Select Committee on Innovation, Universities, Science and Skills Minutes of Evidence

Examination of Witnesses (Questions 20-39)


28 APRIL 2008

  Q20  Ian Stewart: But how will your targets assist in that?

  Lord Leitch: Targets do not necessarily assist but they can help you, for example, in terms of the output. The output might be in getting a job, so I think they would help in those areas. One of the key areas here would be one of the Sector Skills Councils in developing for a particular sector the skills that they need, but there are other skills. If you look at NEETs, how many NEETs have we got today? 200,000? There is this big potential underclass that I worry about of some of those softer skills, concerning getting up in the morning, having the discipline to go and work, the discipline to go for an interview, and we have to do something centrally for those sorts of areas. So it is a combination of, for instance, Sector Skills Councils and something nationally to deliver those sorts of areas. You need them both.

  Q21  Ian Stewart: We have developed some non traditional approaches, bite-sized learning or other less traditional routes. Do you think that the targets based on qualifications may discourage the development and use of those non traditional approaches?

  Lord Leitch: What sort of things do you mean by "non traditional"?

  Q22  Ian Stewart: Well, the bite-sized learning approach, which is outside the qualifications scheme of things.

  Lord Leitch: No, I do not. I think employers having more of a role, more of a voice in developing skills which are economically valuable makes that more flexible. You are giving more power to the employers, the Sector Skills Councils, to develop those sorts of skills that are absolutely right with more flexibility, more focus and more measurement in those sorts of skills, and I think we have that.

  Q23  Ian Stewart: Sandy, in the past you have been pressed on ELQs, but before we ease into that, does the setting of targets for the proportion of the population at particular levels of skills attainment have a detrimental effect on those who wish to re-skill rather than up-skill, and what is there in your report to assist those who need to re-skill?

  Lord Leitch: Setting of targets is a vexed question. A lot of people have asked me whether target setting makes any difference; I think you have to have targets. A business has to know where it is heading, and to do that you need to start with what you are aiming to do, so I think targets are important. But we set off starting by saying you have to have a vision, and the vision has to be world class in skills by 2020, and we mean by that to upper quartile in the OECD. Then you have to translate that into what does that mean, and you have to have objectives, and we have very clear objectives in terms of basic skills, intermediate skills and higher level skills, and there are numbers in there, and I think you have to have those to help you achieve your vision. Then you have the specific recommendations, which drive you to achieve those objectives. So I think that is a very logical, very pragmatic way of running targets, but "targets" as a word has fallen into a bit of disrepute, I think, and I think that is exactly the way to run it.

  Q24  Ian Stewart: When you say that there is a presumption that a person will train and gain new skills to achieve a particular job, and that will help drive innovation, what about those people who because of the nature of industry these days have to change their existing skills for new skills? They also make a contribution, do they not?

  Lord Leitch: Yes. Absolutely.

  Q25  Ian Stewart: So at that point the question is if, as government policy, we are running for a flexible labour market in the type of world that you have described, why do you think a government would not wish to support people studying ELQs to retrain or train for new skills?

  Lord Leitch: The Government does want to support those. In our report we talk about 70% of the working age population by 2020 already having left compulsory education, so to have people with the skills you need you cannot rely on a flow of young people coming through, and the flow of young people is going to reduce by 2020, so a key part of this is retraining the work force. A critical focus, for example, of Sector Skills Councils will be on retraining, changing people's skills, improving their skills, driving that forward. I do not want to come on to ELQ yet but it is a main thrust of what we are saying and what is in the report. On graduate numbers, our objective is to exceed 40% by 2020—and when I say "exceed" 40% will not be enough in 2020, and it is not just level 4 but it is level 5 and above, so we have to drive all this forward by that time, and the only way we can do that is by focusing on the stock of people in work, and that is the strong message from the report.

  Mr Marsden: The balance between re-skilling and up-skilling was one of the issues swirling around the ELQ debate, and we would like to press you a little on this.

  Q26  Mr Wilson: How does cutting £100 million from the ELQ budget help re-skilling?

  Lord Leitch: My job in this review was to do this extensive comprehensive analysis and then make the recommendations. I never thought I would continue to oversee the implementation. Indeed, my review was not an implementation blueprint; it did not cover everything, and if we had it would have been a lot bigger and much longer. So we did not cover every single aspect of the skills agendas. Indeed, I always said it was my job to deliver the recommendations; it is then the Government's job with the Commission for Employment and Skills to oversee the success of that journey. I know there has been a lot of talk about ELQs, and we recommend 40% and above at 2020 and increasing the flow of young people, but that is not enough; we have to up-skill the stock. There are six million people at level 3 in this country, and they are potentially the candidates to move to the next level. That next level might not be a qualification but it could be a graduate level skill that we are looking at so it is important to get to that, and that is going to be a real focus for Sector Skills Councils. But I cannot really comment on the detailed arguments because I do not know the arguments.

  The Committee suspended from 4.55 pm to 5.05 pm for a division in the House.

Q27 Mr Wilson: Your answer was pretty noncommittal—

  Lord Leitch: I had not finished!

  Q28  Mr Marsden: Could I say at the risk of irritation that it would be helpful if the answers could be a little briefer.

  Lord Leitch: Fine. We did not specifically cover ELQs, though I think the principle is we do have to prioritise, but we need to watch out for unintended consequences.

  Q29  Mr Wilson: The automatic reaction to that is do you feel that what has happened to ELQs may have some unintended consequences?

  Lord Leitch: I do not know enough of the detail, genuinely.

  Q30  Mr Wilson: Because you have said that any changes in funding streams and mechanisms must be effectively managed so that the excellent work of institutions such as Open University is not undermined. You are probably aware that Professor Latchford from Birkbeck College and the Open University are very exercised about the impact these cuts are going to have on part-time students and, in particular, women returners to the work force. Surely you can see there is going to be a huge impact on these people as a result of these cuts?

  Lord Leitch: What I have not done in the last 18 months is get involved in detailed implementation. I do not think that is right, that is a job for the Government. It has to prioritise, it has to make tough decisions, and so genuinely I have not been involved in that. Open University and Birkbeck have written to me to ask for my views and I have not given them one; I do not think it is right. If you are going to give a proper, educated view you have to look into the whole topic and what was said and done, and I have not done that.

  Mr Wilson: In that case I will step back, if we cannot get a view from you.

  Q31  Dr Blackman-Woods: Lord Leitch, I think a lot of the analysis in your report on future skills needs is very helpful, but can you tell us how robust you think the modelling is, and what your analysis of the current and future skills picture is based on?

  Lord Leitch: I am very confident on the analysis because that is looking at what was on now and I think we had some of the best brains—Harvard University and Sheffield University—helping us, and people from the Treasury and DWP. Modelling, of course, is the future and you need assumptions for that, but I think I am confident enough of the models we have made to justify the recommendations. We have tapped into the best brains here and it is sound. In terms of the modelling where I am confident is working back from the ambition to be upper quartile. These are the things you need to do so I am very confident on that. And, by the way, the Commission for Employment and Skills is currently independently looking at our models to verify those.

  Q32  Dr Blackman-Woods: So it might be helpful for us to come back at some stage in the future and look at those again, is that what you are suggesting?

  Lord Leitch: I think it is always worth revisiting. Basically, I did a study and I thought it was very important to have an assessment and continuously to review and keep this in the front of my mind, and that is what the Commission will be doing. So yes, you should be constantly looking at it, looking at competition in the world, seeing where we have to make adjustments and seeing if our progress is good enough.

  Q33  Dr Blackman-Woods: Nevertheless your report does say it is very difficult to model for 15 years in the future, so would your conclusion be that it is worth modelling for 15 years in the future, or is it only worth doing that in a very general way?

  Lord Leitch: I said one of the principles was to adapt and respond. When I first started this study I thought we could take a skill type, model it through to the future and say: This is how many of this you need by the year 2020. I soon realised that history tells you you always get that wrong, so you have to build a system that adapts and responds to what employers need, what society needs, and to drive forward those demand-led, adapt-and-respond fundamental issues for the strategy.

  Q34  Dr Blackman-Woods: I have heard a number of people comment in relation to your report that what you did was suggest that in the future there would be very little demand for low-skilled employment in the United Kingdom. The figure that is usually used is about 600,000 being needed, down from about 3.6 million today. Could you say whether you think that is a fair conclusion to make from your report, or whether you were just simply outlining for the future what skills qualifications would be, rather than what they should be?

  Lord Leitch: There will be less low-skilled jobs in the future. That is the statement from that.

  Q35  Dr Blackman-Woods: And do you think it is fair? Because I have heard a number of ministers saying that based on your report it is likely that the demand for those with low-skilled occupations will be much, much lower for the future than at the moment?

  Lord Leitch: I think that is right, and the consequence from that that we should give those people who do not have these basic skills a chance to acquire them, and that is a fundamental point, a social point and an economic one.

  Q36  Dr Blackman-Woods: We have already discussed targets and whether they are useful or not. However, we would all accept that the targets set in your report and subsequently added to by Government are quite challenging. Do you think they are realistic, given that we are 12 years away now from 2020? Are they going to be met?

  Lord Leitch: I earnestly hope they are going to be met. I think they are realistic because, remember, there are countries in the world who are Quartile 1 in skills and we are not, so these are attainable, achievable. I think we have to achieve them. There are competitive countries out there. I think for the fifth largest nation in the world where we are is unacceptable. Some countries have made fantastic progress—countries like South Korea, Australia, France—and some countries are catching up like Spain, Portugal, Brazil, and I think the consequences of not delivering are severe—severe at different sections of the work force but also for the economy and for individual groupings. So the targets are realistic but they need a lot of commitment and action to deliver them.

  Q37  Dr Blackman-Woods: And do you think we would be helped in terms of delivering the targets if a greater role was taken by regions, or even at a sub regional level? Do you think RDAs, for example, have a strong enough role in terms of delivering?

  Lord Leitch: I think there is a balance between RDAs and cities, as I mentioned earlier. To be absolutely clear, there is national, sectoral and local. For example, with RDA, if you are in Cornwall, you would not have many city structures there because it is not big enough, but if you are in Sheffield—and what they are doing in Sheffield is incredibly impressive—you could argue you did not need to do much more to bring employment and skills together. So there is a jigsaw here, and I would say I would be flexible on the local delivery of the jigsaw.

  Q38  Dr Blackman-Woods: But should RDAs have a clear role in setting targets for their region, and doing sector-specific targets?

  Lord Leitch: To be honest, I am not sure what the sub-national review said. I have not followed that. Do you know?

  Q39  Dr Blackman-Woods: Yes. It gave a role to poor local authorities.

  Lord Leitch: But not regionals?

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