Select Committee on Welsh Affairs Minutes of Evidence


Examination of Witnesses (Questions 640 - 643)

WEDNESDAY 28 APRIL 2004

FSB

  Q640  Hywel Williams: In your memorandum you say that the substantial and most critical shortage of skills is arguably one of the greatest problems affecting manufacturing in Wales. What types of skills are most underdeveloped? Are they generic skills or specific skills? I know that Steve Jones referred earlier on to engineering but is there a division there between generic and specific and has there been an improvement or a decline in the last few years?

  Mr Cottam: The common complaint is in areas of basic numeracy and basic literacy. I do not want to overburden you with statistics, but I should say that our annual survey has only just been released, which is quite timely for our purposes, but in the manufacturing sector 43% of manufacturers in Wales stated that they have difficulty in recruiting skilled staff and 40% have had difficulty recruiting unskilled staff. The majority of manufacturers, when asked what are the main problems, actually pointed to basic numeracy and basic literacy skills. We are not necessarily talking about issues surrounding management skills, although that is a problem in terms of getting the grade of managers that we need in Wales to be productive, but basic numeracy and basic literacy are the two that come up again and again and you asked whether that has gone down or up in recent years. Looking over the statistics, as I have over recent years, it has largely stayed the same. We do not seem to be tackling that problem. I am going back possibly 10 years over the statistics I have looked at. Possibly over 30 years there was not so much that issue.

  Q641  Albert Owen: The Government has had policy and implementation pushes in this direction. Can you see any detectable consequences?

  Mr Cottam: It is very difficult to relate that to any consequences that are apparent in the manufacturing sector, I have to say, certainly from my experience. I do not know if any of my colleagues would be able to enlighten you further, but certainly from any statistics that we have it is very difficult to say.

  Mr Jones: I can give you some real life experiences of that, if you wish. Certainly basic skills are a key issue in manufacturing right now. I do not know if it is a Welsh thing or a UK-wide thing. I suspect it is UK-wide, clearly, but there is an acceptance that basic skills have declined. Certainly that has been the evidence in recent times. We have recruited a number of people. We have doubled our workforce in the last four or five months and trying to find people with basic skills of literacy, numeracy and also verbal communication skills is very difficult. I sort of despair at the levels of basic skills in individuals. Yes, there are clearly policies in place. There is a basic skills agency and companies are signing up to promote basic skills, of course, which has to be applauded. It is too soon to comment on the outcome of that, of course, but certainly this is not just my view. We have been involved in the Wales manufacturing steering group in recent times at the Assembly and it is certainly the published view of that group that basic skills are of key concern. There are other skills which are of concern as well, especially in manufacturing where it is also kind of thought by this group that manufacturing has an image problem. It is thought to be dirty, in decline and with no future by the best graduates. Now, we need the best people in manufacturing, the best design engineers. We do not want them going overseas. We need to keep them here and we have to get around this image problem as well. That is clearly an issue for manufacturing companies but it is also an issue for the groups that represent, let us say, manufacturing companies and perhaps the Government as well.

  Ms Sommer: Going back to the timber industry again, there were two focus group meetings held in March. These are manufacturers, very small ones, they are micro-businesses. The meeting was supposed to be about business support and it completely and utterly turned into education and skills problems and what they are saying is that they simply cannot get the skills necessary. These are craftspeople, tool makers, pattern makers. They cannot get the people. They cannot find the course to put them on. We also had representatives from the colleges and the higher education and they said, "Yes, we do have these courses but nobody takes it up." There is a clear gap of understanding between what the private sector wants and what is available in the educational sector. These people do not talk to each other, they do not understand each other, and the result is that you do not get the skilled people in that particular sector. The knock-on effect is that most of these company owners are in their 50s or 60s. They are going to shut down fairly soon. They have got no succession, they have no apprentices, and that has a major knock-on effect on the entire industry. This is small-scale manufacturing but it is the backbone of Wales. It is small companies that hold it up.

  Q642  Julie Morgan: Your submission does not say a lot about sustainable development and I wondered if you had any comments you would like to make about that and whether you see any potential business opportunities in that field?

  Mr Lawson: As for sustainable development, obviously it is something which does not tend to get very high upon a business's agenda. It is just about the business being financially sustainable. But I notice your comments about the opportunities that will come along as we become more aware of sustainability and I think Wales is finding quite a niche which would perhaps be developed within environmental businesses. But looking at it as a more general topic, I do not think any business would really argue with the central idea behind sustainable development, that we should develop ourselves today, but bearing in mind that there are going to be children and grandchildren who are going to come along later. But it does not really help when you bring in blunt instruments such as the Climate Change Levy, for example. We did a survey of our members which found that 45% of them did not even know they were paying the levy, therefore it is not really going to have an impact on the use of the utilities or whatever. The levy is there to charge. I think it really does come back to the point that we can relate it back to manufacturing in the sense that I do not think manufacturers would not particularly object to paying more levies like that if they could see direct benefits, if it is actually going into things like developing your manufacturing processes which are in fact more environmentally friendly. It is a bit like taxing people on petrol. You are not going to get people out of their cars unless there is a viable alternative for them to go to. So they will just keep going in their cars and they will just find cost savings elsewhere in order to do this. So I think I am right in that, am I not, Steve? Unless you actually see the money going into something which is going to benefit this issue you would find it very difficult to hand the money over.

  Mr Jones: I think there could well be a whole industry, let us say, springing up to take advantage of the legislation that comes in here and maybe that is something which could be exported. I know that Corus have an idea on filtering certain emissions in the steel-making process, for example. That was being developed in Wales. Okay, they had some problems funding it locally, which is a shame, but that kind of thing perhaps could become an advantage for us. So it should be looked at in two ways. In terms of disadvantages then clearly if it is going to be another on cost on business to do so I think we have to look again at the level playing field issue. When we are competing with our products against products from other countries should the whole burden of complying with this be on business? That is the question we need to ask.

  Ms Sommer: Could I approach this from a slightly different angle. We are involved in a wood cluster, which means we have found a site where 25 timber-orientated businesses can work and live. That means a combination of dwelling and workshop and the point of that is that is sustainable in many areas because it takes away the commuting between house and workshop. It makes sure that the work should be spread to the capacity and the requirements as it is needed for that particular industry. It creates 25 businesses who can put together their efforts to re-cycle, to use up energy in the best way, to reduce traffic and transport cost, provide local economy jobs and so on. So you can approach sustainable development from another angle than just taxation. It is just a change of thinking.

  Q643  Julie Morgan: Where is that?

  Ms Sommer: It will be in Ynysybwl, hopefully. We have been working on this for three years. It is very difficult to get the public sector to think about a change of attitude towards working and dwelling. I am German, as you hear from my accent. I have always worked in Germany, where I live, or I live where I work. I would not dream of commuting. That is the way it is done. In the UK it is very different. We have these hordes of people getting into their cars every morning or onto the Tube and getting to their workplace and back again. The waste here is tremendous in time, in nerves, in energy and so on. It takes a sea change of attitude here. I have been trying to find a house where we can live and work for three years and I cannot find it because the local authority says, "You cannot work here because you make a noise and you cannot live there because that's an industrial estate." There are other ways of doing it and it is being done in other European countries.

  Julie Morgan: Thank you very much.

  Chairman: I think those are the questions we have got for you today. If there is anything else you think about afterwards, feel free to send us a letter or another submission. Thank you very much indeed for coming.





 
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