MONDAY 22 JANUARY 2007

LEARNING & SKILLS COUNCIL

  Q304  Chairman: Thank you for coming, and thank you also for being patient and waiting; we began late and did not want to cut our last witnesses short. As I was just saying informally to the Committee, I understand that you are not at full strength yourselves. Perhaps you would like to introduce yourselves to the Committee and explain the weak link, as it were?

  Mr Cragg: I hope it will not be that!

  Q305  Chairman: I meant to say the missing link!

  Mr Cragg: If I can formally place on record apologies from my colleague, David Way, who is our National Director of Skills. As you have said to the Committee already, Chairman, unfortunately he had to have an emergency eye operation last week, so he is going to be out of action for a couple of weeks. I am David Cragg, Regional Director for the West Midlands Learning and Skills Council, and Jaine Clarke is my national colleague, who is the National Director with responsibility for skills for employers. That would include also all the changes which emanate from Leitch and the introduction in particular of the national Train to Gain programme.

  Q306  Chairman: We are grateful to you for coming and, in your case, stepping into the breach. We may have a conversation afterwards about one local issue; I am very glad you are here.

  Mr Cragg: I would be more than pleased to talk to you about whatever that might be, I cannot possibly guess!

  Q307  Chairman: I think you can probably guess! Let us look overall at the Learning and Skills Council. One of the purposes for your creation six or seven years ago was to modernise and simplify the post-16 system, but one of the really strong overarching themes, the evidence we have had from everyone in this trade unions, employers, other people in the skills business is that the system remains immensely complex, indeed Leitch proposes dramatic simplification. What exactly has the Learning and Skills Council done to make the system more accessible to employers and learners?

  Mr Cragg: Over the last two years we have instituted a whole range of changes which run very much with the grain of what Leitch is proposing. We have, for example, through the work we started on our Agenda for Change programme two years ago, looked to significant simplification of funding. Again in the light of Leitch, together with the Department for Education and Skills, we have published only in the last month the major reforms around creating a demand-led system which fits with Leitch. I think we have moved to what again Leitch is seeking, which is a much clearer inter-relationship between budgets and skills priorities and, for that matter, wider 16-19 education and training priorities. I would, of course, in this context say that overwhelmingly the biggest change we have introduced is Train to Gain. I would not underestimate it given that Leitch has very strongly endorsed that, and I would say that is going to be one of the most significant bits of simplification in the whole system. I would equally say to the Committee that it is obviously clear that the whole of the landscape on skills was not invented by the Learning and Skills Council, but I think it would be important for us to place on record that in terms of the structural simplification proposed by Leitch we would wholly support that. In fact, again to emphasise the steps we have taken, we have not only reduced the size of our organisation by something like 30% over the last 12 to 15 months but we have substantially streamlined our own operation so that the regional and local parts of our system are much more tightly integrated, with far less duplication of function, and we have similarly reduced in size our own national office by something like 40%. We have taken a whole range of steps but in particular, if you were looking at this from an employer perspective, I think the creation of Train to Gain is by far the most important step we have taken.

  Q308  Chairman: A couple of years ago now the Foster Review of Further Education said the sector "suffered from too many initiatives", a common problem across Government in my view; it always has been and probably always will be. How many initiatives are you currently running? Do you think that sector skills councils have made the system more initiative overloaded?

  Mr Cragg: I would say we have moved very radically away from initiatives. If you are looking at Train to Gain, I would not regard that as an initiative, I would regard it as a long-term strategy. I am delighted to say that it is embedded within Leitch. It is a very simple proposition. In investment terms, it is very clear where the public investment lies, which in particular is to fix market failure, ie to address basic and essential skills needs among the workplace and, in particular, to take anybody without the minimum threshold of a level 2 I think that is regarded universally as a reasonable threshold for employability in the workforce to a level 2, but then most importantly and it has been at the heart of a lot of your discussions earlier with the sector skills councils to create a ladder of opportunity within the workplace, overwhelmingly shifting the focus of skills for employers and vocational training for employers to a work-based model, and through creating a universal skills brokerage to ensure that we get the right kind of advice looking at organisational development and individual employee needs in the context of the business. I would say those are really important pieces of work. If we come back to your initiative observation, I would say we have moved very much away from initiatives to a clear long-term strategy linking budget priorities much more clearly to national and regional priorities and delivering them, in particular as far as employers and their workforce are concerned, through a single, simple set of mechanisms, which are still bedding down; I would be the first to concede that.

  Q309  Chairman: Do you share my concern, particularly when dealing with the small and medium sized businesses, that it is very important you do not keep on changing the system too often, the way it is badged, the way it is organised, because it takes a long time to get used to it? My generation still talks about O levels, we have not come to terms with GCSEs yet, and if you keep on changing the names, the badges, it makes it difficult for employers in particular with lots of other things to think about to engage in the system.

  Mr Cragg: I could not agree more with you. I think our most fervent hope is that we do not change either the badge or the delivery system now over the next three to four years. Train to Gain was built on a three-year pilot programme through the Employer Training Pilot. My experience of operating that pilot in three out of six of the sub-regions in the West Midlands was the longer we kept the simple, single message going out and the same mechanism going out the more success we had with small and medium-sized businesses, so that in that Employer Training Pilot, 80% of the businesses taking part were employing less than 50 people and very significant proportions were employing less than 20 people. We would say it is exactly what you are saying, Chairman, which is keep it simple, do not chop and change, if Leitch is right and we believe the overall ambition of Leitch is right, that the mechanisms essentially are right embed that and keep it there for the medium to long-term.

  Q310  Chairman: On that subject of keeping it simple, which I strongly agree with, we have also heard this criticism that it is very difficult for employers, particularly again the small and medium-sized ones, to understand the system. Who do they go to? There is the Learning and Skills Council, the Sector Skills Council, the Regional Development Agency, the Local Education Authority, and there is a whole stack of other acronyms and organisations around the place. Do you share that concern?

  Mr Cragg: I think I would have said in the past I absolutely share that concern. The way we are organising the interface with employers means that in delivery terms, in practical response terms, that is done through the brokerage service. I do not think we have been universally successful, I preface my remarks by that, but if you took the best examples and I think in the West Midlands we have got an excellent example there are not two brokerage services, there is a business support service which has skills brokerage fully integrated within it, and that is in its early stage and will be fully operational from April of next year. That will be, at last, not just sloganising about having a one-stop-shop, that will be the one-stop-shop for practical advice and support. We have positioned and SEMTA is a good example sector skills councils behind that in the region providing an advisory service to those people delivering brokerage on the ground. The way we have worked with Advantage West Midlands, for example, means that whilst we are a separate legal entity from them and vice versa, we have a parallel process of procurement. We have arrived at one common integrated service and that is being delivered through a common set of mechanisms right across the region, incidentally, in the context of manufacturing, with the Manufacturing Advisory Service fully embedded within that.

  Q311  Chairman: Do you recognise this concern and tension between sectors and regions? We were told in the last evidence session that we are one of the few countries which has a regional approach as well as a sectoral approach.

  Mr Cragg: I do not think there is, I think it is both/and. It is absolutely right that as far as standards are concerned, and as far as some of the other wider issues you are dealing with in your Committee and your inquiry around inward investment and around external trade, there must be a national approach. Frankly, if you look at the structure of the labour market in the West Midlands in manufacturing compared with the North East, it is fundamentally different. If you look at the demographics of the labour market in the West Midlands versus the South East when it comes to manufacturing, let alone the clustering of particular kinds of niche manufacturing in certain regions, then you have to have a both/and approach and a differentiated approach. My belief is where that is working well it is working extremely well. If you are looking at a really difficult industry sector, which manufacturing is because of the scale of restructuring, because of the impact of globalisation, then one of the things you have got to look at in a regional context is that you maximise the opportunities for redeployment of people losing employment in parts of the manufacturing sector which are downsizing, or in extremis are closing, to redeploy them and not lose their skills. I think it is one of the things which Martin Temple said to you in his evidence. My experience, and I led all the work on the retraining of the Rover workforce, is we managed to get 40% of the 90% of the people who were back into work for Rover, and that in itself was a very significant achievement, 40% have gone back into manufacturing employment and, overwhelmingly, we have not only redeployed them, we have re-skilled them.

  Q312  Chairman: I must not get bogged down in this discussion, but the RDA would claim credit for that.

  Mr Cragg: No, they would not, they would say they did it as a partnership. I sat around the same table with John Edwards, my colleague from the RDA, and we took the lead responsibility jointly with Jobcentre Plus to deal with all the retraining and employment issues and we stood as one.

  Q313  Mr Weir: We have touched on this already and perhaps answered part of the question but, as we have heard, the Skills for Business Network state in its evidence that: "existing qualifications add little or nothing to the employers' business". What is the Learning and Skills Council doing to meet these concerns?

  Mr Cragg: First of all, Mr Weir, we are not responsible for the development of qualifications, so I think I should preface my remarks with that.

  Q314  Mr Weir: Presumably you design these qualifications?

  Mr Cragg: We do not do any of the design of the qualifications, that is the responsibility jointly of the QCA under the sector skills councils. We would say one thing which is absolutely crystal clear to all of us is there is a very, very urgent need for a radical overhaul and rationalisation and simplification of qualifications recognised fully by sector skills councils and recognised, not least, in Government policy and specifically in Leitch. The speed at which some of that is taking place might frustrate us as much as you, but I think one of the things which is absolutely clear to us is that we have to have a significant cull of a lot of qualifications which are no longer, if I might use the expression, fit for purpose. It is high time that instead of just saying that public funding will be available for level 2 qualifications or level 3 qualifications, we are much, much clearer about the value which employers place on that as opposed to providers, and there should be real evidence of the relevance to competence and productivity in a business context.

  Q315  Mr Weir: What impact have sector skills councils had in the design and delivery of vocational education?

  Mr Cragg: I think having hogged it this far I am going to pass over to my colleague who is much better equipped to talk about that.

  Ms Clarke: You heard some of the evidence from the sector skills councils themselves earlier, particularly manufacturing. They have been fundamental in terms of working with us in clarifying which qualifications and at what levels the learning and skills councils should be firstly commissioning through the way we can procure provision and funding so we work very closely SEMTA is a very good example of that in terms of prioritisation of our funding into that sector. It is clear to us admittedly it is early days that the sector skills agreements are having an impact on us as purchasers and on the way employers behave. It is easier for employers through the sector skills agreement to understand which qualifications will make a difference to their business. It is very clear the impact they have had. You touched earlier on the National Skills Academy for Manufacturing, and I think that is another example of where the sector skills council, working with the learning and skills council and other partners, can make a fundamental difference to the way that employers behave and to the way their supply side behaves. Again, it is early days, but as part of their remit as the National Skills Academy for Manufacturing they will ensure that employers and young people and adults are very clear on which qualifications will be economically valuable, which will make a difference to the individual and the employer and, where necessary, they will work in terms of the design of that curriculum, the design of the qualification, so that it clearly makes a difference to the employer and to the individual. The other thing I would say in terms of qualifications is certainly our experience through Employer Training Pilots is that sometimes it is about the way a qualification is delivered. The Pilots taught us that delivery in the employers' premises at a time and place which suits the employer improves the application of the skills which derive from that qualification, improves them being embedded in the business, and then the employer can more easily and more directly see the benefit of the qualification and the benefit of the learning. It is not just a matter of the qualification in the design and content, although that is important and critical, it is also how is it delivered, and the Pilots clearly say delivery in the workplace is the most direct way to—evidence to employers that that qualification is making a difference to them and their workforce.

  Q316  Mr Weir: Who is going to deliver in the workplace? Are you looking at employers to do the delivery or do you see further education colleges going into the workplace to deliver that training within the workplace?

  Ms Clarke: Again through the Employer Training Pilots the evidence shows that colleges and independent providers, who are base learning providers as well, have had to gear themselves up to be better able to deliver in the workplace. There is evidence, of course, of some being quicker to respond to the skills needs and the approach they would need to do that effectively. What I would say about the Employer Training Pilots, and indeed now Train to Gain, is it offers a real partnership opportunity of the employer and the provider working together to ensure that what is delivered is absolutely meeting their needs.

  Q317  Mr Weir: We have heard evidence that the competition among training providers today has failed to provide the courses that their major customers, employers, and employees want. Is that changing with the new system?

  Mr Cragg: I would say that is changing quite radically. Again, if we have the opportunity of submitting further evidence to you after your hearing, then I think just looking at all the evidence of employers' satisfaction: 90% satisfaction with the overall operation of the programme, including the way the brokerage service is working. If I look with more of a worm's eye view of that, I certainly have no evidence whatsoever that we have not got very satisfied customers within the region building on what we have done on the Employer Training Pilot.

  Q318  Mr Weir: Obviously many industries are a fast-changing environment where the materials they are using move very quickly. We have also heard evidence that many further education courses were being run with out-of-date materials and techniques. Does the system have the capacity to be responsive to these rapid changes in demand from fast-moving industry, or do you see the movement into the workplace as being a way to deal with that to take it out of the college completely?

  Mr Cragg: I would say, and it is elsewhere in some of the evidence you have taken, what this is taking us towards, which is also very much signalled in Leitch, is to much greater specialisation right across conventional further education and private sector providers. Especially in manufacturing, if you are looking at the kind of demands and the specialist niche markets which providers are going to have to work in, they need to be very, very close to their employer customer-base. What we are doing and this is really a growing trend up and down the country is developing specialist networks right across the regions so that individual niche providers can work on a region-wide basis in providing a much better service. I was delighted, for example, earlier in the summer last year when the EEF, the Engineering Employers Federation, came to me with the major FE and private providers and said, "We are contemplating establishing a specialist consortium to deliver Train to Gain" which they have duly done, again capitalising on their individual strengths. I do not want to divert you too much, but one of the pieces of work we have done with SEMTA in the West Midlands is to undertake a piece of work which is called a skills balance sheet. That has looked at the critical occupational skills shortages and linked that across to the relevant qualifications, but even more importantly, from my perspective, it has taken a serious look at the geographical distribution. Chairman, I think if I referred it back to you, you would probably say to me in South Worcestershire or in Herefordshire it would be pretty hard to have the capacity to deliver specialist training relevant to a really specialist manufacturing business. However, if we work on a region-wide basis and those providers work together, they can tackle that issue much more systematically.

  Q319  Mr Weir: You talk about specialisation and dealing with the demands of the employers, but you talked also about the situation with Rover where there had to be massive retraining and redeployment. If it gets too specialist, is there a danger that if the industry moves on or closes down or offshores or whatever, there would have to be a massive amount of retraining of the people who had already been trained?

  Mr Cragg: I would not underestimate the broader challenges for globalisation, and it is not just in what we hope are very much exceptional one-off cases like Rover. Frankly, there is no alternative but to improve our skill base.