Cheat sheet - Leitch Skills Review (2006)

As ever, I'd suggest reading the entire executive summary of the skills review, even if not the entire document as there are almost 160 pages! A lot of content throughout, and interesting to read in the light of the recent National Skills Strategy announced only a few weeks ago.

'Learner accounts' and more information for employers, as well as those currently employed, are amongst the initiatives that may ring familiar. Published a year before the Freud Report, looking at welfare to work as a whole and changing the focus and landscape of the industry, this review should definitely be read in its context.

The challenge

As emerging economies start to deliver high skills at moderate cost [and technological advances reduce the number of staff needed], the OECD countries must themselves reform their skills policy. As the global economy changes, an economy’s prosperity will be driven increasingly by its skills base.

Employment

Increasingly, skills are a key determinant of employment – less than one half of those
with no qualifications are in work, compared to nearly 90 per cent of those with graduate level qualifications.

The best form of welfare will be to ensure people can find their next job, staying in the labour market. The best way to do this is to ensure that people have a basic platform of skills that allows flexibility and can update their skills as the economy changes... World class skills are inexorably tied to world class employment.

Prosperity and fairness

Without world class skills, UK businesses will find it increasingly difficult to compete and innovate. The employment opportunities of the lowest skilled will continue to decline, risking a lost generation, cut off permanently from labour market opportunity. The Review has concluded that, where skills were once a key driver of prosperity and fairness, they are now the key driver.

Importance of skills

The Review has found that the skills and employment systems, which should work in
tandem to improve people’s job chances, are disjointed. Out of work support is not joined up with in work support. Current skills and employment services have different aims, which means that delivery can be complex with an array of agencies trying to give help and advice to people.

Welfare to Work providers are also rewarded if their clients are still in work after 13 weeks. The short-term focus moves attention away from pre-work interventions that might improve the sustainability of employment, as well as creating little incentive to build links with in-work support that might improve retention. Two-thirds of Jobseekers’ Allowance claims are repeat ones.

The results

The Review has estimated the enormous benefits that achieving this ambition would
bring for the UK. The prize means more economic prosperity and increased social justice. It would deliver a possible net benefit of at least £80 billion over 30 years, an annual average of £2.5 billion.

The employment rate would grow 10 per cent more quickly than projected, with at
least an additional 200,000 people into work by 2020, helping to move towards the ambition of an 80 per cent employment rate. People will have a fairer chance to progress, there will be less social deprivation and positive wider impacts on health, crime and social cohesion.

Young people

If the UK is to achieve a world class skills base, it must aim for world class attainment among young people. It is unacceptable in the 21st century in the fifth richest economy in the world that young people should leave school unable to read, write and add up. Yet over one in six young people in England do

[The government] should implement a change in the law, so that all young people must remain in full or parttime education or workplace training up to the age of 18.

Participation in higher education has increased significantly over the last decade so
that around 42 per cent of young people now participate in higher education, driving a
welcome increase in the proportion of highly skilled workers.

Far too many young people who have the ability to go university are unable to do so because of their background.

For the unemployed

People who are out of work will receive much more targeted, comprehensive help and
support, focused on both their short and long-term prospects.

Individuals will be screened for basic skills needs at the start of their claim,
rather than after 6 months. Where basic skills needs are the key barrier to work, they will be referred to flexible training, alongside job search activity.

People who struggle to stay in employment will receive a full Skills Health Check at
the start of their claim, which will shape their Back to Work Plan. They will also receive additional in-work support.

Low skilled workers

Low-skilled workers will have much greater awareness of the benefits of training and
know where to access relevant careers advice.

After 2010, if the legal entitlement to workplace training is invoked, the individual may qualify for the statutory right to ask their employer to train towards a full Level 2 qualification within the workplace.

An individual can use their Learner Account to act on the advice of the new national
careers service. They will find out in advance what their financial support entitlement is, helping them to make an informed decision about the type and length of course they undertake. People will be more in control of their learning.

Apprenticeships (intermediate skills)

Apprenticeships are a crucial method of delivering work-focused intermediate skills.

The Government should work with the Commission, SSCs and LSC to dramatically increase the number of Apprenticeships in the UK to 500,000 by 2020

The Government should build on the success of the Apprenticeship route, expanding
it to become a pathway which is open to every suitably qualified 16-19 year old.

The Government should consider creating a new entitlement as resources allow so that every young person with the right qualifications should be able to take up an Apprenticeship place.

High skills

The Review’s world class ambition requires increased engagement and investment from employers with higher education, to drive management, innovation and workforce development.

The Review’s recommendation is to exceed 40 per cent of the adult population with
Level 4 or above skills, widening the drive to improve the UK’s high skills to encompass the whole working-age population. Changing the targets away from the sole focus on young people aged 18-30 will transform the incentives of HE providers to work with employers

Suggested reforms

For the benefits of world class skills to be realised, the Review recommends the
following principles underpin their delivery:

• shared responsibility. Employers, individuals and the Government must
  increase investment and action. Employers and individuals should contribute
  most where they derive the greatest private returns. Government investment
  must focus on building a basic platform of skills for all, tackling market
  failures and targeting help where it is needed most;
• focus on economically valuable skills. Skill developments must provide real
  returns for individuals, for employers and for society at large. Where possible,
  skills should be portable to deliver mobility in the labour market for
  individuals and employers;
• demand-led skills. The skills system must meet the needs of individuals and
  employers. Vocational skills must be demand-led rather than centrally
  planned;
• adapt and respond. No one can accurately predict future demand for
  particular skill types. The framework must adapt and respond to future market
  needs; and
• build on existing structures. Don’t always chop and change. Instead, improve
  the performance of the current structures through simplification and
  rationalisation, stronger performance management and clearer remits.
  Continuity is important.