Reform Scotland Dealing with the gaps: how can Scotland address regional skill issues?

20th November 2025

A summary of the report "Reform Scotland: Dealing with the gaps: how can Scotland address regional skill issues?" (by Joe Robinson, published 18 Nov 2025) on the Enlighten site.

Scotland continues to face persistent regional productivity disparities - Even though Scotland has one of the more educated workforces in the OECD, it also has a higher share of adults with no qualifications (8.2%) compared to England (6.2%).

There is a significant regional dimension to the skills gap: for example, in Edinburgh the share of high‐skill workforce is ~73.2%, whereas in areas such as North Lanarkshire it is around ~38.2%.

The policy landscape has shifted from a pure "supply-push" model (just increasing skills/education) to a more "place-based", demand-side aware approach—i.e., aligning skills development with regional economic demand and context.

Scotland has a range of regional institutions: the 12 Growth Deals, 8 Regional Economic Partnerships (REPs), annual Regional Skills Assessments (RSAs) delivered by Skills Development Scotland (SDS), etc.

Findings: What's going wrong / gaps

Governance & coordination: Cooperation between regional actors is weak. For example, many colleges feel excluded from decision-making in growth deals; REPs are sometimes seen as "toothless".

Employer engagement: Although employers (especially SMEs) are key to matching skills supply to demand, many feel they lack time, resources, or meaningful engagement in skills policy development.

Funding instability: Skills and regional initiatives suffer from uncertainty in funding. The Flexible Workforce Development Fund (FWDF) has had no new allocation since 2023. Also, UK-level funding (e.g., UK Shared Prosperity Fund) is being cut, particularly revenue spending.

Data & evidence limitations: While RSAs exist and provide useful insight, many interviewees say the data is not sufficiently granular or sector-specific for regional action. Implementation tends to require additional local intelligence.

Mis-alignment of policy ambitions vs regional reality: Some regions face labour shortages or high inactivity rather than simply "skills gaps". Rural areas point to youth out-migration, high inactivity, and fewer high-skill jobs—not just missing qualifications.

Cultural/structural biases: There is a strong cultural bias favouring university-pathways and high‐skill “transformational” industries; meanwhile colleges, apprenticeships, local “lower-skill” but vital sectors (e.g., social care) are undervalued and under‐resourced.

Implementation gap: Although rhetoric and strategy (e.g., the National Strategy for Economic Transformation-NSET) emphasise regions and skills, many interviewees feel policy is still too nationally-driven, fragmented, and lacks clarity on regional roles.

Recommendations / What needs to happen

Regional institutions should have greater control and flexibility—with clear governance frameworks, decision-making powers closer to regions, and stronger regional leadership (though not necessarily via the same “mayoral combined authority” model as in England).

Colleges and apprenticeships should be given a more central role in the regional skills ecosystem: they are deeply rooted in local communities and better placed to align with regional demand.

Employer voices (especially SMEs) need meaningful structures: e.g., regionally-based employer boards and forums so that demand-side logic informs skill supply.

Funding must be stable, long-term and regionally adaptive: revenue funding (for skills development, not just capital investment) is important so local actors can plan and deliver.

Data and evidence must be more granular and locally actionable: besides annual regional assessments, the intelligence must be shared and used by regional actors to inform planning and delivery.

A recognition that regional solutions may differ: one-size “transformative high-skill job” strategies may not fit all regions; in some areas the priority may be boosting employment, tackling inactivity, and retaining youth rather than simply upgrading skills for high-end sectors.

A cultural shift: elevating the status of further education/colleges and apprenticeships, ensuring parity of esteem with university-paths, and recognising that “jobs that matter” include good local jobs in less-glamorous but essential sectors.

Implications

Unless the regional skill barriers are addressed, Scotland risks perpetuating its regional productivity gaps and failing to create more geographically balanced economic growth.

Regions with weaker governance, fewer local institutions or less funding will likely lag further behind unless they are given more tailored support and autonomy.

The mismatch between national policy ambitions and local realities means that interventions may miss their mark unless grounded in region-specific contexts, demand-structures, and labour market dynamics.

Without better employer engagement and data, skill programmes may not align with actual demand, resulting in under‐utilised skills or misinvestment.

Overall, the report suggests that while Scotland has good strategy in place, the biggest challenge is execution at the regional level—governance, funding, data, and culture all need to be strengthened.

Read the full report HERE