Examination of Witnesses (Questions 660
- 679)
TUESDAY 6 MARCH 2007
DTI
Q660 Chairman: So the politicians
should make sure that we do all we can to encourage parity of
esteem for those other qualifications.
Mr Allen: I believe parity is
one of the motivating factors behind 14 to 19.
Q661 Mr Bone: Minister, you seem
to be arguing two ways on this; that there is this desire to get
50% of people to go to university but there is also a desire to
get more people proper vocational training. That sort of clashes,
in my view, because will there not be a temptation that in order
to meet the 50% target you are encouraging and directing people
towards a university degree rather than vocational training which
could well be going on to manufacturing?
Malcolm Wicks: No, I do not think
so. Manufacturing already has and will need in the future many
people with a university degree and a post-graduate qualification.
They will also need a range of people with other kinds of skills.
In particular, we have got to try to tackle this issue, which
I am sure we are all very familiar with from our own experience
and from our Constituencies, of the young person who may not find
school a turn-on at all. I do not want to typecast but at the
extreme will be the child who comes to us with their parents in
our advice surgeries who has truanted or been excluded from schools
and, really, is not set to pursue an academic qualification, but
is the kind of young person and I saw many of these when I was
a DFEE Minister who, if you put them in a situation where they
do car mechanics, to take one example, get very, very excited
about the prospects of working with car engines and then can be
persuaded, actually, if they are going to make a career as a mechanic,
they do need to read and write and do mathematics at a reasonable
level and can be persuaded to do that. That is an extreme case,
but I think those groups of people, who can have perfectly good
careers in manufacturing, are the kinds of people that we need
to focus more attention on.
Q662 Mr Bone: Can I follow that up
very quickly? I had experience when I was in industry of taking
on the very people you describe, who are bright, intelligent young
people who were turned off completely by school, and got on to
a vocational course and did exceptionally well and went on to
become directors of companies, and all sorts of things. Is not
the current logic of the Government's position that those people
will be forced to stay on at school in an attempt to get them
to go to university when, really, the right route is to encourage
first-class vocational training?
Malcolm Wicks: I do not think
those two issues are in contrast to one another. I do think we
need to move to a situation where it becomes typical to stay on
in education and training to at least 18 I think that is where
we need to go but that is not about making the hapless 17-year-old
re-sit GCSE chemistry if she or he has no aptitude for it; it
is about having a whole new approach to education and training
for that group of people, including on-the-job training. What
Leitch said I have found the quote here is: "The focus must
be on economically valuable skills that deliver returns for employers
and individuals". That is not just about graduation, that
is about the agenda item we have just been discussing.
Chairman: We can pursue that philosophical
question at great length, but I think we will probably move on
to Roger Berry.
Q663 Roger Berry: Minister, is there
an issue in the whole skills area about overlap in terms of who
does what, and the issue of duplication of effort? We have regionally
based structures, LSCs and so on, yet we have sector-based skills
councils. For example, I am a South West MP, so I have to watch
my words very carefully at this point, but recently the South
West Manufacturing Advisory Service launched a leadership training
course. At first blush, leadership is important so a training
course is a good thing, but the question that has to be asked
is would that not, perhaps, be better done by someone else, for
example the National Manufacturing Skills Academy? Should they
not be handling leadership? Given that the aforementioned Sir
Digby has, amongst other things, talked about the plethora of
providers, do you think there is too much overlapping of organisations
and duplication of effort, or does it work out all right in the
end?
Malcolm Wicks: If you do not mind
me saying so, that is quite a good question.
Q664 Roger Berry: Thank you, Minister!
I am very grateful.
Malcolm Wicks: My first ministerial
job was the grand title "Minister for Lifelong Learning"
in the DfEE, as was. I had to take through to legislation the
Learning and Skills Council revolution, the Connexions Service
and initiated a review of NTOs (National Training Organisations)
that led to the Sector Skills Councils. I find it interesting,
as it were, revisiting this territory now. This is not what I
meant to say but at first sight that question came to mind as
well. What I would say very pragmatically is that we should not
now be in the business of starting afresh. Part of this, and this
is a positive thing to say, is that skills cannot be segmented;
it would be wrong if just one agency was the skills agency. If
I can make a point, (this is not in the spirit of touché)
I think I must have discussed skills issues with at least four
Select Committees in this House of Commons. When I was Energy
Minister it often came up with one or two Select Committees;obviously
the Education Select Committee, I imagine, are interested in it;
Treasury, and so on. This is such an important theme that there
are many dimensions to it. Therefore, I do not think it is surprising
indeed it is a wholly good thing that RDAs are concerned about
skills. With the Chancellor yesterday we were talking to SEEDA,
the South East England Development Agency, and one of the big
themes that they identified, not us, was skills. So you have a
regional dimension and, perfectly properly no apology you have
got a sectoral dimension. Those interested in agriculture or construction
or the leisure industry, or manufacturing, aerospace, are desperately
interested in skills. So you have got the Sector Skills Councils,
and other institutions, too, I think, can reasonably argue that
they are interested in skills. So I think I would say, prima
facie, it does look confusing, it does look complex I would
accept that but I think the crucial thing now is to make it work.
There is quite a lot to do there. Some Sector Skills Councils
are doing very well, some are relatively weak. We have got to
make these things work in the light of the context that is now
being set for us by, among other things, the Leitch Review. Jeremy,
do you want to add anything to that? Perhaps Keith first.
Mr Hodgkinson: I just wanted to
quickly respond, Mr Berry, to your specific example about MAS
and the National Skills Academy for Manufacturing, because I am
aware that those two organisations are talking to each other,
at the moment, to establish a Memorandum of Understanding about
just these sorts of issues that you are highlighting. Yes, probably
there is the need for some national leadership on standards and
approaches on issues like management and leadership. So we are
seeking to do that, to make sure that the MAS network is properly
networked into NSAM and we are not reinventing the wheel nine
times in each region.
Malcolm Wicks: Can I ask Mr Allen
to make a point as well?
Mr Allen: I was only going to
add that I think the DTI are putting themselves in the business
point of view. A demand-led system of skills provision has to
look simple and coherent. That is the key. It must look that way
from the point of view of the employer. If there has to be complex
wiring it should be in the black box and not exposed to the employer.
That puts an onus on RDAs, Sector Skills Councils and the LSC
to function well together in understanding and then addressing
skill needs, perhaps on a regional or on a local level, but to
do so that ends up in a coherent and simple way for employers
and is consistent with our ambition for business support simplification.
Roger Berry: If you are an aerospace
employer in the South West, the rational thing to do is to look
around and say: "Where can we get support for leadership
training?" and then you will discover there is a regional
initiative; you will discover there are national initiatives and
then there is the LSC, and so on and so forth. I am not suggesting
this is necessarily a bad thing but, from the point of view of
the individual employer, the demand-led model they want, I guess,
is that they get a supply side response from as few skills providers
as possible. That is the issue that slightly concerns me; it happens
time and time again that employers identify a need and then they
draw up a list of all the possible organisations that might help.
Then they try them one-by-one. It is probably too early to evaluate
this model because, as the Minister says, it is a comparatively
recent one. We do not want to keep changing things, for Heaven's
sake, but overlapping and duplication is an issue.
Q665 Chairman: If I may say so (particularly
in the sector Mr Berry has chosen, aerospace), aerospace is an
important feature of the economy in the South West, in the East
Midlands, in the North West and, I suspect, in the South East
too, and to have competing regional initiatives for an industry
that is actually a national one is unhelpful, I think.
Malcolm Wicks: I do not know.
You can argue that one to and fro, can you not? I do think it
is a strength of the RDAs that skills is a fact, and despite the
world of email I think it is helpful if there is someone in your
region you can talk to who can get inside your industry—
Q666 Chairman: And not doing something
different from the next-door region, which is offering a service
to the same industry.
Malcolm Wicks: The Train to Gain
initiative, where a consultant can, as it were, come into your
company might be particularly helpful to some of the medium and
smaller sized companies to understand the industry, hear what
your needs are but also reflect on whether the employer has got
it right and then find the training you need. I think that is
quite a helpful piece of oil in the machinery.
Chairman: Peter Bone's questions are
quite similar to this. At the end of Peter Bone's questions we
can see whether there is anything that Roger or I ought to come
back on.
Roger Berry: I am happy.
Q667 Mr Bone: I understand, Minister,
that the DTI's approach really, from an employer's point of view,
is that there is what you call "no wrong door", so if
you went along to the Manufacturing Advisory Service or Train
to Gain you would expect to get the same quality of advice. Is
that the Department's approach?
Malcolm Wicks: Yes, broadly. I
think it is what Mr Allen said. We are not saying we are there
yet but we want to get into a situation where despite what looks
like complexity, which we can argue about, it is clear to the
employer where they can go to get support and advice.
Q668 Mr Bone: There is, of course,
another view, that really there is an awful lot of overlapping
of, say, the Learning and Skills Council and the Regional Skills
Partnership. Have we just got an enormous amount of quangos? I
know your Government loves to create quangos and empire-build,
but is that the way to go forward with the manufacturing industry?
I think, Minister, you said earlier on there are about three million
people now employed in manufacturing, which is only about twice
the number that are employed in the NHS. Our power house of the
British economy, the manufacturing industry, is being reduced
to almost nothing under this Government, yet all we are doing
is building quangos. Should we not just have a big bonfire with
the quangos and get rid of them?
Malcolm Wicks: We could argue
historically about quangos, yes, and various other sectors of
the industry, yes? The clarity a previous government brought to
British Railways might be an interesting thing for us to discuss,
but I suspect not here. We could argue that. What I would say
is that the manufacturing industry remains a very important component
of British industry. We have discussed this before. Yes, it has
been in decline for the structural reasons I think we understand,
but much of it is now a great modern face, it is a new face of
British industry. Indeed, I am interested, as something of an
aside, in whether the word "manufacturing" captures
some of what happens in that economy now. I think Rolls-Royce
is an example that has been put to me, where actually a lot of
the after-sales service maybe now is as much as 54%—of turnover
of Rolls-Royce? There are some sectors now, when you look at them
and understand what they do, where you would not be quite sure
whether you would describe them as manufacturing or service, because
they are actually something of a hybrid. I think I am rather more
optimistic about manufacturing than you are, sir.
Q669 Mr Bone: I just wonder if we
can burn all the quangos. You did not answer that bit of the question.
I am trying to make a serious point: there are too many, are there
not?
Malcolm Wicks: Partly, because
we have had one or two answers on that, I acknowledge that at
first sight it looks a complex picture, but when you start to
think of the regional dimension, when you think of the sectoral
dimension, and when you look in detail at the role of the Learning
and Skills Councils—albeit they are being reduced in number
from 47 to 9, so they more reflect a regional dimension—I
think rationalisation is going on. I am sure that will continue.
If things are not appropriate for industry they should be changed.
Q670 Mr Bone: Mr Chairman, I get
the feeling the Minister is almost wanting to say that he does
agree that there are too many and that we should get rid of them,
but, you know, he has to defend slightly the Government's position
on this. If the Government is saying you are going down from 47
to 9 they rather have accepted the argument that there are too
many. I just find that half the names that have come up today
I have not heard of. It would be better, if I was in manufacturing,
that the least number of quangos to go to the better. I wonder
if that should be the thrust of the DTI.
Malcolm Wicks: Yes. I think the
thrust should be not to let (a pejorative use of terms) quangos
interfere with the intellectual discussion about this. That is
quite nice for the saloon bar—I am sure the hon gentleman
never ventures there—
Q671 Mr Bone: Quite so.
Malcolm Wicks:—but I do
not think it is a very serious approach. The more serious approach
is to say should there be a regional dimension? What should that
look like? Should that be complemented by a sectoral dimension?
I think probably it should. What does that look like and how do
we make the Sector Skills Councils work? That would be my approach.
Q672 Chairman: Mr Bone, being a thoroughly
modern Conservative, frequents the public bar, not the saloon
bar. Let us look at the National Manufacturing Skills Academy.
Launched in January of this year, we have had a mixed reaction
from our witnesses about the Academy. Some see it as a very welcome
strengthening of training provision and so on; others see it as
another complexity. It did take quite a long time to get established.
What was the reason for the delay?
Malcolm Wicks: Could I turn to
my colleague to answer that? He was much more involved than I
was.
Mr Hodgkinson: There was indeed
a six-month business planning process and, in parallel to that,
there was a nine-month transition process to transfer the Automotive
Academy into the National Skills Academy for Manufacturing. I
think the reason for that length of time was because of the complexity
that you were referring to; the project team which established
the business plan for NSAM, if I can call it that—I apologise
for the jargon, it is a very long name to repeat over and over
again—was led by John Cushnaghan, the former Managing director
of Nissan UK, and it was a team drawn from all sorts of different
agencies, from the Regional Development Agencies, from companies,
from the Industry Forum Network so it pulled together some really,
really top-notch current expertise. What they wanted to do was
make sure they produced a plan that did not duplicate activity
that was already out there; that genuinely resulted in a new approach
which was demand led, which enabled all of the UK's major manufacturers
in those sectors to participate. Indeed, that is what has happened.
We have got Airbus, GKN, BAE Systems, Corus, Rolls-Royce, Caterpillar,
Ford, Vosper Thorneycroft, all leading the effort in those regions.
In the nine-month transition process the Automotive Academy was
terrifically important as well. It was established by the Automotive
Innovation and Growth Team and was backed by a significant amount
of DTI funding, and we were very anxious, and so was the sector,
to make sure that the good work the Automotive Academy had done
was maintained and carried over into NSAM, and that nothing was
lost in that transition.
Q673 Chairman: Let us just explore
that point. The Automotive Academy was deemed to be quite a success.
Focusing very much on the automotive sector, what was the logic
for destroying a successful organisation and losing the sharp
focus in a rather broader-focused organisation?
Mr Hodgkinson: Clearly, Chairman,
we hope we have not destroyed the focus of the Automotive Academy.
The objectives that the Academy had, which were tied, of course,
into the Government funding, are carried over into NSAM and they
are still being measured against those same targets. The automotive
companies that back the Automotive Academy are fully backing NSAM.
The real logic is that what is good for the automotives sector
is also good for other sectors, and the approach was working well
there, as you say, and we wanted to make that available to the
full spectrum of manufacturing, at least in the first instance
to aerospace, which has been mentioned, and the other sectors
that are in the SEMTA footprint.
Q674 Chairman: I suppose, Minister,
I have this concern. You talk about the complexity, (and I thought
Mr Allen's answer was a very good one, about the black box: you
may need the wiring but let us keep it invisible from the user);
the trouble is businessmen are very busy people and if we keep
on changing structures they get confused and left behind. Stability
is tremendously important, at least in the public face of organisations,
I think, so that businesses can understand how to use them. I
am just worried that if we have another change, the Automotive
Academy going to the National Manufacturing Academy it is all
right for the big companies, they can cope with it, but the smaller
ones will find it much more difficult.
Malcolm Wicks: It has been supported
by the very significant companies that have been mentioned. Of
course, your point is about the smaller companies.
Mr Hodgkinson: The pledge that
those companies and they are the largest companies in the UK have
made is to their supply chain, in effect. They regard themselves
to be completely competent in the skills area, but the real challenge
is in their supply chain. I think Mike Turner of BAE Systems at
the launch said: "60% of the value of my product is in my
supply chain, so it is simply not good enough just to focus on
BAE Systems, we have to be pulling those others with us and raising
standards right through the supply chain in the UK". So I
can reassure you, NSAM is very much about those middle-market
and smaller companies. The leadership being provided by these
big companies is essential but it is not aimed at them; it is
aimed at those others.
Q675 Judy Mallaber: Trade unions
have been often extremely enthusiastic, innovative and very active
in promoting training and skills, and it has been one of the pleasures
of my life going to trade union events and handing out certificates
and applauding those people who have undertaken education for
the first time, encouraged by their unions. Which is why, if I
may say so, it has been so extraordinary that others have sometimes
opposed positive initiatives like union learning reps and support
for them. Given that the "lifelong employability" agenda
is, in one sense, more about employees than employers, and given
the enthusiasm of many trade unionists for engagement in this
area, do you not think that unions should be given equal weight
to employers in social partnership, as, for example, happens with
the Low Pay Commission, rather than be seen as being secondary
partners with training and skills being employer-driven rather
than being seen as a partnership?
Malcolm Wicks: We certainly need
a partnership, and, like you, I have been immensely cheered when
I have met those who have benefited as a result of the trade union
involvement in learning, and the role of the learning rep is really
very important. The push that Government gave to that early on
in our tenure in office was most important. I am a great supporter
of this. I do not think we are in a bad place now because while
we talk about the needs for the economy, and companies to drive
much of this, in many of the agencies we are talking about there
is trade union representation, and rightly so. Often, the worker
can be better persuaded by a fellow worker to take that rather
difficult step to learning some basic skills, or be encouraged
to go on, than by someone in the company who has that role. There
is enough work to do in terms of up-skilling our population for
a range of agencies to be involved, and I am very committed to
the idea that the trade union should be a key agency. I would
put more store on that broad principle than, say, precisely what
representation there should be round a particular table.
Q676 Judy Mallaber: Clearly, there
are areas where there is not union organisation, so therefore
you have to have another mechanism for doing it, but where there
is union organisation, do we need to have middle men like the
Sector Skills Councils, or could not training and skills programmes
just be developed through joint negotiation at a national level
or at the workplace and company level?
Malcolm Wicks: I do not think
it is either/or. There are many sectors where union representation
is pretty poor. I do think it is important that we get this right
and that there is an organisation, the Sector Skills Council,
focusing on the sector, but they will need do that in conjunction
with employers and, also, the trade unions.
Q677 Chairman: Minister, thank you.
We have come to an end bang on the time I hoped. I am very grateful.
It has been a great pleasure to see you again in front of the
Committee. I hope you feel we have covered the ground sufficiently,
and you have promised a number of written pieces of work, for
which we are grateful.
Malcolm Wicks: May I say a final
thing? A lot of this has been the organisational landscape and
I have admitted that I understand, as it were, the question. I
think when I reflect on this, we have been through a period of
quite substantial reform now; the development of the Learning
and Skills Council, I think, was important, and the advent of
the Sector Skills Councils and then the regional dimension. I
think now, and I think Leitch said this, there is no longer a
great appetite for massive restructuring. I think some consistency
now is very important. That is not to say there will not be changes,
the development of academies, and so on, but I think the work
we have to all engage on now is to actually make the structures
work effectively to really raise standards across the piece and,
as Mr Allen said so well, to make sure that when it comes to the
individual employer company looking for support or, I would add,
the individual citizen looking for support, that we can develop,
as it were, a common access point, a one-door policy. I think
that is important.
Q678 Chairman: I am grateful for
that comment. You actually made a comment earlier, and I had begun
my first question to our first witness this morning, Mr Rammell,
by pointing out that the first Select Committee report on this
subject came in 1867, about the lack of skills, and the threat
to Britain's competitiveness. There has been a report every two-and-a-half
years since then. I think the risk is always that Ministers have
been under pressure consistently to develop improved skills and
Ministers, therefore, like to be seen to be doing things. What
probably needs to be done now my own view and as the aforementioned
report says is "just let the system bed down" rather
than make too many radical changes.
Malcolm Wicks: Are you just going
to reprint the 1867 report?
Q679 Chairman: We will look at it.
We might well! It would be an interesting exercise.
Malcolm Wicks: Thank you very
much.
Chairman: Minister, thank you.
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