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Skills Base

My Lords, I am delighted to contribute to today’s debate and to join colleagues and noble Lords who have congratulated the noble Lord, Lord Leitch. He suggested that, although the report took him two years to produce, it felt like 10. For those of us who were waiting for it and its implementation, it felt like much longer than that. I agree wholeheartedly with the sentiments of the noble Lord, Lord Leitch, and his ambitions and recommendations within the report. However, I want to talk specifically about the role of sector skills councils and trade unions. I declare an interest as someone working with the Sector Skills Development Agency to encourage employers and trade unions to get involved in these bodies and to take the maximum that they can from them. I endorse the noble Lord’s view that sector skills councils are uniquely placed to drive forward the whole skills agenda. I share his concern about the patchiness of some of them, but they are moving on in lots of ways. The longer people have, the greater effect they will bring. From experience elsewhere in the world, it is clear that a strong sectoral approach is essential if we are successfully to target the needs of employers and employees. That is crucial because, as the noble Lord, Lord Leitch, said, 70 per cent of the 2020 workforce have already finished school and are employed. Consequently, solutions to our skills problems will lie mainly in our existing workplaces, with employers and trade unions working together. I also agree that, if sector skills councils are to deliver an enhanced role in the system, we must make sure that they are both fit for purpose and adequately resourced to do the job that we ask them to do, as the noble Lord, Lord Newby, suggested. The relicensing and refocusing process that is about to take place is important, and the newly defined role, especially in relation to qualification reform, employer engagement and investment, is essential. That is at the heart of what my noble friend Lord Leitch described, in a fantastic turn of phrase, as the ““something for something deal””. It is with employers that the significant ““something for something deal”” comes about. We must not lose sight of that as we respond to the recommendations proposed by my noble friend Lord Leitch and I hope that the Minister will assure us when responding that the recommendations will be embraced by our Government, as I am sure they will be. Put simply, the deal is this: employers will engage and invest more in systems in return for more control over how the system works and what it does. The Commission for Employment and Skills, the pledge and the enhanced role for sector skills councils are the key to driving this deal. A reinforced approach to sector skills agreements can then provide the detail about how they will operate on a sector-by-sector basis. Some sectors will want to invest more in higher-level skills, such as the science and engineering employers represented by SEMTA and the IT and telecommunications sector represented by e-skills. The sector skills councils will want to deliver such a deal in very different ways in each of their sectors, and in each of the sectors they will decide that. For example, Skillset, the sector skills council for the broadcasting and audio visual industries, has developed a series of academies at universities and colleges across the UK—the noble Lord, Lord Dearing, said that that was the way forward—and there is a levy in part of that sector. The overall point is that it sometimes seems easier and more effective to think of delivery mechanisms on a sector-by-sector basis, which often makes more sense to employers than taking solely a geographical approach, although my belief is that the two can and should be complementary—only then will they really work. In London in particular, where it is clear that sectors such as tourism and hospitality and financial services are vital, those SSCs should take an interest in how the skills and employment strategy now evolves under the guidance of the Mayor and how it fits into where they are going. I am sure that other speakers, in particular the noble Baroness, Lady Valentine, will comment on the London strategy. We need therefore to ensure that sector skills councils have both the capacity and the resources to do the job properly. As we reorganise the system from a planned to a more demand-led approach, that should be at the centre of our plans. So much is being done by many of the sector skills councils—we have talked about patchiness—that we forget that they are quite young organisations; indeed, some have been in existence for only two years. They are also a relatively small part of the system within the entire Skills for Business network, comprising the SSDA and the 25 sector skills councils, and they receive less than £80 million of funding each year. For many of the sector skills councils, that has been a real and growing issue, and many would ask for a commitment from Government and from everyone to an increase in core funding, which equals increased accountability and practical delivery on the deal with employers around their commitment to increased investment. I also want to talk about the role of trade unions, for which delivering the 2020 agenda is hugely important. Unionlearn, with which I work closely, and the network of union learning representatives are crucial to the delivery of the sector skills agenda. There are now over 18,000 union learning representatives in UK workplaces and they already play a significant role in ensuring that we reach that goal. In conclusion, I thank my noble friend Lord Leitch for the debate and for the work that he has done to put a much greater focus on the whole sector skills process. His report gives us the freedom to make sure that we can grow from where we are and have the confidence to take it forward. Thank you.