Select Committee on Work and Pensions Minutes of Evidence


Examination of Witnesses (Questions 400 - 419)

WEDNESDAY 13 DECEMBER 2006

LORD LEITCH, MS LOUISE TILBURY AND MR STEPHEN EVANS

  Q400  John Penrose: Just to pursue a little bit on that. What we have been hearing is that attitudes to skills vary very strongly between different groups. You said yourself we do not necessarily have a culture which values skills in this country in the way that some other countries do. Do you think you are going to have to delve into whether or not some groups of the harder to help are more or less pro skills development? If there are some groups that are less pro skills development, does that not argue that you may need to have some specific kinds of outreach or something like that in order to change that particular culture because it will be a different set of obstacles than in other groups?

  Lord Leitch: One of our principles is to adapt and respond, so I agree entirely with you. I think there will be different tailor-made solutions for different groups in different locations. I think the situation is different in different parts of the country. It is different for different socio-economic groups as well, I agree with you.

  Q401  John Penrose: Are you planning to do any follow-up work to address those sorts of questions?

  Lord Leitch: My job is to deliver this report and it is then to fight hard as a champion for recommendations and then the implementation, how that is taken forward, is up to the Government in the UK, Northern Ireland, Scotland and Wales.

  Q402  John Penrose: So which departments should we be following up? Is it going to be DWP or is it going to be the Department for Education and Skills?

  Lord Leitch: I think it is both actually. I commend you to do that.

  Q403  John Penrose: That is the question they have got to answer? You have identified it; they have got to come up with the answers?

  Lord Leitch: Yes.

  Q404  Michael Jabez Foster: Your report seems to acknowledge that the ambitions of the individual to be trained are really important in determining whether or not they are going to enter into a training programme. On that area of personal attitudes and expectations, may I put to you that in certain areas—my own constituency of Hastings—there are very, very low skills and a culture of acceptance of low skills. What can be done about that?

  Lord Leitch: I think, as I said earlier, changing the culture is incredibly difficult. I think we should begin a journey to change behaviour which will lead to a change in culture. I think it should start with awareness and then access. Awareness is actually showing people that there is increased value to them from learning. I think that starts perhaps in pure marketing in terms of giving people the insight to what is there. I mentioned this particular advert that went before. I think we should start with that. Then we have the basic skills and all the work we have talked about. I think that is the only way we can do it. I can think of no other solution.

  Q405  Michael Jabez Foster: I had a carer yesterday who is 53 years old and she said, "My caring role has ended. My parents have had to go into a home eventually (so she is feeling terribly upset about it) and I have not got a skill in the world. I am not very clever (she probably is) and I have certainly not got the confidence to go and do anything." What do we do about people like that because there are many thousands of people like that, particularly carers who get to the end, who lose their carer's allowance because they are no longer performing the role and they have no income and no confidence. There is a massive group out there.

  Lord Leitch: There is and the universal careers advice service would be the first port of call for that person, done in a user-friendly way, to sit down and counsel where you are in your life, what skills you have, if any, what you would like to do, and what is possible. It is the art of the possible. First, it is the analysis, then giving them advice and guidance as to what they can do, and then giving them access to that. That is the way forward.

  Q406  Michael Jabez Foster: Do you think there is enough facility there because the whole project is based, as you said at the very first question, on asking employers what they want, and by asking employers what they want is not the difficulty at the softer end—perhaps carers who are still caring in that area who are a long way from the work market—and do you think there is sufficient attention given to those groups which are not the immediate concern of employers?

  Lord Leitch: We are suggesting more attention should be given to those groups. This is not all employers. What we are recommending is not everything for all employers. There is a responsibility on the state to give everybody this basic platform of skills. The Careers Advice Service is a Government responsibility, it is not an employer responsibility, so there has got to be that balance. What we are saying is on the role of the Commission it is employer-led, but we make the point very strongly in the report that it is within a framework of rights and responsibilities for individuals, so this is not saying delegate or abdicate all responsibility from the state to employers. It is not that at all because the state has a very crucial role to play in groups like you are talking about.

  Q407  Michael Jabez Foster: So you would accept that outcomes may be more distant than the immediate?

  Lord Leitch: Yes, absolutely.

  Q408  Michael Jabez Foster: And the gains may be more distant?

  Lord Leitch: Absolutely and you might have to take a longer view with some people. There is clearly a social aspect to that.

  Q409  Harry Cohen: Where do you stand on the DWP's "work first" approach? Does this mean that the focus is on upskilling people who are already in work, perhaps even at the expense of those who are out of work?

  Lord Leitch: I think that the "work first" approach from DWP has been incredibly successful. All the evidence shows that for people who are unemployed getting them into a job is a great solution, and I think a 75% employment rate is testimony to the approach of work first. We are not advocating that you change that approach. What we are saying is that you complement it by saying there are some groups who need skills first before they can get work. We have identified the sorts of things we have been talking about there. There would be some groups who need more skills before they can get into work and these particular disadvantaged groups are exactly that, so skills first.

  Q410  Harry Cohen: Train to Gain has been successfully piloted and you have eulogised about it earlier on as well. How do we ensure that the quality of the training is there and very relevant and not just for the current job but for that person to take on into the future?

  Lord Leitch: In quality of training I think there is a role for sector skills councils. Again, we are talking about economically valuable skills. I think that has got to be a mantra. If we drive economically valuable skills, the best thing you can do for any individual is to get them into a job that is delivering those economically valuable skills. They will then get a wage premium, they will then get a sustainable job, they will get promotion and then a bigger wage premium. That is exactly what we should be doing. I make no apologies that economically valuable skills is absolutely the direction we are trying to move into, so it would be demand-led. I keep saying the reformed and relicensed sector skills councils because they are not all performing at the standards we would like. There are 25 at the moment and I think a number of them need to be evaluated and assessed as to whether they are delivering to the standards that we want. The sector skills councils, reformed and relicensed, will do that approval. We will also have a regulatory approach by the QCA which will apply a light touch, risked-based quality control regime on the courses. I think that you will see the 22,500 vocational courses, many of which as I have said have no return, reduce, and we are actually charging the sector skills councils to come up by the end of 2008 with a view on the number of courses that would apply going forward, so there is that control. Obviously you have got to have the QCA controlling it too.

  Q411  Harry Cohen: That is helpful. The aim is by 2010 to get an additional 3.6 million people to Level 2 or higher qualification, as far as I can see. That is a lot people. Is it achievable on the Train to Gain model? What is needed to achieve that?

  Lord Leitch: I think it is eminently achievable. Other countries do it; we are behind. As I said earlier, I think the proposition to employers is compelling, but there are some hard-to-reach employers whom we have got to get to and evangelise the benefits to them (that is the job of Sir Digby Jones) and I think that is absolutely achievable.

  Q412  Harry Cohen: In the time span? It is a short timespan.

  Lord Leitch: We have said on the pledge that we have got until 2010 and our targets are for 2020. We have got to look at the trajectory and if it is a positive trajectory I would make a judgment and I would continue with the voluntary approach. If it is not working I think we should then introduce the entitlement. Coming, Michael, back to your point about compulsion, I think then there is a good case for saying we have to have that. However, it would be done in full consultation with unions and employers and done in the workplace, which I think is one of the factors that would influence the success rate as an entitlement. The other thing just on the entitlement, we have got to be very careful if we bring in the statutory entitlement that what it does is it enhances employers and does not cripple employers. It is very important that we design very carefully what eligibility means. Again, you do not want to have a blunt instrument where you bring in compulsion of an entitlement which damages employment. You would have to have criteria like how long have you been in the job before you are entitled to this. You need to make sure that you are not spending investment and time on people who will not be there in two weeks' time.

  Q413  Harry Cohen: Can I just pick up on some of these other aspects, not just skills but job retention, earnings progression, people if they move jobs progressing in work. How will Train to Gain work in that regard? Do you think it needs perhaps some adaptation to work?

  Lord Leitch: Yes, I think Train to Gain will continue to evolve and improve. One of the areas that is being looked at on Train to Gain is to take the concept to higher levels. I have mentioned the higher education levels. One of the reasons for a lower percentage of funding in the UK compared to comparator nations is the fact that we do not have the stimulus for employers to fund higher education in the same way. We are recommending that a portion of the HEFCE budget is applied to stimulate this, so you can see co-funding of degrees in the workplace. Again coming back to an earlier point about breaking things down into bite-size chunks so that employers see a value in unitised, more modular degree courses done in the workplace, we think that is the way to stimulate that. I can see Train to Gain extend in that sort of way up to higher levels. In the medium and lower levels it will continue to evolve and improve and adapt. One of our principles is "adapt and respond".

  Q414  Harry Cohen: My last question is about rewards and incentives. Clearly there is something there for employers if they can get a more skilled workforce, but what about Jobcentre Plus, the welfare to work providers, the LSC, the skills councils; should something be built into the system that rewards them if they get people into employment, let alone the skills upgrade?

  Lord Leitch: That is a very good question. The job of the provider in vocational skills is to provide those skills to individuals so that they can then either get a job or progress in a job or sustain a job. At the present time there is not enough analysis of the impact of what they have done on outcomes, so what we are recommending in here is that providers should provide an analysis of what has happened based on the courses that they provide. That would be one of the factors for assessing the performance of the provider. You mentioned that employers get a benefit from this. I can tell you that not all employers see the benefit from skills. One of the areas that we want to improve is awareness and engagement, and that is again where the Commission and the sector skills councils will come in because we want the one-third of employers who do nothing to start training and we want those people who are already doing it to see ways in which they can improve their investment and increase their productivity.

  Q415  Mrs Humble: First of all, I just want to ask a follow-up question to one of your answers to Harry Cohen when you talked about Train to Gain going up through into the higher education sector. How can you make HE as responsive in the way that you want it to be responsive given there is a long lead-in time before universities can set up new courses, new departments, and recruit staff to then deliver courses that have been identified by employers in the way that you have outlined? And then of course degree courses are three years. If you say it is a five-year period by the time they turn out these graduates, there might not be the need for their particular skills. How can HE be part of this much more flexible responsive skills training system that you want to put in place?

  Lord Leitch: I think it can and it must. There was a report done three years ago by Richard Lambert on the engagement of employers with higher education institutions. He was saying much more needs to be done to improve that engagement. I read two months ago a report done by the City of London employers on financial services saying exactly the same. You have got to improve the engagement between higher education and employers. It has to be done and I believe it can be done. We have got some good examples. I will give you a good example. There is one sector skills council which is called eSkills. I do not know if you have come across this, this is in IT, and for me this is an exemplar of how to run a sector skills council. Around the table of the council are the chief executives from all the major IT companies in this country—the IBMs, the Oracles, the Ciscos, they are all there around the table defining what they need. They have defined that in their sector they need a particular graduate course, so what they have done is to work with certain universities to design that graduate course the curriculum of which is suitable for their industry, so collectively they have done it and they have developed a portable skill which they say is so good it is going to benefit all of them. In this year they are going to enrol 600 students in that course, so that is employers taking a three-year view on what can be done. What we are also saying is that degrees can be done in a modular way. If you have got degrees which you can do if you are in work (like the Open University) they can be done much more in the workplace with a stimulus of funding coming from higher education which will then encourage the employer to put more in. The other point on degrees is of course that one of the most successful areas for higher education in recent years is MBAs which have been stunningly successful. I think that shows it can work.

  Q416  Mrs Humble: Thank you for that. Now I will ask the questions that I should be asking you which are about the interaction between benefits and skills training. I want to carry on the example John Penrose gave you earlier of somebody who is over 25, who is unemployed, who knocks on the door of his FE college because he has recognised that he needs reskilling and you outlined that that individual would have access to the learner account and the proposed Skills Development Fund. How would that support interact with their benefit entitlement if they are receiving financial support in some way?

  Lord Leitch: I will let Stephen answer.

  Mr Evans: Then he will say the opposite! I think that there is always a debate about the benefit rules versus all the other support that people get outside benefits. We will probably end up ducking this and saying it is for the Government to decide the interaction. What is clear for people on benefits is that some of them need to learn. It is for the Jobcentre to decide which of them need to get skills whilst they are out of work. For those people who need to learn they need financial support to learn and they can get that through the benefits system or through the kinds of things Sandy was talking about. As long as they get it, it is up to the Government to decide which source they get it from best.

  Q417  Chairman: There is a famous rule in social security, the 16-hour rule on learning and education. If you are doing less than 16 hours you can stay on benefit. Did you have any discussions around that rule?

  Mr Evans: No.

  Lord Leitch: I will be quite blunt on where we have not got gone to places and where we have.

  Chairman: That is fine, it is not a problem.

  Q418  Mrs Humble: I am still going to push this a little further even though I recognise that you have said it is up to Government to sort out the benefit rules. This is actually a very important area. For example, somebody on a jobseeker's allowance is required to job search so how would that then impact if they have had their skills audit and they are told, "You need this that and the other reskilling, we have identified the course. We are going to fund it through one mechanism or another"? That individual has still got to as part of his benefit entitlement be looking for jobs. He could then be offered a job in the middle of the course. Could he turn down that job offer, still retain his benefit because he says, "Hang on a minute, you have identified I need reskilling because you have done this skills check." How would this work? Another example—and it is appropriate to my constituency in Blackpool—is sometimes people are offered jobs that last less than a year, seasonal employment where they are employed from Easter to the switch off of the Illuminations at the beginning of November. They could say, "Just a minute, I do not really want to have a job that is just for however many months. I want to do some training and then get into a job that gives me a longer-term future."

  Lord Leitch: We have looked at this. Again conditionality is an incredibly complex area. What we are recommending is part-time basic skills as part of your back-to-work plan, so the sort of example you are quoting you could do with part-time basic skills. Again, I think what you need to do now is to take our recommendations at this level and you then need to go to the next level to look at every "what if" under that next level, and we have not done that in this report.

  Q419  Mrs Humble: You suggest that the Government "should review whether participation [in basic skills training] should be mandatory for all jobseekers with basic skills who remain on benefits at six months." What are the pros and cons on compulsion in this matter?

  Lord Leitch: I think if it is absolutely clear that if the barrier to somebody getting into work is that they are in this recycling route of repeat claims, then compulsion should be applied in those situations, but in a sensitive way—and it has to be a careful evaluation—otherwise that individual that we are talking about does not stand a chance of getting a job. It has to be done in an encouraging way to say, "This is how we are going to help you get into a job otherwise your chances are much less."


 
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