Where next? An independent perspective on the role of government in workforce development

1. Where next? An independent perspective on the role of government in workforce development James Kewin Managing Director, CFE UVAC Annual Conference, 11th November 2010

2. Where to begin?

3. Statute of Artificers, 1563 • Growing concern at the number of masterless men, increasing vagabondage, and escalating crime • Regulated supply and conduct of labour, and provided legal basis for vocational training until the 19th century • Transferred to the state functions previously held by guilds

4. Industrial Revolutions • Growing concern that the workforce was of a poor standard compared to other nations – skills gaps and shortages • Associated British Chambers of Commerce: it is the duty of the state to see that training is provided for working people which will enable them to work • Technical Instruction Act 1889: empowered Local Authorities to establish Technical Colleges

5. Maggie, Maggie, Maggie • Government interventions focused primarily on reducing unemployment • But employers continued to report significant skills gaps and shortages in the workforce • Response was competence-based qualifications and ‘training’ initiatives focused at lower levels • But early pilots of university level work based learning did begin soon after

6. Call me Tony • Increased role for government with flurry of initiatives tied to centrally agreed targets • Focus was on increasing lower level qualifications • Initially had little to say about university level work based learning or skills beyond Level 3 • We then embarked on a journey...

7. The journey from Sandy to Mandy

8. The golden years? “The policy context, exemplified by Leitch, for the development of work-based learning has never been more favourable” Garnett and Young 2008 • Finally an acknowledgement that work-based learning does not end at Level 3 • Considerable investment made in HE infrastructure

9. A journey characterised by... • Increased attention focused on ‘employer-led’ workforce development and ‘economically valuable skills’ • Employer in the driving seat • Success measured through progress in international qualification league tables • Qualification targets used as measures of success: 40%, 50%, 75%

10. Policy assumptions and lessons learned

11. Policy assumptions (of old?) Increased skills = increased productivity Improving supply of skills = increased demand for skills Government must play an active role in ‘shaping’ the market for skills

12. Policy assumptions (of old?) Increased skills = increased productivity Improving supply of skills = increased demand for skills Government must play an active role in ‘shaping’ the market for skills • Leitch Review: whereas skills were once a key lever for prosperity and fairness, they are now the key driver • HE at Work: productivity is 30% higher if all the workforce has a degree than if none do • Higher Ambitions: skills underwrite this country’s competitive advantages

13. Policy assumptions (of old?) Increased skills = increased productivity Improving supply of skills = increased demand for skills Government must play an active role in ‘shaping’ the market for skills • Alternative perspectives • Macro level: skills and investment, innovation, enterprise, competition matter • Reskilling can matter as much as upskilling • Skills utilisation is as important as skills acquisition • Conflating skills with qualifications means you can hit the target but miss the point!

14. Policy assumptions (of old?) Increased skills = increased productivity Improving supply of skills = increased demand for skills Government must play an active role in ‘shaping’ the market for skills • If only higher level skills provision was: • Cheaper! • Easier to find! • More demand-led! • Delivered more responsively! • ...more employers would be engaged • ...so universities and colleges must raise their game

15. Policy assumptions (of old?) Increased skills = increased productivity Improving supply of skills = increased demand for skills Government must play an active role in ‘shaping’ the market for skills • Alternative perspectives • There is work to be done, but universities and colleges are actually big players in workforce development • The decision not to invest in skills is often a perfectly rational, strategic one • Stimulating the demand for skills involves much more than banging the skills drum

16. Policy assumptions (of old?) Increased skills = increased productivity Improving supply of skills = increased demand for skills Government must play an active role in ‘shaping’ the market for skills • Example from Higher Ambitions: • Where demand-led pressures from employers and students do not stimulate the provision of important skills in a timely and appropriate way, funding levers will be used to ensure supply can meet demand

17. Policy assumptions (of old?) Increased skills = increased productivity Improving supply of skills = increased demand for skills Government must play an active role in ‘shaping’ the market for skills • Alternative perspectives • If there is a market, the product may not always be formal qualifications • Command and control can be counter productive – learn from the Train to Gain experience • Universities and colleges may be best placed to understand the current and future needs of the workforce • The I in LMI should be intelligence rather than information

18. “If the goal is not only a fully trained workforce, which is only a snapshot in a film, but a better educated society, which is the film itself, then more mature engagement and less ad hoc regulation...is required.” Rudi Bogni

19. Where next?

20. The world outside has changed... • Recession and economic downturn • Rise in unemployment • Public spending cuts • A new Coalition Government • Proposed bonfire of the quangos • Browne Review

21. ...and will continue to change • Skills for Sustainable Growth: skills strategy published this month • HE White Paper responding to the Browne Review • Impact of CSR will start to kick in

22. But old habits die hard • FE = skills, training, vocational, apprenticeships • HE = 18-21, full time, academic, campus-based • Some signs of change and rhetoric encouraging (e.g. progression, HE in FE) but new government falls into some of the old traps...

23. Higher level workforce development continues to fall between two stools • Skills for Sustainable Growth: HE mentioned only as desirable destination for apprentices; as with Time to Train, no HE stakeholders consulted • The ‘skills’ system continues to be viewed primarily through a ‘traditional’ FE lens and focuses on training rather than learning

24. Higher level workforce development continues to fall between two stools • Additional £14 million for employer co-funded ASNs committed by previous government • But little to say about higher level workforce development • Swamped by coverage devoted to traditional undergraduate provision – workforce development does not sell newspapers! • University: “do they know we exist or are they just not sure what to do with us?”

25. Views on the Leitch settlement • Gove: The dangerous preoccupation with quantity over quality was most evident in the response to the Leitch Review • Hayes: Leitch was the right diagnosis but the wrong cure • Willetts: Leitch was over-rated by the government...the emphasis is on pieces of paper rather than the necessary skills

26. Some broad themes are emerging • Shifting burden of funding from taxpayer to employer and individual • Less emphasis on targets • Government intervention to support key subjects (particularly STEM) and skills in key sectors • Recognition of part-time students

27. Two cheers for part time students? • The lack of support for part time study makes it much more difficult for this country to catch up with other countries on the skill levels of the existing workforce (Browne) • PT learners offered same upfront support for costs of learning as FT • But how many work-based learners are less than one third FTE (and therefore may not be eligible)?

28. Whose priority? • Public funding withdrawn from non-priority subjects • Government plays a greater role in determining what is funded • How many work-based learners are in non-priority areas?

29. ‘I’m afraid to tell you there is no money left’ • Plans to reintroduce funding for ELQs? • Plans for employer co-funding? “Taxpayers should not be involved in subsidising employers by paying for workplace activity that includes large amounts of firm-specific training” Alison Wolf

30. Evaluation of HEFCE’s Workforce Development Programme

31. Evaluation of HEFCE’s Workforce Development Programme • To inform HEFCE policy development and to inform its advice to Government • To inform further developments in employer and employee focused provision across higher education • To provide accountability for the use of public funds and to help HEFCE deliver value for money for any future funding investment, should this become available

32. Evaluation of HEFCE’s Workforce Development Programme • CFE/KSA appointed in November 2010 • Evaluation begins this month and reports in July 2011 • An opportunity to inform future interventions • We will be in touch soon, please get involved!

33. Thank you James Kewin Managing Director James.Kewin@cfe.org.uk 0116 229 3300 www.cfe.org.uk