Leitch Review of Skills “Prosperity for all in the global economy – world class skills” (Slides from DfES presentation) Leitch Review of Skills Professor Keith Mander University of Kent CPHC Conference Birmingham, April 2007

Review’s remit 2004: Sandy Leitch commissioned to undertake review to: “Identify the UK’s optimal skills mix in 2020 to maximise economic growth, productivity and social justice, and to consider the policy implications of achieving the level of change required.” December 2005: Leitch interim report published Budget 2006: Leitch asked also to consider how to deliver better integration of employment and skills services at local level Review UK wide: some recommendations common to UK, others specific to England Main focus post-19. But emphasises importance of 14-19 reforms

Current UK skills profile Despite recent improvements, strong stable economy, and record employment rate, UK has skills deficits: 7 million adults lack functional numeracy and 5 million lack functional literacy In OECD 30, UK ranks: 17th for low skills 20th for intermediate skills 11th for high skills 35% of working age population do not have full Level 2 36% qualified to intermediate (level 2-3), compared to 50%+ in Germany and New Zealand

…and consequent shortfalls in competitive skills base Even if all current targets delivered, projections show UK wouldn't improve much on international position by 2020: Demographic change - 70% of the working age population in 2020 are already over 16, and half is over 25 Gaining one place to 15th out of 30 on low skills, rising 7 places to 13th in intermediate skills, and falling two places to 13th on high skills.

Recommended world class ambition and targets UK should commit to becoming a world leader in skills by 2020, benchmarked against the upper quartile of the OECD. Recommended targets to deliver this ambition: 95% of adults to achieve functional literacy and numeracy, up from 85% and 79% respectively in 2005. Over 90% of adults qualified to at least Level 2, up from 69% in 2005; with commitment to achieve 95% as soon as possible. Shift balance of intermediate skills from Level 2 to Level 3; 1.9 million additional L3s (4 million total) to 2020, increase Apprentices to 500,000 Over 40% of adults qualified to Level 4 and above, up from 29% in 2005. HE targets broadened to cover whole workforce

“Something for something” Overall recommendations designed to strengthen employer voice and influence Government should invest more, and act to secure demand-led supply In return, employers should voluntarily commit to train all employees to first full Level 2 - the “pledge” If improvement rate is insufficient by 2010, introduce statutory entitlement to workplace training at Level 2 in consultation with employers and unions Increased employer investment at Levels 3 and 4 in workplace

Implications for HE 40% of adults qualified to level 4 or above (up from 29%) Much of this in the workplace Individuals and employers to ‘bear the bulk of the additional cost’ Delivery through a demand-led funding route like Train to Gain SSCs possibly approving FDs ‘a rebalancing of the priorities of HEIs to make available relevant, flexible and responsive provision that meets the high skills needs of employers and their staff’

Some numbers Number of working-age adults with level 4 qualifications: 9.8M, of whom 2.3M will have retired by 2020 New people needing to be qualified at level 4 by 2020 to meet 40% target for working-age adults: 8.7M UK domiciled students achieving level 4 in 2005: 397K Number of years to reach 2020 target at 2005 rate: 22 Shortfall over 15 years: 2.7M people Cost of bridging this shortfall (assume in one year) Public (£5k per student): £13.7B Loan (£3k per student): £8.2B Private (£7k per student): £19.2B Total (£15k per student): £41.1B Projected cost of staging London Olympics: £9.3B