The Scottish Government

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Headline Performance

• The Scottish Skills Fund is highly valued in the skills community and generally over-subscribed.
• Projects supported by the Fund have addressed identified sectoral priorities in Scotland.
• Projects supported by the Fund appear to have achieved most objectives and been very successful.
• There is strong evidence of project additionality. Very few projects would have gone ahead in the absence of the fund.
• There is evidence of project progression, with activities continuing beyond the period of fund support.
• There are few alternative sources of funding for projects supported by the fund.
• There is low awareness in the wider skills community of projects supported by the fund.

* Many of the recommendations made in this report, regarding the future operation of the fund, have already been implemented for Round 4 of supported activity announced in June 2004.

Background and objectives

• The Scottish Skills Fund was established in April 2001 to assist the emerging Skills for Business Network, to deliver projects in Scotland which identified the skills and training needs of sectors.
• The primary objective of the Scottish Skills Fund is to improve the demand for high quality in-work training at sector level in Scotland.
• The Skills Fund has been allocated 0.5 million each year until 2005/06 to support sector skills.
• This evaluation is designed to assess the performance of the Fund, identifying good practice and making recommendations for future development and direction.
• The evaluation process was delivered through a combination of analysis of management information, a postal survey of Skills Fund supported projects and six in-depth case studies.
• The evaluation was completed in April 2004, at the point when the fourth round of the Scottish Skills Fund was launched. Recommendations made within this report have been taken on board for Round 4 operation.
• The analysis presented in this report relates only to the operation of the first three rounds of the Fund.

Applications and Process

• In Rounds 1 and 2 the application format was very light touch.
• The Round 3 application process was more detailed and required completion of a bid pro forma.
• In Round 4 nine priority sectors have been introduced: construction, food and drink, hospitality, renewable energy, e-learning, agriculture, aquaculture, forestry and sea fisheries. Priority areas were also identified as core skills, increasing completion rates of existing training opportunities and 'green' jobs.
• Over the three Rounds of the Fund, a total of 141 applicants with a total bid value of almost 4 million were submitted by 72 organisations.
• 13 organisations have submitted bids in the first three Rounds.
• Eight organisations have submitted more than three Skills Fund bids.
• The average bid value of applications per round rose from 22,000 in Round 1 to 38,000 in Round 3.
• Of the 72 organisations that applied to the Fund in Rounds 1 to 3, almost two-thirds were members of SCONTO (SSAScot).
• Average Skills Funds Awards are approximately two-thirds of the average application bid value.
• The majority of applications for amounts under 30,000 were approved in full or in part.
• There has been a relatively even spread of projects across the seven themes, with each theme being addressed by at least 22 projects.
• The most commonly addressed theme in Round 3 was persuading employers to invest in training opportunities.
• The theme with the least support relates to the collection of labour market information and intelligence.

Quantitative Assessment

• Half of projects found out about the fund through the Scottish Executive.
• Almost two-thirds of projects were linked to establishing a new Scottish initiative.
• Almost two-thirds of projects hoped that activity would continue beyond the support period.
• Projects had limited contact with the Scottish Executive during the application process.
• In the main, projects found Skills Fund documentation useful.
• Most projects thought that the time required to develop the project was proportionate to funding.
• Over half of projects had not considered alternative funding.
• Project deadweight is estimated at 26%, i.e. those projects who have gone ahead without skills funding.
• Almost one-quarter of projects thought that the timescales were unrealistic.
• Almost two-thirds of projects felt that the award was sufficient to undertake planned activity.
• Over 90% of projects achieved targeted outcomes.
• Three-quarters of projects thought that their project had been successful.
• 40% of completed projects have continued in some way.
• Almost two-thirds of Round 3 projects have applied for further funding (some to the Scottish Skills Fund) and are awaiting funding decisions to determine future action.

Qualitative Assessment of Performance

• 80% of projects thought the Skills Fund had contributed to wider actions and activities.
• The six case studies selected were:
• SCONTO Business Hub;
• NET NTO Electoral Technical SVQ Level III;
• Financial Services NTO Skills Development for Scotland;
• Cogent Safety and Reliability of Petroleum Product Distribution in Scotland;
• Skillfast Learning Opportunities in the Workplace;
• Skillset Models of Professional Company Practice.
• All projects were consistent with Skills Fund themes.
• The Skills Fund was identified as the most accessible and relevant source of funding.
• Projects were not described as particularly innovative. Their need was regarded as important rather than urgent.
• Projects were designed to research and test ideas that would be taken forward and rolled out more widely.
• Projects in the main had limited links with other NTOs/SSCs.
• Matched funding was mainly in-kind.
• There is a general feeling that the scale of the fund was insufficient to address the need in Scotland.
• Project evaluation appears to be light and largely informal.
• Delays in project start dates had significant effects on delivery.
• The scope of the Fund was regarded as too wide in Rounds 1 to 3.
• Eligibility of the Fund should be restricted to SSCs.
• Consideration should be given to funding of projects for more than one year.
• Projects were largely unaware of the activity and outcomes of other supported projects.

Conclusions

• The Skills Fund has generated a portfolio of projects that have addressed sectoral priorities in Scotland.
• The priorities are largely self-selecting, although in later rounds there has been a tighter focus in the bid criteria.
• There is evidence of significant additionality, with only a few projects indicating that funding might have been obtained from elsewhere.
• Projects, albeit on their own assessment, have largely been very successful, with the majority achieving specified objectives.
• There is some evidence of ideas being taken forward, with 40% of completed projects continuing in some way.
• The majority of projects have been unable to demonstrate quantifiable outputs. This has only been a requirement for Round 3 projects. However, those projects recording outputs have performed well against them.
• Evaluation activity has been low key, with the focus more on monitoring than on assessment of impact. It also, inevitably, focuses on the period of funded activity. It is not clear the extent to which projects have been mainstreamed or have impacted on sectoral issues.
• Although there are a few examples of follow-on projects across Rounds, most have been delivered in isolation to previous funded activity.
• Projects have a very low awareness of other supported projects. Potential good practice is not being cascaded. There is a strong demand for this information.
• It is quite clear that the Skills Fund is addressing a gap in the market, with few alternative sources available to address Scottish specific skills issues.
• Despite clarification from both the SSDA and the Scottish Executive, there appears to be confusion around the extent to which the SSDA can legitimately support Scottish specific activity with SSCs or SSCs in development. Similarly, it is unclear how Sector Agreements in Scotland will be funded, and how this might relate to Skills Fund supported activity.
• There is a divergence of view regarding the future focus of the fund. Non-SSCs think it should exclude SSCs on the grounds that they have access to greater funding potential. SSCs argue it should focus exclusively on SSCs, as this is the primary strategic priority.
• The operation of the Fund by the Scottish Executive is warmly welcomed. The only significant criticism relates to delays in commissioning projects in Round 3 of the Fund. This was cited as the single most significant factor for projects not achieving outcomes. The process was rectified for Round 4 operation.
• The nature of the evaluation process has made it difficult for us to identify and judge good practice. There has been no scope to assess activity against other sectors in Scotland, or with activity outside Scotland.
• The lack of information on success of previous projects (over time) and the difficulty in assessing relative good practice is a significant inhibitor to the effectiveness of selecting future projects.

Recommendations

• The Scottish Executive should decide who the primary audience of the fund is - SSC or non-SSC (action taken for Round 4).
• In order that each organisation is allowed scope to identify and deliver solutions most appropriate to their sector(s), it is recommended that the scope for activities supported under the Skills Fund remains - as at present - relatively open, and available for the same range of activities (action taken for Round 4).
• It is recommended that the Scottish Executive examine opportunities to expand the financial scale of the Skills Fund and also involve key partners in mapping alternative funding sources.
• It is recommended that the Scottish Executive take steps to ensure that the Round 4 and subsequent decision processes are more timely and streamlined (action taken for Round 4).
• The future Scottish Skills Fund prospectuses should be issued further in advance of the submission deadline, to allow more time for the identification and development of project ideas and applications to be developed.
• The Scottish Executive should examine ways in which projects can be supported to run over the end of the financial year.
• If the Executive is committed to developing a strong and stable network, which is resourced equitably with their English counterparts then it is recommended that, in the longer term, the Executive should consider options for a more sustainable form of project funding for SSCs in Scotland. This should be based on a clear view of the role of the SSC network in Scotland and its role in delivering national policy aims, such as those of the lifelong learning strategy.
• It is recommended that the Scottish Executive clarify and develop the assessment criteria used on applications.
• It is recommended that the Scottish Executive provide the assessment panel with enhanced information on the performance and output of previous Rounds of the Skills Fund.
• It is recommended that the Scottish Executive review the composition of the assessment panel for the Scottish Skills Fund (action taken for Round 4).
• It is recommended that the Scottish Executive give consideration to making links with external employer representatives and specific pre-application contact with the Enterprise Networks an expected feature of the design and management of Skills Fund projects.
• Careful consideration should be given to the balance between monitoring and evaluation.
• The Scottish Executive should publicise completed project details on the Scottish Executive and SASScot website.
• Projects should be invited to produce good practice case studies. These should track performance beyond the period of funding.
• The Skills Fund should seek to encourage collaborative bids which address cross sectoral activity.
• Where possible, and resources permitting, the Scottish Executive should meet with project managers on completion and discuss a performance report prepared by the project.
• Supported projects should provide a minimum of 25% matched cash funding (not in-kind), have smart objectives and quantifiable outputs.