Further memorandum by the BPF Ref 278,
pg 32How well do we do relatively on the skills front compared
with European Countries, certainly Germany?
Research carried out by the Performance and
Innovation Unit (PIU) has
highlighted that the UK lags behind most other Western Countries
in basic skills, productivity, in-company training and vocational
learning. A large cultural change is required to bring the UK
up to the standards of competitors, which are more highly skilled
at the basic and intermediate level and can guarantee performance
over different economic cycles. The current economic downturn
and the increasing competitive pressures of globalisation could
see the UK fall further behind if standards are not raised. The
message from the Government's own advisers, indicates that the
appalling state of the British further education system and the
lack of training carried out by companies could turn the UK into
the "sick man of Europe".
Over 20 per cent of adults in the UK have poor
numeracy and literacy skills. Seven million adults do not have
literacy and numeracy skills of a Level 1 standard, which means
that one in five adults do not have the skills to perform simple
everyday tasks. 
Poor basic skills are a substantial barrier
to the take up of further work force development opportunities.
Without good literacy and numeracy skills, individuals are less
likely to be able to engage in other skills development. Poor
basic skills adds to business costs (because of the need for additional
supervisory staff, higher error rates etc).
The graphs below show OECD comparisons of basic
skills. The UK rates very poorly with only Poland and Ireland
having lower levels of literacy and numeracy.
|% adults with low literacy
||% adults with low numeracy||
In terms of international productivity data, evidence suggests
that the sizeable gap between the UK and the US is not due to
skills levels, while the 4 per cent gap with Germany and the 3
per cent gap with France is due to the UK's lower levels of skills.
(Differences in physical capital account for the UK's productivity
gap with the US and Germany; differences in technological innovation
explain the gap between the UK and the US).
The National Skills Task Force Research Paper (2000) highlights
that the gap in qualification levels between the UK and France
and Germany is particularly significant for vocational qualifications.
Similarly, the PIU Productivity report confirms that the
UK has one third fewer people qualified to NVQ level 2 than France
and Germany and only half as many people qualified to NVQ level
3 or above as in Germany. 
Workers in France and Germany undertake significant work
force development after the age of 21 in order to achieve level
2 and level 3 qualifications. This is not the case in the UK.
British workers who do not achieve a level 2 or 3 before the age
of 21 are less likely to make up for this later in life than their
counterparts in France and Germany. See the table below for more
informationtaken from the PIU Productivity report.
COMPARISONS OF QUALIFICATIONS AT LEVEL 2+ AND LEVEL 3+
IN THE UK, FRANCE AND GERMANY (% OF RELEVANT AGE GROUP)
||Level 3+ ||
In the UK, the proportion of employees receiving training
increases with establishment size, with relatively low levels
of training undertaken in businesses with up to 25 employees.
Firms with fewer than 25 employees are significantly less likely
to provide training, yet 11 per cent of the workforce is employed
by such businesses. This reinforces the poorer chances for lower
skilled employees to upskill, since approximately 50 per cent
of those without level 2 qualifications are estimated to be employed
in firms with fewer than 50 employees.
EAMA's original evidence outlined the problems SMEs face
in providing training. While the need for management/cultural
change is a huge issue, it must be recognised that SMEs do have
distinctive needs, which cannot always be addressed by the standard
business qualifications available within further and higher education.
Barriers to training include the relatively higher costs of undertaking
training and time-off for training, the inherently higher levels
of uncertainty resulting in shorter time horizons regarding investment
decisions (including training), the unsuitability of many training
courses to small firms' needs, which are often more related to
business lifecycle, the changing size of the organisation and
the need to address immediate business problems. 
Government does need to provide more incentives to encourage
more SMEs to invest in training, as well as more evidence to raise
awareness of the bottom line benefits of training.
At the recent CIPD conference, The Future of Learning
at Work, delegates
were asked which would be the most effective and politically acceptable
way to stimulate skills training in employment. The results were
Training Levy35 per cent.
Tax Credits59 per cent.
Advertising4 per cent.
Laissez Faire1 per cent.
EAMA welcomes the Chancellor's proposal to introduce new
training subsidies, which will offer people with low skills up
to 100 per cent of the cost of approved training and accreditation
and offer employers compensation for employees' absence.
The above figures on basic and intermediate skills needs
to echo the experiences of UK engineering industry, which is experiencing
severe skills shortagesthe reasons for which were highlighted
in EAMA's original evidence. Engineering industry is particularly
concerned at the need to strengthen the pool of labour at the
technician and crafts levels and there are real concerns to strengthen
the supply of competent, committed and commercially aware technical
people at every level. In the UK, in almost all engineering occupations,
in all sectors half or more of the vacancies for which employers
are recruiting are "hard to fill".
UK engineering industry lacks sufficient skilled people at
the intermediate level but remains on a par with most western
countries in terms of university engineering graduate output.
A key issue in the UK is the promotion of the vocational
route. Young people at school must be encouraged to consider the
vocational route as a worthwhile option. Apprenticeships in industry,
coupled with relevant part time vocational educational support
are often a preferable route for many young people, who should
be encouraged that this is not an option for the less able. Apprenticeships
are a vital way of serving industry's needs, while the apprentices
retain the option to return to Higher Education with the added
advantages of better motivation and more practical experience.
EAMA welcomes the Government's £16 million campaign
to promote apprenticeships and its aim to increase the proportion
of 16-22 year olds entering the scheme, from 23-28 per cent within
two years. The success of the plans does however lie in the commitment
of employers to take them up and NTOs, soon to be SSCs, will therefore
have to play a vital role in explaining the benefits of apprenticeships
within the context of labour supply and sectoral competitiveness.
Red tape and the bureaucracy of funding are key issues currently
deterring industry from investing in MAs. These issues will need
to be addressed if Government is to reach its ambitious target
of increasing participation in MAs, to 35 per cent, by 2010.
In Europe vocation qualifications have much greater currency.
OECD reports on vocational training systems in Europe
highlight how on the continent institutions are far more branded
and defined by the needs of the labour market. Similarly, Chris
Hughes, Chief Executive of the Learning and Skills Development
Agency, recently outlined how vocational qualifications in Europe
are linked to the market in quite particular ways, in some cases
providing a licence to operate in a particular area. Qualification
levels determine salary levelsrates of return for qualifications
are therefore greater than in the UK and there is far more parity
of esteem between the vocational and the academic route. See
Annex 1 for a Case Study highlighting Germany's renowned vocational
In the UK there isn't the same connection between qualifications
and the labour market. With the national qualifications framework,
it's difficult for employers to fine tune a qualification to their
needs. As Chris Hughes outlined in the above report, training
provision should be more flexible, driven by what industry needs
and should not just offer a set package of qualifications. In
order for this to work business needs to play a part and needs
to be more aware of the vital role it must play in improving the
provision of vocational education.
There is in the UK a very poor image of engineering industry,
which again is symptomatic of the under promotion of the vocational
route. For many people, an engineer is someone who mends cars.
It is the lack of public distinction between the role of maintenance
technicians and that of a professional engineer, which is preventing
many students from entering a potentially rewarding career in
engineering. A MORI poll carried out by EMTA showed how: 70 per
cent of secondary school age children said they knew either not
much or nothing about engineering, 50 per cent associate engineering
with a dirty working environment, only a third associate the profession
with good pay and only 4 per cent of girls would consider a career
"In Demand: Adult Skills for the 21st Century". A report
by the Performance and Innovation Unit (PIU). November 2001. Back
CIPD's Executive Briefing following CIPD Conference "The
Future of Learning for Work". July 2001. Back
PIU Report. op cit. Back
Britain's Productivity Performance 1950-96: an International
Perspective, NIESR 1999. Back
Skills for All: Research Report from the National Skills Task
Force 2000. Back
PIU Report. op cit. Back
For more info, see The nature of training and the motivation
to train in small firms. DfES Research Brief No RB330. March
op cit July 2001. Back
For more information on skills shortages and skills needs within
the UK's engineering industry, see: Skills Dialogues: An Assessment
of Skills Needs in Engineering. DfES Publications 2000 ref.SD2.
Sector Workforce Development Plan for Engineering Manufacture
2001-05. Produced by the National Training Organisation for Engineering
Manufacture (EMTA). February 2001. Back
For more information see: www.trainingvillage.gr or CEDEFOB at
www.cedefob.eu.int which is the European Centre for the Development
of Vocational Education. Back
See A New Outlook: This country's tradition of vocational education
needs to be reinvented at www.educationguardian.co.uk dated 12
March 2002. Back