Select Committee on Education and Employment Minutes of Evidence

Examination of witnesses (Questions 120 - 139)



Valerie Davey

  120. You mentioned earlier that the first objective of your Department is to raise standards. How do you then, on the basis of PSAs, see the cost-effectiveness of the different strands in order to raise standards?
  (Sir Michael Bichard) I think that is an interesting question. Whether or not you can justify the additional expenditure that is required to produce a one per cent increase in numeracy or literacy, for example, I think is the point you are making. When I say it is an interesting question, it normally means I do not have a fully fledged answer. At the end of the day I think it is a question of judgment. What is it in terms of our competitors performance on literacy and numeracy? What is the level that we should be aspiring to if we are going to compete in the global market in the next 20 years? Secondly, what is it going to cost and can we afford it? That is something which we will have to address at each stage of our discussions with the Treasury and will, I am sure, be part of the Spending Review discussions in the coming couple of months.

  121. Essentially, you are an Education Department and you are raising standards as opposed to setting targets and achieving them in a range of options.
  (Sir Michael Bichard) We are an Education and Employment Department. I am sorry. What was the second part of your question?

  122. Essentially the remit of the Department in employment and education is to raise standards and get more people into work, and that must be the criteria against which you are judged, not achieving a range of targets in terms of facts and figures which are essentially more tangible and easier to diagnose than the ultimate achievement of raising those educational standards across the board and getting more people into employment.
  (Sir Michael Bichard) If all you are measuring are the things that are easy to measure, you have a problem. Your targets have got to reflect what you want to happen on the ground. Sometimes that is quite difficult. Of course, in this country for 20 years we were seduced into believing that you could not measure anything in the world of education, that education was too complex to be measured and for there to be targets. I think over the last 10 years we have made a lot of progress. This country's education system now is more accountable than probably any other system in the world because we do measure what we can measure. We draw conclusions from what we measure. There are some things that it is impossible to measure, but from what we can measure, I think we can draw some pretty firm conclusions as to whether or not the system is improving or getting worse.

  123. You mentioned your Policy Innovation Team earlier. Can I ask whether they are looking at the role within the description you have just given of your Department that the LEAs play and how cost-effective you think they are in this programme?
  (Sir Michael Bichard) The Policy Innovation Unit is not currently looking at the role of LEAs, but of course, the role of LEAs is a live issue, not least because of the OFSTED inspections and the intervention that we have found necessary in 12 authorities so far, not least because of the concern of schools that too much money was resting with LEAs and not getting to schools. That was one of the reasons why in the recent Budget there was a direct funding of schools with the additional £1 billion.


  124. Will that really be a direct funding? The Chancellor mentioned a cheque going direct to schools.
  (Sir Michael Bichard) It will go to local authorities but it is to be passed on without any overheads being taken to the school, and there is a formula, as you know, for each school depending on the number of pupils. The answer to your question is that of course the role of LEAs is a live issue at the moment. We are discussing with local authorities and LEAs how we can perhaps revise the funding system, how we can ensure that LEAs add value. This is very much Helen Williams's area, and I wonder if I can just ask her to comment.
  (Ms Williams) One of the things that we are considering at the moment is the code of practice on LEA/school relations, which defines the way in which LEAs and schools should work together. I do not know whether you are familiar with the document. It is a rather lengthy document, with 60 pages, and there is a general feeling that it would be helpful to have a more succinct and clearer statement of the LEA role in relation to schools, and we are working on that at the moment. In general, I think we are also in the code reflecting the delegation of funding over the last couple of years to emphasize the importance we place on the school itself managing the school, as the main agent in delivering the Government's standards agenda. We will define the role of LEAs as essentially an enabling role, supporting schools.

Valerie Davey

  125. Where is the constitutional issue going to be directed? Who is going to question the accountability locally and nationally in terms of the democratic accountability of the funding both nationally and locally? It may not be a question for you, but I do raise it in this context.
  (Sir Michael Bichard) It is an issue which goes well beyond the responsibilities of the DfEE and is ultimately the responsibility of the DETR and the Prime Minister. The intention is that there should be a Green Paper on local authority expenditure published some time in the summer and part of that will address education expenditure and the LEAs' position there. What that will contain I have no idea at the moment. It is quite possible, I would have thought, that it will contain a number of options and there will be a debate over a period of time around this very important issue that you have raised, because local education expenditure is clearly a massively important element of the local authority expenditure and therefore is a constitutional democratic issue.

Mr Derek Foster

  126. Can you give us any indication at all about the kind of ideas that the Department is feeding into this review?
  (Sir Michael Bichard) I do not think I can because, as I say, it is in the early stages and I think you will have to wait and see what is in the paper, but I think it will be a range of options rather than one preferred solution.


  127. I think everything you have said has highlighted what we believe, that you are very much committed to Public Service Agreements. You are negotiating a new tranche of these with the Treasury at the moment, I believe.
  (Sir Michael Bichard) Yes.

  128. Would it be possible for some details of this to be given to the Committee so that we can actually be part of that route rather than out of the route so that we can make a contribution to the process?
  (Sir Michael Bichard) Public Service targets will depend very much upon the resources which are allocated in the Spending Review. That must be the case. It is a question of your needs and aspirations, which are also constrained by your expenditure. So we are not actually, at the moment, in negotiation with the Treasury or anyone else as to what the Public Service targets will be. We will see what we are likely to get in cash terms and then we will have those negotiations. Of course, if the Committee has views on what the Public Service target should be, then it is for the Committee to express those views, and doubtless they will be taken into account in the negotiations.

  129. Let me give you an example. This Committee shares a view on ICT training. I know both the Chairmen of this Joint Committee share this concern. You know of the recent Microsoft Summit in Brussels, which showed the enormous skills gap in information technology skills, not just for this country but Europe, as against our major competitors. Would something like our inability to produce the right number and volume of ICT skilled people, would that be part of a Public Service Agreement, that this will be one of the targets? Is that a possibility?
  (Sir Michael Bichard) I think that is a possibility. Clearly we will be talking, as part of this Spending Review, about our investment in IT and in IT skills. It is already pretty substantial. There is a lot of money going into schools. Internationally, we do not do that badly in terms of hardware, and increasingly we do better in terms of teaching skills. There is a lot of money going into schools and IT learning centres. There will be 750 of those this autumn around the country. There is a lot of money going into the UfI. I do not think we have to assume necessarily that we are slipping behind our competitors, certainly in Europe. I do not believe that to be the case.

  130. Europe is the point. As part of Europe we are slipping behind. The real competition is not in Europe but outside.
  (Sir Michael Bichard) If you look at the United States in terms of their investment in schools we do not compare too badly. However, there is no room for complacency. The knowledge economy is upon us and if you believe that IT skills are going to be critical to make us competitive, then we must not be complacent. It will be something, I am sure, that is discussed as part of the Spending Review, following which we may well decide or not, depending on other priorities, that this should be a Public Service target. But there is nothing to stop this Committee making an input publicly at this stage.

Mr Derek Foster

  131. If I can pursue that a little bit further. It is about twelve months ago that the Chairman of Motorola and the Chief Executive of EPS told me that within their industry—not just their two companies, of course—there were 100,000 unfilled vacancies, mostly for young graduates: not for graduates who necessarily had degrees in ICT but who were capable of being trained to fill those vacant positions. More interestingly, perhaps, that if young women graduates could be persuaded to take the industry rather more seriously, or find it more attractive, then that problem would be more than half solved. Now, will that feature as a priority for the Department? It strikes me that 100,000 unfilled vacancies of pretty well-paid, potentially highly skilled jobs, is a very important matter.
  (Sir Michael Bichard) It is a priority for the Department. It is something which the Skills Task Force have identified. It is something that we have identified as a priority; a first priority for the University for Industry. One of the reasons for setting up a Learning and Skills Council, which will be employed next year, is to ensure that the training which takes place in the workplace reflects business needs. We particularly have in mind IT as being one of those skills shortages which the Learning and Skills Council needs to address. So it is already a priority. We assume it will be an urgent priority and part of the discussions on spending. I cannot guarantee you that this is going to be a PSA target at the end of the day, but it will be discussed.

  132. I do not necessarily want it as a PSA target. We just want the problem solved. Apparently, the kind of training that industry is talking about is the shortest, 12 weeks. Is it not the kind of thing which we would have to directly enforce, as training people in universities have to deal with?
  (Sir Michael Bichard) I talked earlier about the increase in further education places. 700,000 were to be achieved by 2001-02. One of the priorities there that we see is IT, and we see no reason why we should not be able to produce some of those courses, 12 weeks as you say. They ought to be a key component of those 700,000 extra places to make a real impact. The money is there for that. What we need to ensure is that FE colleges deliver that. One of the ways of doing that is to make sure that we target the investments on the FE colleges that really can deliver competently, particularly in this area. So right across the board we are looking at every possible way of ensuring that that real skills gap is bridged.

  133. Including devices for bringing employers and potential employees together within the Employment Service, or stimulating solutions coming forward from the private sector?
  (Sir Michael Bichard) Of course the Employment Service has a really important part to play. Partnerships are beginning to emerge between the Employment Service and private sector, which are very, very happening. All of those things are happening on IT. Let us not forget that we also have this problem at the other end of the continuum with basic skills. All of the same points apply.

Mr St Aubyn

  134. Public Service Agreements are really about delivering output targets. Nevertheless, do you think the amount of money going in is critical to their achievement? Would a 1, 2, 5 per cent settlement increase in resources going into these agreements have a significant impact on their success in achieving their output?
  (Sir Michael Bichard) Again, I have never been known knowingly to throw away money so, yes, of course, more money helps, does it not. On the other hand, I think I said that in most public services too often we speak as if money is the answer to all of our problems. Very often it is ensuring that you are delivering efficiently, being more focused on the outputs, and you are working effectively across boundaries. Those sorts of things can make a huge difference to how well you spend your resource. In reality, you are probably talking about 1 or 2 per cent between a really good settlement and a rather disappointing settlement. You can make 1 or 2 per cent in the way you use the resources. Now, on behalf of Education and Employment, you can be guaranteeing, we will argue (very eloquently, I hope) and quite aggressively, but let us never forget that there are other ways of ensuring that resources are used effectively.
  (Mr Shaw) There are different types of PSA. Within the current PSAs related to three-year-olds' participation and class sizes of fives, sixes and sevens, these are very resource related as to the provision of capital for the class size and places and teachers for the three-year-olds. When it comes to attainment at age 11, there is much more a mixture of resources that come outside class: the working together on the literacy hours, the issues on the timetable, working with parents. So some of the PSA targets directly relate to money. With others there is a whole variety of factors. On literacy, very much the aim has been to engender all of those operating together, to deliver the step change that has happened so far; and the step change which is on course to deliver in 2001.

  135. I am glad you mentioned class sizes. Sir Michael, you are obviously in the business of delivering the class size pledge, where the costs have not gone up by a few per cent. The cost seems to have gone up more by a factor of 600 per cent. It has gone up from the original estimates of the Department, which were £100 million, and I gather the most recent estimates of the cost of delivering this pledge is going to be £620 million. Do you agree that there are serious concerns about whether value for money is being achieved? No-one is questioning the desirability of delivering the pledge, but a six-fold increase in the cost of that pledge appears to suggest at least a level of incompetence either in the original estimates or delivering the pledge. What do you think it is?
  (Sir Michael Bichard) I do not recognise the increase from 100 million to 600 million. I do not believe this is an example of incompetence. It is a brilliantly delivered commitment, delivered ahead of time and well managed. You can argue about whether or not reducing class sizes for five, six, seven-year-olds is a desirable thing to do or not. That is a political argument and judgments have to be made about that. The evidence, such as it is, does suggest that smaller class sizes for very young children does have an effect on the quality of learning upon the literacy and numeracy standards at that age. The evidence suggests that it is not as critical with older children. The Government took a decision on that evidence to make this a commitment, a manifesto priority, which had a fair amount of public support. What we have done is to halve the number of children in infants classes of over 30 in one year, the last year, from 356,000 to 177,000.

  136. For the record then, the estimates given by Ministers at the beginning of this Parliament, of delivering the class size pledge, that it would only cost £100 million rather than their latest estimate of £620 million: those estimates were not derived by any calculations made by the Department for Education and Employment. Is that correct?
  (Ms Williams) May I make an observation here. Much of the 620 million figure that you have mentioned is capital expenditure. It is one-off expenditure to build extra classrooms. The on-going, the inherent costs of attaining the pledge, are in the order of £160 million.

  137. But the cost estimated throughout the lifetime of this Parliament, was it not originally estimated at just £100 million for delivering this pledge?
  (Ms Williams) I am not competent to say.
  (Mr Shaw) When the Comprehensive Spending Review took place two years ago, there was a thorough piece of work which led to £620 million being the figure that came out of the Comprehensive Spending Review for expenditure over a three-year period. That was from detailed work which took place, leading to the benefits that Sir Michael was talking about.

  138. Do you think that the knock-on effect—that as the number of primary school teachers seems to have gone up the number of secondary teachers appears to have gone down; and not because of the fact of lower class sizes in the first three years but higher class sizes in the later years—do you think that has been a price worth paying to deliver this pledge?
  (Sir Michael Bichard) If you look at the statistics, the average size of primary classes has fallen from 27.5 to 27.1 pupils, a 0.4 reduction. The average size of classes has fallen overall from 24.8 to 24.7. The only increase has been in the average size of secondary schools from 21.9 to 22 pupils, a 0.1 increase. If you take into account the evidence that I paraded earlier, that class sizes are not so important at secondary level; if you take into account the fact that teacher ratio in secondary schools is 17.1, six lower than they are in primary schools; this year secondary schools have received somewhere between £30,000 and £50,000 per school which, if they devote to teaching resources, which they can do, (it is a matter for them), would reduce the secondary school ratio by 0.4: then it brings the whole thing into perspective.

  Mr St Aubyn: I will take that as a yes. Thank you.

Judy Mallaber

  139. New Deal targets and employment policies are very much a key priority for Treasury; one of the key apples in the eye, as it were. Does the DfEE have any influence at all over the targets that are set for employment in getting people into work and New Deal, or are they all set for you by Treasury?
  (Sir Michael Bichard) They certainly are not set by the Treasury. They may be the apple of the eye of Treasury but they are even more so for us and the people who deliver it. We are determined to deliver our targets. The negotiations on an annual basis between the Department and the Treasury on Employment Service targets generally are always robust; and they ought to be because ending up with the right target you need to have a robust negotiation. They are not set for us by the Treasury. We propose the set of targets. We discuss them with the Treasury and there will sometimes be some adjustment.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2000
Prepared 21 June 2000