Memorandum submitted by The Skills for
Business network
THE SKILLS
FOR BUSINESS
NETWORK
1. The Skills for Business network (SfBn)
consists of 25 Sector Skills Councils (SSCs), supported and funded
by the Sector Skills Development Agency (SSDA). The network was
initiated in 2002 and the final SSC was approved for licence in
November 2005. Our mission is to ensure that the economy is equipped
with the skills to achieve world class business performance by:
— identifying, defining and articulating
employer skill needs within the UK;
— increasing the demand for skills
from employers; and
— influencing governments and learning
delivery partners to ensure those needs are met.
We are building a much needed bridge between
employers and education so that the skills employers really need
can be supplied in real time.
2. The SfBn is employer-led, with employers
leading the network through membership of SSC and SSDA Boards.
Since the first SSC was licensed in 2003, employers have become
steadily more aware of the SfBn. Some eight in 10 employers are
aware of their own SSC in the most mature sectors. Two thirds
of employers having dealings with their own SSCs are satisfied
with the services they received. Over eight out of 10 employers
that had dealings with their SSC report that had had a positive
impact in their sector over the last 12 months. The SfBn is already
the best, and is rapidly becoming the authoritative, provider
of information on the nation's skill needs.
3. The SfBn receives some public funding
to augment that provided by employers to achieve its objectives.
We are part of a governmental response to intensive analysis on
UK productivity which demonstrates that a failure to improve the
skills of the workforce will lead to a decline in global competitiveness.
We take this relationship between skills and productivity as given.
We accept that the exact relationship can, and must, be refined
to prioritise investment in the skill needs of the nation. We
further accept that this is for us to deliver. We are up for this
challenge.
4. Sectors matter. International comparisons
show that most of the overall UK productivity position can be
explained by the relative size of high and low productivity sectors[1].
These variations between sectors strongly suggests that action
needs to be tailored on a sectoral basis to be effective, this
is particularly acute for Small and Medium Sized Enterprises (SMEs)
who rarely have the capacity to negotiate bespoke provision. Sectors
have common areas of interests which will provide a good means
of engaging employers and incentives to change. Sectors are determined
by what the employers produce. They compete for similar customers
and share common occupations and skill needs. They are thus interconnected
by similar economic, competitive and market conditions, technology,
business strategies and ways of working. It is important that
skills and productivity deficits are examined by sector to provide
a basis for action. Sectors differentiation and specialisation
needs to be clearly articulated so that skill demands can be identified
and met and policy solutions sufficiently tailored to optimise
their effectiveness. General solutions (for example setting targets
at a particular qualification level) which do not differentiate
between the actual needs of employers will always be sub-optimal.
EMPLOYERS AND
PROVIDERS: GENERAL
5. One of the problems we face at present
is that employers and educationalists have not got a common language
to express mutual concern. Employers understand markets, pricing,
margins, and supply chain competition. Educationalists understand
teaching, targets, the key stages of the national curriculum,
and the levels of accredited qualifications. It is imperative
for future competitiveness that employers are assisted to articulate
their needs in language that educationalists understand and can
respond to. Equally it is important that the education and training
system is transformed to become part of the supply chain of skills.
It is a primary function of Sector Skills Councils to provide
this translation and set the direction of transformation. Employers
simply want a competent workforce; it is up to the rest of us
to make the skills-delivery system fit for purpose. Again, we
are up for this challenge.
6. We do not accept that there is a natural
conflict between meeting the learning wants of individuals and
the skills needs of employers. For example, in Higher Education,
those courses which are most in demand from potential students
are those that have a predominantly vocational content and intent.
However, there will be major mismatches between the supply and
demand for knowledge and skills if we continue to have a national
purchasing system aimed primarily at meeting the, often ill-informed,
wants of the learner. It is all too easy for teachers and careers
advisors to tread the usual "A-level" path. A better
balance must be struck, by improving the information available
to learners, by incentivising learning which will meet skills
needs, and by clarifying the purpose of the organisations and
institutions which comprise the learning delivery system.
BUILDING LINKS
BETWEEN EMPLOYERS
AND FURTHER
EDUCATION AND
OTHER TRAINING
PROVIDERS
7. The Further Education system (including
provision in other settings) is vitally important to the supply
of skills for the nation. To this end we warmly welcome the Secretary
of State's acceptance of the main conclusion of Sir Andrew Foster's
report: that skills development should be the primary mission
of FE. Our own submission to the review focussed on this as the
single most important issue to be resolved. However, what is vital
is that there is sufficient quality provision to fulfil this economic
objective, whether or not this provision is a Further Education
College is not of prime importance. FE colleges, private training
providers, or new public private partnership arrangements could
all achieve this objective.
8. We need a network of providers whose
identity, purpose and drive is to meet the skill needs of the
local/regional economy which connect effectively with both actual
and potential members of the workforce to meet evolving labour
market needs. And this needs to be developed within a consistent
policy context with clear objectives for all.
9. In locations where the FE sector is assigned
this function, it should be the primary objective of the College.
Funding, from all sources, should be contingent on the extent
to which it achieves this objective.
10. We acknowledge that there are already
a number of initiatives that are moving in the right direction,
and the Skills for Business network is working closely with key
partners (DfES, LSC, QCA and DTI) to help make these initiatives
a resounding success:
— The National Employer Training
Programme (NETP) is the first funded initiative to target
the skills needs of the existing workforce. Given that 73% of
the workforce of 2020 is already employed, this must become an
increasing source of active learners. However, if the programme
is used primarily to meet a general level 2 target (where the
relevance of the learning to a local employer is not the first
concern) the outcomes will be sub-optimal. The success of NETP
will depend on meeting the needs of individuals and employers.
To this end we warmly welcome the level 3 pilots which have a
greater chance of realising this dual purpose. That the provision
supplied under NETP will be contestable and brokered on behalf
of employers will help redress the imbalance between supply and
demand.
— National Skills Academies (NSAs).
Employers are investing in the skills of their workforce (£23.5
billion per annum on best estimate), but in return they want control
of what, when and where the learning takes place. They are looking
for and should expect a return on their investment. The key issue
is why so little of that investment by employers is directed at
public sector providers. Our best estimate is that only 6% of
employer expenditure on training (excluding wage costs) is spent
with public institutions. The conclusion must be that public providers
are not always meeting the needs of employers. This despite the
finding of the LSC Skills Survey that where employers have used
FE colleges satisfaction rates exceed 80%. NSAs are a bold and
genuine opportunity to change the drivers of provision to meet
the needs of employers sector by sector. It is early days yet,
but we take comfort that the four NSAs to start operation in September
this year are being led by the relevant SSC.
— Centres of Vocational Excellence
(CoVE) reassessment. Now that we have completed the SfB network
it is right that the intelligence each SSC has on the needs of
employers is utilised to define provision which meets those needs.
We warmly welcome a reassessment of CoVEs which utilises the strength
of that intelligence. There is good reason to hope that future
CoVE networks (working to the demands of a NSA where present)
will better meet the needs of employers, sector by sector, in
both quality and flexibility of delivery.
— Sector Skills Agreements (SSAs)
are UK wide compacts between employers and the funders and providers
of education and training. SSCs work with employers and key partners
to identify the actions they will take to deliver the skills necessary
to achieve productivity at internationally competitive levels.
The LSC in England has been a particularly active partner and
shown a significant degree of commitment to the process. Where
SSCs have evidenced qualifications of choice and can be specific
about volumes and numbers to be delivered, the LSC have produced
a purchasing strategy which is fed through to providers via the
LSC planning cycle to direct their purchasing for the following
year. The LSC are currently developing this in a regional context
through Regional Skills Partnerships where appropriate, which
will form part of the future SSA regional action plans. The development
of a sectoral provision strategy to bring coherence to the disparate
landscape of FE provision. This will encompass looking at apprenticeship
models, reviewing the CoVE network and the development of Academies.
— Sector Qualification Strategies
(SQSs) are being developed to increase the influence employers
have over the design and delivery of vocational qualifications
across the UK. SSCs and other sector bodies are working with key
partners to define and support the implementation of reforms to
vocational qualifications over the next 5-10 years. The detail
of the work is being finalised, but Sector Qualifications Strategies
should lead to vocational qualifications that support increased
productivity across the UK, by contributing to skill development
in the workforce.
— 14-19 Implementation Plan—ensuring
that by 2013 all 14-19-year-olds can access an entitlement that
covers acquiring and developing functional skills and employability
skills within their mainstream schooling (embedded within GCSEs,
A-levels and the new specialised Diplomas). The 14 specialised
Diplomas are being developed by employer led (through SSCs) partnerships
and will ensure that young people of all abilities can access
a vocational curriculum that will both increase the success rates
for those who are less likely to achieve 5 A-C GCSEs and those
who need more stretching curricula. LLUK is working with the Training
and Development Agency to develop the workforce strategy to support
the implementation of the specialised Diplomas.
— The agenda for change—This
will reshape how the LSC works with the other key players in planning,
funding and supporting colleges and other providers to become
more focussed on "skills for employment". We have a
particular interest in ensuring the SfBn are leading the development
and endorsement of the Quality Mark for colleges. This will ensure
our employers can have confidence in it. The SfBn welcomes the
internal staffing changes in the expectation that this will improve
national sectoral communications and regional coherence. We particularly
welcome the clear statement that LSC will work with LLUK to develop
the skills of the teaching and learning staff and assessors in
colleges and other providers.
11. All this is taking us in the right direction.
And we are well aware that there is much excellent provision out
there, but is still far too patchy. So we know that much more
is needed. We look forward to influencing the Government's formal
response to the Foster report and we hope this will include a
radical programme of renewal giving the nation the providers and
provision it needs.
WORLD CLASS
PROVISION
12. Employers know that if they do not compete
effectively and efficiently, their company dies. The same is not
true of publicly-funded colleges and institutions. The FE system
for the near future must: deliver what employers need; where employers
need; when employers need. To achieve this objective, the Skills
for Business network made a series of recommendations to the Foster
Review. To employers engaged with the network these remain valid.
13. The Skills for Business network continue
to recommend, on behalf of employers:
— That the planning and funding authorities
in the UK are required to ensure that sufficient provision is
available to meet the projected skill requirements of each local
economy, each year, every year;
— That Sector Skills Agreements become
the starting-point for the local planning of provision; that a
comparison between the provision stated in SSAs and that which
is currently available is made in each Local LSC area, this to
identify both needed provision which is not available and provision
which is no longer required; that each Local LSC should work with
its suppliers (including Colleges) to develop a three-year plan
to deliver the skill needs articulated in SSAs;
— Rapid development of "hub and
spoke" Skills Academies so that sector needs drive the nature
and volume of provision, and that all FE Colleges only deliver
curricula endorsed by National Skills Academies (where existent);
— That FE Colleges are made less accountable
to the purchasers of provision and more accountable to the consumers
of provision, by:
— collection and publication of destination
information by College by subject;
— passing the Adult FE budget and NETP
budgets to a system of brokers which access employers and meet
their needs by buying from a range of potential suppliers;
— reduce monopoly suppliers of government-funded
provision by making all supply contestable; and
— by FE colleges having a core fund
to develop and maintain their capacity to respond flexibly and
swiftly to changing demands.
— Greater workplace based provision,
with colleges having the flexibility to deliver into a market
which no longer operates on a 9-5 working week;
— That college success is measured
by the impact they are having on meeting their customers needs,
not through the achievement of targets set by Government Agencies;
— That the new Quality Improvement
Agency (QIA) adopts customer satisfaction as its main criterion
of quality, and establishes programmes which drive-up quality
and performance; and
— That poorly performing FE Colleges
should be allowed to fail, with provision being put to external
tender; and well-performing Colleges should be allowed to succeed
by expansion and increasing the scope of their provision.
DEVELOPING THE
WORKFORCE WITHIN
FE AND OTHER
TRAINING PROVIDERS
14. Because skills are of central importance
to improving productivity, long term economic growth and a fairer
society then equipping the learning and skills workforce to be
world class has to be a major priority. To achieve this specific
objective there is a unique SSC—Lifelong Learning UK—which
is dedicating the skill needs of employers in the education sector.
LLUK will be working with the Department, the Association of Colleges
and others on planning for the workforce within FE and the wider
Learning and Skills sectors to meet the challenges set out by
Foster.
15. The Foster Report is a snapshot in time
and, under "Success for All" and "Equipping our
Teachers for the Future", LLUK are making strides towards
reforming the infrastructure which supports the workforce delivering
learning. These reforms are intended to fully professionalize
the sector whilst recognising the skills of those that work in
it. Particularly:
— Initial Teacher Training;
— Skills for Life workforce;
— Continuing Professional Development;
— Management and Leadership (in partnership
with the Centre of Excellence in Leadership);
— planning for the workforce within
FE and the wider Learning and Skills sectors; and
— standards for the profession (due
for completion in March 2006).
16. These steps, if fully supported through
all the policies that this sector needs to address, will ensure
that those that supply education and training have the world class
workforce that is needed.
CONCLUSION
17. The Skills for Business network warmly
welcomes the opportunity to discuss with the Committee the future
of Further Education in England. There is a growing consensus
that this future must be characterised by increased engagement
with employers and their skill needs. The Government has given
us a job to do—to ensure that the employer voice is known,
articulated and influential in the planning and delivery of skills
provision. We are up for the job.
January 2006
1 Jagger et al (2005) "Sectors Matter:
an International Study of Sector Skills and Productivity".
SSDA Research Report 14. Back
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