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Here in the UK, I am proud to be chancellor of Thames Valley University, known as TVU, which is a modern university. It is one of the largest universities in Europe, with 60,000 students. We offer seamless education opportunities for people as young as 14 years old right through to pensioners, and for people who want to study anything from vocational skills right up to PhD research. Last week, I visited our Reading campus and was amazed to see the opportunities on offer for children as young as 14, children who come to TVU from school two to three days a week to take part in learning that the schools cannot offer, children who potentially would drop out of school, but who are taking vocational training and engaging in learning.

Walking around the campus is utterly inspiring. There is even a building construction site, simulated right down to the scaffolding, with students learning masonry, tiling and other skills. There are automotives, motorcycles, music technology, carpentry, design and fashion. Our students are engaging in the World Skills Competition and interacting with countries such as Japan and Finland. This is world-class teaching and world-class skills teaching right on our doorstep, and I know that it can be replicated around the country and beyond.

Some students just want to go up to level 2 or level 3, others want to go all the way to PhDs, but they have that option. Why is this not being taken up more? There is the ability to have a seamless progression from further education to higher education—and one of TVU's mottos is “further and higher”.

TVU is also leading in lifelong learning, with an incredible diversity in the age of students. I try not to regret too much, but my one major regret is that I did not embark on lifelong learning until eight years after I started my business, and attended the business growth programme at Cranfield. It was a turning point in my career, in my business’s career and in my life. At TVU, 77 per cent of part-time students are over the age of 25. That is the kind of commitment to lifelong learning that is wonderful. It is never too late to learn.

We need to show that we are serious about Britain maintaining our position as a tiny country where knowledge has been the source of our competitive advantage, where learning, knowledge and skills, combined with hard work, has put us at the forefront in the world for centuries. This country, thanks to having the most open environment and economy in the world, has been able to adapt, to be flexible and to

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stay at the forefront in so many areas. If only we could have the will to skill embedded in the attitude of our children from as early an age as possible. If only we realised that education and skills is a passport to success, a passport to the UK's future success to compete in the global marketplace. Otherwise, we will be left behind. President Clinton had a great saying: the more you learn, the more you earn. The more Britain learns, the more Britain will earn.

According to Universities UK, currently 1.1 per cent of the UK’s GDP is spent on higher education. The world leader in this field by far is the United States where it is 2.9 per cent. Therefore, if the Leitch report recommends more spending to enable this to happen, more spending to the tune of billions, to create more institutions like Thames Valley University, we have to be prepared to spend more. It is a calculated investment. With investments, there should be rewards. The reward here is a highly skilled nation ready to take on the world, with a real will to skill.

1.17 pm

Lord Haskel: My Lords, I, too, congratulate my noble friend on his report. He and other noble Lords call for a focus on economically valuable skills. It seems to me that one skill is central to this—a skill required by perhaps our largest occupational group. I speak of management skills. Surely, it is the skills and capabilities of those leading and running organisations that will determine whether the skills of others are valuable. The CBI, in its recent report, said:

My noble friend also drew attention to that in his report, as did the noble Lord, Lord Dearing, and the Chartered Management Institute—and I am indebted to it for its briefing.

Yet, there is lots of management around. I wonder if my noble friend Apprentice Bhattacharyya was among the 6.2 million people who watched “The Apprentice” on television. That is where ruthless trading seems to be the key skill. Of course making money is an important motivator but where that is combined with the desire to create new products and new services, many skills beyond ruthless trading are needed. First, you have to be more competitive, and being more competitive means being more productive. My noble friend told us how, in spite of improvements in recent years, our productivity still lags behind that of other competitor nations. Some of that is due to poor management. My noble friend, in his report, said:

Another recent paper shows that in the services sector better organisation combined with earlier and better introduction of information technology by management explains why some services firms have greater productivity than others—management skills again.

In the UK, small and medium-sized enterprises account for over half of employment, but the high failure rate of these companies is well known, and the

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Association of Business Recovery Professionals has shown that poor management is the main reason for this business failure.

Innovation is identified by the Government as a key element for growth and creating our knowledge economy. But Professor Michael Porter, in his review which stimulated much of this debate, states that innovation will require “changes in management behaviour”.

My point is simple. In all sectors of our economy, manufacturing and services, small and medium-sized enterprises, encouraging innovation and raising productivity, management skills are pivotal to raising our game. Ruthless trading and a Milton Friedman desire for a “get rich” philosophy will not do the job. To borrow a phrase, it may help the few but it will not help the many—and there are many. The Working Futures report indicates that there are 4.6 million managers and senior officials in this country, and the number is growing.

Several noble Lords drew attention to qualifications. The Council for Excellence in Management and Leadership concluded in its report that in the longer term, the proportion of managers with management-related qualifications similar to other occupations will not rise much above 20 per cent. In any occupation, that must be unacceptable.

How do we achieve better management practices? As ever, the answer is the carrot and the stick. The stick is competition. Many researches have shown that competition helps with the rapid exit of poorly managed firms to be replaced by new firms or by well managed firms expanding. That is the best inducement to both greater management effort and the need to learn better management practices quickly. I am calling for a much greater emphasis on management training skills under the proposed Leitch implementation plan that my noble friend told us about—in the proposed commission, in the reformed sector skills councils, in “Train to Gain” and in the awareness programmes of the value of skills. That is how we will raise the competitiveness and the productivity of our economy, and the excellence of our public services, both of which are central to the prosperous economy and society that the Government seek.

1.22 pm

Lord Sawyer: My Lords, I add my congratulations to my noble friend Lord Leitch, both on leading the debate and on his excellent report. I know from our conversations how much time and energy he has put into that work. I know that at times he has even had to sacrifice his hobby of antiquarian book collecting to get on with the report. Given the success and warmth with which his report has been received today, he can probably treat himself this afternoon to an antiquarian book.

It is a first-class report. What I like about it is that it is accessible, understandable and comprehensive. You can read it and it does not turn you off. You can go through the statistics and make sense of them. It is a valuable road map for the future. I welcome it and support its conclusions.

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In particular, I support the emphasis on the demand-led approach. I see the importance of the balance between the state education sector and employers, but I think that we need to recognise the importance of entrepreneurs and employers, who create work, jobs and businesses. They can play a very important role in the skills development agenda. I was sorry to hear the noble Lord, Lord Newby, who is not in his place, sound a little pessimistic about the role of employers. I think that employers have an important role to play and would like to say something about that in the short time available to me.

I think that I know something about the world of work. I started work at 15 and I have been trying to avoid it ever since without success. I am also a signed- up member of the Apprentice Club, so there are at least two of us in the House today—probably many more on these Benches.

I come to the debate from many angles. I still consider myself to be a student and a learner. I think that that is very important for all of us who sit on these Benches and, like all of us, I take on many other roles as employer, chairman, coach—whatever we are called on to do in our capacity as Members of this House. I enjoy thinking about that, coming from the background that I did to become Chancellor of the University of Teesside, because I can see the full range of what can be achieved in skills development. Across that interplay, I see mediocrity but I also see excellence, and we must concentrate on the excellence.

I agree with my noble friend Lord Haskel. I am convinced that the most important factor in developing a skilled workforce is the quality of leadership and management. It genuinely starts at the top. I go further and say that it is not just about management innovating and making profit; it is very much about management being able to develop people’s skills, to communicate with vision and to describe with passion what can be achieved by a skilled workforce. Managements who can do that stand the most chance of success.

I am equally convinced that the quality of work needs to be discussed, because it is crucial. That is crucial, because for employers to make work challenging, exciting, welcoming and rewarding and to truly value people for performing that work is what makes people want to learn, develop and grow. The quality of work and encouraging employees to do that work and be valued by managers, leaders and employers is for me at the heart of all this. Let people get excited about their job, excited about their work and they will be queuing up to learn and to get new skills.

Go to another workplace where that does not happen and people cannot wait to go home, they cannot wait to leave and they are demotivated and disappointed. We have good role models that we should advance. That is what I want to talk about. How do we measure that? It is a hard thing to measure. Investors in People has done a really good job in trying to concentrate on that and get companies to link their business plans with the workforce training and development. The report suggest that we continue to work with Investors in People to take that forward.

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I have been thinking about how we could measure that more rigorously and comprehensively. I think that it must be based on the appraisal of leaders and managers by the workers. That is fundamental. I know that a lot of big businesses do that, but it is a key index of how well a business is doing if the managers and leaders have been appraised by the employees. That is done by the best; it needs championing and extending.

The Sunday Times list of top 100 companies that value employees is a very good index to look at. My noble friend might think about talking to the firm that compiles that index to see how it could link with what we do, how we can get to measure companies that really value their employees. It is about raising aspirations and raising awareness. Show me a company that values its employees and I will show you a company where skills and training are doing well.

That is my contribution. Once you stand up, your time goes in no time. We need concentration on leadership and management; we need to make work rewarding and fulfilling; we need to value people; and we need to try to measure performance. I have a complementary slogan to that of the noble Lord, Lord Hunt: “Who values wins”.

1.28 pm

Lord Ramsbotham: My Lords, I am one of those people who believes that the only natural resource that every nation has in common is its people, and woe betide it if it does not do everything that it can to identify, nurture and develop the talents of its people—all its people—because if it does not and they go to the wall, it is fraught. Earlier this week, I cited a speech made by Sir Winston Churchill in the other place in 1910, in which he talked about the criminal justice system. In it, he said that there is a treasure in the heart of every man, if only you can find it. I believe that finding it is a duty on all of us.

I declare an interest as a member of the advisory and strategy board of the City and Guilds Institute, which is one of the vocational training award-winning bodies in the country. I therefore welcome especially the impassioned comments of the noble Baroness, Lady Morris of Yardley, regarding the status of vocational training; the need for a national language for a national debate, not using merely academic terms; and the remarks of the noble Lord, Lord Dearing, about the attitude to technical training. That national language is needed if we are going to have and take part in the national debate called for by the noble Lord, Lord Hunt of Wirral.

I also agree with the notion of entitlement to the levels of skills mentioned by the noble Lord, Lord Leitch, in his excellent report, which I fully support. I agree with his analysis, and support the diagnosis and targets. However, I have a slight worry about the entitlement to level 3 skills for young people and level 2 skills for adults, because providing funding for youngsters but not for adults resulted in 700,000 fewer adult learning programmes last year than the year before, which cannot be what the noble Lord meant in his report.

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Democratic studies show that the skills shortage that we will face in the years to come can be bridged only in three ways: by attracting migrant labour, by re-skilling the existing workforce, or by attracting more of the currently unemployed. The noble Lord, Lord Low of Dalston, mentioned one group who could be approached; the disabled. Noble Lords will not be surprised that I wish to draw attention to another possible source; those in our prisons. Two years ago, British Leyland discovered that it had a possible skills shortage in its trucks division. The governor of the local prison was approached to see whether he had anyone who might fill that shortage in the future. Very sensibly, he gave an aptitude test to people who lived in Preston. Some people with potential were found, British Leyland sent in people to help to train them, and they came out not only with a job to go to but with potential. When asked about this, the governor explained that it was possible only because they came from Preston and it was therefore worth the while of British Leyland to work with people who would come to them. I mention this because, at the moment, that sort of activity, which all sorts of firms with all sorts of possibilities could repeat to their advantage all over the country, is being prevented by the way in which our prisons are organised. Perhaps when the Minister takes part in meetings to discuss this with other Ministers, he could explain that this sort of activity could be a possibility if prisons were organised in community or regional clusters so that people did not go away from home. It is not difficult or new; it was originally proposed by the noble and learned Lord, Lord Woolf, in his report on the Strangeways riots in 1990.

My two other points are in support of helping prisoners and others to enter the workforce. First, some people suggest that there are now too many qualifications, and that the qualifications system, in which the City and Guilds Institute is involved, is too complex. I suggest that that is not wholly true, because in a truly demand-led economy, there is a need for far more qualifications, not fewer. That need will expand in the future, and we should do nothing to reduce the number of qualifications that might be available. Secondly, I am extremely glad that attention has been drawn to something else that has happened in recent years and which has implications for all those who are looking for employment. At the end of the 1990s, we had one of the most highly regarded careers services in the world. It has gone, and we now have almost no service at all. If we are to maximise the opportunity provided by the report of the noble Lord, Lord Leitch, career information must be available to all those, of all ages, who want either to enter the workforce or to move within it. As I say, I am enormously grateful—I am sure that many people are—for the trouble that the noble Lord, Lord Leitch, has gone to. I simply hope that all the other points made by noble Lords in this debate will enable there to be a national debate to make certain that we maximise the vocational skills inherent in this country.

1.34 pm

Baroness Lockwood: My Lords, I am sure that my noble friend Lord Leitch must feel encouraged by the

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response to his important report this afternoon and by the consensus across the House on all aspects of the problem. I shall focus largely on higher education. Noble Lords may recall that I have a long-standing interest in higher education, which stems from my association with the University of Bradford, where I was chancellor until recently.

The noble Lord, Lord Leitch, recommends some very stretching targets for the higher education sector, not least the target of more than 40 per cent of the 2020 workforce qualified to degree level or above. This will be a big leap from today’s position, where some 29 per cent of the population have reached that standard. I agree with the report that, to achieve this ambitious target, we will need to ensure that our universities work as closely as possible with employers and individuals. The University of Bradford does, and continues to do, just that. Next week, for example, it will open its new microtechnology and nanotechnology unit to add to its already worldwide work on polymer technology. The unit is part of a campus that is fast growing because of recruitment and research successes. The University of Bradford is also top of the league in its access programmes, and second from the top for its graduate employment. These are both very important. Access is particularly so, and I will return to it shortly.

The higher education sector in Yorkshire and the Humber comprises 14 higher education institutions, and has a combined turnover of more than £1 billion a year. As a percentage of the region’s GDP, it is estimated that, directly and indirectly, the sector generates £3 billion, and that nearly 10,000 new jobs will have been created by 2010. About half those new jobs will be in the universities. Co-operative and collaborative working between Yorkshire universities, in all its guises, has changed enormously. Indeed, there has almost been a revolution. This has made it one of the driving forces in the regeneration of the region.

There are several examples of this. First, there is the Graduate Enterprise Scheme, which successfully promotes enterprise and entrepreneurship among the region’s students. Secondly, there is the Knowledge Rich programme, which brings together universities and Yorkshire Forward to facilitate the appropriate expertise for use in business and in developing clusters. Thirdly, there is Yorkshire Forward itself, which was the first RDA to set up the secondment of a senior academic to act as an intermediary between the RDA and higher education institutions and to have regular officer and vice-chancellor meetings. Out of this has come a relationship that has been key to the sector’s economic development and very important for the growing inward investment made by many national and international companies that are now locating their businesses in Yorkshire.

Such activities do not simply happen. Increased funding, as well as enlightened initiatives, has facilitated these developments. As many noble Lords have indicated, further investment is still needed for all sorts of reasons, not just because of our low competitive position with other countries, but also because of our need to bring up our standards to

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those of our competitors. In that sense, widening student participation is essential.

The experience of the University of Bradford, as well as that of Yorkshire Forward, which has a big programme to bring level 2 qualifications up to and above national standards, has indicated that formal approaches are not always sufficient in themselves and that there needs to be much more innovative outreach work, often with bite-size parts and small training programmes in order to widen access to learning. I think that the noble Lord, Lord Bilimoria, said that the more you learn, the more you learn, which is absolutely true. It is also true that the more you do not know, the less you know, and we have to rectify that problem too.

1.40 pm

Lord Rowlands: My Lords, is it not very sad that in 2007 we are still bedevilled by the vocational and academic divide, and still have not established parity of esteem between vocational and academic qualifications and routes? I declare an interest as president of the National Training Federation for Wales and as adviser to a Merthyr charity, Tydfil Training. I have looked at the Leitch report through the eyes of a Welshman. Of course, most of the skills strategy is devolved and now needs to be the strategy of four nations, not just one.

The Welsh labour market is characterised specifically and especially by the preponderance of a large number of SMEs and micro-employers, which presents particular challenges in delivering and engaging employers in skills. The other sad feature of the Welsh labour market is its higher preponderance and higher percentage of economically inactive people of working age, which is much greater than many national figures. To mean something to Wales, any skills agenda will have to address both those issues.

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