"To fill the next generation of jobs, we need to invest in the skills of those adults already in the workforce… We need millions more people qualified at Level 2 and at Level 3 - the equivalent of A levels - to ensure sustainable economic growth"
QEII Conference Centre, London
18 June 2008
CHECK AGAINST DELIVERY
Good morning.
When I was back at the Tottenham home where I grew up this Christmas - not far from where I live today - I was struck by two framed certificates on my mum's wall.
The first certificate was my mum's: a qualification in secretarial business administration. When my father left, my mother was a home help and could not have supported the five of us without the encouragement and support of her Union. The old NUPE helped her to learn and apply new skills, get a qualification and increase her earning power.
The other was my GCSE certificate. Growing up where I did in the 1980s, getting those grades was the exception rather than the rule. And in no small part, it's thanks to my mother, whose dedication and commitment to bettering herself - along with support from my teachers, my Church, and the people I worked for - that I've got where I am today.
It's these experiences that I bring to the job of Minister for Skills, and which I see reflected in the work of DIUS. In supporting the network of 20,500 Union Learning Reps in factories and offices across the country, who encourage their friends and colleagues as my mother was. In helping more than 1.76 million adults achieve a first Skills for Life qualification since 2001. By investing £2.3billion to upgrade college buildings and facilities.
I've met parents experiencing a new lease of life because they can now read to their children and play a more active role in their schooling. I've spoken to mature students who've charted their own progress from passing GCSEs to graduating from university. This is an agenda strong on social justice - an agenda transforming families and communities.
But we're now embarking on a new chapter in the history of FE and skills, as globalisation poses a different set of challenges.
Not that long ago, this country could survive - even prosper - with a low skills base. For school-leavers who could neither read nor write - let alone possess formal qualifications - jobs were available in the mines, the steel mills, the shipyards.
Those jobs are shifting inexorably to emerging markets, while Britain's future is as a knowledge economy - creating high-value products and offering innovative services. Low and unskilled work won't disappear, of course, but our competitiveness depends on a sophisticated workforce
who are world-leaders in finance & IT, in engineering & the creative industries.
The skills dimension to this new reality requires us to raise our game, and to operate differently. To fill the next generation of jobs, we need to invest in the skills of those adults already in the workforce; the seven million who cannot add up, the near six million who don't understand the instructions on a packet of aspirin, and the 8.5 million in the workforce not at Level 2 - the equivalent of five good GCSEs. We need millions more people qualified at Level 2 and at Level 3 - the equivalent of A levels - to ensure sustainable economic growth.
Developing a closer relationship with the nation's employers is vital. Sandy Leitch recognised the importance of a skills system shaped around the needs of its customers: employers and individual learners. Indeed, some 30 years earlier, Jim Callaghan noted in his Ruskin College speech "complaints from industry that new recruits from the schools sometimes do not have the basic tools to do the job that is required."
For a considerable period, those complaints went largely unheeded, and I'm pleased that this Government has finally addressed this issue: through companies sponsoring academy and trust schools; the business community involved in shaping the new diplomas; experienced professionals acting as role models to young people through the Science and Engineering Ambassadors programme.
In fact, the principle of a "demand-led" system has underpinned our skills policies for the past decade - and its application is evident at every level.
The new UK Commission for Employment and Skills is providing real employer leadership and challenge at the heart of system. Sector Skills Councils are raising demand for skills from employers and designing relevant qualifications. And there are now nine National Skills Academies leading the delivery of high-quality, responsive skills training for their respective sectors.
But the front line of demand-led skills - the key to delivering the qualified workforce our country needs in this age of global competition - is Train to Gain.
Train to Gain is the primary vehicle through which employers can invest in the productivity and profitability of their businesses by upskilling their workforce. It is also the main vehicle through which we in Government can ensure that adults in work gain the skills they need now and in the future.
Now, Train to Gain might not be relevant for every company. British employers already spend more than £38 billion a year on training their staff. Many are taking the right steps in light of the global skills race. Some, like Network Rail and McDonalds, have worked with us to have their training programmes nationally accredited.
But a full one-third of employers don't spend a single penny, and they are at risk of losing out - as are the eight million employees who went without any training last year. As a government, we must encourage these firms act afresh.
"Train to gain" is a simple equation: develop the skills of your employees and drive your business forwards.
More than 100 staff at Cityclean's refuse and recycling services in Brighton have gained English language and IT skills - and won an award from NIACE as a result.
Sharpe Systems, a IT company from Derbyshire, has seen an 80 per cent growth in business.
Regency Lodge, an independent psychiatric hospital in Blackpool, has seen a four-fold increase in patient admissions, staff retention levels at an all-time high and exemption from annual inspections by the Healthcare Commission.
But the most immediate benefit of Train to Gain comes in the shape of a skills broker: an expert providing impartial, quality-assured advice to help companies identify their skills needs at every level, and then source appropriate training and qualifications.
Employer satisfaction with the brokerage service has been high, at 80 per cent. It has made a real difference for those "hard to reach" employers with no track record of investing in skills.
And since Train to Gain began in 2006, we have increased the range of support that employers can access through skills brokers. In April, we introduced a specialist service for employers with between 1,000 and 5,000 staff. And for SMEs with between 10 and 250 employees, there is help to develop their leadership and management skills - with investment increasing from £4m to £30m. And from next April, employers will be able to access the full range of publicly-funded business support through a single point of contact: Business Link.
We know that for employers - and for individuals - the real economic return on investment in skills is greater at Level 3 and beyond. But lower-level skills are essential nonetheless, which is why Government covers the full cost of Skills for Life and first full Level 2 training through Train to Gain; neither employers nor their staff pay a penny. And for firms with less than 50 employees, funding is available to help them cover the wage costs of releasing employees to train.
If employer buy-in is essential to the success of Train to Gain, so too is buy-in from providers.
Without question, the FE sector has improved dramatically over the past decade. In 1997, there was no dedicated funding stream for college building. Many had fallen into disrepair; few could even claim to offer state-of-the-art facilities. But since then, public investment has increased by more than 50 per cent in real terms. College success rates have exceeded targets.
Now, for many providers, embracing the philosophy that underpins Train to Gain means adopting different ways of organising and delivering their services. Like Leicester College, for example, which has provided food hygiene courses at a bakery during the night shift and English language lessons in a care home on Christmas Day - fitting in with the operations of different businesses in different ways.
The Government is supporting providers to align their business models with Train to Gain, and helping them move away from traditional classroom-based teaching methods towards more flexible, work-based delivery.
Train to Gain is here to stay, and all the evidence suggests that we have a strong platform to build on. Since national roll-out began in April 2006, Train to Gain has engaged more than 92,000 employers and enabled more than 211,000 people to gain qualifications.
This is much more than a skills assessment service. Thanks to effective training, 43 per cent of learners report that they've received a subsequent pay rise, 30 per cent have been promoted and 70 per cent plan to stay with their current employer.
I recognise that Train to Gain is still relatively new. We are learning from experience and improving the offer.
We're developing "sector compacts" with employers in key sectors of our economy that tailor Train to Gain to their specific circumstances. The first of these compacts was signed last month with the Sector Skills Council for science engineering and manufacturing. We'll be announcing further compacts in the coming months.
We're reducing the bureaucracy surrounding contracting and procurement so that successful providers can deliver more.
And, today, I can announce that we are increasing funding rates by an additional nine per cent over three years - over and above the increase announced last autumn. This reflects the importance of Train to Gain and our determination that providers have the capacity and incentive to offer high-quality training.
However, the programme is currently fulfilling all demand coming forward from employers. If we are to build the country's skills base along the lines I've outlined today, we need many more employers to recognise the importance of this agenda and work with us to train their staff.
By 2010/11 we will invest over £1 billion per year through Train to Gain - providing the employer demand is there. Employers can, of course, choose not to train their staff, even though it's inimical to their own interests. But that decision is also damaging for their staff - who receive neither the benefit of private or state investment in their skills.
So there's a challenge here for all of us - for employers and providers, for trade unions and for Government. At stake is both our economic competitiveness and our social well-being - the prospect of a country where all people get to share in national prosperity by training throughout their working lives. Which is why we intend to empower workers to request time to train - to create a groundswell of demand for skills.
I've every confidence that, together, we can build a world-class skills base for British businesses and public services, that we can unlock talent in all parts of our country.
Thanks for listening.
