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
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
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
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
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
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.
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"
Mr Rosser: Downwards, I am afraid.
Q1035 Mark Pritchard: So laying off
Mr Rosser: Yes. Early retirement,
generally by small numbers, losing contractors. I think the Welsh
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
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