Examination of Witnesses (Questions 20-39)
PROFESSOR EWART
KEEP, PROFESSOR
LORNA UNWIN,
AND MR
ALAN WELLS
OBE
21 FEBRUARY 2007
Q20 Mr Marsden: Alan, can I ask you
about other things which Leitch touches on but maybe does not
focus on to a great degree. One of the issues, which has been
raised by a large number of people, for example, City and Guilds,
and various others as well, is obviously the demographic changes
which are going to take place over the next few years. Does Leitch
give enough attention to the issues of training and retraining
and skilling of an older workforce?
Mr Wells: I do not think so. One
of the problems is, if you look at all of the statistics on literacy
and numeracy, in fact, more people who are older have problems
than younger. There are, I think, technical reasons for this,
in the way the testing is done, to be absolutely frank. I think
testing is often not of literacy and numeracy skills but of short-term
memory, and, frankly, most of us who have got older have worse
short-term memories, and I think that is an international problem
in the way that the testing is done. There does not seem to be
much incentive built into the systems suggested in Leitch for
people who are perhaps out of the workforce, not likely to be
back in the workforce, particularly people who are "early
retired", ie are not looking for jobs, who may have worked
for a long while, or cannot get jobs, frankly. Again, Leitch tends
to look quite like a report written in the South East of England
and in London, which is rather different from parts of the North
East of England, as you well know. Because it is, and I can understand
this, very economically-driven, with work, really, fundamentally,
as its rationale, then it is weak on what you are doing for both
older workers who are reaching towards the end perhaps of their
career, or are hoping to, or people who are not in the workforce
but may have a significant role to play in the skills of the next
generation of people coming up. We know the link between parenting
and grandparenting and the skills of the younger generation, not
least their aspiration, and it seems to me to be extremely weak
on that; it is a model driven largely by the interests of a youngish
workforce.
Q21 Mr Marsden: On that particular
issue, enabling skills, soft skills, call them what you will,
the sorts of things which enable people potentially to get back
into the workforce, is Leitch valuing those enough; does the current
Government strategy value those enough?
Mr Wells: No. I do not think it
does. I think the strategy is so top-driven, basically, and so
narrowly economically-focused, in that sense, I think one economic
focus, that it does not value those other skills enough, and it
does not, I think, therefore relate to the lives of lots of older
workers, in or out of work, basically, probably not living in
the South East of England. It seems to me to lack enough vision
in that area.
Q22 Chairman: Professor Keep, you
are nodding energetically there?
Professor Keep: I am sorry. I
tend to do that, when I agree.
Q23 Chairman: Is there anything you
want to add; you must agree with that?
Professor Keep: The one thing
I would agree with, it was emphasised, is that one of the other
ways in which Leitch, yet again, takes us somewhat backwards from
where once we thought we were heading is the way in which everything
is about skills which are economically useful, and it is a very
narrow, utilitarian definition of economically useful. There are
huge rafts of evidence, yet again, that there are many economic
benefits from people learning things which are nothing to do with
their work; things to do with parenting, things to do with hobbies,
voluntary activities, citizenship activities and duties, cultural
activities. I fear that we are moving towards a vision of adult
learning, adult education, that is based so narrowly on the economy,
the workplace and utilitarian values that we are in awful danger
of throwing out a very large baby with the bathwater, and I think
that would be a huge loss.
Chairman: Let us move on and we want
to go back to productivity.
Q24 Mr Chaytor: If I can pick up
the point which Ewart made earlier, about the higher proportion
of people with Level 3 qualifications in Germany; is not that
why BMW took over Rover and not the other way round?
Professor Keep: It is; but you
have got to remember that licence to practise runs right across
the German economy, so you need to have done an appropriate apprenticeship
to become a sales assistant in a retail store. It runs right across
the economy. It is a form of labour market regulation which is
more common than people think. It exists in the Australian States,
not across all occupations but across many more than is the case
here. It exists in America, but again on an individual State basis,
rather than a federal basis. Quite a lot of countries have far
more extensive licence to practise than we have; we do not have
it, on the whole, except for a few, very safety-critical and professional
occupations, and I think it does help skew the level of qualification
when you tot up the totals. Your point though about Germany having
a more skilled workforce in manufacturing certainly is true; but,
again, we have some studies which suggest that the reason for
it is because the German organisations are producing high quality
goods in a different market niche from our own. Many of our producers
produce things which require lower levels of skill to produce
them, because they are further down the value chain. Changing
the skills of the workforce may not change the product market
strategy of the organisation, on its own.
Q25 Mr Chaytor: In the long term,
is not the German approach to these things more likely to deliver
prosperity over a long period of time, because they have got a
bigger share of high value manufactured goods?
Professor Keep: That certainly
is true, and Germany has a massively better balance of payments
than we have and a massively greater, certainly physical, exporting
record than we have. The catch is that, as Leitch suggests, simply
supplying more skills, of itself, will not help us. We can have
a German-level qualified workforce and many British employers
would not know what to do with it; it would not give us a German
economy. Their economy now is so different from ours, structurally,
in terms of its continuing dependence on high skill, high value
added manufacturing; our economy is dependent upon other things.
We have to be cautious about saying simply "If we had as
many as Germany, we would be like Germany." There are a lot
of other things which make Germany different from us.
Q26 Mr Chaytor: It is the relationship
between cause and effect which you are questioning?
Professor Keep: Yes.
Q27 Mr Chaytor: Can I come back to
the other point you made about the organisation of work; you made
the point that maybe other countries are better at organising
the level of skills they have, whatever that level is, but surely
is not that a critique of management skills? Are you saying that
really the British disease is paying insufficient attention to
the quality of management and training of people for management
in organisational ways?
Professor Keep: Certainly in part
it is a critique of British management, but you could argue that
the problems go beyond that, because very often British managers
know what they should be doing but then choose not to do it. I
think that a lot of the things British managers do, in actual
fact, are a rational response to the economic incentive structures
which, as managers, they face, at a personal level, in terms of
what they will get rewarded with through their pay packet, what
the stock market will reward their company for doing, and so on.
It is a mixture of both. Yes, sometimes our managers do not have
the right skills, but also they have in their heads, sometimes
for a very good reason, a different model of what a well-functioning
organisation should look like. I think one of the most interesting
developments of the last 20 years is the way in which, just as
the production line, routine jobs have declined in manufacturing,
they have expanded in the service sector, so you go into cheque-clearing
factories, you go into call centres, you go into large retail
organisations, where the organisation tries to script the interaction
between a sales assistant and the customer. If you upskilled massively
the people doing those jobs, they could not use the extra level
of skill, unless the job changed. It is getting the job to change
which is so hard.
Q28 Mr Chaytor: In our evidence session
on Monday of this week, we had some documentation which suggested
that the productivity gap between Britain and France, Germany,
the USA, was in the order of 15%, but that Britain was about 6%
more productive than Japan. I think the score for Britain was
100. Japan was 94, as I recall it. How do you explain that, given
that half the goods in our shops are Japanese?
Professor Keep: First of all,
the Japanese service sector is monumentally heavily staffed; it
has staffing levels which just make your jaw drop. Secondly, you
have got to remember that there are lots and lots of different
measures of productivity, and this is one of the huge confusions.
There is productivity per hour worked, which is the one that a
lot of labour economists think is the best measure, but there
are lots of other, different measures and, depending on which
measure you choose, the number of hours people work can skew them
enormously. If you take just output per worker and you do not
compensate for the number of hours they work then countries zoom
up and down the league table. Japan is a story of two halves:
massively efficient, lean manufacturing organisations, and then
still, though it is less the case than it used to be, service
sector organisations, like retail and catering, which have levels
of staffing at which UK employers would go green with terror when
they saw them. In that sense, it is explicable.
Q29 Mr Chaytor: The productivity
indicator is not necessarily an accurate guide to the overall
health of the economy or the sense of well-being of a nation;
is that what you are saying?
Professor Keep: It is one indicator,
but there are lots of different ways you can measure productivity,
and different economies, particularly because the amount of hours
that people work in different countries varies enormously; unless
you compensate for that you get a very skewed picture. The best
measure of productivity, because it is regarded as the most accurate,
is the one which compensates for hours worked, so that you get
the genuine product. In any given hour, a British worker will
produce X, a French worker will produce Y, and because they have
got a short working week in France they use their people very
productively in the short working week they have got. Labour market
regulation comes back in there again. Productivity is only one
measure. Balance of payments, which when I was growing up used
to be something which was on the news every time it was announced,
now no-one seems to care that we have a huge current account deficit,
which I find intriguing. There are lots of different measures
of well-being, and, again, last week, or was it this week, it
blurs, the UNICEF league table on the well-being of children suggests
another way in which you can view the well-being of society, and
one which might be quite important.
Q30 Mr Chaytor: Would the introduction
of a French-style, 35-hour working week immediately increase Britain's
productivity indices?
Professor Keep: No; because British
employers would not know how to cope.
Q31 Mr Chaytor: It is the skills
gap of British employers which is the problem?
Professor Keep: It would be a
real shock. That would be a very interesting experiment, but I
think a rather dangerous one; the French moved there in steps.
Certainly there is some evidence that if you cap the working week
it is one way, one incentive structure, which then forces managers
to say, "Okay, if X can work only 40 hours this week, max,
then, my goodness, I've got to make sure they work productively."
If you think, "Right; well we can force them to do as much
unpaid overtime as we like until they drop," then you will
not worry too much about whether they are very efficient in any
given hour. There are lots of different ways in which you can
change productivity but it is best to think about doing it gradually.
Q32 Chairman: Before Ewart moves
away from the UNICEF analysis, there have been some severe criticisms
of that thought, in terms of the age of its data and the accuracy
of its measurement?
Professor Keep: It is like everything,
it is a dip-stick.
Q33 Mr Chaytor: Back to skills and
productivity; what is your view then? You are saying, first of
all, skills are related only remotely to productivity; secondly,
productivity itself is a pretty nebulous concept because there
are different ways of measuring it; and, thirdly, productivity
itself is not related directly to the health of the economy or
the welfare of the nation. What is your recommendation as to the
way forward, in the context of Leitch and the Government's intentions:
do nothing, or are there certain areas of skills that we do need
to invest in more?
Professor Keep: Skills are important
but they are, as Leitch admits and as the PIU report suggested,
a derived demand; so, in a sense, they are dependent on other
first order decisions. If enough of our employers decide to move
up market to produce goods and services which require high levels
of skill and simultaneously we supply that skill then we have
a recipe for economic growth and success. My fear about Leitch
is that Leitch says basically that skills is the, as he put it,
in capital letters, THE main lever we can pull. I do not think
it is. It is one of a number of levers which we have to pull simultaneously
and pull in quite crafty and complex ways. Simply pumping more
people with paper qualifications into the economy, of itself,
will not be enough. Therefore, I think we need to be very cautious
about chasing blanket targets for qualification levels, unless
we are clear what economic development strategies we have in place
to ensure that those skills get used once they are created.
Q34 Mr Chaytor: Accepting your point
about the economic development strategy being the prime driver,
is there not a value to the nation and to the individual and to
the wider community in generally raising the level of skills,
in the same way there is in generally increasing the number of
graduates?
Professor Keep: Yes, there is,
but again then you might beg the question, if it is general benefit,
in terms of the well-being of society, you might not obsess quite
so much as Leitch does about economically valuable skills as the
sole arbiter; because it is very difficult to judge what is economically
beneficial. Many high-end employers say that what they value is
creativity and they are not the least concerned about what degree
people did; they want someone who happens to have a creative turn
of mind and who has been educated in a way which stimulates that
creativity. I think a very narrow definition can lead you down
something of a blind alley and we need to be slightly more liberal
in thinking about what might be economically and societally beneficial.
I am not against increasing levels of learning, I am not against
increasing levels of education, but I worry about the simplistic
assumptions about increasing the levels of skill.
Q35 Chairman: Do you agree with the
drift of that, Alan?
Mr Wells: Yes, I think I do. I
think the problem will be, if we are not careful, that we will
have very, very well-educated people in very, very tedious, low-skill
jobs; very highly skilled but actually frustrated by that. There
is a danger with that. I have always felt that the overall health
of our nation, in a sense, is much more complex than just a narrow
skills-driven agenda. I am in favour of more education and people
being educated better, because I think things like citizenship,
and good citizenship, and all of those things, are just as important
as the economic drivers. If you look at, and it is not very well
explored, the number of young men in prison who cannot read and
write or use numbers properly, and it is a very difficult area
and it is a chicken and egg area, you have a good reason for thinking
that maybe education has a part to play in stopping young men
going into prison. Generally I do agree that there is a danger
of giving people the idea that more and more skills, more and
more certificates, basically, will mean that somehow or another
they are going to be in better, more interesting jobs and better
off; because unless we can guarantee that then people are going
to be in for a sad shock.
Q36 Mr Chaytor: Let me pursue that
point. Your scenario of increasing numbers of people being over-qualified
for the jobs they are doing, is not that a very effective way
of (a) ensuring either they get out of that job and get a better
one quickly, or (b) they bring something to that job and their
employer which increases the overall level of the operation, and
it moves the employer up the value chain, which was what Ewart
was arguing earlier?
Mr Wells: I think that is right,
in theory, but the practice of it is that I think quite often
people look at, the quite short term, what is going to be the
benefit for them, if the benefit for them is that they are better
qualified—and there is a difference, I think, and Ewart
has made this point, between skills and qualifications—but
they end up still being in a job which does not need those qualifications.
I remember, years and years ago, I advertised for somebody who
basically was in charge of a stock cupboard; everybody who applied
was a graduate. Therefore, did I make the job more interesting
by developing more stock cupboards? No, I did not. What I tried
to deal with was a whole load of people who were frustrated because
they were in a job which did not need the kind of educational
background that they had. I am in favour of aspiration, there
is no doubt about that, and I am always conscious of the vocational/academic
divide, because I want people from working-class communities,
who have not had the great advantages, to become doctors and lawyers.
I think there is a danger in promising and then not delivering,
and then thinking that somehow or other it is down to the individual
to demonstrate their wonderful creativity which suddenly will
see them promoted up in organisations. Ewart made the point, and
I always think, when you are talking about skills, about the person
working in the local café, where there are only three employees,
and whether they are going to be able to show their creativity
in order to be promoted in the business or go into another business.
I think it is just a bit more complex perhaps than thinking that,
somehow or other, higher skills will drive it in such a way that
everybody will move up to jobs which are eminently satisfying
for them.
Q37 Chairman: Surely, if you stretch
people, in terms of their skills and training, it gives them more
opportunity; they do not have to stay in the same job, in the
same occupation? One of the things that I have seen in my own
part of Yorkshire is that my population, compared with perhaps
Barnsley, or Jeff Ennis', is much more mobile and willing to switch
jobs and move quite regularly in order to seek and find a better
job. Surely, increasing skills gives the possibility of mobility?
Mr Wells: To an extent, of course,
it does give the possibility of mobility, but the idea that, somehow
or other, we are all a mobile population, or that high mobility
in jobs is a good thing, is not my experience. As a former employer,
I wanted a few people who might stay in the job for a while, because
the idea of mobility was costly and disruption. In times of high
employment people came into jobs and they were looking at the
paper for the next job directly they came. To an extent, of course
mobility is a good thing, but we cannot have a whole population
of people moving from job to job; lots of people do stay in jobs
for a rather long period of time. I am not against ensuring they
have the education to make absolutely the most contribution they
can in that job, but making the best contribution they can to
the life of their community as well is just as important to me.
Q38 Stephen Williams: Chairman, just
to stick to this comparison we have had, between this country
and Germany and other countries, about our productivity gap and
our skills gap, if you look at what this country is good at, say,
the City of London, if you compare it with Frankfurt or Paris,
or whatever, everyone working in the City of London, or in Edinburgh
or Bristol, in corporate and financial services will have at least
Level 4 and more likely Level 5 qualifications and we beat all
of our competitors hands down in that area. If you look at manufacturing,
is not that where our skills gap is, as well as our productivity
gap, so does not that imply that we need more skills in the manufacturing
area? What I am trying to say is where we have got high-level
skills we do extraordinarily well; where we have not, that is
where our productivity gap is?
Professor Keep: One half is right
and one half is wrong, I suppose would be my response. Certainly
the economy is quite efficient at allocating the most talented;
and you could say that, because of the kinds of salaries that
the City and allied business services firms are willing to pay,
they take their pick of the brightest graduates. You could say,
given that is now one of our major export sectors, the driving
force of large chunks of our economy, that is a very efficient
allocation of talent. Those manufacturing firms which we have,
which have survived this long, on the whole are actually quite
productive, it is just that we do not have quite so many of them
as we used to have. The biggest productivity problems, and they
vary enormously by sector, a lot of them are in the service sector
but they are in the bits of the service sector which you might
guess have got problems, things like hotels, catering, parts of
the transport industry, wholesaling, and so on. Those also tend
to be the parts of the economy where the qualifications demanded
by employers of large chunks of their workforce are the lowest,
often zero, in the sense that employers simply do not use qualifications
very much in the recruitment and selection process. It is not
clear that simply supplying more skills will change the way those
employers conceive of those jobs, or that necessarily it will
impact significantly on their productivity, unless they make other
changes as well. That is not to say that probably we should not
be trying to force those employers in those industries to think
harder about skill creation and utilisation, and that is what
the Sector Skills Councils are there for, but on its own it may
not be enough.
Q39 Stephen Williams: To quote from
the Leitch report: "qualifications are the most common measures
of skills." I would guess, from earlier answers, from Mr
Wells and Professor Keep, that you are rather sceptical about
it. I wonder if Professor Unwin could say whether she is sceptical
about that as well?
Professor Unwin: I am not sure
that "sceptical" is the right word. I think qualifications
are a measure of skills, to some extent, yes. As Ewart pointed
out before, what they do not capture though are large numbers
of skills, including soft skills, which people use and develop
in the workplace. I would raise though a different issue about
qualifications, which I do not think we have touched on yet, and
that is, there is a big assumption in Leitch, and in most Government
policy, that our qualifications system is sound. We have a very
complex qualifications system, particularly on the vocational
side, and the key qualification which is used in Government targets
is the National Vocational Qualification, the competence-based
qualification, which was introduced in the late 1980s. One of
the issues which I think is of great concern is the quality of
that qualification and the fact that it differs so considerably
between sectors, between occupational areas, so we have a notional
system of levels, and Leitch uses the notion of the Level 2 as
being the key target. The problem with our system of levels is
that it varies so enormously from sector to sector, so a Level
2 in parts of the service sector can be achieved very quickly
and often through accreditation of existing skills, whereas a
Level 2 in areas like engineering, for example, demands a much
higher level of general education and takes much longer to acquire.
Obviously, qualifications need to be fit for purpose and skills
in, say, retailing differ from skills in engineering, but I think
we need to have a serious look at whether, in a lot of our occupational
areas, the use of Level 2 qualification, and Level 3, in some
instances, the notion of this level actually measures what we
presume is the quality of skills.
Mr Wells: Can I make a point,
just to clarify. I am certainly not against qualifications, because
I think generally people who are against qualifications are people
who have got lots of them and I think most people recognise that
getting qualifications is important. The point I was making, similar
to Ewart, was that qualifications do not capture absolutely everything
about knowledge and skills. What I think is important is that
the qualifications are real and meaningful. One of my concerns
has been the drawing of equivalence between, for instance, Level
2 qualifications and GCSE qualifications. By the nature of it,
that is an incredibly crude measure; yet it has now become accepted.
These qualification are assessed in entirely different ways. A
GCSE in English is totally different, in the way that it is assessed,
from a Level 2 qualification through the national test in literacy,
and I suspect that no employer will think that they are the same
as each other, that their worth has the same value. I think it
is quite important that we encourage people to get qualifications
but that those qualifications do not turn out to be a con, in
the end, that they are worthless, but that they are meaningful.
Personally I think that there needs to be a look at the way that
equivalence has been drawn between qualifications for adults and
what are effectively qualifications at the end of a compulsory
schooling period.
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