Hugh Tollyfield, MIoD Higher Education Funding Council for England Special Adviser, Employer Engagement Leitch Follow-up Event Friday 15 February

*Dr Marilyn Wedgewood -Report to DfES (2007) “Employer Engagement-Barriers and Facilitators” What do we mean by a world class workforce? “A thinking, educated workforce - working intelligently”*

Two Key UK Government Reports ‘Leitch’ Review “Prosperity for all in the global economy - World class skills” (HM Treasury Dec 2006) ‘Sainsbury’ Review “The Race to the Top A review of the Government’s science and innovation policies” (HM Treasury Oct 2007)

Two Strong Themes Across the Reports Business-HE Partnerships Strategic Engagement Research partnerships Business Improvement Knowledge exchange Demand Responsive Consultancy Enterprise Development Supporting spin-outs High Quality Workforce Strategic Demand STEM and post-graduates Graduate Employability Generic and vocational knowledge and skills Demand Responsive CPD More people at HE level Include non-graduates

UK workforce skills in a global economy Leitch Review (Dec 2006)* “The Review has concluded that the UK must commit itself to a world class skills base in order to secure prosperity and fairness in the new global economy.” ‘The Prize’ –Economic Prosperity –Increased Social Justice Driven By –Increased productivity –Improved employment *HM Treasury, Final Report of the Leitch Review of Skills (December 2006) “Prosperity for all in the global economy – world class skills”

Leitch Review – Ambitions for 2020 Working age adults in 2020: –95% to be functionally literate & numerate (2005 base - 85% and 79%) –90% or more qualified to at least Level 2 (2005 base - 69%) –Shifting the balance of intermediate skills from Level 2 to Level 3 with 1.9 million more people achieving Level 3 by 2020 –40% or qualified to at least Level 4 (2005 base - 29%)

Sustainable growth in GDP per head/per hour Increase Productivity (Output per worker) Increase Employment (Adult economic activity) Productivity Drivers EnterpriseSkillsCompetitionInvestmentInnovation The Drivers of Productivity

Moving Ahead Comprehensive implementation plan*: –UK Commission for Employment and Skills –Sector Skills Councils –Vocational Qualifications –Diplomas –Apprenticeships –Train To Gain –The Skills Pledge –Universal adult careers service –New Legislation *Cmn 7181(July 2007) DIUS “World Class Skills: Implementing Leitch Review of skills in England”

The Leitch challenge for HE “World class high skills, exceeding 40% of the adult population qualified to Level 4 and above.” (By 2020) Everyone of working age Shared responsibility for funding – employers, individuals and Government Focus on economically valuable skills Demand-led rather than centrally planned Adaptive and responsive to market needs Building on existing structures.

The economic contribution of HE UK HE is worth £45 billion to the economy on a public investment of £15 billion. Income in from: Collaborative research - £440m Contract research - £555m Consultancy - £200m CPD - £335m And mainstream HE already a major supplier of an economically valuable workforce.

Where the focus of HE is critical: More than 11 million adults in work, most of whom won’t progress to HE unless we innovate, gain the commitment and investment of employers, and take HE into the workplace. *Working Age ‘000s Level 4+ % Level 3 % Level 2 % UK 34, %19.5%20.5% Eng. 28, %19.3%20.4% *DIUS Labour Force Survey 2006,Q4 – Working age adults 19 to 59/64

SSC collaborative projects, including Cogent, Summit, GO Skills, LLUK Skillsmart and others; Joint projects with major employers across the range of skills and qualification levels; Development of employer-led consortia, including rail, utilities, aircraft maintenance and bio-pharmacy; Partnership with British Chambers of Commerce – now 8 SME focused projects; Innovation in accreditation of in-house training and qualification frameworks FDs have led the way in employer collaboration with HE:

Meeting the challenge: Growing the new market of employer co-funded provision for people in work who may otherwise never experience HE through: Part-time and short course accredited modules/units APEL, progression and credit accumulation Validation of employer in-house training and shared delivery with employers Innovation in teaching and learning delivery.

We shall be spending more than £100m on a programme of action research: to test employer market for higher skills, increase employer investment and building the HE response to supplying it; together with building new capacity and capability in the HE sector. “HE transforming workforce development” Programme :

Our goals for ,000 extra entrants to HE based workforce development in , backed by strong employer investment alongside public funding (5,000 in and 10,000 in ) Transformational development of the HE sector aiming for a third or more of English HE providers involved in shared investment workforce development with employers Increase Foundation Degree enrolments to at least 100,000 by 2010 A new funding process to support future growth

Co-funding… In return for innovative, flexible, customised provision which responds to business and workforce needs - we ask employers to pay towards the cost: –Not the full cost. HEFCE will contribute half of what it would normally pay for a mainstream funded learner; –Therefore an employer only pays only the difference between the amount of the HEFCE funding and the HE provider’s price for a learner on that provision; –An HE provider delivering employer co-funded provision should develop a sustainable cost/price model which will at least cover its costs through the combination of employer and HEFCE funding contributions.

How might employers pay? Contribution towards capital and recurrent costs of provision (e.g. shared funding of joint venture operation); –Or cost sharing through agreed division of teaching, supervision, assessment and premises between provider and employer Pay agreed price ‘per employee’ or ‘per course’; Contributions/payments in cash or in kind or a combination of both; Other possibilities not listed here The over-riding principle will be one of sustainability. HE providers will be expected to develop sustainable cost/price models for employer focused provision which do not require the continued input of development funding in order to survive.

HEFCE Funding Employer Engagement Fund At least £105m over 3 years Operated outside mainstream funding arrangements Ring-fenced within our Strategic Development Fund Two components Employer Engagement Capacity Fund Contributes towards a provider’s set-up and early stage fixed costs associated with an employer engagement transformational project Employer co-funded provision fund Fixed - funding for a core of provision Variable - easy access to funds to meet higher demand

HEFCE Development Funded projects - breaking new ground – the first steps Coventry University –Organisational development inside major national and international organisations University of Hertfordshire –Creating the “Business Facing University” London South Bank University –Central employer engagement unit brings together all employer an business services in one place Salford University –Transformational programme, creating a university- wide workplace learning infrastructure for business

HEFCE Development Funded projects - breaking new ground – the next steps University of Leicester –Integration of workforce and organisational development for medium and large enterprises, through responsive and flexible provision University of Derby –“UoD Corporate” offers comprehensive business improvement, customised skills development and lifelong learning services De Montfort University –Enabling SMEs to grow and prosper through customised knowledge and skills packages Thames Valley University –Onsite workforce development for companies on three of the most economically active business/industry parks in the UK University of Bradford –A progressive programme to create learning organisations in the public and private sectors