Examination of Witnesses (Questions 60-79)|
MONDAY 12 MAY 2003
60. We also have a question about what lessons
this programme has for other Member States in the EU? I find I
do not know whether other Member States in the EU actually do
(Mr Perryman) They do not. It is quite unique in Europe,
although there is a measure of interest from other countries.
Singapore and the Republic of Ireland have already taken up the
standard and some of the countries are quite interested in doing
so. I guess the other model which is used very extensively in
Europe would be the EFQM model, which is the framework for quality
management, which is somewhat different; it comes from a slightly
different focus, from a quality focus and a whole organisation
performance focus. Nevertheless I guess it has a reasonably close
fit with Investors in People. I was struggling really with
trying to answer your question about European comparisons.
Lord Cavendish of Furness
61. Perhaps I should say that I have a series
of small businesses and specifically on Investors in PeopleI
hope you will not take this amiss when I sayI have just
decided for the time being not to go for it, but it was a narrow
decision. The two reasons really were a difficulty in persuading
my colleagues that this was a justifiable and very considerable
expense in terms of management time and money. Second, with a
track recordforgive my saying so; not your ownof
previous government initiatives not measuring up, like quality
assurance was going to mean that government would only use quality
assured products and they went away and did exactly the opposite,
there is a certain cynicism around that. I do not want to be too
heavy-handed about this: we like the principle of Investors
in People, but there is a resistance, would you accept, along
the lines I have pointed out?
(Mr Perryman) Yes, you are right and I am just rather
glad that you made that decision rather than the other one and
for very understandable reasons. It is a very large commitment
for a company to make and we very well understand that companies
on a day-to-day basis have to make very tough decisions about
the market in which they are operating and they inevitably tend
to make, quite logically and understandably, relatively short-term
decisions. It is quite necessary for them to do so and to adopt
a process like Investors in People is certainly time consuming
for the management of the company and for all concerned. We believe
the pay-off is there and is demonstrated by the effectiveness
of many organisations which have gone through the process. It
is a fine balance.
62. Could more measurement and evaluation of
the scheme not be made public?
(Mr Perryman) I am not sure. I would need to check
how much is now made available. I should be surprised if there
were not extensive evaluation made available now, but I am very
happy to go back and offer you more later.
63. You said that one of the methods of evaluation
was to ask companies whether they felt it had made any difference
to them. Has there been any evaluation based on more formal external
evaluation rather than asking the companies themselves whether
they thought they were any better as a consequence?
(Mr Perryman) I would need to come back to you with
some specifics on that.
Chairman: Could you? Fine. We are entirely relaxed
that you are not going to have answers to all this wide range
of questions. If you could, that would be enormously helpful.
64. Could you tell us more about two of the
new Sector Skills Councils, ESkills UK and SEMTA? How do they
operate? What do they achieve? What do they do? Who is responsible
for these bodies?
(Mr Perryman) Absolutely; I shall be very pleased
to do that. I am certainly more comfortable in this area since
it is one I am responsible for personally. SEMTA and ESkills are
the first two Sector Skills Councils which have been formally
licensed by the government. We have five trailblazer bodies which
were agreed last December, but these are the first two which have
come through the new process we have established. They are both
in areas which I hope are very much of interest to you as a Committee.
It may just be worth me saying a word about the policy in general
for the Sector Skills Councils as a whole. The purpose of developing
Sector Skills Councils is to try to make a step change in the
effectiveness of what we call the demandside of our work in the
sense that we have been worried for some while that employers
have not been able to voice their skills needs very effectively
in many cases, because the organisations which were previously
representing them, called the national training organisations,
were very patchy in terms of their size and performance, in fact
actually the two which have come through first to be licensed,
SEMTA and ESkills, were both previously national training organisations,
but they were some of the best of the previous organisations and
we were very pleased to adopt them into our new network. Really
we are trying to make a fundamental change in the quality of the
work in this area, trying to move from having rather small organisations
with only a limited amount of capability and not frankly very
well connected to the employers in their sector, to a new arrangement
where we ask employers from each sector to come forward if they
are prepared to have a Sector Skills Council which they really
want to drive forward and make a powerful organisation. We are
asking each of those organisations to focus on reducing skills
gaps and shortages in their sector, thinking really hard about
the relationship between productivity and skills, thinking about
how we can develop greater opportunities for everyone for the
workforce in each sector and then how we can connect that sectoral
analysis of skills into a wider debate about how we develop provision
across the economy as a whole, further education provision, university
provision, private training provision and so on. There has been
a disconnect frankly between what employers are looking for in
terms of skills development and what is sometimes being delivered
by the public education system at the post-16 level. There is
a real challenge as to how organisations are to become robust
enough and powerful enough to be able to push through those kinds
of reforms. I should also say that we are looking to develop a
network of about 23 Sector Skills Councils. We had previously
something over 70 national training organisations, so we are looking
for a far smaller number of much more powerful and strategic organisations.
65. Do you mean you are changing them altogether?
(Mr Perryman) Yes, we are fundamentally changing them.
66. You say they are trailblazers. Are they
completely new systems?
(Mr Perryman) Yes. We have asked people to bid to
be a new Sector Skills Council. In some cases the previous national
training organisations are putting forward proposals to be a new
Sector Skills Council, but in order to do so, they are having
to reshape their thinking and structure fundamentally. For example,
on average about three national training organisations are becoming
one new Sector Skills Council, because we are trying to have organisations
of much greater significance and mass than we had previously.
In the case of SEMTA, which is the Engineering Sector Skills Council,
it actually covers a wide range of areas. It has 12 groups that
sit under its board effectively and they range from electrical
engineering, electronics and semi-conductors, metals, mechanical
engineering, motor vehicles, ship building, biotechnology, mathematics,
forensic science, a whole variety of different sub-sectors, aerospace
as well. For each of those there is a sector strategy group and
those strategy groups then report into a board, which is chaired
by Lord Trefgarne with a chief executive called Michael Sanderson.
It is an organisation of about 150 people basically, which is
67. What do they actually do?
(Mr Perryman) Their responsibility is for each sector
to draw together an analysis of the skills needs of that sector
and how those skills needs connect to the productivity debate
and competitiveness of that sector. Perhaps I could just take
an example. We are currently working with the chief executives
of the various automotive companies, Nissan, Toyota and so on,
who are saying to us that they want to establish an automotive
academy for the country, which will be in something like six or
seven sites across the country and SEMTA will be very active in
helping them to shape the structure of that organisation and help
them to design the qualifications that they need for the future
of that organisation and to do the analysis of the skills needs.
For example, in the automotive sector, what they are saying there
is that fundamentally changes are taking place in the sector which
require a completely new thinking about how people get developed
and trained for flexibility and for future skills needs. So SEMTA
is the voice of employers in a sense, in trying to make sure that
we first of all get that analysis of skills right and then we
make sure that we deliver proper training skills on the back of
68. To whom are they responsible? It sounds
as though they were not very efficient before.
(Mr Perryman) The old models were variable in quality
and that is why we have now brought in these new organisations,
Sector Skills Councils, to replace them. They are responsible
firstly to an agency which we have set up, called the Sector Skills
Development Agency, which acts as a co-ordinating and good practice
sharing body effectively, helping the Sector Skills Councils to
develop, making judgements about whether the Sector Skills Council
is ready to be licensed by government and then supporting them
in terms of doing their work. That responsibility then comes through
to our Minister for Adult Skills, and the Secretary of State to
make decisions on exactly who gets a licence and when.
69. Will the development agency actually evaluate
(Mr Perryman) Yes indeed; yes. We have been developing
this fairly new programme and we only have two licensed so far
and are expecting the rest of the network to be licensed over
the next 12 or 15 months. We are just developing quite a sophisticated
performance measurement framework which tries to look at a whole
variety of different ways of assessing the performance of these
new bodies, at the bottom end thinking about how well they are
known, how much engagement they have with employers, what effect
they are having on the numbers of apprentices going through their
sector, those sorts of measures. At the top end over time we shall
be wanting to look at the impact these approaches have on productivity
in a more substantial way. If you are interested, we could let
you have a copy of that emerging framework to give you a feel
for the specific measures which are being undertaken.
70. On that last point, who is drawing up the
evaluation framework? Is that the Department for Education and
Skills? Do you have any discussions with Treasury on evaluation
techniques? Do Treasury concern themselves whether you are getting
value for money or impacting on productivity?
(Mr Perryman) Yes; absolutely. It is quite a complex
process. In developing the policy in the first place, we developed,
as we do for all our programmes, a thing with a ghastly title
called a ROAMEF statement. I am not sure I would like you to ask
me exactly what that stands for but it is about setting out the
objectives and measurement and the key performance measures we
are going to have for the policy and how we are going to run the
policy. We agree that with the Treasury and we use that fact as
the basis for our discussions about funding as well. In our bidding
process with the Treasury we would use those frameworks because
they specify really quite specifically our expectations from the
policy in terms of value for money and the key objectives and
so on and so forth. We can let you have details about how that
works if you would find that helpful, but the framework is about
the rationale, the programme, the objectives, the comparisons
of likely costs and benefits, the monitoring procedures and the
evaluation process we are going to adopt for policy. That sets
out the framework in broad terms. We are then discussing with
the Sector Skills Development Agency, our small agency, exactly
how we translate that into action on the ground. They have now
developed this performance framework, in consultation with the
forthcoming Sector Skills Councils, and we shall then agree that
with them as part of agreeing their corporate plan. They are about
to put together for us a three-year corporate plan and we will
agree that corporate plan with them. We will then actually write,
as we would on an annual basis, a remit letter to them which sets
out the government's priorities for their work over the next 12
months and in that we will state the most important things we
are expecting them to achieve in this next year.
Chairman: It would be useful if afterwards you
could let us have a copy of that particular framework you are
developing with the Treasury, just as an example to us.
Lord Cavendish of Furness
71. Question 3, which is in two parts really.
In paragraph 4 of your written evidence, you refer to the Higher
Education Innovation Fund (HEIF), jointly funded by your Department
and the DTI. When is the next round of the higher education programme?
Will the Higher Education Reach-out Organisation (HEROBC), University
Challenge and Science Enterprise Challenge schemes then cease
and be subsumed under the HEIF? Would you deal with that first?
(Mr Perryman) We are expecting to issue shortly the
guidance for the next round and that round begins in the summer
2004. The guidance will be issued for consultation initially.
You are right that yes, the funding previously allocated to University
Challenge and Science Enterprise Challenge is being combined into
the new HEIF budget. That is really for simplification purposes
and to make sure that Higher Education institutions only really
need to apply once for funding rather than on several occasions.
72. You tell us that the Higher Education Innovation
Fund will "explicitly focus on broadening funding to less
research intensive" institutions. What will be the balance
of funding between research intensive and less research intensive
institutions? What is the rationale of that policy, what are the
objectives to be set for HEIF for each of the two sectors of higher
education and how will the results be measured and evaluated?
Can you deal with that?
(Mr Perryman) Yes. We are currently working with the
Office of Science and Technology on the guidance and unfortunately
I am not now in a position to be able to tell you the exact balance
because that will come out as part of the guidance process and
that is still under negotiation. There are two main objectives.
The first is to build on achievements which have already taken
place in the programme, demonstrating knowledge transfer, including
three successful deployments of earlier rounds of funding, really
trying to build on the successes of the first round. The second
is to broaden the extent of knowledge transfer activities through
support for non research intensive university departments working
in partnership with others to engage smaller businesses, less
technologically sophisticated business in stimulating innovation.
What we are saying about that is that we think it is very important
to try to work between those higher education institutions which
have perhaps more of a regional focus and smaller companies in
each region to build closer linkages. This process is not just
about the most prestigious research institutions, but about other
organisations which are closer to the ground in terms of some
small businesses and small business support, for example.
73. I must press this a little further. Is this
suggestion that new research intensive institutions are being
too well funded at the expense of those with less, or redressing
(Mr Perryman) No, no. I am not saying that at all.
We are not trying to divert funds from research intensive institutions.
We simply are trying to strike the right balance between knowledge
transfer based on research within an institution and a different
kind of knowledge transfer based on stimulating regional, local
economies through real life industrial problems and support for
local small businesses, for example.
74. So if a service is required for less sophistication
as well as the more research intensive.
(Mr Perryman) Yes. I am not from the higher education
directorate, but by my understandingand if I am incorrect
about this I shall come back in writingis that it is about
also trying to ensure that we really do have close linkages between
higher education institutions which are not top of the tree in
terms of research and the small business community, where there
are some very important linkages to be made.
75. You are not dumbing down.
(Mr Perryman) Certainly not.
Lord Faulkner of Worcester
76. Sticking with paragraph 4 of your written
evidence, can you tell us a bit more about the Higher Education
Reach-Out to Business and the Community fund, which I must confess
is not something I have come across before and would like to know
more about? What are the objectives and how would you measure
its results and what has it achieved so far?
(Mr Perryman) The first of the objectives for HEROBC
ismy apologies to the Committee for these ghastly namesto
initiate a third stream of funding, complementing existing grants
for teaching and research. The second is to reward and encourage
higher education institutions to enhance their interaction with
business. The third is to provide a platform of core funding to
help higher education institutions put into practice their support
in this area. It is really about encouraging them to interact
with business and helping to make sure they have the core funding
to allow them to step out and do that kind of work properly. The
results are measured primarily by an annual monitoring statement
by the higher education institution itself to HEFCE, which is
our Higher Education Funding Council in England. Those reports
are on progress against agreed targets from their initial plan.
We also gather data from an annual higher education business interaction
survey. Our view is that whilst this work is still pretty new
for our higher education institutions, we are making some quite
encouraging progress. What we have found so far is that to date
people have tended to focus on developing their internal capacity
to do this work and to set up things like one-stop-shops internally
inside the university or higher education institution so that
they have a single place for business to come to when they are
trying to approach the organisation. That is important because
historically it has been quite difficult for businesses to find
their way into universities with confidence and know quite whom
to approach and how to make connections. Putting in place a one-stop-shop
in the university to allow that is very helpful. They have also
done work on things like intellectual property audits. What we
are now hoping to see is an increasing focus on outcomes such
as number of spin-off companies, amount of consultancy income
being generated from the private sector and then really to get
people to think harder over time about impact. I suppose that
we are at the start of the journey really and we are getting the
basics in place and we are hoping to move on to more sophisticated
77. Would you say the results have matched the
(Mr Perryman) Yes, but it is early days. We are quite
encouraged by the way that universities and higher education institutions
have picked up this work and some quite encouraging projects have
78. Could you give us one or two examples?
(Mr Perryman) I can indeed, yes. Some examples from
spin-out companies. University of Oxford has a spin-out with Celoxia,
which is about accelerating the process of software design, which
sounds rather worrying to me, but I am sure this is correct, and
by cutting out the end stage of hardware function programming.
I am sorry, I do not know what that means, but it is a new company
which is about software design and it comes from Oxford University.
Segmentis is a spin-out from the University of East Anglia and
that is about transforming images and graphics on PCs, a graphic
design company. There is a company called Newland Scientific started
at Hull University which has a fascinating product called Sound
Bug, which apparently allows any surface to be used as a loudspeaker;
so you can turn anythingI do not know whether that really
means anythinginto a loudspeaker. It means you do not have
to have loudspeakers in a dimensional sense. There are some interesting
examples there of the spin-out companies which have emerged. What
I am saying is that it is early days, some encouraging developments,
but a long way to go. I have some figures here which might also
help. Early analysis we have shows that there are now 20 per cent
more spin-off companies than in a 2001 surveythis is a
survey in 2002, so in a yearthat there is a 15 per cent
increase in businesses taking up particular services from HEIs,
80 per cent of HEIs now provide an effective enquiry service to
small firms, 37 per cent of business contracts are now with smaller
firms and a 25 per cent growth in income from courses to business
as well. We are seeing some encouraging developments.
79. How long has HEROBC been going? I thought
it had been going four or five years.
(Mr Perryman) Yes, it started in November 1998 and
is now effectively being wrapped up into wider HEIs.