This morning I gave a speech to the City of Westminster College entitled; ‘Ending the gap between classroom and career: Labour’s next steps in skills and higher education reform’.
See the full text below:
Ending the gap between classroom and career: Labour’s next steps in skills and higher education reform
Speech by Liam Byrne MP, Labour’s Shadow Minister for Universities, Science and Skills
Monday 7 July 2014, City of Westminster College
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It’s a huge privilege to be here at the City of Westminster College’s Paddington Green campus.
As the grandson of a college principal I feel very much at home.
It’s a privilege to be with those who share my grandfather’s passion for learning that changes lives.
And it’s a privilege to tell the story of someone who shows us just what that change can mean.
Catherine was homeless when she enrolled here.
She’d leave a nearby shelter each and every morning, making the daily trip to and from this very campus.
By night, she’d study under torchlight, dreaming of a way out, dreaming of a way in which she could make her life better.
And she did just that.
Ladies and gentlemen, Catherine graduated in 2011.
She’s can now pay rent, support a family and live the sort of comfortable life that so many of us take for granted.
Her energy, her commitment, her belief were the driving forces behind her remarkable achievement… but without the values and virtues of this College, the City of
Westminster College, there would have been no ladder to climb.
So Catherine has a lesson for us:
We have to ensure that everyone, regardless of their circumstances, has a real choice to change their lives with education.
Without that real choice, we’ll hear less stories of lives changed – less stories like Catherine’s.
And that’s what I want to talk about today.
With under a year to go until the next election, the battle of ideas is taking shape.
The Tory-led government’s script is already clear.
And so are its flaws.
As I said last week they might boast of a recovery – but it’s not a recovery for the many.
Families will be £974 a year worse off in 2015 than they were back in 2010
What does that mean in practice?
It means we have to work harder – it’s an extra fortnight every year at the moment – just to stand still.
Why? Because that old curse, the ‘British Disease’ is back.
That crisis of low productivity that haunts industry and makes it ever harder to give your staff a pay rise.
Since the last election, output for every hour worked hasn’t gone up.
It’s gone down.
Output per worker?
Not up, but down.
Did you know that today’s crisis in productivity is actually far worse than it was the end of the 1970s?
The damage to our global position is huge.
We’re now 21% less productive than the G7 average.
What countries in the G7 finish making on a Thursday, takes us till the end of Friday to complete.
If there is a global race, we are well and truly losing.
We can’t go on like this;
Thankfully, over the last fortnight you heard the voices now calling for a change of course.
The IPPR’s ground-breaking condition of Britain report sets out a path back to full employment, especially for our young people and our parents.
Mike Wright’s review of manufacturing and the supply chain is making clear the role of government in bringing together sectors to plan long term to boost skills and lower our cost base
Lord Adonis’ breakthrough report arguing for a radical devolution of powers and resources to our city regions.
John Armitt’s call for a new approach to infrastructure.
Our own launch of a review into science and innovation policy.
And tomorrow Ed Miliband is speaking at the Sutton Trust’s conference on the importance of high quality vocational education
When you boil it down, our argument is simple:
Big reform, not big spending
An inclusive prosperity for this century
As Ed Balls puts it: “more good jobs, boosting skills and long-term investment as we restore the broken link between the wealth of the nation and family finances.”
Now the sharp-eyed amongst you will have noticed that running through every single report, every single major statement of the last month, running like a golden thread is the challenge of skills.
And that is why you are so important.
Your country needs you like never before.
The years ahead should become a golden age for educators.
When your passion for learning and your mission of service put our country on a new and better path.
It’s now very clear that skills are the key to a Britain that grows more, firms that employ more, and workers who earn more,
How much evidence do we need?
The inextricable trends in trade and technology, discussed so eloquently in books like the ‘Second Machine Age’, sound the death-knell of ‘routine’ jobs
The Migration Advisory Committee has added 117 high-skilled roles to the shortage occupation list.
British business has had to sponsor over 282,000 skilled people into Britain – that’s the same size of Newcastle – because they couldn’t find the skills here.
But look at the future and the skills crisis looms larger still.
In the UK, between 2012 and 2022, it is projected that we’ll need:
Over a million more people in professional occupations
Nearly 600,000 new managers, directors & senior officials
The Royal Society of Engineering tells us that we’re delivering 36,000 too few engineering graduates every year.
Mike Wright says that the country’s automotive and aerospace industries will suffer if there isn’t a greater focus on improving the level of domestic engineering skills in the
Andrew Adonis describes the skills shortage as the “single most important impediment” to British businesses
How many more times do we need to hear it?
The tragedy is that great firms want to bring back work to Britain.
I can understand why.
When I left Business School in America, there was only one place I’d consider to build any business.
Here is Britain.
It’s one of the best places in the world to build a business.
And lots of people want to do more.
In fact, PWC says that ‘re-shoring’ could create 100-200,000 extra jobs over the next decade, adding £6-12billion onto GDP.
What’s standing in the way?
A lack of skills.
This is what KPMG said is stopping too many jobs coming here.
And here’s the tragedy for workers.
Extra skill means extra pay.
Analysis for BIS shows the difference in earnings between a high quality level three apprenticeship and a GCSEs, is £117,000 over a lifetime.
But for most it’s a degree that’s the key to a middle-class life.
Economists may disagree on what technically constitutes ‘middle-class’, but the marketeers tell us it’s the difference between earning £37,000 and £47,000 a year.
That’s the kind of earning power a degree level qualification gives you.
On average, degree holders earn more than £100,000 more than someone with only two A-Levels.
Shifting more people into ‘top gear’ with a degree is one of the best things we can do to earn our way out of this cost-of-living-crisis.
But, right now it’s too hard for students to shift into ‘top gear’
There’s the traditional degree route which is well-established and open to half of our young people, thanks to changes that Labour made in office.
But what about everyone else?
More and more want an earn-while-you-learn route into higher-level skills.
Yet look at the figures: the number of under-25s starting on an apprenticeship isn’t rising, it’s falling under this Government.
In the last year alone, we’ve seen 11,400 fewer young people starting an apprenticeship.
That’s why Ed Miliband has made it a central mission to change the future for the forgotten 50% who today do not have a good enough or clear enough choice of high
quality vocational education.
They do not have enough apprenticeships and there’s no real vocational route to degree level technical and professional qualifications.
Right now a vocational route to higher-level skills is like navigating rapids: risky, a bit haphazard with a high risk of drowning.
First up, it’s very hard to get your foot on the ladder.
Last year, there were 11 applications for every apprenticeship vacancy.
That means it’s now twice as hard to get on an apprenticeship as it is getting into University.
High-quality apprenticeships, where firms are prepared to sponsor you to degree level skills are even harder to win.
It’s almost three times more difficult to enrol on a Rolls Royce apprenticeship than going to Oxford.
For BAE it’s 2.5 times harder than getting into Cambridge
So we have frustrated companies and we have frustrated workers
We need a new way forward.
A path that’s pro-company and pro-worker.
So today I want to out some principles for change.
First we have to accept the big, bold principle of devolution for skills that Andrew Adonis has set out.
Today I want to say more about how that might work in practice, and as I do I want to say a huge thank you to my advisory group, co-chaired by the Rt Hon Stephen Timms, Rushanara Ali, and advised by, amongst others, Cllr Keith Wakefield, Leader of Leeds and Cllr Sue Murphy, Deputy Leader of Manchester City Council.
Let me say at the outset that as we give employers and LEPs and Combined Local Authorities more say over how skills funding is spent, no-one is advocating for the proliferation of funding agencies, handling cash or contracts or countering fraud.
Second: We think the role of employer-led sector bodies, built on reformed SSCs and their industrial partnerships, are critical to fostering a ‘something-for-something’ deal with big employers and their supply chains to drive up apprenticeship numbers.
So we’ll give employers, working collectively through reformed sector bodies, more control over the standards and assessment criteria for training in their sectors, and enable them to broker a significant share of the £1.4bn apprenticeship budget to address their skills needs.
In return, we will ask them to work to drive up the number of high quality apprenticeships in their sectors and supply chains – and we’ll use the power of public procurement to help.
Large firms will need more apprenticeship to win big government contracts. Full stop.
Third: Combined Local Authorities and Local Enterprise Partnerships should shape the broad goals for adult skills in their neck of the woods.
To win this freedom, these authorities will have to show us that they are up to the job and Andrew Adonis has set out some tests for quality governance.
But I think these broad plans will have some important things in common.
First, they should include what Lord Adonis calls Business Hubs – and what I’ve described in this post as City Apprenticeship Agencies.
One stop shops that provide information and advice in particular to small and medium businesses with a real focus on support for apprenticeship recruitment.
It’s a model like we’ve seen in Leeds – a solution that’s seen apprenticeship numbers doubling in the city.
In an age where SMEs are creating jobs five times faster than big business, we need solutions that works for all firms, regardless of their size.
So in the future, if I run an SME in Birmingham I will have on my doorstep, a hub that can offer me advice on how to set up a high quality apprenticeship with a choice of apprenticeship arrangements: some put in place by sectors nationally; or as a service delivered locally.
Second, we want LEPs and combined local authorities (CLA) to shape some goals for the adults’ skills in their area.
Back in December 2006, Sandy Leitch set down an important principle: “The skills system must meet the needs of individuals and employers. Vocational-skills must be demand-led rather than centrally planned”
This is an important principle.
But for the £2.4bn 19+ Adult Skills budget we need to bring a better balance to the ambitions of learners on the one hand, and the ambitions of business to employ them.
So: we desperately need better information and guidance so ‘demand’ is better informed.
We need a different relationship with DWP, as you see work so well in Germany, where students are far better informed about the local world of of opportunity.
But I think we also need LEPs/CLAs and providers together to forge the kind of ‘Outcome Agreements’ that are tried and tested in Scotland and over the medium term, aim to eliminate the skills gaps in a demand-led system.
Third, I think there is a need for the CLAs/LEPs to directly commission what you might call a strategic core of skills, where serious local skills gaps have been identified.
This flexibility is absolutely critical in a world where we envisage Combined Local Authorities and LEPs are taking a much bigger role in co-commissioning Work Programme contracts.
This will – for the first time ever – ensure that skills provision meets the needs of local areas, balancing social and economic demands with identified areas for growth.
Many parts of Britain, including my own constituency, have very high-levels of unemployment alongside firms crying out for skills.
Mike Wright of JLR has spoken about JLR’s challenges.
Yet on the south side of the M6, half a mile from the Castle Bromwich gates is my constituency with the highest youth unemployment in Britain. The balance between the ‘commissioned core’ and the ‘market margin’ will obviously look different in different places.
Giving local areas the flexibility and freedom to commission against local labour market priorities will help us join up the skills system and the welfare to work system for the first time.
Naturally, there is still a great deal for us to work through, and I look forward to those discussions ahead.
Already clear is that two funding systems, split between the adult and young people’s skills budget, is a complex set-up.
So we’ll want your advice on whether to move post-19 funding to a per-student, not per-qualification basis, as works for under-19s and in Scotland.
The changes we propose offer the chance of a creating a far stronger ‘triple track’ for skills, for young and old alike.
Some will want to take the well-established academic route from A-Levels through to University
Others will want to progress through the vocational track, with opportunities to move through colleges specialising in delivering technical and provisional skills, on courses better aligned to the needs of local employers.
And we hope many more will secure high-quality apprenticeships with high-quality training ahead.
But every track will need to offer something more.
A surer route to higher-level skills.
Back in 2006, Sandy Leitch advised an increased focus on L5 and above skills.
Yet today it’s incredibly difficult to take an apprenticeship or college route to degree level professional and technical skills.
Just 2% of apprentices are given the chance to study to degree level each year.
None of our competitors are making the same mistakes.
Back at the end of the 19th Century, the huge explosion of our university system was in part driven by the need to equip a new generation of businesses and a new generation of workers with the skills to shift into ‘top gear’ with the qualifications that can unlock a middle class life.
Beginning with the creation of my alma mater, Owens Colleges, Manchester in 1851, eleven universities were opened over the course of fifty years with a clear empathy for the German model, pioneered by the University of Berlin in 1810, and what Rev. J Percival described as:
“Teaching [the people] things which would help them in their occupations”
In the years that followed, science and engineering expanded whilst classics declined until finally under the pressure of World War One, a modern relationship was finally forged between government, academia and business.
This was a spirit and a purpose which Harold Wilson rediscovered in his famous ‘white heat’ speech.
Before the 1964 election, Labour’s Higher Education Study group concluded:
‘Economic expansion is only possible if university and technological education expands rapidly and continuously to provide the necessary brain power and skill’.
This was the analysis that inspired the great explosion of Polytechnics.
Today, we want colleges, universities and business to come together in a new alliance as they did in the 1960s.
Not in two different worlds. But in one, world-class system.
We want to open many routes – not just one road – to a degree and the better life degree level skills can open.
When we were last in office, we began the job of reform.
Bill Rammell gave colleges the right to apply for powers to award foundation degrees.
John Denham pioneered the Workforce Development Programme.
But the truth is today there are many rocks in the path of building the vocational path to degree level professional and technical skills.
Over the months ahead, we want your advice on turning this ambition into action.
Every so often in British politics, we arrive at this point where we see the skills challenge in a stark and profound way.
Back in 1944, Lord Percy, Rector of the Newcastle Division of Durham University put it like this: ‘the position of Great Britain as a leading industrial nation is being endangered by a failure to secure the fullest possible application of science to industry; and second that this failure is partly due to deficiencies in education’
I couldn’t put it better myself. And we are determined to change it.
There is no other way to a prosperity that is inclusive.
And a recovery for the many and not the few.
Thank you very much.