Cross-border provision of public services for Wales: Further and higher education - Welsh Affairs Committee Contents

Examination of Witnesses (Questions 1020-1040)


7 OCTOBER 2008

  Q1020  Albert Owen: You touched on research briefly in your paper. Does the fact that Welsh higher education institutions receive proportionately less research funding than might be expected for the relevant size of the sector have implications for employers in Wales?

  Mr Rosser: I think the implications are probably around funding generally, which I have dealt with quite fully in the answer to the previous question. I am aware that Welsh institutions get a lower percentage of Funding Council monies than one might expect. I am not sure how those figures look once you strip out Oxford, Cambridge and London, the research intensive, whether we are then doing as well as the next two universities or whether we still receive less funding than one might expect. Clearly there is a chicken and egg situation here because funding awards by Funding Councils are done on a competitive basis and if you are less able to invest in your research capability because of the core under-funding then you are probably going to be in a poorer position to compete for further Funding Council bids. We have to try and break this logjam somehow and free that up.

  Q1021  Albert Owen: I understand what you are saying about Oxford and Cambridge, but is there not a danger that any foreign investment might go close to those areas and to bring it to Wales we need to bring those research centres up to standard and we need the funding. What I am suggesting is business is losing that. What do you think can be done to close that gap? Do you think it is the quality of the bids that are not there or do you think that the mechanism across the United Kingdom does not support Wales in the way that it should?

  Mr Rosser: I am not sure I am qualified to comment, certainly on the quality of the bids that come out of Welsh universities, I am not yet familiar enough with the mechanisms used by Funding Councils. Switching that from a competitive bidding process to some form of geographical allocation of research is a pretty fundamental switch.

  Q1022  Albert Owen: Have you got any anecdotal evidence of companies looking at other parts of the United Kingdom because of the issues regarding research and lack of funding?

  Mr Rosser: I think there are plenty of examples of companies in Wales who are choosing to partner with universities outside of Wales because the expertise that they are particularly interested in rests in those other universities. There are plenty of examples of that. Whether that is a consequence of the way in which Research Councils allocate their funding is something I am not at all clear on.

  Q1023  Chairman: Professor Mervyn Jones of Bangor University is undertaking on behalf of the Welsh Assembly Government a review of higher education, initially on finance but much more broadly beyond that. Will you be giving evidence to that review?

  Mr Rosser: We have not received a formal request to do so yet, but I would be surprised if we were not asked to give evidence.

  Q1024  Alun Michael: We have a situation at the moment where further education colleges in England are able to validate their own foundation degrees and that is not the case with FE colleges in Wales. There seems to be a debate going on, one saying FE colleges in Wales should be given that power, the other alternative is saying, "We took a decision, don't mess about with what has been decided and which is now understood between the HE and FE sectors". Does the CBI have a view on that?

  Mr Rosser: We had understood from the Skills Minister in WAG that FE colleges were going to be given the powers to accredit foundation degrees.

  Q1025  Alun Michael: I am referring to the fact that originally there was a decision that they would not and then there was a statement that they would and some of the HE institutions were saying the goalposts seem to be trotting around the pitch.

  Mr Rosser: The CBI supports further education colleges being given the power to award foundation degrees where they can demonstrate that they operate sufficient quality standards. From our perspective it is the quality of what is being offered and provided rather than the category of the institution doing the provision which is important. The other point that is worth making here is that in England the numbers of foundation degree places funded have increased dramatically. We are pretty sure that has not happened in Wales, so further education colleges provision presumably would just reduce the provision by higher education.

  Q1026  Alun Michael: Your answer really is it depends?

  Mr Rosser: The answer is we support further education colleges being given the power to offer foundation degrees provided they can demonstrate that they have the quality systems in place that we want.

  Q1027  Alun Michael: Have you made any assessment of the value to business of two comparative approaches, the Workforce Development Programme in operation in Wales and the Train to Gain Programme in England?

  Mr Rosser: It is probably too early to tell. We have had mixed reports on Train to Gain from employers in England. Some have found it very useful, some have found some of the structures a bit too rigid for what they as individual employers need in terms of the qualifications. The Workforce Development Programme Wales, as intended, seems to offer a high degree of flexibility, but the funds put towards it are pretty small currently and we look to see with interest how that develops. It strikes us in a number of areas in education policy in Wales that good initiatives that we would support sometimes fail to be taken forward through general lack of funding, so this is probably the latest in that line.

  Q1028  Alun Michael: Do you think more needs to be done to make sure that particularly for businesses that are on either side of the border there is clarity and parity of opportunity?

  Mr Rosser: Certainly clarity of opportunity is important. The communication to companies of different policy decisions and different funding regimes is critical so that companies can plan. Parity, I think we would like to see the best applied across both sides of the border irrespective of which side dreamt it up really.

  Q1029  Mrs James: I would like to turn to the Sector Skills Councils. You have already mentioned in your earlier evidence the difference between provision and training, et cetera, between south-west England and south-west Wales. Do you think that the Sector Skills Councils are sufficiently equipped to deal with cross-border issues?

  Mr Jenkins: At the moment we understand the challenge that Sector Skills Councils have to actually work with employers throughout Wales. There are geographical issues and there has been a huge expansion in Sector Skills Councils in the last few years and we have to recognise that. In terms of the actual on the ground liaison with employers, we have found that it is not as high in Wales as it should be compared to England. If Sector Skills Councils, which they have been, are given quite a key role in Wales Employment and Skills Board going forward, they need to have a marginal resource or they need to use the resource more effectively in terms of communicating with employers. The Wales Employment and Skills Board is almost going to judge courses and plan courses at a strategic level and they need real-time information at employer level of the kinds of skills needs and the Sector Skills Councils, for good or bad, are that role in Wales.

  Q1030  Mrs James: You have touched a little bit upon the next part of my question which is the WAG skills strategy states that the Councils will be asked to articulate the demand for higher level skills. Can you see this working well in a cross-border situation?

  Mr Jenkins: It is difficult to see at the moment how it will pan out. The setting up of the Wales Employment and Skills Board is the first start of Wales' response, if you like, to Leitch and it is the start of trying to plan things on a strategic level.[1] At the moment we would say that it is pause for thought in terms of whether the Skills Councils will be able to deliver that strategic level input on HE, particularly Level 3, Level 4 courses, because there is that lack of input at the moment at the local level, particularly in parts of Wales, so you do wonder what the impact of the information feeding into the Wales Employment and Skills Board from the Sector Skills Councils will be.

  Q1031 Mrs James: I sense when I go to companies that I represent in my constituency a frustration at the match between their levels of skills need and what is happening on the ground, the provision there. Do you sense that frustration within your organisation?

  Mr Jenkins: I think there is that level of frustration. There are exceptions and construction skills is a classic example where the Sector Skills Council is brilliant. There is that expectation that the Skills Councils will be liaising with the companies that are in their appropriate Council and getting to know them, getting to know their needs to be able to feed into this intelligence. Not on a one-off basis, but continually. I do not think we are there yet in terms of Wales having that rounded feel and depth. They may have had one or two contacts, but the depth and quality of the engagement is not quite there yet for employers. In terms of Alun Michael's question in terms of HR advisers, the Workforce Development Fund, there is going to be a 35% increase in HR advisers in the Wales Employment and Skills Board planned over the next few months and that is a critical bit, getting the quality of advisers to liaise with the Sector Skills Councils and employers. It does come back to the Workforce Development Fund having the proper advisory structure in place to liaise with employers as well.

  Q1032  Mrs James: May I ask one more supplementary. The other frustration that I am hearing from companies that are operating in Swansea East is there are lots of demands made of them to ramp up and to put in good HR and good training, but they really do not have the expertise. They want more, but they are frustrated as to how they can actually get it.

  Mr Jenkins: You are exactly right, there is that frustration. This is where HRD advisers could be the difference. In England you have seen that in Train to Grain, for example, they have been quite good but there has been an issue around them actually just pushing Level 2 rather than saying, "What is your qualifications base? Some of your individual employees could do 3 and 4", whereas Train to Gain has traditionally been pushing them into Level 2. In Wales we would not want to go down that line, we would want to be looking at the skills base of the individuals within companies and then choosing what course is right for them rather than the other way round.

  Q1033  Mark Pritchard: The CBI pride themselves on telling it like it is and we could not really have the CBI before us without asking a more general question about the economy in Wales given the global financial crisis, and I do not know what has happened to the Stock Market this morning. Do you predict that employment will go up in Wales this year or will it be unemployment that goes up in Wales?

  Mr Rosser: According to the radio in the taxi on the way here the banks are still suffering this morning on their share prices. It is rare that I meet a company in Wales at the moment that is not adjusting its workforce.

  Q1034  Mark Pritchard: What does "adjusting" mean?

  Mr Rosser: Downwards, I am afraid.

  Q1035  Mark Pritchard: So laying off people?

  Mr Rosser: Yes. Early retirement, generally by small numbers, losing contractors. I think the Welsh economy—

  Q1036  Mark Pritchard: Just so I am absolutely clear, because, as I said in my introduction, you like to tell it like it is as an organisation, are you saying the companies that are laying off people, which is my term, are doing it solely through early retirement?

  Mr Rosser: No, I am not saying that.

  Q1037  Mark Pritchard: Therefore, they are laying off some people?

  Mr Rosser: Yes, they will be.

  Q1038  Mark Pritchard: When you talk about small numbers, what do you mean? A job to an individual is a big number.

  Mr Rosser: I have been there myself, I fully understand that point. A company of 500 employees losing 40; a company of 500 losing 50/55; a legal practice of 120 losing 10. Those sorts of numbers. Too small to make too many headlines in the media but, as you say, cumulatively it will have an impact and for the individuals concerned it is a very, very difficult time. I think the Welsh economy will suffer as the UK economy is going to suffer over the next 12-18 months.

  Q1039  Mark Pritchard: Given that we all want the United Kingdom economy and the Welsh economy to do well, and I want to end on a positive note, what hope can you give them, given the fears out there in the community of people losing their jobs today, next week or next month?

  Mr Rosser: The Welsh economy is far better balanced than it would have been in previous downturns. I would expect the Welsh economy to suffer in proportion to the English regions outside the south-east and London, which may suffer worse, but equally to bounce back and to participate in any recovery in proportion too. What we want to see at this stage is what can Government do to ensure that is the case. I think the message of government at the moment is not to do anything to hamper that recovery, so it is about retaining flexible markets, not taking any decisions which further increase costs on business, building regulations might be one, additional climate change targets might be another, for example. There is very little Government can do at the moment to stop what is happening, but there is a lot they can do to not make it worse and to allow companies in Wales to participate in the recovery.

  Q1040  Chairman: Can I thank you both for your attendance this morning and the very wide-ranging evidence you have given us. It will be very helpful to us in our cross-border inquiry. If you feel there are points which we have not covered then we would be very pleased to receive a further memorandum. Once again, could I thank you for the written memorandum which you provided to the Committee earlier. Thank you very much.

  Mr Rosser: Thank you for the opportunity.

1   Leitch review of skills: Prosperity for all in the global economy-world class skills, HM Treasury, 2006 Back

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