Our agenda for the new Secretary of State for BIS

29 May 2015

This piece was originally published in the Times Educational Supplement on Friday 22 May 2015.

‘We are the party of hard-working people’ is already a familiar phrase in just the first few days of this Government. The new Business Secretary has the right family and personal experiences to understand what that means for the millions of people in this country who, through education and enterprise, have made better lives for themselves and their families. For the many who are university graduates, the economy is beginning to deliver and those with higher level skills are likely to prosper in coming years.

But how do current policies stack up for those people, young and old, who have yet to secure the benefits of lifelong learning?

The evidence is compelling, with a growing realisation that the current employment and skills systems are failing too many people and consequently they are failing the country, businesses and the economy. Four critical challenges stand out: the barriers facing young people getting a first step into work; people of working age struggling to find work; too many people on low pay and in low productivity jobs; and, the growing skills shortages which are hampering business growth and success.

Overall, the last decade has been a disaster for people who missed out on a good education. Opportunities for people to learn once they reach their 20s have collapsed as funding has been cut by both Government and employers. Over a million learning opportunities have been lost and training at work has reduced whilst part-time and flexible self-funded learning has collapsed since the introduction of loans. In the employment field, the Work Programme has ‘parked’ people who deserve more support – such as people with disabilities – and access to apprenticeships is very unequal.

This ‘perfect storm’ is damaging the prospects for a sustained and vibrant economic recovery because it limits the prospects and opportunities for millions of people who want to have the opportunity to work hard and have fulfilling and rewarding lives and careers.

Of course, it would be great to see the funding re-instated but in light of manifesto commitments to cut public spending, that is not a short-term likelihood. But even if cuts were reversed the system would still not be delivering for hard-working people and those who want to be hard-working. Instead we need radical reform and this just might be the Government which can help deliver it.

Reforms need to drive demand from people and employers to release the entrepreneurial spirit in education and employment. Taking this approach avoids the regular, arcane and self-defeating debates about the structure of the sector, or the machinery of Government. A simple but radical approach would favour personal control of learning and support through accounts, greater employer investment in skills which benefit their bottom-line, joining up of employment and skills locally through new devolved powers and a supply-side which has the freedoms to respond with new delivery models, new products, greater use of technology and more learner-centred solutions.

My advice to the new Secretary of State and his Ministers is to work with us and others to reform the system. It is not delivering what we need, so let’s change it.

For young people the promise of 3 million apprenticeships over the next 5 years is welcome. However, two problems shine out – quality and access. The reputation of the apprenticeship programme is under severe strain, the experience of too many apprentices is poor and the outcomes are not good enough. We have proposed a new Apprentice Charter to set standards for employers who want to offer an expansive experience with the simple aim of helping every apprentice to become expert in their discipline. I would also re-set the measures of success for the apprenticeship programme to be a job with progression and opportunity.

A better quality apprenticeship programme could become a more respected path for talented young people, but we still need to do more on access. Participation of disabled people and those from Black and minority ethnic communities is pitiful and must be addressed. We also need investment in proper Traineeships which motivate young people to aspire to real jobs with prospects. We propose a new learning and earning route to help make this happen and look forward to helping roll-out the Conservative commitment to a new youth allowance.

With only 10% of Work Programme participants finding sustained work and half of all disabled people out of work compared with a quarter of those who are not disabled, we need radical reforms there too. The skills and support dimensions of that are critical, particularly for people who deserve extra and more joined-up support. We want to see a distinct employment programme for disabled people which is commissioned locally alongside skills.

Perhaps our most radical shift fits well with the new Government’s thinking. Britain has 5.2 million low-paid workers, 1 million more than the OECD average. If this is to be a Government for hard-working people, then a new advancement service is essential to help improve skills and focus on improving productivity and hence improving pay. A re-focusing of the National Careers Service funding could make this happen quickly and would provide the wrap-around support for the roll-out of Universal Credit.

Skills shortages are widening as the economy grows and there are not enough young people entering the labour market to fill much more than half of the vacancies. Another radical focus should be to find ways to support working people gain new skills at higher levels. So far, the loans in further education and part-time higher education have failed to deliver. The challenge is tough – how do we persuade hard-working people to invest their time and take on debt? And what role is there for employers in that challenge? But even that is not enough, because colleges and universities need freedoms to offer more flexible ways to learn and the investment to make those changes.

More than anything, we need a new vision for how people learn, develop and access good jobs. I’m happy if that vision is centred on how hard-working people can access work, progress at work and earn more through higher productivity. That would be a sound basis for the lifelong learning society I want us to achieve, with people able to realise their ambitions and talents.