Examination of Witnesses (Questions 60-79)
MR BRYAN
SANDERSON AND
MR JOHN
HARWOOD
MONDAY 9 DECEMBER 2002
60. What is it about quangoes that puts off
people who are running tiny businesses, or in fact large businesses
as far as my constituency is concerned?
(Mr Sanderson) By "micro business" I presume
you mean five people or less.
61. Yes.
(Mr Sanderson) The answer, as they would see it anyway,
is that they do not have time for anything other than the bottom
line.
62. So how can you be representative of their
needs at area level?
(Mr Sanderson) It is difficult. I think what we need
somehow or other is preferably two or three micro business representatives
around the place, or more than two or three, who have made it
to the level where they are prepared to give up time. We have
a few of those but those are rather rare beings. Of course, the
temptation is for them to go on and become middle sized businesses.
If we could get good general commerce or CBI representatives who
understand the needs of these people then that is a second best.
I must say, speaking as an ex-businessman myself, I think it is
very much a second best. It is far better to have people who have
had a direct line and know what it means.
63. It does not really sound as if you have
got a strategy.
(Mr Sanderson) You cannot have a strategy to seduce
people away from their first love, I do not think, which has got
credibility. The first love of a small businessman is to make
money and they are not usually prepared to give up the time that
is necessary for outside bodies. Having run a business myself
I can have some sympathy with them. It is very demanding to survive
sometimes.
64. Does Mr Harwood think it is that impossible?
(Mr Harwood) I think it is very difficult. It is not
really my job to go round recruiting members of the local Learning
and Skills Councils although I do obviously have an interest in
that. The real challenge is to be able to recruit a group of people
who are committed and have the drive and approach that we want
to secure. That is what is going to make a difference, I think,
rather than some mathematical relationship in their backgrounds.
I could tell you some micro business people who would add immense
value to a local Learning and Skills Council and some micro business
people who probably would not add very much value to their local
Learning and Skills Council. The real issue is the individuals
and the drive that they bring.
Chairman
65. I think Andrew Turner's point is a good
one. It still sounds to me a bit like gentlemen players. If you
are a small micro business and you are expected to give up hours
of the week helping the Learning and Skills Council, and there
is no pay in it, there is nothing, I can see that that is prejudicial
to anyone who works for themselves in very small business. I cannot
understand why in some areas of our public life there is money
paid, for example if you are on a hospital health trust you are
paid, and for a small business if it was £5,000 or £10,000
a year I think people would be encouraged to give their time.
I think sometimes people like yourselves, Mr Harwood and Mr Sanderson,
should have been banging on the Minister's desk saying, "We
will not get the breadth of people and the experience we need
unless you give us the chance to offer some payment", and
I think you really should think about that.
(Mr Sanderson) I did bang on the desk to get payment
for local chairs, with minimal success.
66. Perhaps the Committee can help in this.
(Mr Sanderson) I am being a little less forthright
on this than you obviously want me to be.
67. If you play for Sunderland Football Club
and you ask some people to do it for nothing and pay others a
quarter of a million pounds —
(Mr Sanderson) That is not a small business. That
is extremely offensive, it has a £50 million turnover! Look,
I do not think the answer is necessarily to pay people.
68. Why not, Mr Sanderson, you have not explained
it.
(Mr Sanderson) There is a place in our society for—
69.—for the gifted amateur?
(Mr Sanderson)—for small micro businesses who
are entrepreneurs—they are very particular sorts of people,
you must have met some of them—who are concerned only with
business, but that is what they want and that is what they want
to do —
Mr Turner
70. They are the overwhelming majority of businesses.
(Mr Sanderson) They are in terms of number of businesses
but not in terms of number of employees.
71. They are the overwhelming majority of businesses.
How do we do what they want if they are so badly represented?
(Mr Sanderson) You are making assumptions—
72. Of course I am but we make those assumptions
about all sorts of things.
(Mr Sanderson) I do not think they are all that badly
represented. We do have small businesses represented on Learning
and Skills Councils, micro ones less so.
(Mr Harwood) I think it is important to make clear
that we do not have a relationship with employers simply through
the membership of six or seven of them, or whatever it is, on
the local Learning and Skills Council. If we were relying on those
people in order to change business then we would not be making
much progress. What matters is the leadership and direction that
those people give to the work of the executive team in the Learning
and Skills Council, and I think the sort of work we do on the
employer training pilots with SMEs is going to generate the relationship
that we need to secure in the future to make a difference in what
SMEs do and the contribution they are able to make. It is part
of a much bigger picture.
(Mr Sanderson) Suppose we had one micro business on
every one of the 47 local and Learning and Skills Councils, do
you think that would make a massive difference to the other 900,000
or so that are not on them?
73. I have no idea actually but the fact that
you use the word "local", which is something in my area
which stretches from Farnborough to Freshwater, tells me that
you have a very different view from that of micro businessmen
about what is local.
(Mr Sanderson) About what is local?
Chairman
74. Is it not also the case, Mr Sanderson, that
those of us who have constituencies know that, by and large, what
pressure you have is there is a group of usual suspects—well-intentioned,
excellent people—in every community who come forward to
serve on boards of different kinds.
(Mr Sanderson) That is certainly true.
Chairman: I chair a small business organisation
of 13 employees and unless we had some compensation for key employees
to have a day a week or two days a month to work on a Learning
and Skills Council, we could not afford to let them go because
we would have to hire someone to replace them. That is the difficulty,
the bind you get into. That is why I teased you about Sunderland
Football Club. Really I meant the old cricket system of gentlemen
and amateurs. At the present moment, a lot of people just could
not contemplate giving that service without payment. Kerry Pollard?
Mr Pollard
75. Can I give an example to try and help Andrew
out.
(Mr Sanderson) I thought he was doing rather well.
76. I was a chief executive of a housing association
before I came here and it dealt with people with special needs
and we were pressed by the Housing Corporation to get somebody
on the board who had special needs. We got the best person we
could ask for, I spent hours and hours trying to get this person,
and they came to one meeting and had a nervous breakdown the day
after. We scrapped it altogether. The point to make is you can
be tokenistic and have somebody along representing—
(Mr Sanderson)—that is what I was trying to
say.
Mr Pollard:—I think that is what you are
trying to say. There is another way and that is using one of the
representative organisations like the Small Business Service or
the Federation of Small Businesses. These are all representative
bodies and they are in Andrew's constituency with thousands of
members. I do not know why he is banging on about this. It seems
to me a complete and utter waste of time. I think he is quite
potty for thinking that a small business person is going to give
up his or her precious time to go along and chat, as they would
see it, it just would not happen, and running a small business
myself I know that would be the last thing I would do. Can I talk
about apprenticeships. Many SMEs are single practitioners and
they say to me that they would willingly take on an apprentice
except they have to fill in a form that is as thick as a telephone
directory to do it. We have got to make it easy for them so that
all they have to do is to train the person, whether male or female,
in their particular skill, not fill in loads of forms. How can
you make it easier?
Chairman: I think Mr Pollard wants a quick return
to the mid-19th Century!
Mr Pollard: There was nothing wrong with that!
Chairman
77. He remembers it well! Mr Sanderson or Mr
Harwood?
(Mr Harwood) I think I am probably going to be the
conveyer of bad news on this.
78. Thank God for that.
(Mr Harwood) I really do not think that a one-person
organisation is going to be able to take on a modern apprentice
unless we are able to—and this is the point you may be getting
to in the question—provide an infrastructure which is supported
by somebody else that does some of the basic skills work and theoretical
framework for the training and so on. The idea that somehow one
person could do all that and do some other business as well seems
to me to be extremely unlikely. I am not saying there is not some
super-person who could not do it somewhere but it seems to me
extremely unlikely. The issue is not actually how does one get
a modern apprenticeship into a one-person micro business, it is
about two other things. One is how can we support businesses which
are taking on modern apprenticeships to make sure that those that
do not have the scale or the wherewithal to be able to provide
the more educational parts of the process are supported in that
by other providers. That is the sort of support structure we are
trying to get to. The second thing is to make sure that the whole
process is the least bureaucratic we can make it, but of course
that has got to come with some expectations about the quality
of learning and the accountability and making sure that the people
who are undertaking that learning and conveying those skills have
themselves the skills to be able to do that. It is balancing those
two together. That is why I think we are making considerable progress
in cutting out a lot of the Victorian paper chase and all that
sort of stuff and concentrating on the key skills which are enabling
people to do a good job in the areas where they can bring added
value.
(Mr Sanderson) We still have to make sure they do
it though. This is public money they are spending.
Mr Pollard: One brick in front of another!
Mr Chaytor
79. Can I come back very briefly to the 66%
productivity target. Forgive me if this question was asked earlier,
but how are you going to calculate it?
(Mr Sanderson) Why do you not go through it.
(Mr Harwood) We are calculating it on the basis of
the overhead costs of running the organisation. We know the cost
of running our predecessor structures, which for next year will
amount to somewhere around £300 to £310 million a year
at current prices. We know that we will be running the overhead
costs of the organisation next year for £218 million.
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