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Skills Base

My Lords, I, too, congratulate the noble Lord, Lord Leitch, on securing this debate and thank him for giving us a chance to consider his report. I suspect that very few Members of your Lordships’ House would disagree with the analysis in the report and the setting, as the noble Lord does, of ambitious targets for skills attainment levels by 2020 surely makes eminent sense. As a nation, we should be ashamed of our current level of skills. To have over a fifth of the adult population functionally innumerate is a disgrace, as is having 15 per cent functionally illiterate. To have more than a sixth of our school leavers unable to read, write or add up properly is a pretty grim indictment of our education system. In his report, the noble Lord places a high priority on the role of employers in driving forward the skills revolution. While I have considerable sympathy with that approach, we must be honest about its limitations as well as its potential. The problem of relying on employers to take more responsibility for setting and implementing policy on skills, and for increasing their own skills investment, is pretty well known. The first problem is senior management commitment. To be effective and if they are really going to work well, the sector skills councils require the best people in the industry to participate in them. But all too often the best people in the industry feel that they are too busy running their own firms to be prepared to devote time to working for the industry as a whole. Having drafted the development plan for what became the City and Inner London North Training and Enterprise Council in the early 1990s, I know that the majority of big City firms treated the whole exercise with disdain, and simply did not have anything to do with it. I do not think that those attitudes have completely disappeared. The second problem is that of funding. Small firms have limited resources and capacity to undertake significant amounts of basic or professional training for their staff. At the other end of the scale, the best firms, particularly those in parts of the service sector, often have little difficulty in recruiting good people because everyone in the industry wants to work for them. They can always hire in expertise. So even though they can and do grumble about overall skills levels, they can feel relatively insulated from the problems. That often leaves those in the middle—the medium-sized and medium performing—which have real difficulty in recruiting staff and probably need to do the most to upskill the staff they have. Is it realistic to expect them to bear the principal burden for skills training on their own? I think not. On basic skills, it is certainly the case that employers look to government, not themselves, to pay. On apprenticeships, Yorkshire Forward has stated that, "““our experience in the region of developing adult apprenticeship programmes is that only with substantial public investment will harder to reach businesses engage in the scheme, and when the wage subsidies are removed, engagement seriously drops off””." This is a problem. If we are to meet the targets of the noble Lord, Lord Leitch, we will need a strong partnership between the private sector, the education sector and the Government, with each partner doing the things it does best, or which only it can do. So far the position is patchy, although in some sectors we are seeing real progress. The design industry, for example, has recently produced a report, Hi-level skills for higher value, which examines how the industry can produce the people it requires to thrive in a business which is being rapidly reshaped by technology, globalisation and environmental concerns. Design is a very successful industry, with large and growing exports and a world-class reputation. Design and technology is a very popular subject at school, and yet the report describes how there is no nationally-sustained professional development for design and technology teachers and how education is not connected to current design practice. So children learning D&T are not being taught relevant things. Equally, college and university students are not being taught the professional skills required by employers in the design industry. The report states that within design companies there is, "““little sign of a culture of professional development and design businesses are generally poor at developing their people””." And this is a very successful sector. The report goes on to make a series of practical suggestions about how to promote teacher development, how to improve links between colleges, universities and design companies, and the need for a UK design academy to establish industry standards and provide intelligence for future skills development. The report was produced by some of the best people in the industry. I declare an interest as its chair, Jonathan Sands, is chairman of Elmwood Design, of which I am a non-executive director. There is no doubt that within that industry there is a momentum for change, but this change will be possible only if government also play their part. Within the design industry there is concern that current funding structures do not sufficiently encourage proposals for national training academies to focus on professional training practice. Given that this is an industry dominated by SMEs, it believes that there is a need for government support to enable it to take on graduates and make a contribution to the development and provision of training schemes. To sum up, I welcome the fact that the Leitch report has thrown down the gauntlet to individuals, companies and government. I hope only that the challenge the noble Lord has now set is matched by the necessary action.