The urge to produce a big report on the perceived weakness of the country’s workforce and education system is not unique to the current Labour government. In fact, between 1867 and 1969 there were no less than 23 government surveys relating to vocational and technical education.
But for anyone who wants to get to grips with Gordon Brown’s skills campaign, the Leitch Review on Skills is the set text. Commissioned in 2004, Lord Leitch, the Chairman of the National Employment Panel and the former chief executive of Zurich Financial Services, was tasked with conducting an independent review of the UK’s long-terms skills needs.
Like most of the previous reports, Lord Leitch’s review is rooted in the fear that Britain risks losing out to better educated, more dynamic workforces elsewhere in the world. These days, the rapidly growing economies of China and India apparently pose the biggest threat to the UK economy; in previous eras, it was Germany, the US, Japan and the economies of south-east Asia.
Two years in the making, Lord Leitch’s report battered home its points in two successive reports. The first, published in December 2005, surveyed the current situation and found it wanting: the UK has only a “mediocre” mix of skills and its key competitors are raising their game. Continuing on its present course of investment in skills and education, it added, would barely improve the UK’s position on the international league tables.
In his second report, published last December, Lord Leitch outlined some of the solutions and ambitious targets to make skills at all levels “world class”. To be among the top eight most skilled countries in the world, the UK will need: 2.3m more people with literacy skills; 5.1m more with numeracy skills; 5.7m qualified to Level 2; 2.1m at Level 3; and about 5.5m with experience of higher education. Mike Campbell, head of research at the Sector Skills Development Agency (SSDA), says that this is the equivalent of every second adult in the UK gaining a higher level qualification before 2020.
All of this met with paeans of praise from business and education groups when the review was published. Skills enthusiasts, such as Mr Campbell, who advised the authors of the report, concede that although there have been plenty of scares in the past about the country being taken over by emerging economic powers, this time is different. The sheer size of China and its ability to “compete right across the value chain” makes it much more of a strategic threat than any other competitor in the past.
“The world is changing fast,” he continues. “In 10 years, China will be bigger than the combined economic weight of every single EU country put together. The changing global pattern of economic advantage and prosperity represents the biggest economic change since the rise of the US. In this fast changing world, a relatively high wage economy like ours can only prosper if we move up the value chain, produce more high value added goods and services, which are more sophisticated and of higher quality.”
Some organisations have questioned whether the UK workforce really is as uncompetitive as all that. The fact that the UK has gone from bottom to second in terms of gross domestic product among G7 countries suggests the country must be doing something right, despite what Lord Leitch describes as its “mediocre” skills.
Martin Wolf, the FT’s chief economics commentator, sounded a rare note of dissent, arguing that Leitch was too preoccupied with improving the skill levels of those at the bottom of the pile which, the international evidence suggests, makes little difference to national wealth. He points out that the country with the smallest proportion of its labour force with low skills is the poor Czech Republic, while the soaring Irish economy has more of such people than the UK.
“In short, the Leitch report looks like just another in a series of proposals to remedy the failures of schooling,” he wrote. “If that were the aim, it would surely be better to extend the student loans being offered to the lucky few going to university to all those seeking further education. Moreover, why should taxpayer money subsidise businesses into doing what they either are, or should be, doing anyway?”
Richard Brown, chief executive of the Council for Higher Education in Industry, also believes Lord Leitch is too transfixed by low level skills: “The UK’s future prosperity will be determined by high value-added, knowledge-intensive businesses, whether that’s BAE, Rolls-Royce, pharmaceuticals or all the research that goes on in the City. Leitch is right that this will require a big increase in the number of people who have had an experience in higher education, up from 29 per cent to day to 40-45 per cent by 2020. But that won’t be achieved with the current funding and not through the traditional qualification system of classroom teaching. The reality is that business requires that the learning can be delivered in bite-size bits, in the workplace at times that suit them.”
Others, such as the Institute of Directors, welcomed the analysis, but complained that Lord Leitch was far too sketchy on exactly how all these high ambitions would be achieved.
Certainly, there is a lot of detail to be fleshed out in some of his broad policy recommendations, in particular that adult skills should be improved across all levels. Lord Leitch gives some guidance on how the cost of that should be split between the state, business and individuals. So, it is right, for example, that the government offers to cover all the cost of Level 2 training, but students should contribute to their own university costs because they will benefit from higher salaries. Moreover, training should be made more relevant to business by giving employer bodies a greater say over which training courses receive public money and universities should be encouraged to offer more training services directly to companies.
Another striking feature of the Leitch Review is that it turned its back on an idea, popular with many observers of the UK skills scene, for a drastic simplification of the plethora of institutions responsible for promoting training. Instead, he proposed a modest change: a new Commission for Employment and Skills that will merge the SSDA and the National Employment Panel. It will be charged with scrutinising progress towards the Leitch objectives and making recommendations for getting there.
Will it make a difference? Mr Campbell believes that by resisting the temptation to tamper with the current skills infrastructure, the Leitch agenda will succeed where other efforts have failed. By contrast, Martin Wolf predicts that in “a few years hence it will surely have joined the other unremembered flops of the past one and a quarter centuries.”
In any case, it is certain that in the short-term, the Leitch effect will be enormous, with the government having swallowed whole most of his recommendations.
But it is likely that there will be some slippage on his suggested targets because the amount of money available for the next few years has already been set by last year’s comprehensive spending review settlement for education.
