Examination of Witnesses (Questions 320-339)
6 JULY 2004
MR MARTIN
HAVENHAND, MR
TOM RIORDAN
AND MR
MARTIN BRIGGS
Q320 Chairman: So a decade behind some
of the most innovative places in Europe?
Mr Briggs: But it is a very different
sort of presence. We deliberately put our presence with PERA—the
Production Engineering & Research Association—which
has had a long presence in those markets, seeking to make successful
supply chain connections for UK markets.
Q321 Chairman: The point at which I am
trying to get—and it is not to put you on the defensive—is
that we are a decade or so behind and we need to catch-up; is
that correct?
Mr Havenhand: From our point of
view, we have only just opened a China office this year, so we
would acknowledge that we are off the pace. What I think it is
important for us to do is to link into the work that has been
done through UK Trade International, so in other words, we are
not creating confusion over there as well. I think we have to
be careful about the development of offices, et cetera, and how
we are seen as the UK in those situations. What we try to do is
to say, which is the region that most relates to what it is we
are doing and where we can offer them in that particular region,
say the Beijing Province, where we can have good export and import
relationships so that we can build up a long-term relationship
both ways. That is why we have chosen that, having done quite
a lot of mapping work. So we may well be off the pace, where you
mention about Rotterdam, et cetera, and what they have
been doing, but I think with the kind of relationship that we
have now built up with China the basis is now starting to be quite
sound, for that trade to start to take place. But we are later
on the scene.
Q322 Mr Mudie: Skills. Why does the level
of skills and workforce qualifications vary so much between different
regions? I think we know that, do we not? Evidence suggests that
staying on rates in post-16 education is a major factor in explaining
the skills difference between the regions. What influence do you,
as RDAs, have on this? We have touched on it, but let us touch
on it a bit closer.
Mr Havenhand: I think the influence
we would say that we have, on the one level is making sure that
we do give opportunities to people to stay on and start to look
at what those opportunities might be. Our concern in the region
has been that most post-16s, 80%, will stay in the region, as
opposed to move out and chase the high technology jobs. So it
is a matter of how can we provide for them within the region in
that situation? So we have been very concerned about the vocational
aspects as opposed just to the staying on levels at universities,
which we think are moving in that right direction. So we are getting
the numbers there but it is making the differential between those
people who are always going to be in the workforce within our
region, as opposed to being more mobile.
Q323 Mr Mudie: I thought you recovered
very well there, but let us take it this way: do the regions—and
you talk in terms of the "other regions"—all have
proactive policies in terms of increasing the staying on rate
post-16? It is a bit unfortunate that I hale from Yorkshire, but
I do not see, in Leeds, for example, what influence you have over
education. I have never seen any evidence of a dialogue. I am
not sure what evidence I have seen working with the Skills and
Learning Council on that particular thing. I am asking you, as
Regional Development Agencies, do you specifically—because
this is seen as key—have proactive policies, a range of
strategies and tactics to keep youngsters, whatever their interests,
in education post-16?
Mr Havenhand: I would say in our
region that we do not have a specific policy that relates to the
education services within the region. The health policies are
all related to the role of the Learning and Skills Council on
the 14 to 19 agenda.
Q324 Mr Mudie: As we have said, and as
Tom has said, the Learning and Skills Councils get their orders
from someone else and not usually with a regional bias to it,
so they are reading from a different hymn sheet, and this is the
opportunity for you to put your stamp on it. It just does not
exist—early days, yes?
Mr Briggs: We are engaged but
we often feel that the margins are there. It divides into raising
ambitions and aspirations, and we have put a lot into a campaign,
Get into Learning and Get On, for example.
Q325 Mr Mudie: I say you are doing nothing
about it, but it is limited, and that is not your fault. The other
thing has to be an area where you must have more input, but I
am not sure I have seen it, is in workforce training, what proactive
policies—and we are interested in the difference between
the East Midlands and Yorkshire in terms of how do they differ
between the two areas?
Mr Riordan: I think in terms of
proactive policies on workforce training we have put significant
resources in, much bigger than we used to get when we were allocated
the 13 different funding streams on skills. We have had an investment
of £74 million on our clusters to have customised training
for the businesses and the people in them. We have also funded
workplace learning representatives through the Unions, that have
worked very effectively in stimulating for demand for learning
from individuals on the shop floor, if you like. So we do have
good examples of that. We have also done a lot of strategic work
with another horrendous acronym, the Frameworks for Regional Employment
and Skills Action, something that we were asked to produce three
years ago, that has set some priorities on workforce training.
So I think things are starting to happen. The difference, I think,
goes back to the cluster policy, and I would make two points.
One is that we do not have the resources, the staff or the money
to deal with every element of workforce training; we have to put
our money where it has the greatest leverage, and that is with
the clusters. The second point I would make is—and it is
not really on our agenda—I met a head teacher the other
day and I was talking to her about the potential as to how we
better link up with the head teachers in the region. She was saying
that she has 17 different people to account to, and I think we
have to be careful about coming in and being the 18th and making
things even more complicated for the schools. So we have to work
through others to help rationalise for the poor head teacher or
teacher on the ground.
Q326 Mr Mudie: Tom, do you have a sectoral
economic initiative for the various areas in Yorkshire, wherein
you are talking to people in engineering and you are talking to
people in retail, et cetera, what they are in for? Or does anybody
do it?
Mr Riordan: We do. We work through
Education Business Partnerships to try and link in business to
schools and to make school children see traditional industries
in a more effective way.
Q327 Mr Mudie: We have left the youngsters
now and I am talking about a workforce. We are talking about competitiveness,
we are talking about surviving. One of the things we know is that
there is a very great number of people without appropriate levels
of qualification and once they are in a job they are just in a
job and nobody takes the initiative in terms of training. What
partnerships do you have operating in either of your areas where
economic sectors can be proactive in persuading firms to give
time off, to gain skills, et cetera?
Mr Havenhand: I think the key
one for us is the Engineering Employers Federation within the
region, with whom we have a very close working relationship, who
do have networks and, indeed, contracts with each of the Learning
and Skills Councils, specific to the kind of manufacturing and
engineering aspects. In addition to that—but only more recently,
so I cannot say it has been going for a long time—the Sector
Skills Councils are starting to find their feet and now starting
to put skills at the heart of their work. So they are now playing-in
in a better way than they had previously, of actually articulating
those industries' needs, and that is having a direct impact on
the Learning and Skills Councils.
Q328 Mr Mudie: If I am going to get some
people who are economically inactive in my patch into work it
is clearly going to be at the lower skill level, initially. That
needs employers with people in work to be very active in terms
of promoting people and encouraging from the shop floor up. Does
the lass on the till want to stay on the till all the time? We
will skill her and help her, et cetera. Do either of you
have initiatives going to move the workforce up to let those individuals
into the workforce?
Mr Riordan: I think the initiative
that is coming out in West Yorkshire, which will help your patch,
is the Employer Training Pilot, which has just been extended,
which gives customised training for what the employer wants, on
the shop floor, rather than it all being supply led. That will
make a difference.
Mr Briggs: You get a bit scared
to talk about this because the acronyms come tumbling out, but
the Regional Skills Partnerships are really at the heart of this,
if they work. We know they have only been in place a few months,
but the aim of those is to brigade all of these different bits
of furniture—the Employer Training Pilots, and the Sector
Skills Council we have talked about—to connect them into
a few of what the regional economic strategy requires in terms
of uplift for education and skills. The dilemma with them all
is that actually the conversations are much better than if we
had been talking about this three years ago, but the crunch is
going to come in whether those conversations really deliver the
programmes that support the ambitions you have, and I think that
is the message that has been implied through all of this discussion:
do we actually have the levers to deliver on the agreed objectives
that we set?
Q329 Mr Mudie: Your partners have to
come to the table with the flexibility to agree something with
that which will be acceptable back home.
Mr Havenhand: Absolutely, and
that is really the shift that has actually happened. If I could
mention the Job Centre Plus? Over the last 12 months, with changing
senior management, there has been a real directive given out to
regional directors about them playing a proper role and more effective
role of integrating their services into what is happening locally
with the Regional Economic Strategies and the Learning and Skills
Councils. So I think out of those we will start to address some
of the points that Mr Mudie has made in more local areas.
Q330 Chairman: I will go on to the area
of entrepreneurship, and if you could give me relatively brief
answers on this. How would you characterise the Government's approach
to enterprise policy? What changes should it make to the multitude
of initiatives, which are aimed at encouraging entrepreneurship?
Tom made the point about meeting a head teacher recently. Schools
all over the area now have this responsibility, and again it seems
another area where there are going to be lots of crevices and
we are not going to get a coherent, joined up approach.
Mr Havenhand: Just very quickly
on the young people item. Young Enterprise has been around for
a long time, but in our particular region we have started to make
major investment into spreading that concept of young enterprise
in all the secondary schools.
Q331 Chairman: It is becoming institutionalised
in schools now, promoting posts and entrepreneurship, that is
what I mean by that.
Mr Havenhand: We are putting funds
in to help support that.
Mr Briggs: There are three elements
that need to be picked out here. There is the question of raising
ambitions and aspirations, which I referred to earlier on, but
it is particularly important in encouraging people to think in
terms of what is possible in terms of self-employment and enterprise.
I speak with some personal experience because my children have
been going to a university in the UK, while my brother's children
have been going to a university in Boston for the last five years.
It has been a very interesting experience and it has been very
difficult to compare institutions directly, but fully one-half
of the people going through college with my nephew have been thinking
in terms of self-employment, often in arenas like physiotherapy,
for example, where it would never cross people's minds here. With
the equivalent numbers in the UK you are looking at about 15%
to 20% maximum, and certainly I have seen that with my own children's
experience. That is partly about ambitions and aspirations. We
have a major campaign that we have run for several years now,
with partners in the region, New Business—New Life.
A cold, February weekend at Castle Donnington bringing together
real life entrepreneurs, people who have done it and got plenty
of the scars to prove it, with people who want to or are thinking
in terms of, "Yes, I would like to run my own business, I
would like to go in that direction." That is what works;
no amount of preaching from us or any other party will do the
trick. Secondly—and this is national rather than regional—the
framework of regulation. It does make a big difference, how difficult
it is to start and run your own business. We do see part of our
dialogue with Government on feeding back on issues which are clearly
issues of national policy, but where Regional Economic Strategies
throw up particular views of what needs to be done. So we do that
as part of the dialogue. Thirdly—and only thirdly, but it
is important—we come back to the business support infrastructure.
We have talked already about Young Enterprise. There are other
programmes. We have a Women in Enterprise Programme; we are working
with the Treasury closely on Enterprise Insight, and we know that
it is pretty much at the heart of Gordon Brown's view of a fundamental
supply shift that we need. Last week he launched an Enterprise
in Britain Campaign, which seeks to identify the areas of each
region and then the areas that are putting most effort into promoting
enterprise.
Q332 Chairman: Presumably you would want
the DTI to be the lead department, would you?
Mr Briggs: I would like to see
it as a shared objective; I think it has to be more than just
DTI. I am particularly pleased by the Chancellor's own close association
with it, which I think makes a lot of difference.
Q333 Chairman: The DTI and Treasury.
Minority groups, under-represented groups such as young people,
ethnic minorities and the unemployed, what action are you taking
in these areas to encourage entrepreneurship?
Mr Havenhand: In our particular
cases we have had a range of enterprise shows and we have targeted
particular groupings to start to address some of those problems.
We are also working with a number of Afro-Caribbean and Asian
organisations, looking at ways in which we can stimulate their
involvement in it as well. Again, linking, as Martin was saying,
these role models to show how it can in fact be done.
Mr Briggs: That, I think, is where
at a regional and local level you do need to do things differently.
We have a Minority Enterprise Network, but, frankly, the challenge
in Leicester is very different from the challenge in Derby or
the challenge in the former coalfields. So our job is to work
particularly with local interests to make sure that we are targeting
the particular pattern of local economies.
Q334 Chairman: Why did you describe business
support services at the local level as being—in your words—"overly
supply driven with insufficient attention to customer needs",
which gave rise—again in your own words—to a "tendency
to re-invent the wheel rather than focusing on what is already
in place and learning lessons"? What should the Government
do to address these concerns at a local and national level?
Mr Briggs: Let me not tread in
too clodhopping a form into the debate about choice and how you
give consumers of services an opportunity to register the choices
they have made. I simply say in relation to business support that
you can summarise what has been said there, that, by and large,
individual customers, ie small businesses themselves, do not have
the opportunity through their direct spending power to influence
the sort of services that are provided or, indeed, the quality
of those services. Our job is to try and work with small business
organisations and small businesses to try to make sure that it
is more genuinely demand driven. What we are not about with business
support services, of course, is creating a welfare state for small
business support. I think it is about the market failure, oft
advertised, about failures in information flows and communications.
But what we seek to do—and I am sure Martin and other RDAs
as well—is to make sure that there is an effectively functioning
market for business services, that draws people in, demonstrates
to small businesses the value that they can achieve from that
advice in improving their business, but does not try to pretend
to them that that comes cost free. It is an input to their business
just in the same way that capital equipment is.
Q335 Chairman: Martin [Briggs] the East
Midlands was one of the pilot areas for the programme of devolved
RDA-led business link services. What benefits did the programme
result in?
Mr Briggs: We are round about
two-thirds of the way through that now and, fortunately, as you
will know, the Chancellor announced back in March that that is
to be extended to all regions from April 2005. The main difference
we have made is to try and attack that demand issue. We have put
into place a Business Support Board at the regional level, which
is dominated by small business interests, and its job is to make
sure that all of the money that is spent on business support services
is delivered efficiently and is delivered to customer needs. There
is a great deal of information I could supply to the Committee
if you wanted it, on how we are doing that, but that is fundamentally
what we are seeking to demonstrate.
Q336 Chairman: What are the advantages
of RDAs taking responsibility for these areas? What are your key
priorities for action?
Mr Briggs: I would make two comments
briefly. First of all, the whole theme of what we have described
this morning is to say that regional variations in economic structure
are important and they need to be recognised in the way in which
services are delivered. So we do not believe that a national,
homogenous approach can possibly work. Secondly, coming back to
this theme that has been here throughout, it is not about silos
of support; business support can only make sense if you interconnect
it with skills and education work, if you are connecting it across
to innovation work, technology transfer. We believe that RDAs
and the Regional Economic Strategies are the mechanism by which
you connect all of that up; otherwise you are bound to have under
performing programmes, however well intentioned.
Mr Havenhand: I would like to
add that we would have to make sure that business links are not
competitors in the business support arena, that we have their
role perfectly. It is about acting as a broker to access the most
appropriate business support for the companies' needs.
Q337 Chairman: Martin Briggs, we are
told that the East Midlands has 400 business support organisations.
Martin, how many do you think there are in your area?
Mr Havenhand: We have said over
250.
Q338 Chairman: A simple question: how
many business support organisations would you like to see in the
East Midlands, and also in your area, Martin [Briggs]?
Mr Briggs: If they are commercial
I do not care how many because the market will determine. What
I want to reduce is the number of largely public funded organisations,
and our aim is to make sure that through some Regional Partnerships
and our Business Link Network—
Q339 Chairman: So how many public ones
do you have in your area?
Mr Briggs: As of now we probably
have not all of those 400—that 400 is about three years'
old—I think we are down to something around the 100 or so;
but actually what we are aiming for is a network that only has
at the sub-regional level one main point of contact.
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