Delivering STEM skills for the economy Contents

1Understanding the nature of the STEM skills challenge

1.On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Education (DfE) and the Department for Business, Energy and Industrial Strategy (BEIS).1

2.STEM stands for science, technology, engineering and mathematics. In education, it means the study of these subjects, either exclusively or in combination. In employment, STEM refers to a job that requires the application of science, technology, engineering and mathematics skills or a qualification in a relevant subject, or that is located in a particular industry or sector, such as pharmaceuticals, construction or aerospace. However, there is no universal definition of what should be counted as a STEM subject or job.2

3.Since the early 2000s, there have been growing concerns about the supply of STEM skills in the workforce, focusing on achieving increased productivity and economic growth in an era of rapid technological change. The November 2017 policy paper, Industrial Strategy: Building a Britain fit for the future stated that “ … we need to tackle particular shortages of STEM skills”. Exit from the European Union could also affect the availability in the workforce of people with the requisite STEM skills.3

4.There is no unified government STEM skills programme, and responsibility for the provision of different elements is spread across a number of departments. The Department for Education (DfE) is responsible for the main learning routes—schools, colleges, apprenticeships and higher education institutions—and is also responsible for generating research on skills needs. The Department for Business, Energy & Industrial Strategy (BEIS) develops insights into key business sectors, and leads a STEM inspiration programme, encouraging young people to consider STEM careers. Other departments also play an important role. Between them, the departments spent almost £1 billion between 2007 and 2017 on initiatives to encourage more take-up of STEM subjects.4

Ensuring an adequate supply of STEM skills now and after exit from the European Union

5.Estimates of the nature of STEM skills shortages vary widely according to which definition, dataset and methodology are used. These estimates are largely based on employer surveys, together with modelling of educational and occupational data, which in itself can be problematic due to the unpredictable impact of technological changes relevant to many STEM occupations.5 Overall, the requirement to use technology is becoming more common in many jobs. The emphasis on digital skills, for example, is as important today as literacy skills were in earlier times.6 As technology advances, the skills profile of the workforce needs to change in parallel. But we are concerned that the provision of suitably skilled people is lagging behind the technological needs of businesses.7 DfE is currently conducting an employer skills survey, the results of which are due to be published in summer 2018. It expects the survey to provide more detailed intelligence than is currently available on skills needs in individual sectors.8

6.The impact of exit from the EU on the availability of STEM skills is difficult to predict, with some major science and engineering bodies believing that it could reduce the availability of those skills. This makes the UK skills picture highly sensitive to any changes that might arise.9 BEIS and DfE are involved in cross-government work to assess the wider impacts of exiting the EU, but they appear to be heavily reliant on the work of the independent Migration Advisory Committee (MAC).10

7.The MAC’s responsibilities include taking a view on the alignment of the skills of the current workforce with the future needs of the industrial strategy. BEIS told us that it is waiting keenly to review the MAC’s report on the current and future impact on the whole economy of European Economic Area workers across all sectors and regions, which is due to be published in September 2018.11 BEIS explained that the MAC has also been asked to address the issue of the number of visas being made available for highly-skilled (Tier 1) migrants.12

8.We asked whether BEIS recognises the problems that public bodies face when trying to deliver major infrastructure projects. It seems apparent that they sometimes struggle to recruit workers from the EU, and when looking further afield they find that potential workers cannot obtain the necessary visa. We were concerned that the public sector pay cap may be having a negative impact on these bodies’ ability to recruit. BEIS explained that it was not aware of this being a particular problem, but would make enquiries about it.13

Skills Advisory Panel

9.The UK Commission for Employment and Skills, the main body responsible for producing strategic information on skills supply, closed in early 2017.14 This created a temporary vacuum in terms of government’s labour market intelligence.15 We understand that DfE is currently setting up Skills Advisory Panels (SAPs), which will work with Local Enterprise Partnerships (LEPs) and combined authorities to better understand employers’ regional and local skills needs.16 We are concerned that LEPs are not best placed to take on this task, given that this Committee has previously reported on LEPs, and found that they vary significantly in their capacity and capability.17

10.DfE plans to establish seven SAPs in 2018. Where it is clear that a SAP does not have the required capability, DfE told us it would share good practice from elsewhere to help it derive a better sense of the skills needs of the local economy. The Department intends to evaluate the success of this initial group of seven SAPs in summer 2019.18 Given the complex and international nature of the market for high-level STEM skills, we consider there is a real risk that SAPs will not be sufficiently aware of national and global skills supply issues to carry out their responsibilities effectively.19

STEM boards and working groups

11.DfE has appointed a single lead for STEM issues, along with a departmental STEM Programme Board that aims to facilitate a more joined-up approach both within the Department and across government.20 DfE told us that, while it was formulating the industrial strategy, it became clear that a working group would need to be established in order to integrate all STEM-related activities across government. DfE now chairs that group, which includes representative from BEIS, HM Treasury, the Department for Transport, Research Councils and others.21

12.Whilst on the surface these are positive developments, they will need to be properly organised to ensure they function effectively. There have been previous attempts to establish cross-departmental STEM governance bodies or working groups, but none have lasted long enough to have a meaningful impact.22

13.We asked DfE whether the members of the cross-government STEM group have relevant skills and experience. DfE told us that they are a mixed range of civil servants, with policy expertise in their respective areas. However, it could not tell us whether any of them have worked in industry, science or technology. We consider that any lack of practical knowledge and experience of STEM issues could stop the cross-government group from being fully effective.23

Incentives to undertake teacher training

14.DfE offers increased payments to trainee teachers in a range of high-demand subjects. For example, for the academic year 2018–19 DfE will offer up to £28,000 of additional funding for trainee teachers in physics, chemistry and computing, and up to £26,000 for trainees in biology. It has also introduced a total payment of up to £32,000 to mathematics trainees.24

15.In 2016, this Committee expressed concern that DfE did not know what proportion of those receiving bursaries and other financial incentives to enter teacher training actually went on to qualify and teach in that subject, and therefore whether the arrangements were delivering value for money. Given the large sums of public money involved, DfE was asked to evaluate properly, as a matter of urgency, whether bursaries and other similar payments lead to more, better quality teachers in classrooms, including whether the money could be more effectively spent in other ways, such as on retention measures.25 DfE agreed to examine this issue and conclude on the value for money of the arrangements by April 2018.26

16.DfE told us it had only partially completed this work. It had examined the impact of financial incentives on the number of applications for teacher training, but it still did not know how long the successful applicants stay in the teaching profession, and therefore whether these incentives offer value for money overall.27

1 Report by Comptroller and Auditor General, Delivering STEM (science, technology, engineering and mathematics) skills for the economy, Session 2017–19, HC 716, 17 January 2018

2 C&AG’s Report, paras 1.1–1.2

3 C&AG’s Report, paras 1.4–1.5, 1.7

4 C&AG’s Report, paras 2, 1.8, 1.11

5 C&AG’s Report, para 2.13

6 Q 10

7 Q 32

8 Q 127

9 Q 120; C&AG’s Report, paras 1.7, 2.23

10 Qq 34, 37, 119, 124, 127

11 Qq 40, 124, 127

12 Q 37