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A perfect storm to transform our investment approach in the UK Lifelong Learning, Crisis and Social Change Lesley Giles, Deputy Director UK Commission.

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Presentation on theme: "A perfect storm to transform our investment approach in the UK Lifelong Learning, Crisis and Social Change Lesley Giles, Deputy Director UK Commission."— Presentation transcript:

1 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

2 About us: Our Commissioners 2

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

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

5 There are pressures on investment “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 (7 th June 2010) I don’t see a time when difficult spending choices are going to go away” David Cameron, Daily Telegraph interview 19 th July

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

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

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

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

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. 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 Poor: Older, income less than £10k, qualifications below GCSE, no work or part-time. 10

11 Are individuals investing wisely in skills? AgesLearning participation Income & (Expenditure) MotivationsBarriers Young Adult Biggest challenge, limited choice 79% £575 wages (£430) Job prospectsCost Midlife Work predictable, class divisions 73% £873 wages (£559) Work performance Job satisfaction Help children Time Cost Maturity Defined by experiences. Rich & poor 71% £744 wages (£485) Learn something new Time Cost Old age Rich retire, low income still work 48% £464 social security (£342) Learn something new Too old 75+ Truly elderly majority women 24% £331 social security (£236) Learn something new Too old Decreasing Participation 11

12 We must meet future needs, but where will the growth come from? Projected UK employment change by sector (000s) between (Source: Working Futures) Change (‘000s) ,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 ( ) 12

13 What will the future jobs be? 13 Most net job creation ( ) 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, , ,117 Projected England Job Openings (Source: Working Futures) Replacement DemandJob Creation

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

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

16 Building a new approach to investing in skills The Growth and Innovation Fund is 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 Provide leadership & management solutions Support future growth of the economy Growth & Innovation Fund

17 Building a new approach to investing in skills The Employer Investment Fund is open only to licensed Sector Skills Councils (SSCs) and is a UK wide fund. Employers invested: £46 million Employer Investment Fund invested: £66 million £112 Million Supporting 77 Employer led projects that aim to Raise ambition & change employer behaviours 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 Support better use of skills across sectors Employer Investment Fund

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

19 To find out more: More about UK Commission investment: Employer Skills survey: UK Employer Surveys site: UK Commission research: Thank you


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