WHAT DO WE MEAN BY SKILLS?

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WHAT DO WE MEAN BY SKILLS?
When we refer to skills we consider five broad
areas
Employability skills the foundation skills and
behaviours necessary for people to find and
succeed in work. An important issue for the
NEET- Not in Employment, Education or Training
- agenda. A big issue for employers
General work skills skills that people need to
do their jobs. A big issue when considering
productivity
Up-skilling important for an individuals
increased competency in current and future jobs,
adaptability, personal motivation, commitment and
responding to technology changes or regulation
Re-skilling training part of the workforce to
either help individuals get a job post
redundancy, or a choice by employers to respond
to new business opportunities or challenges eg
the Green Agenda or to deal with economic shocks
Leadership and Management skills skills needed
to manage people and resources in the workplace.
Evidence shows that this is a big issue for
business improvement and capability
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WHY IMPROVE SKILLS?
Skills contribute to a wide range of desirable
outcomes
Economic objectives
Social objectives
Skills
Personal and family well-being
Stronger communities
Greater social mobility
Sustainable Growth
Greater social inclusion
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WHY IMPROVE SKILLS? (2)
They enable people to attain and progress in work

• People with higher level skills are more likely
  to be employed and less likely to be unemployed1

Employed Unemployed
No Qualifications 44 15
Level 2 75 8
Level 4 85 4

• Low skilled adults who improve their numeracy
  skills between ages 21 and 34 are more likely to
  have their own home, savings and less likely to
  be on benefits than those who do not improve
  their skills2

1 Labour Force Survey, 2009 Q4 - Q4 2010 data
will be released in a new Supplementary Table to
the Post-16 Education and Skills Statistical
First Release on 31 January and Q4 2011 data will
be released at the end of March 2 Bynner
Parsons (2006) New Light on Literacy and
Numeracy Results of the Literacy and Numeracy
Assessment in the Age 34 Follow-up of the 1970
Cohort Study. National Research and Development
Centre for adult literacy and numeracy.
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Human side of these problems

• Those with poor skills are 1-
• More likely to be in prison
• More likely to be in debt
• More likely to be unemployed
• More likely to be unwell and have mental health
  problems
• More likely to have a child who cant read at 9
• More likely to be involved with or have to be
  supported by the State
• Are less likely to vote
• Are less likely to own their own homes
• Are less likely to take up a community role such
  as school governor
• Are less likely to hear their child read
• Will never normally earn more 14,000

Those with no qualifications are on average 37ppt
less likely to be in employment than those with HE
1 Centre for Research on the Wider Benefits of
Learning, Research Brief, October 2006
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WHY IMPROVE SKILLS? (3)
We fall behind our key competitors at Level 2 and
above
With 74 of the working age population qualified
to Level 2 and above, the UK is close to the OECD
average (of 73 per cent). This has remained
stable over time - in 2011 we are ranked 19th out
of 33 OECD countries and in 1998 we were ranked
19th out of 29 OECD countries, although only 60
of our working age population was qualified to
that level.
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WHY IMPROVE SKILLS? (4)
At Level 4 and above the UKs relative position
is strong, but we are still below the top
quartile, which may impact on our future
competiveness with emerging economies
With 37 of the working age population qualified
to Level 4 or above, the UK lies above the OECD
average (of 30) and is ranked 9th out of 34
countries. In 1998 we were ranked 12th out of 29
with only 24 qualified to that level (although
this is an improvement due to a change in the
methodology we use in the UK to calculate L4
qualifications, we cannot assume that this is a
genuine improvement).

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WHY IMPROVE SKILLS? (5)

• Skills deliver benefits to individuals, employers
  and the wider economy
• Evidence suggests that skills deliver benefits
  to
• Individuals In the form of higher wages and
  improved employment prospects
• Average hourly wages are 17.53 for those
  qualified to L4, 10.68 for those qualified to
  L2 and 8.88 for those with no qualifications
• Employment rates are 84 for those qualified to
  L4, 68 for those qualified to L2 and 47 for
  those with no qualifications
• Employers In the form of increased profits and
  competitiveness. For example
• NIESR matched-plant studies show how lower levels
  of skills in the UK workforce led to lower output
  per employee
• 77 of employers believe apprenticeships make
  them more competitive 76 say that they provide
  higher overall productivityii
• The Wider Economy For example, firms operating
  in high skill areas tend to have higher
  productivity than firms with a similar skill
  profile, but operating in a low skill areaiii
• Skills accounted for around one fifth of UK Gross
  Value Added (GVA) growth from 1997-2007iv

i Labour Force Survey 2011 Q2 ii Findings
summarised at http//www.apprenticeships.org.uk/Em
ployers/The-benefits.aspx iii Galindo-Rueda
Haskel (2005) Skills, workforce characteristics
and firm-level productivity Evidence from the
matched ABI/Employer Skills Survey iv Groningen
Growth and Development Centre, EU KLEMS
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THE SKILLS OFFER

• Full funding for literacy and numeracy courses
  for all adults aged 19, and first Level 2 and 3
  qualifications for those aged 19 to 24 and the
  unemployed.
• Full funding for 16-18 Apprenticeships
  co-funding for 19 Apprenticeships.
• From 2013, adults aged 24 will be able to access
  loans to fund L3 and above skills.
• Additional support for leadership and management
  skills.
• But the Skills Strategy Skills for Sustainable
  Growth set out a model designed to give business
  more power and responsibility, not just to define
  the vocational skills needs of different sectors,
  but also to develop new ways to meet them, e.g.
  supported by - Growth and Innovation Fund-
  Employer Ownership Pilots, up to 250m over 2
  years of public investment for training and
  Apprenticeships channelled directly to business
  to give employers real purchasing power in the
  skills market.

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Freedoms and flexibility moving to a demand led
system

• Policy rationale
• To move to a more demand-led system, we need to
  free up the system to be more responsive to what
  individuals and employers want.
• Within this system the relationship between
  further education and its direct customers
  (individuals and employers) takes primacy and is
  the key to securing high quality and relevant
  training

• New policy
• No top down targets with colleges and providers
  free to determine the learning offer they provide
• An Innovation Code which enables colleges and
  providers to develop new programmes which meet
  the needs of their communities
• Local Enterprise Partnerships will play an
  important role in linking to local businesses,
  understanding their needs and liaising with
  providers to ensure training is available. More
  detailed advice on vocational training and
  qualifications is available from Sector Skills
  Councils and National Skills Academies
• A City Skills Fund to support effective working
  between colleges, providers and cities
• A simplified FE and Skills System
• Simplifying landscape closing, merging and
  scaling back number of intermediary organisations
• Reducing bureaucracy simpler systems and
  processes
• Removing regulation
• First class advice delivered by the National
  Careers Service is free to all adults to help
  them in their work and life

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Apprenticeships

• Apprenticeships
• Apprenticeships help employers improve
  productivity and give them a competitive edge,
  enabling them to compete globally. Employers
  recoup their investment within two to three years
  in most cases.
• Apprenticeships are
• paid jobs incorporating on off the job training
  and leading to nationally recognised
  qualifications
• open to all suitably qualified people over the
  age of 16
• at 3 levels Intermediate - Level 2, Advanced
  (for Supervisors) - L3, and Higher (for Managers)
  - L4 5
• available in over 200 occupations.
• HMG subsidies are full funding of the off-the-job
  training at 16-18 50 at 19 40 at 25 (...
  with 25 less for large employers).
• Apprenticeship Frameworks, developed by Sector
  Skills Councils and employers, describe the
  content of different apprenticeships
• Employers can go to the National Apprenticeship
  Service (NAS) for further information about
  recruiting an Apprentice on 08000 150 600 or
  www.apprenticeships.org.uk
• Source Skills Investment Statement.

100,000 employers offer Apprenticeships in more
than 160,00 locations and there are over 1,200
job roles available to apprentices
Government funding for Apprenticeships in 2011-12
is 1.4bn, and this has been increased in 2012-13
to over 1.bn, which is sufficient to train
444,000 new apprentices
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Apprenticeships have grown strongly despite
economic challenges and significant programme
changes
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Apprenticeships
The programme could support up to 2.4 million 19
Apprenticeships over the spending review

• Our main priorities are to
• Focus the programme more sharply where
  Apprenticeships bring the greatest returns and
  wider benefits, including targeting younger
  adults, new employees, higher level
  qualifications and particular sectors where
  investment will make the greatest impact.
• Increase the number of 16-24 year old
  apprentices, including by encouraging small
  employers not yet engaged with the programme to
  take on new young apprentices. Partly through
  the Youth Contract, we will provide up to 40,000
  incentive payments.
• Significantly extend Higher Apprenticeships
  provision, including with the launch of a further
  opportunity for organisations to bid for funding.
• Take strong action to drive up standards and
  quality, including withdrawing funding from
  providers that do not meet the high standards
  that learners and employers demand and ensuring
  that providers support apprentices to achieve
  Level 2 in English and Maths wherever possible.
  A major employer-led review of apprenticeships
  standards will consider how the programme should
  adapt to meet evolving employer and learner
  needs.
• Make it easier for employers to take on an
  apprentice, by reducing bureaucracy, streamlining
  and speeding up processes and removing all
  additional health and safety requirements on
  employers. We will ensure the National
  Apprenticeship Service better supports the needs
  of small employers through more targeted advice
  and guidance.

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ACCESSING THE OFFER
Employers can access enhanced support and
improved integrated information on skills from
the Business Link website - http//www.businesslin
k.gov.uk
Business Link
Employers may wish to access help with how to
invest in skills and training, by contacting
their local FE college or training provider
direct.
FE Colleges
Employers can find details of training providers
and compare qualification success rates, learner
destinations and learner and employer
satisfaction ratings, through the Skills Funding
Agencys FE Choices site - http//FEChoices.skills
fundingagency.bis.gov.uk 
FE Choices
Employers may be able to access skills support
through projects run by their Sector Skills
Council under the Growth Innovation Fund or the
Employer Investment Fund. UKCES works with SSCs
to provide leadership to drive up employer
investment in and better use of skills. Groups of
employers may also be able to bid for funding to
deliver skills training through the Employer
Ownership Pilots.
SSCs/other routes
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ISSUES FOR SMEs
Pathfinder idea emerged from a workshop in
December to look at the skills issues facing SMEs
- the environment they operate in key drivers
factors that influence investment decisions how
this applies to Skills. Issues- - Skills
training not always offered by FE sector in a way
that meets SMEs needs or they can access (we
dont fund company training) - Many SMEs favour
on the job training rather than formalised
education / qualifications - SMEs not always able
to understand/articulate their needs - They lack
knowledge about what support they can access or
have difficulties navigating the skills
system - Lack of volume / purchasing power means
they are not always an attractive customer for
training providers. - SMEs get information from a
range of sources local level messaging/case
studies work best - Good examples of SMEs in
niche sectors collectively influencing design of
qualifications at local level - Leadership and
Management capability in SMEs a key factor in
determining ability to overcome business hurdles
and capacity for growth but less likely than
larger companies to invest in leadership and
management training.