Examination of Witnesses (Questions 360
WEDNESDAY 13 DECEMBER 2006
Q360 Justine Greening: Although what
you talked about in terms of compulsion was very interesting,
I think one of the problems, having worked in industry myself
and being funded by my employer to do an MBA, one of the dilemmas
they faced was that in making me more valuable to them in terms
of my skill set they also made me more valuable to many other
employers out there. I realise obviously that we are talking about
a whole range of skill sets, but I would be interested to know
your thoughts about how we can encourage employers to see investing
in staff as something that is generally a good thing and not something
that is going to make their key staff more likely to walk out
of the doors? For smaller companies. What is interesting is that
large companies can invest and become known as a good employer,
but smaller companies, who do not have that recognition across
the market, are more likely to be on the receiving end of the
bad side of investment, which is that their employees walk perhaps,
rather than the positive. How do you think that we can flip the
tables around so that small investors, small companies who are
great at developing their staff perhaps, can get the recognition
that ought to go along with that, which then makes it valuable
for them to keep doing it?
Lord Leitch: I think that large
companies do invest in skills, and some of them are absolutely
superb, but many of them can do even more. If you look at what
we are recommending on brokerage, we are saying to expand brokerage
for larger employers, so that their Train to Gain brokers can
go into these companies and demonstrate that if you do this on
skills then it will have this impact on your productivity, will
have this impact on your bottom line. So I think large employers
can do more. I come from an employer background myself and of
course what the employer is best placed to do is to identify the
skills that can deliver performance for their organisation. That
will always be an employer's first priority, to deliver those
skills and make a difference. What we have to try to do is to
get them to increase that even more, so that productivity is good
for the nation, it is good for employment, and we want to do that.
At the same time, as a by-product we do want to have more portable
skills and I think that by having skills approved by Sector Skills
Councils, so that they are more economically valuable skills,
is a way of getting qualifications much more prevalent. We have
22,500 vocational qualifications in this country, and we have
identified that a significant proportion of those qualifications
deliver no return to the individual and no return to the employer.
If we can get Sector Skills Councils reformed and re-licensed
with the influence to improve and to approve those qualifications
we can make a step change in what we are trying to do. I agree
exactly with what you are saying, that SMEs are the most difficult
to reach group. In terms of engagement we have recommended changes,
for example on management, on a management grant for SMEs. In
terms of calls for evidence, and, again, recently from the CBI,
the biggest calls in looking at skills gaps going forward is for
management. It is absolutely clear that management skills make
a huge difference to the productivity and to the success of employment
in this country. What we are recommending is that we take the
current grant and apply that down to SMEs of 10 people, and so
that we are giving more help and there will be more help to the
SMEs in order to improve their management skills. Train to Gain
is a great example to involve SMEs. Just to give you an example,
I went the other month to a small company in south east London
and it was a printing company with five employees and two principals.
They had never done any training before. The Train to Gain broker
came in, analysed what they needed and then defined courses for
these people, and I talked to two young men who, since leaving
school, had never received any training and they were now going
on training courses and they were inspired, they were motivated,
they were working better. The principals were actually delighted.
Another thing we are recommending is to have a more unitised,
modular approach to qualifications, so that you can do it in chunks,
and then they end up with a portable qualification which can be
delivered. So the way to SMEs, I think, is through Train to Gain.
Q361 Chairman: Can I just take you
back to the training levy because you were fairly categorical
that the training levy has failed, but I would suggest to you
that the failure was that the training was provider driven and
that we are in a completely different environment today to 20-odd
years ago; that governance of providers is vastly different? You
have just quoted there a small printing company and the average
age for a skilled craftsperson in the printing industry now is
52; in 1980 it was 38. Why? Because the industry, once training
levies were abolished, stopped training. When they were paid for
it they all wanted to be involved in training, but once the levy
went they saw no obligation to, and that has drivenwhich
is very good in the trade uniona wage race for skilled
printers to £35, £40 an hour because there is that shortage
and a lack of training because nobody was paying the training
levy. You might want to reflect on that, that when we had training
levies it was a completely different environment, producer driven
and pooled governance.
Lord Leitch: Can I respond on
that, Chairman, just quickly? All the international evidence that
we looked at on compulsion and training levies demonstrably showed
that it did not work effectively in a sustained way. I will give
you another example from my own industry with training levies
in financial services and insurance. Basically people used to
pay the levy and not do the training. So you actually have to
have an alignmentand that is what we are recommending hereof
what the employer needs; and you are right, we are hoping to change
the environment, going forward such that the employers do define
the skills that they need. Then we know that less than 10% of
employers use FE colleges and this way there is a much greater
opportunity for employers to get those economically valuable skills
Q362 Chairman: One of the most startling
recommendations that you have come up with is this idea of effectively
moving the school leaving age to 18. In what timeframe would you
see that being implemented?
Lord Leitch: Our remit has been
largely on adult skills. In fact, we have gone outside it a little
bit, but our remit has been on adult skills for the reason that
70% of the working age population in 2020 will have already left
compulsory education, and also the flow of young people coming
in by 2020 will actually reduce, so our remit has been on adult
skills. But we have also recognised the importance of education
pre-18, and we are very conscious of the problems of those individuals
not employed, not in education, not in training and we are very
concerned about that. We think a diploma is a good thing to be
doing and our staying on rates in this country, at 83%, is significantly
below the OECD average. There are some countries up in the 97s,
95s, staying on past 16. So our view is that first of all you
should get the framework right to make sure that the mechanisms
that we have in place are ones that will work for those people
between 16 and 18, who are not staying on at the present time.
So, first, get the framework right and then consider changing
the law. It is not first put in a change and then compel because
it might be the wrong thing to do, you might actually be compelling
and forcing people to do things they do not want to do, so that
they would refuse to do it and find ways to get round it. So that
is what we are sayingput in the framework. Our view is
that the staying on rate, we should see a progression of that
and when we see a progressionand we are not making a judgment
on what the figure would actually bethen you can consider
legislation. That is the way round, I think.
Q363 Chairman: There are great inequalities
in employment, different groups of people, differences in basic
skills and so on. To what extent do you think that this agenda
can reduce and, hopefully, eliminate those inequalities?
Lord Leitch: I think it has a
great opportunity to reduce those inequalities. Our terms of reference
were to look, at by 2020, how we could maximise economic prosperity
and productivity and at the same time to improve social justice.
I think that was a key part of what we have done. Getting people
with more basic skills is absolutely vital to do that. There is
a direct correlation between skills and employment. In this country
we come from a strong position on employment with a 75% employment
rate, which is world leading. At the same time we know there is
disadvantage in terms of the people who do not have jobs. If you
look at it, almost one-half of those unemployed have less than
a Level 2 qualification, of whom 300,000 have no qualifications
at all. If you look at almost one-third, of those economically
inactive have no qualifications at all. Around 50% of those with
no qualifications are out of work. Employment rates for disadvantaged
groups have actually increased over the last 10 to 15 years except
for those with no qualifications, where it has not increased whatsoever.
So here we think that there is a huge opportunity. I would just
say, first, that to get jobs you first need employment; you still
need employers to improve, which is coming back to the point that
we have to get employers, we need successful businesses, leadership,
management and innovation, and that is why we are recommending
very stretching objectivesand I will come back to the basic
skillsnot just at the basic skill levels, at the higher
levels, at the intermediate levels. There is no single panacea
here, there have to be skill improvements at every single level
in order to improve economic prosperity and improve social justice.
So basically we are saying that if we can give more basic skills
to those groups I am talking about then they will improve their
job chances and their life chancesthat is what we are looking
Chairman: Mark Pritchard.
Q364 Mark Pritchard: Lord Leitch,
colleagues have mentioned about a training levy. Of course, some
employers would say we already have a training levy and that is
corporation tax and other forms of company taxation, and what
we have to do is to try and get it right the first time rather
than have to catch up and hopefully get it right a second time,
which of course means a double bill as well for us. Given that
so many people are still leaving school with very few qualifications,
and therefore being limited in their life chances and having to
be socially excluded from the work place, what is your view on
how we can improve basic education in schools?
Lord Leitch: We have concentrated
very much on adult skills, but the effectiveness of the school
system is not one on which we have concentrated and we do not
make recommendations other than on the staying on rates at schools,
so I think I would pass on that question.
Q365 Mark Pritchard: Despite the
fact that we have some fantastic teachers, particularly in my
constituency, do you agree that the principle of trying to get
it right first time, in whatever one does in life, whether in
government or privately, is a principle to which we should perhaps
Lord Leitch: I agree absolutely
with that principle. Indeed, I think if my terms of reference
had said rather than look at 2020 look at 2050 then I would not
have bothered looking at adult skills because the flow should
actually do it, and that would have been a lot easier, perhaps,
in terms of the review. But it is not and I think we have a situation
where the flow is reducing, but I agree entirely with the principle.
Q366 Mark Pritchard: You mentioned
about shifting the focus of Welfare to Work policy from supply
side to demand side and I completely agree with those thoughts,
but do you think there is a danger, given some of the concerns
expressed by the Association of Colleges, that whilst the aim
is right an indirect consequence of that might be that we are
setting local colleges against employers, when indeed we need
local colleges and employers to be working more closely together
to deliver the aims and objectives?
Lord Leitch: It clearly is going
to be a challenge for Further Education Colleges and other providers,
but I think it is a fantastic opportunity. It is a fantastic opportunity
where performance of the provider will deliver success, and in
some of our visits I can tell you that I saw some stunning Further
Education Colleges that do it really well. I remember one I saw
that was generating 60% of its income from local employers. How
was it doing that? By engaging with local employers, identifying
what they needed from a demand side and then fulfilling their
requirements, and I think that is a great opportunity for providers,
whether it is private or public, in order to do that. I think
that is the challenge in the opportunity.
Q367 Mark Pritchard: Two final questions,
if I may? With the Lyons Review coming up we are obviously going
to see, arguably, some sort of contribution from local businesses,
so perhaps a local business tax. We have heard from the Turner
Review in the last few weeks and we had the White Paper yesterday,
and again employers are being asked to do more; and, again, with
your own review employers are being asked to do more, with which,
as I say, some aspects I agree. But coming back to Smaller Medium
Enterprises, there is an oversight in regard to how flexible small
companies can be at providing these services and the skills and
the support that we all recognise is needed but, nevertheless,
can they be delivered on the ground compared to some of the CBI-type
companies who have large budgets and have that flexibility overtly?
I note your point about 10 employers earlier, but small businesses
drive the business economy, they are going to be asked to do a
lot more under Lyons, under Turner and now under your own report.
Are we asking them to do too much?
Lord Leitch: They are one driver
of the British economy. Large and medium sized companies are also
a huge driver of the British economy. I think we are asking all
the stakeholders to do more here. We are asking individualsand
we will maybe come on to talk about individualsto demand
more of themselves; we are asking the Government to demand more
of itself; and we are asking employers to demand more of themselves.
I think it is right we should ask employers to do things primarily
which will benefit them, and SMEs, and this will benefit them.
But you are absolutely correct, giving that reach to small employers
is difficult, and Train to Gain is a great opportunity for us
to do that. The Pledge is a great opportunity to do that, to build
up the momentum and to say, "This is useful to you."
I will come back to the Pledge. Increasingly we are saying five
GCSEs or equivalent is the minimum standard you need to work,
and I will come back to the Pledgeit is a compelling proposition
for small employers. So if Digby Jones does his job properly and
he comes along to use a small employer and says, "This is
the proposition," I think many small employers will buy into
that; but it is a difficult challenge, I agree with you.
Q368 Mark Pritchard: We hear a lot
about social cohesion at the moment and clearly access to the
workplace is a key part of social cohesion, but perhaps an even
more important part prior to that is the issue of language, and
it appears that those who do not speak the English language, who
are perhaps British citizens, or those who seek to become British
citizens who do not speak the English language, might find it
more difficult to get a job. That is possibly a point of contention.
How important is the English language to people living in this
country who need to be encouraged to go into the workplace, either
for the first time or to go back into the workplace as a result
of other factors?
Lord Leitch: Of course it can
be a very significant barrier if you do not have the language;
it is very significant for those people. The employment rates
for ethnic minorities, as you know, are 15 points lower than for
whites. We have increased immigration in this country, and it
will be perhaps a more important issue coming forward. What we
are saying is that we are recommending the introduction of a universal
careers service. One of the things we found here is that if you
wanted advice on what you need to get into workand for
some people skills are necessary to get into many jobs but they
are not the only thing because you have other situations, such
as if you are disabled, and other obstacles in terms of getting
a jobfor many situations you need skills. What we are saying
is that we will create this universal careers service where everyone
will be entitled to go for a skills health check. This is something
that does not exist in a coherent way in England at the present
time; it is fragmented, the services that we have are in silos.
It exists in Scotland and it exists in Wales but not in England,
so we are going to bring something together, we are going to base
it in Job Centres, and in addition it will be in other locations
as well, so that people can come in and get that assessment of
what they need, and language will be one of those needs.
Q369 Mark Pritchard: Finally, with
rising unemployment, unemployment at a seven-year high, do you
think that in relation to your excellent report that there should
be countywide employment strategies as a statutory obligation
on somebody, probably the local authority, so that all the stakeholders
are coming together and each year or every two years they are
passing up a strategic employment plan for their county or their
region, or whatever it might be, to DWP rather than the other
way around, or there is two-way traffic? And whether you feel
that that is a skills gap at the moment in local authorities?
Lord Leitch: I think your question
is a very good one because skills strategy is done at the national
level and it is done at the sectoral level, and skills in employment
is delivered at a local level. So I agree with that. I think what
we are advocating is very much a market-led approach and we are
advocating that we have local employment and skills boards, employer
led, which will engage either at a local or a county or a regional
level and which can bring together whatever geographic community
makes sense; to bring together the supply side and the demand
side, and what works together with the local authorities, with
JobCentre Plus, with the Learning and Skills Council to deliver
employment. I do not think I would advocate that we start with
targets, no, at the local level.
Q370 Harry Cohen: To come back on
this point about English, we had an evidence session earlier this
week where it was said that there needs to be a very big boost
on English as a second language to get people into work and training.
What I want to ask you isbecause your answer was a little
bit equivocal and you put it on a par with other barriers to workin
your opinion should the Government put a big investment in English
as a second language?
Lord Leitch: I am not being equivocal
because I think there are big barriers on reading and writing
skills and numeracy skills as well. If you look at the figures
we have seven million adultsfive million adults in this
countrywho have difficulty with every day basic skills.
So I think there is an equivalent priority in those things in
addition to English as a second language. So I am not going to
prioritise English as a second language compared to the basic
skills of reading, writing and adding-up, which I think is a serious
problem for many people in this country. Mr Chairman, coming back
to one of your earlier questions, people without basic skills
are most at risk in the global economy that we are facing. When
I started on this review I thought we could do some very clever
sophisticated modelling and model skill types through to 2020
and beyond. History tells us that we will get it wrong; to define
how many nanotechnology scientists we will need in 2021, you know
you will get it wrong. What we need to do is to identify the way
that the framework can adapt and respond to the market; that is
what we need and that is what we are trying to do going forward.
Chairman: Natascha Engel.
Q371 Natascha Engel: I have read
a lot of it and it is very, very exciting and although there is
loads on it I want to focus a bit more on the process side of
it and the way that specifically what you are talking about impacts
on Jobcentre Plus and the Learning and Skills Council. Even though
you have described the system at present as being quite fragmented
you have not actually gone so far as to recommend a merger of
Jobcentre Plus and the Learning and Skills Council, but instead
you propose setting up a Commission for Employment and Skills,
which merges all these different organisations together, like
the Sector Skills Development Agency, National Employment Panel
and the Skills Alliance. Do I have that right, more or less?
Lord Leitch: Yes and no. Would
it be helpful if I explained?
Q372 Natascha Engel: Yes.
Lord Leitch: The Commission for
Employment and Skills, what we are trying to do here is to strengthen
the employer's voice, and it brings together the National Employment
Panel, the Sector Skills Development Agency and the Skills Alliance
in England. So it is a rationalisation to bring those together
to increase the strength and the influence of employers because
we believe that employers are best placed to know the skills that
are required to be economically valuable. I come back to we need
employers to succeed to get jobs, and that is public and private.
Just to make the point as a segway, we want public employers to
be exemplars in what we are doing here. Then we were asked by
the Chancellor this year in the Budget to look at how better to
integrate employment and skills. We have looked very carefully
at that and, you are right, we have not recommended radical reorganisation.
One of the five principles is, if possible, do not chop and change;
and if you look at the history of education and skills, goodness,
there have been enormous amounts of change over the yearswe
chop and change too much. When I did the first piece of the analysis
on this I thought that perhaps the best recommendation I could
make is to deliver what we started, because we start so many things
and we do not go through with them and deliver them well enough.
So we looked at this and said, "Shall we reorganise Jobcentre
Plus so that perhaps it comes together with the adult part of
the Learning and Skills Councils?" We looked at that and,
to be perfectly frank, there was a temptation to do that; it was
an elegant solution on paper. But after very careful analysis
we thought that we have to be much more pragmatic and look for
a better solution that will actually not destabilise these organisations,
and you wait 10 years for delivery. When you merge in big organisations
like this it is a long time to go through that change process.
We have just seen Jobcentre Plus merging the Benefits Agency with
Job centre, and that has taken five years; it is just getting
towards the end of that. So there is a huge price to pay in that
radical reorganisation. We have looked at a variety of options.
The good thing on what Jobcentre Plus does and its integration
with skills at the local level is that everybody we talked to
agreed that the status quo was not good enough, and that
was a good starting point. Jobcentre Plus does a fantastic job
doing what it is told to dowork firstand I think
part of the reason for getting that 75% employment rate is a great
performance by Jobcentre Pluswork first. What it does not
do is get you into sustainable work. Two-thirds of claimants coming
through are repeat claimants, and I found that quite an astonishing
figure. So they recycle round; they come in, they are a JSA claimant
and then they come out of the job again and recycle round. Skills,
clearly, are a necessary part; you have to have more skills' assessment
and advice at the local level, twinned with Jobcentre Plus. Coming
back to your question, we then looked at all these various options
and we came up with the option of aligning the objectives of DfES
and DWP for Jobcentre Plus and Learning Skills Councils, and we
thought that by aligning the objectives and the behaviours we
could deliver what we wanted. So the skills advice will sit in
the Jobcentre Plus, the Jobcentre Plus adviser will be incentivised
and rewarded based on different criteria, not in getting somebody
into a job and not sustaining the jobwe will change the
motivation and the incentives. So we are doing it that way. Another
reason why we decided not to have a radical reorganisation isit
is a funny thing on reorganisations, and I have done many in my
business life beforebecause every time you make the change
there are consequences for that change, and we looked at this
radical reorganisation, for example bringing Jobcentre Plus together
with the Adult Path Plan and Skills Council. For every schism
you heal you introduce another schism and you would have a schism
perhaps between other levels of education and you move it from
one place to the other. I suppose ultimately the best solution
would be to merge DfES and DWP, but, golly, what a big department
that would be, and we did not think about that for more than a
minute because it would be so huge and bureaucratic and not deliver
what we wanted to do. So that was the rationale as to why we came
up with this. One last point on the Commission, the Commission's
role will be three-fold. It is executive in managing Sector Skills
Councils and the local Employment and Skills Boards, so it has
an executive responsibility there. Secondly, it has a responsibility
for reporting and monitoring, so the Commission would be an independent
voice monitoring the performance of the local Jobcentre Plus.
I would also say that the Commission, we recommend, should do
a mini Leitch Review every year on our journey towards our vision
of being a world leader in skills by 2020. I think there has been
a lot of benefit from doing this review of raising the awareness
of the issues, and we have to monitor the progress. The third
role is that it would have would be policy advice, so that the
Commission has a very powerful role in monitoring where we are
going, managing Sector Skills and Employment Skills Boards and
Q373 Natascha Engel: Thank you for
that very full answer. What I was really interested in was to
see how this new Commission would, in practice, on a day to day
level work alongside the Jobcentre Plus and the Learning and Skills
Council and how specifically the Commission would influence that,
really the nitty-gritty day to day work of Jobcentre Plus and
Learning and Skills Councils. So how senior is it to the functions
that exist at the moment and how much does it work alongside?
Lord Leitch: It does not have
executive responsibility for Jobcentre Plus; it is very important
that Jobcentre Plus reports to Government and it does not report
to the Commission. The Commission, though, has an important role
in monitoring and advising Government. The Commission reports
to Government and to the devolved administrationsthat is
how it reports. The Commission has power over those bodies because
it reports to Government and it can tell Government, "This
is what is happening or should be happening" and then of
course Government can apply an executive responsibilities over
Jobcentre Plus and the Learning and Skills Council. That is how
it should work.
Q374 Natascha Engel: The new Careers
Advice Service you have touched on a little and talked about the
skills health checks, which are really, really excitingI
have lots of ideas about that! Specifically on the Careers Advice
Service I have a large number of questions really, but what specifically
will be its role? How will it be funded, which I think is quite
critical? Who is going to be delivering it and, again, how is
it going to work alongside the existing structures of Jobcentre
Plus and the Connexions Service?
Lord Leitch: We talked a little
earlier about various stakeholders demanding more of themselves.
I would like to turn to individuals. We have a chapter in the
report which talks about "embedding the culture of learning",
and this clearly would be a journey and it is probably a generational
journey to embed a greater cultural learning in this country.
If you look at other competitor countries and you see the hunger
to learn and the hunger to workand you can see it in China,
you can see it in India, you can see it in Finlandit is
greater than we have here. What we want to do is to increase the
awareness of people across the whole spectrum to the benefits
of learning to them and their families, and we believe that we
should start with a sustained national awareness programme, and
this would be high profile, targeted and would give individuals
a thought that they could do something to improve their lives.
And we know it can work. I do not know how many of you saw the
"gremlin" ad? It was so bad it was good! It was a terrible
advert about how you can actually do something better. Do you
know that from that one ad there were 300,000 responses and 120,000
people then enrolled to do courses? That is a tiny example of
what you can do to increase awareness. So the first step is to
improve awareness right across the whole spectrum of society.
Then you have to have a situation where people get better access,
than at the present time, to information, advice and guidance.
What we saw was that there were some very good facilities in EnglandLearn
Direct is excellent, but it is not comprehensive, there is not
one centre you can go to get this information, advice and guidance,
and we are saying that therefore we should create this. This would
come under the auspices of DfES. One part of it would be co-located
in Job Centres if you want information, advice and guidance. The
reality is that not many of us would dream of going to a Job Centre
if you are in work, so you have to have it located elsewhere as
well, so that you have more access in other locations too.
Q375 Natascha Engel: Like where?
Lord Leitch: This could be in
a whole series of places; it could be in shopping centresit
is something we have to look atsomewhere where it is readily
accessible; and also on the Internet so that you can see where
you can go. But it would be face-to-face advice that you would
be coming in to do this. It could be libraries, but that is still
to be determined, but in more locations. So that is information,
advice and guidance, and then we are saying it reports to the
DfES, and in terms of the funding that funding will come from
DfES and I hope that will be something that will be tackled in
the Comprehensive Spending Review.
Q376 Natascha Engel: Who will deliver
it? Will that come through Jobcentre Plus?
Lord Leitch: There will be two
functions in Jobcentre Plus. Jobcentre Plus gets you into a job,
the Careers Service will assess as a diagnostic health check for
you, so two functions within a Jobcentre Plus location. Does that
answer all your questions?
Q377 Natascha Engel: Yes, it will
do! The other thing was about the procurement of learning. You
have spoken a bit about it in the review, but going back to Jobcentre
Plus and Learning and Skills Council, what changes would you like
to see in the way that they procure learning, specifically given
the Welfare to Work and the welfare reform programme that we are
delivering at the moment? How do you see that working?
Lord Leitch: Of course the role
of the Learning and Skills Council changes as a result of this.
No more block funding based on anticipated demand. The funding
will come through two routes, the Learner Account and through
Train to Gain, and that is a very significant change for Jobcentre
Plus. We have not talked about Learner Accounts. Learner Accounts,
I think, were always conceptually a very good development. There
was an analysis done last year which said that there were no systemic
problems with Learner Accounts in terms of the design; it was
an operational failure in terms of fraud in England. So systemically
it is a good idea; it is operational performance that you need.
We have seen that Learner Accounts have succeeded in Wales and
in Scotland, so conceptually they are good and operationally they
can work. So we are saying in terms of procurement of training
that that would come through a demand-led system through the Learner
Accounts and through Train to Gain. That is how we would see this
working and going forward.
Q378 Natascha Engel: Finally, overall
do you think that Jobcentre Plus, as it is at the moment, nationally,
locally and specifically at personal adviser level, really has
the capacity to take on what is a pretty massive new responsibility
for them? You can just say yes or no, if you want.
Lord Leitch: Yes, I do think they
have the capacity. They have just come through the merger, which
has been a huge change programme. The merger with the Benefits
Agency and Jobcentre Plus was something like 100,000 people. It
has been a massive change programme and they have done it very
successfully; they have just come through it and I do think they
have the capacity of doing this. Coming back to your radical reorganisation
point, we thought to impose another radical reorganisation also
would be a change too far. I think this can be developed. In many
ways it will improve the performance of Jobcentre Plus because
they have the schools advisers working with them, focused on delivering
a part that they do not do so well at the present time.
Chairman: Jenny Willott.
Q379 Jenny Willott: I would like
to ask you some questions about future trends and skills training.
The first issue is about the fact that in your report you seem
confident that there is going to be a substantial decrease in
the number of low-skilled jobs over the next few years, but, given
what you have already said this morning about the difficulty of
predicting accurately, how confident are you that that is actually
going to be true?
Lord Leitch: In terms of low-skilled
jobs I think we are confident in terms of what we are saying that
low-skilled jobs will diminish. I think there are two aspects
hereand we say it in the reportthat if jobs can
be digitised and automated they will move elsewhere if the costs
are lower. That is point one, and I feel that very strongly, it
will move elsewhere. For those jobs left we believe that the skill
levels will increase. If you look at basic jobs, take manufacturing.
Manufacturing today is 14% of employmentit has dropped
massively. By the way, it is a very important 14% because it has
this multiplying effectyou make something, you have to
transport it and you have to sell it, so it is a very important
14%. If you look at how manufacturing has changed there is no
doubt that we have moved much more towards a service led economy;
manufacturing has become more of a high value added industry and
it will be going forward, and I think that is where Britain can
succeed in manufacturing if it has this high design, high value
added facility inside it. If you look at the basic skills, they
have changed. For example, the physical skills that you needed
in manufacturing, you needed to labour in a certain way, and you
can see it in other industries tooyou can see it in farming.
I remember 20 years ago where the farmer with a modest farm would
have six workers on there. The farmer on that modest farm now
will have himself and someone very good in terms of coping with
all the technicalities of the equipment they have. Those are the
skills you need and you see those basic skills changing. I am
very confident that the basic skill levels will increase. The
other thing on basic skills, basic skills these days include things
like IT, which 10 years ago was not there; you actually need some
expertise in basic skills.