Examination of Witnesses (Questions 640-659)
MR STEVEN
BROOMHEAD AND
MR JOHN
KORZENIEWSKI
4 JUNE 2007
Q640 Chairman: Mr Korzeniewski, is
it necessarily complex? What about all the siren voices that say
that it should all be swept away and we should make it easily
understandable, and anyway it is all the fault of the LSC?
Mr Korzeniewski: And the achievements
are the LSCs. I agree with my colleague that we work with a complex
system. Clearly, one of our major responsibilities is to make
sense of it in the North West. I also agree that Leitch provides
opportunities for simplification. We think that we are in a good
position to take advantage of that simplification, working locally,
nationally as well as regionally.
Q641 Helen Jones: Were you disappointed
that Leitch gave very little attention to the role of Regional
Development Agencies in his review, and why do you think that
was?
Mr Broomhead: We were disappointed
when the report came out, but we also saw it as an opportunity
for RDAs. The Department has not always been as strong on the
regional agenda as we think it should perhaps have been in terms
of its recognition of regional economic strategies and the strong
partnerships between ourselves and the LSC, in particular the
role of the Regional Skills Partnership. Since Leitch was published
we have worked quite hard. My understanding is that Government
intends to publish the Leitch implementation plan on 14 June,
and we have been very heavily involved in making submissions about
that in a number of areas: first, the importance of regional economic
strategies. Whilst we accept that there is a national skills policy
with national targets, partners in each region have worked together
to establish a set of regional skills priorities. My colleague
and I work very closely on that. We believe that now there is
recognition of the regional debate and the role of development
agencies. Our employers in the North West have been waiting with
baited breath for action under Leitch and now they want to see
what will happen in terms of changes at the region. The evolution
of the LSC to have a regional governance structure is also very
supportive of the fact that we can get regional focus around the
key economic issues that should drive the skills agenda in the
future.
Q642 Helen Jones: I want to tease
that out a little. We hear a lot about the need for skills strategy
to be employer-led, but looking to the future there are occasions,
are there not, when there are no employers to lead it? You will
know as well as I do that the Omega development in Warrington
is a good example of that. We are looking forward to what will
be there in the future and trying to train for that. What do you
think should be the role of Regional Development Agencies in developing
skills, looking at the way that the economy in the region will
develop in future and making sure that we have the skills to meet
it? How can that best be put in place?
Mr Broomhead: Our responsibility
as a development agency is very much about economic development
and sustainable economic growth. That is why I believe we have
a very strong partnership with the delivery side of skills in
terms of the LSC in the region. To answer the specific question,
one of our roles is to make sure we join up all those issues,
so we will be working with the Sector Skills Councils and various
professional trade bodies such as the CBI, the Chambers of Commerce,
Institute of Directors and private sector partners to make sure
we take a much more proactive medium-term and policy and evidence-based
approach to the development of skills across our region. It varies
from place to place. The skills needs in Greater Manchester are
very different from the skills needs in Cumbria, which is why
we believe—perhaps we may have the opportunity to talk about
how we organise ourselves in this matter—that sub-regional
working between our two organisations is as important in many
ways as regional working.
Q643 Helen Jones: Perhaps Mr Korzeniewski
can come in on the back of that. Only a very small part of the
RDA's budget is devoted to skills; most of the spending is on
economic development. Bearing in mind what has just been said,
in your view where is that money best spent?
Mr Korzeniewski: First, one of
our drivers is the Regional Economic Strategy. We have a set of
regional skills priorities which are determined through the Regional
Skills Partnership. That gives us a picture of what is required
in the region going forward. We can then put that against the
various deliverers of skills, because we are a central body but
not the only one. At high level it is not us at all. In my view,
the best place for the RDAs to put their money is in the places
where ours do not go, so we are, as it were, operating a pool
in the region against those priorities.
Q644 Helen Jones: Assume I am an
adult and I am looking to upgrade my skills. How will I know which
skills will be of most value to me in the future and where I should
go to get them? The planning being done at RDA level is all very
well, but if I am a learner on the ground how will I know where
I should be learning and what kind of learning I should be taking
up which will give me the best chance of getting a decent job
in years to come?
Mr Korzeniewski: At the moment
I think that is very difficult. I echo my colleague's point about
Leitch's recommendation about a comprehensive adult information
and guidance service which should provide that. There is information
available generically through things like Learndirect, but in
a specific place it is very difficult at the moment. Obviously,
there are intermediaries and providers who can help, but there
is not a comprehensive service that can provide that for the total
range of individuals. If you are in the system already you will
tend to know.
Q645 Helen Jones: Mr Broomhead, referring
to the priorities and targets set by Leitch, he took very much
a national and sectoral approach. Does that fit with your experience
of what is happening in the North West region, or do you suggest
there are different priorities which ought to be addressed regionally?
Mr Broomhead: We have had quite
a lot of discussion with our sponsoring department, the DTI, about
this very issue. Each RDA has its own Regional Economic Strategy
and needs and, frankly, we need to reflect the fact that if there
are different economic issues and needs there must be different
sets of targets in different regions. Certainly, the employment
and skills issues are very different in the North West from what
they are in the North East. For instance, the arrival of the BBC
in Media City—Salford—will produce a whole set of
new needs around the creation of digital industries which will
not be needed in the East of England. We need a system of variable
geometry which also fits with targets. I think that we are now
at a stage with the sub-national review being carried out by Government
as part of the Comprehensive Spending Review where we can have
a discussion about national and regional targets so we can have
a much more appropriate set of arrangements than we have at the
moment.
Q646 Jeff Ennis: We have heard evidence
from representatives of the Sector Skills Councils that they feel
that with their expanded role they are very much under-resourced.
Do you agree with that statement? If so, from where do you think
additional resources should be obtained?
Mr Broomhead: To be fair, they
are still new organisations, and certainly they have been given
a very important, pivotal role in terms of the Leitch report and
its implementation, particularly in relation to the licensing
of qualifications, which will then turn into funding arrangements
for learning providers and colleges. In my view, if they are to
fulfil that role, particularly the licensing of qualifications,
they will have to be a much stronger and better resourced organisation
than it is at the moment. Perhaps some of that resource should
not necessarily come from the public purse, because frankly these
organisations are the licensed voice of employers. Therefore,
if employers believe that they want to do something for their
particular sector perhaps they should make a voluntary contribution—I
do not suggest a levy—towards their development. My experience
is that the larger, blue chip businesses have good knowledge of
and working relationships with each of the SSCs. The small to
medium size enterprises, for example the ones I meet in my day
job at Chambers of Commerce events, do not even understand the
names of the SSCs. I think that some work is to be done among
medium size enterprises to raise the level of awareness of those
SSCs.
Mr Korzeniewski: In the North
West we have a system of what we call Sector Skills and Productivity
Alliances which essentially bring together the SSC, the RDA and
ourselves to talk about the sectoral implications of the economic
strategy and help us get that employer voice through the sector
councils into regional decisions and choices. Although it is a
slightly different point, in the North West we have a good track
record of engagement with SSCs.
Q647 Jeff Ennis: Mr Broomhead, to
go back to the point about employers making a contribution, has
it not always been the 64 thousand-dollar question? In this country
employers want to have everything on a plate by and large, do
they not?
Mr Broomhead: Obviously, that
is a big policy issue. Many employers in the past have been entrusted
with delivering training. If you take a market-led approach to
skills, certainly in some of the earlier elements of the discussions
on Leitch I was rather worried that we would see the re-introduction
of naked market forces in education and training. Certainly, the
market must be more dominant, but there will always be a need
for intervention particularly around learners who face disadvantage.
A key issue for me is how small and medium size enterprises in
particular that have never had a culture of training and professional
development will respond to this. Whilst the results of Train
to Gain which has been established are quite encouraging—people
are ringing Train to Gain and getting advice and so on—a
lot of work is to be done on a big set of cultural changes which
it is hoped can be fulfilled by Leitch.
Q648 Jeff Ennis: Following your comments
on making Sector Skills Councils more visible to employers, does
that not reflect the fact that some of them have got out of the
starting blocks a lot quicker than others and some have a considerable
way to go to show their wares to potential employers and employees,
etc? Do you think there is a role for your two organisations to
help the Sector Skills Councils achieve that role?
Mr Broomhead: First, SSCs have
variable visibility and performance. Generally speaking, the process
has worked well but they are all new. Certainly, we feel that
at regional level we can work the Sector Skills Agreements with
each of the councils to make sure employers understand more and
more the work of an SSC. In particular, if the employer's pledge
is to be fulfilled—that is a key recommendation in the Leitch
report—we have a lot of work to do to get employers to understand
the role of the SSC and what the pledge means in practice.
Mr Korzeniewski: Not all SSCs
play in the same way in each region. Some are more important to
some regions. Given the focus of the RES in a way that tell us
the relationships and the prioritising in a particular place,
we will see that reflected in regional strategies.
Q649 Jeff Ennis: Can you give a positive
example of where your organisations have engaged with a particular
Sector Skills Council in your region to the benefit of both companies
and potential employees?
Mr Korzeniewski: I can think of
a couple: Cogent Sector Skills Council for the chemicals industry
and Sector Skills and Productivity Alliances in the North West.
It has been demonstrated that there is a shortage of apprenticeships
particularly along the Mersey estuary where there is a conglomeration
of petro-chemical firms, as you are aware. As a result of that,
in our regional commissioning plan we commissioned about 70 extra
apprenticeship places, so there is a direct line of sight there.
We have another example of working with one or two Sector Skills
Councils. I refer to working with Proskills and Cogent on qualifications
in business improvement techniques in the North West which we
have been able to commission. I do not say I can give you an example
for every Sector Skills Council.
Q650 Chairman: You have not really
said anything positive or negative—you have been neutral—about
Sector Skills Councils. You have said these are early days, but
we have heard quite a lot of criticism from people like the Institute
of Directors. They say that they are not the genuine voice of
the employer and criticise the suggestion that Sector Skills Councils
can be put in place. I take it that this afternoon we will get
a bit more of that from the Engineering Employers Federation.
What is your view of them?
Mr Broomhead: Clearly, British
Chambers of Commerce and the Institute of Directors, to take two,
are likely to view the SSCs as a threat because they see themselves
as the voice of their members and they do not want to see their
policy voice diluted by another body. What we have said to those
bodies in my region is that they should get behind the SSCs. They
will express their own views but they ought to engage more in
the SSCs and make sure that their members are aware of what they
are about and their future potential. For years employers have
moaned about the mismatch between the outputs from colleges and
universities in relation to their own businesses. I keep telling
them that this is a golden opportunity for them to get involved
with a body that is likely to shape qualifications and competencies
that they need. They are new at the moment, but the challenge
facing the SSCs will come through the Leitch implementation plan
and that will have to be met through the new national commission
on skills and employment which Leitch recommends should be developed.
Mr Korzeniewski: For me, the issue
is: what is the gap in the system that SSCs are designed to fill?
I think that the signal from Leitch on qualifications is an important
one in defining a role for them. Apart from that, I agree with
my colleague that in many cases they regard them as young developing
organisations. I think we can give examples where they have affected
our planning and spending.
Q651 Chairman: Would you give them
some money to be more effective in your region? In principle,
are you allowed to do so?
Mr Korzeniewski: The honest answer
is that at the moment we are trying to put as much money into
direct delivery as opposed to capacity building. The work that
we have described doing with them is expensive of our time across
the region.
Q652 Mr Chaytor: As a supplementary,
Mr Korzeniewski, can you think of a single Sector Skills Council
that is likely to become financially self-sufficient by 2008?
Mr Korzeniewski: That is a good
question, but I am not sure that I have the information to be
able to answer it.
Q653 Mr Chaytor: What is your gut
feeling?
Mr Korzeniewski: I have mentioned
the name of one or two which are very visible in our work in the
region. In a way, I guess that that provides some kind of answer.
Q654 Chairman: Is there not a temptation
for some of them to raise a bit and get into areas where you would
not expect them to be and would not want them to be?
Mr Broomhead: I think that would
be a matter for the new national commission because it would have
oversight of and make regulatory arrangements for the SSCs. What
I would not like to see is a move to create more SSCs than there
are now. We came from a situation in which there were about 70
national training organisations of one sort or another. That was
very confusing to both learners and employers. I think that the
25 we now have is about right, although the boundaries sometimes
do not suit the needs of individual employers in certain areas.
Q655 Paul Holmes: You just said that
there had been 70 training bodies and now it is better and simpler.
Would that not apply equally to yourselves? We have two separate
organisations: the Regional Development Agency and the regional
Learning and Skills Council. Each has a different Chief Executive
and so forth. Why not just create one body? Would it not be more
efficient and clear? Would not employers find it simpler to deal
with?
Mr Broomhead: To go back in time
a little, up until 1997 we had the Further Education Funding Council
and a large number of separate TECs. That changed in terms of
what happened with the development of the RDAs and in particular
the Learning and Skills Council. We have seen a greater shift
in the number of bodies going downwards in simplification. I was
of the belief at the time of my appointment to the development
agency in 2003 that there needed to be greater regional synergy
between the work of the Learning and Skills Council and its remit
to deliver skills and that of the RDA whose remit is to deliver
sustainable economic growth within my region. There were discussions
about that out of which emerged the Bill now going through Parliament
to remove 47 arms of the LSC and create nine regional bodies.
We are content with that, because I and my colleague can have
a strategic and operational dialogue about particular issues.
I mentioned the BBC. Obviously, we can work together to shift
resources if required into those areas. When we have had redundancies
in places we have been able to work together round those areas.
As to the big challenges in my area to do with nuclear decommissioning
in West Cumbria, again we can work together on those areas. Rather
than move to one body, which has been mooted as part of the Government's
sub-national review, our relationship is very strong. I am a member
of the board of the regional LSC, so the economic input is made.
My colleague makes his input into the Regional Skills Partnership.
I think we have a very good and strong working relationship. If
we merged them it would make a very large organisation. We might
be criticised for being large and having insufficient focus.
Mr Korzeniewski: We work nationally,
regionally and locally and that is helpful. We are probably the
only body that does that. We also work across the range from young
people, including pre-16 increasingly, to adults in the workforce,
so we can help to join that up as well so that particularly over
time the regional economic strategy and the skills priorities
should be influencing what goes on, for example, in the new Diplomas
and apprenticeships. As my colleague has said, he attends the
existing regional board in the North West and challenges there
in terms of ensuring that the plans in draft meet the needs of
the regional economy as described in the RES. I believe that we
have a good relationship that is both positive and challenging
at the moment. I am not totally sure what we would gain by your
suggestion. It is a lot to merge.
Q656 Paul Holmes: Do both of you
think that London is going in the wrong direction by becoming
one body that effectively is told what to do by Ken Livingstone?
Mr Broomhead: We wait with interest
to see how in the medium term that works out in practice. At the
moment I understand that it is a set of strategic relationships
between the London LSC and the Mayor to try to address the big
strategic issues and plan on a more London-wide basis. I am not
certain that it is a merger, but I may be wrong.
Q657 Paul Holmes: But in practice
the London Skills and Employment Board is headed by Ken Livingstone
and the London LSC will implement what it is told to do by that
body, so in effect in London the LSC has been taken over.
Mr Korzeniewski: Obviously, that
is a description. If I may just reflect on the differences between
London and the North West, London is a region, as I understand
it. The Mayor's responsibilities are the same as the geography
of the London region of the LSC, whereas there is no parallel
for that in the North West of England. I guess that the nearest
kind of Employment and Skills Board might be Greater Manchester
or Greater Merseyside as that comes forward. That would not have
the same relationship with the region as the London arrangements
simply because of geography. Part of the complexity for the LSC
is to manage national priorities alongside regional and sub-regional
ones. I think that is part of the skill of working within the
Learning and Skills Council. Whereas I can see how complexity
can be dealt with in that way in London for the reasons I have
suggested, I am not sure that it can be done in the same way in
the North West.
Q658 Paul Holmes: But are you not
saying, therefore, that London is one city and has an identity
and so it is okay there but in the North West you have the needs
of Manchester which are very different from rural needs elsewhere
in that region? Is that not an argument for going back to the
47 LSCs instead of having a regional LSC?
Mr Korzeniewski: That would be
five in the North West, which was the structure before. What we
have worked hard at—I hope that you are starting to see
it come through—is exactly that regional dimension in the
North West which puts us in a better place than when we were five
separate local councils reporting nationally and almost missing
out the step of asking: what is our contribution to the regional
economic strategy?
Mr Broomhead: In our region we
have five sub-regional partners which are made up of the public,
private and voluntary sectors. They work alongside the regional
LSC and RDA particularly in offering economic intelligence about
areas that require public or private sector investment. When the
Bill is passed we will see the demise of the 47. They are also
very costly; all have overheads. I am very conscious about my
overheads with CSR around the corner. We have seen their demise.
But employers in those areas want to have their say about skills
issues. Our model has been that employers will work with the existing
structure—the sub-regional partnerships—to make sure
that the skills voice and strategies are dealt with there. That
will feed into the work of the LSC and RDA at regional level.
Q659 Paul Holmes: The North West
has a good reputation and you say that you work well together,
but imagine a hypothetical region where the person in charge of
the Learning and Skills Council just takes no notice of what the
RDA says and goes off on different paths. What mechanism would
stop that?
Mr Broomhead: I should have said
the very nature of our relationship is that the North West leads
for all RDAs on skills issues. If that was the case and there
was tension—
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