CORRECTED TRANSCRIPT OF ORAL EVIDENCE To be
published as HC 333-viii
House of COMMONS
MINUTES OF EVIDENCE
TAKEN BEFORE
Education and Skills COMMITTEE
Post-16 Skills Training
Wednesday 20 June 2007
MR IAN FINNEY and MRS DIANE JOHNSON
Evidence heard in Public Questions 757 -
856
USE OF THE TRANSCRIPT
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1.
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This is a corrected transcript of evidence taken in
private and reported to the House. The transcript has been placed on the
internet on the authority of the Committee, and copies have been made available
by the Vote Office for the use of Members and others.
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2.
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The transcript is an approved formal record of these proceedings. It
will be printed in due course.
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Oral Evidence
Taken before the Education and Skills Committee
on Wednesday 20 June 2007
Members present
Mr Barry Sheerman, in the Chair
Mr David Chaytor
Jeff Ennis
Paul Holmes
Helen Jones
Fiona Mactaggart
Mr Gordon Marsden
Stephen Williams
Mr Rob Wilson
________________
Memoranda submitted by The Society of Motor Manufacturers and Traders
Ltd
and Electrical Contactors Association Ltd.
Examination of Witnesses
Witnesses: Mr Ian Finney, Group
Managing Director, Concept Mouldings Ltd and Mrs Diane Johnson, Director, Eric Johnson of Northwich Ltd, gave
evidence.
Q757 Chairman: Good morning. Can I welcome Ian Finney and Diane Johnson to the
proceedings? We have been looking
forward to meeting you because we are having an awful lot of people who say
they know a great deal about skills but they are usually heads of large
enterprises, whether public or private, and we really wanted to talk to people
who are at the sharp end, who run small businesses or who are involved in small
businesses, to see what the present skill system in the UK looks like to
them. You are very welcome. If you have not given evidence to a select
committee before, we are not going to treat you as though you have just arrived
from the private equity world in the City which I think is going along down the
corridor here, but we really just need to probe and find out what real life is
like for you. We usually invite our
witnesses to introduce themselves to get started; you do not have to repeat
your CV because we have all got that.
Diane, what does the world of skills look like from where you are
sitting at the moment?
Mrs Johnson: My name is Diane
Johnson; I work for Eric Johnson of Northwich Ltd. We are a small company employing just over 50; we have been a
family company in business for 61 years and trained at least 300 apprentices. What does the world out there look like to me? It worries me because we now have a massive
shortage of skills throughout all the building services industry. We have somehow got to encourage employers
to take on young people because if we do not, in my view, in ten years' time we
will be very much a de-skilled country.
A country's economic value is based on the skills of your workforce so
that is what worries me.
Q758 Chairman: Ian, would you agree with that?
Mr Finney: In principle yes I do
agree with that. Concept Mouldings has
been in business for about 16 years and we set up a successful business in what
I would call a pretty deprived area of Wolverhampton. The work opportunities for the young people are limited at best
and these young men and women are coming out of school at 16 with low self-esteem,
very little purpose and as a means to try to help our business survive in the
manufacturing sector in the 21st century we feel we have to grab
them early, take away a little bit of their choice in that they usually come
though the door a little bit angry about things and we try to calm them down
and open their eyes to the opportunities that manufacturing can actually give
them. I hope that a lot of the
questions will be around how you can mould that person actually from 14 rather
than 16 and how the focus of skills regime and how some of the educational
money is put into the wrong areas. You
have got an 80-20 rule of thumb, if you like, and you are trying to push a lot
of people down the university path but vocational skills can open their eyes
and make them go forward to proper futures in any sector and how manufacturing
can play a part in that really.
Q759 Chairman: Diane, you are in electrical contacting; is
that residential or commercial or what?
Mrs Johnson: Everything. The whole gambit. We will go from domestic to commercial to industrial.
Q760 Chairman: In terms of the way that you run training in
your company, how do you keep abreast of changing technologies? It seems to me that even if you have a
domestic boiler the kinds of systems and the electronics and all that that are
involved, even in a residential household, are so much more sophisticated than
they were, how do you keep your training up to date?
Mrs Johnson: All of our
electricians will be trained to an NVQ Level 3 and then obviously each year
something changes. You have the 16th
Edition so we would send them on courses for 16th Edition. The new Edition has come out now which is
the 17th Edition so all of our operatives whether they be female or
male will have to go to college so that they are up with the regs. Also if something new comes on the market
you often find that the manufacturers will also put a course on. We are also part of the Electrical
Contractors Association which is a trade association and their education and
training department, whatever comes up new, if there needs to be a course and
the employer wants it they will work with them to give us that course to
educate our workforce.
Q761 Chairman: Who would supply those new courses? Would it be the manufacturer through the
private sector directly, or would it be the local college?
Mrs Johnson: No, it would not be
the local college. The 17th
Edition will go through the local college but the manufacturers often put
something on at their own premises or the Education and Training Committee of
the Electrical Contractors Association will do something in-house or they will
use providers as well. It is the whole
gambit, to be honest.
Q762 Chairman: What about the whole Corgi thing?
Mrs Johnson: That is gas.
Q763 Chairman: That is only gas, is it?
Mrs Johnson: Yes, that is the
whole gas area, not the electro technical.
Q764 Chairman: Is there not a Corgi kind of equivalent?
Mrs Johnson: I wish there
was.
Q765 Chairman: People do die because of bad electrical
fittings as well as gas fittings.
Mrs Johnson: If you want my
honest wish list, my honest wish list would be that everybody who wants to be
an electrician had to be licensed. For
example, you today could leave your position here - and I mean no disrespect -
go out and buy yourself a white van and a bag of tools and turn out to Helen's
house and say, "I can rewire your house".
That is outrageous.
Q766 Chairman: You will know that the daughter of a
parliamentary colleague of ours died as a result of that sort of thing.
Mrs Johnson: Yes, Jenny Tonge's
daughter. There are people in the
industry who are not qualified and what we are fighting to get are qualified
people in the industry. We give very
good training but the trouble is that at the moment a lot of the children
coming out of school at 16 are all being told to go to university or to further
education so a lot of A- C students will go straight on to further
education. We have to take our entrants
from what is left and it is not always what we need.
Q767 Chairman: There are still 57 %.
Mrs Johnson: Yes, but we are
looking for people who are quite happy to stay electricians but we also want
the people who are going to be the market leaders in the future in the
industry; we are looking for people who are going to be the business managers
who, through vocation, can still go to university. We are not getting that kind of candidate coming through. That is not the young person's fault, it is
because at 16 you have to make a decision but no-one asks, "Do you know what is
open to you? Do you know what it takes
to be a plumber, an electrician, a bricklayer or whatever?" At 16 they are making these choices but, to
be honest, they are very ill informed.
Q768 Chairman: That is a very important piece of
information. Ian, you are part of the
Society of the Motor Manufacturers and Traders, are you not?
Mr Finney: Yes.
Q769 Chairman: Are you better organised than the Electrical
Contractors in terms of training?
Mr Finney: I think the
automotive sector gives you a discipline.
I guess you can look at the automotive industry as being leaders in what
they do. We have gone through a
turbulent time in the automotive industry and we are very much involved in
niche volume manufacturing, technically difficult, pedestrian safety, carbon
emissions are all part of our focus to meet EU legislation and you are in a
changing environment within the global automotive sector in that you have to
meet the requirements of TS16949, ISO9000, and ISO14001. As large manufacturing dies and withers away
and is replaced by SMEs I think these SMEs are now agile and fit to innovate
for the future. We do undertake most of
our training. Like I was saying earlier
really, we need people to sweep the floor, we need people who want to be
production operatives, we need people who then go on to become supervisors,
team leaders, engineers. Manufacturing
is seen as being a dirty, poor career choice early on and that perception has
to change. That mindset has to change
in that the manufacturing business is about opportunity; it is about proper
business management tools and there is a career path for whatever educational
level you choose to come into the system.
Education can open doors but of course opportunity and vision and
purpose can really drive your vocational requirements through the system. Agreeing a little bit with Diane, the
education system is very disjointed, we have loads and loads of disjointed
schemes around. I feel sorry for my PA
because we are looking for a few new people, we are looking for production
operatives - there is this incentive to try to encourage people to bring people
on, we live in this disadvantaged area obviously and these are systems that are
open to ourselves - she looks at me and goes, "Oh no Ian, not again" and there
is a mountain of paper work and there is a load of cumbersome things that are
necessary to undertake, a lot of hurdles and barriers and ticking of the boxes,
but actually we just want to open the eyes of the young people and say, "Look
at the opportunities that are there for you".
We need to get to the 14-year-olds and we need to say to them, "Perhaps
your vocation at this point in time or your capabilities are not really opening
the doors for a university and a degree and trying to meet a pre-requisite
Level 3, but look at what other opportunities are available for you". Let them go and experience them. This is not some corporate social
responsibility goal that we are trying to put forward. This is because we need manufacturing to be
lean, fit and organised to meet the challenges of the 21st century,
the safety requirements that are coming in through the system, the carbon
emissions. There are a lot of
engineering challenges and the focus of attention is to bring the bulk of the
people from a zero to a Level 2. We
need to focus quite a high concentration on the expenditure onto Level 3 that
can help these people and guide these people up through zero to 2. At school they hid; from zero to seven a
child learns the basics; you get from seven to 14 and you may have a clearer
understanding of the real world around you than actually these educational
skills have given you to date. It is a
case of opening their eyes. If you wait
until they are 16 to open their eyes, they come through our door and we have a
relatively simple task for them to undertake.
We will pay them £250 a week to undertake this simple task. They look at you and sort of go, "Well, what
are my options? I can work here for 40
hours a week and somebody will pay me £250 a week or I can go to a job on the
corner and earn £200 a day." You are saying
to yourself that they are missing such an opportunity. We find it necessary to sit them down and
say, "Look, that is a bad choice. We
can't stop you, there is the door, but actually if you look and see what we can
offer as a manufacturing unit, we can offer you whatever skill path or whatever
crafted path that you want to take we can try to offer you that, but you have
to want it." So for three or six months
they may choose to fight it a little bit until they open their eyes and say,
"Actually, it's not bad, this" and they drive themselves. It is up to us to craft and drive that path
for them because unfortunately that is what you need within 21st
century manufacturing; it is not seen as a nice place to be and everybody looks
at it as though it is the black hole of Calcutta, but it is not the black hole
of Calcutta any longer. These SMEs are
nice, well-organised business units and to open somebody's eyes to that
opportunity that actually presents itself in front of them is an important
thing. There is a need for somebody to
sweep the floor, there is a need for the production operative. If they feel challenged within that
particular role they will stick to it; if they find it very easy then they will
get bored with it. There is a role for
the team leader; there is a role for the supervisor. Then you look at project management, developing new projects and
it does not matter whether they are 16 or just coming out of university, as we
get more and more into R&D and innovation and trying to move the debate
forward to meet European legislative requirements we start to take university
students who suffer with exactly the same problems. They come through the door, they have spent five years at
university; great, no problem at all, they have learned how to press the
buttons. Now we have to teach them how
to start off with nothing and come out the other end with something, so start
off with the raw material and bring it all the way to fruition, to the finished
product. Again this university student
says, "I've spend five years at university, I've got this degree and I want to
earn £40,000 a year." So we say, "Well
actually, we're an SME". Within a very
competitive automotive sector we are trying to balance all this with the need
for revenue streams and actually we want to teach it because that is what we
need you to understand to give our business longevity. We do not have the pick of the crop, the
best, because they go onto these large organisations. There is a lot of focus on the global car industry and how the
press see it but actually the UK has lots of manufacturing businesses that
actually utilise the skills of manufacturing.
We have a very good car industry; we have a niche volume car industry
which is very successful even down to your Morgans and your luxury sports
cars. Let us not focus on this global
industry; let us focus on what we are good at and we are good at
innovation. It is time that we helped
the people see that.
Q770 Fiona Mactaggart: Since we are focussing on skills - you both spoke about skills, but one of
the things I am interested in is how relatively important are skills in terms
of the success of your business? How
important is it compared to access to capital?
You, Diane, mentioned issues about regulation; I think you were arguing
for more which was interesting and rare for small businesses. You mentioned the burden of bureaucracy,
Ian, when you were doing things. I am
just wondering, in terms of the things which prevent your business success, how
important are skills in the kind of hierarchy of challenges that you face?
Mrs
Johnson: For me skills are the most important
thing. My business is not a business
without skills because my business is not a business without a decent workforce
who can carry out the domestic, the industrial, the commercial. What we are finding is that employers are
reluctant to take 16-year-olds on.
Why? Because they are very
expensive now. That sounds an awful
thing to say but when they come out school a lot of them are not fit for work,
they do not have responsibility in them any more. If you come to work you turn up on time; not only do you turn up
on time you do a good day's work for a good day's pay. You are treated properly, because of
legislation of course they are treated properly now. That does not happen.
They come along; they turn up late.
It is basically like having a child again; you have to nurture them and
bring them up and teach them how to deal with things socially. They go into people's houses and you say to
them, "Please do not spend half an hour on your mobile phone because somehow I
have to charge you out to that customer".
Of course the customer will say, "Don't charge me for that electrician"
(they do not realise he is an apprentice) "because he spent half an hour on his
mobile phone." So you have to start
with their social skills and also how they deal with the people they are
working with. When a young person comes
to work with us they are basically in a sit by Nellie situation because you
have to have someone supervising them all the time, so your productivity has to
go down, that is understandable. What
we are finding now is that it has to go down because the people who are
teaching the young people have basically to teach them even social skills, that
when you go in you are not abusive to people.
Respect has gone basically and that is the problem we are coming
across. This is not with all young
people, I am talking a very broad brush here, but when we take young people on
at 16 it takes us 12 months to get them into shape just to be able to put them
with electricians out on the workforce.
Employers are saying to me, "When I can get highly skilled, highly
motivated operatives from Eastern Europe, why do I want to take an apprentice
on at 16 who is going to cost me X, Y, Z, I have to train him in social skills,
they do not always come out with the qualifications that are necessary, they do
not turn up at college; it really is an HR problem and it is costing us
money?" I struggle to tell them why
they should. Why do we do it? Because if we do not we will not have a
business. I also get very annoyed
because of the poaching situation. It
is far easier to wait until somebody has trained someone else and then poach
them for your business by offering them more money. For me skills are the main thing in my business and I am
passionate about trying to change things so that young people when they come in
are fit for purpose for work. That does
not mean that they know the craft but they know what is expected in the
workforce and I am not sure that is being taught in school.
Q771 Fiona Mactaggart: So you are saying that those kind of soft
skills are very important - not just a bit important, very important - how
would you change what happens in education to make those young people better at
those things?
Mrs Johnson: I would in
a way do a backward step. If you
remember years ago there was work experience - what I call proper work
experience - so people could go into manufacturing areas, into building
services et cetera. For a fortnight they could come in and see
how a business works. They cannot do
that any more for a start because most of our clients will not let them on site
because of the insurance, the health and safety issues. These young people have never been into a
business. It is like saying to someone,
"Right, you have left school today, next week you are going to do a little test
to see if you want to be an apprentice, you want to be a plumber, whatever." They want to be a plumber because some daft
person has told then they can earn £90,000 a year and all that sort of
rubbish. They think that coming to do
an apprenticeship after three weeks they can fit a toilet, they can put lights
up, but it is a long process and they have to go to college. I think we have to go into schools earlier
with employers, have what I suppose I would call a careers convention,
something that would last a couple of days where you could get young people to
come along regardless of what the business is and say, "Look, if you want to be
a motor mechanic, if you want to be whatever, this is what you have to
do". Also we have to inform parents
because again, I agree with Ian, somehow if you do not go to university any
more you are seen as not as good as the rest.
That is a real big problem for the skills agenda because, looking at the
14-19 Diploma which actually could be brilliant, because that is how you could
really let people know that this could be their introduction to industry. What we have to do is make sure the parents
understand and make sure that the 14-19 Diploma fits in by saying that if
someone does the 14-19 Diploma and does want to go to university, the
university will accept how good it is, that it is useful but also that the
14-19 Diploma in whatever skill you are looking at in whatever area, fits into
what the employer wants as well. That
could be very, very useful.
Q772 Fiona Mactaggart: When people talk about diplomas we often hear
that they could be good but I can hear in their voices the fact that they could
also be bad. I suppose what I would
like to hear from both of you is what would be the critical qualities that you
would expect in that kind of a diploma that would deal with some of your
problems that you both described very vividly to us?
Mrs
Johnson: I do not know enough about what is in the
diploma so I am not going to sit here and say anything about it.
Q773 Fiona Mactaggart: They do not exist yet, but what I am asking
you is to say that if they included X and Y and Z the problems that you
currently experience would be reduced.
That is really what I am asking you.
Mrs Johnson: In the diploma, to
me, you would have fit for purpose for work.
Teach someone what they need to be able to work in whatever
industry. Also, depending on what
discipline they were going to, to give them background information for
that. The biggest thing is that we have
to sell it to the parents. You are all
parents. If your child comes home and says, "They've asked at school to do the
14-19 Diploma", regardless of what is in it and how good it is, if we have not
sold it to the parents that this diploma is as good as a GCSE and A level - as
it stands at the moment - it is dead in the water because the people who are
going to use it are the ones who are going to sit with their parents and say,
"Should I do this, Mum?"
Q774 Fiona Mactaggart:
Ian, do you have the same problem with work experience?
Mr Finney: I agree with Diane in
a lot of areas. I think to capture them
young is very important. Without
reiterating what I have said, we are not really talking about the people that
want to go to university. What we are
talking about is the 57 % that you rightly talked about earlier on and within
that group of people there are differing skills and capabilities. Some are at the very bottom of the social
skill level and some just do not quite make the grade. What is fundamentally wrong in the system at
the moment is that educationally we stream them but there is a lot of focus on
those people going to university and trying to find them the right career
path. There is the disillusionment of
the 57 % who are all of a sudden told, "Well, you ain't going to make it lads;
you're destined to work at Sainsbury, you're destined to work at McDonald's"
(with the greatest of respect). You can
take a career path very quickly through the retail sector; you can take a
career path very quickly in other sectors because once you have learned to deal
with somebody on a consumer-facing product I am seen to be pretty good and the
group of people I am embraced with are people around 16- years-old. To fight my way to the top of a group of
16-year-olds is far simpler than to fight my way through a group that covers
lots of age groups, offering lots of different disciplines. You can have all the key performance
indicators you want - do not get me wrong, they are important boxes to tick -
but unfortunately we are trying to tick too many boxes. If you go into a bank or you ring up a bank
and they go, "Yes, Mr Finney, this, this and this", if I ask a question that is
outside the box they cannot cope with that.
Unfortunately that is what the real world is really about, coping with a
little bit of adversity over here. What
manufacturing in essence does is teach you the "what-ifs". What if we undertake this as a problem and
we have to craft a solution to problem?
That is a much longer, more maturing life time skill, regardless of
whatever sector you are in. I am sat
here, talking about the automotive sector and because it is a global industry
it does lead the debate on skills, it leads the debate on climate change. Whatever issue you want to talk about
automotive industry is there because it is big business. It requires a high discipline of
understanding to be able to even compete within that area. They make some mistakes. Ask them about China. China is a very unwieldy animal and the
difference between buying this brake pedal from here and buying this brake
pedal from over here, when you really need to put your foot on that brake it
does not break and it works, it saves your life; if you buy one from over here
and this one breaks, to the uneducated it is the same product. If you look on the Internet and you type in
the product that you are looking for you will buy by brand or by price -----
Q775 Chairman:
I am sorry. I am fascinated by your
answers but I have all these hungry Members who want to get to their turn to
ask a question.
Mr Finney: The answer to the
question is that it is not all about ticking the box. What it is about is educating the people to actually fulfil a
task and to drive them onto the next task, by putting the efforts into some
higher level learning at, say Level 3, and it is the school's job to open their
eyes. Bring them into industry, take
away the fact of having to insure them and all this, we will put them with
somebody and open their eyes. That is
the answer to your question.
Q776 Jeff Ennis:
I would just like to ask a supplementary question on the issue of work
experience. I accept that you are both
from fairly specialised companies and because of health and safety et cetera it is difficult to take on
work experience pupils. Having said
that, in my experience and from the secondary school governing body I am on,
whenever I have spoken to the kids who have done work experience which is for a
two week period, if it had been a good placement they wish it would have lasted
longer, for four weeks or something like that.
I accept that you are probably not delivering in terms of taking
students on work experience placements at the present time, but do you think
that is something that we ought to be looking at, possibly extending the work
experience placements for the kids at school?
Mrs Johnson: I would welcome
it. Our company has been going 61 years
and I have been in the industry nearly 20 years so I remember us taking work
experience kids in. To be honest, some
of them come along and it is like, "I've been in my bedroom and I've made this
and it does this" and you have an enlightened child who comes along. It could be that he is so enlightened that
he will come into the industry but you need to do something a bit more with
him. Or he is just somebody who is
very, very interested. Or you get
someone who comes in and says, "This is not quite what I thought". So for the child who does want to go in that
job should not be taken by somebody else who has got there and says, "This
isn't what I wanted". To be honest, in
our industry I would say we have a 60 % success rate which I think is quite
high in the apprenticeship fulfilment, that is with the leading training provider
which is Joint Training Limited.
Q777 Chairman:
So 60 % of the ones you have taken on stay with you.
Mrs Johnson: Stay with the
industry, yes. I think that could be
more because those that do not stay it is often because it is not what they
thought or it is because, in our industry, maybe they have to go back to
college. I take on board what Ian said
before but to me I do not just want the 57 % that are left behind. I want trade and skills to be open to
everyone so that whether you are an A grade student or an E grade student this
could be for you. That is what we are
trying to get. Instead of saying,
"Sorry, but the disenfranchised are the ones that go to vocational; everybody
else goes to something higher". That is
what is what is wrong with the skills in this country.
Mr Finney: In our industry we
are not just interested in the 50 %; we believe that we have an all important
contribution to make to that 57 %. We
see the graduates that are obviously out there but from an engineering background
I think the traditional apprenticeship is one of the places to start. We have a lot of disillusioned children at
16 and maybe the place to start it is at school and to say, "Let us open your
eyes to what is available. Let's use
some of the technical colleges with the capabilities that they have." Of course most of the educational system and
the people within it are educated people; they have taken an academic
path. Have they actually seen what
manufacturing is really like today or can they only relate to what they knew
from 20 or 30 years ago? What I am
saying is it is only the child's own choice for them to go down that
route. You will never pick them up and
drag them down that route. They need to
see the vision; they need to see the profession in order to actually feel it,
believe it and want to go down that path.
I think it has to start at 14 with some sort of traditional
apprenticeship. Let us not just say,
"I'm sorry, you're in the 57 %; we're just going to chuck you to one side and
give you some sort of mediocre qualification that means nothing to
nobody." We have to embrace these
people as much as we embrace the top end of the scale. By embracing these people, giving them
vision, giving them their apprenticeship, showing them the world it will have an
effect over all market sectors (retail, engineering, manufacturing).
Q778 Jeff Ennis:
The Leitch Review wants employers to sign up to "The Skills Pledge", whereby by
2010 all adult workers without a first Level 2 qualification or basic skills
receive help towards obtaining these.
Can you see your firm signing up to the Pledge? If I understand correctly, there are 150
firms like McDonald's, for example, who have already signed up to the Pledge.
Mr Finney: That is a corporate
and social responsibility, "I'm going to do this to tick a box". We do it because we need to do it. It is the education system that should do
it. We want to focus on Level 3 and
above. We want you to put resource at
16 and above for 3 and above. Do not
palm your problems off on us. We have a
corporate and social responsibility anyway.
Q779 Jeff Ennis:
You are not telling me all your workers have Level 3 qualifications?
Mr Finney: No I am not. It is our job to open their eyes. Because somebody is 60 and sweeps my floor
and he makes a really good job of sweeping my floor and he does not desire any
more than that (he used to work in a foundry, he works really hard), but he
cannot read and write. Why should I
distinguish? Why is he a bad
person? If you took a 16-year-old he
would be leant on that brush most of the time, not sweeping up. I can craft a path for anybody at any
educational level but it needs the education system to open their eyes. It is our job to craft a path once you have
opened their eyes. The failure to open
their eyes is not good enough.
Q780 Jeff Ennis:
Is your firm going to sign up to the Pledge, Diane?
Mrs Johnson: I will find it very
difficult to sign up to the Pledge. The
reason is that you are then asking me to take somebody into my company who has
no qualifications because the Pledge Level 2 is at GCSE. Tell me how many young people are coming out
of school that do not have a GCSE, so what exactly am I trying to sign up
to? That is my problem with the Pledge.
Q781 Jeff Ennis:
So they have got the target wrong then?
Mrs Johnson: I think so, yes.
Q782 Jeff Ennis:
Looking at the current system which is very complicated, are there any
obstacles within the current system that stops your company from actually
providing more training for your employees or potential employees?
Mrs Johnson: Personally no, we
still take apprentices on because if we do not we do not have a workforce. We have a lot of people coming to us,
knocking on the door, who have been in other disciplines where basically the
manufacturing base has been decimated in certain areas and they come to us and
ask us if there is any chance to do a bit of retraining to become an
electrician. They have the work ethic,
most of them have mortgages, responsibilities and they are desperate to
work. All we would need to do would be
to have some sort of qualification that we could bolt on to the discipline
they've got already. There are
thousands of people out there who could be retrained in all sorts of areas. That is something we could look at but there
is no funding post-25 and 19-25 is very, very limited funding so employers will
not look at them. We have them, but
they are paying for themselves to go to college. We allow them to go and we lose the productivity the day they are
not there, but they are our electricians of the future so we are already doing
it and we would love to be able to get some funding for it.
Mr Finney: From my point of view
I think with so many cumbersome, disjointed incentives that are currently out
in the system it is a bit like a minefield finding your way through them
anyway. As an employer all we want is a
well-trained, well-educated workforce that meets all of our requirements. I talk about the guy who sweeps up and I
talk about the innovators of tomorrow and within the manufacturing spectrum we
can cope with all those but we need to open their eyes earlier. There is some social, corporate
responsibility and that is why you will get McDonald's and people like that - I
do not mean to disrespect McDonald's - the large organisations who have a tendency
to take on these 16-year-olds. Let me
try to put this into perspective by giving you a very quick analogy. When I am sat in front and I am serving you
a McDonald, how do I know I am better than the person behind me? Because I have a little gold star, or I have
two gold stars or three gold stars.
What is that all about? You do
that with your seven-year-olds because they get a gold star on a piece of work. Let us be realistic about this; let us open
their eyes and show them what opportunities there really are and make a
difference to UK plc and not just some corporate responsibility. It is because we need these people. I need somebody to sweep the floor; I need
somebody inspired to work a machine; I need somebody inspired to create change,
innovate - the graduates of this world - and we need to get everybody working
to that common goal. It might be
idealistic but it happened on Labour's watch as well as the Conservatives who
started it so there is no distinction but the whole system is fundamentally
flawed.
Q783 Helen Jones:
I would like to talk to you a little bit about apprentices. Listening to you, Diane, my dad was a turner
and he used to train apprentices and he used to say exactly the same thing that
you are saying 30-odd years ago. I
wonder really, is it that the education system and young people are very
different and we are not preparing them for work or is that just a
characteristic of most 16-year-olds? If
it is, what can we do better to prepare people for work and to encourage them
to look very seriously at taking on an apprenticeship? Does the system of how we run
apprenticeships have to change itself to make it beneficial?
Mrs Johnson: What I am going to
say I suppose is a bit outside the remit of how we would do it, but one of the
biggest things is that we have to teach children how to respect others. That is one of the biggest things. No matter where they go they have to respect
the teacher; they have to respect that you do at times have to do as you are
told. That has gone. People do not respect other people. In schools teachers have very little that
they can do to a young person if they are disrupting a class. How do you bring that child into line? I know you have some very gifted teachers
who can do it but not all teachers can.
If they think they can get away with it in the classroom from when they
are four to 16, why is it going to be any different when they come out to
work? If I am going to come to an
apprenticeship there has to be discipline especially in electro technical
because they could kill themselves basically.
We want someone who is going to come in, who is going to respect
people's property, company's property, respect the people they are working
with, listen to what they are being told and adhere to the message. That is the biggest change that has happened
to our young people up to 16.
Q784 Helen Jones:
We hear quite frequently from employers that the education system does not
understand the needs of the employers.
That may well be true. Is it
also true the other way round that employers do not understand what is
happening in the education system? Is
there a need for dialogue both ways?
Mrs Johnson: I could not agree
more. I have a son of 18 and I have a
daughter of 14 so I know what is basically going on in the education
system. When I was at school we had
career conventions, we had a lot of ties with business. I would love to go into schools and talk to
school children about what they can get out there in my field of building
services. We are asked why we want to
come into schools. It is all to do with
funding because the more children we send up the line is it not more funding
that goes to colleges, et cetera, so
there is a different mindset; we are all talking about different things.
Q785 Helen Jones:
Is that right, Ian? Do you not get the
opportunity in local schools to talk to them about the opportunities that are
on offer in manufacturing? I have to
say that that is not the case where I come from; there are employers in schools
all the time.
Mr Finney: Yes, there are
opportunities but I think it is one of institutional change. Unfortunately it is not a win-win and HR is
just a part of my business. It is a big
part because I am only as good as the people I employ, but it is only a part of
my business. While I strive to fight
off other influences, I have one chessboard and only so many pieces and I can
only position them as I best see fit and we will take on that responsibility as
and when the time is appropriate and we will go into schools if that is what is
necessary to encourage people down the path of manufacturing and making it look
better. However it is the educational
system's responsibility to grab hold of these people vocationally and help them
steer a path. I talk about in the first
three months of a disillusioned 16-year-old coming in. It takes three months of intensive, you
know, "You are going to be here at eight o'clock; you are going to do this; it
might not be what you want to hear but that is the way it is". It takes that sort of attention. We do it on almost a one to one basis
because it is intrinsic in getting them into the system. You are looking at it at a more global level
and there will be people who receive vocational skills and you talk about
sending them to college where they learn to lay a brick, but it is far more
far-reaching than that really. What I
am talking about is opening their eyes to what industry is really all
about. You start off with a little raw
material here and even though governments do not really accept it somewhere out
there somebody has to make something.
We cannot all shuffle pieces of paper around. You start off with a raw material and you come out with a
finished product. You actually make
something and you add value. There are
all the disciplines necessary to actually make that happen which will enable
things to move forward. We have to
educate our children in that so we have to make it inspiring. At 14 you have already established that
these people do not want to sit in a classroom and be told exactly what to
do. What we have to do is to say, "How
can we best express ourselves? How can
we best open their eyes?" I am probably
not the best person to tell you this but sitting them in a classroom trying to
drum it home will not work because you have tried that for 14 years. So let us try a slightly different approach
where we actually say, "Okay then, let's engage them".
Q786 Chairman:
Is that not what the new diploma system will try to do?
Mr Finney: The honest answer is
that I do not know. I do not know enough
about it. All I know is that you need
to open their eyes and you need to say, "These are the opportunities that are
available to you." I am not saying the
present system is bad, but where is it taking us? You can become an electrician; these are the opportunities that
are available. You can go into
manufacturing, you can become an electrician and do house rewiring or
whatever. You can work for the SMEs; it
is not a dirty word. This is what we
offer you. From that skill base - from
that engineering skill base, from that vocational skill base - you can go onto
sales and marketing, you can be far more expressive so we will take the grunt
out of you and we will get you communicating on a proper level. That is where you have to start, at the
beginning, like any other problem.
Q787 Helen Jones:
What happens when you, as small businesses, want to access training? You are both clearly committed to training
but I think what we are interested in is how the system works for you. Is it easy to access the kind of training
you need? Is there too much bureaucracy
involved? What changes would you want
to make to the system to make it much easier for you to get the training that
you want?
Mrs Johnson: I have to be
honest, the electro technical apprenticeship is very good. We have a very good system where young
people who say they want to go into an apprenticeship they will have to go to a
training provider who will give them a small test to see if they are basically
up to coming into an apprenticeship. We
will then get a list down. It is up to
us who we employ. We will interview
them, take them on with the training provider and the FE college. It is quite an easy system. My problem is not the problem that Ian has;
my problem is that there are kids out there, they are not always of the right
calibre but even when they are I am struggling to get employers to take them on
because of the problems I have already mentioned. For me it is not that the kids are not there, they are there; it
is how do we make employers put more money in.
The employers will turn round and say to you, "You are saying to me you
want more money for training; how much more do you want out of us?" This is costing us a fortune to train these
young people not because of the skills that we need to teach them, the skills
which they should have had; we have to teach them those as well. How would you put a cost on that? As Ian said, in his industry they have a one
by one situation for over three months to teach someone how to interact with
another person. That should have been
done right through life, even at home.
That is what employers are saying to me, "Yes, we accept we have a
skills shortage; I can fill it from somewhere else far cheaper". For me as a company that is so backward
thinking because in 10 to 15 years these people from other countries - I have
no problem with them coming in, they are highly skilled - will go back; some
might not, but a lot will go back. Then
if we have not trained people what are we left with?
Q788 Helen Jones:
Ian, can your company access the training it needs easily? From what you said earlier about your PA
groaning at you it sounded as if you could not.
Mr Finney: It is a very
cumbersome process. We access people
from university who have been through design developments, graduates who have
learned a part of the skill. Have they
had the exposure to industry? Have they
taken a formal apprenticeship and have they understood the pressures of
delivering on time, the pressures of actually starting with something and
finishing with something? This
apprenticeship scheme can take a much wider, broader view and can encompass
people who are at university and bring them into industry, to contribute to
industry. It is equally important that
we have somebody who can work the buttons.
I left school a long time ago; I am not particularly very old but I am
definitely not young and these people come with fresh ideas. Who says that we have all the right
ideas? We want to nurture these fresh
ideas and we can then put some reality into them. You go, "Actually you can't do that because of this" and we can
discuss it and we can innovate change.
Do I think it is right that people take five years out of industry in
formal education, come out the other end and want to earn £40,000 a year? They are sucked up by the big industry which
leaves us no choice but to go across to Europe where we have this young,
enthusiastic guy, we can train him. We
should be training our own people, surely.
We have a pool of labour. The
automotive industry is a global industry so you can go anywhere to pick up
people. There is a common language to a
certain extent. What I am saying is
that if you take the old system where you had a craft apprentice, you had
technical apprentices, HND, degree level or whatever and it has to embrace all
that. It has been proved that leaving
it to 16 you have disillusioned them already and it takes three to four months
hard slog to get them back on a reasonable path. If you start at 14 it will not be three months. All you are doing is opening their eyes to
opportunities and that may be manufacturing, it may be in electrical, it may be
in any particular discipline for any sector.
Q789 Helen Jones:
You talk about apprenticeships but one of the things I am interested in are all
the sorts of training the you need to do in business. You need to update people as things change and so on. Is the system responsive enough to do that? Are the providers, are the FE colleges quick
enough to catch up with the kind of training that business needs on the
ground? If they are not, what would you
do to improve that?
Mr Finney: Interact with
business, that is the answer. Interact
and find out what they need and then inspire the people to achieve the
objective.
Q790 Chairman:
When we go to FE colleges very largely they say, look we now have this new kind
of system that has been piloted quite well in the country. We have a very high percentage of kids from
14-16 in FE colleges. We presumed they
were getting some more realistic view of the world of work. You say in your area that that is not
happening.
Mr Finney: If it is happening it
is in its early conception stages. I
have not seen the results coming through.
Maybe we are unique but we are in a pretty prime area where that sort of
thing should be going forward. We are
in the middle of the Black Country - it was not called the Black Country for no
reason - and actually there are numerous SMEs growing up in that area and they
are becoming mature businesses. We have
been in business 16 years, get us off the ropes; you do not need to give us a
social, corporate responsibility, we will do it because that it is intrinsic in
giving our business longevity.
Q791 Helen Jones:
Let us say that you find that a product is changing, a system is changing and
you need short courses to update people on those changes, can you get them
easily?
Mrs Johnson: That is what I was
just thinking, to be honest. I only use
an FE college for an apprenticeship and as I said the 17th Edition
is coming out so colleges will put that on.
We would normally go to our trade association and say what we need and
they will point us in the right direction.
If you are talking about these children at college from 14-16 I would
say those are the disenfranchised and I would love to know from the FE college
what the employment rate is for those children who have done that. My understanding from when I do get into
schools is that children who are pushed towards that are the ones who cannot
sit still in the classroom.
Mr Finney: This new incentive of
the 14-19 Diploma, will it encompass some of the better achievers as well?
Helen Jones: It is intended to,
yes.
Q792 Mr Marsden:
We have been talking quite rightly a lot about the attitude of young people and
you have been very eloquent on that.
You also mentioned the need for many more enabling opportunities to
older people as well. There is the
issue of a short term replacement base but leaving that aside if we could wave
a magic wand tomorrow and up-skill all of the young people to the skills that
we need them at 18 and 19, all the demography suggests that in five or ten
years' time you still would not have enough people to do the sorts of things
that you are needing to do. What I want
to ask both of you is what more do you think your industries can and should be
doing - as well as what you are doing yourselves - to actually energise that
transfer programme, getting older workers re-skilled and re-trained and maybe
even bringing in some people who have not really had any Level 2 skills at all?
Mrs Johnson: At the moment on
our workforce we have three people who have come in who basically would have
been at a Level 2 and we have allowed them, with our help, to up-skill. One of them is now an NVQ Level 3
electrician; the other two are working towards that.
Q793 Mr Marsden:
What age range are they?
Mrs Johnson: I think you are
looking at 28 to about 36, off the top of my head. Basically they have been in the industry but without the
qualifications or they have been in a side industry and we have brought them in.
Q794 Chairman:
Do they pay their own way?
Mrs Johnson: We pay their wages;
we have allowed them to have a day off to go to college but they have paid
their own college fees and they are not cheap.
There has been no funding for them whatsoever, but that is the only way
for them to have gainful employment that will go on for the future. To me this is an opportunity that we could
do with a lot more mature people out there.
Also what we have to think about is when people are going to retire
now. You are looking at people who are
possibly going to be working until they are 68 or 70 so it could be that you
are working until, say, age 40 in one industry and that goes; what do you then
do for the next 30-odd years? Yes, the
employers have to give something to it, I am not expecting full funding, but at
least if we could help these people and the employer to pull it all together
you have a resource there that at the moment is totally untapped.
Q795 Mr Marsden:
Ian, what are the prospects in your industry for the up-taking or re-skilling
older workers in the next five to ten years?
Mr Finney: I think if you are
talking Levels zero to 2 and they are gainfully employed within our industry,
nobody is going to stop them seeking opportunities to improve themselves. If they are fulfilling a function which is
part of the revenue stream and it is a necessary function and people can see
that they are inspired by this vocational skill that they have acquired within
the industry, then nobody is going to stop them pushing into quality because
they understand the process.
Q796 Mr Marsden:
That is reactive, is it not? I am
talking about pro-active.
Mr Finney: Pro-actively I think
to carte blanche and tell everybody that you have to make them Level 2 you are
going to get some resistance. That is
my honest opinion. You can utilise
their skills. I ask the Committee here,
when was the last time you stopped learning?
You never stop learning.
Although it may be re-active, it is necessary to be re-active within the
framework of what you are trying to achieve.
Q797 Mr Marsden:
We have had evidence from NIACE (The National Institute of Adult Continuing
Education) and one of the things that they have questioned is whether the
current ways of measuring progress in schools takes enough account of training
on the job and whether in fact there are ways in which more bite size training
could actually be incorporated into the Level 2/Level 3 qualifications. What do you think about that?
Mr Finney: I would just like to
address the cumbersomeness of it. It becomes
a numbers game. The Government employs
an organisation who then spreads the word down and say, "Right, you need to get
X number of students past this goal. We
don't care because it's a numbers game and we get a revenue for every number we
get through the system." The education
system is about a numbers game but it is not about the money, it is about
crafting a way forward.
Q798 Mr Marsden:
I understand that, but in an industry where people are going to move on -
whether you like it or not from you to someone else in the future - how are
you, as an employer, taking on someone else, to judge someone's competence
without having something (whether it is experience on the job be it a diploma)
which is a benchmark.
Mr Finney: Experience.
Q799 Mr Marsden:
You can say it is experience, but if you take that person on you have to have
some idea in the first place of their qualifications in the broadest sense to
do the job you are employing them to do.
Mr Finney: We are talking about
very basic skills if we are talking zero to 2 so: "Will you turn up for
work? Will you undertake a task and
will not be aggressive with me?" You
are talking about pretty basic stuff.
Q800 Mr Marsden:
I am not being facetious here but you are almost saying that people need to
come along with the equivalent of a time keeping certificate.
Mr Finney: If you want to start
that basic then so be it. Am I
interested in coming to work? Once you
get that passed that barrier then there is something you can do with them.
Q801 Mr Marsden:
On this issue of motivation, both of you have been passionate this morning
about what you can do, what employers can do, how you can bring people on and
this, that and the other. We heard some
similarly passionate things said when we had a number of people talking about
the role of union learning reps in terms of engaging people. The Committee heard a woman from Scarborough
who was a union learning rep involved with Tesco or Asda but she did a whole
range of other businesses as well. All
the evidence that we have had is that union learning reps are making a very
important contribution. However, when I
looked at the submissions that came from the ECA and from the Society of Motor
Manufacturers and Traders - I realise you did not put them yourselves - when
they were asked about union learning reps both of them said that they had no
comment. That seemed a rather old
fashioned way of looking at the process.
What do you think about the role of union learning reps?
Mrs Johnson: To be honest I have
had nothing to do with learning union reps.
Nobody has ever been to my business; nobody has ever asked me anything
about it so I cannot comment.
Q802 Mr Marsden:
So you know nothing about them.
Mrs Johnson: I have to be
honest, I know nothing.
Q803 Chairman:
Do you have unions in your field?
Mrs Johnson: We are a JIB
company so yes.
Q804 Chairman:
It is interesting that it seems to be the larger companies that have these
union reps.
Mrs Johnson: I think to be
honest that is it; I think the larger companies would have it but I do not
think they come down to the smaller companies.
Q805 Chairman:
What we had already found some years ago, when we looked at individual learning
accounts, was that the people who got the best information and did not get
ripped off were the ones who had that guidance from their learning reps. The people who had no guidance chose the
flaky companies. Ian, did you want to
say anything?
Mr Finney: It was the
traditional manufacturer who employed a lot of people and felt they needed the
strength of a union. I think the
mindset is changing. We have found a
little bit of our emotional self.
Nobody wants to get cheap labour.
We want to craft the path. We
may have to use the European pool to bring people in to cover some of the
skills shortages but it is our job to get it right for our people. It has been 15 years plus; we have to go
back to the basics and start at the beginning.
It is the engineer in me if you like, that you start at the beginning
and work it through. Forgive me for
being blunt.
Mr Marsden: That is fine. You are talking about that from your
perspective as an employer but trade unions have changed in this country as
well. They are not just going in there
with their sleeves rolled up to have a conversation with the gaffer on how much
they are going to get on piece work this week.
They have changed because they have had to change. The evidence that we have had is that
potentially in terms of trying to change the attitudes and motivate the people
we are talking about to fit your crafted path - to use your wording - they are
actually playing a very important part.
All I am saying is that it is slightly worrying that when the Society of
Motor Manufacturers are asked the question about what they see as the role of
union learning reps they do not appear to have either any knowledge of it or
any view as to whether it is a good thing or a bad thing.
Chairman: Ian is not a
representative.
Q806 Mr Marsden:
I am aware of that, Chairman. I said
that to both of you right at the beginning but I am just curious of what your
perspective is as to whether trade unions in their new role as advisors and
encouragers have a role in SMEs like your own.
Mr Finney: The answer will
probably be yes. Just like everybody
else big manufacturing has changed; unions have changed; the mindset of the
young has changed; the mindset of the consumer has changed. We are one global community and we are going
through the upsets that are necessary in order to balance those out a little
bit. Everybody will find a level which
maximises their contribution into the system.
It might take some time but that is where you are going to end up
because in order to survive you have to modernise just like manufacturing, just
like the global industry is playing on a global playing field. We will all have a place, including the
educational system, which will enable everybody to funnel their effort into a
direction to meet an objective.
Funnelling their effort to me means funnelling in all the requirements
of the educational skills and vocational skills of the children to meet a
demand for the future.
Mrs Johnson: To me, dealing with
the unions, it could be a win-win situation.
The more people who are in employment, the more they will belong to a
union et cetera. I do not know enough about it but surely it
is something that we have to do.
Q807 Mr Marsden:
The Education Select Committee a few years ago went to North Carolina to look
at a whole range of things. One of the
things that was really interesting was that when we went to schools the kids
were white collar American kids who were not going to go down the university
route and they had in their schools a number of skills academies within the
school, between the ages of 12 and 15, where relationships were built up over a
long time period of placement with major employers. Most of those kids then went on to get jobs with those sorts of
skills. Is that, as well as the
old-fashioned system of day release, something that might be an interesting
model for you?
Mrs Johnson: Are you talking
about a skill academy in a certain place or are you talking about a cove of
excellence?
Q808 Mr Marsden:
In the North Carolina case they did a lot of stuff on telecommunications
because they had very good links with Bell Telecom.
Mrs Johnson: It could be an
idea. I would not disregard it but I do
not know enough about it.
Mr Finney: As long as you do not
make it too specific. The biggest
employer in that area is going to dominate.
That is okay if it offers not just tunnel vision, it has to offer
breadth so that you are opening them up.
It is okay getting business to do it but they will be very specific over
what they target just like a marketing campaign and just like everything
else. They are indoctrinating the
children to take a certain path because they need this pool of labour, but it
is a much broader vision than that. You
have to offer all the skills. You can
sponsor it en masse and you have a central fund that allocates that money but
if you make it too specific it will be too focussed in one area.
Chairman: We are getting more
interesting answers from you on this, Ian and Diane, than we got from
Engineering Industry Training Board or Engineering Employers Federation.
Q809 Mr Chaytor:
Could I ask Ian first, are you accredited with TS16949?
Mr Finney: Yes, we are.
Q810 Mr Chaytor:
Does every supplier within the automotive industry have that accreditation?
Mr Finney: Absolutely not.
Q811 Mr Chaytor:
What are your views about the value of that system?
Mr Finney: I could make a point
about that. You see they are barriers
for the automotive industry to say, "You're a bit expensive so, you know, you
need to cross this barrier". You can
tick all those boxes but it does not give you a god-given right to supply to
the automotive industry. In essence
they are disciplines that do not necessarily make a good product. You still have to perform well and get that
product there, on time, every single day.
Q812 Mr Chaytor:
What percentage of SMEs in the automotive industry in the Midlands, for
example, that you are familiar with, would have this accreditation?
Mr Finney: Very few.
Q813 Mr Chaytor:
Could I ask Diane about Sector Skills Councils? Have you had any involvement in Sector Skills Councils?
Mrs Johnson: I have to be
honest, I sit on the board of Summit Skills and together with the trade
association we are not just looking to government to say, "Cure our ills" we
are actively going out there. At the
moment we have the Horizon Project which is the Sector Skills Council for
building service engineering that is going out actively. It has gone round 13 regions saying to
building services right across the board, "What is it you want? What are the problems? Tell us, because unless we can find out what
the problems are we cannot cure the ills."
I can only tell you as an employer for me that the Electrical
Contractors Association are also doing the same thing. We have done a mail shot not just to ECA
members - we are talking industry-wide electro technical - to say, "These are
the questions, why aren't you training?
If you are training, is it this, is it that?" We are trying our best to work together so that when we do talk
to government we can say, "Look, we are talking with one voice here. We are trying to work together to find out
how we help government with this problem".
Q814 Mr Chaytor:
Do you think the majority of SMEs in your area of business are actually wanting
to become more involved in the planning of the school system or do they just
want to say, "You do it for us, we'll take what's on offer"?
Mrs Johnson: The thing is, it is
down to profit. It is a question of how
much it is going to cost us, what am I going to get out of it and what we have
to do is to go them and say, "We have done our research; if you don't train,
this is what will happen". It is like
the carbon footprint, we are trying to tell people now, "If you don't do this,
that is what is going to happen". I
know it sounds daft but a lot of people going into industry start a business
and think they know about everything but they might not; they might be a
fantastic engineer, the head of that company who knows all about engineering,
but when he comes to looking at what skills he needs for the future sometimes
he can be a bit insular. With the
Sector Skills Council and with the trade association we are trying to bring it all
together. I think a lot of SMEs are dealing
what they have now. It is how much can
I make now.
Q815 Mr Chaytor:
Do you think your experience then supports the case for giving more
responsibility for planning the future of skills training to employers as a
group?
Mrs Johnson: I think it has to
come from employers. Employers have to
look and say, "What do I need for the future?"
If you look now in this country there are not as many family businesses
as there used to be whereas for us we are passionate because we live by what we
do, what we make. If I worked for an
organisation I might only be there for five or ten years or 15 years and when I
have retired so what? For me this is
generations, it is pride in your company.
I am not saying that people who work for other people do not have pride,
what I am saying is that when they are looking to the future they might not be
in that company in 20 years' time so does it matter whether that company trains
people or not? I think the ethos of
where we came from in the beginning, lots of little family businesses growing,
that is not the same any more.
Q816 Mr Chaytor:
Is the history that you are describing one of a poor record of training within
the electrical industry?
Mrs Johnson: Actually I would
not agree with that. I think what has
happened is, if you look going back 20 years ago, you had a big manufacturing
base to pull from, you had places like ICI et
cetera and they would come along and train plumbers, tiffers, electricians
or whatever and as they took more jobs those personnel went out all over the
place, whereas now we do not have the big companies any more that are doing the
mass training, it is the smaller guys.
There is just not enough training going on in the smaller element to fan
out to where it is required. It is not
that we are not training; the companies are not there that were training.
Q817 Mr Chaytor:
So it is the lack of larger companies.
Mr Finney: Yes, and that
demonstrates really what I was saying.
It is the role of SMEs, who have now taken on the role of what used to
be the large organisations, to create the pool. We need the pool; we cannot survive without the pool. Unfortunately these people do leave and they
will go into the smaller industries. We
are not a massive industry, I can assure you.
The cost for training for our organisation is disproportionate to the
level of turnover we have. The problem
is across the board. While governments
encourage bad products to come in and lack of innovation, of course we cannot
invest in training which does not then leave a pool there. Why these people are feeling it so badly is
because we are not training them here.
Q818 Mr Chaytor:
What I struggle to understand is what is the block? There is a general agreement across government and industry,
large companies and small companies, that more training is needed and there are
skills shortages. What is the block
within SMEs? Is it entirely financial?
Mrs Johnson: Cost.
Mr Finney: Cost.
Q819 Chairman:
How much does it cost you to put an employer in practice?
Mrs Johnson: The thing is it is
the hidden cost that you do not see. If
I sat here and told you how much it would cost to employ an apprentice I would
be lying. Out of our company - we
employ 50 people - we have 15 apprentices on our books at different
stages. The days they go to college
they do not earn so you have that straight away. I accept that for all the things I have said about having
difficulties, we just decide we have to do it.
The first six or seven months basically you are teaching that person how
to interact with people, how to accept discipline. All that adds to the cost and also your insurance as well can go
up depending on what site they have to go on.
There are a lot of hidden costs rather than them just going to college
so I could not answer the actual question.
Q820 Mr Chaytor:
There is a relationship between cost and profitability because it is almost a
cash flow issue where the initial cost is not recouped until it is reflected
years down the line in increased profitability.
Mr Finney: Even 20 years ago
when you took on an apprentice there was a cost for 12 months; you got nothing
back really. You taught them how to
carry a toolbox, you taught them how to make a cup of coffee and not spill it
while they were walking to everybody else to give them their cup of
coffee. It is like an ingratiation and
an exposure to a group of people of varying different skills and capabilities
that enable them to move forward. It
was nothing to do with how much it cost you to get passed that 12 months; it
was what they achieved over the next three or four years to actually start to
contribute to your business. That long
term planning can only be done in larger types of organisations and with the
greatest of respect profit will always be a key issue regardless of whether you
are massive or very small. You only do
it to survive.
Mrs Johnson: I think the problem
when it comes to the SMEs is that we do the training now; we invest the
training and the bigger boys come along who are not doing the training. This is where the cost really counts when
the return you should have got on that worker has gone because he has gone to
work somewhere else for 50 pence on the hour.
That is where the costs comes in for the SMEs.
Q821 Mr Chaytor:
Do you feel that what employers need is more skills training and more financial
incentives? Or do they want to have
more involvement in the planning of the training and the design of the overall
system and the content of the design of qualifications?
Mrs Johnson: When I talk to
other employers they will turn round and say to me, "We feel that when we do
this training people do not think it costs us anything and we feel we are
already taking a burden for the training and if they want us to do more then we
would like some more help". That is what
I get from other employers, that is financial help. Even to the point that every child who goes onto sixth form
college, if they turn up to college they get £30 a week - means tested of
course - for putting their bum on the seats.
Why do you not say to the employer, "You take them on and instead of
that £30 going to them it will go to part of their wages", something as simple
as that.
Mr Finney: You have to keep them
active and the financial constraints will always be there. It follows the money, does it not? So follow the money and you will not be far
from the answers. Part of the problem
is that a lot of the money as I see it - and I really do not know everything
about your policies even though sometimes I criticise them -----
Q822 Chairman:
This is an all party committee; we are not the Government.
Mr Finney: What I am trying to
say is that if you have X amount of money and you are trying to distribute it
among the zero and Level 2 which should have been captured within the
educational system, then you are diluting the effort that could be targeted at
a slightly higher level of 3 and if the educational system can push those
people up to a certain level the 3s will drag up the zeros to 2. That is my opinion because if you get them
inspired they will move forward.
Education is a graph like that.
You start to learn very slowly.
From zero to seven you learn to read and write; at 14 it is too young to
chuck somebody in the bin, I promise you.
Their learning curve can equally be there and it can catch up at some
time in the future. Life is about
learning on the way so when they get a house and get some responsibility, you
have closed all the opportunities to them whereas within manufacturing or
within other sectors you have the capability of switching on the light for
somebody and they realise they had it wrong.
It is all our jobs to make them and help them achieve their full
potential in life.
Mrs Johnson: This is just a
personal opinion, if the Government are giving money for funding, for training,
et cetera, I do not understand why,
when they are giving out government contracts regardless of how small - whether
it is a hospital, a school or whatever - they do not turn round to whoever is
tendering for the contract and say, "You must have a number of apprentices who
are on your books and therefore if you do not you are not allowed to
tender". If you make people train we
would not have the problem. The problem
at the moment is that it is all down to cost; we are going in for the job at
the cheapest price whereas if one of the stipulations was that you have to
train. Depending on how many people are
employed, there must be a percentage of apprentices on your books otherwise you
do not get the work.
Q823 Mr Chaytor:
Can I ask what you think about this new system of brokers? Have either of you had the experience of
using brokers for training in your companies?
Mrs Johnson: Do you mean the
Train to Gain brokers? I personally have
not. I tried to access Train to Gain
and, as I said earlier, I do not employ anybody who does not have any
qualifications. Basically most people
who come to me have a GCSE.
Mr Finney: It is a numbers
game. We do our own targeting.
Q824 Mr Chaytor:
Have you had anything to do with brokers?
Mr Finney: Not a lot.
Q825 Paul Holmes:
Coming back to what Diane was saying about enforcing employers to train by
saying they do not get a contract unless they do, another answer to that -
which we used to do and which countries like Denmark still do on a massive
scale - is to have compulsory training levels.
When we were in Denmark and looked at their college system, every area
had to pay a levy so every area took apprentices on because they were going to
pay for it effectively. Would you
favour going back to that system?
Mrs Johnson: The trouble is that
the levy can be quite an expensive thing to turn. If you put a levy in, who is going to run it, who is going to
collect it? ECA companies would give
you a register but those who are not registered with a trade association how do
you know who is out there? All of a
sudden I might be paying my levy but Joe Bloggs down the road can undercut me
on everything because he does not get involved in that, you do not know about
him and he does not need to. I think
the industry would turn round and say, "How are you going to regulate the
industry so that everybody pays the levy?"
To me, if you make everybody who wants to be in electro technical
licensed it means you have to do an apprenticeship to be an electrician,
therefore you have to have that skill so you would not have a black market
economy where Joe Bloggs can go out in his van or whatever. That, to me, would be far better than a
levy.
Q826 Paul Holmes:
So a wider use of licence to practise in every field, shop assistants and the
lot; they should all have a licence to practise which forces the training.
Mrs Johnson: I cannot talk about
other disciplines. In our industry we
can kill people and to me I do not like people out there unregulated so it
would be unfair for me to say that somebody who is a shop assistant has to be
regulated; that would be for their industry to say. I can only talk about mine because I think it is something that
would help us with apprenticeships and would also make our industry far better.
Mr Finney: I think a regulated
industry is a way to go but everybody has to work to the same set of
rules. While there are drivers to
undercut the system, there is a lot of European legislation, safety issues,
there are a lot of local government drivers to save money, but until you get
everybody on a level playing field, at least within reason, to create a balance
then ticking the boxes is not enough to give you work. It is about revenue streams; business is
about a revenue stream. You can feed
the people, feed the training needs by good revenue streams. It is not until people realise that these
legislations are coming in to place and actually government should be creating
a barrier to say, "You must achieve this certain level". As long as you are at this minimal level
then you have a free economy; if you fail to meet that minimum level standard -
whether you are talking about electrical standards, whether you are talking
about safety issues or whatever - then the barriers are closed. Whether that is at a local government level
or a national government level the barriers are shut; if you meet this level,
you reach a minimum standard, we open the doors. Everybody has to compete on a level playing field. At the moment what you have is a disparity
where money is not a driver. I talk
about the Internet being a global thing you can do so you go on there and say,
"I'm looking at a picture, they seem the same, I'll just choose the
cheapest". That is not always the best
answer. It drives problems in safety. You can look in the Yellow Pages and you can find a lot of electricians or plasterers;
there are good ones and bad ones just like everything in life. You need a certain gauge - which I think we
were driving towards earlier on - to say, "I have ticked a box and I have
reached this level playing field" and you will stop the black economy, you will
stop the people who do not pay tax revenues and all the rest. At the moment the balance is totally the
other way. It is stifling the SMEs, you
are stifling them with the bureaucracy of what used to be for large
manufacturing. I am not saying that
everybody is trying to do it right, but if you look at the mass 80 % of them
are trying to do it right. You, as
government, have to try to assist that, to give the revenue streams into that
as a path.
Q827 Paul Holmes:
Training providers criticise employers because employers will often say to one
of their workers, "Don't bother finishing that training, that qualification,
that apprenticeship because you've got the skills we need now, you don't need
to bother finishing that". I was given
an example yesterday by an employer saying, "I'll increase your pay if you stop
doing the apprenticeship now because you've got the skills we need". Employers often criticise government and the
training providers for saying, "You have to do this complete package;
government will only fund a training course that leads to a qualification so
you can tick the box or you can prove you've got something for your
money". How do you resolve that
difficulty?
Mrs Johnson: I have to be
honest, in our industry I have not come across that because they need the card
to work, they need the JIB card. If you
have not fulfilled your apprenticeship you do not get it, you cannot get on the
big sites. So for us that is not an
issue.
Q828 Paul Holmes:
To give one example, I came across it when I visited Chester College and they
were saying that with some employers there was a problem.
Mrs Johnson: I think that is
very backward thinking of an employer because to me if you have someone who has
gone through an apprenticeship as they are getting older they bring in more
skills. I accept that some of the
people we train will go onto bigger companies because they have that level of
achievement and they are going to go on to be the engineers of the future or
the business leaders or whatever. You
have to finish your apprenticeship so that to me, to be honest, would be alien
and a very backward thinking employer.
I would imagine now, especially in our industry, there are levels of pay
where if you are a JIB company you have to adhere to. My worker, if I did that, would just jump ship and go. It is a bit alien to me, that one, to be
honest.
Q829 Chairman:
How long are your apprenticeships?
Mrs Johnson: Four years.
Mr Finney: Let us go back to
what was traditionally an apprenticeship and the craft apprenticeship to
engineering which covers quite a lot of disciplines. You have to give get-out points, so you have achieved this level
and it is your choice, do you want to get out, do want to stay in. You may be encouraged by the employer to get
out but if it is not the student's choice and they want to try to find somebody
else who will sponsor them through the next level then that is up to them. You have to meet a minimum standard; give
them a get-out clause. For the first 12
months we talk about normal disciplines, so you have achieved Level 1 and you
can walk at that level because you are a reasonable person to go and
employ. You clock in on time basically;
you meet the minimum requirement. Level
2 or 3 means that you have reached another standard and you make the standard
the sliding scale all the way up and you have get-out clauses because not
everybody wants to be totally academic.
The vocational skills can equally follow that same pattern. You may want to be very academic or you may
want to be more vocationally orientated, but they have to be on a level playing
field because people pay for experience.
Q830 Paul Holmes:
The Leitch Review envisages much more involvement from employers in designing
qualifications and having a say in that system, but since we have lost most of
the large employers who did the apprenticeships and training and there are many
more Small and Medium Enterprises, is that realistic? Can all these Small and Medium Enterprises actually spare the
time? Do they have the interest? They do not all have HR departments, can
they really get involved in doing this?
Mrs Johnson: Yes, I think they
can through the trade associations. The
ECA that my company is a member of work very actively to make sure that what
the employers need is what they get. They
are actually reviewing at the moment what is called the AM2 - which is the Achievement Measurement
2 - which is coming to the end of the
apprenticeship to make sure it is fit for purpose for the 21st
century. They are going out to
employers now and saying, "This is what we've got, what do you want?" so that
basically when it is reformed it will be exactly as is needed because the AM2
has not changed maybe for 20 years (although do not quote me on this), but
things have changed. In the electrical
industry we are actively all the time making sure that our qualifications are
fit for purpose.
Q831 Paul Holmes:
We have heard some evidence when we were looking at diplomas that it is all
very well saying the Sector Skills Councils have been involved in designing the
diplomas but most employers do not have a clue what you are talking about, that
the Sector Skills Councils are not really representing the bulk of the people
within their sector.
Mrs Johnson: I can only talk
about the Sector Skills Council which I deal with and that is Summit
Skills. We have actively gone out and
talked to employers about what we want in a 14-19 Diploma for building
services. I cannot comment on other
Sector Skills Councils but Summit Skills have definitely gone out to do that
actively because the members and the industry at large at our industry have
said, "Hold on a minute, if you are going to give us a 14-19 Diploma, make it
something that we want".
Mr Finney: To answer the same
question, at an individual level the norm would be not to get involved, without
doubt. By talking to the trade
associations whose job it is to start to implement you will get a much broader
version anyway and that is what you are actually looking for, a broad
perspective because if you allow certain businesses to dictate what the
training needs are you are going to hone it down and not keep a broader
perspective. So it has to be done on a
broader perspective. If you do it too
narrow-mindedly you will target one industry, the same as putting technical
areas of expertise within schools it would be very focussed. It will come out of somebody's marketing
budget to do it and you do not want that, you want a broader vision.
Q832 Stephen Williams:
I have some questions about funding.
Diane, you are the Finance Director of your company - if I were to look
at your statutory accounts of the company, what would I see as the figure for
training? What proportion would it be
of your turnover compared to other costs?
Mrs Johnson: That is a bit
difficult. The full training? The hidden costs? The whole lot?
Q833 Stephen Williams:
How do you account for your training?
Mrs Johnson: Basically we decide
how many apprentices we will take on and we will just fund whatever is needed
to do that. There is not actually a
budget as such, it is how many workers we have lost in the year to how many
workers we need for the future which will depend on how many we take on. We could be a lot more profitable if we did
not take apprentices on. We will then
also look at how much we want to do, like the 17th Edition is coming
in, we do the ECS courses which are the health and safety courses, I have
health and safety courses for management, and we will sit down and look at what
we need and basically we fund what we need to fund to keep the business growing
and active. We do not say, "We will
only spend five per cent this year", we basically look at what is
necessary. We do what is necessary and
then bolt on add-ons if the budget allows but a lot of the necessary stuff like
the health and safety is necessary. To
be honest a lot of training now is not what you want to do, it is because it is
a necessity to keep up to date. If you
said to me, "Do you budget for training?" I would say not properly because we
cannot always do it. If it has to be
done then something else like buying a new vehicle that would have to go
because we are going to do some training.
That is my honest answer. I do
not sit down with a budget because something like the 17th Edition
has come in and we are going to have to send operatives on that so yes, I will
budget for that but it could be that we have lost two electricians this year,
gone off to a bigger business, so next year we have to grow again. I might not have had that in my budget; I
might only have been going to take one on.
Do you know what I am trying to say?
So to actually give you a set budget, no we do not have one.
Q834 Stephen Williams:
I understand that. What I am trying to
get out of you is what would be the total cost of training. You have 15 apprentices from what you said
earlier out of your 50 employers. There
is an opportunity cost of those 15 when they are off site not working for
you. There are the employment costs you
incur for them, the direct trading cost you might incur for them, then there
are the other 35 employees who presumably have some sort of training as well.
Mrs Johnson: Yes.
Q835 Stephen Williams:
You must have some sort of ball park idea.
Is it a quarter of your turnover?
A fifth?
Mrs Johnson: I would say
something like that, yes. Do you want
the truth? I have never said down and
done a complete cost analysis of it because I think it would frighten me to
death.
Q836 Stephen Williams:
The same question to you, Ian.
Mr Finney: To answer your
question, if you looked at our statutory accounts it probably works out at
about seven to eight per cent of our turnover.
Do we allocate anything against it?
No. You are talking about courses, specific things that people would
allocate within the nominal ledger to say, "That is a training exercise". A lot of hidden costs are really derived
around the one to ones. We have team
meetings and things that actually do not appear on the accounts. What are those hidden costs? My guess is probably somewhere near double
that, so in the order of 10 to 14 % is what I would say is our real costs of
nurturing our people through our system.
That is not far from the truth but within the statutory accounts it
probably looks a lot less because you only pick up those costs as physical
expenditures.
Q837 Stephen Williams:
Back to Diane, is there any clarity, do you think, within your industry as to
what costs you are expected to pick up as an employer and what costs the state
would pick up to give you new trainees who are fit for work?
Mrs Johnson: I think we are
actually looking at that at the moment.
I know the Sector Skills Councils are trying to work out an actual cost
of how much an apprentice costs from one to year four. In year one basically they earn you very
little but by the time you get to year four, let us be clear about this, if they
are good they can earn you money. We
most probably spend something similar, 10 to 15 %, I accept, but then to negate
that cost the trainee who is now in year four can be very productive in earning
me money. To say how much I spend on
training I should really off set that off the training costs. When you asked me how much does my business
spend on training, what I am trying to say to you is that to get to an absolute
figure is an impossible situation. I
know that for me we spend roughly, I would say, about 10% on training.
Q838 Stephen Williams:
I do not know how this works, if an apprentice is with you for four years are
they expected to serve with your company for four years or could they move
around after three years?
Mrs Johnson: To be honest, yes
they can, but it is not very often. I
mean you do get a clash of personalities maybe. We are quite lucky because most of our apprentices in all this
time have stayed with us but we have had an apprentice who has moved away so he
found somewhere else. The thing is, he
has then got to find an employer to take him on so he found an employer to take
him on, swapped training providers, so yes it can be done, that is not a
problem. They normally stay with who
they have got because nine times out of ten there is no-one else to take them
on.
Q839 Stephen Williams:
There is no restriction somebody in year three when you have put them onto the
training course -----
Mrs Johnson: Oh no, but you will
not get anything back. That is what I
mean, when you start talking about the cost of training to a firm it is how do
you actually work out the cost of training: "You've been with me for four
years, I've trained you right the way through, yes, in year four you've earned
me some money but now you come along and say to me that you fancy going to
London because the Olympics are one" and they are gone. How do I now recoup any profit on those four
years? That is what I am saying, in the
cost of training for companies there are a lot of hidden costs.
Mr Finney: There is no way of
stopping somebody's choice of leaving or not leaving. Actually it is a numbers game again really. You have to hope that you are providing the
right guidance and the right inspiration but unfortunately if you do not have
the revenue streams and somebody is prepared to pay them more then they are
going to walk and there is not a lot you can do about it. The only way to try to negate that really is
to give them the mindset of the common goal of the organisation. It is the job of the employer to inspire
them to be a part of it and actually most people want to be in a comfort zone,
funnily enough, so you can get them in a reasonable comfort zone just slightly
outside of it, challenged every day, feeling a part of the team, feeling as
though they are making a contribution to the overall structure of the business
then they are more likely to be inspired and want to be a part of that
business. Sometimes you need to be the
helping hand for them when their life is a bit in turmoil or whatever and show
a little bit of empathy on that side, that inspires them to keep going
forward. Ultimately if somebody wants
to go you cannot tie them up into some sort of contract and tell them they
cannot leave because it does not work.
It is like constraining somebody and they will not have it, will they?
Q840 Stephen Williams:
Back to Diane, what do you expect the state to give you as a company for free
in terms of education? What do you
expect when somebody starts with your business and what do you expect the state
to offer thereafter at no cost to you?
Mrs Johnson: I expect from the
state that when I take a young person on that they have all what I would call
the basic, key learning skills; that they can add up, that they can write and
read, that they can interact with people, that they have got social skills that
they have learned through debating at school and things like we are doing
today. That is what I expect from the
state sector for schools. What do I
expect when they join my company? I
would like to have a partnership with whoever government, this is not
political, that if I put in money for training that they would match with
me. In other words, if I give him the
day off to go to college they would pay his college fees. That is all I am asking. I am not asking for anything mega, but I am
also asking the Government - or any government - that at 16-19 please take me
further, take me 19-25, 25 to whatever, if I employ them please help me with
the college fees. You help me train
these people, they will go back into the economy, they will make you more
money, they will pay more taxes et cetera;
it is a win-win situation. That is what
I would expect off any government.
Q841 Stephen Williams:
The Government is saying that 50 % of the cost of getting a Level 3 type
qualification should be met by the employer or the individual.
Mrs Johnson: I think more than
50 % is already met by the employer on what we have talked about today.
Mr Finney: I think the direct
answer to the question is that anything under Level 3 I believe is a
government's responsibility. You want
industry to help you train these people, re-train them, give them lifetime
skills; it was a job that should have been done by government, bottom
line. We will take on that
responsibility because we want to do it.
If you want to look at Level 2 then I think it is government's
responsibilities and industry can pick up the reins and maybe the mistakes of
the past. From Level 3 onwards then you
have to share the costs.
Q842 Chairman:
Diane, you are shaking your head.
Mrs Johnson: I would say it has
to be to Level 3.
Mr Finney: Where we contribute
is Level 3.
Mrs Johnson: I would say Level 3
and above acceptable but up to Level 3 we definitely need it because, as I say,
most people come out of school with a GCSE which is a Level 2, so if they say
they are only going to give to Level 2 once they come into industry you will
not get any funding.
Mr Finney: What I am saying is
that to an industry in general, whether you are talking about manufacturing or
any industry, the minimum our expectations should be is that they should be in
and around Level 3. Anything below that
is down to the education system.
Q843 Chairman:
You want job ready or oven ready young people when they come into
apprenticeship or when they come into employment. You keep coming back to this, you want people who have those
sorts of skills before they start; that would give you a much better start up
phase.
Mrs Johnson: Without being
funny, you say "oven ready", what have they been doing at school since they
were four if they cannot read and write.
Q844 Chairman:
You were talking about understanding the work environment - certainly Ian was -
and that side of things.
Mrs Johnson: That does not worry
me so much. What I want is a young
person who basically can come to my company and accept that he is going to have
to work, he can add up, he can write, he can read, all what I call your key
skills, whereas what we hear now is that employers are being asked, you know,
we have to look to get people to Level 2 to make sure they have the key skills. What I am saying is, why are they not coming
out of school at 16 with those key skills?
If you have someone who comes to you with key skills you can teach them
anything. If they do not have the key
skills you have to go back and that costs employers money to go back to get
them to what really we all started work with, with key skills.
Mr Finney: I think it goes a bit
deeper than that. You have to answer
the question, why do they not appear to have these key skills? Some of them are just hidden. It is not that they cannot add up; it is not
that they do not want to try. It is
just that they feel as though life has left them behind almost and they are not
inspired. Once you get them inspired
funnily enough they will come out. You
find these people and they are doing a cross-word or whatever. They have the capability, they just do not
have the self-esteem, the self-confidence, the drive to want to make it work.
Q845 Chairman:
This is my point about getting ready whether it is done in school or whether it
is done in diplomas or however.
Mrs Johnson: The 14-19 Diploma
could be very good because there are different ways of teaching people, I mean
if you take young lads to a pub and you ask them to play darts you watch them
do the numbers on the dart board; you sit them in a classroom and give them a
piece of paper and ask them to add up and it is like, mental block, cannot do
it. It is just that maybe the 14-19
Diploma is how you teach these young people.
Whatever we are doing at the moment is not quite working. Do not get me wrong, I do not have all the
answers, but that was just an idea that there must be other ways to excite
these people. Of course you can add up,
if you give someone short change in a shop a young person will soon tell you
whether you have done it or not and yet they cannot add up at school.
Q846 Chairman:
You seem rather ambivalent about this.
On the one hand you, Diane, are describing a business that runs very
well, you get people who come in and you make 60 % of them complete their apprenticeship. On the other hand you give a picture where
the people are coming in, they cannot read, cannot write, cannot do anything.
Mrs Johnson: I can give you my
opinion because I come from leafy Cheshire where the schools are very good
schools, you are looking at the level of employment et cetera, but this is not the same. Even though I am here to give you my opinion it would be unfair
for me to sit here and say, "This is how the garden is really rosy everywhere";
it is not. In other areas, in the cities
et cetera, that picture is
different. I do not have a problem
getting apprentices; I do not have a problem with the level of apprentices that
are coming through. I would like some
of the others because basically their parents are saying to them they must have
a degree. Some employers say to me,
"You sit on the Sector Skills Council, whatever, but I am telling you now that
when I get a young person come into my work I am struggling to employ them
because they do not even have the basic skills". Because I am here today it would be very remiss of me just to sit
here and say that the electro technical industry is fine and dandy; we have
problems the same as everybody.
Q847 Stephen Williams:
We have talked so far in this entire session about the skills of employees;
what about the skills of management?
Businesses can thrive or fail through many different factors but one of
them surely is the quality of management.
Is there skills training to get competent finance directors, sales
directors and so on?
Mrs Johnson: No. I think the management levels in a lot of
industries are very poor and they are getting worse because your business
leaders are retiring and the people who are below, there is nothing there. This is the plea that I am hearing from
businesses that are saying that this is where we need the students that are
going to university, the A to C students, who are not coming into the
industry. A lot of managers of the
future are not attracted into the building services because we are not seen as
a sexy industry.
Q848 Stephen Williams:
So you think that the 43 % who are currently going into higher education are
not sufficiently attracted to work in a management role in an SME?
Mrs Johnson: I do, yes, because
they often come out of university and then they start thinking about what they
want to do and a lot of them would have been better going through a vocational
time and being basically sponsored. A
lot of companies will sponsor people to go to university. It is in our interests to get hold of people
and move them up the chain because they are our business leaders of the future,
they are the new business owners of the future, whereas if they go to
university they often take something which is nothing like engineering or
whatever and then they come to us at 23/24 and say, "I think I'd like to come
into engineering". Where do we
start? That have had loads of funding,
they are carrying masses of debt and they have taken their degree in something
which is alien to our industry and we have to start from square one.
Mr Finney: I think it is about
management systems, understanding how the business needs to operate as a global
entity, not as a global market place but just as an entity in its own
right. We talked about having one chess
board and we try to juggle the pieces, good management is about good core
skills. Good core skills is about not
only your education but your life experiences skills. It is both those life experiences skills and a decent education
that enables you to become a good manager - whether that is a technical
manager, a human resources manager - and to holistically look at your
businesses and say what are the best routes for your business to try to craft
the right path for the business. The
analogies that I give about education have to run deeply through the whole of
the business to ensure that there is a common goal for everybody, that there is
a driver, that people are inspired to be a part of it. When they are inspired to be a part of - I
know this is against tradition - people want to work by choice within an
organisation for 20 years - not by no choice but by choice for 20 years - and
that crafts their path through some of their working life or maybe even the
whole of their working life, maybe that is all they want. Not everybody has to be this upwardly mobile
person going from job to job. What does
going from job to job create? It
creates uncertainty, it creates challenges but some people do not want that, that
is well outside their comfort zone.
What they actually want is security; they want to feel a part of the
team; they want to be driven forward and they want somebody to lead them
properly into that future. If they
believe in that person they will follow them, no problem at all.
Q849 Chairman:
I do not think the people working for Cadbury's thought of that until a couple
of weeks ago.
Mrs Johnson: You look at a lot
of people who are in big business now, I have no problem with people going from
business to business, that is what makes you a stronger person and I have no
problem with that. I think we have
somehow, for our industry, for the manufacturing and for building services, to
say to people, "You can be a world leader, you can be a market leader, you can
own a business, you can achieve great things" but you do not always have to go university,
you can do it by the vocational route all the way up. That would be my plea.
Q850 Stephen Williams:
I have a final couple of questions on support available to you as entrepreneurs
and business leaders. Do you think you
get sufficient advice or do you know if there is sufficient advice out there if
you want to access it from various agencies, whether it is chambers of
commerce, the RDA, the DTI programmes and so on?
Mrs Johnson: I have to be
honest, for me, as a business, the first port of call for us would be the
Electrical Contractors Association which is our trade association. If I need something I can ask them and they
will go out and find whatever I need.
So for us it is that. I used to
deal with Business Links et cetera,
there are places if I need to go to, there is back up there, but for me my
first place of call would be my trade association.
Q851 Stephen Williams:
Have you ever had cause to access formal support from various agencies?
Mrs Johnson: To be honest, I am
trying to think. We actually got some
management training because they came to us and said, "Is there somebody in
your company -----
Q852 Stephen Williams:
Who is "they"?
Mrs Johnson: I am trying to
think now. I might have to come back to
you on that one because I cannot lie to you, I cannot think what it was called
now but it was in Cheshire and there was an organisation where they came to us
and we accessed money because our managing director, superb as he is, was not
very good on IT skills so as long as we matched the training, in other words we
sent him on a two week course and we paid 50 % and we got 50 % funding. I am always looking at where I can get
funding from to be honest, and if we can do we will do. So I have done but I would have to come back
to you on where I got it from.
Q853 Stephen Williams:
Ian, would you just look to the Motor Manufactures Association?
Mr Finney: I tend to use
Business Link but again this is very disjointed. You sat there and mentioned three or four different
organisations. You need a gateway; you
need to be able to say, "This is my problem, where do I go?" So I need one port of call.
Q854 Stephen Williams:
You do not feel that there is a one-stop-shop out there for you.
Mr Finney: Definitely not. It is too disjointed; there is good and bad
everywhere. The mentoring and the
guidance that I am talking about, you see good business skills, who mentors
me? Who is telling me that this is the
right path for my business because this is a path I have never trodden either. I have to come out of my comfort zone in certain
circumstances to drive my business forward as well. There is a requirement at all different levels and there is
experience out there of a well-trodden path.
You ask the cost of real training, look back 20 years and equate the
figures because that system was not perfect and we can learn a lot of lessons
from it. It was not perfect but
fundamentally it had some good grounding, some good grass roots which perhaps
traditionally we should start to re-evaluate as SMEs become manufacturing and
the demise of large manufacturing has taken place. The point that I am trying to make is that the experience, the
loss of skills, is 20 years-old minimum.
Unless we address the problems today and foresee and give some vision to
our children the skills base will not be there for any sector regardless so you
will always be picking from a very low pot.
We need the vision to implement the change because by the time the
people who are now 45/50 leave the industry who is going to teach the children
of the future? It is a learning
experience all the way through and we need to address it.
Q855 Stephen Williams:
My final question is on advice but not for you as business leaders, rather for
employees or prospective employees whether school leavers or further on the in
the workforce, do you think there is sufficient advice and guidance for people
to find the right employer and access the right training?
Mrs Johnson: No. To give you an idea my son is 18 and I went
to a talk about where he should go.
This was at 16 and his words to me were, "Please, Mother, don't say
anything because you're going to embarrass so whatever's said don't say
anything". We stood in a college where
a lady from one of the Connexions said, "There are only 56 jobs in Cheshire at
this moment in time so I suggest that most of you think about going onto
further education" and he said to me, "Don't move, Mother". Nobody had come to me and said, "Are you
taking anybody on?" and when I look, especially at building services, you often
find that the people who are talking to the youth in schools have never been
into industry so how can they advise people on whether to go into the motor
industry or whatever if they have no experience of it. It is like me trying to tell somebody how to
become a government minister, I would not have a clue, but talk to me about the
electrical industry or building services at least I can give them a route
through. I think the information our
children get is very poor on their choices in future life.
Q856 Stephen Williams:
What about for adults?
Mrs Johnson: I would actually
say they could most probably go to their employment centres et cetera. I do not know because if I am putting a job out it will go in
anywhere in the employment sector. I
took a young lady on who works for me who actually had not been in employment
for 15 years. She had got married, had
four children but unfortunately the marriage failed and she had to stay at home
to look after the children. She decided
that instead of sitting at home she would go back to college so she started off
with a GCSE in mathematics and then took an A level in mathematics. She then thought everybody was using
computers so came out with a degree in computing. She tried for 12 months to get a job. I put an advert out because I wanted an administrator. I put this job in the job centre and she
came to me and I took her on because she has superb skills, she has
responsibility et cetera and it has
worked out very well. I would say that
when they go to job centres they are still told to apply but what sort of
information they get as to help I honestly do not know.
Chairman: Thank you. It has been an excellent session. The bells have rung so we have run out of
time. May I say that I found this - as
I am sure the other members of the Committee did - a fascinating session. We have really learned from people very much
involved in the process at the sharp end.
I think your evidence has been so good I am going to look at the web cam
and listen to the recording to pick out some of the high points. I thought you were absolutely fantastic and
we have had much better evidence from you than from a lot of professional
associations. If we could come back to
you if we have queries later on we would be grateful.
