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The Scottish Executive: Draft Budget 2004-05 Summary

Chapter 7 Enterprise and Lifelong Learning

To create a highly skilled, learning, earning, connected Scotland.

OBJECTIVES AND TARGETS

Objective 1: Raise the long-term sustainable growth rate of the Scottish economy.

• Target 1: Increase business investment in research and development compared to OECD competitors. *
• Target 2: Improve productivity levels in Scottish industry compared to OECD competitors. *

Objective 2: Influence Scotland's industry towards more sustainable patterns of development.

• Target 3: Applications for Regional Selective Assistance (RSA) grants of 2 million and over will be assessed against the Executive's sustainable development objectives by 2004.

Objective 3: Improve the skill base of Scotland to be better prepared to meet the demands of the knowledge economy.

• Target 4: Increase Modern Apprenticeships to over 25,000 in employment and training by 2006, targeting under-represented groups.
• Target 5: Increase the number of people in employment undertaking training. *

Objective 4: Closing the opportunity gap on employment and learning.

• Target 6: Close the gap in unemployment rates between the worst 10% of areas and the Scottish average by 2006. *
• Target 7: Reduce the proportion of 16-19 year olds not in education, training and employment by 2006.
• Target 8: Increase support to 16-19 year olds from low income families to stay on at school and/or FE college, thereby raising the participation and retention rates of this group by at least 5% by 2007-08.

Objective 5: To encourage and support lifelong learning, widen access to skills opportunities and improve the quality and effectiveness of further and higher education within Scotland.

• Target 9: Increase graduates as a proportion of the workforce. *

* These are from "A Smart, Successful Scotland". The aim is to improve Scotland's performance and move towards the top quartile of OECD countries.

Objective 6: Boost science and increase innovation

• Target 10: Assist 150 joint academic and industry ventures by 2006.

Objective 7: To equip unemployed people with the skills to secure a job, re-skill the existing workforce or improve the skills base of particular geographic areas through European Structural Funds.

• Target 11: By 2006, have awarded project grants to train 38,000 unemployed beneficiaries for employment 12 months after training, and to generate 112,000 qualifications by 2008.
• Target 12: By 2006, have awarded project grants to assist 28,000 socially excluded people into employment by 2009.

Objective 8: To encourage economic development through the European Structural Funds in areas suffering from industrial decline, rural or urban problems, and areas experiencing difficulty arising from pressure on the fisheries sector.

• Target 13: By 2006, have awarded project grants to assist 23,000 existing businesses by 2008.
• Target 14: By 2006, have awarded project grants to create 83,000 net jobs by 2009.

Spending plans 2003-06

Table 7.01 Spending plans (level 2)

What the budget does

Virtually all of the department's programme expenditure focuses on post school education and training and jobs, including resources to increase support for science, innovation and investment. Our objectives here are also supported by the Structural Funds programmes. Much of our spending is aimed at closing the opportunity gap in employment and training.

Portfolio priorities

In 2004-05 we will focus our resources on:

• supporting science and innovation;
• enhancing the enterprise, skills & employability of those in work and without it;
• encouraging the creation, growth and transformation of businesses;
• obtaining best value from higher and further education;
• encouraging connectivity and digital access;
• contributing to the Executive's priorities of sustainable development and closing the opportunity gap;
• supporting Enterprise Networks' performance;
• communicating Ministers' strategy, listening to business and promoting effective joint working at local level; and
• managing the portfolio so that it delivers a quality service to all its customers, founded on the principles of Best Value.

New resources

An additional budget of 2 million in 2003-04 has been made available for enterprise in education (E in E). The Hunter Foundation is helping develop a number of programmes to be funded by a contribution in

2003-04 of 2 million matched by an additional 2 million funding provided by the Executive. These include:

• A pilot training course in leadership skills for headteachers;
• A core training resource for teachers in E in E;
• A 'Whole Schools Approach' pathfinder; and
• A core enterprise programme (CEP) which will allow all schools across Scotland to participate in E in E from this school year.

An additional budget of 10/15 million in 2004-05 and 2005-06 respectively, has been made available for student support, in recognition of possible future pressures in this area.

An additional 18 million has been made available in 2003-04 to fund part of an integrated package of measures to stimulate demand for broadband services across Scotland assisting the development of e-commerce. Scottish Enterprise will take part in a targeted marketing campaign to promote the benefits of broadband and increase demand and uptake It is expected that the above measures will help to achieve over 70% coverage in Scotland, and additional options will be developed in-year in order to extend coverage further.

Following a review of the Regional Selective Assistance scheme and the severe economic downturn in 2001-02 and 2002-03, which saw a substantial reduction in inward investment projects, it was proposed that part of the RSA budget be redirected to other areas. The Minister announced that, from 2002-03, there would be a greater focus on growing Scottish firms, with the emphasis on high growth and innovative projects. For 2003-04, 2004-05 and 2005-06 23m, 26m and 16m has been transferred to other parts of the programme to give a boost to venture capital for small and growing companies (Scottish Co-Investment Scheme) as well as investment in innovation (New Initiatives, Due Diligence and Proof of Concept) and science (Higher Education Research).

Closing the opportunity gap

Enterprise and Lifelong Learning has the objective of closing the opportunity gap in employment and learning. A range of policies help to meet this objective. The Enterprise Networks direct their interventions by assessing both opportunity and degree of need for public sector support. Activities to promote learning and skills are important. For example, Modern Apprenticeships will be increased in number and targeted at under-represented groups. More than 50% of those finishing their Modern Apprenticeship go on to further training or learning. Education Maintenance Allowances are being extended across Scotland, ensuring that children from low-income families are able to stay on in education beyond age 16. In enterprise, Regional Selective Assistance promotes economic development in areas of higher unemployment and lower growth.

Sustainable development

The Framework for Economic Development in Scotland makes it clear that sustainable economic development requires a sustainable increase in the rate of growth of productivity. It is recognised that economic development will not only generate higher incomes and better quality employment but in so doing will also help to achieve our goals of social justice and sustainability.

Priority business areas have been audited by independent consultants who found that the overall enterprise and lifelong learning policies would have a positive impact on sustainable development. Further action will be taken, including identifying performance measures for sustainable development to add to those set out in "Measuring Progress Towards Smart Successful Scotland", and considering how larger applications for Regional Selective Assistance could include a requirement to demonstrate planning for resource use.

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