Memorandum 66
Updated submission from the Government
INTRODUCTION
1. The Government welcomes this further
opportunity to report to the Committee on the progress it has
made in realising the world class skills ambition described by
Lord Leitch.
VISION
2. Our vision is for a prosperous and fair
Britain in which the talent of every individual is used to build
a skilled, resilient and innovative workforce that rivals the
best in the world.
3. Leitch showed that skills are a key driver
for both economic prosperity and fairness in the new global economy.
Investment in skills is key to enabling people and businesses
to make the most of opportunities and to increase their resilience
to external shocks such as a changing economic climate. Supporting
people to gain skills also ensures that their opportunities are
not pre-determined by their background but that everyone can play
their full part in society.
LEITCH TARGETS
4. In order to achieve this vision, we committed
to achieve the following targets:
By 2020
— 95% of working age adults will have
functional (level 1) literacy and (entry level 3) numeracy skills;
— more than 90% of working age adults
will be qualified to level 2, with a commitment to achieve 95%
as soon as possible;
— 68% of working age adults will be
qualified to level 3 (represents an additional three million);
— 400,000 apprenticeships in England;
and
— over 40% of working age adults will
be qualified to level 4 and above.
LEITCH RECOMMENDATIONS
5. Leitch pointed out that, with a majority
of the 2020 workforce already in the labour market, we needed
to direct much of our effort towards these people and made recommendations
about how we should do this. These included:
— increase adult skills across all
levels;
— route all public funding for adult
vocational skills in England, apart from community learning, through
Train to Gain and Learner Accounts by 2010;
— strengthen the employer voice;
— increase employer engagement and
investment in skills;
— launch a new "Pledge" for
employers to voluntarily commit to train all employees up to Level
2 in the workplace;
— increase employer investment in Level
3 and 4 qualifications in the workplace;
— increase people's aspirations and
awareness of the value of skills to them and their families; and
— create a new integrated employment
and skills service.
PROGRESS TOWARDS
LEITCH TARGETS
6. We have interim targets for what we should
have achieved by 2011:
— Level 1 literacy (2011 indicator)
is 597,000 achievers. Although actual performance will not be
measured until 2008-09, current performance is on track to achieve
the 2011 indicator.
— Level 1 numeracy (2011 indicator)
is 390,000 achievers. Again, performance will not be measured
until 2008-09 academic year, but latest data from 2006-07 also
indicates that we are on track, albeit with a steep trajectory
to 2011.
— Level 2 (2011 indicator) was to have
79% of working age adults qualified to at least Level 2. We are
only at the beginning of the measurement period and the proportion
of adults qualified to Level 2 or higher now stands at 70.6%.
The target is very stretching and we are continuing to expand
Train to Gain through recently announced Sector Compacts in key
industrial sectors, including manufacturing, construction and
processing.
— Level 3 (2011 indicator) was to have
56% of working age adults qualified to at least Level 3. The actual
level now stands at 50.3%. As happened with Level 2 there has
been a slow initial take up of Train to Gain. We expect to see
an upturn, following the introduction of the free entitlement
for learners aged 19-25 and the roll-out of Sector Compacts.
PROGRESS AGAINST
LEITCH RECOMMENDATIONS
Increase adult skills across all levels
7. In his report, Leitch said that "progress
towards world class is best measured by the number of people increasing
skills attainment. The raised ambitions will require additional
investment by the state, employers and individuals. The Government
is committed to increasing the share of GDP for education and
skills. Additional annual investment in skills up to Level 3 will
need to rise to £1.5—2 billion by 2020."
Investing in adult skills
8. We are making significant investment
in programmes such as basic literacy and numeracy and full level
2 and full level 3 qualifications that provide adults with the
skills needed to participate fully in an economically successful
and cohesive society. This is a planned and continuing strategy
to respond to the skills challenges we have as a country, and
is relevant to all adult learners in particular those across the
lower socio-economic groups.
9. Funding for adult participation will
reach £3.6 billion per year by 2010-11, an increase of 17%
compared with 2007-08. This will support on average over three
million funded adult learners per year over the next three years.
We have realigned funding from a high number of shorter and low
quality courses to those that offer the greatest opportunity to
gain the skills for employability and further progression in learning.
This strategy is working with increasing numbers of adults gaining
basic literacy and numeracy, level 2 and level 3 courses and gaining
the skills they and their employers need to succeed in an increasingly
competitive economy:
— 2.28 million learners achieving their
first Skills for Life qualification in literacy, language or numeracy
since 2001;
— by the end of 2007 there were 1.78
million more adults in the workforce qualified to Level 2 than
at the end of 2001; and
— recent research shows that of those
learners who have completed their Train to Gain course 43% had
received better pay and 30% promotion.
10. It is also worth noting that the latest
National Adult Learning and Adult Population Survey, which covers
learning outside of LSC-funded provision, also shows that adult
participation in learning has remained steady over the last few
years.
Skills for Life
11. Skills for Life is a radical
and successful strategy that, since its launch in 2001, has transformed
the teaching of adult basic literacy, language and numeracy skills
in England. Skills for Life introduced—for the first time
ever—national standards and curricula for literacy,
language and numeracy, and a national test.
12. Skills for Life covers literacy, numeracy
and language (ESOL) from pre-entry level up to Level 2—see
annex A for an explanation of the various levels. Literacy and
numeracy learning is free of charge to all adults (people aged
16+) with literacy/numeracy skills below Level 2. Fee remission
for language (ESOL) learning was ended in August 2007 as part
of our ESOL reforms, though learners on income-related benefits
are still able to access free provision:
— since 2001, 5.7 million adult learners
have taken up 12 million Skills for Life learning opportunities,
with over 2.25 million adults gaining a first qualification counting
towards the target;
— our Public Service Agreement (PSA)
target to improve the literacy, language and numeracy skills of
2.25 million adults by 2010 was met in June 2008, two years early;
— our long term ambition is for 95%
of adults with functional literacy/numeracy skills by 2020, up
from 85% literacy and 79% numeracy in 2005;
— since 2001 we have invested £5
billion in Skills for Life @ £660 per achievement;
— over the period 2007-08 to 2010-11
planned expenditure is £3.9 billion; and
— we have spent over £1 billion
on ESOL since 2001; helping two million learners improve their
English language skills.
Routing all public funding for adult vocational
skills in England, apart from community learning, through Train
to Gain and Learner Accounts by 2010
13. Leitch said that the skills system must
meet the needs of employers and individuals and that vocational
skills must be demand led rather than centrally planned. Consequently
we are routing much of our investment through Train to Gain to
meet employer demand and are developing Skills Accounts to empower
learners.
Train to Gain
14. Train to Gain has been developed as
the Government's premier service to support employers in England
of all sizes and in all sectors, to improve the skills of their
employees, unlock talent and drive improved business performance.
15. Through Train to Gain, employers can
now access:
— government funding, to sit alongside
their own financial contribution, including a subsidy of up to
100% for certain training;
— quality-assured, impartial advice
from skills brokers with expertise in the employer's business
area to help identify skills needs at all levels;
— help in identifying and sourcing
the training and qualifications at all levels that will best address
those needs;
— advice on wider business needs, provided
by the Business Link network, into which the Train to Gain brokerage
service will be integrated from April 2009;
— high-quality, vocational skills training,
delivered at a time and place to suit the employer, from a wide
range of further education and other providers; and
— for small employers with fewer than
50 employees a contribution to wage costs for the time they release
employees for training.
16. Train to Gain operates on the assess/train/assess
model approach to development; this approach is more efficient
and cost effective for employers. An initial assessment identifies
the individual's existing skills and skills gap against the qualification
sought. Training provision then meets the needs identified in
that initial assessment. Lastly, there is a follow-up assessment
to determine the extent to which the training need has been met.
17. Since it was fully rolled out in the
autumn of 2006, over 100,000 employers have engaged with Train
to Gain. It has supported over 570,000 learners to begin their
learning programmes and over 291,000 learners have achieved a
qualification of which over 254,000 are full level 2 and almost
16,000 full level 3 achievements.
18. Funding for Train to Gain will increase
from £520 million in 2007-08 to over £1 billion by 2010-11.
This makes a significant contribution towards the Government commitment
to increasing the proportion of adult skills funding that is delivered
through demand-led routes. In addition, by 2010-11, we expect
adult learners with Skills Accounts to be able to access £500
million of adult funding, increasing to around £1.5 billion.
But we need to go further still. Train to Gain: A Plan for Growth,
published in November 2007, described how we are making the service
more flexible to ensure it meets the needs of employers and employees.
Train to Gain Evaluation
19. In the development of Train to Gain
we have sought to minimise any deadweight ensuring that the Government
investment in Train to Gain secures additional training and does
not replace employer investment. There is a target that 51% of
employers engaged through Train to Gain are "hard to reach".
This is defined as not having Investors in People accreditation
and not having a recent history of training leading to a qualification.
This target is currently being exceeded with 73% of employers
being "hard to reach". Evaluation also shows that of
employers engaged in Train to Gain 72% reported training staff
who had not been trained before, 67% said they trained more staff
than they would otherwise, and 55% trained more junior/less experienced
staff than they would otherwise.
20. 27% of employers did have some training
history outside Train to Gain, but the Train to Gain training
led to those employers increasing the number or range of employees
involved, or enhancing the quality of their workforce training.
This suggests that just under half of all employers who have been
in contact with a Train to Gain skills broker (47%) have carried
out additional training that could be attributed to the Train
to Gain service.
21. Employers confirm that their employees
have gained new skills through Train to Gain, in the evaluation
74% of employers report they have noticed an improvement in the
skills of employees in relation to their specific job role. Employers
also reported positive impacts on business performance: 51% reported
some increase in staff productivity, 42% reported an impact on
the bottom line, and 25% said that the training had supported
the introduction of new products or services.
22. For individuals the evaluation showed
that most learners were gaining new skills not just having existing
skills accredited; 73% of learners say they had acquired skills
to do their current job better as a result of training through
Train to Gain and 81 per cent reported that they had gained skills
that would help them do a better job in the future. Employers
clearly value these new skills as 43% of Train to Gain learners
reported they had gained better pay and 30% had gained a promotion
as a result of their training. Even for individuals who did not
gain new skills the accreditation of their existing skills is
of value both personally for example in increased confidence and
in the labour market, allowing them to demonstrate their skills
to other employers.
Sector Skills Compacts
23. To help ensure that the Train to Gain
offer meets the needs of every sector, we have been developing
"sector skills compacts" with employers in key sectors
of our economy which tailor the Train to Gain offer to their specific
needs and circumstances. The sector compact sets out the specific
offer to employers in the sector within Train to Gain and makes
a reality of the "something for something" deal called
for by Leitch. In return for additional flexibilities in Train
to Gain secured through the compact, the Sector Skills Councils
(SSCs) or sector body will work with employers to stimulate demand
for higher volume of skills in their sector.
24. We have already agreed compacts with
SSCs for five sectors Semta, ConstructionSkills, People 1st, Proskills
and Skills for Justice, together worth some £440m over three
years. A second tranche of sector compacts are in development.
Skills Accounts
25. A Skills Account will give learners
access to a new range of services which will help them take control
of their learning and working life. Through a Skills Account,
individuals will receive greater choice and support, and will
therefore have a sense of ownership over their own future. They
are designed to provide a gateway through which learners can access
personalised careers advice including details of courses in their
area, and their eligibility for Government funding to meet the
costs of learning. In introducing Skills Accounts we are not altering
any of the existing eligibility criteria or entitlements.
26. A Skills Account will also include a
confidential record of an individual's achievements so that they
can share these with employers, careers services or others who
may find it helpful. As the service develops the range of products
and services will increase so that a Skills Accounts becomes the
one-stop-shop for learning.
27. As a first step towards Skills Accounts
we are making sure that, from age 18, depending on existing qualifications,
all young adults who do not go to university will now have access
to a range of entitlements up to Level 3.
28. Universal Skills Accounts trials will
begin in September 2008 in the South East and East Midlands regions,
building on the trials of Adult Learner Accounts which were also
trialled in these regions. The focus of the Skills Accounts trials
will be on building and testing the core products and support
services. The key success factor is to ensure a quality service
and an experience that works for learners and providers and which
in turn has a positive impact on both learner motivation and provider
responsiveness.
29. In year one (academic year 08/09) we
will focus on product development and testing systems, progressing
to a phased introduction of Skills Accounts across England in
year two (academic year 2009-10), with full national roll-out
beginning in 2010. We expect Skills Accounts to be fully rolled
out by 2015. By 2010-11 £500 million Government funding will
be accessed by learners with Skills Accounts. This will rise to
£1.5 billion by 2015.
STRENGTHENING THE
EMPLOYER VOICE
30. Under this heading, Leitch recommended
we rationalise existing bodies, strengthen the collective voice
and better articulate employer views on skills by creating a new
Commission for Employment and Skills, reporting to central government
and the devolved administrations. The Commission will manage employer
influence on skills, within a national framework of individual
rights and responsibilities.
UK Commission for Employment and Skills
31. The Commission came into being on 1
April 2008, and in July published its Business Plan for 2008-09.
We have asked the Commission to advise Government on what more
we should be doing to simplify the system in England. We are not,
of course, just thinking in terms of skills development but also
about recruitment, retention and the effective utilisation of
skills.
32. Areas of advisory work set out in the
Commission's first Business Plan include:
— the first State of the Nations
Report, detailing progress since the Leitch report and/or against
each nation's skills strategy, current trends and projections.
The Commission will deliver this report by 31 March 2009;
— a programme of projects on employment
and skills services, including publishing a basis for the 2010
review of whether more radical change is needed to integrate employment
and skills services (including Higher Education) in England, Wales
and Scotland, and a project on simplification of employment and
skills services in England; and
— a series of Commission projects to
give a clearer picture of the development and use of skills in
the workplace, including a UK-wide project on the role of skills
utilisation and high performance working in business success.
33. In addition the UK Commission has responsibility
for funding and managing the performance of SSCs and for advising
the UK Government and Devolved Administrations on SSC Relicensing.
The Commission published the Relicensing Prospectus and a supporting
employer facing document in July, and aims to make substantial
progress on relicensing during this year, completing the process
in 2009. Re-licensed SSCs will have a new remit sharply focussed
on raising employer investment, articulating the future skills
needs of their sector, and ensuring that the supply of skills
and qualifications is driven by employers.
34. The UK Commission is currently consulting
on the Five Year Strategic Plan which it will develop by the end
of 2008-09, setting out its longer term goals for the period 2009-10
to 2013-14. It has also commenced a major review of the "collective
measures" available to Government to stimulate employer investment
in skills and is engaged in work to report on the effective utilisation
of skills. Finally, the Commission is leading on the development
of a "Talent Map", an interactive web-tool to help employers
easily find and engage with publicly funded education, employment
and skills systems. The prototype is currently being tested with
employers, intermediaries and representative bodies.
INCREASING EMPLOYER
ENGAGEMENT AND
INVESTMENT IN
SKILLS
35. Under this heading, Leitch recommended
we reform, relicense and empower SSCs and deliver more economically
valuable skills by only allowing public funding for vocational
qualifications where the content has been approved by SSCs. Expand
skills brokerage services for both small and large employers.
Sector Skills Council Re-licensing
36. The Government is clear that a strong
and highly effective network of employer led SSCs is crucial to
the successful implementation of its long term skills strategy.
They are a key link between employers in each part of the economy
and the education and training system and provide vital intelligence
to help ensure that the system continues to develop to meet employer
needs. Since the publication of World Class Skills, Government
has worked with key stakeholders and developed an approach to
re-licensing SSCs which the new UK Commission for Employment and
Skills will implement. The UK Commission for Employment and Skills
issued a re-licensing prospectus on 14 July 2008 setting out a
refocused remit and the challenges SSCs will have to meet to be
re-licensed. The UKCES will make recommendations to Government
on which SSCs should receive a new licence, and we expect that
all new licences should be issued by the end of 2009.
37. All SSCs have now completed their first
full Sector Skills Agreements (SSAs). These are a key mechanism
for setting out the skills needs of each sector, and help underpin
the move to a more demand-led system. They provide the framework
for SSCs to work with employers, key delivery agencies like the
LSC, and with Government to address priority skills issues in
their sectors. SSCs' work in developing SSAs provides a platform
for working with SSCs on how their identified skills needs can,
in future better be met through the Train to Gain service. Discussions
on this are taking place with a number of SSCs with the intention
of agreeing with them `compacts' to help tailor Train to Gain
provision to meet the needs of employers in their sector and thus
boost skills and improve productivity. In developing their SSAs,
SSCs recognise the increasingly important role played by the English
regions in the skills agenda. Regional Development Agencies contribute
sectoral intelligence held in the regions and provide examples
of good practice in sector development work that have already
been tested in the regions.
38. All SSC have, based on their SSAs and
labour market intelligence completed their Sector Qualifications
Strategies (SQSs). Eighteen Standard Setting Bodies are also developing
Qualifications Strategies (QSs). SQSs and QSs outline the current
and future learning and qualifications needs by employers in sectors
or occupations. Specific qualification needs are then identified
and detailed in SQS/QS Action Plans, which help direct the vocational
qualifications (VQs) developed by awarding organisations.
39. Based on these qualifications strategies
and plans, SSCs now lead the process of ensuring that VQs fully
meet the needs of their sector and are consistent in terms of
standards and transferability. To fulfil this role, SSCs have
been piloting a process of "approving" VQs prior to
accreditation; a final approval process is currently being developed
and will be in place by early 2009. SSCs are also responsible,
in England, for advising the Learning and Skills Council (LSC)
on those VQs that should be priorities for public funding.
A new "Pledge" for employers to voluntarily
commit to train all employees up to Level 2 in the workplace
40. Leitch recommended we launch a new "Pledge"
for employers to voluntarily commit to train all eligible employees
up to Level 2 in the workplace. He suggested we review progress
of employer delivery in 2010 and, if the improvement rate was
insufficient, introduce a statutory entitlement to workplace training
at Level 2 in consultation with employers and unions.
41. The Skills Pledge has been introduced
and is a public commitment by employers to support their employees
to improve their skills and gain qualifications. It not a product
or service—it's a philosophy which signals an employers'
understanding of the value of skills to their business and to
their employees. Launched in 2007 we are making excellent progress.
Already almost six thousand employers have committed to the Skills
Pledge covering 4.8 million people.
Right to request Time to Train
42. We have just completed a consultation
and are now planning legislation to introduce a new right to request
time to train to millions of workers. This will give employees
a legal right to ask their employer to give them time away from
their mainstream duties to undertake relevant training. Employees
can request time to undertake any training—whether nationally
recognised qualifications, or shorter, more targeted, and unaccredited
courses.
43. This new right would help encourage
and support adults to develop their skills and rise as far as
their talent will take them. That empowerment will be particularly
valuable for those employees who don't currently receive training.
And, by helping to raise their employees' awareness and aspirations
in relation to skills, the proposed right would support and encourage
employers to invest in the skills of their employees as a driver
of future business performance.
INCREASE EMPLOYER
INVESTMENT IN
LEVEL 3 AND
4 QUALIFICATIONS IN
THE WORKPLACE
44. Under this heading, Leitch recommended
we extend Train to Gain to higher levels, dramatically increase
Apprenticeship volumes and improve engagement between employers
and universities. He also suggested we increase co-funded workplace
degrees.
Apprenticeships
45. The Government has made a record amount
of funding available for the Apprenticeships programme, which
is planned to increase by almost a quarter between 2007-08 and
2010-11 to over £1 billion. Apprenticeships are a high-quality
route to success; they rely on the appropriate mix of practical
and theoretical learning. Our Apprenticeships system has been
revived and rebuilt over the past decade. With the advice and
support of Sector Skills Councils, we now have more than 180 available
and in more than 80 different occupational areas. Apprenticeships
enable businesses to develop people with the right skills at the
right time and are a mechanism for developing the talent which
employers need. We are making good progress in implementing "World-class
Apprenticeships". The Government has more than doubled the
number of young people and adults starting high-quality Apprenticeships,
with 184,000 starts last year. Completion rates are at the highest
ever at 63%.
46. Work is now underway to expand and strengthen
Apprenticeships. For example—we have developed a strategy
for public sector engagement and are making it easier for employers
to have their own training accredited. In July 2008 the Government
published an Apprenticeships draft Bill to underpin and help sustain
the improvements in the quality of the programme. This draft
Bill will ensure that Apprenticeships are a badge of quality skills
for young people and adults and for employers. Apprenticeship
starts are projected to grow to almost 210,000 by 2010-11. Legislation
will drive forward the provision of sufficient Apprenticeship
places to meet the entitlement for our young people to have an
offer of an Apprenticeship place by 2013 and we anticipate one
in five young people will start an apprenticeship by 2020.
47. From this autumn, DIUS will require
that successful contractors for college construction projects
take on apprentices, we are also working to ensure major developments
such as the Olympic and Paralympic Games include opportunities
for Apprenticeships. Our recently published Manufacturing Strategy
gave a renewed focus on Apprenticeships with 1,500 new manufacturing
apprenticeships, in addition to the 9,000 places announced earlier
this year which will increase the total number of manufacturing
apprenticeships by over 10%. We will expand the new places by
inviting bids from larger manufacturers to train additional apprenticeships,
including for their supply chains thus creating further opportunities.
INCREASE PEOPLE'S
ASPIRATIONS AND
AWARENESS OF
THE VALUE
OF SKILLS
TO THEM
AND THEIR
FAMILIES
48. As part of our overall response to the
Leitch Review, a key element of our strategy was to raise awareness
of the importance of skills. A cultural shift in approaches to
learning is the aim of the campaign `Our Future. Our Hands. Our
Success' which was launched in July 2008. It has proved successful
by stimulating an increase in the appeal of learning new skills
and is prompting people to explore opportunities and actually
do a course. By tackling the main perceived barriers to learning—time,
cost and employer support, we are encouraging yet more people
to acquire new skills. Our evaluation has shown that employers
and individuals across the piece—including the hard to reach
pre level 2 group—are responding very positively. Awareness
of Train to Gain is much increased and an econometric analysis
undertaken by Learndirect has shown the 12% uplift in calls to
the careers advice line attributed to the Skills Campaign equates
to around 37,000 calls.
CREATE A
NEW INTEGRATED
EMPLOYMENT AND
SKILLS SERVICE
49. Leitch recommended we create a new integrated
employment and skills service based up existing structures, to
increase sustainable employment and progression.
Integration of employment and skills
50. As noted by the IMF, our labour market
is flexible and responsive and is one of our key strengths, but
we cannot be complacent, we need to continue to be ahead of our
competitors in reacting flexibly to changes in the economy and
the market place. As set out in World Class Skills and in Opportunity
Employment and Progression DIUS and DWP are working closely together
to create an integrated welfare and skills system. This led to
the Work Skills command paper, published in June 2008 which set
out how the Government would overhaul the Skills and Welfare systems.
51. In the West Midlands in September 2008,
and in other areas from November 2008, we are trialling a more
coherent and joined-up service to help people get into and on
in work. The trials of an integrated employment and skills (IES)
service will cover a range of measures such as Skills Accounts
and careers advice. As a package they will include earlier and
more thorough identification of skills needs, access to financial,
training and other support to address any barriers, improved referrals
and exchanges of information between careers advisers, Jobcentre
Plus and skills learning providers.
52. In Manchester and Birmingham the systems
will be decentralised with traditional distinctions between adult
training and Job Centre Plus broken down and services redesigned
with the interests of individuals and employers at the centre.
We expect these reforms to help up to 75,000 people in the Birmingham
city region and 30,000 in Greater Manchester
FURTHER INITIATIVES
TO ACHIEVE
THE LEITCH
VISION
53. In addition to implementing the recommendations
made by Lord Leitch, we have developed a range of additional policies
and programmes to help us achieve the Leitch vision. The most
important of these are set out below.
Adult advancement and careers service
54. We are developing an adult advancement
and careers service to deliver tailored employment and skills
advice and support to adults, empowering individuals with the
information they need to identify the training and gain the skills
that will enable them both to find jobs and to advance in their
careers.
55. The new service will provide more coherent
support for individuals, merging the enhanced nextstep and learndirect
advice services and working in partnership with Jobcentre Plus.
The advancement and careers service will have a key role in supporting
the delivery of Skills Accounts, and will provide an integrated
service for identifying individuals training needs through Skills
Health Checks.
56. Key elements of the service will be
trialled progressively from 2008-09 to 2010. Prototypes will test
ways of joining up wider sources of advice such as housing, employment
rights and childcare as well as skills, jobs and careers providing
"no wrong door" access to advice on the full range of
barriers to learning and getting on those individuals, in and
out of work, may experience. The prototypes will run from autumn
2008 in North West, London, South East and West Midlands regions.
A skills health check tool is being developed and trialled from
autumn 2008 in the West Midlands. The tool will be available online,
initially aimed at Jobcentre Plus customers, with subsequent releases
throughout 2008-09 enhanced to meet the needs of the higher skilled
user. When fully developed the skills health check will be available
to all, linked to their skills accounts and information and advice
from the adult advancement and careers service.
UK vocational qualifications reform programme
57. We are supporting demand by introducing
reforms to improve flexibility of qualifications to better suit
the needs of employers and employees and to allow people to request
time to receive work related training. The next two sections set
out how we are tackling these challenges.
58. The UK Vocational Qualifications Reform
Programme (VQRP) was set up in 2005 with the aim of ensuring that
the system of developing vocational qualifications (VQs) is led
by demand. It aims to create a system:
— based on learner and employer needs;
— with greater clarity and more flexibility
and choice;
— encouraging a more skilled and productive
workforce;
— allowing individuals to fulfill their
potential; and
— supporting greater social justice
and opportunity.
59. To encourage individuals to undertake
more qualifications, and to increase employers' support for training,
we are reforming the vocational qualification system to give accredited
vocational qualifications the flexibility to meet learners' and
employers' needs in a more responsive and inclusive manner. The
Qualification and Credit Framework (QCF) for England, Wales and
Northern Ireland has been tested and trialled over a two year
period and detailed plans for its roll-out are now being developed
for Ministerial approval in autumn 2008.
60. Through SSCs, employers have a leading
role in reforming vocational qualifications for their sector.
We are making it easier for employers to have their own training
programmes nationally accredited. Around 40 have had their training
accredited by working with existing awarding organisations, a
further four employers, two employer representative organisations
and 1 further education college have been accredited as awarding
organisations in their own right. The employer trade bodies between
them represent hundreds of employers, particularly SMEs. More
than 50 other employers are currently discussing the options for
having their training accredited.
Responding to employment and skills needs in particular
places
61. The Sub National Review, published in
July 2007, highlighted the importance of place and the role of
skills in economic development. The SNR placed an important focus
on the sub region, particularly the city region, as a key economic
driver and changed the balance between the region and the sub
region. The SNR gave Local Authorities a greatly enhanced role
as key strategic partners for the RDAs.
62. Because of the economic development
role of Local Authorities, DIUS is engaging more closely with
them, notably through the inclusion of skills indicators in Local
Area Agreements and the emergence of skills as a key theme in
Multi Area Agreements. MAAs are emerging as the key tier with
regard to skills—they cover geographical areas which make
real sense in terms of skills and travel to work and provide a
vehicle for significant interaction between central and local
government in a number of policy areas.
63. An MAA brings together central government,
local authorities and other partners to agree new approaches for
their local economy, in return for a commitment to deliver progress
on the ground. The flexibilities which have been granted by Government
Departments through MAAs have been widely welcomed by LAs and
others. This is seen as a genuinely devolutionary approach which
is making the system more responsive and enabling groups of LAs
to deliver challenging outcomes in the sub region.
64. The Government has progressively made
the employment and skills system less top-heavy by devolving responsibility
to those much closer to the ground. The Working Neighbourhoods
Fund, for instance, is providing £1.5 billion over three
years to support local authorities with concentrations of deprivation
to do more to tackle worklessness and low levels of skills and
enterprise in their communities. The City Strategy is also passing
more responsibility to local level to address worklessness, raise
skills and reduce poverty.
THE DELIVERY
SYSTEM
A responsive further education sector
65. A high quality and responsive further
education sector is essential if we are to deliver the skills
the country needs and give greater control to employers about
the training they receive. We are widening the provider base to
deliver greater choice for employers but only by ensuring high
quality delivery will we increase employer trust and investment
in FE. All colleges and work based providers will be assessed
on employer responsiveness as a performance indicator in the Framework
for Excellence. Those who fall short will be offered encouragement
to raise their performance. The Training Quality Standard is a
quality mark which has been introduced to demonstrate that a provider
has achieved excellence in working with employers.
66. The latest Learning and Skills Council
survey of employers found that:
— nine out of 10 employers that use
further education say that it has benefited their business; and
— half say it has specifically increased
productivity, boosted employee motivation, job satisfaction and
employee retention.
67. The National Learner Satisfaction Survey
2007 showed 91% of Work Based Learners (WBL) satisfied (26% extremely
satisfied) with their learning experience, this compares to 90%
(27% extremely) satisfied with Further Education. This has remained
broadly flat since 2001 (92% 2001, 90% 2002, 2003 and 2004), but
the proportion of extremely satisfied learners has risen from
17% in 2001 to 26% in 2007 for WBL learners. Satisfaction with
WBL teaching remains high (at 90%).
68. 94% of WBL learners agree that their
learning programme has given them skills that they can use in
a job (86% for FE learners), 94% agree that taking part in their
course will help them move forward in their careers, and 71% feel
that their course is essential for their current job.
The learning and skills improvement service
69. In creating a system which is responding
better to employers and learners the FE sector is developing a
culture of self improvement—enabling leaders, teachers and
trainers to access the support and advice they need to improve
performance and meet the needs of learners and employers. We have
created the Learning and Skills Improvement Service (LSIS) to
bring together the Quality Improvement Agency and the Centre for
Excellence in Leadership. This brings the responsibility for quality
improvement with management and leadership development together,
in a single organisation, for the first time. The LSIS was announced
on 10 June and the merger will complete on 1 October. LSIS' focus
will continue to be on learners and supporting providers to become
excellent and maintain successful sustainable performance. Learning
Providers are being supported in the delivery of the Vocational
Qualifications Reform Programme and the Foundation Learning Tier
by a Qualifications Reform Support Programme which will be led
by the LSIS.
Developing links and promoting progression from
Further Education to Higher Education
70. There is already much close working
between FE and HE with over 150 FE colleges currently providing
HE and around 190,000 students taking HE options in FE colleges.
In taking up the powers to award Foundation Degrees, colleges
will need to continue working with other institutions, particularly
at a local and regional level, to make sure that students can
identify progression routes if they wish to go on to further higher-level
study.
71. A prime example of successful collaboration
between FE and HE is in the West Midlands, where the sectors have
developed progression agreements through Lifelong Learning networks
LLN). The LSC has strengthened this process by appointing a Train
to Gain HE coordinator within each LLN in the region to facilitate
better understanding of the HE offer, and to develop links between
employers, the brokerage service and FE.
72. The University of Brighton has developed
particularly successful progression routes with an FE college:
the University's campus linking to the college with which it has
developed joint curriculum planning and cross institutional partnership.
73. Traditionally HE has been driven by
demand—from students, typically young people seeking full-time
Honours Degrees. The approach set out in our consultation document
Higher Education at Work was intended to lead to an HE system
which is more demand-led in terms of responding to business as
well as prospective learners.
74. Many employers express their demand
in their graduate recruitment activity and early responses to
Higher Education at Work confirms that, as employers' preferred
way of building up a highly skilled workforce. But we will not
meet the Leitch targets for Level 4 and above if employers do
not engage more seriously in providing their existing workforce
with high level skills. We are targeting messages on employers
to convince them of the necessity, and the benefits, of workforce
development on the basis that it will stimulate the step-change
we require.
Future reforms
75. Whilst the current landscape has worked
well, the ever increasing pace of change means that the learning
and skills infrastructure needs to be reshaped to ensure the best
quality and most responsive supply of learning for young people
and adults. The Government's White Paper: Raising Expectations:
enabling the system to deliver, proposed substantial transformation
of the system.
76. The consultation on the proposals in
the Raising Expectations: Enabling the system to deliver
White Paper closed in June 2008. There were a range of considered
written responses and good attendance from stakeholders at a series
of consultation events around the country. The Government published
the first stage of its response on 30 July in following two documents:
— Raising Expectations: Enabling
the System to Deliver—Summary of the Events and Written
Responses; and
— Raising Expectations: Enabling
the System to Deliver—Update and Next Steps—which
lays out the next steps following the consultation.
77. The reforms set out in the white paper
will require legislation, which will be included in the Education
and Skills Bill (session four) due to be published in draft later
this year.
78. The plans are to transfer responsibility
for 16-19 funding to local authorities, supported by a new Young
People's Learning Agency. Local Authorities will come together
in sub-regional groupings to plan and commission the full range
of 16-19 provision enabling them to meet the challenges involved
in raising the participation age and to deliver new entitlements.
For young people, the demand for apprenticeships will be aggregated
at a sub-regional and regional level to agree requirements with
the new National Apprenticeship Service.
79. In addition, the new Skills Funding
Agency (SFA) will support the move to funding which responds to
demand. It will route funding swiftly to learning providers and
will be a single point of intervention where performance pre or
post 19 does not meet standards. The SFA will have a national
and regional presence and will be responsible for joining up delivery
of the system and services at every level to respond to users
needs. This will be through the delivery of Train to Gain for
employers and through Skills Accounts for individual learners.
The latter will also be linked to the new adult advancement and
careers service to ensure that more people have access to high
quality information and guidance to enable them to get the skills
they need to enter into and progress within employment. The proposed
changes will be implemented over a number of years.
80. Work is underway to develop the specific
organisational design of the Skills Funding Agency and to develop
an implementation plan by the end of October.
81. In addition, we are setting up a National
Apprenticeships Service to take end to end responsibility for
the Apprenticeships programme, including ultimate responsibility
for the delivery of targets. It will be a discrete coherent service,
led by a Director and reporting to the Secretaries of State for
DCSF and DIUS and managed within the Learning and Skills Council
LSC and subsequently by the Skills Funding Agency.
IMPROVING THE
FLOW OF
SKILLS AND
QUALIFICATIONS OF
YOUNG PEOPLE
COMING INTO
THE LABOUR
MARKET
Young people
82. In developing the adult skills response
to Lord Leitch's recommendations we are taking into account the
future workforce. As young people take the challenging step into
further or higher education or into work, we are aiming to ensure
that they have the right skills they need to succeed and that
the economy needs to prosper. To achieve that we are reforming
14-19 education. The programme of reform for the 14-19 phase of
education has three clear goals:
— to ensure that all young people enjoy
an education that fulfils their potential and stretches and challenges
them so that they can go on to further or higher education or
employment;
— to give young people the knowledge
and skills that employers and the economy and the nation need
to prosper in the 21st Century; and
— to close the achievement gap so that
all have an equal opportunity to succeed, irrespective of gender
or race, disability or background.
83. Building on the secondary curriculum,
young people will be able to choose from a range of learning routes
and qualifications which are key to raising participation and
achievement so that they can see clearly the options that are
on offer to them; make an informed choice that will enable them
to fulfil their potential and progress further with the knowledge
and skills that are recognised and required by HE and employers.
84. At the core of this system will be four
learning routes so that all young people can make a choice that
engages and motivates them and gives them these skills and qualifications
vital to future success:
— strengthened and reformed General
Qualifications (GCSEs and A levels);
— 17 lines of the new Diploma that
combines theoretical with more applied learning;
— apprenticeships that will become
a mainstream option for all young people who are suitably qualified;
and
— the Foundation Learning Tier with
progression pathways to improve on the current complex array of
provision below level 2.
85. Whatever route young people choose,
they will gain skills needed to apply what they know and to operate
confidently, effectively and independently in life, in further
and higher education, and in work. Functional Skills in English,
maths and ICT and personal, learning and thinking skills will
be a core part of all 14-19 qualifications.
86. And where young people need our help
the most, we will provide additional support. For example, young
people out of education, employment or training (NEET) between
the ages of 16 and 18 are wasting their own potential and their
potential to contribute to society and the economy.
87. Our target is to reduce the proportion
of 16-18 year olds who are NEET by two percentage points (from
the 2004 baseline of 9.6%) by 2010. To achieve this we have set
out a strategy and toolkit that will help local areas and their
delivery partners to re-engage these young people, for example
through careful tracking of NEETs and those at risk of becoming
NEET, through motivating learning opportunities that meet their
needs and interests, and through more personalised guidance and
support
Migration
88. We are working hard to ensure that we
are increasing skill levels and the ability of the population
to gain jobs in growing and successful industries. However, in
the shorter term there is a key role for managed migration to
fill those jobs that cannot yet be filled by British workers or
workers from the European Economic Area (EEA). The recent independent
Migration Advisory Committee report to Ministers has identified
a number of skilled occupations where there is currently a shortage
and also a reason to recruit migrants from outside EEA.
89. We are working with the sectors covering
these occupations to help each sector to ensure they are equipping
their workforce with the skills they will need to deliver the
jobs of the future. One of the most powerful ways is by ensuring
that the public support and funding available through the Train
to Gain service is tailored to meet those needs.
CONCLUSIONS
90. We committed, by 2020, to achieve:
— 95% of working age adults to have
functional (level 1) literacy and (entry level 3) numeracy skills;
— more than 90% of working age adults
qualified to level 2, with a commitment to achieve 95% as soon
as possible;
— 68% of working age adults qualified
to level 3. (represents an additional 1.9 million);
— 400,000 apprenticeships in England;
and
— over 40% of working age adults qualified
to level 4 and above.
91. In respect of the first three, to plot
progress, the interim indicators set out below were set for 2011.
(The baselines for Leitch started at 2006.) It should be kept
in mind that we are still at the beginning of the three-year period
where the Skills indicators will be measured; it is early in the
day, but overall signs are positive that we will make progress
towards the 2011 targets. The scale of ambition for some indicators
is significant and we are taking further action to raise demand
and increase learner numbers. There are also some concerns that
the Labour Force Survey may be under-reporting achievements at
this stage.
92. The Leitch review illustrated a huge
task for the nation. Since its publication, global economic problems
mean that businesses and individuals are facing challenging times.
We need to ensure that we equip British business and the greater
population to respond to these changing circumstances and a key
tool will be improving their skill levels to aid productivity
and competition. The targets we have set will need the continued
commitment of Government, employers and individuals themselves.
93. We have set out a range of measures
designed to achieve these targets. From changes to the skills
landscape and the infrastructure; strategies to tackle quality
improvements including in capital buildings, revised funding mechanisms;
targeted programmes to raise participation and achieve higher
level qualifications and importantly action to tackle our perception
and approach to skills development.
94. The rates of return to learning at higher
levels are good and the incentives are there for both employers
and individuals. The costs of becoming a world leader in skills
and sustaining high levels of employment is significant, but the
cost of failure is greater -social exclusion, higher levels of
unemployment and the cost to industry and the economy of an unskilled
workforce, insufficiently equipped to compete in a globalised
economy.
95. We have come a long way in a short time.
However, the challenge is still there to be met. We, the nation
as a whole, are providing the investment to meet the skill needs
for 2020. But there is still much to do and we will remain relentless
in our pursuit of attaining the goals Lord Leitch set out for
us. We have no other option
September 2008
Annex A
STATISTICAL
Overall, England's skills profile has increased
significantly since 1997, with a substantial reduction in the
proportion of working-age adults with no qualifications, and an
increase in the proportion qualified to level 4 or above.
Within that overall national picture, the picture
varies by region, although the overall trajectory remains upward.
In recent years, Learning and Skills Council
expenditure has been increasingly focused on national skills priorities,
ie skills for life, and first, full level 2 and 3 qualifications.
The number of adults studying on those national skills priority
programmes has increased in recent years, including a 42% increase
in the numbers studying towards a full level 2 qualification between
2005-06 and 2006-07.
1. The headline success rate in Further
Education colleges has improved dramatically since 1997, from
53% in 1997-98, to 78% in 2006-07.
Source: Learning and Skills
Council Benchmarking Data.
Note: Figures exclude
external institutions.
2. Since its national roll-out began in
April 2006 (full national coverage was reached in August of that
year), Train to Gain has grown quickly. Over 101,000 employers
have engaged with Train to Gain, over 570,000 learners have started
learning programmes, and over 291,000 have achieved qualifications.
The LSC grant letter for 2008-09 sets out how
funding will be allocated over the next few years, with a continued
emphasis on national skills priorities.
The number of Apprentices is forecast to increase
over the three year period 2008-09 to 2010-11.
Earnings returns
People with higher qualifications earn more
on average than similar individuals with lower qualification levels.
In general, higher qualifications carry higher earnings returns
and academic qualifications earn more than their vocational counterparts
Chart 1—Earnings returns to selected qualifications
| Academic Qualifications
| Old NQF Level | New NQF Level
| Female | Male
|
| Higher Degree | 5 |
7-8 | 12% | 9% |
| First/Foundation Degree | 4
| 5-6 | 29% | 26%
|
| 2+ A Levels | 3 | 3
| 14% | 14% |
| 5+ A*-C GCSEs (or equivalent | 2
| 2 | 9% | 11%
|
| Vocational Qualifications |
| | | |
| Vocational higher degree | 5
| 7-8 | 52% | 40%
|
| HNC or HND | 4 | 5
| 9% | 13% |
| RSA (advanced diploma or certificate) | 3
| 3 | 10% | -5%
|
Source: Jenkins et al (2007): The Returns to
Qualifications in England, Updating the Evidence Base on Level
2 and Level 3 Vocational Qualifications. CEE Discussion Paper
no 89.
The return to most qualifications has remained relatively
constant over recent years. Chart 2 below shows graphically the
returns by qualification levels/types from 1997 to 2006. This
would suggest that the supply of skilled labour has been keeping
pace with employer demand.
Chart 2. Returns to qualifications 1997—2006
Source: Jenkins et al (2007): The Returns to
Qualifications in England, Updating the Evidence Base on Level
2 and Level 3 Vocational Qualifications. CEE Discussion Paper
no 89.
While a number of studies have found the returns to lower
level vocational qualifications to be negligible at best, two
recent studies based on longitudinal data have found strong positive
returns to vocational qualifications at Level 2.
Jenkins et al found substantial positive returns to
vocational level 2 qualifications gained in adulthood, see chart
3 below.
Chart 3—Earnings returns to level 2 qualfications
by age gained
Source: Jenkins et al (2007): The Returns to
Qualifications in England, Updating the Evidence Base on Level
2 and Level 3 Vocational Qualifications. CEE Discussion Paper
no 89.
Forthcoming research by the Center for the Economics of Education
also finds substantial positive returns for individuals gaining
NVQ2 qualifications in their 20s and 30s. This research also finds
higher returns for individuals of lower ability, with returns
as high as 37% for low ability women.
Other research has also found a positive return for those
who leave school with poor qualifications. McIntosh (2004) found
that women who leave school with poor GCSEs (or equivalents) who
later go on to achieve Level 3 vocational qualifications in their
20s earn 14% more than otherwise similar but unqualified school
leavers who do not achieve further qualifications. However, for
men the gain from further learning is even greater at 25%.[145]
Returns from qualifications are also dependent upon occupation
and industry sector.[146]
Employment returns
Individuals with higher qualification levels are more likely
to be employed (see chart 4). Almost 90% of the population of
individuals with NQF4 or above are in employment compared to just
slightly less than 50% of those individuals who have no qualifications.
Equally individuals with higher qualifications are less likely
to be unemployed. Chart 5 shows the associated unemployment levels
for economically active individuals by qualification level. Data
extracted from quarter 4, 2007 Labour Force Survey.
Chart 4. Employment rate by highest qualification level
Chart 5. Unemployment rate by highest qualification
level
Wider benefits
Returns from gaining qualifications are not simply limited
to financial gains. There are also important wider gains to both
individuals and the wider society. For example improvements in
levels of depression and obesity are associated with gains in
qualifications.[147]
This research showed that the most significant effects were experienced
by those who moved from no qualifications to gaining a level 1
qualification. Strong significant effects were also experienced
by individuals moving to level 4 qualifications.
Other research has highlighted the association between level
2 qualifications and women's cervical screening behaviour. This
research showed that women with level 2 qualifications had a 5.7
percentage points higher probability of having more than two cervical
smear tests in 11 years compared to women with qualification blew
level 2[148].
Society also benefits from the growth of skills in the population.
Research has found that a one percentage point increase in the
proportion of the working age population with O level or equivalent
qualifications reduces the costs of crime by £10m-£320
million, through its effects on wages.[149]
The benefits of skills and qualifications are not just accrued
by the individuals but by employers and wider society. Evidence
has shown that employers often capture some benefit of training
for themselves. For example, while not directly comparable in
formal qualifications, two studies have suggested that the productivity
impacts of training are approximately double the wage benefits.[150]
It is also important to note that the skills profile of the
UK workforce has improved over time (see one of the graphs in
original memo) and this has contributed to the economic growth
of the UK. Analysis suggests that improvements in the skills of
UK workers have contributed to around one fifth of annual growth
in the UK economy over the past 25 years.[151]
Gaining higher qualifications seems to lead to the increased
likelihood of undertaking further learning. Analysis of the Labour
Force Survey (Q4, 2007) clearly showed that more qualified individuals
are increasingly likely to undertake further job related learning
(see chart 6).
Chart 6. Percentage of working age population who have
undertaken job related education or training in the past three
months, by highest qualification
Higher Education
There, in general, are real economic gains to individuals
who go on to study for a degree. The graduate earnings premium
is comfortably over £100,000, after tax, compared to those
with two or more A levels. Graph X, below, shows the graduate
earning premium by age.[152]
These data take into account real earnings growth and employment
probabilities and is discounted, so that equivalent to today's
valuation.
However, these returns do vary considerably according to
the subjects studied. Gross lifetime earnings premiums for Medicine
are almost £350,000 but the earnings premium for arts degree
graduates is less than £50,000. However, the lifetime earnings
premium for a graduate is approximately £150,000.[153]
Graduates also enjoy better health and are more likely to
vote and be actively engage in their communities.[154]
Graph 7. Graduate lifetime earnings profile
Annex B
PROGRAMME FOR THE INTERNATIONAL ASSESSMENT OF ADULT COMPETENCIES
(PIAAC)
DIUS is making a contribution to the costs of the OECD's
international development work for 2008. The Department is represented
on the PIAAC Board of Participating Countries and at meetings
of the national project managers.
PIAAC (fieldwork 2011) will allow a benchmark of adult literacy
and numeracy against a much wider set of industrialised countries
than in the International Adult Literacy Study (IALS, fieldwork
1996), and to look at what has changed in the intervening fifteen
years. (No part of the UK took part in the Adult Literacy and
Lifeskills Survey, which ran in the middle of the current decade.)
By combining a direct measure of key cognitive skills with
measures of formal educational attainment, PIAAC will offer a
more complete picture of the stock of human capital than has yet
been available by way of comparing OECD countries. The OECD's
annual collation of qualification statistics is a useful monitoring
tool, but provides only a rough proxy for actual cognitive skills.
PIAAC will include:
— testing for functional literacy skills;
— testing for functional numeracy skills;
— an assessment of the skill requirements of jobs
for the employed members of the sample; and
— a background questionnaire on individual characteristics
and other contextual information.
PIAAC will provide an important measure for Government in
the context of the Leitch ambition for the UK to be a world leader
in skills by 2020, benchmarked against the upper quartile of the
OECD.
145
McIntosch 2004 Vocational Qualifications. CEE Discussion
Paper no 89. Back
146
Jenkins et al (2007): The Returns to Qualifications
in England, Updating the Evidence Base on Level 2 and Level 3
Vocational Qualifications. CEE Discussion Paper no 89. Back
147
Feinstein, L (2002) Quantitative Estimates of the Social Benefits
of Learning, 2: Health (Depression and Obesity) Wider Benefits
of Learning Research Report. Back
148
Sabates, R and Feinstein, L (2004) Education, training and
the take-up of preventative health care, WBL Research Report
No 12. Back
149
Feinstein, L (2002) Quantitative estimates of the social benefits
of learning, 1: Crime WBL Research Report No 5. Back
150
Dearden et al (2000) Who gains when workers train?
Training and corporate productivity in a panel of British industries,
IFS; Dearden et al (2005) The impact of training on productivity
and wages: evidence from British panel data. Back
151
Bell et al (2005) A Quality Adjusted labour input series
for the United Kingdom (1975-2002) Bank of England Working
Paper 280. Back
152
Internal DfES analysis. Back
153
PwC (2007): The economic benefits of a degree. Back
154
Bynner et al (2003). Back
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