The long-awaited report on post-16 education and vocational training in Scotland calls for a fundamental review of how the sector is financed.
The Government-commissioned report, led by Willy Roe, chair of Skills Development Scotland, argues that a revised funding system would end the current "discrimination" inherent in the financing of post-16 education, vocational training and higher education, which varies according to whether the learner is engaged part-time or full-time, on-the-job or off- the-job, or whether it is provider-based or distance-based.
"Over time, the distinctions between further and higher education and between academic and vocational education and training will become more blurred as innovation, collaboration, flexibility and technology accelerate change," says the report, published last week.
"Scotland should anticipate these trends and design a comprehensive strategy and investmentfunding system that will support this direction of travel."
It calls on the Government to set up a study, led by an independent expert group, to recommend whether a future funding system should be: unified at national level; unified and then disaggregated to regional level; or personalised through a system of Personal Development Accounts (PDAs) that could be held by anyone over the age of 16.
As part of that work, a feasibility study on the introduction of a national system of PDAs should be commissioned, with a view to its possible introduction in three phases over the next 10 years.
A strong theme of the review is the need for vocational education to be market-led with stronger employer engagement.
"It is important for Scotland's future that business leaders and other employers become much more significant influencers and players in the skills and vocational education system than is typically the case," it says.
"The scale and reach of public sector institutions can have the effect of crowding out or discouraging employer leadership and investment. More of both is needed," it adds.
It also calls for rapid development and implementation work on Skills Development Scotland's online careers and training portal "My World of Work", so that it is embedded in every school, college, training facility, employability programme and Jobcentre in the country.
The review also recommends that SDS should consider setting up a "matching and rating" service for placements and internships in Scotland, or that the existing service, ratemyplacement. co.uk, expands its business in Scotland, possibly in a co-investment package with SDS.
HOW PERSONAL DEVELOPMENT ACCOUNTS COULD WORK
The PDA would consist of four elements: virtual, borrowing, saving and cash:
Virtual: the element that logs entitlements and credits for tuition and training costs from third parties, such as taxpayers and employers;
Borrowing: the element which could manage income contingent-style loans as well as mortgage-style loans for tuitionmaintenance;
Saving: could involve both a short-term and long-term savings product. A future government could choose to incentivise saving in a PDA;
Cash: a basic cash account which could also be a vehicle for low-level savings for learning and a mechanism where individuals use their own income to purchase learning in cash.
Individuals would also have access to information, advice and guidance. To encourage the take-up of PDA, tax relief, at the standard rate of 20 per cent, should be available to those who purchase learning or training - but only through a PDA.
How it could be rolled out:
Phase 1 by 2015:
Training for work;
Workforce development support;
Phase 2 by 2018:
16-19 further education;
16-19 modern apprenticeships;
Full and part-time higher education in further education colleges;
Employer and adult employee funding.
Phase 3 by 2020;
Full and part-time higher education in universities.