Select Committee on European Union Minutes of Evidence

Examination of Witnesses (Questions 54-59)

MONDAY 12 MAY 2003



  54. Good afternoon, Mr Perryman and welcome also to Mr Colman. Thank you very much for taking the time to discuss these matters with us today. I hope that you received our questions in advance.
  (Mr Perryman) We did indeed; thank you, yes. We got them on Thursday.

  Chairman: By its nature the work of the Department is very wide ranging and we well understand that you may not yourselves deal with every issue we are going to ask questions about, but if you would be patient with us. If there are matters which you feel might be better followed up with a supplementary written note afterwards, by all means say so. We are more concerned to get some answers to the questions than whether you carry everything like this in your head. The other point I wanted to make was that we recognised the wide-ranging nature of the Department and that education and skills are not only concerned with the issues which are before this inquiry. That does not mean in any way that we under-estimate or under-value the wider contribution of education and skills to the lives of people. Inevitably in our inquiry at this point we want to concentrate on a narrow range of issues.

Baroness Cohen of Pimlico

  55. You told us in paragraph 2 of your written evidence that your skills strategy supports the government programme for reform to target historic weaknesses in the five key drivers for product performance. What I should like is an example of one of the programmes and how you attach it to which of these. We deliberately phrased it that way because we thought you would know about some of them and not others.
  (Mr Perryman) I am very happy to do that. I am just slightly worried that I might not cover sufficient breadth for you by doing that. If you would let me, it may be helpful if I could give you two examples. Shall we see how we go?

  56. Indeed.
  (Mr Perryman) The first example which I should like to mention would be Investors in People, which is one of our longest established programmes. It has been running for about ten years. Whilst it has not got a very specific target on higher technology companies, in fact it really tries to support companies of all sizes and from all sectors, nevertheless I think it is quite an interesting and important programme in terms of trying to shape business success. It is unique in being a standard really for people skills and is quite unique both in Europe and across the world in that respect. It tries to draw companies into a debate and to help them to think about how best they can use their people and workforce development to maximise their effectiveness and the productivity and competitiveness of their business. It does that first of all by asking the business to commit to becoming an investor in people, which is really almost signing the pledge. Then, over a period of about 18 months, with assistance from our Learning and Skills Councils or Small Business Service, which is run by the DTI, it helps them to position themselves in developing a training strategy which links into their business strategy, then taking action to develop people on the back of that. We currently are in a position where some 33,000 organisations had been recognised across England, with a further 15,000 who have committed to reaching the standard. That means that something like 9.5 million people have been covered now in the workforce by organisations which have the invested-in-people standard and that is about one third of the current workforce. Over a period of time, because it has been around for some while, it has now become very well known by the business community and that has become rather important in terms of gathering over a period of time a lot of credibility for it as a process and programme and, as a result, the impact this now has is becoming quite significant. You are interested in how we evaluated and measured performance in this area. Would you like me to go on and say a little about that?

  57. Yes, please: how the outcomes are measured and evaluated.
  (Mr Perryman) Firstly, it is unusual as a programme because the decision about whether somebody becomes an investor in people or not depends upon an independent assessment by external assessors and there are regional centres which deliver an assessment and support process. First of all, it is a fairly rigorous standard and it is assessed fairly rigorously and independently. Whether companies maintain that standard is then checked on a regular basis by the same assessors, which we think is very important, so that is in a sense at the firm level of the evaluation. Beyond that, at the national level, we also have an agency called Investors in People UK, which continually evaluates the impact and effectiveness of the whole programme through a programme of qualitative and quantitative research. That includes things like a six-month tracking study on awareness and attitudes and various researches on the impact of the programme. For example, the latest of those evaluations, which was actually in 2001, showed that something like 73 per cent of companies benefited from the programme, 60 per cent of programmes said that it had a positive effect on their culture, by which I mean the way the whole organisation operates, and 50 per cent indicated improved business performance which they directly attributed to Investors in People. They seem to talk about business benefits in terms of the motivation of the workforce, the improved level of innovation performance by the company and the quality of morale and job satisfaction in the organisation. A fairly significant amount of work on evaluation, which has been quite positive from our point of view in terms of running the programme. Interestingly, the Chancellor's pre-budget report in autumn last year offered an additional £30 million to promote Investors in People with smaller firms, where it has been more difficult, as you may appreciate, to get the sort of penetration we were looking for in the small firm community. This will give a very significant boost to the annual budget to deliver Investors in People to small firms. We are just now thinking how we can best use that money, but one possibility is to try to link the money very closely to encouraging management and leadership and entrepreneurship in small firms. That ties very nicely back to your interest as a committee.

  58. I am quite familiar with the IIP programme but I always have trouble reciting to myself what it does, where it takes us. Clearly one is better off with it than without it.
  (Mr Perryman) Yes.

  59. What do you say to yourselves about its importance?
  (Mr Perryman) We believe it has quite a fundamental importance in the sense of really helping companies to set a framework around which they can develop their workforce and to get organisations to think quite hard about the linkage between productivity and skills development and that is something which is surprisingly difficult for even large companies and organisations to consider and certainly very difficult for smaller companies who tend to have rather short planning horizons. This is one tool amongst a number, which tries to help companies think a bit longer term about the linkage between the people they have and the productivity they have as an organisation. We always find that is a quite significant challenge.

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