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A perfect storm to transform our investment approach in the UK Lifelong Learning, Crisis and Social Change

A perfect storm to transform our investment approach in the UK Lifelong Learning, Crisis and Social Change. Lesley Giles, Deputy Director UK Commission for Employment and Skills 18 & 19 October 2012. About us: Our Commissioners.

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A perfect storm to transform our investment approach in the UK Lifelong Learning, Crisis and Social Change

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  1. A perfect storm to transform our investment approach in the UKLifelong Learning, Crisis and Social Change Lesley Giles, Deputy Director UK Commission for Employment and Skills 18 & 19 October 2012

  2. About us: Our Commissioners

  3. About us: The UK Commission for Employment and Skills Aim: Transform the UK’s approach to investing in the skills of people as an intrinsic part of securing jobs and growth Impact Investment • Maximise the impact of employment and skills policies and employer behaviour to support jobs and growth Intelligence Work with businesses to leverage greater investment in skills • Provide outstanding labour market intelligence which helps businesses and people make the best choices for them • More employers investing in the skills of their people • More career opportunities for young people • More collective action by employers through stronger sectors and local networks • More employers taking ownership of skills Five assets and 100 staff to deliver on outcomes

  4. Global performance is NOT world class Source: OECD Employment Outlook 2011 and OECD Productivity Database 2010

  5. There are pressures on investment I don’t see a time when difficult spending choices are going to go away” David Cameron, Daily Telegraph interview 19th July 2012 “Today, our national debt stands at £770 billion. Within just five years it is set to nearly double to £1.4 trillion. To put it in perspective, that is some £22,000 for every man, woman and child in our country.” Speech on the Economy, David Cameron (7th June 2010)

  6. Upskilling rates are not making us world class We especially need to address the long tail of individuals with low skills 25th Current international skills position 11th 26th 13th 21st 25th Intermediate Skills High Skills Low Skills

  7. Are businesses investing wisely in skills? There are 2.3 millionbusinesses of 1+ employers across the UK. Of which... 59% train (1.3 million) 41% do not train (0.9 million) Of those who do train: Of those who do not train: 8% (0.2 ml) 29% (0.6 ml) 23% (0.5 ml) 26% (0.6 ml) 15% (0.3 ml) Do not know if they want to do more Would like to do more training Do sufficient training to meet needs No training need Perceived need but met barriers • Key Challenges: • Training investment is holding up despite the recession overall • But with only 19% of businesses adoptingHigh Performance Working practices, is this ambitious enough?

  8. Employer investment in training Across the UK £49 Billion Is spent on training. However: Of which £13.5 Billion Is tradeable costs (i.e. Elements of training that can be outsourced) £24.7 Billion Is spent on the direct costs of training. £11.2 Billion Is non-tradeable (i.e. Elements of training that cannot be outsourced) £24.3 Billion Is the wages of those being trained. £2.8 Billion on course fees £3.9 Billion on payments to external providers £1.1 Billion Other activity

  9. Investment in qualifications And this varied by business size 16% 37% 58% 23% Of employee’s trained were training towards a qualification 67% 66%

  10. Big variations in individual learning, Skills rich vs skills poor well established Rich: Employed, managerial & income £31K+, younger, qualifications A-levels or above, parent in education after 16. Poor: Older, income less than £10k, qualifications below GCSE, no work or part-time. Key factors: attainment at school and parents education Learning creates a habit and leads to more learning. Over 8 out of 10 people with higher qualifications (e.g. degree level) undertake learning compared to less than 3 in 10 with no qualifications Training connected with employment showing a gradual decline

  11. Are individuals investing wisely in skills? Decreasing Participation

  12. We must meet future needs, but where will the growth come from? Projected UK employment change by sector (000s) between 2010-2020 (Source: Working Futures) Change (‘000s) Sector Private services expected to be the main engine of job growth (2010-2020) Manufacturing Non-market Services Primary Sector & Utilities Construction Trade accommodation & transport Business & other services -170 -103 -22 237 415 1,195

  13. What will the future jobs be? Most net job creation (2010-2020) expected in high level occupations, but job openings expected in all occupations due to replacement demands Projected England Job Openings 2010-2020 (Source: Working Futures) Net Job Openings (‘000s) Occupation Managers Professional Associate Professional Admin & Secretarial Skilled trades Caring, Leisure etc Sales Operatives Elementary 1,614 2,726 1,742 1,106 930 1,256 779 535 1,117 Job Creation Replacement Demand

  14. Where are the future jobs? While growth will occur almost everywhere, the north-south divide will continue to be exacerbated. Projected change in total employment across the UK: 2010-2020 6-8% 4-6% 2-4% 0-2%

  15. Skills play a vital role in performanceFirms in the UK that don’t invest in training, on average... Likelihood of business failure 2x Manufacturing Are twice as likely to fail 2x Retail and Wholesale And this varies by sector... Transport and Comms 2x 4x Construction 9x Hotels and Restaurants

  16. Building a new approach to investing in skills Growth & Innovation Fund The Growth and Innovation Fundis open to all employer representative organisations (including Sector Skills Councils) and is an England only fund. Employers invested: £22 million Growth & Innovation Fund invested: £13 million £35 Million Supporting 16 projects that aim to Develop innovative Working practices Raise professional standards in sector Increasing the demand for Higher skills Support future growth of the economy Provide leadership & management solutions

  17. Building a new approach to investing in skills Employer Investment Fund The Employer Investment Fundis open only to licensed Sector Skills Councils (SSCs) and is a UK wide fund. Employer Investment Fund invested: £66 million Employers invested: £46 million £112 Million Supporting 77 Employer led projects that aim to Raise ambition & change employer behaviours Support better use of skills across sectors Drive innovation & develop new ways of working Secure momentum to support sustainable increases in skills levels Stimulate employer investment in skills and to improve the use of these skills in the workplace

  18. Building a new approach to investing in skills Employer Ownership Pilot The Employer Ownership Pilot is open to employers and is an England only fund. Employer Ownership Fund invested: £67 million Employers invested: £98 million £165 Million Will test new delivery and investment models • 45,000 training opportunities (including work experience & work placements • 18,500 full time training opportunities • 11,000 • Apprenticeships

  19. Thank you To find out more: More about UK Commission investment: http://www.ukces.org.uk/ourwork/investment Employer Skills survey: http://www.ukces.org.uk/publications/employer-skills-survey-2011 UK Employer Surveys site: http://employersurveys.ukces.org.uk UK Commission research: http://www.ukces.org.uk/ourwork/research

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