Examination of Witnesses (Questions 460-479)
MS DINAH
CAINE, MS
LINDA FLORANCE
AND MR
BRIAN WISDOM
14 MAY 2007
Q460 Chairman: I just point out that
I chaired that experience. Ms Florance, what are the barriers
to being more effective?
Ms Florance: Perhaps I may kick
off with what we have done as a Sector Skills Council and then
talk a little about barriers. As a Sector Skills Council we were
one of the trail-blazers, pulling together industries that had
never worked together before. Many in the public sector view clothing
and textiles as being one; they are not. They were not happy bedfellows
in the same meeting room when we set up a Sector Skills Council,
but now they are gaining the trust of each other in terms of business
and realising that on skills their competition is not in the UK
or Bradford; it is in Beijing. There has been a big recognition
within my sector that collaborative action on skills which perhaps
in the past they would not have endorsed is the real solution
for the future. Much of that is coming together in the formation
of our Sector Skills Agreement which has nine strands backed by
various sub-sectors of the industry. Moving that onto what are
the biggest challenges is to get that Sector Skills Agreement
to stick with others in the training infrastructure. I mean that
this series of measures is aimed at ensuring that our sector is
sustainable and increasingly productive for the future. It is
not a menu from which to select; it is a range of interventions
which will support the industry in future. I find success in some
regions of England, but I also find it a very hard job to change
the gearing of the training system to be able to deliver against
my sector's agreement.
Q461 Chairman: One matter that emerges
from all the evidence we have had so far about the Sector Skills
Councils is that you are national bodies and a lot of the business,
resourcing and provision is at regional level. People have told
the Committee that one of the deficiencies is that you are not
down at the regional level because you do not have the funding
to be in every region with the kind of clout you should have.
Does that strike a chord, or is it poor information?
Ms Florance: In part it does strike
a chord; some of it does not. For every Sector Skills Agreement
that we have, each strand has been both researched at regional
level and in some cases at local level where there is a local
hot spot. They have also been developed into regional plans for
pick up by partners. If what we say is that partners are perhaps
not happy to implement those particular plans without further
intervention from us on a wide scale, dealing with a myriad of
partners at local level, currently we are not resourced to do
that.
Ms Caine: I give you one example
of where we are working at regional level because that gives people
a focus. There are other examples across the country, but for
us the BBC move to Salford and the development of Salford as a
media city will have an impact right across the North. We are
working with all the employers, trade associations, unions, the
three RDAs and the three Learning and Skills Councils, also building
partnerships with relevant schools which will be offering the
14-19 courses and the FE and HE institutions with which as an
industry we are building links. We are very much taking a strategic
lead in pulling all of that together. That is a concrete example.
You are right that resource is an issue and that, if we turn to
Leitch, the calibration between, as it were, ourselves as sector
bodies with a regional, national and UK-wide and global role and
the plans around the setting up of the local skills and employment
boards and how they integrate will be key. I happen to chair the
network of Sector Skills Councils in London and have just become
an adviser to the newly-formed London Skills and Employment Board.
That brings benefits in terms of bringing the network and region
together and ensuring that we mesh effectively. But you are right
that resource is a defining issue. The Sector Skills Councils
which have people on the ground in London and the resource to
do that have much greater traction in and for London than the
ones which do not.
Mr Wisdom: It is also important
that that sectoral perspective is strongly held. For example,
for the tourist industry the Cotswolds are important. There are
three regional development agencies that intersect three Learning
and Skills Councils. What employers could not understand was why
there would be three different approaches to skills and training
in such a confined areas as the Cotswolds which clearly is a destination
in its own right and has its own particular skills. To make sure
that balance is right is very important.
Chairman: Let us move on to how you as
Sector Skills Councils represent employers.
Q462 Fiona Mactaggart: I was wondering
how you know that you are the voice of the people particularly
within very diverse sectors, for example big hotel chains versus
local leisure clubs and so on. It must be quite complex. How do
you know? What is your test?
Mr Wisdom: The fundamental litmus
test is the level of satisfaction with the product that we are
able to produce, but to get to that point you need the ability
to influence the product in question, which is skills training
for the sector. The governance of People 1st is carefully structured
to make sure it is representative of all the industries within
the sector. I have talked briefly about our board. The board is
elected by a members council which has 20 chief executives and
HR directors from both small and large organisations that represent
our 14 industries. We have subsets of meeting structures that
also pull together employers from both regions and our sub-sectors.
We work as broadly as we can. But the next important point is
the research that we conduct, that is, the labour market intelligence
which covers 5,000 employers in our sector. That is the largest
piece of labour market intelligence conducted in hospitality,
leisure, travel and tourism in three decades. That in its own
right demands that there is clearly a representative voice being
heard there. I am sure that my colleagues have other examples.
Ms Caine: Research is the cornerstone
of everything we do. We have a regular programme with employers
and the workforce, and within that we ask them about their knowledge
of and satisfaction with us. The critical point for them is how
we then work with them to develop strategies and action plans
that build on that. To my mind, ultimately it is whether or not
they change action. For example, we know from two of our sub-sectors
that they are satisfied because film has moved to agreeing a statutory
levy, which is the first time in 30 years any sector has done
that. In TV and radio the companies have voluntarily agreed to
a co-regulatory situation with Ofcom, Skillset and the industry
which is about focusing what they do and how they do it. To my
mind, that action and delivery results can be brought about only
if we have been involving them and they feel that they own who
we are, what we do and the actions we are taking.
Q463 Fiona Mactaggart: That is quite
different from Ms Florance's pattern where if the businesses are
paying themselves for the service they get from the Sector Skills
Council that is a reasonable measure; it has agreed to a levy
and is paying it and that means it is getting a service which
it believes represents its needs. That is not what is happening
in Ms Florance's sector, is it?
Ms Florance: But that does not
change the fact that the information is based on robust labour
market intelligence which is divided up to be representative of
each of the sub-sectors and types of employers. It is really important
not only to listen to what the employers are saying but to turn
that round and get them to future-proof it. In the skills world
it is not just about the employer who shouts loudest about a skills
shortage or gap today; it is about us trying to inform the suppliers
of education and training to change things for the future. Therefore,
we have to look at future skills, not just the skills today. That
is a really important role for the Sector Skills Council and one
that we have taken very seriously with focus groups of employers
throughout the UK.
Q464 Fiona Mactaggart: I think that
is a very reasonable point. All of you have talked about your
Sector Skills Agreements which clearly have a role in that process,
but are you sure that employers have bought into those agreements
and they feel that they meet their needs?
Ms Florance: In my case the employers
are ready to get behind some of those agreements with their personal
investments. We have managed to implement some pilots for that.
To give an example, there is an early pilot that tests a brokerage
model. Where there are small businesses that do not have sophisticated
systems for HR and training advice a broker that can help them
determine their future business and skill needs can be exceptionally
helpful. In piloting that the Learning and Skills Council in England
put in £0.5 million that would back employer-driven skills
required. In return for that my sector put £800,000 into
that skills package. I believe that for small to medium size businesses
to more than match public service investment is a demonstration
that the industry is supportive of an employer-led agenda and
one of the strands in our Sector Skills Agreement.
Ms Caine: I think that the two
examples I gave were products of our Sector Skills Agreements
and our industries' commitment to action. As one of the pathfinders
one of the matters we found slightly disappointing in the process
was the promise made of a something-for-something deal of rights
and responsibilities which our sector took very seriously and
addressed. We did not consider that it was quite so fulsome in
terms of a joined-up response from the public agencies involved.
Therefore, we welcome the Leitch review's recommendation that
Sector Skills Agreements should become firmer, if you like harder-edged,
both in terms of the commitments that the sectors make but also
the way in which authority and investment flows in relation to
that demand-led analysis and agreement to act. Unless we get both
those together and calibrated we will not see the step change
that we need.
Q465 Fiona Mactaggart: What were
you expecting from the public bodies that you did not get?
Ms Caine: We were expecting more
joined-up commitment and support in terms of recognising us as
an authoritative lead, which we believe we had earned and demonstrated.
We believed that institutional politics were at play to a significant
degree.
Q466 Fiona Mactaggart: Can you give
an example? You may anonymise it if you wish. To say that institutional
politics were at play can mean almost anything so I would like
a story, if you have one.
Ms Caine: There are nine English
regions and in some there is a genuine openness and willingness
to work in partnership with us; in others we were regarded as
national interlopers on the regional patch and to be ducked around
rather than worked with. As it goes, I think we were a pathfinder.
Matters have improved and developed, but I certainly believe that
the harder-edged holding all partners to account around a demand-led
agenda has to be firmed up if we are to get the kind of buy-in
from employers that everybody wants to see. We cannot step up
to the mark and then have promises made which are not followed
through in a systematic way.
Mr Wisdom: I believe that is the
biggest worry. I sit here looking up to my two colleagues because
I have the freshest yet Sector Skills Agreement which is not yet
being put to the acid test of whether all parties will play their
part. But I look at some fairly simple issues such as the training
of chefs for which my Sector Skills Council takes some responsibility
and accountability. Over the past five years we have seen a 6%
rise in demand but colleges of further education have produced
10% fewer trained chefs during that period. We have 50,000 practising
chefs and cooks out there with at best the equivalent of a basic
food hygiene certificate which does not really equip them to cook
from scratch, whereas we have an industry that is crying out for
an industry standard qualification that it can recognise. 15%
of my employers still advertise for a qualification that has not
existed for 15 years. The challenge of all those things happening
within the context of our Sector Skills Agreements fills my employers
with some dread that it just will not happen. In terms of the
qualification for chefs, for example, it has taken us two and
a half years to get 14 colleges piloting the new qualification
with no firm agreement to full funding from the Learning and Skills
Council for the future. Going at that pace we fear for the 2010
date that Leitch talked about.
Q467 Fiona Mactaggart: I am very
interested in the conflict between sectoral and local or regional.
I represent Slough. There is a huge demand for skills in the town
I represent. There are very low levels of skills, but in a way
the issue is not particularly sectoral; there is a very big common
agenda of skill shortages and skill needs which exists within
the place rather than necessarily the sectors. I am wondering
how you deal with the tension between the skills needs and demands
and shortages in a place where your employers are based and the
skills, needs, demands and shortages in the sector. I believe
that these things pull in different directions. I should like
to know how you as Sector Skills Councils would deal with that.
Mr Wisdom: Living in Datchet which
is very close to Slough, I am fully aware of the difficulties
that the shortage of chefs causes in Slough. The sectoral need
is also present in the local area and raises the interesting question
that if you take my own sector—every sector is different—45%
of the workforce work for UK-wide organisations. 45% of the workforce
work for micro-businesses in local locations. Therefore, the regional
agenda in the middle is quite a difficult one for our employers
to understand because they care either about the economy in Slough,
Blackpool or Weston-super-Mare or about having a skills provision
that crosses the UK for them.
Ms Caine: As far as our industry
is concerned, our employers have global, national and probably
regional interests. First, there are stunning examples of where
the two agendas do mesh extremely effectively. I just give the
Skillset BBC move north as an example. That reaches and ticks
all of those boxes from local through to global. It is very important
one recognises it is possible and there is a lot of good practice,
but it seems to me that something systemic needs to be addressed
to ensure that that is the case. I come back to the local skills
and employment board. It is our view that they too need to be
licensed by the new commission. In our view, the network, which
is the important part, needs to be represented or meshed in some
way. You are quite right that in terms of issues like employability,
basic skills, management and leadership there are cross-cutting
themes which will impact and be important at a local employment
level. Between us we can and do support those agendas and we network
across them. The issue is the one the Chairman discussed earlier:
the resource and detail and the level to which we can work in
order to play our part to that picture.
Ms Florance: And it is the delivery
of sector-specific skills. The bottom line is that in an industry
which is scattered right across the UK we need to help provision
cross-boundaries. We see waste in the system where two neighbouring
colleges in different regions offer the same programme and both
fail because they cannot attract enough delegates. We transcend
that barrier. We could advise them and give them the right data
on which to base their future provision to make sure it is secure,
because our industry loses if it loses two programmes that one
could win. I believe that is the additional benefit that we can
bring to the regions, but for generic employability skills I agree
with everything that Ms Caine has said. We need to interact effectively
in the regions and at local level.
Q468 Mr Chaytor: I want to return
to the question of budgets. I should like to clarify what each
of the witnesses said earlier about the budgets of the respective
organisations. Ms Florance, you said that the budget of Skillfast
was £3 million of which £1.3 million came from the SSDA.
Ms Florance: I said that £1.3
million came from the SSDA and a further £3 million came
from elsewhere.
Q469 Mr Chaytor: Ms Caine, yours
is £8.3 million, of which £1.3 million comes from the
SSDA.
Ms Caine: No. The £8.3 million
is a mixture of UK Film Council and levy and industry contribution
which we use to invest in training. We then have £1.3 million
from the SSDA, £1 million from our industry and, like Ms
Florance, we probably bring in through a range of project activity
another £1 million, so our core budget is about £3 to
£4 million.
Q470 Mr Chaytor: Mr Wisdom, you referred
to a figure of £21 million.
Mr Wisdom: It is £21 million
over four years. That comprises the income from an awarding body
business which we owned and subsequently sold and income from
projects and employers in the industry.
Q471 Mr Chaytor: Ms Florance and
Mr Wisdom, you agree with Ms Caine's comment that the original
objective of trying to make the councils self-financing at the
end of the three-year period is a non-starter, or is there a possibility
of that happening?
Ms Florance: I agree with that.
One must contrast the development of any commercial lines of income
with the core role of an SSC which is strategic. My Sector Skills
Council piloted a number of ways of developing an income but at
the crux of it was a conflict of interest between some of our
strategic activities and the development of an income.
Mr Wisdom: I endorse that. The
reason we sold the awarding body was that we believed there was
a conflict of interest with our role in terms of simplifying and
rationalising qualifications. It was distracting us from the core
work that our employer expected us to do, that is, to reduce the
500 qualifications operating within the sector that they do not
understand.
Ms Caine: That was one of the
matters in respect of which Leitch felt SSCs should move on.
Q472 Mr Chaytor: The prime object
of the SSCs is the building of the network and the strategic oversight.
What are the legitimate revenue-earning activities that would
not involve a conflict of interest? You do not want to be involved
in providing qualifications or directly delivering training, so
what else is left?
Mr Wisdom: It is very difficult.
The question is how one earns an income from those core activities
if they are not in delivery or the world of qualifications. That
is why proper funding for Sector Skills Councils that enables
them to continue to maintain their presence effectively as honest
brokers within their sectors, signposting without any fear of
bias or conflict of interest to the very best provision and ensuring
that qualifications are fit for purpose, is absolutely key.
Q473 Mr Chaytor: When you refer to
proper funding you mean more funding from the public purse. Your
view of the future is that the SSC should be very largely funded
by the Treasury?
Mr Wisdom: Sector Skills Councils
must have enough resource to provide world-class labour market
intelligence to be able to conduct a proper reform of the qualification
system with colleges. That takes more resource than is now available
to the network.
Ms Caine: At the end of the day,
we have a key role to play in terms of raising investment for
training in our sectors and focusing employers' contributions
and demands. That is absolutely key if we are to meet the challenge
in terms of skills and UK plc going forward within the global
economy. We are happy to be held accountable for that; we are
happy to be held accountable through our Sector Skills Agreements
in a more tighter way, but we go back to Leitch and the fact that
he was saying one should clarify the roles of the agencies. We
believe that resources should follow that clarification. He called
for a streamlining of the Learning and Skills Council organisation.
To us, that seems to make sense because if we in Leitch world
are to be given the role to interface with employers and workforces,
identify needs and demand-led agendas and economically valuable
skills and the Learning and Skills Council becomes a commissioning
body, or buyer of training against those plans, then to us there
seems to be sense in terms of apportioning the available resources
that now exist in line with the clarification of the new roles.
Q474 Mr Chaytor: Ms Florance, what
is your view of the future funding of your Sector Skills Council?
Ms Florance: I concur with what
Ms Caine has put forward. A lot of savings can be made in the
system as long as there are clear roles. The clear roles will
help employers gain access to the advice that they need to train
their workforces and, importantly, individuals to back the right
horse in terms of their own learning to ensure that they undertake
training that is fit for purpose for their future career prospects.
Q475 Mr Chaytor: Another view is
that the Sector Skills Councils have been around three years and
have received a considerable amount of public funding and, frankly,
within that period nothing has changed. There has been a lot of
networking but what has changed? Presumably, as we speak the LSC
is preparing its brief as we move towards the next comprehensive
spending review and demanding that your wings be clipped a little
bit. Is not the real problem that your role is uncertain and therefore
the whole issue of how it should be funded is also uncertain?
Mr Wisdom: The issue is how important
is our employers' future skills need in this economy. Who will
voice it if it is not the Sector Skills Councils?
Q476 Mr Chaytor: But to provide a
voice for the employer is not a big job, is it?
Mr Wisdom: I hear trade organisations
or other membership organisations quoted. One of the issues about
employer membership organisations—I give you a little example
from Northern Ireland—is that they must represent all of
their members. In Northern Ireland there is a big issue about
where hospitality education is located. It is currently on the
North Antrim coast. The trade association is unable to argue that
it should not be there because it has members on the North Antrim
coast, so who will articulate that the best place for it to be
on behalf of the majority of employers is in Belfast if it is
not the Sector Skills Council? I think that is just one example
of where you get an independent view of skills provision that
you cannot get through some of the other bodies, so it is a question
of balance.
Ms Caine: I hear that analysis
but I make two points. First, we have to face the fact at the
moment the players who have played thus far have not succeeded
in achieving the level of employer engagement and investment that
I believe we would all want to see and need to see if we are to
move the economy forward. If we take that as a given then the
question is: how best do we proceed? You could say that Sector
Skills Councils have been around for three years. Ms Florance
has just described the collecting together of different size companies
and sub-sectors. TV and radio are both broadcast mediums but,
my goodness, there are fundamental differences between them and
how they see themselves. The whole thrust of being a voice for
employers requires the building of confidence, the analysis of
information and working with them to get them to see that skills
is a key issue and lever and is something on which they need to
work together.
Q477 Mr Chaytor: Is there not a big
difference between your Sector Skills Council where 60% of people
working there are graduates and there is a fairly high level of
technical skills in the area of radio, television and film, and
the hospitality and clothing and textiles sectors? This is reflected
by the fact you have a levy which a large number of your employers
are prepared to pay. In terms of the other two is there any scope
for getting that kind of employer buy-in through a levy, or has
that been discounted completely?
Ms Florance: You are absolutely
right that there are differences between sectors and that is why
there are 25 Sector Skills Councils. There will be many approaches
to levering investment into the development of the workforce.
Clearly, in some sectors to have larger businesses that are able
to support a workforce that ultimately is freelance and whose
services they wish to buy into is critical. In most areas in my
sector we looked at creating incentives in terms of training.
There are not any drivers in terms of health and safety; there
are no drivers to say that there should be a licence to practise
in this sector. Many people enter the industry without any qualifications
whatsoever and succeed supremely because here we are looking at
skills not necessarily qualifications. If we can tailor the public
effort and investment in such a way that leads to further private
investment that must be my objective. That is what I should like
to be held accountable for in my Sector Skills Council. I mentioned
waste earlier. To give an example, I said that we spanned the
couture industry. There are 3,000 graduates every year in fashion
design for which there are around 500 job opportunities each year,
including the people who enter self-employment. On its own that
is quite a damning statistic because when young people enter those
courses they do not do so for general education but on the basis
of their belief that those course will equip them for a role within
the sector.
Q478 Chairman: Are you advocating
there should be the right number of jobs for the people?
Ms Florance: I am saying that
the match should be closer. 50% of those who exit with degrees
do not have the technical skills required to be picked up by the
industry. We would like to increase the number of graduates that
the industry employs in future, but because there is a shortfall
in some of the skills when they exit we have a difficult mismatch.
I believe that in pulling those things closer together we will
have a better investment for employers; indeed, many of them are
now prepared to offer master classes into universities to ensure
that undergraduates understand what will be required of them in
future.
Q479 Mr Chaytor: Ms Florance, you
said that public investment was important to lever in private
investment. What do you think the broad ratio should be in terms
of the typical Sector Skills Council in future?
Ms Florance: I find that question
extremely difficult to answer. To go back to an earlier point,
for an investment of £500,000 my sector put in £800,000.
That kind of balance in many sectors and sub-sectors would work.
Mr Wisdom: It is very difficult
to say what the balance is. Research has shown that within our
sector there is about £600 million of public sector investment
in skills that supposedly helps the hospitality, leisure, travel
and tourism industry every year. We also know that 98.5% of our
small and medium size enterprises have never accessed or had support
from any of that funding. Therefore, we have to find a balance
which says that we make that investment work harder and more effectively
for our businesses. When we do that we encourage our businesses
to invest more. Today, our businesses probably invest more than
the public sector does alongside it. Next, there is also the issue
of the learners who will invest only if they believe there is
some value to them out of the skills they are learning.
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