Rt. Hon. Richard Caborn - Former Minister for Trade (Jul 1999 - Jun 2000)

Steel Industry National Training Organisation (NTO) Conference on Careers in the Steel Industry

SKILLS AND COMPETITIVENESS

I would like to thank the Steel Industry NTO for their kind invitation to speak to you today.

Coming from Sheffield I have a long association with the steel industry. I know that it can provide a rewarding and demanding career but is that message getting over to school leavers and graduates? Do they still see an old fashioned industry with no real future in today's dot.com world.

If they do then we need to establish the industry's credentials with these young people. We need to put them right now.

The industry is modern, competitive and lean.

After 20 years of major rationalisation, restructuring and productivity improvements, the UK steel industry is one of the most efficient and cleanest steel industries in the world.

Productivity per employee has improved nearly five fold in the past twenty years. That is 10% a year!

70% of steel qualities available today have been developed in the last 10 years to meet the increasing demands for stronger and lighter materials.

Steel's greatest contribution to improving the environment is as a recycler. Almost 40% of steel produced in the UK is made from recycled material. And the industry is as much at the heart of the knowledge driven economy as relatively new industries linked to information and communications.

As for all industries, the challenge is not about physical assets or even about technology, but about people.

So what is Government's role in all this? First we must provide business with people whose education has equipped them with the essential literacy, numeracy and IT skills on which to build. This is fundamental and education is the Government's top priority. We should all welcome the extra £1 billion for education announced in the recent Budget. And we are getting real results. The latest results for English and Maths for 11 year olds are the best ever. We are giving our children the skills on which they can launch their careers.

But we need further change. The Government is already investing heavily in our future skills base. The Department for Education and Employment announced last summer changes to the post 16 education and training system. Changes which will improve the quality of training and deliver the skills that people and businesses need to succeed. The centre piece of these new arrangements is the creation of the Learning and Skills Council which will have sub-regional outlets to ensure local needs are met. It will be a customer focused organisation which will plan and fund learning which meets the needs of individual, businesses and communities. £50 million saving from the current system will be ploughed back into front-line learning provision. The Council itself will have a budget of around £6 billion and be responsible for almost 6 million learners.

But the reality is that changes we make now will take time to have an effect and we can't wait.

Upskilling our workforce is the biggest challenge facing business. Learning in the workplace builds on the knowledge and experience gained through schooling. It is the only way to adequately refine the skills which people need in their work.

Training must be at the heart of business and at the heart of Government. We can only compete successfully against the best in the world if we create an economy based on learning, skills, innovation and enterprise.

Of course businesses already invest significant amounts in training. There is some encouraging evidence that the incidence of training has increased in recent decades. Investment in the UK in skills compares well with our international competitors. It would be easy to say that the level must be about right. But if we continue to invest in skills at this rate we will not close this skills gap. And it has to be closed if our businesses are to thrive. We have a long way to go on this - almost one in six employers believe that their employees have insufficient skills. Almost half feel that their younger employees lack the skills essential to meet business needs and yet - less than four in ten employees receive off-the-job training; a third of employees say they have never been offered training by their current employer; and the average number of training days per employee actually fell from five in 1996 to three in 1998.

Investment in training tends to focus on those who already have a high level of skills. This must be cause for concern. While we cannot expect all individuals to receive exactly the same amounts of training each year, neither can we allow people who could potentially benefit most from training to repeatedly miss out.

We need a step change in our approach to workforce development. We don't have enough people with the right skills to meet our needs now. But where are they going to come from? We want new people to come into the industry, and that is the main purpose of today, but we must also develop the people we have already. We must also convince people that once they have come into the industry we will continue to develop them. Developing the skills today for the challenges of tomorrow is an absolute must.

A number of our most successful companies are rising to this challenge for instance setting up employee development schemes. Some of the biggest are establishing corporate universities. DTI is working with DfEE and other partners to produce a booklet called "The Future of Corporate Learning" to examine how corporate universities are developing in the UK and how we can take this forward.

The government has supported the development of the People Skills Scoreboard - a benchmarking tool, developed by DTI and DfEE to measure a company's investment in its workforce. We piloted it in the engineering industry, and now the Steel Industry NTO has recently completed it for the second time. It is now being spread to some 20 other sectors. This tool gives businesses of all sizes a benchmark against which they can measure their investment in training.

But this is not just a task for government. Employers and employees across all sectors also have a significant role to play in improving the climate of employment relations in the UK. Partnership involves helping companies to help themselves, to become more flexible and competitive by harnessing the creative energies of all their employees - ultimately to increase profitability and meet the challenge of the knowledge driven economy.

As some of you may know, the Government launched the Partnership Fund last May. Over the next four years, £5 million will be made available in a series of calls to support projects at the individual workplace to foster partnership, and projects which enable successful partnerships to share their experience with others.

The first round of applications for funding has now been assessed and the winners were announced on 13 March. Thirty-six projects have been recommended for funding worth a total £1.2 million, which the applicants will be matching with at least an equal amount. Amongst the successful bids was one from Corus and the Iron and Steel Trades Confederation. The "Steel Learning Partnership Project" will run four workshops aimed at developing lifelong learning strategies. The project develops partnership by involving in the seminars managers, union representatives and employees. I congratulate the industry on this commitment to partnership.

When the second round of the Partnership Fund is launched we will once again be looking for proposals from the widest possible range of bodies - companies, employer federations, trade unions, trade associations, public sector bodies and SMEs.

I also want to see all our small firms rise to this skills challenge. Collaboration between businesses will be the key to this.

This is why we have launched "Learning through Business Networks," a best practice guide to promote the spread of learning throughout the full range of business contacts. The case studies we published demonstrate the benefits of learning in business and show the wide range of opportunities for businesses to collaborate to gain benefits for all.

The local arms of the Learning and Skills Council and the Small Business Service franchises will work together to ensure that between them we achieve a step change in our approach to support for workforce development.

It is important that we give management skills greater emphasis. They are the key to successful development of new companies, and effective growth of larger ones. We must recognise that management skills are part of workforce development: good management is essential throughout a business if it is to realise its goals and achieve its full potential.

Management skills are an important determinant of this. After all 99% of UK companies employ managers yet during 1998 over a third failed to provide any off-the-job management training. We are taking steps to tackle weaknesses in management.

We have supported the establishment of the Council for Excellence in Management and Leadership, under the chairmanship of Sir Antony Cleaver. The Council will work with all our management organisations to develop a national management development strategy.

The Steel Industry NTO has also been active in this area with financial support from my Department. The Steel Industry Managers in the 21st Century initiative is a three project which reaches fruition this year. The project is addressing the development of management skills in the industry. It is drawing on best practice from other industries to produce a bespoke management tool which will create a framework for management development - but it will be a framework which is flexible enough to meet the specific requirements of individual companies. We look forward to the outcome of this project later in the year.

By now I am expecting you to say stop. How can we cope with all these initiatives, worthy as they are, and I have not mentioned them all. It's all too confusing. We have responded to such calls by developing, through the internet, what we call "A Great Place to Work?" . It is one of the ways we are helping businesses make sense of the mass of information out there. The website brings together information on people management and development practices. It uses case studies and signposts businesses to further sources of help and advice. It will continue to evolve over time with the addition of new case studies examples. So if you if you have a good case study then please send it to my Department.

New technology is also changing the nature of training. The use of the internet for training - e learning - lets people learn at their own pace, in a place that suits them.

The Government is backing the innovative use of new information technology by the University for Industry - taking forward the revolution in the way that people learn.

Making use of new technologies, the University for Industry will be able to deliver the right learning package to employees both in and out of the workplace. This type of flexible delivery reduces lost production time and take out of training such issues as time away from the workplace and travel costs. Using information technology the University for Industry will give UK business access to what will be on the largest learning networks in Europe.

The messages I am giving you today are also echoing around Europe. One of the outcomes of the Lisbon Summit is the commitment to improving employability and reducing the skills gaps which is exactly what we are trying to do in the UK.

NTOs

Looking now at NTOs. 77 NTOs have been recognised and cover 94% of the workforce. A workforce in which employers invest over £15 billion each year on skills development. It is because NTOs are driven and resourced by their employers that they are well placed to provide the "voice of the employers" and push forward the skills agenda throughout the UK. They have a pivotal role to play.

At national level NTOs will take the lead in galvanising action on learning and skills in their sector, identifying current and future learning and skills needs. The Steel Industry NTO was one of the first NTOs to be formally recognised by the Secretary of State for Education and Employment in July 1997.

Today's high-tech and globally competitive steel industry has been massively restructured and is now very different from the steel industry of the past. It employs a lot less people and have fewer management layers, which means that the young people it recruits need to be better than ever before.

I know that the Steel Industry NTO is addressing these issues on a range of levels, from producing curriculum support packs for teachers to use in at primary and secondary level, to structured training programmes for apprentices and graduates. There are real opportunities in this sector for young people to rise to the top. But I believe there is a lot more to do to raise the profile of these opportunities and to promote careers in the industry and I hope today's conference will be a step towards that aim.

I would encourage you today to ask questions, to challenge your own perceptions of this industry and to be a voice for careers in this dynamic and modern sector of our economy.

Other speeches by Rt. Hon. Richard Caborn - Former Minister for Trade (Jul 1999 - Jun 2000)

(the following are available from the archive)
• "Can RDAs in partnership regenerate the English regions?" (21/03/01)
• Southern Manufacturing 2001 (28/02/01)
• Launch of the Invest in Britian Bureau Annual Review (05/07/00)