Select Committee on European Union Minutes of Evidence

Examination of Witnesses (Questions 80-91)

MONDAY 12 MAY 2003


  80. I should not have said it was "early days" now to talk about that. I should have thought in business terms if something was approaching five years, you would be expecting very clear results. Why is HEROBC being subsumed under this broad programme, if it is successful?
  (Mr Perryman) My understanding is that it is being subsumed, not because it is not successful, but simply because we are trying to rationalise the schemes. There is a number of schemes which have broadly similar aims about bringing together businesses and higher education more effectively and we are trying to simplify the procedure both for higher education institutions and also to help industry to have a clearer understanding of what is available.

Lord Shutt of Greetland

  81. The IOD in its evidence has argued strongly that the highest educational priority in promoting business performance and enterprise should be to eradicate high levels of innumeracy and illiteracy. That is their view, but how do you balance the expenditure between promoting enterprise, higher education stuff and all this, against the basics they are talking about? I imagine they are talking about adult basic education in these terms.
  (Mr Perryman) They are indeed. Actually we have a lot of sympathy with their view. In our recent progress report on the skills strategy, which we published in the last month or so, on basic skills and the skills of people at the next level, below level 2, which in clearer terms would be GCSE level in school terms, we are quite worried about the numbers of people in that position. It is quite alarming really that seven million adults in the UK have low or no qualifications, more than 3.5 million of those are in the workplace. Our view is that because those people are going to find it so difficult to gain employment and to be employable in any sense in our society as society becomes a higher skilled society, the government regards it as extremely important to tackle those issues. We have a skills for life strategy, which was launched in March 2001, which has a target of reducing the number of people with basic skills problems by 1.5 million by 2007 with an interim target of 750,000 by 2004. The focus of that is on adult literacy, on language and on low levels of numeracy. To date we have helped 300,000 people to go through some basic skills programmes, so we do regard it as extremely important. We are investing very significant amounts of money in basic skills work. The sort of people we are focusing on, for example, are unemployed people, people who are no longer active in the labour market, particularly low skilled people, quite a lot of very low skilled public service workers in the health sector for example, and also prisoners. We are talking about a very large number of people. These are very difficult figures to compute, but we believe actually that industry loses over £4 billion due to poor literacy and numeracy in the economy, a very great wastage of talent in our economy. We do feel it is extremely important that we tackle this issue. How we balance our expenditure on this against other needs is a very difficult question. We are spending a very significant amount of money, £0.5 billion per annum, on basic skills needs, so £1.5 billion over the next three years. That would compare with £3.2 billion which we spend on all adult learning in England per annum and, for example, it would compare with something like £9 billion which we spend on schools and a similar sum which we spend on the higher education system. I am not sure it is very easy to be exactly clear about how we balance one against the other. It does not quite work like that. What happens is that the Department has a set of public service agreement targets which it agrees with the Treasury and it then bids for resources against those public service agreement targets. We then receive from the Treasury budget each year a global sum of money for the Department. Ministers then have to make decisions about how that money is allocated between the various priorities, but those sums of money tend to be driven by the targets we are trying to achieve, the level of demand historically for those particular services and programmes and any changes in balance we are trying to make. I am sorry that is a rather vague answer, but it is not an easy question.

  82. Do you think you are on target?
  (Mr Perryman) We are very definitely on target, in fact we are ahead of target in delivering against this. We have over 300,000 who have now been helped by this programme. We also have a very significant strategy to drive forward change in this area, including, you may have seen, the Gremlins television adverts which try to help both individuals and employers think about the problems associated with low basic skills, but also we have a substantial amount of work running with employers to try to help employers to think about how to tackle basic skills problems in the workplace including toolkits and a workplace promotion campaign and so on.


  83. It is important to get people interested in adult illiteracy problems, but of course the desired objective is actually doing something about the illiteracy and innumeracy, is it not?
  (Mr Perryman) Absolutely.

  84. As long as I can remember we have known this is a problem. Every minister and every politician I have met for 30 years has said this is a problem. Apart from yet again running advertisements, commercials to get people to be interested in doing something about their own problem, what results have been achieved? I do not mean people counselled. Is there any evidence at all that the levels of innumeracy and illiteracy have actually fallen?
  (Mr Perryman) Yes, there is. I believe that the strategy we have developed around basic skills is probably one of the most successful strategies the Department has developed over the last two or three years. We have a special unit which has been established particularly to drive through work in this area. That unit has been hugely successful in gaining resources; I have talked about half a billion pounds a year being put now into basic skills and that is huge. I am afraid I cannot tell you exactly the amount of increase, but I can find that information if you would find it helpful; a very significant uplift in the amount of money we are spending. It is not just a case of putting some adverts on the television, an enormously sophisticated strategy has been developed, including developing a completely new curriculum for basic skills development, which has three parts to it. You do level 1, and level 2. We have had to train literally thousands and thousands of new tutors and assessors to undertake the task because we simply did not have enough people capable of doing that work. The people we had doing that work were not doing an adequate job. We had people who were not following a modern syllabus and who were not getting the level of results through that we were looking for. Susan Pember's unit has been tremendously successful in driving huge change both in putting the right foundations down to deliver the work and then starting to see really quite high numbers of people now flowing through programmes who are genuinely getting significant improvements in their literacy and numeracy.

  85. How regularly do you quantify the reduction in numeracy and literacy? Is there a monthly review or a quarterly review? What is the way of assessing the business performance here? I do not mean money spent but actually reducing the number of people who are illiterate or innumerate and who is doing that for you?
  (Mr Perryman) We have an organisation called the Learning and Skills Council, which is our most significant agency, it is an agency which is huge and which delivers most of the Department's programmes and services. They are responsible for putting in place arrangements in each local area and are also then responsible for collecting data about how many people are flowing through programmes and bringing that back to the Department. I am sorry that I cannot tell you whether we collect the data on a monthly or quarterly basis, but we certainly have a quarterly review with the Learning and Skills Council about the full range of its programmes and when I say "we" I mean ministers do that and they are held to account against their full range of programmes. We have detailed analysis on each of those programmes which flows into the Department on a regular basis.

  86. So you would know in principle—not this afternoon. You could send us the last 12 months of review figures which are hard figures of numbers of people who have improved their numeracy and literacy by specified target amounts.
  (Mr Perryman) Yes, I could.

  Chairman: That would be extremely helpful.

Baroness Cohen of Pimlico

  87. The same question really. I am listening to a very good description of inputs and not a lot of description of outputs, which is the trouble with all government programmes and they do not concentrate on outputs. Presumably your output can be classified by getting through level 1, level 2, level 3.
  (Mr Perryman) That is correct.

  88. If we understood what those levels did and then understood how many people have got through them, we would be pretty far down the line.
  (Mr Perryman) Yes; absolutely.

  89. If that is how you keep the statistics, that would be very useful.
  (Mr Perryman) Yes, we can provide you with that information. I am sorry I do not have it with me now.

  90. Maybe it is published.
  (Mr Perryman) I am sure it probably is, but I shall make sure that you are furnished with that information.


  91. I am afraid we are just about there. May I throw the last question at you with an unreasonable degree of brevity in responding to it? Let me reword it slightly. You have given us a range of answers to a range of questions. We started off effectively quoting from the Chancellor's own pre-budget report in November 2002, where he refers to five key drivers for product performance, one of which was to support science and technology and the development of more efficient ways of working. Can you explain your understanding of how the Department for Education and Skills sees the Department achieving that objective? What is the connection between the Department for Education and Skills and the processes which will support science and technology and develop more efficient ways of working? What will be the approach? How would you summarise the approach and what are the key priorities in the Department for achieving that?
  (Mr Perryman) The approach we are adopting is that we think we need to look very carefully indeed at all our services and programmes to support adults and adult learning. We have begun a major piece of work in the Department looking at the whole of our spending on adult learning, which is about £3 billion a year. We are developing a skills strategy which will be launched by the government in June of this year. We put out an initial progress report a month or so ago, which sets out our analysis of the current deficiencies in terms of skills development in England and some suggested ways forward. To explain, that is running in parallel with a review of innovation being held by the DTI. We understand that their review is likely to report later this summer, but I understand you are taking evidence from them separately. In fact the two reviews are running really very closely together and the two departments are working extremely closely together on the work. It may just be helpful for me to say a bit more about some of the key things which are emerging because they are quite significant in this respect. Firstly, we believe that there are fundamental problems about basic skills and employability, but we also believe there are big issues about intermediate skills and technician level skills in the workplace. We believe there are major issues about quality of management and leadership, particularly at middle and junior management level and particularly in small firms. We believe there are big issues which would be very important for you as a Committee, about maths, engineering science teaching at school, in university and how that then connects into the workplace. We also believe that there are concerns about what some people call a low skills equilibrium emerging, a low skills, low value added equilibrium emerging in some sectors of the economy. By that I mean that on an individual business firm basis companies make decisions which tend to be more short term and as a result they tend to opt sometimes for cost cutting strategies rather than product enhancement and value adding strategies. As a result of that, they do not get into the innovation/technology debate that we would like them to get into and the linkage between skills and innovation is extremely important. Our view, backed by survey evidence, is that the effective realisation of innovation and technology development only comes when you have effective management and leadership of companies and when you have the skilled workforce to deliver it effectively. Those things are inextricably linked and we are working quite hard on how we connect those together. We are also very concerned about making sure that employers have a bigger say in what is done by the education sector, particularly by the further education sector. We have a major programme called Success for All, which is trying to drive change in further education and make it more responsive to employer needs. We need to link our Sector Skills Council work with our work with the further education sector, to make sure that we start to get a much more responsive supply of skills coming into the economy. So several things connect our work and that of the DTI on innovation and we are trying to back up their thinking on innovation with our response in terms of skills.

  Chairman: That is a very useful summary and we are grateful to you and your colleague, Mr Colman, for coming this afternoon. Thank you very much indeed.

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