Examination of Witnesses (Questions 448-459)
MS DINAH
CAINE, MS
LINDA FLORANCE
AND MR
BRIAN WISDOM
14 MAY 2007
Q448 Chairman: I welcome Brian Wisdom,
Dinah Caine and Linda Florance to this very important inquiry
into skills. In this session we want to learn more about the role
of the Sector Skills Councils. We thought that it would be very
interesting to bring together here the rather diverse sectors
represented by the witnesses. We usually give witnesses the opportunity
to say a few words, not lasting more than a couple of minutes,
about themselves and their organisations. If that is acceptable,
we will begin with Mr Wisdom.
Mr Wisdom: I am Brian Wisdom,
chief executive of People 1st. People 1st is the Sector Skills
Council for the hospitality, leisure, travel and tourism industry
which comprises approximately 180,000 employers and about 1.8
million employees. In the past 18 months we have conducted research
with over 5,000 of our employers. My board consists of the two
largest employers in the sector, the second largest visitor attraction
business in the world and three small to medium enterprise chief
executives.
Ms Caine: I am Dinah Caine, chief
executive of Skillset which is the Sector Skills Council for the
audio-visual industries. Effectively, our board comprises large
companies like ITV, BBC and Channel 4 and a large number of small
to medium size enterprises—we have a number of levies running
in our industry—but also 60% are micro-enterprise or freelance,
which is a significant issue. Further, over 60% of our industry
are graduates. That is our skills profile. We were a trail-blazer
Sector Skills Council; we were one of the first four pathfinders
to develop sector skills agreements. Like all other Sector Skills
Councils, we are led by our industries. We are not non-departmental
public bodies but limited companies led by our industries who
work in social partnership with the trade unions where they are
recognised within the industries.
Ms Florance: I am Linda Florance,
chief executive of Skillfast-UK which is the Sector Skills Council
for apparel, footwear, textiles and related businesses. It sounds
like a very long title, but that is everything from the production
of fibres through to high-level couture fashion, and certainly
new and innovative industries have been born out of that sector.
For example, at this moment our weavers are weaving the wings
for the new Airbus and knitters are knitting products that will
end up in heart valves and ligaments for surgery. Our industry
is dominated by small to medium size enterprises and micro-businesses,
many in niche product areas who trade internationally with some
global brands that are well known around this table, for example,
Mulberry, Jasper Conran and so on. In the past two years we have
been linked in to about 2,500 employers directly to look at their
needs across the sector and each sub-sector, which differ quite
significantly. It is worth mentioning that we three represent
the 25 Sector Skills Councils which themselves have representation
across the FTSE 350 companies but, importantly, build on those
links with small businesses and the trade union movement.
Q449 Chairman: We may well have other
Sector Skill Councils before us later in our inquiry. We want
to hear what you think and you can generalise if you like, but
do not feel it is too onerous. I open the questioning by asking
all of you what sort of budgets we are talking about to do your
jobs and who provides the money.
Mr Wisdom: The core funding that
comes via the Sector Skills Development Agency to People 1st has
been an average of £1.3 million for the past three years.
The rest of the income for the Sector Skills Council comes from
industry or our own commercial enterprises.
Q450 Chairman: You get £4 million
from the Sector Skills Development Agency. How much do you get
from other sources?
Mr Wisdom: In terms of total revenues
for the past four years it is £21 million.
Q451 Chairman: Therefore, the £4
million is quite a small part of that?
Mr Wisdom: The £4 million
is a relatively small part.
Ms Caine: We manage levies on
behalf of our industry. We manage funding of about £8.3 million
which is a mixture of levies and industry contributions and money
from the UK Film Council which supports the training of people
within our industry. Much like Mr Wisdom, we then have about £1.3
million a year from the SSDA and about £1 million from our
industry. In addition we raise approximately £1 million in
project funding from a range of agencies across the UK. Therefore,
our core resource is relatively small in relation to the growing
list of things that we are expected to deliver as part of our
licences with Government. Obviously, we have to deliver those
roles right across the UK. Am I right in understanding that all
the Members here represent English seats?
Q452 Chairman: Yes; they must be
to be on the Committee.
Ms Caine: Obviously, training
and education is a devolved power, and our role is to represent
our employers and interface with those many different agencies
and governments right across the UK, which is a significant additional
pull on our resources. It is welcome but nevertheless significant.
Ms Florance: To repeat what has
been said to some extent, our Sector Skills Council has also had
core funding of £1.3 million a year for the past three years.
In addition, we have sourced another £3 million worth of
funding approximately to deliver on specific pieces of work, many
from regional development agencies; some on the qualifications
development front and others through the LSC to pilots and strategies
for them.
Q453 Chairman: How much are we talking
about?
Ms Florance: It is £3 million
per year in addition to the £1.3 million that we receive
in core funding.
Q454 Chairman: Where does the second
£3 million come from?
Ms Florance: The second £3
million per year has come from a range of bodies, in some cases
regional development agencies.
Q455 Chairman: What comes from the
industry itself?
Ms Florance: In terms of the industry
we have had very low investment into the Sector Skills Council
for the industry. I believe that is a key point on which to build.
Our objective is to get our industries to invest in skills within
the industries themselves rather than in the Sector Skills Council.
In an industry driven by small to medium size enterprises the
actual onus to get them to invest significant amounts that would
be easy to manage by the Sector Skills Council has been quite
difficult.
Q456 Chairman: The original intention
was for all of them to be self-sufficient, was it not?
Ms Caine: You are quite right
that that was the stated aim and intention of DfES. I have to
say that that aim was decided upon without consulting the Sector
Skills Councils and Ms Florance's point is very well made. Currently,
the network of 25 enjoys something like £36 million worth
of core investment. Perhaps we can go on to discuss later that
the percentage of satisfaction and recognition by employers is
increasing. When looking forward to the Leitch expectation, one
perhaps has to begin questioning the proportionality around which
agencies have been tasked to do what and where that resource is
being applied. The original proposition that we should be self-financing
in three years was extraordinary and misguided. Our practice shows
what we can deliver in terms of the benefits to which Ms Florance
has referred but we believe that for that we require authority
and further resource. I just draw to the attention of the Committee
that currently the Learning and Skills Council has a budget of
£10.4 billion for England alone and a significant part of
that is applied to staff and overheads.
Q457 Chairman: My question is not
a criticism; it is just to get the balance right and compare it
with the original intention. What are the great challenges facing
the Sector Skills Councils? It has been going for some time. How
successful do you rate yourselves?
Mr Wisdom: It depends on how one
measures it. I believe that the sector skills movement has achieved
a lot in a very short space of time. I think the first Sector
Skills Council was established in April 2003 and the last one
in January 2006. This is a relatively young network. I cannot
talk about every Sector Skills Councils. If I take my own first,
on 7 March the Minister for Tourism and Creative Industries launched
the first ever national skills strategy for hospitality, leisure,
travel and tourism based on a massive breadth of research, including
four skills summits that had involved in the region of 200 employers,
to develop solutions for the industry, and all of that was from
a standing start with fairly minimal investment.
Ms Caine: It is interesting to
note that at lunchtime today CIPD launched its research which
looked at its employers' views on skills and agencies. Given that
we are, as Mr Wisdom said, a young network, it is very pleasing
to see that 87% of those employers rated our performance either
as good or average. That is better than the RDAs and is pretty
level pegging with the Learning and Skills Council.
Q458 Chairman: You are being a bit
selective. I chaired that launch of CIPD at lunchtime and KPMG
said some quite hard and rather nasty things about the performance
of other parts of the Sector Skills Councils.
Ms Caine: I am sure they said
that we probably needed to improve.
Q459 Chairman: No; they said they
rated you below FE colleges and private trainers. You were in
the third tier. It is true that you were not as bad as the LSC
but by some criteria you did not achieve quite that result.
Ms Caine: I think that is right.
What I am saying is that given that the network has only just
been finalised we were pleased to see the result. One must not
forget that we are also strategic bodies and do not deliver training.
If you ask employers about the benefits from training FE and HE
are institutions that deliver, but it is also worth pointing out
that when asked about factors that would increase employers' contact
with training bodies one in three said that more sector involvement
would deliver it. If one looks at other statistics, in the summer
of 2005 after only two years of the establishment of the network
35% of employers were aware of their own SSC and of those 62%
felt that they had had a positive impact as a result of that interface.
We know what Leitch said; we are aware of the points that have
been made about the patchiness of the network. We recognise that
we need to improve and deliver to a standard across the piece,
but inevitably all nine RDAs do not deliver to the same standard,
nor do the 47 local Learning and Skills Councils. We believe that
we have made a good start and have some good stories to tell in
terms of success with employer involvement and the picture is
positive.
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