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I welcome the opportunity to set out the success of Scotland’s colleges, to reflect on the need for stronger accountability and to look to the future of this valued and valuable sector. We are here as a result of three reports that the Auditor General presented to the Parliament over the course of 2014 and 2015. The Public Audit Committee considered those reports and published its own findings. I welcome the opportunity to discuss the committee’s findings, as well as the Auditor General’s findings.
As we know, Audit Scotland has a key role in ensuring transparency, high governance standards and effective use of public money, and I very much welcome its important work. It is of course likely and understandable that today’s today debate will focus on areas for improvement, but we should not forget, as the “Scotland’s colleges 2015” report acknowledges, that there are many positives. The report confirms that colleges’ finances are sound, that planning for mergers was good and that the sector has responded well to a period of significant change.
We know that colleges play a crucial role in this Government’s commitment to improving the employability of all Scotland’s young people. Colleges’ ability to flex to the needs of industry while attracting young people to courses that better prepare them for the world of work is excellent.
Current youth employment levels are at their highest for 10 years and colleges have played a significant role in that achievement. Quite simply, colleges matter; they make a vital contribution to our people, our economy and our society. Their proper stewardship clearly matters, too. Good boards can support a college to better the lives of students and to help businesses perform better. They can be a force for good—they can be a force for great good. However, because of their vital role, poor boards could risk actively making things worse—indeed, much worse.
That is why the committee’s reports are so jarring—they document how those entrusted with the proper stewardship of public funds broke that trust. The events at Coatbridge, at North Glasgow and at Glasgow Clyde were appalling. However, it would be catastrophic to fail to learn the lessons. That is why I am absolutely determined to take concrete action to prevent the recurrence of such events.
Although the specific governance failures outlined in the two college-specific PAC reports occurred before Office for National Statistics reclassification of colleges and the Auditor General for Scotland’s confirmation that the new controls are much more robust, we cannot and must not be complacent.
Following the serious failures of governance at Glasgow Clyde College and the unprecedented action in October last year to remove board members, I announced the formation of my college good governance task group to consider what more could be done. There is an opportunity, which my task group is seizing, to extract some good from recent failures.
I chaired an excellent second meeting of the task group last week. I thank all the members of the group for their contributions to date, including those from the president of the National Union of Students Scotland, union representatives from the Educational Institute of Scotland and Unison, and members representing Colleges Scotland, the Scottish funding council and OSCR as well as the member who is independent from the sector. The group is well on the way to producing its report next month.
I do not want to pre-empt our report but key areas that we are looking at include: the Scottish funding council taking a more proactive, risk-based approach to satisfy itself that governance standards are being met; enhancing the key role of board secretary; and providing better support for board member training, building on a lot of good work that has been done in recent months.
All colleges need to be led and governed to the highest of standards. Through my task group and other relevant work, I will ensure that we have greater confidence that the required standards are being met across the sector.
The Scottish funding council is vital to realising our ambition for the success of the sector and its better regulation. I welcome the SFC’s engagement with my task group, and my expectations are that the SFC will implement the recommendations swiftly and effectively.
My letter of guidance to the SFC, which was published just yesterday, sets out my priorities for both the college sector and the university sector. In what has been a tight financial settlement for public services in Scotland, I am pleased to have been able to protect college resource funding at 2015-16 levels. With responsibility for such a significant amount of public funds, I place the highest importance on proactive risk management and rigorous monitoring, and my letter of guidance makes clear my expectations in that regard.
Colleges have implemented the most profound set of public sector reforms in Scottish tertiary education for more than a generation, which is, in itself, a remarkable achievement. The debate over structures is behind us. We must now ensure that they work to their full potential. Colleges are now delivering similar levels of activity for less resource and with much greater impact—that is surely the definition of good public sector reform, especially in the current economic climate. The Scottish Government is working with the Scottish funding council and Audit Scotland with a view to publishing data on financial and non-financial benefits.
The Public Audit Committee’s three reports have helpfully captured areas of improvement for our continued attention. I recognise that there is more to do, and I look forward to continuing to support the sector in the next phase.