Examination of Witnesses (Questions 1080
- 1099)
MONDAY 17 MAY 2004
MR BRYAN
SANDERSON AND
MR MARK
HAYSOM
Q1080 Mr Chaytor: When the Chief
Inspector of Schools came before us with his comments from Ofsted
some weeks ago, he said, or one of his colleagues said, "I
think we are still posing questions about whether the LSCs in
all 47 regions are yet functioning at full throttle in terms of
the strategic overview". My question is, how many of your
47 LSCs are now functioning at full throttle and what has been
the impact of the Strategic Area Reviews on the capacity to plan?
Mr Sanderson: Let me talk about
councils, and then Mark, I can see, is burning to get in, so we
will let him. I think once we get to the executive level it is
working pretty well now. The local council, which is also very
important, it is more patchy, but most of them are working. Some
of them are working exceptionally well; most of them are working
fine. There are about half a dozen or so who still do not have
the strength of local representation that we would want. They
are, though it is very noticeable now, picking up pace a lot,
and that is because we went through the difficult formation phase
and then the planning, which they did not much like, but now we
have got plans and we have, for the most part, got local agreement
to them—the LEAs and all the other people involved—they
are now doing things. So buildings are starting to go up, and
I think several of your constituencies are cases in point, are
a bit iconic and give people something to get hold of. They are
beginning to think they are making a difference, but it is an
imperfect—
Mr Haysom: Yes, inevitably, and
I think Bryan is very generous about the executive side. I would
say that there is still a way to go in a number of areas. I am
not going to answer a question about how many of the 47, because
I am not sure how you measure it. There is a whole range of measurements
there, but I think we are aware that we are on a journey here
of getting the right skills, the right attitudes, the right kind
of strategic capacity, for want of a better expression, across
the whole. What we are also doing, through the new management
structure that we have introduced with the regional presence,
is to make sure we get great consistency of approach across regions.
I think that will enable us to raise the gate. So there is a journey
and there is a way to go. In terms of organisations, the LSC is
only a few years old, and, frankly, coming into the organisation
and seeing its state of readiness now, I am very impressed with
an awful lot of what I see. There are other areas where we have
got a distance to travel.
Q1081 Mr Chaytor: Accepting that,
and understanding why you do not want to name the ones where there
is a longer journey to go, are there particular examples of good
practice? Would you be prepared to name certain LSCs that you
think are functioning at full throttle and are particular there
examples of Strategic Area Reviews that have led to a successful
process of reorganisation locally?
Mr Haysom: Yes, as far as LSCs
that are going full throttle, I am not sure I would use the phrase
"full throttle" in terms of the LSCs that you would
say immediately, "We have got a good track-record. We are
in good shape". I think the ones that you would probably
be familiar with are the West Midlands. Birmingham, Solihull,
that area, would be ones that would immediately leap to mind up
in the North East, across the North East generally actually, but
particularly in the Newcastle area. You would say that was strong.
You would say some areas in the South East in Surrey and Sussex.
There are good examples everywhere. In terms of the Strategic
Area Review process, we should not think that that process has
come to a conclusion anywhere, because it has not, but there are
a number of very interesting things emerging across the country,
and one of the things I think we are getting much better at is
sharing those amongst ourselves and making sure that we are learning
in different areas from different outcomes.
Q1082 Chairman: You have fallen for
the oldest one in the book. Why do MPs never judge a baby competition?
Because you please one mother and alienate all the rest. You should
see the faces around the table; you have not mentioned any of
us!
Mr Haysom: I have deliberately
managed to avoid everyone here. It is an impossible question.
There are some that stand out. It is a fair question.
Q1083 Mr Chaytor: But if generally
things are moving forward, why has it been necessary to create
nine regional LSCs?
Mr Haysom: In order to move it
forward faster. I think we talked about this briefly the last
time I came. I think Bryan would have said that—
Mr Sanderson: I would have had
it in a year before it came, because, to put it bluntly, we had
to respond to the regional agenda and I did not want another layer
of management in—I kept saying that—and I still do
not, but there is certainly a case, and I think, Mark, it is absolutely
right to do it, to make sure that we have a focal point to talk
to each of the RDA's, who may become regional assemblies, of course,
in due course, and we just need to be able to speak with them.
Mr Haysom: There is that aspect,
but there is also a management aspect. One of the things that
I inherited which I think Bryan flagged up to me as utter nonsense,
if it was not before I joined it was as I joined and did not need
flagging to me really, is that I had 55-56 people reporting to
me across the country: 47 local LSCs, seven national directors,
one or two others, some of whom I probably never met. Of course,
if 56 people report to you, no-one reports to you; so we had to
put in a management structure that works, a decision-making group,
a management team, that could take decisions, and that, I think,
is a really convenient fit with the regional structure because
it does exactly what Bryan says, it enables us to play to that
regional agenda and to punch our weight. Frankly, we were not
punching our weight before because, hard as the guys were working,
the executive directors in each of the areas and they were trying
to get joined up between them, as hard as they were doing that,
it was inevitably a fragmented response to the regional presence
somewhere else. We do not have that any more.
Mr Sanderson: Fortunately the
people who legislated the Learning and Skills Council had the
foresight to make LSC boundaries exactly contiguous with the LEAs,
but that would have been a real trouble if it had not.
Q1084 Mr Chaytor: If the votes in
the three regional referenda go against regional government, will
you stick with your present structure?
Mr Sanderson: We need something
to pull it together administratively, so we will think of something
like that, yes. There would still be the RDAs anyway, would there
not?
Q1085 Mr Chaytor: Whether it goes
against regional government or for regional government, do you
think the current model is the right one for the indefinite future,
or do you not feel that if there were at least one or more regional
assemblies come this time next year, then the pressure by the
regional assemblies to absorb your functions will be so intense?
Mr Sanderson: First of all, let
me say a couple of things. I looked at this, and I do not start
from a particularly regional position, nor does anybody from my
part of North East England, but we do have to be very, very careful.
What we have got now is something which works, which has the funding
and which has the accountability, and we must hold on to those
two things. A lot of the debate that is going on now, particularly
in the North West, is talking about bringing this person and that
person in and more consultation and a sort of committee in charge
of skills, and so on. That is fine, consultation is fine, but
inside of that there must be one body, which is the governing
body, which we are, and they must be held accountable for the
outcomes, not some amorphous mass, because it will get locked
and people will just stop moving. So, yes, we must, of course
we must go the way of the regional agenda if that is what happens,
but not at the loss of accountability.
Q1086 Mr Gibb: Bryan, we have been
talking about comparative skills. Can you say something to me
about what skills we do lag behind in?
Mr Sanderson: Of course. First
and foremost, this terrible legacy of basic standard literacy
and numeracy; that has all sorts of ramifications that people
do not necessarily think about. One that comes to mind from my
own background is safety. I have terrible trouble in Germany with
Deutche BP because we have a very high accident rate and we could
not understand why for a very long time, because we said, "We
do everything, put up all the instructions", but then we
discovered that half of the workers in the plant were Turkish.
Did they have the safety instructions up in any language these
guys could read? No, they were all in German, of course. If you
transpose that across the UK, it is very similar for these guys.
If they come into work and there is a big notice on the machine
saying, "Do not put your fingers in here", they do not
read it. There are all sorts of ramifications in every day life.
It is a bit like walking down a street in China and thinking,
"What are all those pretty pictures outside the shops",
whereas if you are Chinese, of course, they say something. We
have got to get away from that. The other two areas I would pick
up: IT is doing reasonably well by international standards, but
there is still much more to do. Perhaps, more importantly, communication
skills—it is rather less tangible. You must have noticed
when you go to the States, for example, there are these college
kids who serve you in restaurants or whatever, and in Holland
also, and they look you in the eye and they give you good service
but they are not deferential, but they have very good communication
skills. We seem to have more trouble in delivering that through
the UK system. That is a bit sort of anecdotal, but I do think
that is a worry.
Mr Haysom: To add to that, again,
last year we did the most enormous survey that I think I have
come across in my life with 72,000 employers being contacted.
We asked them about skills and skills gaps and skills emphasis,
and there is a huge amount of information which we would be delighted
to provide for the Committee, which I suspect it is not valuable
to do today, but one of the really interesting things that came
out of that is that one in five job vacancies in this country
remains unfilled at any given time because of skill shortages.
That is what employers are saying. That suggests that is across
the piste.
Q1087 Mr Gibb: What skills are they
clamouring for?
Mr Haysom: As I say, that is across
the piste. If it is one in five that is saying this, it is a widespread
issue.
Mr Sanderson: That is literacy,
numeracy, IT, communication.
Q1088 Mr Gibb: Do you have a feel
for why we have this problem in basic skills, based on your experience
of industry and at the LSC?
Mr Sanderson: On the literacy
and numeracy, it is changing. The primary education programme
is clearly working and has worked pretty well, and there is a
wave coming through, which unfortunately has not hit us yet, at
about age 14 of improvement, but it is neglect. In some areas
of social deprivation—I am sure you all know this—kids
drop out of school at 12 or 13 and just vanish, lots of them.
Q1089 Mr Gibb: Can I see whether
you think the LSC is necessary?
Mr Sanderson: Do I think it is
necessary?
Q1090 Mr Gibb: Yes. Do we need this
administrative body to administer the funding for the FE colleges?
Mr Sanderson: We do more than
that, of course, but on the old FEFC stuff, the funding, all I
would say on that is that somebody has to do it, and it should
be done efficiently. We have had recent examples of what may happen
if it is not done efficiently in schools, and I would claim, after
getting through opening problems, we do actually administer it
efficiently. The techniques that are used are clumsy and we have
not yet changed it, but we are going to change the way the funding
is delivered and make it much more simple. We thought it was important
to get it right and get the systems right before we did anything
to change it.
Q1091 Mr Gibb: The budget is about
£8 billion?
Mr Sanderson: Somebody would have
to do this.
Mr Haysom: The total budget is
about £8 billion, yes, but that is not FE. FE is about £4.3
billion. I think to build on what Bryan was saying, to think of
our job as being here just to fund FE is actually to reflect it
in a very small way. Our job, I would maintain, is to transform
post-16 education in communities across the country, and so it
is a planning, funding, it is a transformation role; it is to
work with those communities to find the solutions to overcome
the decades of neglect that Bryan spoke about earlier on. That
is what the LSC is all about and that is what we have got to do.
Mr Sanderson: People are obliged
to listen to us and get involved because we have got money, that
is why it is important, and it is a conduit, of course, for you
and for Ministers.
Mr Haysom: In the perfect world
we would not be here. If the world were perfect, we would not
be here. You would have a small organisation handing out the money,
but we know, you have just heard some of the numbers, the world
is not perfect and we are an organisation that is making that
difference.
Q1092 Mr Gibb: Where does the other
£3.7 billion go? What is that spent on?
Mr Haysom: Schools and workplace
systems.
Q1093 Mr Gibb: What is your own admin
cost?
Mr Sanderson: The admin cost as
a percentage is 2.5% of £218 billion. If you were a private
company, anything around 2% is pretty good. It is not easily comparable,
but I am really quite satisfied that it is way down on when we
took over; way down. It is about £80 million a year we are
saving the tax-payer. The other parts of the public sector would
do well to look at this model. I think the RDAs, for example,
are about 7%.
Q1094 Chairman: RDAs are 7%?
Mr Sanderson: Somewhere round
there.
Q1095 Mr Gibb: The transition from
the previous bodies to the LSC, how are the staff managed and
how have the staff adapted? Have you supported the staff?
Mr Haysom: Yes, we have worked
very hard on that. I think it is an extraordinarily difficult
thing, and I think Bryan was a little bit modest on behalf of
the organisation earlier, to bring together the TECs, the FEFC
and all the various cultures, systems and processes and all of
that in a very short time. I think it is a huge achievement. It
has been difficult for the staff, there is no doubt, and there
has been quite a lot of staff change, but there has been a massive
effort to try and support the staff through that. We have shed
a lot of jobs, and we are still in the process of doing that,
because, Bryan is right, we have a good record but we are determined
to get even better and so we are right in middle of a process
of taking 200 jobs out of our national office which, in total,
means that we have taken out 800 jobs in the last year, and there
is still work going on to build on that.
Q1096 Mr Gibb: Are you a good example
in terms of training your staff that other employers can look
at?
Mr Haysom: Yes, I think we are.
Again, one of the things that the organisation set out to do was
to be (I think, a horrible word) an exemplar organisation in terms
of all the practices for the staff, and I think that we have got
a good record and I think we are going to have to get better,
because if we are really to move the organisation ahead in the
way that we have described, and I talk about turning it on its
head so it is facing outwards to employers, really facing outwards
to the local communities, if we are going to do that, we need
higher and higher skills throughout the organisation, so we need
to invest more and more in training.
Q1097 Mr Gibb: What proportion of
your 2.5% are you spending on training?
Mr Haysom: I do not have that
number to hand. I can come back to you with that, if that would
be helpful.
Q1098 Mr Gibb: Finally, have you
got Investors in People?
Mr Haysom: Yes, there was a decision
taken to do that individually across the LSC, and this morning
I was awarding or actually congratulating the team in London East,
the latest LSC to achieve the Investors in People status, and
I was handing them the plaque, and I seem at the moment to be
going around the country doing that to every LSC I come across.
There are still some that are playing catch up in that. The national
office, because we are going through this big change process,
is also a little bit disrupted, but they are all on track now
to achieve it.
Mr Sanderson: And we have had
very close relationships from the start. It is the one educational
thing which nearly every businessman will recognise, and we have
helped their cause a lot. I think I would agree with that.
Chairman: I do not think there is anything
wrong with being an exemplar organisation. We like to think of
this as an exemplar Select Committee, the cre"me de la
cre"me. We pride ourselves on it!
Q1099 Jeff Ennis: Going back to one
of the main problems you have got, Bryan, in terms of reducing
the skills gap, the Government, to try and address this, have
established a number of sector skills councils, which, by all
accounts, are beginning to make a difference in reducing the skills
gap. How does the LSC interface with the sector skills councils
and at what level?
Mr Sanderson: It is another way
of slicing the cake. Some of them are working well—there
are, I think, 23, 24 on the map—some of them are in the
start-up phase. We had all the Chairs, or nearly all of them,
into one of my . . . I have evening sessions with all the councils,
we have an informal chat, and we communicate with them and we
have set up a point of contact with them, have we not?
Mr Haysom: We have indeed, and
one of the things in terms of the changes I was just talking about
to the National Office, we have created what we call a skills
group under the leadership of a new skills director who we appointed
last week, David Way, and David has a team whose main role is
to interface with the various sector skills councils and to work
alongside them as they are developing their needs and to take
that back into the LSC and also to make sure that we can join
up, not just nationally, but also regionally, which I think is
very, very important, in terms of the work that the sector skills
council is doing, and to feed that into the local LSCs as well.
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