John Healey MP, Parliamentary Under Secretary of State for

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John Healey MP, Parliamentary Under Secretary of State for Powered By Docstoc
					                               E-Skills Summit
                                29th May 2002
               Old Royal Naval College, University of Greenwich
         Organised by IMIS, and CompTIA on behalf of a consortium including
         CPHC, EMTA, the University of Greenwich, CISCO, e-Skills UK, OCR,
                the Learning and Skills Council and Computer Weekly,

    Keynote speech
    John Healey MP, Parliamentary Under Secretary of State for Adult Skills

1   Firstly I want to thank the University of Greenwich for hosting the event and the organisers for
    inviting me to speak. I have a formidable task in following Rebecca George’s vision of the future
    capabilities of technology and my contribution will be rather more prosaic and will concentrate
    on skills.

2   What I hope to do this morning is to set the context for the public policy framework within which
    you from industry, along with colleagues from the learning and education system, need to work.
    I will start by saying that ICT is really the defining technology of our generation and touches
    every aspect of our lives, and there is nothing more fundamental in terms of importance to the
    economy. There is no part of our economy unaffected by IT. 98% of businesses in the UK use
    ICT and 27 million people today work with ICT in some way in their daily lives. The internet too
    is transforming the way in which business works and at a very fast pace. A year ago 500,000
    SMEs were online, now that figure is 1.9 million. That is the pace of growth. It is not just the
    business world that is changing - ICT is central to the way we want to deliver public services.
    16,000 people have now applied for passports online, NHS Direct receives 100,000 telephone
    calls and 1 million website visits each week, and 75,000 people have filed an e-tax return. The
    Government made a commitment to getting all government services online by 2005 and intends
    to deliver.

3   Today I want to consider the question of skills and e-skills. Technology is only as good as the
    people who can make it work. Rebecca George (the previous speaker), drew a distinction
    between formal and informal skills. I would like to draw another distinction – between user skills
    and specialist skills. The focus of today’s event is on specialist skills development – software
    development, servicing networks and maintaining infrastructures. The demand for those skills
    is not confined to the IT sector – IT is relevant to all jobs and disciplines within the economy.
    This is a dynamic area; in terms of labour demand and skills demand there was a very rapid
    expansion during the 1990s and after a downturn over the last twelve months there are now
    signs of recovery with reports of growth in recruitment and even telecoms companies reporting
    staff increases.

4   The relationship between the labour market and the skills supply is more complex. Although the
    jobs demand weakened in the recent downturn, the skills demand has remained strong
    throughout. Management skills are in short supply and demand was highest for technical skills
    such as web related software design. 9,000 organisations reported hard-to-fill vacancies for ICT
    professionals and cited skills shortages as the reasons for these in ¾ of cases. 2/3 of ICT
    companies with skills gaps cited that the problem was in new technology skills. This forces the
    conclusion that the skills supply challenges are critical and that they are also fast changing,
    reflecting technical developments in the field.

5   One of our cross-Government concerns over the last few years has been to improve the general
    level of intelligence about what is going on and there has been some criticism in this area. That
    is why so much emphasis is being put on dialogue and the DfES is working with e-Skills UK to
    cut the lag time between research and publication and to collate more comprehensively the
    range of data sources they have to draw on to analyse and predict the skills needs. The first
    labour market intelligence bulletin has been published by e-Skills UK and is supported by the
6    I want to address another question that applies to every area – what is the rationale and role for
     government intervention? What elements are outside it and better coordinated by industry?
     The continuous development of skills is essential to the modern economy and modern society,
     hence training and skills are at the heart of prosperity for the individual, for businesses and for
     the UK generally. Those who share the benefits should therefore share the costs and the
     responsibilities. That is my starting point. My second observation is that the IT sector is
     particularly important as it underpins other industrial and economic activity across all other
     sectors, so in education terms we need a continuous flow of individuals from the education
     system with the right combination of technical skills. We also need revisions to the national
     curriculum to recognise the key role of IT so that everyone is taught ICT either as a set
     discipline or embedded within the syllabus. We need technical skills and the adaptability to
     respond to changing demands. Our role as government is firstly to invest in learning delivery,
     secondly to promote high standards of innovation, and thirdly, to provide learners and potential
     learners with the advice they need.

7    I suggest this role for industry:– firstly to respond by funding and supporting continuous
     professional development in the workforce to improve skills and self image, secondly to develop
     flexible approaches to draw on the diverse potential of the workforce, and thirdly to actively
     influence the supply side on provision of education and learning so that it better meets the
     demand of the sector. These are my basic principles, they are at the heart of this event and of
     my message.

8    Over the last 3-4 years intervention has been right across government – DTI and the e-Envoy
     are working closely with us and with the agencies here today. The skills issue has also been
     categorised as requiring a long term sustained solution rather than short term intervention. We
     need to help improve the image of ICT, improve the link between ICT, industry and the labour
     market, and create better-defined demand. Helping to provide better information is only half the
     equation. The other half is on the supply side and the major reforms we have introduced to the
     education and training systems over the last few years seek to address this. I will now run
     through the agencies, funding streams, strategic plans and the design of the curriculum, that
     you need to address and influence.

9    Regarding adult skills, the Learning and Skills Council (LSC) has been running for just over a
     year and covers all post-16 learning with the exception of HE. Just to give you a feel, last year’s
     budget for the LSC in England was 5.5 bn and provided funds for 6 million learners and enabled
     the delivery of 17,000 qualifications. Learn Direct has been running for three years now and
     had almost ¾ million learners involved on courses. 75% of those are IT courses and 55% of
     learners are women. The Connection service is the biggest investment ever made in this
     country for advice and information for young people. The New Technical Institutes are setting
     out to increase the supply of well-qualified, new recruits for industry, particularly to small
     businesses. By 2004 the new Technical Institutes will train up to 10,000 students each year.

10   That brings me on to the Certification of Vocational Excellence. This is designed to improve
     specialist teaching in colleges to meet the skills needs of employers and is specifically focused
     on local regions. The success of these will depend on employers and industry working closely
     with these centres of excellence. We want to have 150 set up in FE colleges across the country
     and last September we set up 16 “pathfinder” centres as pilots, two of which specialise in ICT
     skills. A second round is establishing 71 further centres of excellence in FE colleges, 14 of
     which will specialise in ICT. This means that one in five are specifically being set up to service
     the needs of your sector. In addition to this we have been able to secure from Treasury
     £57million to boost the Centre for Excellence programme in two ways. Firstly we will develop
     another 50, and what we are aiming to do with the LSCs is to ensure that in every region there
     are at least two centres that service the needs of the ICT industry. Moreover we will extend the
     centres of excellence beyond the FEI colleges and I am launching one of the first five
     independent centres in Leeds tomorrow. Some will be private, some voluntary and in some
     cases some will be provided by companies. They will be aimed at addressing the needs of
     employers in specific sectors. I believe that throughout that range the single most important
     factor in addressing the skills challenges that we face in this country is to engage employers
     fully in defining the problems and in demanding the actions to follow them. Government is fully
     committed to making this happen and devising a framework that allows it to happen.

11   I now want to turn to a specific initiative that is very important in this sector. As part of the vision
     for developing world class skills and a new deal between government and industry to allow skills
     needs to be tackled by sector, the new sector skills network is designed to replace what we had
     before with the National Training Organisations (NTOs). In return for greater investment from
     Government and greater influence on government thinking we are looking for greater
     engagement and commitment from employers in the sector. Some have criticised this as
     change for change’s sake and others see it as a redesignation of NTOs. I believe we can build
     on the best of the old NTOs but there were too many and they were too small and many had
     insufficient reach, low credibility and inadequate support from employers. The challenges we
     face and the ambitions we have, sector by sector, are much greater than the old NTOs were
     able to measure up to. This of course demanded too much even of the better NTOs like the e-
     Skills NTO. We as government have now established these structures and are determined to
     deliver our side of the bargain. We promise you greater influence not just within DfEE but in
     other departments, devolved administrations and agencies, and we promise greater investment.
     We are prepared to put up to £1million every year into each Sector Skills Council (SSC) who will
     hold a 5 year licence with a 3 year funding policy. We are doubling investment in the new SSC
     network and by next year we will have tripled that investment to nearly £30million. Evidence
     from employers so far is encouraging:- they are looking at the proposals and acting on them,
     both within and outside their own sectors. Since October the involvement of employers in e-
     Skills UK has doubled directly in response to what we are offering as well as a response to skills
     challenges. This is exemplified by the level and calibre of commitment of the e-Skills UK board,
     which comprises CEO level people from major multinationals and represents the formidable
     industry-based leadership that you need in your sector. Although e-Skills UK was not selected
     to be one of the trailblazers of last September it is now in a very strong position to be an
     effective sector skills council.

12   We need a stronger, wider array of sector skills councils and the Sector Skills Development
     Agency (SSDA) has a responsibility from Government to be in charge of driving the campaign to
     deliver skills for business, sector by sector, across the UK. Within days senior employers will be
     invited to express interest in setting up Sector Skills Councils (SSCs) to add to the five that were
     trailblazers from September last year. DfES has been taking forward my commitment to build on
     the best of the former NTO network and will involve colleagues from Northern Ireland, the
     devolved administrations, Whitehall departments and thirty organisations all wanting to become
     sector skills councils. We have conducted an assessment of the readiness of each of these
     organisations for their new role and only four of them are being recommended to the SSDA to
     go to the next stage of development. I am pleased to say that e-Skills UK is one of those four.
     Progress is not, however, automatic and the final decision rests with the SSDA Board. Once
     taken, the agency will agree funding for the short development stage before issuing the SSC
     licences. Beyond those four successful bodies there is a lot more work to be done and some
     radical rethinking will be required among the remainder. I said at the outset, and will re-iterate
     now, that we will not compromise on credibility or the financial and business support needed
     from SSDA.

13   In conclusion I suggest that there is a great deal of scope for you in your sector to benefit from
     the reforms and innovation underway in the training system. Securing your own SSC will
     enable you to take maximum advantage of those changes and make a real contribution to
     progress. Skills problems will not be resolved overnight. The challenge is continuous
     development. As last year’s White Paper iterated, we want to make the UK the number one
     country to supply advanced IT related skills and although much has already been done there is
     still a long way to go. I hope today’s discussion will give you cause to believe that we have the
     opportunity to do what we set out to achieve in the White Paper.