Examination of Witnesses (Questions 20-39)
MR DAVID
BELL, MR
MARK HAYSOM
25 JANUARY
2006
Q20 Sarah McCarthy-Fry: Green enterprise
was mentioned very much, and the whole key about green enterprise
is that you have to have flexibility of workforce.
Mr Bell: Absolutely.
Q21 Sarah McCarthy-Fry: It is no
good having one person that can do one thing; they have to be
able to move around.
Mr Bell: It is very interesting.
When employers were asked in this Report about skills shortages,
one can identify particular sectors of the economy, but also employers,
as we know, want more generic skills—the ability to transfer
your knowledge from one area to another and the ability to work
in a team—all those generic skills that are terribly important
to be a flexible employer. That is another important reason why
we do not just look at the investment in level two and level three,
as it were, for 16-plus students and for adults, but we also think
of how to generate those sorts of attributes in the employees
of the future. Therefore, it seems to me that the schools system
has an important contribution to make to ensure that we are preparing
workers of the future to be much more flexible, given that that
is the nature of the economy that they are going to grow up into.
Q22 Angela Browning: Mr Haysom, I
understand that the funding streams from the Learning and Skills
Council for FE colleges reflects the priority that you give to
the types of courses they run. For example, it was recently described
to me as rather like a traffic-light system, and therefore some
of the practical skills in which we have shortages, for example
engineering, would be in the green light, whereas A levels now
appear in the amber light. You are shaking your head, and I am
delighted you are shaking your head. Can you briefly outline how
your funding streams are going to influence the priorities in
FE colleges?
Mr Haysom: We have talked a little
about this on previous occasions, have we not? The way that we
envisage this working, and the way in which it is working to a
greater extent already, and will work even more in the future,
is that we want to be able to take from sector skills councils,
regional skills priorities and local employers as much information
as we can gather about demand. Then we want to sit down and have
a series of intelligent conversations with suppliers, colleges
and others. We want to see where we can get to in terms of shaping
what happens in colleges and other providers against that demand.
There are priorities, as David has clearly outlined and as I have
already referred to. There are some things in the lower priorities
but one is not A levels—absolutely not.
Q23 Angela Browning: There is less
money though, now.
Mr Haysom: No, that is not true;
more and more money has gone into training and education for young
people to the extent that I recall on a previous visit here that
there was quite a lot of questioning about the impact of that—the
growth of funding for young people and the impact then on adults.
It is wrong to say there has been a reduction for young people.
Q24 Angela Browning: I may come back
on that, but I will not delay the Committee on it at the moment.
How do you make sure that what is perceived nationally to be a
skills shortage is really reflected at a local level? I know of
women in their thirties in my own Devon constituency going to
train for midwifery, having previously trained as nurses, only
to find at the end of the day that there are no midwifery vacancies
in Devon. They are unable to move because of family commitments,
and only finding that out at the end of a year's training. How
are you going to marry up what is seen as a national problem or
national skills shortage and really targeting it in local areas?
Mr Haysom: The way we are not
going to do it—if I can come at it from that angle—is
to sit in London or a head office in Coventry and somehow produce
a perfect map of skills shortages and training provision across
the country. That is not the way it works. The way this has to
work is the way I have just described; we have to take all of
those inputs from the national level, the regional level and the
local level, and then to really see how that works in the local
environment; and then to work it through with colleges and other
providers. That does not take you however to a position where
every course that is provided in every college in the land is
going to lead to a positive employment outcome in that location,
because people in Devon may indeed wish to train to be a midwife
and then go elsewhere in the country—
Q25 Angela Browning: They may, but
the problem was family commitments and they were not free to travel.
Mr Bell: There is a question,
is there not, about the initial advice given to the returners?
If it was known that there were not going to be employment opportunities
locally people might have made a different choice.
Q26 Angela Browning: Exactly.
Mr Bell: There is an important
issue there.
Q27 Angela Browning: Mr Bell, you
talked about generic skills, and we are all familiar with what
are basically life skills and interpersonal skills. Many, many
employers say these are lacking, and I quite agree with the role
the schools play. However, yesterday we had an announcement in
the House about welfare reform. Quite clearly, into the market
place will come a lot of people, including people with disabilities
who may never have worked and who will not have the benefit of
the schools having an input; so how will you tackle this problem?
Unless there is a qualification at the end of the course now,
it is very, very difficult to get the funding for people to attend
it. Even young adults with disabilities for the social services
package are having their funding cut, so how are you going to
deal with this group of people as well as the existing people?
We are talking about generic skills that are important in the
workplace, but there is no formal qualification at the end of
it.
Mr Bell: Mark may want to comment
in terms of provision for those with disabilities. A more general
point to make, however, is that in giving people those level two
skills, the platform that I mentioned earlier, that does include
of course development of those more generic skills. In other words,
you are encouraging people to be able to communicate effectively
in such training; you are encouraging people to participate with
others, and to do all those general generic things that are important.
I do not think you should just see getting people to the level
two baseline as simply about a set of knowledge; it is also about
the attributes that one requires to be a productive employee in
the future.
Mr Haysom: I recall that we talked
about this, but there should not be a situation where there is
not suitable provision for all people in communities, with or
without disabilities. If there are examples of provision being
cut that impact on people's disabilities, I need to know about
them. I know that individual courses have changed and that one
provider has stopped provision, and that those people may have
to go somewhere else; but in every single part of the country
there should be a map of provision for people with disabilities.
Q28 Angela Browning: I am particularly
focused on what FE colleges provide in this area, where now social
services are being asked to pick up the element of the package
that people with disabilities were gaining in an FE college; when
of course social services do not have the money in the existing
budget simply to pick up that tab. That is the reality in my constituency.
Mr Haysom: I am not aware of social
services being asked to pick up that tab. I am aware of the opposite
happening: an awful lot of costs previously borne by other parts
of government have over time switched to us to fund. A review
published late last year talks about that aspect of it and about
seeking to redress those sources of funding.
Q29 Angela Browning: I will write
to you on that specifically, but my broader point was that in
the light of yesterday's announcement we do want to see more people
with disabilities getting back into work, but I am also concerned
about people who have never been in work and are being introduced
to the workplace in their twenties and thirties with quite complex
disabilities, particularly in communication. Will the training
needs that will inevitably be needed by employers considering
taking those on, whether it is making them ready for work or whatever,
be in place?
Mr Bell: Colleges have quite a
good story to tell when it comes to working with young people,
and adults with disabilities in fact. I think that the colleges
are well placed to do that. You made a passing comment about employers
being prepared to take those folk on, and that is a more significant
question, because employers are always having to make an assessment
of what is going to be in their interests in terms of the success
of their business; and they may be sceptical, frankly, about taking
some people back, and I do think that that is one of the questions
to be addressed by colleges, to ensure that when they are talking
to local employers they say, "we have been training these
people and they could be productive employees for you in the future".
Q30 Angela Browning: Turning to the
small business, particularly referencing paragraph 28 on page
14, I wanted to talk about the challenges for small businesses
in training. One of the difficulties for really small businesses
is that as they increase the number of people they employ, including
usually the principal in the business, it is critical that people
can multi-skill. Very few people in a small business have the
luck to be doing just one job in the course of a day. Their training
needs are very often to multi-skill the existing workforce, which
may be very small indeed. Are your brokers going to be able to
deal at this micro level; and how will this affect costs? I notice
in the Report, quite rightly, that it says the broker could identify
shared costs between different employers, but are you going to
regard the micro businesses collectively, or will they have individual
assessments of their multi-skilling needs?
Mr Haysom: They all have to have
individual assessments, do they not, because every business is
different and every business needs to be understood? If a broker
is going to be successful, then they truly have to understand
how they can help to make a bottom-line impact to that business,
and therefore have to understand the nature of what could be provided
to make a real difference to that business. If that can be brought
into co-operating with other businesses, so much the better, but
the starting point surely has to be in helping that individual
business?
Q31 Angela Browning: You are not
going to get the economies of scale with this group of people.
Mr Haysom: It is harder, is it
not? That is absolutely the case. This is the group of employers
that is the hardest to reach, and it is the group that most urgently
needs reaching. Again, the learning out of the pilots suggests
that there are ways of achieving that, and we have got some great
examples of us being able to achieve it.
Mr Bell: To reassure you, a lot
of the provision under the employer training pilots was targeted
at the companies with between 1-49 employees, and 70% of those
that participated were in that category. They actually received
more assistance and higher rates of wage compensation. That is
just one example of how the strategies together are trying to
focus particularly on the needs of small businesses. I hope you
will be reassured that we are very sensitive to the particular
needs of small enterprises.
Q32 Kitty Ussher: When I go round
the larger employers in my constituency I am repeatedly told by
the good employers—and I will come back to the bad ones
later—that skills is their main blockage to achieving success;
and that if the Government cared about the future of their business,
then they would help solve that problem for them. What should
I say?
Mr Bell: There is an answer to
some extent in this Report about the wide range of ways in which
government is helping employers to improve the skills base, not
least the sums of substantial money that we have described earlier.
We can say to those employers that we are ensuring that more young
people are coming through the schools system and are hopefully
better prepared to take their place, with higher numbers of them
getting the level two platform and above. We would say that there
is significant investment in making sure that the existing employees
are at least at that level two baseline, because without that
we could say to them that they are going to find it really hard
to compete. We could also say to them at level three: "We
recognise that the real challenge in the future for their company
and for this nation is to invest in the high-level skills".
There is a strong story to tell on the part of government in relation
to each of those different categories of today's employees and
tomorrow's employees.
Mr Haysom: Can I add one thing
to that? We should also say to them that we are trying through
all of this to listen to them, to really understand what employers
are seeking, and to make sure that their voices are heard through
sector skills councils and in all the other ways that David mentioned
earlier; and to shape qualifications that are relevant to people,
to make sure that they are the qualifications that employers want,
and then to fund those qualifications and then not to fund other
things that employers do not want. There is awful lot of really
good activity going on, but it is a huge, huge task, is it not?
That is the other thing that comes through here.
Q33 Kitty Ussher: I do say all of
that, but it comes back to, "How you can help my company
now?" Is the answer in the future that I give them the phone
number of the brokerage guy?
Mr Haysom: Yes, absolutely, because
there will be a national programme which rolls out in two parts
this year, and so there will be this programme called Train to
Gain, and there will be brokers who are there to help them.
Mr Bell: It was very interesting
that the Leitch report talked about the tripartite responsibility
when it comes to skills development. The individual has a responsibility
to contribute to that. The Government has a responsibility if
it wants to create a healthy and competitive economy; but the
business also has a responsibility. I think it would be good to
encourage employers not just to say "what is government going
to do for me?" but to say, "how can you contribute alongside
employees and government to become more competitive?" That
is an important point, just to keep reminding them that the responsibility
is shared across three parties.
Q34 Kitty Ussher: Sure. I wanted
to pick up on the point you made that colleges need demand pressure
on them from employers, but it comes back to the situation that
we need these guys; we need more training; we need skills levels
to rise, to make our economy more prosperous. Skills are the biggest
potential gap in terms of having an effect on productivity. It
is very easy to blame the private sector, but we need the results,
and if they are not doing it we need to solve the problem. I would
say to them, "You should invest because you will reap the
rewards from it"; but what they are saying to me is, "You
have got to make it easier for me". In terms of investment
in fixed capital, the Government provides loan schemes, particularly
in deprived areas, and twenty or thirty years' research has been
done into the type of work that the Government can provide. In
human capital there is absolutely nothing, and employers say this
to me as well. What would your response be to that?
Mr Bell: You say there is nothing.
Q35 Kitty Ussher: You, the Government,
will broker some kind of regional selective assistance type firm-based
public sector support for investment in fixed capital.
Mr Bell: Yes.
Q36 Kitty Ussher: Specifically to
raise productivity; but you will not do it for human capital and
skills and so on, whereas the economic effect is exactly the same.
Mr Bell: We could say that there
is continuing growth in the amount of money that has been invested
in skills development. That is the first thing to say. One would
also then say that part of the conversation with the broker is,
"what does your company need—not just tomorrow but
what might it need in the future?" There is a difference
obviously between long-term capital investment and support for
that, and the human investment, which may well be ongoing but
will depend on particular needs of your workforce at a particular
time. I do not think any of the interventions that we have referred
to or that Mark has referred to are simply one-off; it is about
keeping the needs of the workforce under review and investing
judiciously at the right time. There is no sense in which we would
say this is a one-off, but I do not think that you can quite draw
the parallel with the capital investment, which inevitably has
to be fixed over a longer period of time.
Q37 Kitty Ussher: I am not sure I
would agree with you on that, but we will move on! Lancashire
was a pilot for the employer training. My constituency is in Lancashire;
why do my companies not know anything about it?
Mr Haysom: I find that very difficult
to answer. I do not know which companies you are referring to.
Q38 Kitty Ussher: I would need to
check with them first, but they are large manufacturing firms.
Mr Haysom: I think the statistics
speak for themselves about the number of employers that we have
dealt with—not just private companies but the number of
employers that we have dealt with and the number of employees
that we have helped. If you would like to let me know of any individual
employer, then I will happily look at it.[1]
Q39 Kitty Ussher: How proactive would
the brokers be in terms of reaching out to employers in their
areas? Will they knock on doors asking them what they need?
Mr Haysom: That is very much the
idea. We are going to be targeting their activity, however, at
those employers that are hardest to reach, as we have said before.
There is a target of 50% for their work to reach companies that
are new to training and new to the public sector in particular.
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