Memorandum submitted by the Confederation of British Industry (CBI)

 

Summary

 

1. As the UK's leading business organisation, the CBI speaks for some 240,000 businesses that together employ around a third of the private sector workforce, covering the full spectrum of business interests both by size and sector. The CBI understands the Committee's wish to examine the current the testing system, and the role of the testing and assessment regime in ensuring accountability and raising standards.

 

2. CBI members are committed to investing in the skills of their employees. In a global economy characterised by rapid change, young people need to have transferable skills to ensure their continued employability. The UK must have an education system which produces young people with the skills employers need, so that we have a world-class workforce that can compete with Europe, the US and Japan and the growing challenge from China and India.

 

3. Employers value test and examination results as a way to monitor the performance of our education system in ensuring young people attain the skills they need for success in life and in work. In this paper, we focus on the public examinations taken between ages 16-19 - GCSEs and A levels. Employers use an individual's GCSE and A level examination results as a good indication of a young person's abilities, particularly during the early stages of a person's career. However, employers are also interested in the tests taken in schools by children at Key Stages 1-3 as they provide an indication of whether educational standards are improving. Such tests must provide an objective and reliable measure of the standards achieved by pupils at crucial stages in their development.

 

4. At present the CBI has two key concerns. First, too many young people leave school without the necessary literacy and numeracy skills to succeed in work and, secondly, insufficient numbers of students leave school and go on to study science, engineering and maths at university.

 

5. Problems with basic skills continue to manifest themselves in the workplace - 20% of the current workforce lack either the literacy or numeracy skills expected of an 11 year old. It is estimated that lack of basic skills costs the economy 10bn per year. Employers invest 33 billion in training their staff every year and recognise their responsibility in training their employees with job-specific skills. But it is the Government's responsibility to ensure young people leave the education system with the basic skills.

 

6. Business demand for Science, Technology, Engineering and Maths (STEM) skills is high, but supply is not keeping pace. Employers are concerned that the number of graduates in key disciplines such as physical sciences or engineering is falling. A third of businesses think raising the number of STEM graduates should be a top priority for Government as jobs in these sectors are set to expand. Whilst the number of science degrees awarded at university has increased, the large rises in biological and computer sciences hide a decline in physics and chemistry. Falling numbers of STEM graduates can be traced back to the shortcomings of school science: fewer students studying triple science; too few schools with specialist chemistry and physics teachers; too little time spent doing experiments; and patchy lab provision.

 

7. The focus on English, Mathematics and Science in the curriculum and assessment regime is appropriate, and reflects how important these subjects are to the future prospects of young people. Employers' confidence in academic qualifications is determined by the number of young people leaving education with the skills that business needs. The CBI has been examining trends on science qualifications because of concern about declining number of students taking STEM degrees.

 

8. Finally, employers understand and recognise GCSEs and A levels and believe them to be world class qualifications. But they remain deeply concerned about the number of school leavers who have inadequate standards of literacy, numeracy and general employability skills. The new vocational qualifications - the diplomas - will help to create the skilled and competent employees business needs. Work-based qualifications must also be improved so that they reflect the skills and competences employers need.

 

Employers are concerned about the employability and basic skills of young people

 

9. Employers are concerned that too many young people leaving school at 16 do not have basic skills. Poor literacy and numeracy skills damage people's quality of life and their employment prospects. Those with poor basic skills are more likely to suffer higher unemployment rates and low earnings, with poorer chances of career progression and social exclusion. They are also less likely to be fully effective in the workplace, damaging the competitiveness of UK firms. According to the latest CBI/Pertemps Employment Trends Survey nearly nine out of ten employers (86%) think that ensuring young people leave school with basic literacy and numeracy should be the government's top education priority.

10. The CBI/Pertemps Employment Trends Survey 2007 also found over half of employers were concerned with the literacy levels (52%) and numeracy levels (50%) of school leavers. Employers often find that they need to remedy deficits in the basic skills of their employees. The survey also found that 15% of employers had to give school leavers remedial training in numeracy, and 13% in literacy.

 

Employers' dissatisfaction with school leavers' key skills (%)

Self-management

67

Basic literacy

52

Employability skills

51

Basic numeracy

50

Positive attitude to work

44

Use of IT

8

 

11. Employers expect young people to enter the world of work with the basic numeracy and literacy skills required - in practice this is the equivalent of a grade C or above in Maths and English GCSE. Pass rates have increased - the percentage of pupils achieving a GCSE A*-C has increased from 57 % in 1997 to 62% in 2007 in English and from 47% to 55% in Maths. But there remains a significant proportion of pupils still underachieving at GCSE level. In 2007, only 46% achieved 5 or more A*-C including English and Maths and a fifth left school with no qualification graded A*-C. This is a significant proportion of pupils who are still underachieving at GCSE and this is a key concern.

 

12. Given employers' concern that young people are leaving school without basic competency in literacy and numeracy, the CBI undertook to explore the ways literacy and maths skills are used in the workplace, and the shortfall in skills that employers experience. This work, sponsored by the DfES, was designed to identify the key functional skills needed by people at work - and the study was informed by survey and case study work. The final CBI report, Working on the Three Rs, was published in 2006 and defined the functional literacy and numeracy skills necessary to be competent in the world of work.

 

13. On literacy, the CBI report showed that reading basic text is a vital skill for the workplace and that writing a short report, with legible handwriting, is also essential. It is important to consider reading and writing separately as they are different skills - and they should be assessed separately too. To be functionally literate, an individual must be able to:

read and understand basic texts

construct properly spelt, grammatically correct writing that is suitable for the audience

write with legible handwriting

understand oral communications and react appropriately

be sufficiently articulate to communicate orally.

 

14.

 

 
A good grasp of basic numeracy is also a vital tool for work, and is used in a wide variety of contexts - from checking change in a supermarket to understanding performance targets. The ability to interpret and respond to quantitative data is also an essential skill for modern working life - there are charts, graphs and tables in most workplaces. It is important that employees understand these in order to contribute to problem solving and quality improvement and help create high performance organisations. To be functionally numerate, an individual must have confidence with:

multiplication tables and mental arithmetic

percentages, ratios, fractions, decimals, ratio

different measures and conversion between them

spotting errors and rogue figures

odds and probabilities.

15. The CBI was delighted that the Government commissioned the development of functional skills modules designed to test the practical application of numeracy and literacy - building the skills people will need in everyday work and life situations. These functional skills units will be incorporated into: English and Maths GCSEs; the new diplomas and apprenticeships; in addition to being available as 'stand alone' qualifications. The functional units - which will be taught from September 2010 - will be offered at the standard of Level 2 (GCSE A*-C), Level 1 (GCSE D-G), and entry level standards.

 

16. In 2005, the CBI set a minimum target of 90% of young people achieve functional skills modules at Level 1 and 80% to achieve a level 2 by 2010. We were therefore pleased to see that last year 90% achieved a Level 1 in functional literacy and numeracy. However employers do expect young people to have the skills commensurate with a C or above at GCSE level (Level 2) and it is therefore disappointing that we remain so far from achieving this target. While functional skills modules within GCSEs offer a welcome strengthening to the system, they cannot replace the goal of having more young people achieving a C or above.

 

17. Employers also expect young people to have employability skills. The CBI's Time Well Spent report published in 2007 identified the key transferable employability skills: self management, team working, problem solving, communication, application of literacy, business awareness, customer care, application of numeracy and Information and Communication Technology (ICT). In 2007, 50% of employers were dissatisfied with the employability skills of school leavers - 67% were dissatisfied with the self-management skills of school leavers whilst 92% were satisfied with their IT skills. The government intends to introduce Personal, Learning and Thinking Skills modules to diplomas and apprenticeships. While these are a step forward, these skills do not reflect employers' definition of employability skills. The framework comprises of six groups of skills: independent enquirers, creative thinkers, reflective learners, team workers, self-managers, effective participators. The CBI would be happy to work with the Government to resolve these concerns.

 

Examination results show the declining number of students taking science and maths

 

18. The CBI shares the Government's ambition to become the world's leader in STEM research and development. The UK must continue to attract - and attract more of - the brightest and most creative minds to these sectors. The CBI has proposed a target of 25% of young people studying STEM subjects at university. This target is essential if the UK is to fill the graduate level jobs that are predicted in these sectors by 2014.

 

19. However, a study of A level entries reveals some worrying long term trends. The number of A level exam entries increased by 14% between 1984 and 2006 but science subjects have not followed this trend :

Physics - the absolute number has fallen by 57% (31,065 fewer pupils) and as a proportion of all A levels from 9% to 3% (a 66% fall). Only 21% are girls. Physics was the most popular science A level in 1984 but is now the least popular.

Chemistry - the absolute number has fallen by 28% (13,534 fewer pupils) and as a proportion of all A levels from 8% to 5% (a 37% fall). Virtually equal numbers of boys and girls take Chemistry - 49% are girls. Chemistry was the second most popular science A level in 1984 and retains its middle ranking.

Biology - the absolute number has stayed broadly unchanged - a 3% rise (1,453 more pupils). As a proportion of all A levels has similarly remained constant at a steady 7%. Biology was the least popular science A level in 1984 but is now the most popular.

Maths - the absolute number fell by 25% between 1999 and 2005 and as a proportion of all A levels from 9% to 7% (a 29% fall). But last year saw an encouraging 8% rise in the number of young people taking Maths A Level (to 49,805 students). Only 38% are girls.

 

20. The fact that too few students are taking science A levels is having an impact on the number of students obtaining first degrees in science subjects. While the number taking "science" has risen by half (49%) since 1994, much of the increase is due to the number taking biological sciences and ICT. The underlying figures show very concerning trends for those sciences business needs - with a long term decline in the number taking physical sciences (physics and chemistry) and engineering and technology. After a dip in the numbers taking these subjects, we are now possibly seeing a recovery, with an increase in the number of applicants to university courses but the absolute numbers remain very much lower than in 1984.

 

 

 

 

GCSEs and A-levels are valued and understood by employers, and vocational qualifications must deliver business relevant content in ways that motivate young people

 

21. Employers use GCSEs and A levels as a key method of benchmarking potential employees. For example, companies set minimum requirements for entry to jobs such as five GCSEs A*-C including English and Maths. At higher levels, employers will look at A level grades when recruiting graduate candidates. Employers understand GCSE and A level qualifications and have no problem differentiating between candidates with good grades. This is because employers always interview candidates and do not offer jobs without interview as many universities now do.

 

22. The CBI welcomed the Government's decision to incorporate the planned A level review into a wider 14-19 review of educational qualifications in 2013. We urged the government not to prejudge the 14-19 review, as although employers involved in the development of the new diplomas are enthusiastic, there remain concerns about the new qualifications. CBI members believe that it is too early to talk about withdrawing A levels and GSCEs. The new diploma qualifications must:

ensure more young people attain vital literacy and numeracy skills

stretch our brightest children - rather than became a dumping ground for the less academically able

be attractive to young people currently disenchanted with the education system.

 

23. It is vital that young people have a wide range of attractive routes to choose from. Therefore, together with a high quality 16-19 academic route, there must be similarly engaging vocational and work-based choices available to young people - particularly the less academically inclined.

 

Quick progress must be made in improving vocational qualifications and accrediting employers' training

 

24. The CBI welcomed the Government's plans for the creation of a new independent regulator for the exams and qualifications system. A key function of the new regulatory body will be the accreditation of qualifications. Strengthening employer confidence in the vocational qualifications system will require developing qualifications with business relevant content.

 

25. It is essential that when the education/training participation age is raised, employers have access to work related qualifications that make them willing and able to provide training to young people that leads to recognised qualifications. The Government has set challenging apprenticeship and qualifications targets for both 2011 and 2020. If these are to be met it is essential that employers and young people see the point in getting involved in work based qualifications. Employers will only see value in employing young people and arranging training towards qualifications if an employee is developing 'economically valuable skills' - i.e. those skills that will lead to improvements in productivity and business performance.

 

26. The primary objective of training from an employer's perspective is to raise business performance, by having a competent workforce. Too many CBI members report that the recognised qualifications available are often out of date and irrelevant to their business - and do not reflect their specific skills needs. Findings by IRS, for example, indicate that NVQs, SVQs, and National Occupational Standards were used by only 32% of employers.

 

27. The Government has tasked the Qualifications and Curriculum Authority (QCA) with developing an accessible system for recognising high quality employer training within the qualifications system. Employers often provide staff with excellent training which is tailored to meet their individual business needs - and accrediting this training will build employer engagement with the vocational qualifications system.

 

28. The CBI has welcomed the recent QCA pilots to accredit employers' in-house training towards qualifications. The Sector Skills Councils also have an important role in ensuring their sectors' qualifications are fit-for-purpose. The CBI believes two models should be available: an employer becomes an awarding body to develop and award qualifications itself or an employer partners with an existing awarding body. The fundamental principle underlying a system for accrediting vocational training must be that qualifications fit employer training needs, and not vice-versa. Maintaining high quality standards will be essential, but this must be coupled with a flexible approach from the new regulator. For example, employer training should not necessarily have to conform to national occupational standards if robust industry or internal employer benchmarks already exist.

 

29. The QCA was tasked with showing demonstrable results by Christmas 2007 and we welcome the progress that is being made with employers achieving awarding body status and getting training accredited. The CBI is pleased to be working with the QCA, awarding bodies and employers to ensure that fit-for-purpose vocational qualifications are designed and delivered. We are pleased that John Denham, Secretary of State at DIUS has made progress in this area a priority.

 

Human Resources Policy Directorate

January 2008