15/09/2011 Newsnight Scotland

Tonight on Newsnight Scotland - After delays, disputes and

political brinkmanship the new contract for the Edinburgh trams

project has finally been agreed. But who's in the driving seat, the

council or the government? And as youth unemployment rockets

further education colleges are at the forefront of dealing with a

economic crisis among our young people. But is the government's

planned rationalisation about saving money or improving

education? Good evening. Finally, peace in our

time - or so it seems. From the city chambers in the heart of out

nation's capital came a dispatch this morning to let Edinburgh's

confused citizens know a deal had finally been done. The city council

and builders Bilfinger Berger signed an agreement in the dead of

night that should see trams run through Edinburgh's famous old

streets - eventually. It came just a few hours after the Scottish

government announced it would now take an active interest in the

project but not the blame should it all go wrong - yet again.

For a time it looked like Princes Street wouldn't see a return of the

diggers to work on the trams. But after months of political scrapping,

political manoeuvring, work will get under way this weekend. The

agreement between the council and the consortium was signed in the

small hours of this morning and that means an expensive and lengthy

court case has been avoided. The sense of relief and council leaders

was obvious. We have been working harder this since the mediation

process since March this year. Finally today we have reached a

situation where the papers have been signed. Yesterday the Scottish

Government stepped in announcing it would oversee the completion of the

project, crucially bringing with them �72 million of funding. Up to

five project managers from transport Scotland will fill senior

roles in the council's team and will have the power to veto

decisions. But they say the book stops here, responsibility for

delivering the trams on time and on budget will stay with the council.

Patience among Spurs as leaders in the capital is wearing thin.

need to know when the work is starting, when it is finishing,

what we can expect outside and watch relief measures are in place.

The trams are estimated to be up and running by the summer of 2014.

But this is far from the final hurdle - there are 700 areas along

the route were problems with utilities still have to be solved.

I'm joined now by the Transport Convenor of Edinburgh City Council,

Gordon Mackenzie, and by the SNP's, Colin Keir, who sits as both an MSP

and an Edinburgh councillor. Thanks for joining us. Councillor

Mackenzie, let's clarify what this deal is. Are the council in charge

of this project? Or are the Scottish Government now running the

show? The council chief executive chairs the project board which will

oversee the delivery of the project. As your report correctly said, the

book starts with us when it comes to funding. I am pleased Transport

Scotland will play a significant role in delivering the project to a

successful conclusion in 2014. say the book still stops with

Edinburgh City Council, but these advisers from transport Scotland

can overrule you can't they? There has always been the possibility of

Government ministers intervening to take funding away from the project.

In fact, we saw a bit of that recently with the Haymarket

decision when John Swinney stepped in. It is not a major development,

it makes it clear it. We are working together with them and I am

pleased to have them on board. figures of this project have been

all over the place. This deal you have signed with the contractors,

how much will the project cost and when will it be delivered? We have

said it should be within �776 million. And we have seen this

summer of 2014 us when we should see it. No do you know the final

figure now you have signed the final contract? It is not a fixed

price deal. What is the risk? �34 million, but that has been �460

million spent all ready for a start people will be concerned. You say

there is a �34 million and risk elements within his contract, but

you are confident it will be delivered in the 776? How

confident? I am more confident about the figures now than I have

been for a significant length of time. We have had this looked over

in far greater detail than when the project started out. We have looked

at it in Neum as different ways and transport Scotland have been

working with us with -- for several months. We have a good working

relationship with the contractor. Those are good indications.

Colin kier are you comfortable as an MSP and Edinburgh city

councillor, now have their hands all over this? We have absolutely

no choice in the matter. The choice that was given to us are

essentially, the cost of scrapping, the walk away cost �161 million.

That would have had to have come up the council revenue budget in the

first year. That would have meant decimation, complete decimation of

the council's services and we had nowhere to go. The choice that was

put forward then was in the final meeting between the Haymarket and

St Andrews Square. Haymarket is a no-go because of the obvious

question, there was no business plan. It would no doubt come in at

an annual loss of roundabout �4 million, which was their guest.

This just a vacation from the Minister essentially saying, we

will help out but we are not responsible doesn't really wash

anymore does it? We have to live in the real world. Do you have

decimated council services or do you have to work through those? We

have had a number of years of abysmal management of this project.

We have tried to keep our hands off it. But we have no option, for the

taxpayers of Edinburgh, this has to go to St Andrew Square, on budget.

Councillor Mackenzie, how confident should people be now that if you

are still in charge, this will be delivered given how pork your

record has been? I think the arrangements we have got in place

are strong a man may have been for some time. We have Transport

Scotland involved. We have a new team involved in managing it from

the council side and we have a new team of private sector advisers.

Were so much money had been spent it transports Gollum had taken an

active involvement earlier on in this project? I think Transport

Scotland have important skills and expertise to bring to the project.

I personally have no doubt they will be able to deliver projects

like this and it is the right way to be going. They have the ability

to recruit and maintain quality staff and they have a programme of

work. They would help to manage contractors. They would have helped,

there is no doubt about that. But I am pleased to have them on board.

We have very little time, do you believe you will be on a tram in

2014? A I hope after the commitments that have been given,

the new relationships that have been built, and quite frankly

getting rid of the previous management cannot harm. I hope it

is the case, we have no option but to make it happen.

Thanks for joining us this evening. We used to controversy over class

sizes and university tuition fees, but further education colleges are

however in the news. But as youth unemployment surges by 10% they are

at the forefront of dealing with the social and Emma Cook et --

economic crisis among junk people. The SNP Government is looking to

make savings through merging colleges. We will debate those

plans and a moment but we report on the often forgotten providers of

education. It may not have the same profile in

the media as the classroom or university, but there are 350,000

students learning to become anything from mechanics to

hairdressers, to builders, printers and farmers at 41 colleges. If that

sounds a lot for a small country, the Education Secretary agrees.

Mike Russell is of a mind to cut their number through mergers and

shared services to affect savings. In Glasgow they have begun the work,

three colleges emerged last year and another six are in alliance to

share courses and services. Two in Edinburgh are planning to merge. In

a sector that educator 20% of further education students at a

cost of over half a billion pounds a year. Meaning it can be half the

cost of university. Some qualifications like business

studies blinks straight into a university course, providing value

for money. But we do have unemployment hitting a ten-year

high, how key is the college sector? The ability for young

people and adult returners to come into a provision within a further

education college and get programmes that will at least

prepare them for the workplace is fundamental. Whether that be threw

up a traditional, Modern apprenticeship or Top Shop

programmes. The courses are flexible. When we have so much

youth unemployment, you can get, you are providing hands-on work for

young people? We are. It is a double edged sword. The first thing

is to keep people engaged and interested in education, even when

there is no employment. And coming through colleges, and ability to

work and associate with people in a similar position and also the

ability to go through a programme of study that will prepare them for

the workplace. We know we are in a recession and there is an

inevitability of coming out of the recession sooner or later. And for

young people coming into a place like this, no matter what the

programmes are, it is fundamental and important. What about the

principle of merging colleges, because it is part of an ongoing

process isn't it? The comments made by the Secretary in terms of the

outlets in Scotland, he seems to think and I agree with this, we

have the right number of outlets in the right locations because we have

a number of places and it is important we provide further

education. His 41 the right number or should it be less? Ronnie Knox

began his career at the college where he is now principal and chief

executive. He learned his trade as a motor mechanic, but believes

colleges provide a social framework for young people with no support at

home. Giving them a purpose keeps them from becoming a problem to the

community and makes them confident. There is already a process of

consolidation and murder and -- merger between colleges and money

is being saved. Where the new entity becomes too large it can be

unwieldy and there is evidence from England were some large City have

had mergers and they are already being done picks.

We are trying to get the mix as to the right critical mass. I think it

is making institutions by merger might be a good idea in certain

areas. I don't think one thing fits all, necessarily and I think it

will depend geographically where the institutions are. I think you

could be in danger, if it becomes too big it becomes unwieldy and

difficult to manage. College leaders are warning against the

expectation of immediate savings coming from mergers, and say the

absorb 10% budget cuts last year, a feat it will be impossible to

Earlier I spoke to the education Mike Russell and asked about the

plans to cut the number of colleges. It is making sure we have the

opportunities for every young person in Scotland. The core of the

policy is to ensloo -- ensure that young people get the opportunity to

go into training or education listen they leave school. And to do

that we have got to deliver more efficiently. But the college I

structure has been largely unchanged for 20 years. It was one

of the last great Thatcher reforms. Times have changed and there are 41

colleges, we need to deliver this more efficiently and that is what

we're going to try and do. How many colleges do you think we will have

in the future. Obviously not 41. We want to deliver on a regional basis,

the paper suggests nine regions, but it could be combinations of

colleges. We want to make sure that delivery re mains on the ground.

But the administration of the colleges means we not only have 41

colleges, we have 42 sets of terms and conditions four staff. We need

to do this better. I believe we can. You're thinking there would be nine

college names, but the buildings that we have now would remain?

want to see local delivery. That is one of the strengths of college.

But there has been a great deal of duplication of delivery. We say the

same in the universities. In each area some things need to be

delivered. But in some areas there is a choice and we don't want the

same to be available from each of them. You say that you will put now

expectation on colleges to have courses which prepare students for

careers in industries where they have a chance of getting a job.

People will be staggered that isn't what colleges are doing. Well we

can do it we -- better. I talked to the head of open university and

they are focusing on delivering where people can go into employment.

One of the important things about the paper with have published this

a learner journey. We have a successful thing called the

Scottish credit framework. It is like the template and we have to

make sure that is efficient and produces the best results and

allows people to move into work easy. - e -- easily. It will cost

money. You have given this pledge to 16 to 19-year-old, how much

akigs -- additional cash will you see. When we see the review we will

see. This is joining I. I believe we can do things more efficiently

and effectively even in a time of constrained resource. So with the

same cash? When you see the spending review you will know. But

we're going to. There is no doubt about this in the public sector, I

made this clear and again after to journ is, there are pressures on

the public purse and we have to accept those. I would rather they

didn't exist. If we were a normal nation they wouldn't be there. But

we're going to do more and sometimes for less cash. Perhaps

nine colleges, you have talked about mergers amongst Scotland's 19

high ireducation institutions. How many are we looking at of those?

The institutions are all different and are not the same as the

colleges. We talk about this possibility of a regional approach.

Scottish universities do serve their own regions, but many serve

the nation and they are international institutions. So

there are different issues about they grow and work together. That

will require more thinking. This is a consultation. This seems to be

the right direction, but we are looking for ideas. Spent time with

university principals and they're thinking and the university of

Scotland is working with very hard on the issues of efficiency. So so

Aberdeen has introduced a new approach. Robert Gordon is focused

on key specialisms. But also on the oil and gas industry. You can make

these arguments for every institution. It is a different set

of issues, there needs to be greater efficiency, but we have 19

institutions that deliver locally, regionally and nationally and

internationally and the college sector we have 41 institutions

which deliver largely locally. So there are different issues. What

this paper does is says we need to lack at these and find a better way

of doing this and it invites the whole community to come in and

discuss how we do this. Ends of the year we will have the responses and

we have a review going on too of edge caution and then we will move

forward with legislation. There is a veiled threat in this to

principals, perhaps principals who disa degree with Mike Russell and

the SNP. There is no such thing. You quote that, what is the veiled

threat. The governance review is chaired by university principals.

You move on to the fact there needs to be greater democratic account

yapblt. That is what the Conservatives made the accusation

yesterday and I rebutted it successfully. What it says this

these institutions spend a great deal of public money. My duty as a

spending minister is to make sure they account for that. There has

been criticism, particularly in the universities of the way in which

university governance has got out of kilt we are public megt

situations -- kilt we are public pegtations. The tradition of the

democratic intellect is important and it is a way we succeeded and we

need to go back and treasure that. Thank you. Time as usual for a look

at tomorrow's newspapers. First the Scotsman and they're going on the

story which was covered in Reporting Scotland earlier,

pensions row could cost Scots �8 pensions row could cost Scots �8

million. That is the difference between the Scottish Government's

view and that of the UK view and a picture of Halle Berry who is

filming in Glasgow. The Herald reveals Scotland's care charges

lottery. And the Times, I need miracle, that is the UBS trader.

From all of us, good night. Hello it is not as cold tonight. Tomorrow

won't be as sunny. But still some fine, bright conditions in the

south. Only one or two showers. Further north a lot of cloud. Some

rain and that could be heavy. As a result it will be noticibly cooler.

Showers across the Midlands. One or two in East Anglia. For much of the

south, still dry and bright. Temperatures up to 21 in London.

High teens in the South West. A few showers in south Wales. A wet

morning in North Wales. Same story in Northern Ireland. The afternoon

should be brighter. Some showers, the showery rain becoming more

extensive in Scotland. It will feel cooler without the sunshine.

Saturday is another cool day, with some stiff winds blowing and lots

of blustery showers across the country. More sunny spells on

Saturday. The showers when they come could be heavy. Particularly