The skills agenda in a post-Leitch world

The Leitch Review represents a defining landmark in the development of skills policy. Commissioned by the now prime minister, Gordon Brown, to assess the UK’s skill needs to 2020 and to recommend the action we need to take to help us get there, the Leitch Review proposed a new skills ambition to make the UK one of the most highly skilled nations on the planet.

That ambition, across all skill levels, is equivalent to more than every second adult acquiring a higher-level qualification than they currently possess.

Leitch placed skills at the heart of economic policy and the drive to increase employment, productivity, economic performance and, ultimately, prosperity for all. It focuses on meeting the needs of a changing economy it is employer led and workforce driven and its mantra is ‘economically valuable skills’ – promoting the acquisition of skills that are relevant and valuable to individuals, employers and the economy. It is already widely influential in other countries but, more importantly, it was implemented virtually in full on Gordon Brown becoming prime minister. So what has happened since?

World Class Skills

World Class Skills, the Leitch implementation plan for England, was published in the summer. It strengthened both strategic and operational employer ‘leadership’ of the skills system, establishing the new UK Commission for Employment and Skills and the reform, re-licensing and empowerment of Sector Skills Councils (SSCs). It emphasised demand-led funding with a substantial focus on Train to Gain. It introduced measures to stimulate more responsive public provision proposed the establishment of an adult careers service introduced the ‘Skills Pledge’ encouraged higher education to work more closely with employers and sanctioned substantial qualifications reform. It also, critically, agreed a range of measures to closely integrate employment and skill services.

The machinery of the government also changed, with a new Department of Innovation, Universities and Skills, charged with following through the Leitch agenda. A new ministerial team was put in place (including John Denham as secretary of state and David Lammy as skills minister). Subsequently, Wales is about to launch its own skills strategy, and Scotland has already done so. Northern Ireland will review its approach in the spring.

In the autumn, the government launched its Comprehensive Spending Review (for 2008-11), together with the new Public Service Agreement (PSA) targets and a set of associated delivery agreements for each. PSA2 is often seen as the ‘Leitch’ agenda: “to improve the skills of the population on the way to ensuring a world-class skills base by 2020”, and it certainly commits the government to challenging milestones right across the Leitch ‘ambition’, from the basic skills to Level 4 and above.

But the big thing is that, in many ways, skills ‘percolate’ through many of the PSAs, from productivity to migration, from regional growth to young people, from employment opportunity to reduced disparities in educational attainment. Skills are everywhere, as a key mechanism in creating and accessing prosperity.

And no-one can fail to notice the emphasis that the government is placing on the role of skills in reducing inequality, promoting social mobility and securing social justice, as well as its role in economic development and business competitiveness.

Skills development

In November, the government announced, through its priorities for the Learning and Skills Council, a substantial increase in funding for adult skills. This includes a major expansion of apprenticeships to 130,000 a year by the end of 2010, and a doubling of Train to Gain funding – enough for nearly 400,000 participants by 2010-11. It also includes a right to free basic skills training and to a first full Level 2, with enough funding for 3.6 million and 800,000 learners respectively. It also provides for an additional 500,000 places at Level 3 (a 150% increase from 2007).

The government also set out proposals in November to embed skills development in a reformed welfare-to-work programme, to increase employability and build real sustainability and progression into peoples’ moves from welfare into work. Here we need to ensure that ‘work pays’ and that we are able to go beyond job entry to job retention and progression. The new adult ‘advancement’ advice and support service will help people move on from low-paid jobs to better-paid jobs, as well as moving from welfare into work in the first place.

The UK Commission for Employment and Skills (UKCES) is to be a key element in the post-Leitch landscape. It is charged with advising ministers on strategy, targets and policies to raise skill levels and increase employment to assess UK progress towards achieving the Leitch 2020 ambition promote employer investment in skills and re-license and performance manage the SSCs. Sir Mike Rake, chairman of BT, was appointed chair, and Chris Humphries, director-general of City and Guilds, chief executive.

The commissioners have been appointed, and UKCES will open for business on 1 April.

What are the key challenges that now face the skills system in seeking to achieve World Class Skills and secure the Leitch ambition? I believe that most challenges are opportunities as well, with the real outcome depending on how well we respond. I’m reminded that the Chinese character for ‘crisis’ actually contains two characters, one representing danger or threat, the other representing opportunity. It is up to us all to work together proactively to achieve our collective ambition.

So what are the key issues?

First, it is absolutely essential to secure effective employer leadership – both strategically, and in terms of delivery. Employers have secured the pivotal role in the new system, both through the UKCES and through SSCs, allowing the system to meet their needs more effectively. They will need to exercise this power and do so in a spirit of partnership and common endeavour with other stakeholders.

More generally, they will need to lead from the front and by example, through their collective organisations, as well as individual employers in respect of, for example, the Skills Pledge and Train to Gain. But I hope employers will also seek to mobilise support, through their networks and supply chains, not only for the World Class Skills Agenda itself, but in making and communicating the business case for skills, so as to drive up employer commitment to investing in skills.

In the end, the demand for skills is a derived demand – we get the skills the economy ‘deserves’. So encouraging more businesses to move up the value chain, to a more ‘skill intensive’ economic development trajectory, can play a vital role in securing the Leitch ambition.

Second, and connected, is the issue of employer responsiveness – their reaction to and take-up of the various policy instruments and offers: the pledge, Train to Gain, reformed qualifications, public provision, and brokerage services.

This is especially true of ‘hard to reach’ employers – smaller employers and those that have, in the past, tended to avoid government initiatives/assistance, for whatever reason. It is vital that the relevant organisations reach out to those parts of the economy that Heineken reaches, through brokerage, the SSCs and directly, through colleges, universities and private sector training providers.

How will behaviour change?

Third, there is the issue of provider responsiveness: how well will colleges, universities and other training providers adapt to the new policy and funding regime? Will they embrace employer demand-led funding, innovate and engage with employers? Many do already, but will more do so, more often and more systematically?

Finally, and perhaps most important of all, how will individuals’ behaviour change? Can we really persuade millions more people to invest in skills? How do we go about influencing their behaviour?

Of course, the skills campaign ‘Our Future. It’s in our Hands’ is helpful, but we need to go much further if we are to challenge and inspire many more people and companies to upskill. And upskill they must, or they will be let down. There is increasingly nowhere to hide for low-skill companies, workers or communities.

In all of this, however, we must keep our eyes on what is at stake and the prize that we can win if we succeed. Achieving the Leitch ambition is probably worth, at least, a cool £80bn – a sum equivalent to the total annual public spend on education from cradle to grave, as well as the value of a 5p in the pound of the income tax reduction. It would be likely to generate an increase in productivity worth £1,800 per worker, and around 200,000 jobs. A prize worth winning a challenge worth meeting.

It is now up to employers, government, providers and the people of the UK to rise to the challenge. The UK Commission for Employment and Skills will be watching the progress with interest.

Professor Mike Campbell OBE is the new research and policy director with the UKCES, a post he takes up in April 2008. He specialises in skills and employment issues and has undertaken work for the European Commission, the OECD, the World Bank, and the government.

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