1. “ There is an urgent need to raise UK skills levels to help drive productivity, growth and jobs.” “The skills and capabilities of our people are ultimately the basis for our long-term competitiveness.” Vince Cable, Secretary of State for Business, Innovation and Skills Charlie Mayfield, Chairman, UK Commission for Employment and Skills Ensuring Apprenticeships Support Economic Growth Thursday 29 th November 2012

2. About the UK Commission for Employment and Skills: Transforming the UK’s approach to investing in the skills of people as an intrinsic part of securing jobs and growth More employers taking ownership of skills 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

3. FE, HE and Careers Our Commissioners:

4. There are 2.3 million businesses in the UK with 1+ staff... 59% train (1.3 million) 41% do not train (0.9 million) Of those who do not train : 26% Said they had no training needs 15% Perceived need but met barriers* *Also includes small proportion of businesses that said ‘don’t know’ or ‘no reason’, or that ‘people learnt as they went’ Barriers cited include: Time  Lack of information  £ Cost …of which: Training in the UK:

5. Employers who do not train, on average, are twice as likely to fail, opposed to those that do... The consequences of not training...

6. Macro level issues facing the UK Youth unemployment and the long-term economic effect this will have on UK PLC and internationally average rate of unemployment across Europe is about 22% UK is about average Spain and Greece hovering around 50%, Germany just 8% Within the UK, there are large variations in youth unemployment across cities At its highest in Tees Valley at 32%, followed closely by Sheffield, Manchester, Birmingham and London. It is at its lowest it Oxfordshire at just 9% Youth unemployment is a local issue across the country

7. Barriers to entry The sharp decline in the number of jobs which are available to young people Jobs that have traditionally helped young people into work are in decline The ‘jinxed’ generation The most common way to find a new job is through informal, word of mouth methods Takes time to establish, and where families and friends don’t have these connections, the route is blocked The emphasis employers place on experience when they are hiring new staff ¾ of employers state experience was either of ‘significant’ or ‘critical’ importance in their recruitment decisions

8. Why ‘employer ownership’? The skills system: the rise and rise of the skills bubble, over centralised Less globally competitive: ‘system’ is too complex Two markets for skills development A lack of alignment, leverage of employer investment Employers need to own the problem and the solution Putting the purchasing power into the hands of the employers

9. Employer Ownership objective To find more effective and sustainable ways to improve skills in the workforce and use these to drive up productivity and growth. “ By giving businesses the chance to shape and set their own training agenda, we’re giving them the power to enrich their workforce with the skills needed for their future success." Matthew Hancock, Minister for Skills Business, Innovation and Skills

10. Simplify and extend existing competitive funds, routed through employers “We need to take determined steps to encourage greater employer ownership of skills, working to secure a sustainable partnership for the long term.” Charlie Mayfield, Chairman UK Commission for Employment and Skills Employer Ownership vision Employer/provider partnerships which deliver high quality outcomes Employer led, sector based collaborations who are the primary customers

11. Future jobs market: which sector? Projected UK employment change by sector (000s) between 2010-2020 (Source: Working Futures) Change (‘000s) -170 -103 -22 237 415 1,195 Sector Manufacturing Non-market Services Primary Sector & Utilities Construction Trade accommodation & transport Business & other services Private services expected to be the main engine of job growth (2010-2020)

12. Future jobs market: which occupations? Most net job creation (2010-2020) expected in high level occupations, but job openings expected in all occupations due to replacement demands 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 Projected England Job Openings 2010-2020 (Source: Working Futures) Replacement DemandJob Creation

13. Employer Ownership objective 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% Future job market: which regions?

14. How does this impact on future apprenticeships? Future apprenticeships should exemplify the employer ownership concept and: be based on a leading edge industry standard in a real job address current and future skills needs of an occupation and sector be good value for money – employers, employees and state be accessible and well delivered give individuals an appetite for continued learning

15. Design Principles Moving Forward 1. Government creating the space for employers to step up and take ownership of the skills agenda for the growth of their industry or locality 2. A relentless focus on employers and employees as the primary customers of quality outcomes 3. Routing the public contribution through employers so that responsibility and reward rests with them and in so doing leverages public investment against private investment 4. Ensuring that there is only one market for skills where supply is shaped by informed employer and individual demand rather than funding incentives 5. Locally investing in ‘bottom up’ business and college leadership to co-own, co-develop and deliver high quality vocational education which meets local economic needs.

16. If you would like to hear more please contact: caroline.roberts@ukces.org.uk 01709 774 800 www.ukces.org.uk Thank you very much for listening Caroline Robert, Assistant Director, UKCES