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Skills White Paper

12.33 pm

The Secretary of State for Education and Skills (Ruth Kelly): With permission, Mr. Speaker, I would like to make a statement about the next phase of our skills agenda. Earlier this month, I launched our reforms of education and training for 14 to 19-year-olds setting out how we will equip young people for employment by securing the basics and improving vocational opportunities. Today I will focus on our ambitions for adult skills.

I start by putting on record my thanks to the national Skills Alliance. Never before have we had such strong and effective collaboration between all the key partners—employers, unions, training providers and four Government Departments—on the skills agenda. They all understand that, in a global economy, we must invest in our future and equip our employees to compete with the best in the world. We cannot afford to stand still on skills. Although the productivity gap between the United Kingdom and countries such as France and Germany is closing, it remains large. In terms of gross domestic product per hour worked, France is 25 per cent. more productive than the UK and Germany is 13 per cent. ahead. Up to 20 per cent. of the gap is accounted for by our skills base.

In previous decades, emerging Asian economies competed on the basis of lower labour costs, but with about 20 million graduates in China and 2 million new graduates each year in India, those countries are increasingly competing on expertise. The only viable course for the UK is to change to a high-skilled, high-value-added economy.

Meeting that challenge will require us to build on the progress that we have already made. Since 1997, 839,000 adults have achieved basic skills qualifications, more than three times the number of young people are enrolled on apprenticeships, and more than 130,000 employees have benefited from our employer training pilots. But 5 million adults still do not have basic literacy skills, 15 million adults lack basic numeracy skills, and more than 6.5 million adults in the work force do not have the equivalent of five good GCSEs.

We also face a crucial challenge at technician level. In 1997, 43 per cent. of the adult work force were qualified to level 3 and above; today that figure is 50 per cent. However, it is estimated that by 2012 two thirds of jobs in the UK will require skills at level 3 or above, so we need to do more. Rising to that challenge will require us to transform the skill levels of young people entering employment through our radical 14-to-19 reforms, the growth in apprenticeships, and our commitment to move towards 50 per cent. of 18 to 30-year-olds participating in higher education. We also need a step change in our approach to developing the skills of the adults already in the work force. Our strong and stable economy, with record levels of employment, means that we now have an historic opportunity to do that. Securing that step change is the aim of this White Paper.

I am clear that these reforms can work only if we put employers' needs centre stage in the design and delivery of training, support all individuals to acquire skills so that they can get on at work, and ensure that training
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providers are high quality and respond to the needs of employers and learners. That is what we will do. We will support employers through new employer-led skills academies in each major sector of the economy—world-class centres of excellence providing a new benchmark in the design and delivery of skills training to young people and adults.

We will create a national employer training programme from 2006–07, offering free training in basic skills, NVQ level 2 and access to higher-level training. To support the transition to the national programme, as announced in the Budget, in 2005–06 we will invest an additional £65 million in the existing employer training pilots on top of the £290 million already allocated. The national employer training programme will help to train the next generation of technicians. Today I can announce that across two pilot regions we will invest £20 million each year in 2006–07 and 2007–08 as part of a new partnership between Government and employers to improve performance at level 3.

We must also strengthen the voice of employers through sector skills councils so that they shape the supply of training and qualifications in each sector, including new specialised diplomas for 14 to 19-year-olds. I therefore welcome the first four sector skills agreements launched alongside this White Paper. For the first time ever, they bring employers together on a voluntary basis to tackle the skill needs of their sector and to give them new leverage over the way in which public funds are used to pay for training. Furthermore, we will advance a partnership with the trade unions. As announced in the Budget, we will invest £4.5 million over two years to support the TUC's proposals to create a union academy. We will also increase the number of union learning representatives from 8,000 to 22,000 in 2010.

I am committed to supporting people in gaining the skills and qualifications needed to get satisfying jobs and a decent standard of living for themselves and their families. Our skills policy underpins our ambitions for a fairer, more socially mobile society. We will help individuals up the career ladder through an unprecedented extension of opportunity. We will expand nationally free training to NVQ level 2 for all adults without that level of qualification, alongside the free training that is already available for basic skills. Every adult has the right to a second chance to a decent education. We will expand the adult learning grant to support adults in training full-time for NVQ level 2 and young adults aged 19 to 30 in studying full-time to NVQ level 3.

We will also expand foundation degrees, with 50,000 places available next year. We will offer more help to adults to help them to navigate their way through the system. For the first time, we will create a one-stop telephone and online service helping people to make decisions about their careers, training needs and financial support. Through the new deal for skills, we will provide one-to-one advice from a learning coach and financial support on top of benefits in order to remove the obstacles that people face in gaining access to training when moving from welfare to work.

To deliver those benefits, we need excellent and responsive providers of training and a clear qualifications system. Our delivery partners have already made considerable progress on that. We will
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build on it by investing £1.5 billion over five years as part of a long-term commitment to transform the further education sector. For too long, FE has not received the attention that it deserves. I want to see a rejuvenated college sector brought about through investment and reform.

We will also provide a simple credible qualification structure for individuals and employers. The Qualifications and Curriculum Authority's proposed framework for achievement will apply a consistent approach throughout the 14-to-19 phase and to adult skills, helping people to build up credit towards qualifications. We will use regional skills partnerships to drive regional economic development, bringing together regional activity on training, jobs, innovation and business support.

Skills benefit all of society. If we tackle the challenges that face us, we shall have a real opportunity to make a fundamental change for the better—for individuals, for employers and for the country. The reforms in the White Paper will do that, and I commend it to the House.

Mr. Tim Collins (Westmorland and Lonsdale) (Con): This is a genuinely important subject and we are pleased that the Government decided to produce a White Paper.

In January, the director general of the Institute of Directors said that the Government were failing to remedy the UK's shortage of skilled workers. He pointed out that some 25,000 16-year-olds were leaving school each year with no GCSEs, and that last year the skills shortage left 135,000 vacancies unfilled. That is not just the view of the Institute of Directors: only last month, in a survey of 6,000 businesses, the British Chambers of Commerce found that the number of firms finding it hard to recruit skilled workers had risen by 50 per cent. in the last 10 years. Yet the number of young people in the NEET group—those not in education, employment or training—has increased, not fallen, since 1997.

As for basic skills, literacy and numeracy were supposed to be independently assessed for each school leaver as a central part of the Tomlinson recommendations—regrettably abandoned by this Secretary of State. In the House yesterday, she claimed that the national literacy strategy was

I hope that that was off the cuff—it did not seem to be in her text—and I hope that the Secretary of State will feel able to correct it today. Basic skills—literacy and numeracy—are not moving in the right direction, and they will not do so if the Government continue their present strategy.

Then there are higher-level skills. The number of entrants for some of the most challenging yet most important A-level subjects has gone down, not up, since 1997. The number of entrants for French A-level is down by nearly 50 per cent., the number for German A-level down by more than a third, the number for chemistry—
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