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Skills Base

My Lords, I, too, congratulate the noble Lord, Lord Leitch, not only on initiating this extremely good debate, but on writing a report which, as the noble Lord, Lord Sawyer, said, is accessible, understandable and comprehensive. From the point of view of this House, the comprehensiveness of the report is important. We perhaps tend to concentrate too much on the higher education sector and we hear relatively little about the vocational skills sectors. I am delighted that we have been able to devote this three-hour debate to the vocational skills sector because it has not had the publicity that it should have in this House. On these Benches, we have long maintained that investment in people is the most important investment that we can make and that as a nation we cannot afford not to make it. In many senses, the Leitch report presents this country and us with some inconvenient truths. As the report stresses, it is urgent that we all raise our game, which means working in partnership; that is, partnership between government, industry and the individual. For a start, he suggests that the Government should set some extremely ambitious targets. Many of us gulp when we look at those targets and ask, ““Is it really possible to achieve them?””. The noble Baroness, Lady Lockwood, talked about the higher education target; but the higher education sector shows how the targets can be achieved and, picking up on a point made by the noble Baroness, Lady Morris, how a culture can be changed. Twenty-five years ago the ivory-tower culture of our universities was in place, but look at how they are now working side by side with industry to fulfil its needs. There has been a total change in culture by our universities. It can be done, and the noble Lord, Lord Bilston, recognised the degree to which our further education sector has risen to the challenges and started to change its culture. But I do not underestimate the huge change still to be achieved. Among the ambitions is the wish to do something about the Careers Service. Here I echo the sentiments of the noble Lord, Lord Ramsbotham. Over the past five to 10 years careers services have not served the best interests of this country. As the noble Baroness, Lady Valentine, mentioned, it is vital to bring together the Careers Service and Jobcentre Plus to serve the community. As the noble Lord, Lord Rowlands, pointed out, some 7.9 million people are not in work. They need help in finding out where they can go. People may have underestimated the degree of revolution suggested in the report. What has not had much mention is the suggested shift to a demand-led approach to skills. There are two aspects to demand, that of employers and that of individuals. Most of the money the Government use to subsidise training goes through Train to Gain into the hands of employers, while the reintroduction of individual learner accounts will put money into the hands of individuals to drive their own demand. It is vital that these two aspects of demand push forward the agenda in skills. However, we on these Benches depart a little when considering the hurdles to be overcome in the implementation of this, which must be thought about. For example, what do we mean by ““economically valuable skills””? Employers are continually asking for a workforce that is rich in creativity and communication skills, and good at analytical thinking and problem-solving. If truth be known, I have a lot of sympathy with the Universities UK briefing, which claims that this is precisely the set of generic skills that universities try to instil in their students, and that the graduate premium and high employment rates among graduates attest to the value placed by employers on these skills. Given that, is there a danger that we may move too far from the present position, where universities train students in generic skills and companies then train them in company-specific skills, to one where the individual, and ultimately the economy, is locked into a narrower and more specific skills set? That underlines a point made by the noble Lord, Lord Leitch, in his introduction: the need for whatever mechanisms are introduced to be flexible so that there is a chance for movement as the economy itself moves forward. However, it is not always possible to align the interests of the individual with those of employers or indeed the nation. Let us take the commitment to train up to 95 per cent of the workforce up to the full level 2 standard, the equivalent of five GCSEs, which the report regards as the ““platform”” for employability. At present only 70 per cent of the workforce has achieved this level of qualification. The assumption is that most people would seize the opportunity of training to this level, free of cost. Yet the conundrum is that they do not, and there may be some rationality in that. As Mick Fletcher, writing in the Guardian a year ago, put it: "““One reason why young people in England leave school earlier than in many other advanced countries must be because they can get a job. It may be a dead-end job, but if you see a degree as beyond you, and a level 2 as not adding much to your chances, going for it makes a sort of sense””." We know also that a level 2 qualification does not add much to the pay packet. People have to achieve level 3 or level 4 qualifications to increase their pay. It may not be easy to persuade the 11.5 million adults currently lacking level 2 qualifications that it is worth their sweat and worth their while to take them up, even if employers sign the pledge and push them through the courses. Equally, employers may not be so keen on releasing workers to gain these qualifications because the qualifications themselves may seem irrelevant to employers’ needs. I echo the plea by the noble Baroness, Lady Valentine, that qualifications need to be relevant. A letter I received from the Business Services Association said: "““However, public funding for basic skills training is rigidly focused on qualification outcomes, making it close to impossible for skills providers to tailor their offerings to employer demand. Because employers don’t release staff to gain qualifications their jobs don’t require, and that is all providers are funded to deliver, there is little hope of challenging the low skills equilibrium. Leitch’s proposals for an employer pledge and statutory entitlement to time off for learning will mean little until employers can see a value in the learning””." In the light of that, I want to raise the question of small and medium-sized businesses. What is the benefit to SMEs? A five-person business cannot afford to lose 20 per cent of its workforce to train for a week. What are we going to do about such businesses? Exempt them from the rigours of the pledge? The noble Lord, Lord Rowlands, mentioned the wide variations between apprenticeships, which is an important issue. At the moment, to gain a level 3 advanced apprenticeship in engineering takes an average of 156 weeks. The same advanced-level apprenticeship in business administration takes 74 weeks, and 64 weeks in the retail sector. For a level 2 qualification, equivalent to 5 GCSEs at grades A-C, it takes 88 weeks to achieve the qualification in the electro-technical sector, 74 weeks in construction and 43 weeks in catering. There are already real problems about the notion of equivalences across our national qualifications. This also raises difficulties in relation to devolving these responsibilities to sector skills councils. Some equivalence has to be maintained. I should also like to pick up on the point made by the noble Lord, Lord Dearing, about adult education. If 70 per cent of the workforce has already finished its education, it is clear that we are going to have to train adults, and it is madness that we are currently discriminating against part-time education. Many adults want to come back into part-time learning, but part-time further and higher education for adults currently enjoys very little in the way of subsidy. Members on these Benches warmly welcome this report, which presents us with an enormous agenda. While there are challenges in that agenda, let us see it go forward.