Skills that Work for Wales A skills and employment strategy Jon Waters Skills Strategy team, WAG

Overview Why are skills important? What’s the problem? What are we doing about it? What will success look like?

Why are skills important? Prosperity depends on employment and productivity – and both depend on skills Source: APS / LFS, Stats Wales June 2008

Why are skills important? PRODUCTIVITY 0.6% increase in value added per worker PRODUCTIVITY 0.6% increase in value added per worker TRAINING 1% increase in proportion of workers trained in an industry TRAINING 1% increase in proportion of workers trained in an industry EARNINGS 0.3% increase in wages EARNINGS 0.3% increase in wages Dearden, Reed and Van Reenen (2006) The Impact of Training on Productivity and Wages: Evidence from British Panel Data. Oxford Bulletin of Economics and Statistics. Productivity refers to how well a firm or an economy uses its resources – how much output is achieved for each input. Training has a bigger impact on business productivity than on workers’ wages.

What’s the problem? Source: Office of National Statistics- GVA data 2006; Employment data Q4, 2007 Wales is a relatively low employment and low productivity economy We want to move towards the top right

What’s the problem? Poor workforce skills are a big part of the explanation Source: National Survey of Adult Basic Skills in Wales (2004), Skills for Life Survey (2003) Source: Annual Population Survey / Local Labour Force Survey Wales has worse literacy and numeracy than most English regions Wales has fewer people qualified to Level 4, and more people without qualifications, than either England or Scotland

What are we doing about it? We’ve been making progress, especially on unemployment Source: Annual Population Survey / Local Labour Force Survey Source: Labour Force Survey

What are we doing about it? But two independent reviews have told us that we need to “raise our game” on skills - the Leitch Review... The Review sets out a compelling vision for the UK. It shows that the UK must urgently raise achievements... and recommends that it commit to becoming a world leader in skills by This means doubling attainment at most levels of skill. Responsibility for achieving ambitions must be shared between Government, employers and individuals.

What are we doing about it? And the Webb Review... More needs to be done, especially for... –people without basic skills –learners aged who do not have a full choice of opportunities –employers who don’t find the skills system responsive to their needs –young people and adults who are not in employment, education or training

What are we doing about it? Sir Adrian Webb’s 7 Fundamental Principles include.. Employer influence must increase greatly in the phase, be paramount post-19 and must drive strategy and the performance of providers New approaches to funding are essential

What are we doing about it? Skills that Work for Wales is our response It covers the whole spectrum of skills, from the early years to adult learning We need to ensure that... –children get a better start in life –young people have richer opportunities –and there’s more investment in adult skills BUT we’re also asking more of individuals and employers

Make sure that young people have better opportunities –Flying Start, Foundation Phase, Pathways, Welsh Bac Target funding on priorities –Post-16 fees policy Invest in basic skills –New GCSEs, entitlement, Employer Pledge Help more people into work –Integrated skills & employment services Elements of the strategy #1

Elements of the Strategy # 2 Invest in workforce development –Expanding Workforce Development Programme, strengthen apprenticeships, integrate skills & business support, Sector Priorities Fund Invest in high-level skills –HE review Shaping the system –WESB, UKCES, SSCs Transforming the learning network –Quality and Effectiveness Framework –Collaboration and new models of delivery

What will success look like? We’re working with WESB to develop a new generation of indicators We’re interested in things like… Outcomes for individuals –Better skills –Progression into employment Outcomes for employers –Employer satisfaction Outcomes for institutions –Success rates –Inspection grades