MONDAY 22 JANUARY 2007

LEARNING & SKILLS COUNCIL

  Q320  Mr Weir: What I am getting at is are we talking about people basically retraining and retraining, getting qualification after qualification and passing it on?

  Mr Cragg: You are talking about people reskilling and reskilling, and if we believe it is any different then, frankly, that is a phenomenon right across the developing world. Unless we can move to a much higher value-added base, the great problem we face in the West Midlands is we come from a very low skill base, from a lot of basic manufacturing industries and we are trying to make that leap across. Certainly I would say the closer you align not just the facilities and not just the qualification but the workforce, the best example I could give you on my patch is the work done inside BMW. BMW commissioned two FE colleges which have now been working for four years inside their major plant at Hams Hall and they provide all the structured specialist vocational training at level 2 and level 3 for BMW personnel.

  Q321  Mr Weir: That brings me on to my last question. You mentioned BMW and their involvement with further education colleges, but we also heard that only 18% of employers engage with further education colleges. How does the learning and skills council intend to encourage more employers to engage directly with the further education sector in order to meet the new focus of employability promise from the 2006 White Paper?

  Mr Cragg: I would say two things. First of all, we are very much in line with policy, moving away from a world where, as far as adult skills are concerned, further education colleges enjoy virtual monopoly. We are moving to a position where in Train to Gain we look at the most appropriate provision rather than just looking at institutional provision. Having said that, if you look at the track record of colleges progressively in responding to the challenges of a more specialist role, you have got examples right up and down the country of Centres of Vocational Excellence which are delivering absolutely to employer requirements, and increasingly so. I think it would be interesting, from our point of view probably, at the end of these first 12 months of the full roll-out of Train to Gain nationally, to see how much greater the market penetration is of FE colleges. I would be confident that it will be very, very significantly greater than the quoted 18%.

  Q322  Mr Weir: Let us turn it on its head, are you looking for further education colleges to go to the employers more than the other way around?

  Mr Cragg: Yes, absolutely, and that is what Train to Gain is doing. I could give you again I will not do it a legion of examples.

  Q323  Chairman: We do not want to drag the session out too long, but there are some interesting examples, so some written examples would be really welcome.

  Mr Cragg: We will give you some written examples. There are many, many case studies we can give you of that kind of responsiveness which we are looking for.

  Q324  Mr Wright: One of the key recommendations of the Leitch report is that the Sector Skills Councils should be given the power to approve all vocational qualifications before they receive any public funding. If sector skills councils are going to play an ever increasing role in developing qualifications you already alluded to the fact that they do that and also training programmes, what role will remain for the learning and skills councils?

  Mr Cragg: The role of the Learning and Skills Council, as set out by Leitch, is a logical development to where we are now, which is to ensure that only quality providers are funded, to develop that further accrediting providers, again Leitch is very clear about that, we should ensure that providers are accredited so that if an employer, a customer is making use of that provision, it is very clear, and that we should act to promote effective competition. That is precisely what we are doing through Train to Gain. It is more and more a question of the right provider for the right task in terms of quality and responsiveness. If you are looking at the role of Sector Skills Councils, it is going to be essential that we provide the bridge working with them between supply and demand. If Leitch is fully implemented, we are talking about a scale of expansion which is colossal. The big job we will have in doing that will be to ensure the capacity is available on the ground, coming back to all the questions about are FE colleges fit for the task, have we got the range of provision, have we got the facilities, because not all of this will take place in the workplace and, underpinning all of that, making sure we continue to drive up standards. We have introduced for the first time very clear national benchmarks this year on minimum performance levels right across the board, so that if you are looking at each sector we are benchmarking performance and where that is inadequate, then we will be taking that out, whether that is through a planned approach with an FE college through its mainstream grant-in-aid budget or whether it is through Train to Gain, we will be systematically raising the bar. All of those tasks are core tasks as seen by Leitch. The other thing we are tending to forget, which is right at the heart of your inquiry, is that we have not best-served adults by having a policy which focuses separately on employment in one box and on skills and competitiveness in another. One of the most important recommendations which Leitch brought forward was the integration of employment and skills, because we have done brilliantly nationally in raising the employment rates; in terms of productivity rates, we have done far from brilliantly. One of the critical tasks in manufacturing, given where the pool of labour will lie, will be to create a mass adult apprenticeship to pull people through. That will require an enormous amount of local work in local labour markets to get the right provision to make people work-ready and progress them on through the Train to Gain mechanisms once they are in work. That is a huge task for us.

  Q325  Mr Wright: Is not one of the real problems of trying to get people into manufacturing related courses the fact that, as one witness told us, quality education in technology-based subjects is scarce because it is cheaper to train hairdressers than engineers? Is that not a real issue, or do you think it is because of lack of demand for those courses?

  Mr Cragg: I do not think that is the primary issue. I could have probably looked five or six years ago and said there was far too heavy a preponderance of low cost areas of provision, I do not think you could say that now. I think we have got some really fundamental difficulties in manufacturing about the perception of manufacturing, and you have heard some of that already. There is a perception that there are no longer any jobs left in manufacturing, it is "manufacturing is declining". You have heard this afternoon that is far from the truth. Shifting that perception requires an enormous amount of effort and a long-term effort and, in particular, serious influence and input from employers. If I gave you a simple example of that from our point of view, again a regional perspective, the net recruitment requirement in manufacturing over the next eight years will be 60,000 additional jobs. Because two-thirds of the skilled workforce in manufacturing is over the age of 45, over the next 10 years we are going to lose 140,000 people from the workforce. We estimate that we are only going to lose between 60,000 and 80,000 jobs in the region as a whole, so we have got a massive replacement demand.

  Q326  Mr Wright: That is in the West Midlands?

  Mr Cragg: Yes. Trying to get that message across to young people and trying to get that message across frankly to teachers, we have had a long-term campaign, for example, in our region with the Engineering Employers Federation which has been built around creating partnership centres for schools for 14-16 activity in major manufacturing plants, back to BMW, back to Jaguar, and yet we still feel as if we are pushing the stone up the hill. We do need a national concerted campaign and, frankly, anything the Committee can do would be enormously helpful, but perceptions are proving a major, major barrier.

  Q327  Mr Wright: You heard the evidence session beforehand, a particular bone of contention with me is the fact that I do not consider enough effort is put into the 14, 15, 16 age group, we are talking about 14-19. How much of your efforts are put into that because I see a terrific void there? By the time these youngsters have got their qualifications, or failed to get their qualifications, they have already determined what they want to do.

  Mr Cragg: Two-thirds of our budget goes on 16-19; I could put a bracket around that and say 14-19.

  Q328  Mr Wright: Is that nationwide or is that in the West Midlands?

  Mr Cragg: No, that is nationally. Two-thirds, it is huge, £6 billion goes into our core statutory responsibilities. If I looked at the West Midlands alone, over the last three years we have spent £150 million in the whole development of 14-19 and the evolution of specialised diplomas. I am saying to you also that crucially in all of that, from our point of view, is to try and get a realistic and balanced view of where the critical opportunities are and in particular where the manufacturing opportunities still lie.

  Q329  Mr Wright: What other constraints exist to the provision of quality or vocational education in areas that are related to manufacturing?

  Mr Cragg: There are certainly challenges around maintaining the workforce because if out there, in the industry as a whole, we have got critical skills shortages, you can be absolutely certain they will be reflected back in the education and training workforce. On the other hand, I think in the kind of work we have been doing nationally, we have done significant work, for example, on workforce development in further education and training with the SMMT, the Society of Motor Manufacturers and Traders, so we have been developing almost an expert trainer kind of approach and cascading that down into colleges in particular and providers as well. We have tended to use Centres of Vocational Excellence as the key vehicles for developing the manufacturing and engineering and technology science curriculum 14-19. A lot of energy and work has gone into that. I would say we are still in a position where relative to the importance of manufacturing, relative to the scale of the sector, we ought to be doing more 14-19. Your experience will be our experience. There are still not enough 14-19 potential diplomas on the ground in manufacturing engineering technology.

  Q330  Chairman: Building on Tony's points just then, we heard criticism of the careers advice available to the younger school children that they are probably not fully aware of the opportunities in manufacturing. Is that a concern you share?

  Mr Cragg: Yes, I think there was a serious risk, with a focus on social exclusion which was an entirely legitimate focus when the connection services was created, that we threw the universal career service baby out with the bath water. I think we are starting to get a more balanced view of that, and certainly many of us in regions have been trying to work with Sector Skills Councils in particular to produce useful careers education, careers guidance documentation. I do think we have ended up in a position where institutions are influencing too much the decisions being taken by young people and we have not got sufficient impartial advice in too many places.

  Q331  Chairman: Is that from the manufacturing perspective?

  Mr Cragg: From a manufacturing perspective in particular it is the same. We have got a whole range of campaigns which we have run in various parts of the country with the EEF in particular and with SEMTA, but I still think it feels like an uphill battle.

  Q332  Mr Hoyle: The LSC have a target of 90% of all 16-18 year olds to be in training or education of some kind by 2015, which is a good target, but now the Government has come along and said, "We want every 16-18 year old to be in some kind of training or education by 2013". Not only have they reduced it by two years but they have actually said all. Can this be met, is this over-ambitious, or is it just a flag-waving exercise?

  Mr Cragg: I think it would be reasonable, if you looked at our position internationally, to say we ought to adopt the same kind of practices. If you look at one of the great strengths of the German system, for example and it has suffered some challenges in recent times, especially with the integration of the old GDR into the single state is that there was a legal and statutory framework in which that all took place. Most would say that the strengths of that 16-18 statutory framework were reflected in the strength of intermediate skills in Germany, especially at Level 3. It seems to me where the policy is taking us is towards that same position compared with similar arrangements which we have got, especially in other EU Member States. We would have to look at, by definition, the whole issue of capacity, the whole issue especially of how this sat alongside all the rest of the work with employers, because I think the chief challenge would be persuading employers right across the board that every young person should be trained and trained to a minimum qualification in that 16-18 group. Of course until we have seen the detailed proposals from Government we are not in a position to respond sensibly at this stage. We could not deny the fact that that would simplify a great deal of the work which goes on in 16-18 and guarantee that many of the young people who sit outside the system at the moment do get systematically trained to a minimum level.

  Q333  Mr Hoyle: You think you can achieve it?

  Mr Cragg: I am not going to answer that, Mr Hoyle, I am going to say the timescales will be crucial and the resources to do the job will be crucial. If you are asking me whether it is desirable, I am saying it is desirable.

  Q334  Mr Hoyle: If you got the funding you could do it, that is what it is about?

  Mr Cragg: Yes, give us the loot!

  Q335  Mr Hoyle: If the investment goes with it, it is achievable?

  Mr Cragg: I am sure the Secretary of State would see it the same way. I am sure at this stage clearly that is a policy intent and it would have to be accompanied by the resources from the Comprehensive Spending Review.

  Q336  Chairman: Can the FE sector keep up with the changing industrial demands of the more specialised manufacturing? Can it keep up with the expectations of employers?

  Mr Cragg: It has to work with employers. There have to be adequate opportunities and that is certainly what we have been creating with sector skills councils for people who have been maybe 15, 20 years away from a manufacturing workplace to up-skill themselves. It is going to be really important that we have got opportunities for exchange between FE colleges and significant manufacturers.

  Q337  Chairman: A few quick ones from me just to finish off. They are questions you might want to come back in more detail on later. I want to look at apprenticeships quickly. There is a target in the Leitch report of 500,000 apprenticeship places by 2020. It is a similar question to Lindsay Hoyle's: is that realistic?

  Mr Cragg: It is realistic because Leitch has said young people and adults, the thing we are short of at the moment is an adult apprenticeship, and we absolutely support that proposition.

  Q338  Chairman: Is progress being made towards that?

  Mr Cragg: Definitely. Train to Gain gives us a very important building block in doing all of that. If I might just pause and reflect a little bit to you. One of the reasons we recruit so few unemployed people into manufacturing is because we do not prepare them sufficiently to be work-ready, we do not get them to a sufficient skill base for them to be acceptable to employers, which means we cannot even get them to the threshold, which means we do not progress them in the workplace. All the evidence from my experience is that if we put that kind of programme in place, do not try and skill them to a qualification before they get into the workplace, but get them work-ready, have minimum levels of skill and competence which the employer wants then up-skill them when they are in the workplace.

  Q339  Mr Hoyle: I heard mention of the Automotive Academy, which was obviously launched because of what had happened in the West Midlands with a great fanfare, a great idea. Do you think there are benefits in merging it with manufacturing, or do you think it dilutes from the principle of what it was set out to do?

  Mr Cragg: No, I do not think it does. I have been very close to the Automotive Academy and I have been working personally with John Kushner, the project director of the National Manufacturing Skills Academy, to bring the national base to the West Midlands. We set up, with our colleagues in the RDA and SMMT, the spoke of the Automotive Academy. The model for the National Manufacturing Skills Academy was very much built on that same developmental idea. It is not the idea of having a great big single national provider, it is about creating a developmental function which brings best practice especially from business and international global players into the sector. That is particularly applicable across automotive and aerospace.