Memorandum submitted by the Chartered
Management Institute
1. EXECUTIVE
SUMMARY
1.1 The Chartered Management Institute welcomes
the opportunity to submit written evidence to the Committee as
part of its inquiry into Post-16 Skills. Following the publication
of the Leitch Report in December 2006, the Institute believes
that this inquiry will make an important and timely contribution
to Government policy.
1.2 The challenges of global competition,
demographic imperatives and moves towards a demand-led system
as described in the Leitch Report, provide a new context for the
UK's skills policy where a greater focus is now on adult skills
with targets for higher level skills that will drive our national
competitiveness.
1.3 Despite a move in the right direction,
unless Government prioritises management skills for current and
future leaders, there is a real danger that we will not be making
the right management decisions to improve UK's international competitiveness.
It is, after all, the skills and capabilities of those individuals
who are leading organisations that determine how people are employed
and whether resources are invested effectively.
1.4 This memorandum presents some of the
key evidence to demonstrate how management skills have a significant
impact on productivity and competitiveness; innovation; public
sector performance; and the quality of working environments.
1.5 Given this strategic importance of management
skills, the UK's management population is significantly under
qualified: under 40% of managers are qualified to Level 4 or above
compared to 80% of those in other professional occupations. This
is also reflected in employers reporting deficiencies in management
skills and the high failure rate of SMEs.
1.6 In reforming the supply side, the professional
bodies must be acknowledged and accessed as a source of high quality
learning and development, best practice and applied skills as
part of the National Employer Training Programme.
1.7 In moving towards a demand-led skills
system, a key incentive is to ensure that funding streams are
re-routed direct through employers and employees. The proposed
New Learner Accounts will help drive individual's learning aspirations.
To further create a demand-led environment, the Committee should
consider the benefits of recommending new targets for the qualifications
of managers.
1.8 In order for the Government to better
stimulate demand for improved management and leadership skills,
the Institute submits the following six policy recommendations
for the Education and Skills Select Committee:
POLICY RECOMMENDATIONS
FOR POST-16
SKILLS TRAINING
— By 2020, at least 50% of managers
should be qualified in management to Level 4 or higher (para 9.1.3)
— Chartered professional bodies should
be acknowledged as a source of high quality learning and development
in their specific fields and targets for professional qualifications
should be included as part of the National Employer Training Programme
("Train to Gain") and other Government skills initiatives
(para 6.1)
— Chartered Manager should be established
by 2015 as a benchmark against which employers and Government
can recognise and measure professional management capability (para
5.2.1)
— Funding for individual learners beyond
the age of 25 should be used to stimulate greater involvement
in adult education. The new Learner Accounts should be implemented
to encourage adults to continue to participate in learning (para
7.3)
— The Qualifications and Credit Framework
should provide a clear credit framework to give both employers
and learners better understanding and greater confidence in the
value of qualifications and learning. The new Framework should
facilitate progression routes across vocational, academic and
professional education and across all sectors and occupations
(para 9.2.7)
— A lead partnership should be formally
recognised to develop standards on Human Capital Management reporting
for inclusion in the Business Review of Annual Reports (para 5.3.1).
2. INTRODUCTION
2.1 The Chartered Management Institute is
keen to support the new policy focus promised by the Leitch Review
of Skills to target the development of higher level and intermediate
skills. These will be essential if the UK is to prosper in the
face of the combined pressures of international competition, a
changing demographic profile and the demands of the knowledge
economy.
2.2 The productivity gap between the UK
and other leading nations has proved an intractable issue for
successive governments. Up to 20% of that gap is now attributed
to skills provision and up to 15% to management practices. The
national skills strategy has led to several significant initiatives:
modern apprenticeships, new vocational 14-19 years diplomas together
with the support infrastructure of LSCs, RDAs and SSCs. It has
however neglected to recognise and harness the considerable resource
provided by the professional bodies.
2.3 Some of the Chartered Institutes are
already working closely with Government Departments and Agencies
in the development of the National Occupational Standards for
their disciplines. Their access and close working relationship
with many thousands of practising executives is invaluable in
ensuring that skills development is based on the real challenges
of the industry sector and on the needs of employers. It is a
model of partnership that should be extended more widely. Instead
we see duplication of effort within the new structures and a failure
to draw on the knowledge, best practice and expertise that already
exists within professional bodies.
2.4 We believe that the Government must
focus on those higher level professional skills that in their
practical application will have the greatest impact on both performance
and also on leveraging the rest of the skills agenda. Professional
managers play an essential role in developing strategies for workforce
development. A great number of highly qualified managers are more
likely to ensure that their teams are adequately trained and can
help to embed a culture of learning and development that helps
drive performance. The evidence provided in this memorandum also
reflects on the critical importance of management and leadership
in terms of productivity, competitiveness, innovation levels,
the success of business start-ups, the quality of the working
environment and delivery of the public sector reforms.
3. BACKGROUND: THE
CHARTERED MANAGEMENT
INSTITUTE
3.1 The Institute strongly supports the
Leitch Report's recognition of the high levels of demand for management
skills and the growing evidence base demonstrating the strong
links between the impact of management skills and increased national
competitiveness. We look forward to seeing this fully reflected
in the Government's response to the final recommendations.
3.2 However, we are concerned that the Leitch
analysis does not fully accept the pivotal role of management
in driving improved performance. As the Cabinet Office Performance
and Innovation Unit's 2001 Report on workforce development concluded,
demand for skills is derived from wider management strategies,
and these therefore need to change if we are to successfully make
the transition to a high skills, high added-value economy.
3.3 In developing this Memorandum, the Institute
has used the findings of its detailed research programme into
management and leadership skills. Our research has been carried
out among the Institute's 71,000 members throughout the past two
decades and more.
3.4 The Institute contributed to the work
of the Council for Excellence in Management and Leadership (CEML)
between 2000 and 2002, helping to provide a thorough analysis
of the multiple factors shaping management capability in the UK.
It also presented a comprehensive and useful set of recommendations,
many of which have already been implemented. The Institute continues
to work with both the DfES and DTI to advise their joint Leadership
and Management Programme Board.
3.5 Through the Management Standards Centre
(MSC), the Institute is appointed by Government (QCA, DfES, SSDA)
as the Standards Setting Body for Management and Leadership. The
MSC sets and maintains the National Occupational Standards on
Management and Leadership, which is a national source of guidance
for all those working in management.
3.6 A further significant factor that distinguishes
the Institute's submission is our strong engagement with employers
across all sectors. Our members are employed at all levels within
business and public sector organisations and through the practical
application of their management skills have a major impact not
only on performance and productivity but also on the development
of the skills of others to develop the capabilities for the future.
3.7 Our qualifications span all levels of
learning from Level 2 through to postgraduate and our membership
criteria demands evidence of practical experience, impact in the
workplace and a commitment to professional management. Our continuing
professional development programme makes lifelong learning a reality
for our members.
3.8 We believe that it is essential that
the next phase of the Government skills strategy addresses the
need to improve management capability and upskill managers in
the workplace. In this Memorandum, we set out both the evidence
base and policy recommendations for management skills to help
deliver this ambition.
4. CONTEXT
4.1 Overview of Leitch Recommendations
4.1.1 The Chartered Management Institute
welcomed the Leitch recommendations for a much greater focus on
higher-level "economically valuable skills", but was
concerned that the Review failed to recognise the critical value
of management and leadership skills. To achieve an economy based
on world class skills, UK employers will need to address critical
leadership skills across all sectors. A gradual increase in demand-led
investment and a further reorganisation of the skills agencies
is unlikely to stimulate change at the pace required to respond
to global changes.
4.1.2 Despite a move in the right direction,
unless Government prioritises management skills for current and
future leaders, there is a real danger that we will not be making
the right management decisions to improve UK's international competitiveness.
It is the skills and capabilities of those individuals who are
leading organisations that determine how people are employed and
whether resources are invested effectively.
4.1.3 The Leitch Report does recognise the
changing demographic drivers. Its focus on adult skills reflects
that 70% of the workforce in 2020 has already left compulsory
education.
4.1.4 The report recommended new targets
for higher level skills, shifting the balance of intermediate
skills from Level 2 to Level 3 and improving the esteem, quantity
and quality of intermediate skills. This would mean 1.9 million
additional Level 3 attainments over the period and boosting the
number of Apprentices to 500,000 a year, which would significantly
improve future workforce capability.
4.1.5 In order to make the impact required,
Leitch called for 40% of adults to be qualified to Level 4 and
above, up from 29% in 2005, with a commitment to continue progression.
We recognise that this goes some way towards the Institute's proposed
target that by 2020, at least 50% of managers should be qualified
in management to level 4 or higher. It is important that investment
in Level 4 focuses on those skills most needed by employers, and
prioritises management skills.
4.1.6 The skills system must meet the needs
of individuals and employers which will be better achieved through
moves towards a demand-led system. The Institute had called for
funding for individual adult learners to help stimulate a demand-led
skills system, and strongly endorses the focus on Learner Accounts
and looks forward to further detail on the practical delivery
of these Accounts.
4.1.7 Despite a move in the right direction,
unless Government prioritises management skills for current and
future leaders, there is a real danger that we will not be making
the right management decisions to improve UK's international competitiveness.
It is, after all, the skills and capabilities of those individuals
who are leading organisations that determine how people are employed
and whether resources are invested effectively.
4.2 The importance of management and leadership
skills
4.2.1 Impact on productivity and UK competitiveness
Leadership and management is proven as the key
to raising financial performance and growing of employment opportunities
in all organisations. Good leaders and managers invest in the
development of their workforce thus pulling through the skills
agenda and embedding a learning culture for future generations
and sustaining the UK's competitiveness in the longer term.
4.2.2 Research based on longitudinal data
and published by the Chartered Management Institute (Management
Development Works: The Evidence, Dr Chris Mabey, 2005; Achieving
Management Excellence, Christopher Mabey and Andrew Thomson,
2000) indicates that those employers who take responsibility for
management and leadership development experience better overall
organisational performance over a four year period. The research
shows that companies that provide training which is aligned to
the organisation's strategic business needs benefit most strongly.
4.2.3 The Final Leitch Report assessed the
productivity gap between the UK and its international competitors
and highlighted the UK's shortcomings (Leitch Report: Executive
Summary—para 8, p7). Productivity in the UK stills lags
behind that of comparator nations: the average French worker produces
20% more per hour than the average UK worker, the average German
worker 13% more and the average US worker 18% more. Differences
in management practices between the USA and the UK, for example,
explain 10-15% of the productivity gap in manufacturing between
the two countries (LSE-McKinsey, June 2005).
4.2.4 Links to driving innovation
Innovation is identified by the Treasury as
"a key catalyst for productivity growth"—and the
importance of management and leadership to innovation has long
been established. Professor Michael Porter's review in 2002 of
the government's work on productivity concluded that UK companies
will have to compete on "more unique and more innovative
products and services", which will "require changes
in management behaviour". He found that while the returns
from deregulation are diminishing, a focus on improvements in
management and leadership would produce far greater returns. He
concluded:
"To achieve higher prosperity, UK companies
will need to upgrade their productivity by competing on more unique
and more innovative products and services. This will require changes
in management behaviour; targeted investments in the business
environment and the development and strengthening of new types
of institutions."
4.2.5 The Department for Education and Skills'
research paper, "Managerial Qualifications and Organisational
Performance" (Bosworth, Davies and Wilson, 2002), identified
the following key findings:
— Highly qualified managers are more
innovative. They appear more likely to adopt strategies introducing
new, higher quality products and improving the quality of existing
products, while less qualified managers are more likely to be
engaged in increasing the efficiency of the production of existing
products and services;
— Better qualified managers are associated
with a better qualified workforce;
— Management proficiency and performance
appear to be positively linked (although this is a two-way relationship).
4.2.6 It is disappointing that despite evidence
of the links between better qualified managers and higher levels
of innovation, research into process innovation in manufacturing,
conducted at the ESRC Centre for Organisation and Innovation (COI)
and the Institute of Work Psychology (IWP) at the University of
Sheffield, and summarised for the TUC-CBI Productivity Challenge
(2001), raised concerns about UK managers' skills in that:
— UK companies had a comparatively
low rate of adoption of new practices;
— UK companies preferred new practices
relating to technology and techniques over "people practices";
— UK companies had adopted fewer new
practices than their counterparts abroad.
4.2.7 Public Sector Efficiency
Professional management and leadership is also essential
for improving public sector and efficiency. The Cabinet Office's
Professional Skills for Government programme has recognised this.
Better skilled managers will be better able to deliver the performance
needed from the public sector, in achieving greater outputs and
more efficient services.
4.2.8 Reflecting that more needs to be done,
Chartered Management Institute research published in 2003 (Leading
Change in the Public Sector, Charlesworth, Cook and Crozier,
May 2003) showed that only about 30% of public sector managers
saw key attributes demonstrated by leaders in their organisations.
Only 33% viewed their most senior team as offering high quality
leadership, and key change management skills were found to be
lacking. For instance, under 50% recognised partnership working
as a key public leadership skill.
4.2.9 Skilled managers improve quality of
working life
Properly qualified, professional managers will
be better equipped to respond to growing demands for flexible
working and new working arrangements, as the Government continues
to introduce reforms and new workplace rights. Recent research
published by the Institute (The Quality of Working Life: Managers'
health and well-being, Worrall and Cooper, March 2006) demonstrates
a link between poor management performance and both low productivity
and high reported levels of workplace ill-health. Good management
can reduce these stress factors and thereby drive higher productivity,
and lower costs and social benefits through decreased absence
levels.
4.3 Management and leadership: evidence of
a skills gap
4.3.1 Lack of management qualifications
The management population is significantly under-qualified,
as recognised in Leitch's Interim Report: "41% of managers
hold below a Level 2 qualification" (Box 5.1). Furthermore,
Labour Force Survey data (March-May 2002) indicates that just
38.5% of managers and senior officials are qualified at NVQ Level
4 or above compared to 80.9% of those in professional occupations.
This level should be viewed as untenable given the UK's ambition
to shift to a high skills, high added-value economy.
4.3.2 However, the Leitch analysis did not
go on to identify the additional point that most managers lack
qualifications related to their profession as managers. Too many
remain what can be termed "accidental managers"—highly
skilled specialists or technicians who are promoted to management
positions on the basis of their technical or specialist skills,
not because of their suitability for a management role.
4.3.3 The Final Report of the Council for
Excellence in Management and Leadership (2001) concluded that
on a "rough estimate ... the proportion of managers with
management related qualifications will not get much above 20%
in the longer term". This estimated level of only 20% of
managers being qualified is unacceptable given that it already
takes into account both a strong growth in specific management
qualifications, such as a 20% growth in first degrees in business
and management studies, and also the fact that the number of management
NVQs has remained fairly static.
4.3.4 Employers reporting deficiencies
The Council for Excellence in Management and
Leadership between 2000 and 2002 was tasked by the DTI/DfES to
develop a strategy for improving future management and leadership
performance. CEML's final report, highlighted the need to address
management weaknesses that are in part responsible for holding
back innovation, productivity and performance.
4.3.5 The common estimate is that between
4 and 4.5 million individuals in the UK have significant management
responsibilities, yet 36% of organisations report that their managers
are not proficient. It is noted that the current low level of
skills in the workplace is part of the reason for why employers
are not moving to higher value added business strategies, but
other significant contributing factors are the combination of
low employer ambition and management skill deficiency.
4.3.6 Falling behind our competitors
The 2006 UK Productivity and Competitiveness
Indicators published by the DTI (March 2006) show that UK managers
are perceived to lag their colleagues in France, Germany and the
US in terms of "management quality", this is according
to the latest survey by the International Institute for Management
Development (IMD). These results are consistent with the CEP/McKinsey
study (2005) which finds that UK manufacturing firms perform less
well in terms of overall management practice, including talent
management and performance management, compared to their international
counterparts.
4.3.7 High failure rate of SMEs
The need for better management skills is highlighted
by the failure of start-ups and SMEs. The Association of Business
Recovery Professionals has shown that poor management is the main
reason for business failure, behind loss of market. It says there
is "an argument" that as many as "six out of 10
insolvencies are management's fault". This must be a priority
area to address; particularly as small businesses are known to
carry out less training. (Corporate Insolvency in the UK—12th
Survey, Association of Business Recovery Professionals, 2004).
In the UK as a whole SMEs account for over half of employment
(58.7%, making this is an important area for tackling the urgent
need for a step change in management and leadership capability.
4.4 UK's Management Skills Profile: future
demand
4.4.1 Management: a growing profession
There are currently 4.6 million managers in
the UK (Working Futures 2004-14). This is a higher number
than previously estimated, indicating a larger employment share
for managers and senior officials—of 15.3%. They now comprise
the largest occupational group in the working population, and
the management population is forecast to grow by a further 617,000
by 2014 alone. Given the growing recognition of the need for skilled
managers and leaders, this growth is expected to be at a greater
rate than previously anticipated. Leitch's Report's acknowledged
this trend. Current and future skills policy must take account
of this and address how this section of the working population
can be helped to develop the specific work-oriented management
skills necessary for success.
4.4.2 As explored by the Leitch Review in
Chapter 3 of the Interim Report, the UK's management population
will face major replacement demands due to demographic change.
This makes it imperative that skills policy helps develop workplace
skills throughout working life. Since around 70% of the workforce
of 2020 has already completed compulsory education, and high exit
levels will be experienced due to factors such as retirement,
it is important that people already in employment or in junior
management posts are supported to develop their skills and competencies,
so that they can progress their management careers.
4.4.3 Sectoral priorities
All the emerging Sector Skills Agreements developed
by the Sector Skills Councils highlight the need for management
and leadership skills. It is recognised that variations in demand
for management skills do exist between sectors, and that those
sectors were economic growth is high, also have the highest demand
for management skills. A report prepared by Bosworth and Wilson
for the SSDA offers the most comprehensive assessment. ("Sectoral
Management Priorities: Management Skills and Capabilities",
Bosworth & Wilson, January 2005).
4.4.4 Using data from the 2004 Working
Futures report, they suggest that the most dramatic need for
managers will be in the computing services sector, followed by
professional services. A total of seven other sectors are expected
to see total demand grow by 50% or more, as indicated in the table
below. Even in textiles and clothing, the positive replacement
demand exceeds the negative net growth of the sector.
5. MEASURES TO
ASSESS SUCCESS
OF SKILLS
STRATEGY
5.1 Responsibility for labour market intelligence
5.1.1 It is important that working across
Government departments and agencies, there are clear responsibilities
for measurement and evaluation.
5.1.2 Sector Skills Councils (SSCs) and
other recognised Standard Setting Bodies (SSBs) such as the Management
Standards Centre (MSC) are now responsible for ensuring that the
skills needs of employers in the sectors they represent are clearly
defined. The UK Regulatory Authorities (RAs), QCA, ACCAC, CCEA
and SQA, working with these organisations and other strategic
partners, have a responsibility to reform and rationalise vocational
qualifications to ensure they support workforce development and
the needs of individual learners. Sector Qualifications Strategies
(SQS) will assist in the reformation and rationalisation of vocational
qualifications.
5.1.3 The SQS will provide a UK-wide vision
or "blueprint" for the design, development and implementation
of qualifications and/or other learning provision in each sector,
which is underpinned by robust evidence of sector need and capable
of supporting workforce development in years to come. The SQS
for Management and Leadership should in turn provide a sound basis
for planned, strategic and intensive activity by all stakeholders,
to reform and rationalise provision.
5.1.4 The Management Standards Centre in
partnership with SkillsActive and the Skills for Business Network
(SfBN) has set up Steering Groups consisting of key stakeholders
with relevant expertise to oversee the work to develop the Management,
Leadership and Enterprise Learning and Qualifications Strategy
(MLELQS).
5.1.5 It is recommended that the Management
Standards Centre, as the recognised Standards Setting Body, plays
a lead role in developing national measures for management capability
that can both influence the development of the MLELQS and also
feed into the incremental development of the National Occupational
Standards.
5.1.6 The Institute would also support recommendations
to expand the remit of current national surveys such as the Workplace
Employer Relations Survey and would seek Government support for
the continuation of its longitudinal survey (carried out in 1996,
2000 and 2004) tracking the links between management development
activities and organisational performance.
5.2 A national measurement of management capability
5.2.1 An important measurement of managers'
real impact in the workplace that could be used at a national
level to assess management capability and performance is the Chartered
Manager designation. The Institute recommends that support for
the development of Chartered Manager should establish this by
2015 as a benchmark against which employers and Government can
recognise and measure professional management capability.
5.2.2 The designation of "Chartered
Manager", introduced by the Chartered Management Institute
in 2003, enables individuals with a management qualification and
a significant commitment to CPD to gain externally validated recognition
of their ability to deliver significant change in their workplace.
5.2.3 The six core leadership and management
skills areas required to achieve Chartered Manager status are
explicitly aligned to the skill areas identified in the National
Occupational Standards for Management and Leadership. It therefore
provides employers with a benchmark for professional management.
As such, it could be promoted more widely by Government to help
drive demand for professional managers.
5.2.4 In the shorter term, management qualifications
that have also been developed using the competencies and behaviours
identified by the National Occupational Standards for Management
and Leadership should be used as key performance indicators for
those Government departments and agencies responsible for delivering
skills.
5.3 Encouraging employer responsibility for
people measures
5.3.1 The Business Review, which in 2006
replaced the requirements of the Operating and Financial review
and will be required alongside listed Companies' Annual Reports,
could play a significant role in setting and raising the standard
of people management in companies. The Institute recommends that
a lead partnership should be formally recognised to develop standards
on Human Capital Management reporting for inclusion within the
Business Review.
5.3.2 The development of workforce reporting
measures within this new Business Review could help to drive employer
understanding of the strategic benefits that can be gained from
investing in better people management. There is already good evidence
of the process by which HCM reporting combines narrative and hard
data about the aspects of people management that most affect business
performance.
5.3.3 The introduction of comparable and
commonly accepted basic standards on HCM reporting could help
to focus companies' understanding of the value of measures of
workforce capability. Already many leading companies are looking
at measures that indicate how they have generated competitive
advantage through their strategic management, deployment and development
of employees.
5.3.4 Currently, the Chartered Management
Institute is working with Investors in People UK, the Chartered
Institute of Personnel and Development, and a number of other
bodies including investor representatives and large employers
on a Human Capital Management Standards Group. The aims of the
group are to produce and test more unified and supportive guidance
on the measures and information that companies should be using
to report on their human capital.
5.3.5 The outcomes of this work will be
shared with Government and disseminated more widely to help develop
both the reporting capabilities of UK companies and investor insight
into management performance.
5.3.6 The Institute has also established
an Employer-led Human Capital Reporting Forum to help develop
progressive thinking and business measures that focus on value
creation by seeking competitive advantage through the strategic
management, deployment and development of employees.
6. THE SUPPLY
SIDE: THE
ROLE OF
PROFESSIONAL BODIES
6.1 Professional bodies are as a source
of high quality learning and development in their specific fields
and targets for professional qualifications should be included
as part of the National Employer Training Programme ("Train
to Gain") and other initiatives.
6.2 There are close to 400 professional
associations in the UK, with memberships extending to several
million learners. They cover the full spectrum of occupations
which cut across industry sectors and are critical to the successful
management of business and public services. They have a deep understanding
of the challenges their members face and of their learning needs.
6.3 The Chartered Bodies in particular are
instrumental in defining the standards for their professions and
the development routes and qualifications that recognise learning
and skills. Evidence demonstrates that many more people take professional
qualifications, usually paid for by their employer, than take
NVQ's or post-graduate academic qualifications in management related
fields as evidence of the relevance of what we do.
6.4 The medium and longer term prosperity
of the nation is dependent upon upskilling, reskilling and updating
knowledge within the current workforce. Indeed, the core objective
of a professional body is the commitment to raising standards
through their codes of conduct, guidance on good practice and
the emphasis on continuing professional development (CPD).
6.5 Chartered Bodies go well beyond the
delivery of professional standards and qualifications to give
real public benefit in terms of lifelong learning. Most provide
journals and other publications, research and leading edge thinking,
best practice and practical advice, contributions to public policy,
libraries, websites, courses, conferences, face-to-face and electronic
networks and other up-to-the-minute services, all extensively
used by members and non-members for the purpose of continuous
learning and improving their ability to deliver change in the
workplace.
6.6 Much workplace development of all skills
is led by management professionals. It is an area for which there
is little public funding and support beyond Level 2 qualifications
or apprenticeships. The Chartered Bodies play a vital role in
encouraging CPD amongst their members. They also provide relevant
frameworks and support to employers seeking to develop their staff
and to transfer newly acquired skills into employment.
6.7 The Institute proposes that the Government
should include professional training and qualifications within
the targets relating to its current initiatives. An example of
this is the National Employer Training Programme (NETP). At present
the skills brokerage for this scheme signposts LSC accredited
provision with an emphasis on Government targets. To achieve the
improvements the nation seeks in productivity, in innovation and
in public service delivery, it is vital that we encourage individuals
and their employers to engage in continuous professional development
of those skills which are fundamental to performance. The professional
bodies should be acknowledged as a source of high quality learning
and development in their specific fields and accessed as part
of NETP and other initiatives.
7. THE DEMAND
SIDE
7.1 The overarching recommendation from
the Leitch Report was that vocational skills must be demand-led
rather than centrally planned, and all policies to incentivise
demand for management skills from both individual managers and
also employers are to be welcomed.
7.2 A key incentive is to provide funding
direct to end users rather than through the supplyside. Proposals
for more flexible funding are supported, particularly where funding
streams are re-routed through the employers and employees.
7.3 Alongside the entitlement approach of
the National Employer Training Programme, introduced in the Skills
Strategy as a way of raising minimum skills levels and engaging
individuals, there is a strong case for reviving Individual Learning
Accounts (ILAs) in a more carefully managed form, with a particular
focus on training to Level 3 and above. As such the Institute
welcomes the proposals within the Further Education White Paper
and the Leitch Report to introduce a new Learner Account.
7.4 The use of the ILAs helped to reveal
a strong preference among individuals for training and there is
no doubt that learning is highly valued. Expressing the entitlement
to learning as a form of empowered choice, with a matched contribution
from employees, employers and government, can be a useful vehicle
to encourage an intelligent discussion of co-financing. Both employers
and employees have a very clear understanding of the idea of a
"government match", and might be more inclined to invest
in their own learning if they believed that the government would
contribute a similar amount.
7.5 The Institute will continue to work
with the Government's Advisory Panel on Leadership and Management
and others both to look at how we support individuals' aspirations
to improve as managers and leaders and to help develop innovative
approaches of engagement supported by using proposals for Learner
Accounts to specifically incentivise management qualifications
for adults.
7.6 The Leitch Report also recommended that
a portion of HE funding for vocational courses, currently administered
by HEFCE, be delivered through a similar demand-led mechanism
as Train to Gain. This should use Government funding to lever
in greater investment by employers at Level 4 and Level 5. The
Institute strongly supports this proposal as it would potentially
open up new access routes for professional qualifications across
the HE sector.
7.7 The Institute already successfully engages
and raises demand for better management among both individual
managers and employers: this is evidenced through its membership
and high customer satisfaction levels. The Institute will be actively
continuing to support the Government's Advisory Panel for Management
and Leadership, chaired by Ian Smith of Oracle, in its proposals
to help raise demand which include:
— The development of a national award
which raises the profile of those employers who offer truly outstanding
leadership and has real currency to prospective employees;
— The identification of leading employers
to help promote best practice in leadership and management development;
— And working with Sector Skills Councils
to help understand the leadership and management needs if each
sector and ensuring that training provision and qualifications
are tailored relevant to sector needs.
8. APPRENTICESHIPS
8.1 In 2006, the Management Standards Centre
was commissioned by the QCA to produce a summary report advising
DfES on the practicality of designing and implementing a self-standing
"qualification" for management apprentices. This report
included an investigation and evaluation into the benefits and
risks of implementing a management apprenticeship "qualification"
based on primary and secondary research carried out with training
providers and employers.
8.2 The MSC apprenticeship in team leading
(Level 2) and the advanced apprenticeship in management (Level
3) rank in the top 25 most popular frameworks in England (in terms
of numbers of learners enrolled). They are well established frameworks
having been in operation for seven to eight years, with a new
framework recently approved and live since the 1 May 2006. According
to LSC data there were a total of 1,603 people engaged in learning
on management apprenticeships across England in 2005.
8.3 The key conclusion from this report
based on the MSC's employer and provider consultations was that
the majority of respondents seemed to view the proposal of converting
the current apprenticeship into a formal qualification with relative
optimism. However, this enthusiasm was tinged with caution that
the current structure and content of the framework should not
be radically transformed. Stakeholders were adamant that issues
such as completion, take-up and status of the apprenticeships
would all be more likely to rise, if efforts were focused on improving
the delivery of the current framework.
8.4 The report called for the LSC to lift
the barrier to post 25 funding for apprenticeships: this is a
key factor restricting take-up as management is an occupation
that is found higher up the career ladder. In addition, most potential
managers are likely to be older.
8.5 Another key area that will improve the
flexibility and management of the apprenticeship framework would
be to increase cooperation between the various stakeholders who
are engaged in delivering the learning package; as one employer
put it:
"My experience as an employer in trying
to set up an apprenticeship scheme has been very difficult. I
have had to battle to co-ordinate SSCs, LSC and colleges. This
could be a barrier to many employers—there must be an easier
way."
9. QUALIFICATIONS
9.1 New targets for management qualifications
9.1.1 As detailed in section 4.3 above on
the current low levels of management qualifications, the estimated
level of only 20% of managers being qualified in a management
discipline by 2020, should be a priority area for tackling in
a future Government skills policies.
9.1.2 To drive management capability, we
recommend that the Education and Skills Select Committee considers
the benefits of new targets for the qualification of managers
in the current workforce, going beyond the generic targets of
the Leitch Report.
9.1.3 The Institute recommends that by 2020,
at least 50% of managers should be qualified in a management discipline
to level 4 or higher. This would include Level 4 S/NVQ in Management;
management degrees, professional Diplomas in Management and higher
level qualifications such as Masters or MBA programmes.
9.1.4 Evidence from a Chartered Management
Institute survey into skills (2002-03) demonstrated that employers
welcome a plurality of options for work-based qualifications with
a more practical content. Employers have also strongly indicated
that assessed qualifications are often more appropriate than examined
qualifications. Professional qualifications were generally rated
as more relevant than academic and vocational qualifications.
9.1.5 While a qualification may be able
to assess competence and knowledge at a given point in time, it
does not always provide evidence of the application of management
skills and an individual's impact in the workplace. Professional
qualifications can combine evidence of impact with evidence of
relevance through continuing professional development programmes.
9.1.6 Therefore, in the same way that public
services are beginning to demand management qualifications for
those responsible for delivering change, more could be done to
help employers in other sectors demand management qualifications.
Examples of good practice in this area include the Cabinet Office's
Professional Skills for Government programme and the DfES's current
proposals for qualification requirements for newly appointed Principals
of FE colleges. Raising employer demand for management qualifications
could be achieved by creating "Licences to Practice"
on a sector basis. For example, the care industry already requires
NVQs in management.
9.1.7 Public procurement processes could
also demand that an appropriate proportion of their suppliers'
or contractors hold a recognised management qualification.
9.2 The Qualifications and Credit Framework
9.2.1 The Qualification and Credit Framework
being established by the Qualifications and Curriculum Authority
should provide a clear credit framework to give both employers
and learners better understanding and greater confidence in the
value of qualifications and learning.
9.2.2 The new Framework should facilitate
progression routes and links across vocational, academic and professional
education and across all sectors and occupations.
9.2.3 The Government must give a clear signal
that its current commitments to implement credit-based learning
for adults through the new Framework for Achievement will be integrated
with similar commitments for 14-19-years-olds into a simple, well-understood
system of comprehensive lifelong learning.
9.2.4 Learners need to be able to navigate
their way with ease through the qualifications system. They must
see qualifications as relevant, believe that achievement is properly
recognised and be confident that the returns from learning—both
economically and in terms of meeting their own potential—are
high. It is vital that on and off the job learning can be united
by a system of interchangeable, mutually recognisable credits.
From the employers' perspective, it is essential that the qualifications
framework is credible and offers an adequate guarantee of competence.
9.2.5 There must be parity of esteem between
the academic, professional and vocational routes. The UK has always
been reluctant to grant vocational qualifications the same respect
that academic qualifications—honours degrees, A Levels,
O Levels and latterly GCSEs—have been accorded.
9.2.6 The new Framework for Achievement
should facilitate progression in a number of different directions:
— Across educational stages—requiring
alignment with the 14-19 curriculum and the Higher Education Qualifications
Framework.
— Across geographical boundaries—requiring
alignment with the Scottish, Wales and Northern Ireland Frameworks
and eventually extending beyond the UK.
— Across occupations and sectors—requiring
alignment with national occupational standards, sector skills
strategies, professional body qualifications and CPD frameworks.
9.2.7 The Institute recommends that there
is also a need for the regulatory bodies, such as QCA, HEFCE and
QAA, to seek greater alignment of their qualifications and funding
mechanisms to provide the desired progression routes across all
levels of education.
January 2007
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