SFC is unable to obtain the information that it requires from a post-16 education body, or is dissatisfied with the information with which it has been provided. I hope that members will be able to support amendment 14.

Ross Greer has lodged two alternative amendments to my amendment 14. Amendment 14A would render the scope of the independent examination very wide—too wide, in fact—and there would be no limit on what the independent examination might look at. I therefore cannot support it. However, his amendment 14B would enable the examination of financial governance as well as financial sustainability. That seems appropriate, so I am happy to support amendment 14B.

Amendment 15, in my name, will amend the power in the bill as drafted for the SFC to issue guidance to fundable bodies and any other person it funds. That is in response to the recommendations of the Delegated Powers and Law Reform Committee, which in turn informed this committee’s recommendations in its stage 1 report on the bill. The Scottish Government agrees that it would be helpful to be clearer about what type of content such guidance might include. Amendment 15 therefore sets out an illustrative list of the types of matters that the guidance could cover. I want to be clear that it is still the case that the SFC can continue to issue other non-statutory information, including guidance, that it considers appropriate, including in respect of the topics in the amendment. I hope that amendment 15 meets members’ expectations and that the committee can support it.

A number of amendments in the group would require reports, assessments or information to be provided to or by the SFC. Amendments 137 and 138, in the name of Pam Duncan-Glancy, would require the SFC to report annually to Scottish ministers on the financial sustainability of post-16 education bodies. Amendment 140, also in the name of Pam Duncan-Glancy, would require the SFC to report on the participation of learners from socially and economically disadvantaged backgrounds. Amendment 141, in the name of Stephen Kerr, would require the SFC’s annual report to include information about outcomes delivered, including student progression.

Those are not the only amendments that call for reporting on a range of information. I am thinking about how much time and resource would require to be applied, mainly by the SFC, to fulfil all such functions, should all those amendments be agreed to. I therefore ask Pam Duncan-Glancy and Stephen Kerr not to move their respective amendments, to allow me, my officials and the Scottish Government to consider all the reporting requirements together and to lodge a suitable amendment to cover reporting duties and responsibilities at stage 3.

I cannot support amendment 133 in the name of Miles Briggs. It would create a new power for the SFC to undertake a review of the activities of a post-16 education body. The SFC already has a duty to ensure that provision is made for assessing and enhancing the quality of fundable further and higher education that is provided by the post-16 education bodies. The SFC has the power to secure efficiency studies of the management and operation of bodies. Governing bodies also have a statutory duty to provide the SFC with such information as might reasonably be required for the SFC to carry out its functions.

Amendment 133 would also enable a wide range of persons to ask the SFC to undertake a review. That broad list could result in the SFC being encumbered with requests for reviews on an ad hoc basis, which would be unmanageable in practice and create inconsistencies across the sector. I therefore ask Miles Briggs not to move amendment 133. Should he do so, I encourage members to vote against it.

Amendments 134, 135 and 136, in the name of Miles Briggs, would require the SFC to monitor the financial sustainability of all training providers and persons who deliver training programmes for employment. It is not the SFC’s role to monitor the financial sustainability of commercial enterprises. There are many more training providers involved in apprenticeship provision and work-based learning than there are fundable bodies. The requirement would be an onerous duty on the SFC, even if it were appropriate. Any concerns about safeguarding public money need to be managed in the same way as other commercial transactions, such as not paying in advance of service delivery, for example. I hope that Miles Briggs agrees and will not move amendments 134, 135 and 136. Should he do so, I encourage members to vote against them.

I completely agree with the sentiment behind Pam Duncan-Glancy’s amendment 139. Nobody wants to see pupils’ learning disrupted. However, I am not convinced that such a legislative framework is the right way to approach that. The circumstances of each situation will be very different and it would be better for the SFC to be able to tailor its response accordingly. I hope that that reassures Pam Duncan-Glancy and that she will not move amendment 139. Should she do so, I encourage members to vote against it.

As Pam Duncan-Glancy said, Daniel Johnson’s amendments 121 and 122 seek to provide for greater transparency in relation to the funds that are received from the UK Government’s apprenticeship levy and how those are spent by the Scottish ministers. I have listened carefully to Pam Duncan-Glancy and Miles Briggs, and to the interventions from John Mason, George Adam and Ross Greer, just as I have listened carefully, in my tenure in this role so far and in my years as a constituency MSP, to the voices of business on these matters. Therefore, I can say in good faith that this is an important discussion.

I and the Government would also like to have more clarity on the exact amount that the Scottish Government receives under the apprenticeship levy, but that is out of our control. Since 2020-21, Scotland has received a Barnett formula share of the UK Department for Education’s apprenticeship levy funding via the block grant, as other members have emphasised. The Scottish Government does not receive a specific allocation of the apprenticeship levy revenue, so we cannot directly link funds raised from the levy to any funding stream.

It is also important to emphasise that, because of the way in which HMRC and the UK Government share information, it would simply not be possible to implement Daniel Johnson’s amendments 121 and 122, or the annual reporting requirement for which Miles Briggs’s amendment 123 would provide.

As I have said, there are issues with the way in which information is shared. We are hopeful that the plans that the UK Government has announced for replacing the apprenticeship levy with the growth and skills levy will provide an opportunity for better information sharing with the Scottish Government. My officials are engaging with that process in order to understand what impacts the changes to the levy might have on Scotland.

For all the reasons that I have set out, I cannot support amendments 121, 122 and 123, and I ask the committee to reject them should they be pressed.

On amendment 125, in the name of Daniel Johnson, the allocation and specification of funding is—properly—the purpose of the annual Scottish budget process, as John Mason, George Adam and Ross Greer emphasised, and that would be a better place to deal with it. I encourage Pam Duncan-Glancy, on behalf of Daniel Johnson, to engage with that process to make the case for specific funding to be allocated to skills development.

Amendment 126 would require ministers to

“publish annual targets for growth in... the ... number of skills development programmes”.

Although it might seem helpful to have annual targets, the Government does not want to focus only on meeting prescribed targets but rather to be flexible and meet skills demand where it arises. Therefore, I am afraid that I cannot support amendment 126, either.

Although I understand the motivation behind all those amendments, I urge members to exercise caution about what we put into primary legislation, which would be binding on successor Governments and Parliaments. What matters now might not matter quite so much in the future. Regarding the levy changes, it may well be that we do not receive a Barnett share in the future, and that we will have to consider how we fund apprenticeships ourselves. There is a lot of potential for change.

It might make sense to set targets now for skill shortages or an older age group, but that might be less relevant in the future. Where targets are set, that implies that funding will follow them. In the future, that could mean money flowing away from the priorities of the time. It might seem sensible to require a specific separation of funding, but that would limit the ability for flexibility and for the recipients of funding who work in skills, education and training to optimise how they use their shares of the funding.

In short, there might be unintended consequences from all or any of the amendments in this group. Although I understand why members have lodged them, I hope that they will also appreciate why agreeing to them would not be useful. I therefore encourage Pam Duncan-Glancy, on behalf of Daniel Johnson, and Miles Briggs not to press their respective amendments. Should they do so, I ask members to vote against all the amendments in the group.

I thank Miles Briggs for raising those points. I agree with the importance of traditional building skills and other—to use his word—niche skill sets that we need to be mindful of. However, I stand by what I have said. In my engagement with COSLA before stage 2, it expressed no appetite for councils to have those powers, as far as I am aware. I hear Miles Briggs’s point in general terms about specific skills, and we will consider that further, but I still believe that the amendments in the group are not the way that we wish to proceed.

The bill forms part of our work of reform that is aimed at simplifying the skills landscape and post-16 education and training. It seems to me that adding another suite of fundable bodies would have the opposite effect. It would also apply to local authorities the provisions and requirements of the 2005 act that further and higher education institutions must abide by, which I believe would be undesirable. It would not help us in simplification, and it would create more burdens on local authorities.

Where it is appropriate for the SFC to provide funding to local authorities, the 2005 act, as amended by the bill, makes provision to do that. That would be when local authorities are acting in the capacity of training providers—for example, in respect of national training programmes, apprenticeships and work-based learning.

Therefore, I cannot support any of the amendments in the group, and I encourage members to vote against them if Miles Briggs chooses to press them.

Yes, shortly. Ross Greer’s amendments 178 and 179 and Miles Briggs’s amendment 180 would add additional categories to the list of desirable criteria to which ministers are to have regard when appointing members to the council. Unlike previous amendments in the group, amendments 178 to 180 would not bind ministers.

It will always be challenging to come up with a particular set of skills or experience that everyone is content with. I am not suggesting that the other amendments are without merit. On the other hand, it would be better to commit to working with the committee and other interested members to ensure that the process that we follow for recruiting new council members in 2026, when there are five positions available, secures the right people for the context.

I cannot support the amendments that propose to make the changes that I referred to just a moment ago, those being amendments 173 and 175 to 180. However, I am prepared to come back at stage 3 with suitable amendments to respond to the points that members have made about the skills and experience that are needed on the council. On that basis, I hope that members will not move amendments 173 and 175 to 180.

I also hope that members do not press amendment 172 or move amendment 174. If they do, I urge members to vote against them.

I should note that Daniel Johnson’s amendment 175 is contingent on his amendment 181, which we will come to in group 16. Amendment 181 would remove the apprenticeship committee and replace it with a different committee, and I do not see the benefit of that.

Paul McLennan’s amendment 36 is helpful in that it makes clear that co-opted members of the SFC may receive remuneration and allowances as appropriate, and that ministers will approve them as part of the terms and conditions of their appointment. That is suitable, and I am happy to support the amendment.

I had hoped that I had reassured Mr Greer that I will come back at stage 3, but I am happy to take his intervention if that is helpful.

With the convener’s permission, I will continue from where I finished.

Bill Kidd’s amendment rightly identifies employers, colleges and universities, training providers and trade unions representing the interests of apprentices as having a strong interest in the work of the apprenticeship committee. I agree with him, and I would welcome strong representation on the committee from those groups.

In the same vein, I am happy to support Miles Briggs’s amendment 188, which would effectively expand the scope of desirability considerations by the council to include people who represent the interests of businesses in relevant industries. His amendment 189 covers similar ground to that covered by amendment 188, so I hope that he might see that it is now not needed.

Amendment 187, also in the name of Miles Briggs, seeks to require the SFC to consult persons who appear to represent the interests of businesses in relevant industries when appointing members of the apprenticeship committee. The emphasis on consultation is helpful and I support the amendment, although I may wish to tidy up the framing at stage 3, should Miles Briggs be agreeable to that.

Amendment 182, also in the name of Miles Briggs, is not strictly needed, because the apprenticeship committee can consult and collaborate under the same duties and powers as the SFC, where appropriate. However, the amendment seeks to emphasise the importance of the views of local authorities in shaping apprenticeship delivery, which I agree with, and I am therefore happy to support it.

Lorna Slater’s amendment 191, as spoken to by Ross Greer, would change ministers’ power to give the SFC guidance on the operation of the apprenticeship committee into a duty to do so. It is absolutely our intention to issue such guidance to the SFC, so I am happy to support the amendment.

I hope that amending the bill in the way proposed in amendment 191 will give comfort in respect of members’ concerns about who should be a member of the apprenticeship committee, because ministers will issue guidance on the issue. For example, the Scottish ministers could specify that more than half the members have to be employers or employer representative organisations, and could insist on there being representation of other groups.

A number of amendments in the group aim to specify that particular types of people should be members of the apprenticeship committee. Pam Duncan-Glancy’s amendment 183 seeks to require at least one member from a body that represents the interests of small and micro businesses, and at least one member who is an employer in a sector in which a majority of the businesses that are engaged in that sector are micro businesses. Miles Briggs’s amendment 184 seeks to require that one or more members must represent the interests of businesses in relevant industries. Pam Duncan-Glancy’s amendment 185 seeks to require that one member must be a Scottish apprentice or work-based learner, and one must be a college student. Monica Lennon’s amendment 186 would require at least one member who is a trade and industry representative.

Those are all reasonable suggestions, but it might not be helpful to set such requirements out rigidly on the face of primary legislation in the way that those members envisage.

Ahead of stage 3, I would like to consider whether we need to say anything more in the bill about the types of member of the apprenticeship committee beyond what is in Bill Kidd’s amendment 18. In doing so, I will take on board all the types of representatives that members have sought to include through their respective amendments.

Daniel Johnson’s amendment 181, which Pam Duncan-Glancy moved, would remove the apprenticeship committee from the bill and substitute it with provision for an industry skills board. The apprenticeship committee is capable of delivering the requirements that are set out in Daniel Johnson’s amendment 181. I prefer the approach that is set out in the bill, so I cannot support amendment 181 and I urge members of the committee to reject it.

Willie Rennie’s amendment 37 seeks to ensure that the chair of the apprenticeship committee is an employer or represents the views and interests of employers. I share his concern that the apprenticeship committee must reflect and consider the needs of employers, but I think that there is a better way of achieving the same aim. It is important that the apprenticeship committee is chaired by a member of the SFC, but amendment 37 would remove that requirement. The apprenticeship committee should be chaired by a member of the SFC for reasons of effective governance and to make sure that the committee has a powerful voice on the SFC board. However, the chair of the committee must have the right skills and experience, which means ensuring that there are members of the council who have the skills and experience that Willie Rennie has set out and can, therefore, be asked to chair the committee effectively.

The SFC will make further appointments in 2026, and the Scottish Government will ensure that the skills and experience that Willie Rennie is looking for are acquired through that process. That is the most appropriate way forward.

I would be happy to discuss all of that with Willie Rennie ahead of stage 3, together with the discussion that I have undertaken to have about his amendment 24, which falls into the same wider area of consideration.

As Miles Briggs set out on his behalf, Stephen Kerr’s amendment 190 would require the apprenticeship committee to have at least 20 members, and the majority of the members to be employer or industry representatives. There is a balance to be struck around the size of this or any committee. If there are too few members, it will not have sufficient variety of skills, experience and views, and if there are too many, it will be costly and hard to manage, even with regard to simple things such as finding mutually convenient dates for meetings. It would therefore be unhelpful for the bill to set a specific number of members when we have not accumulated any experience of the way in which the committee will operate.

The SFC needs to engage stakeholders, including employers and workforce representatives, on the design of the committee and whether it should have subcommittees to support it. It would be premature to set the size or composition of the committee in primary legislation, as amendment 190 envisages. Therefore, I cannot support the amendment.

Stephen Kerr’s amendment 192 seeks to require the apprenticeship committee to report to the Scottish Parliament on how employer views have informed its decisions and recommendations. Scottish ministers will give the SFC guidance on the committee’s functions, and that guidance can set out what, if anything, the apprenticeship committee needs to publish and when. Reports from the apprenticeship committee will be best dealt with administratively, especially given the SFC’s statutory duty to provide an annual report that includes the work of its committees. In terms of governance, it would be inappropriate for a committee of the SFC to report directly to the Scottish Parliament, given that the SFC’s role is to report to Scottish ministers, the Parliament and publicly. Therefore, I cannot support amendment 192.

It is not fully clear what Pam Duncan-Glancy’s amendment 193 seeks to achieve, although I appreciated what she said about it earlier. It appears to be about ensuring that learners have the support that they need to be a member of the council. That could be financial support, but council members are remunerated and can claim expenses. It is not obvious that learners would need something additional, beyond what the SFC would be required to provide in making reasonable adjustments to support a member with a protected characteristic. I do not consider that amendment 193 is necessary, but I undertake to ensure that we communicate to the SFC our expectations for support for council members, including in relation to aspects such as training.

The bill forms part of our work to simplify the funding body landscape so that it is more efficient and achieves better outcomes. I fully support the need for regional skills planning and an appropriate response to that in terms of provision. However, I cannot support Stephen Kerr’s amendment 194, as it would result in a plethora of regional skills boards with associated costs. It is unclear how those boards would interact with the apprenticeship and skills committees, with which they are more likely to come into conflict given their overlapping roles.

The amendment would also give a specific function to the SFC that currently sits with SDS, so I cannot support amendment 194.

In summary, I ask members to vote for Bill Kidd’s amendment 18, Miles Briggs’s amendments 182, 187 and 188, and Lorna Slater’s amendment 191.

In light of my commitment to look again at the issues raised in their amendments, I ask Pam Duncan-Glancy not to move amendments 183 or 185, Miles Briggs not to move amendment 184, and members not to move amendment 186 on Monica Lennon’s behalf. If they do, I encourage members to vote against the amendments that I have listed.

I hope that Pam Duncan-Glancy, on behalf of Daniel Johnson, will not press amendment 181; if she does, I encourage members to vote against it. I hope that my undertaking on board appointments will persuade Willie Rennie not to move amendment 37; if he does, I encourage members to vote against it.

I ask Miles Briggs not to move amendments 190, 192 and 194 on behalf of Stephen Kerr; if he does, I encourage members to vote against the amendments. Finally, I hope that I have assured Pam Duncan-Glancy that I share the aims behind her amendment 193 and that she will now not move that amendment. If she does, I encourage members to vote against it.

I would like to make progress, if that is okay.

The reform to the skills landscape that we are taking forward does not anticipate skills planning to be something for the SFC to lead on. Amendment 117, in the name of Miles Briggs, would pre-empt the priorities that are to be determined by the new skills planning function within the Scottish Government. Further, it would not be appropriate to name particular sectors in the bill, not least because they might change over time, or equivalently important sectors might come to the fore.

Amendment 119, in the name of Stephen Kerr, would give the SFC a role that is not for it to play. The SFC’s role is to secure provision, and it is for the Scottish Government to assess labour market demand and skills shortages, with other public bodies.

Amendment 35, in the name of Willie Rennie, would, in effect, recreate the Scottish Apprenticeship Advisory Board. Given that the apprenticeship committee set out in the bill is designed to take on the SAAB’s functions, the proposed additional board would duplicate the work of the apprenticeship committee and therefore complicate the landscape. However, I refer back to the discussion with Willie Rennie that I had last week on considerations ahead of stage 3 with regard to further industry involvement.

In conclusion—and I know that members and the convener will be glad to hear that phrase—other than Jackie Dunbar’s amendments, the Scottish Government and I, for the reasons that I have given, cannot support any of the other amendments in the group. However, as with every other group, I thank members for their constructive engagement, and I am happy to keep an open mind on the question of funding for apprenticeships ahead of stage 3.

I ask the committee to support amendments 9 and 10 from Jackie Dunbar and my amendments 11 and 12, and not to support the other amendments in the group.

Will the member give way?

Briefly.