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

Examination of Witnesses (Questions 40-59)


28 APRIL 2008

  Q40  Dr Blackman-Woods: Yes.

  Lord Leitch: I think there is a role for regionals when you have a big land mass and few cities. That seems logical to me.

  Mr Marsden: We move on now to where you recommend in your report a new partnership between government employers and individuals in taking action on skills and training, so we are going to be asking a set of questions about the demand-led system and responsibility for skills.

  Q41  Mr Willis: First, I was very interested in your analysis here of the way forward, particularly at higher level skills, level 4 and above. You made it clear that you feel that employers and the employee or the student should provide the main bulk in terms of the funding of those qualifications and the gaining of skills at higher levels, is that correct?

  Lord Leitch: For the additional funding?

  Q42  Mr Willis: Yes.

  Lord Leitch: One of the principles was that those who benefit most should invest most.

  Q43  Mr Willis: We have a simple calculation that, between now and 2020, we have to move from a position where roughly 39% of people are going to university to where 50% going to university in the 18-30 group. We also have to get to a situation where roughly one in four people have a qualification at level 4 and above to a situation where four out of 10 have a qualification. That is a big challenge and will require a huge expansion of higher education and skills training above level 4. Do we agree that that is the starting point of this discussion?

  Lord Leitch: I agree.

  Q44  Mr Willis: In which case your argument is that, because you see employers and the employee or the individual as being the main beneficiaries, that expansion will be funded by those two groups?

  Lord Leitch: Yes.

  Q45  Mr Willis: What earthly evidence have you to support that?

  Lord Leitch: What "earthly" evidence?

  Q46  Mr Willis: Yes. Where is the evidence to support that? These were just calculations that were made without any evidence, were they not?

  Lord Leitch: No, we had evidence here. You are right about the expansion and you are right about the increased investment we need to make in higher education. At the moment the United Kingdom invests 1.1% of GDP in higher education, the United States 2.9%, South Korea 2.6%, Australia 2.5%, Scandinavia 2.5%, so clearly there is a shift to take place here, but those investments are a mixture of public and private and I think our view was that, looking at what the State invests in other countries carefully it did not seem right that the State should invest dramatically more when there are key advantages to that. For example, take employers. We think there is a very significant opportunity for employers to co-invest in improving the qualifications of the existing stock.

  Q47  Mr Willis: But employers are not stupid, are they—at least I hope you are not saying they are. Why have they not come to that conclusion? Because if their employees are more productive then there is more profit and they can have bigger Ferraris or Ford Focuses?

  Lord Leitch: Of course they are not stupid, and employers in this country have done a very good job, by and large, for training, but one third do no training.

  Q48  Mr Willis: But where is the quantum leap going to come? Where is your evidence to say that suddenly, because Sandy Leitch has produced this report and the Government says "Halleluiah", all employers are saying "Where can we get the latest higher education training? Where can we fund it?"

  Lord Leitch: Can I go back an hour, when I said there is no panacea? Employers are not going to wake up and say "This is the way we are going to do it". This is a journey and there are many steps. I can give you an example which I think is a beacon of what we can do. There is a Sector Skills Councils called e-skills, the IT industries of the United Kingdom. They got together and they said "We need more graduates with a curriculum that suits our businesses". So they got together, pooled their resources and their expertise and are working with a variety of universities, and have designed particular graduate courses for them that they can have for new people and for existing recruits. They partially fund these, and I think this is the way forward for significant more investment.

  Q49  Mr Willis: How many other national Sector Skills Councils are doing the same?

  Lord Leitch: When you have change you have to start with a leader on change, and I think this is a great opportunity. We also have Tesco's, Royal Bank of Scotland, Flybe and Network Rail all looking to do these co-investments. If this is done properly it is the right way forward. Research happens in other countries in the world and if it happens in other countries in the world we should be showing that it can happen here, so I feel very confident we can deliver this, if we get the right leadership.

  Q50  Mr Willis: In the Sector Skills Councils, or where?

  Lord Leitch: Can I talk about Sector Skills Councils?

  Q51  Mr Marsden: Yes.

  Lord Leitch: I started off liking the concept of Sector Skills Councils but not so much the delivery. I saw one third doing well, one third badly and one third unproven, and I thought "Goodness gracious". Conceptually it is the right approach, and I think one of the areas missing on the two thirds neutral or negative was about strong leadership in getting employers to come together. Like in many areas in life it is about somebody being the champion and showing the way, so that is why we call for the reformation and the re-licensing of Sector Skills Councils.

  Q52  Mr Willis: Let's hope you are right and the Sector Skills Councils all become incredibly dynamic bodies that take their employers into the trenches and buy into all these extra skills. Let's assume that is right. It has never happened before but let's assume it happens on this occasion.

  Lord Leitch: Yes.

  Q53 Mr Willis: As far as universities are concerned, and to some extent colleges but particularly universities, we have had university tradition which is basically about university autonomy, about it being, if you like, a supply-side system. You are suggesting in your report, and the Government has accepted, that we are now going to have a demand-led system within Higher Education 2, with employers, given that you already have briefed that this expansion will come via employers, through the Sector Skills Councils making demands on higher education institutions to produce the sorts of courses and products which they want. Will that not change the whole nature of our higher education institutions in the same way as Train to Gain is potentially likely to change—I am not saying for good or bad—the nature of our further education institutions?

  Lord Leitch: Yes, it will alter the balance, but may I say that the most successful development of university courses in recent years has been MBAs, which are not supply driven but are also demand led. This is what industry is requiring, and they have been fantastically successful. So your example that universities are only supply-driven is not correct.

  Q54  Mr Willis: But the majority, of course, are supply driven.

  Lord Leitch: But it is the evolution here.

  Q55  Mr Willis: But that is what you see happening?

  Lord Leitch: Yes, but, if you look, there are degrees in architecture, engineering and all these things. This is not about being supply driven; this is about being demand driven as well. We need these graduates in these subjects. There are degrees in law, medicine; this is not just learning for learning's sake but learning for a profession. For instance, Richard Lambert did a report three or four years ago and he was basically saying there is a mismatch of needs in our society, and university must engage much more with employers, and I think the forward universities are doing exactly that. Business has found it difficult to engage with universities, and they must find it easy to engage with universities. There is real employer concern, and what we have now is changing. We are at a turning point.

  Q56  Mr Willis: So we are going to have a Benthamite, utilitarian approach to higher education in the future?

  Lord Leitch: No, that is not fair. It is not utilitarian; it is about a flexible approach that is demand-led.

  Q57  Mr Willis: Well, let's park that one as well. The other big driver for this is, in fact, money. At the moment 90% of all funding in higher education to support students goes on three year, full-time undergraduates; 10% goes on part-time. The whole essence of the development that you see in your report is about part-time students really delivering in the work place, students who are earning as well as learning at the same time. Why did you not as one of your conclusions and recommendations ask for a shift of resources so that you are incentivising and supporting people up-skilling from level 3 to 4, and, indeed, from level 4 onwards? Why was there not a change in the support mechanism recommended so that part-time students in particular got the sorts of incentives that full-time students get, which would have done probably more to incentivise this, rather than making employers compulsorily have to pay for training?

  Lord Leitch: There was a recommendation to allocate part of the HEFCE budget towards this, if my memory is correct.

  Q58  Mr Marsden: Would you like to elaborate?

  Lord Leitch: There is a reference that we should take part of the HEFCE budget and allocate it to more level 4 qualifications in the work place. Shall we come back to that?

  Mr Marsden: Yes.

  Q59  Ian Stewart: Are trade unions valuable partners in the development and delivery of learning and skills?

  Lord Leitch: Very much so.

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