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Further and Higher Education (Employer Engagement)

: I accept the hon. Gentleman's integrity in raising that matter. The programme is developing and is not being rolled out nationally until the coming financial year. We deliberately started with a pilot programme to learn from the pilots as things move on. I particularly take his point about awareness in business. One has only to breathe about school issues and one immediately commands attention and media coverage, but if one wants to talk about work-based training, which is in many ways equally important, and can fundamentally affect the development of the economy, it is extraordinarily difficult to get newspapers, television and radio interested. We are working on that, but I should welcome his support in pursuing progress. As I was saying, we regard skills as very important, which is why we commissioned Lord Sandy Leitch to undertake an analysis of our skills profile as we move towards 2020. Our position has improved over the past decade, and that is likely to continue, but despite those improvements, we still have a poor basic skill level and an unacceptably high number of adults without at least a level 2 qualification. That is the crucial platform on which we are trying to build so that we can progress to the higher skill levels that business and the economy need. To improve our performance, we must tackle the demand for and supply of learning. We must ensure that employers are increasingly actively involved in shaping training and learning so that they respond better to employers' needs. The challenge involved in that is great. About 80 per cent. of the 2015 work force is already in the world of work, so there must be a significant drive to improve their skill levels. The Government are making significant strides in that respect. Through our five-year strategy for children and learners, we are setting the framework for developing an education and learning system that is among the best in the world. Our vision is also about putting employers centre stage in improving the skills of the nation, as we set out in our two White Papers on skills. Our skills strategy is about supporting businesses to improve their bottom-line profitability and success. The train2gain scheme, to which I referred earlier, is a key element of that. We therefore have a programme of transformation to build skills for the future. It involves transformation throughout the system, and I want to explain in some detail what I mean by that. First, we are transforming the way in which employers shape the learning system through the skills for business network. That network is now complete, and 25 sector skills councils, representing employers from 85 per cent. of the working population, have been tasked with producing the crucial sector skills agreements. Those agreements are not just pieces of paper; indeed, if they are to work, they cannot just be pieces of paper. Rather, they must be a living and changing analysis of skills demands and learning needs, and must reflect what employers want and what learning providers should deliver. Sector skills councils projects are now influencing further and higher education. Secondly, we are rightly transforming the schools experience of young people from the age of 14 by means of the specialised diplomas, which should and can provide young people with a real choice when deciding whether to pursue the academic or the vocational route. That is an important initiative, which allows us to tap in to those young people, who can be switched off from the academic route. If we can engage them in decent vocational education and training, they can be enthused and become committed to achieving to the right levels of qualification. If it suits them, they can ultimately progress down that route to higher education. In that respect, we are also transforming our higher education system. We are introducing variable fees and a modern system of student support, and I should also mention foundation degrees, our focus on gateways to the professions and the sector skills projects. In a modern, knowledge-driven economy, knowledge transfer is about transferring good ideas, research results and skills between universities, other research organisations, businesses and the wider community to enable us to develop the innovative new products and services that we need. That has been one of our goals. We recently announced the third phase of the higher education innovation fund, under which £238 million is being made available, and that figure has risen in each consecutive round. As I witnessed at Sheffield Hallam university the week before last, there is a host of examples of where the necessary changes are being made, with teaching and research in the university sector being applied to business situations and to developing products that can be used in a meaningful way. One thing that I have picked up by talking to higher education providers throughout the country is that that process is working well. However, higher education institutions need to develop their skills and the profile of their personnel, so that they not only do the excellent knowledge-transfer work, but develop the entrepreneurial skills necessary to exploit that potential commercially. Many higher education providers are looking at that at the moment. Higher education has a great deal to offer employers. By accepting the need to think afresh, the sector has rightly opened itself up to the potential benefits that partnerships with business can bring.There has been a transformation in thinking on the issue within our universities. More than 89 per cent. of higher education institutions now have a single inquiry point for businesses, and higher education institutions already engage with employers to a significant extent— for example, in providing continuous professional development. However, I should add that the higher education sector could expand that. The sector currently receives about £130 million of business in continuous professional development, but the market for that amounts to about £4.5 billion, so the sector could undertake significant further development. Foundation degrees are a crucial element in our efforts, and they are beginning to be a significant success. They are higher education level qualifications that are designed alongside the employer, with their needs very much in mind. Already 50,000 students will be undertaking foundation degrees by the end of the year. Our aim is to have 100,000 such students by the end of the decade, which is achievable. We are also transforming the further education sector. That is the right thing to do. FE colleges and skills providers are important for achieving our objectives, and we want to support them to maximise their impact. The recent Foster review of further education has been significant. In my experience of talking to people from colleges throughout the country, the review has commanded widespread support. Its focus is on the vocational, more specialised mission in further education colleges. That is the right way forward, and the Government aim to respond shortly to the issues that the review raises. We want the further education sector to work closely with employers to identify their training needs, to develop business solutions tailored to their skills needs, and to involve them directly in the design and delivery of learning provision. That type of engagement has real benefits for everyone concerned. Employers get the services they want; colleges keep up to date with local business and vocational needs, thus providing a valuable additional source of income; and, crucially, learners get the training and skills that their employers will require of them when they enter the workplace.