COMMITTEE FOR EMPLOYMENT AND LEARNING

Report on the Inquiry into Education and Training for Industry (Continued)

Report 01/01R

Thursday 29 June 2000

Members Present:
Dr Birnie (Chairperson)
Mr Byrne
Rev R Coulter
Mr Dallat
Mr R Hutchinson
Mr J Kelly
Ms McWilliams
Mrs Nelis

Witnesses:
Dr M Anyadike-Danes ) Director, Northern Ireland Economic Research Centre

Mr B McGinnis ) Chairman, Training and Employment Agency, also Chairman, New Deal and Skills Task Force

Mr T Scott ) Director, Skills and Industry Division, Training and Employment Agency

104.

The Chairperson: Good afternoon, Ladies and Gentlemen, and thank you very much for coming along. With us this afternoon is Mr Bill McGinnis, Chairman of the Training and Employment Agency (T&EA), though speaking mainly in his capacity as Chairman of the Skills Task Force. This is something with which we will be concerned in the context of this inquiry.

105.

Also present is Mr Tom Scott, director of skills and industry division in the T&EA, and Dr Mike Anyadike-Danes, Director of the Northern Ireland Economic Research Centre (NIERC). I have to declare an interest here since it was that body that gave me my first job. In the rows behind are accompanying departmental officials, Mark Livingstone and Terry Morahan from Research and Evaluation Branch; Adrian Arbuthnot, Director of Regional Operations; Tom Hunter, Secretary to the Skills Task Force; and Brenda Marson, Assembly Liaison Officer. We are very pleased to have you all with us.

106.

Thank you for your kind words of welcome. I would like to tell you a little about what the T&EA does, and I will then tell you about the Skills Task Force. I am the non-executive Chairman who conducts the meetings, co-ordinates business and provides business advice. My colleagues are the practitioners.

107.

The Training and Employment Agency is a non-statutory body. The Board's primary role is to help to secure strong collaboration and co-operation between the T&EA and the private sector and to assist in the development of training and employment services. As Chairman, I have particular responsibility for providing effective strategic leadership in such matters as formulating the Board's strategy for discharging its duties, ensuring that the Board is provided with advance papers, taking account of wider Government policy and ensuring high standards of propriety.

108.

Communication between the Board and the Minister normally takes place through me, and I have, as appropriate, in the past had regular meetings with the direct rule Ministers and, more recently, with Sean Farren. I brief all members taking up office with the Board on their duties and responsibilities. I also ensure that the Board meets regularly and that proper minutes are kept and actioned.

109.

My general role is to promote the Agency and its policies and programmes, and I carry out representational work when I present initiatives like Investors in People. I also have involvement in NVQ certification and pay visits to industry to identify needs. My primary role is to maintain a strong liaison with the Agency's executive to ensure that the Board's advisory and challenging role is understood. I also work in partnership with the executive to assist with delivery of the Agency's objectives. We produce a corporate plan and an operational plan on an annual basis, and I am sure that you have seen copies. We are soon to publish this financial year's operational plan; it is almost ready to go to print. That sums up my role as Chairman of the Agency.

110.

I will give you some background to the Skills Task Force. I joined the Board about three years ago and subsequently became its Chairman. During the first half of the 1990s the Board had to balance its policies and programmes between creating a wide range of opportunities for unemployed people, particularly the long-term unemployed, and providing industry with the skills it required. High unemployment rates and the large numbers of long-term unemployed made that task difficult and there was a necessary focus on the social targeting of training. As unemployment has fallen - we are now down to something like 6·6%, one of the lowest regions in the UK - others have begun to recognise the need to avoid skills problems. The Agency has had to refocus much of its work and that has been evident by the move from employment creation programmes, such as the ACE programme, to those with a strong training element.

111.

It has also become apparent that if we are to ensure that Northern Ireland remains a good place for inward investment, we need to better understand the dynamics of the changing labour market and the areas of potential employment growth. We have always had a good close working relationship with the Industrial Development Board (IDB) and the Local Enterprise Development Unit (LEDU), and we have been fully aware of their priorities in job creation and improving the workforce. Perhaps, we have had less understanding of the contribution made by the higher and further education sector. In recent years, and probably since the introduction of New Deal, I have had more contact with people in that aspect of education. We have worked hard at trying to convey the contributions which can be made to creating future skills through a wide range of activity. The creation of a Skills Task Force can influence the labour market, T&EA research and the work of the Department of Education. The creation of a new Department for Higher and Further Education, Training and Employment has further underlined the need for co-ordination and research.

112.

Now that a research programme has been put in place, and a flow of information is beginning, I expect the Task Force to become a greater catalyst for change. I believe a process of change has begun, helped by the focus of Strategy 2010 and the Information Age initiative. We still have time to avoid major skills shortages and I should not like to categorise our present situation as a crisis. We still have a supply of good people in Northern Ireland, but reskilling and upskilling are required as jobs change. The work of the Northern Ireland Economic Research Centre on the Information and Communication Technologies (ICT) industry to be published shortly, shows that the policies we have put in place are having a positive impact. We cannot be complacent, but neither can we suggest that good inward investment projects and local expansion are being over-constrained at present. That concludes my general introduction.

113.

Mr Scott: Thank you for the welcome, Chairman. I will say something about the Skills and Industry division within the Agency and the new Department. The role of this division is in providing training programmes which advance employability skills, particularly of those entering the labour market, basically school leavers and the unemployed. It is also about meeting the skills needs of industry. The size and complexity of the New Deal and Welfare to Work programmes require a separate division within the Agency.

114.

I deal essentially with the non-New Deal aspects of training. My responsibilities include programmes such as Jobskills, which is the main programme for young people; Lifelong Learning, including University for Industry, Individual Learning Accounts, Open Learning and Investors in People; the training centres and the ongoing role of merging those training centres with further education colleges; the Bridge to Employment initiative, sectoral training policy, management development and of course Skills Task Force responsibilities. The key policies we have been adopting over several months include the research programme undertaken by the Skills Task Force, and the short paper I sent to you was meant to set the scene for what lay behind that and the types of research being undertaken. If you wish, we can go into the research programme in some more detail as we proceed.

115.

We have refocused the Jobskills programme, and, in particular, we have increased the number of young people engaged in Modern Apprenticeships - that is employment-based workplace learning with employers who actually employ them from day one. That has been an area of successful growth.

116.

The Bridge to Employment programme is about training unemployed people for specific vacancies that occur where there is an inward investment or a local expansion. We are achieving about an 80% success rate for people going through that programme.

117.

We have also been engaged in, for example, the software industry strategy which includes a number of programmes such as the graduate conversion programme. About 250 graduates are being retrained in the software industry - infact they will graduate this weekend - and it looks as if we will get about a 75% success rate in respect of those going into employment in the first three months.

118.

We are also currently working on a tourism training strategy. We are allocating money which the Chancellor announced two years ago - £14 million over three years for a range of initiatives. We can give you details of that if you think it would be useful.

119.

That is a flavour of the sort of things we are involved in to try to address some of the bottlenecks. Our main role, however, is about influencing the mainstream provision, and on a cross-departmental basis, talking to our colleagues in further and higher education and in other areas about how those programmes can best be targeted on where the growth and skills will occur. We have identified some early areas to look at, including tourism, software, and so forth, and our main focus is about influencing those policies. That is likely to be a long haul, because things will change as the types of inward investment change.

120.

That is a short introduction. Dr Anyadike-Danes may wish to say something about the research we are conducting with him, and then we will answer questions.

121.

Dr Anyadike-Danes: I sent some documentation notes to the Committee, so I will be brief. I sent you a full-page note explaining our background and the sort of work that we do at the Centre. It also gives details about NIERC, an independent research centre concerned mainly with evaluating the effects of economic policy and doing research which will assist policy makers to improve policy in Northern Ireland and thereby, we hope and trust, improve its economic prospects. We are an associate researcher of Queen's University, Belfast. Essentially, we are independent of the university; they provide us with their premises, but other than that, we secure all our own funding. About one third of our funding comes from a block grant from what is now the Department of Enterprise, Trade and Investment (DETI), and the Department of Finance and Personnel (DFP). The other two thirds of the money comes from contracts of various kinds, typically long-term contracts with public sector agencies of which the contract for the Priority Skills Unit to help advise the Northern Ireland Skills Task Force is an example. We have a three-year contract to do that work.

122.

There are about half a dozen programmes and units within the Centre. The first three, which are funded by the block grant, are to do with tradable services, human resources and economic development; innovation and industrial change. They are the core programmes agreed with DETI and DFP, and the three units which carry out the more contract-orientated research, or most of it, are the Policy Evaluation Unit, which does a lot of work for LEDU, on its small business policy in particular; the Priority Skills Unit, which I will come back to in a moment, and the Regional Forecasting Unit. As part of its work on the UK as a whole, the Regional Forecasting Unit sets forecasts of employment in Northern Ireland twice a year.

123.

Those are the main areas in which the Centre works. There is more detail in the paper that I sent to you. When we have done the work we disseminate it in a variety of ways. We give seminars and talks to people in public agencies and in public, and we give academic seminars. Lots of the work is published as NIERC reports.

124.

Perhaps you saw some publicity in the press yesterday for our most recent report, by Stephen Roper, on e-commerce and manufacturing innovation. Another report, funded by the Training and Employment Agency, will come out in a few weeks. There is a steady flow of these sorts of publications as well as more academic pieces drawn from the research published in academic journals. I have listed a sprinkling of our recent publications, some of which might interest you.

125.

Another form of dissemination is the Scott Policy Seminars at Malone House, which we took up a couple of years ago. We hold these in series of three and typically invite a speaker eminent in his field to give a lunchtime address on some aspect of economic and social or educational policy. The audience is a mixture of business people, academics and people from agencies and the Civil Service. These seminars have proved very popular with the audience, who have derived a good deal of stimulation from some of the speakers. For example, a speech by Lindsay Paterson on education policy in Scotland attracted a fair bit of attention. He talked about the way in which devolution allowed them to reshape the educational agenda there. We try to encourage more debate on matters of widespread interest in Northern Ireland through the seminars, another aspect of our dissemination activities.

126.

If you wish to know more about the Centre, we have a website, the address of which is at the bottom of the note I sent. If you visit it, you will find out more than you ever wanted to know about the Northern Ireland Economic Research Centre.

127.

The Priority Skills Unit is a dedicated unit within the NIERC. It presently employs two people who have a programme of work, designed to cover the three years of that contract, to do two different sorts of things. One task is producing priority skill assessments, looking at a particular skill nominated by the Northern Ireland Skills Task Force, and carrying out research allowing them to form a view about the present Northern Ireland market position for those skills and prospects over the next five years. It typically involves studying the principal industry that employs the people in whose skills we are interested and collating the results with information from education and training institutions - the supply side - so one ends up with at least an approximate idea of how many people industrial employers want and how many the education and training institutions are likely to produce.

128.

The first skill assessment, dealing with IT, is complete and on the verge of publication subject to the T&EA's approval. It should be with you in the next few weeks. They have started the next priority skill, electronic engineering. There will be a sequence of these reports on various skills, we imagine, around three a year. That is one strand of their work.

129.

The other strand is broader in scope - a series of annual reviews of two things, the first being an annual review of labour market entry from post-compulsory education and training institutions. They are compiling a set of statistics from the different education and training levels and using that to provide estimates of the number of people from each of those levels, by course category, entering the labour market in a particular year. The most recent statistics available are for 1998-99, so they have linked data about the output of training organisations, further education colleges and universities. There are three sets of numbers side by side by category and level of qualification.

130.

It took a little while to harmonise these different classifications. This is not the way in which the statistics have been put together previously. You receive one set from an agency or institution and another set from a different source, and you have to try to find some way of harmonising the definitions of classifications.

131.

That has been done, and that too is being examined by officials of the Agency. The first report is due out before the end of the summer.

132.

The other part of the annual review strand is medium-term projections of occupational trends. That sounds better than I suspect it will turn out to be, as far as usefulness is concerned. We have had a preliminary go at it, and the difficulty, as with many other things in applied economics, is the numbers. The principal source of up-to-date information on occupational and skills classifications in Northern Ireland is the 'Labour Force Survey'. This survey involves looking at classifications across and between industry and occupations which results in projections and trends. We would look at, for example, managers in engineering or operatives in manufacturing and so on down to a reasonable level of detail. When you project the industrial employment forward, you get some sense of how many people in different occupations are going to be required from the industrial side. It varies considerably between industries.

133.

The 'Labour Force Survey' is the source of information for that, and once you get to any level of detail, the fact that it only used a 2% sample means that the margins for error are quite large. We will be producing these occupational trends forecasts in as much detail as the statistics allow. Unfortunately they will be broad, which is why they are a complement to our priority skills assessments rather than a substitute for it. It is not possible to get down to the level of detail that one needs to assemble a supply/demand balance, with that quality of data. Detailed information, industry by industry is required, and that is not something you can do for Northern Ireland all in one go.

134.

That is the work of the Priority Skills Unit. We conduct the relatively focused, and narrowly targeted priority skills assessments about three times a year, and course completions, entry into the labour market, and occupational trends are reviewed annually.

135.

Mr Byrne: Since this Committee started work we have focused on further and higher education up until now. We all realise that not everyone can get into those sorts of jobs. Therefore, we must focus on skills training needs and the delivery of skills training for different sectors. The long-term unemployed are a cause of major concern, as are the young people who are not that academically successful, the 16-year olds doing GCSEs.

136.

I am concerned that in some industries, such as construction, we have a bottleneck, particularly of electricians, bricklayers and plumbers. There has been a bottleneck for a long time in welding, and engineering firms in Tyrone have a major problem with a shortage of skilled welders. However, this is anecdotal and that is why getting the right information is vital for human resource planning for the future.

137.

The other industry where there is a major bottleneck is catering. In the past we had good training of chefs in culinary skills, I am concerned that there has not been the same detailed skills training recently.

138.

I am also concerned about the short-term approach with regard to the New Deal. I would like to see a critical examination of its effectiveness. Lastly, in Modern Apprenticeships, at GNVQ Levels 2 and 3 we need to have a stronger examination of the mixture between practical and theoretical skills.

139.

Mr McGinnis: First of all, we have to distinguish between skill shortages and hard-to-fill vacancies. That is a problem in the traditional industries. I come from a traditional industry where we have difficulty finding welders and that type of person. Young people find it quite difficult to work given the conditions and low pay in some of these jobs, especially in the hospitality sector and some of the food manufacturers, where there are particular competitive pressures to supply the large supermarkets. The big challenge is how to get their prices up to allow them to increase the wages. That is a problem, and we really cannot do very much about it - we have tried to help them. The New Deal, believe it or not, has helped to fill a number of those vacancies, because some of the jobs are quite low-skilled.

140.

We also have the emerging industries, like ICT. We are certainly addressing that matter adequately, at the moment, especially with the job forecasts for that sector from the IDB. With action being taken at the higher level there will be enough employees to fill those jobs in the future. But there are certainly problems with the traditional industries, quite a lot of which are to do with pressure on the pound. People have difficulty getting prices and then have difficulty increasing their wages - that is a major problem.

141.

Mr Scott: Adding to the issues of training for young school leavers and apprenticeships, there is a shortage of people in the construction industry and the "wet trades". Young people are choosing not to follow that training route, and there are more places than there are young people. The growth in the economy in the Republic of Ireland has drained people with those skills from Northern Ireland. There is evidence of a lot of migration in the construction industry in particular. This is an issue that we have been trying to tackle in conjunction with the Construction Industry Training Board (CITB) and the construction employers' groups, and it is, without doubt, a difficulty.

142.

With electrical and plumbing trades in construction, employers tell us that Modern Apprenticeships is working for them, that more young people are coming into the industry. About 400 young people now, on leaving school, go for an apprenticeship, for example in electrical contracting. Employers believe that the outflow from that, as it starts to happen this year, will have a major impact on the quality and numbers of young people in that area. We are not complacent about it and you are right to say we need to keep it under review.

143.

On the more general issue of Modern Apprenticeships, young people, at the age of 16, make a range of choices. They have to decide whether to leave school and go into a training programme or whether to stay on in sixth form, or whether to go on to a further education college and pursue either a general or a vocational route. We are trying to ensure that, whatever choice a young person makes, the progression route that he or she decides to take will be right for them. We are not closing any doors on Modern Apprenticeships. They are available to young people up to the age of 25, unlike Jobskills which stops at 18. There is an opportunity for people to progress.

144.

We are working on developing programmes for level 4 and above, that is technician level and apprenticeships for technicians. We have been talking to the engineering industry recently on how we might do that. We are constantly reviewing it, but it is difficult to get right. We are convinced that you cannot divide vocational training from vocational education. As we move into the future, a closer working relationship between further education and training, just call it learning, is essential.

145.

Mr Byrne: The catering and tourism industry is one industry where, it is speculated, a peace dividend should result in an economic dividend, with a growth in tourism.

146.

I accept it is a low-paid industry. The question is, where will the initiative come from to change the nature of the industry? Are we going to leave it to individual hotels and organisations, or should Government (or a Government Agency) take the lead in creating the higher value-added, higher skilled approach where modern tourism is going to provide a better service?

147.

It is about providing that higher value-added product in a predominantly people business. There is a major responsibility on a public organisation to lead the way. Other tourism spots have better service skills than we are currently producing. We did have these in the past, but have let them slip somewhat.

148.

Mr Scott: In conjunction with the industry, we have established an organisation called the Tourism Training Trust that comprises all aspects of the tourism industry, including hospitality, which is obviously a key part of it. They have drawn together a training strategy for the industry, and we are currently working with them on that.

149.

One of the related issues is that an estimated £12 million a year is spent on training for the hospitality industry through our various programmes of further education. The impact of that, however, may not be so obvious. There is a high drop-out rate and a low rate of converting that training into jobs on the tourism side of catering and hospitality. People with those skills are going into other types of employment.

150.

We are working with the industry to try to establish a strategy for holding those people who have undergone training in employment, once that training is finished. Image is one of the issues here. We have funded a group called Hospitality Matters, which is focused on selling and promoting careers in the industry with the appropriate people in the industry. Although steps are being taken to address the problems, more needs to be done, and we are working with the industry to address this.

151.

Mr McGinnis: An important point is the diverse nature of these groups. I have had to chair some of them and bring them all together. A caravan site owner, for example, and the owner of a five-star hotel will have entirely different needs. It is very hard to get a strategy that suits them all. To deal with that we have to divide it into smaller chunks, and we are working closely on that at the moment.

152.

Mr Byrne: I accept that. I think it is about how we create the leadership to get the higher skill levels. We have to make it attractive to young people in order to retain them so that they can develop those higher value-added skills, and by doing that we can create an attractive product for the potential customer.

153.

Mr Dallat: I would like to focus on the catering aspect. The senate of the University of Ulster recently approved the merging of the hotel and catering industry boards. That was immediately attacked by senior people in hospitality, in language which I found offensive. I really despaired. To repeat what Mr Byrne said, a lot of the employment prospects in the future will arise out of the completely different political environment we will be living in. You must be disappointed to find the industry in such a mess, and that they refer to people coming to train in Northern Ireland as imports. As a politician, I was totally destabilised by that style of language, not to mention the notion that training should take place only in Belfast and anywhere else should not be involved. I am not sure what influence we can have in your deliberations with these people, but I hope I am reflecting the views of the Committee that this was ill-advised, ill-founded and will certainly require some repair work to be done. The Assembly will give all the support it can to the hotel and catering industry, but we need to be pulling in the same direction and speaking the same language, particularly parliamentary language. I would be grateful if that message were to get through.

154.

Mr McGinnis: Those are some of the things I was touching on, how diverse the industry is.

155.

Mr Dallat: How would you suggest that these obstacles could be overcome?

156.

Mr Scott: The Tourism Trust, with whom we work very closely, is developing a strategy for training in the wider industry, and it has a number of facets. From the time tourists arrive in Northern Ireland until the time they leave, they come in contact with a vast range of services and people. There must be regional equality of these services, not least, of course, in the hospitality industry, which is one of the key points of reference for a tourist coming to Northern Ireland. We are trying to look across the board and are working closely with the industry on a number of initiatives here.

157.

We are funding a multi-skills initiative to try to get more people of a mature age interested in training for the industry. Recently, a number of people graduated from a programme in Newry College under this initiative. We are trying things out, but it will be a long haul. I do not know what the industry thought of the amalgamation of the two institutions, but as the situation works itself out and there is an improvement in training and in the type of course that comes out of that amalgamation, perception may well change.

158.

Mr Dallat: You will convince them that there is a life outside Glengormley?

159.

Mr McGinnis: Yes. I too have to travel that route every day.

160.

Mrs Nelis: You are all very welcome, and thank you for your presentations. With regard to your skills monitoring approach with employers and the vacancy monitoring survey, do you feel this provides you with the quality and quantity of data that you require? I am asking this because of the various schemes which have gone before, for example, if you think back to the heady days of YTP, then there was ACE, and now there is Jobskills.

161.

Mr McGinnis, you also talked about policies that have been put in place which have had a positive impact. Would you like to elaborate on refocusing Jobskills and employment-based work-skill learning? Could you give us an example of how that works? I also wanted to ask about skills and training for the hard-to-fill job vacancies. If you go into the jobcentre in the city where I come from - and Mr Arbuthnot and I have talked about this quite often in terms of the New Deal programme - most of the jobs that are advertised are service-sector, low-paid jobs. Quite frankly, you could not afford to acquire a skill while in receipt of benefits. What is particularly valuable is that at last, we might be moving towards addressing a certain deficit, but I think it is going to be a long, hard slog.

162.

I also wanted to ask about the T&EA programme, which monitors skills deficit and how this addresses the religious differential in unemployment.

163.

Mr Scott: Perhaps I will let Dr Anyadike-Danes give you the research details, but essentially, what we are trying to do is tackle a range of research projects of varying depths to get a three-dimensional picture, rather than a single-dimensional snapshot of what is happening. Bringing all the information together will help us see more clearly what types of policies to pursue in the future, and also to influence the providers of education and training as to the choices offered by various other colleges and providers. Better information will help them make the decisions which will help us.

164.

On the issue of refocusing Jobskills, up until about 18 months ago it had four categories of funding and four periods of training for a range of people. Firstly, we simplified it by having two levels of funding and two periods of training. Secondly, as an incentive, the higher rate of payment for training was given to the area which we thought had the most potential for employment growth. Previously, we had a very large percentage of young people in training in the area of non-priority skills - the non-growth areas. We now have a significant percentage of young people training in what we consider to be the six priority skill areas and these are mentioned in my paper.

165.

As regards Modern Apprenticeships, 70% of the young people on these are in priority skills areas: the difficult-to-fill parts of the construction industry, for example, electricians and plumbers, software and engineering. We have begun to incentivise the programme in such a way that more providers are training more young people in the areas that we would like to see them trained in.

166.

You said that you found it difficult to see how previous programmes worked. The problem, perhaps, was that although we guaranteed every young person who left school a training place, we were not always able to guarantee a positive employment outcome. As the economy begins to improve and, with luck, employment continues to rise, we will be able to offer those young people a better career opportunity, and so we can afford to incentivise the programmes in favour of more relevant training. That is beginning to have an impact and we can let you have detailed figures. There is clear evidence of a trend towards young people being trained in areas of economic growth.

167.

We monitor all our programmes on the basis of community background, gender and disability. Each year, we publish a report on equal opportunity monitoring. Across the board, our programmes largely reflect the needs of the community in all those areas. There is research from the Fair Employment Agency, now the Equality Commission, about differentials in different career areas and we have also carried out some research into that. Our main concern is to offer an opportunity to everyone who wants it and to ensure that, in targeting social need, we reach the places which most need those employment and training opportunities. We monitor those to see how they work out and we can let you have a copy of our most recent monitoring data.

168.

Dr Anyadike-Danes: If I understood correctly, you wanted to know more about the statistical background. The broadest statistics on people, by category of course and level of programme have been put together at the post-compulsory education and training stage. The data is collected from different groups and organisations. For example, we get training organisation data from the Training and Employment Agency. Further education data used to come from the old Department of Education for Northern Ireland, now part of the Department of Higher and Further Education, Training and Employment. The UK-wide Higher Education Statistics Agency (HESA) produces data on students in higher education. That is the starting point: numbers of people taking courses.

169.

There are a couple of extra steps. For the skills research, we are interested in people coming on to the labour market. They are the ones who are going to be taking the new jobs. It is important to ascertain, in each of those levels of education and training, exactly how many people are looking for a job. We have found, particularly in further education, that certain qualifications are regarded very much as ladders to a further qualification. There is a strong transfer between HNDs, especially in information technology, and higher education, going on to a degree.

170.

In that particular case, there is some difficulty in tracking what happens next, because it is not obvious that these students are going on to further study in Northern Ireland. There is a flow into higher education in the UK, because entry levels for information technology in the universities there are rather different. We are losing numbers, and then they come in again.

171.

What we tried to do was build up a rather complicated picture so that we could see who had actually come onto the labour market in Northern Ireland. It was quite a comprehensive undertaking to track all those things again, partly because of people moving from one level to another and not actually taking new jobs.

172.

There are also a number of people who are involved in part-time education. They will often be working and, therefore, will not actually come on to the labour market for new jobs. Our figures had to take into consideration these sort of adjustments in the labour market.

173.

Mr Scott: I missed a question. You asked me to give an example of what we have done. In the software industry we offered about 80 training places, 20 of them in the north-west and the rest in the Greater Belfast area, to people who were unemployed. We put them through a 20-week training course, and 80% of them are now working for software companies. None of them had previously worked in the software industry, and they had all been unemployed for at least six months, many for longer. That was a successful pilot. We are now repeating this with two more companies. In this way particular industries can be targeted to match the needs of people who have an interest but perhaps do not have the formal qualifications. By completing a 20-week training course, sufficient formal qualifications can be attained in order to get a job. People can then work their way through a career from this base.

174.

Ms McWilliams: It seems that you have set yourself some tall orders. For example, your intention to carry out three assessments in the Priority Skills Unit. So far you have completed only one. Are the other two still ongoing, and do you think you will carry out three every year? I am interested in this particular way of looking at these issues. I think this is where quite a lot can be learned by our Committee and how that feeds into policy development.

175.

I also want to ask you about your methodology. It is quite quantitative in design, but a lot of what we have learnt about the Northern Ireland labour market has come from more in-depth qualitative studies. While macro-economic forecasting and predicting trends is extremely useful, sometimes we find that there are some idiosyncratic reasons behind peoples' choice of occupations within the labour market. Do you feel that the reasons for job decisions by individuals can be uncovered through quantitative methods?

176.

You also claim to have by far the best innovation database. I am glad that you have added "of any UK region". I am particularly interested in how we are standing up in comparison to other European countries.

177.

Mr McGinnis: To focus on your point about setting ourselves a tall order, if you read the press at the moment there is a great deal of discussion about skill shortages. We have to address these fairly quickly. We have a window of opportunity with the formation of the Assembly and the development of inward investment. We must be geared up and have the answers as soon as possible. However, we probably need to put more resources into meeting that target.

178.

Ms McWilliams: Do not get me wrong. I am not criticising you for setting yourself a tall order. However, it is one thing to set yourself a strategic plan, but will you meet it?

179.

Mr McGinnis: We will meet it. Yes.

180.

Ms McWilliams: Obviously we will be very interested to see the other two studies. What are they on?

181.

Dr Anyadike-Danes: The IT is complete, the electronic engineering study is underway, and then we will focus on mechanical engineering. That is not yet started. Our year runs from September to September. While I would not wish to contradict the Chairman, I think the original agreement was three on average. This is the first year the Unit has been in operation. If you wanted me to be realistic, I would say we would have two and a half studies completed by September. It is a new area, and not just in Northern Ireland. What we are doing is not commonly done, so there is a very steep learning curve for both the researchers and the system.

182.

This bears on the question about the methodology of research. Built in from the beginning, for the Agency, the Task Force and ourselves, was the need to understand the industry. Any well-schooled undergraduate with a computer can do projections. There are packages that allow one to do that. The numbers are put in and some numbers come out as the projection. That is precisely not what we are doing here.

183.

Each of the skills assessments involves a period of consultation before the study takes place. The basic model involves a consultation process with industrial representative organisations, the Agency, the IDB, and various industrial development bodies. There will then be a survey of the industry that is principally employing the skills that we are interested in. In the period after the survey is written up and analysed, there is another period of consultation, discussing the results with people to see whether they think that we have captured the main features or have missed anything. Those processes ensure that we are not just sitting in the office with a computer, putting numbers in and taking numbers out. It is more about trying to get to the bottom of an issue than just producing numbers. It is by no means a recipe for finding the ultimate truth, but we are getting below the surface of the numbers.

184.

For example, our first survey on the IT industry revealed some things about the computer services industry. We surveyed it because it essentially employs IT-qualified people in Northern Ireland. The survey revealed aspects of how that industry worked here. They were not necessarily different from elsewhere in the United Kingdom, but they were not very well appreciated by many of the people who talk about the industry. It does not seem to be generally appreciated, even by relatively well-informed people, that less than half of the people who work in computer services have an IT qualification. Therefore, to talk about the need for IT-qualified people is not the same as talking about the number of people employed in computer services. If one says that the number of people employed in computer services is going to go up by 10,000 then only about 50% will be IT-qualified people.

185.

The next step is to recognise that there is a mixture of newly-qualified and experienced staff among those IT-qualified people who are employed. To project the industry's growth prospects, a series of adjustments has to be made to the numbers of qualified people being used.

186.

In the past, people have not always understood enough about the industry to recognise that that was necessary. That is part of getting to the bottom of what is going on, as opposed to taking the numbers and just pushing them forward. The same processes went on when the Priority Skills Unit went out to see the Professor of Electrical Engineering at Jordanstown, Professor Anderson, representatives of Nortel and the Engineering & Employers Federation. That is now in the mix. The survey has been designed, and it will be going out into the field in the next couple of weeks once we get survey permission.

187.

We are making a serious effort to get to the bottom of issues, as opposed to just taking a statistical overview. It is not the methodology that is always used, partly because it is time-consuming. Very often with these questions, one finds that people want to know the answer yesterday. Someone will say "There is shortage. Now, what can you tell me about it?" There is a danger of overreacting to that. Of course, it is important, and we need to know about matters as quickly as possible, but there is a danger of overreacting and, as a result, not grasping some of the factors at work in the different industries.

188.

Ms McWilliams: I would like a copy of the IT study, as it would be useful, given the Committee's focus.

189.

Dr Anyadike-Danes: We can arrange that.

190.

Mr Scott: We should have it within two weeks. We will give you an advance copy early next week, before it is published.

191.

Dr Anyadike-Danes: There was a third question concerned with innovation. That is not actually in the remit of the Priority Skills Unit, but obviously it is of concern to the Committee. The issue is covered in the main by a research programme run by Stephen Roper. As I mentioned earlier, the report published yesterday was his, and, amongst other things, it dealt with e-commerce.

192.

The report compared the use of e-commerce and various other measures of innovation between manufacturing firms in Northern Ireland and the Republic, based on the results of the third survey. We now have three sets of data on innovation comparing Northern Ireland and the Republic which span roughly 10 years. Because the survey was part of a collective effort across Europe there will be comparable data sets for Scotland and Baden-Württemberg in Germany, providing us with a number of different benchmarks. Those other data sets have only started to arrive, so they have not yet been analysed next to the Northern Ireland results. We do have the comparison between the Republic of Ireland and Northern Ireland on different measures of innovation including the use of numerical control machine tools; computer-aided design; electronic data interchange between customers and businesses; the worldwide web and email. There are indicators for each of those by size of company and by ownership of company for both Northern Ireland and the Republic.

193.

It is a long report with about 70 pages and lots of tables. I happen to have with me a research briefing which summarises it in two pages, and I am quite happy for you to have that. The Centre produces a research briefing each time it publishes one of the more technical working papers to provide us with a summary and a bit of the detail.

194.

Ms McWilliams: It would be great if we could have that briefing note, because we are particularly keen to focus in on international comparisons.

195.

Dr Anyadike-Danes: Stephen Roper's report was covered in the press yesterday. The coverage had a distinctly half-full or half-empty feel to it. Some parts of the media highlighted the fact that Northern Ireland and parts of the Republic were on level pegging in some areas, particularly with regard to e-commerce and the web. Other parts of the media highlighted areas where Northern Ireland was slightly behind. The parts of the study they reported depended on what they wanted to say.

196.

When I read the report my reaction was that there had been a distinct improvement in Northern Ireland's performance relative to that in the Republic. We are still lagging behind in certain areas, but it is not mainly in e-commerce. This represents a major correction, because studies on competitiveness by the Department of Trade and Industry suggest that Northern Ireland is right out of the picture as far as the use of computers and e-commerce is concerned. This new report indicates that in manufacturing at least, this is not the case.

197.

Ms McWilliams: Is it not the case then that we started off much worse and are now much better, but in comparison to the Republic we are doing OK?

198.

Dr Anyadike-Danes: That is right. There is level pegging in many areas and the Republic are meant to be doing quite well by international standards, but we will see more comprehensively when the other data arrives.

199.

Mr Scott: May I pick up on a small point that was raised? Generally, it is our intention that all work carried out under the auspices of the Skills Task Force is published and disseminated as widely as possible. There is no point doing the work if it does not influence what people do. Our clear intention is that everything will be published, and published quickly. There is no difficulty however in letting you see our reports in advance of them being published.

200.

On the point raised about quality as opposed to quantity; there is some research evidence from the National Skills Task Force that sometimes a mismatch exists between the output of colleges, universities and industry - not in terms of the qualifications gained, but in terms of the course content.

201.

We intend, in due course, to begin to target that type of research so that we get a feel for whether or not we need to change. We discovered from this work that Northern Ireland employers in the software industry are not keen to employ HND graduates as opposed to university graduates. We have asked the colleges to change their courses to better meet the needs of the local software industry. They appear happy to do so in conjunction with us.

202.

The Chairperson: Regarding the method you have been using to uncover skills needs, I have read the various articles in the bulletin written by Terry Morahan and Mark Livingstone, and two things spring to mind. The first is the extent to which you rely on employers' perceptions of their skills needs. The employer may sometimes uncover what is needed, but there is a danger that they are simply complacent, that they do not realise they need to upskill to be more competitive. Have you adopted a different approach to that adopted in Great Britain? My understanding of the National Task Force, relative to what is happening here, is that to a greater extent they have tried to explain the gaps, whereas, to some degree, you are acknowledging them. The advantage of doing it very directly is speed, but systematic weaknesses could arise because you are not really explaining the process.

203.

Mr Scott: I do not know whether Michael or Terry wish to comment on the research elements, but some of the work that we have undertaken in terms of responses to skills gaps has been of the Elastoplast type. We have spotted where the gaps are, and we have decided to take some quick action. They are not to be seen as long-term policies. When we get better information we will begin to develop longer term mainstream policies. For example, the £14 million of the Chancellor's money that we got over a three-year period is being used very much as first aid. But we will undoubtedly adopt more robust policies to address the longer term deep-seated issues as they arise. I would like to make that clear right away. We do not see what we are doing as a panacea.

204.

Mr Morahan: The genesis of this goes back over several years when skills shortages were rising up the agenda. We moved from the situation where demand was the problem to one which increasingly became one of supply. I joined the CEDEFOP which is the EU Institution concerned with training, and it has a sub-group called CIRETOQ which is concerned with developing forecasting and links into the leading-edge monitoring and forecasting research technologies.

205.

The best systems that I found, and this is explained in Labour Market Bulletins 11 and 12, were in Belgium and Holland. When I visited the Dutch Statistical Institute there were 2,000 statisticians working there. We do not have those resources. Belgium, for instance, goes into greater depth which is the kind of research we are concerned with.

206.

Employers' perceptions, in terms of forecasting, are not a reliable approach. Employers do not think that far ahead. Furthermore, adding one bad result to three good results gives a bad result. In terms of monitoring, there is now a good source in our employer survey. There has been an 80% response rate and 4,000 in the entire survey.

207.

It has shown that vacancies have risen from 10% to 21% in the last two years. So the labour market is tightening. There is a section with employers' comments and insights into the problems: that is the qualitative element which will give us a greater insight into the issues you raised.

208.

Mr Livingstone: As far as skills monitoring is concerned, we rely on employers' perceptions. There is an argument for harder measures. The problem is that there will be a time lag in getting the data and it is impossible to disaggregate it in the industry and occupational sectors to make it meaningful. We rely on employers' responses, but that is not to say that we do not query them.

209.

For example, in the Skills Monitoring Survey we asked employers how they fill vacancies. We then explore what qualifications they are asking for and what the salary was, and why they thought that there were vacancies. Using that sort of information we disaggregate the true skill shortages from the vacancies which are hard to fill because of the way certain businesses are run. That is one of the elements.

210.

Mr Morahan: It is a labour market, and people's rate of employment and their wages will reflect demand and supply. A couple of weeks ago we published the Centre for Research into Higher Education project on graduate skills for the labour market. Our focus was on those who entered university in 1991. It was clear from their employment and salary levels how well they had done. That is a good guide which reflects the realities of the market rather than just perceptions.

211.

Mr Scott: The monitoring study that Mr Morahan referred to will be published in the late summer, and he is quoting from our raw data. Once that has been published we will send you copies. My job is to process all the information from the econometricians and economists, make a value judgement on it and, finally, propose ways forward.

212.

We go beyond the raw data and ask IDB, LEDU and employers' groups for their views of the broader industry and what advances they think can be made. We do not rely totally for future policy on what employers say, but we take a position on where inward investment should go and where expansion seems to be taking us. We know what the targets are for inward investment and we use that to help us.

213.

Mr Byrne: It is difficult to find good information on where skills are needed for the future. There will be a need for more statisticians to have empirical information.

214.

Mr Scott mentioned IT training for those who had been unemployed for six months, but there are only two centres, one in Belfast and one in Derry. It worries me that we are still using the main centres of urban population to do specific training while vast tracts of Tyrone and Fermanagh are not catered for. This will affect decisions made by LEDU and the IDB when they determine where inward investment is to be located.

215.

If one of the deciding factors is the availability of a skilled workforce, we will never be able to develop those counties as long as we continue to train people in large cities or where there is existing industry. If we are to have a balanced regional development across all of Northern Ireland, there is an onus on us all not to repeat the mistakes of the past. In particular, we have to redirect and focus some skilling in other areas.

216.

Mr Scott: In the example that I gave, the pilot focused on five existing software companies, two of which happened to be in the north-west and the other three in Belfast. I demonstrated that this can work, and we can look to see how it will work elsewhere. One big help will be when the University for Industry finally launches its products in the autumn. They will be able to deliver flexible and distance learning to communities much more easily. Sixty per cent of its products will be on-line, and we hope that, through local learning centres, we can bring that type of learning to the community.

217.

Numbers and the support of numbers is a problem, so the flexible line of approach may well help us, and trials seem to bear that out. The University of Ulster has a good on-line training facility for undergraduates, and that is an issue that we will look at. We will talk to IDB not about where we might locate companies, but about the type of companies that they might focus on. We will then try to create a labour pool to help to ensure that there is readily available assistance for investors' needs when they finally arrive.

218.

The relative success of the software industry is due to the opening up of the tap on university placements five or six years ago. This created a surplus, and for another short period, growth overtook the output of universities until it caught up again. I am sure that you are right and that we will have to examine how we create skilled labour pools. But it is not a simple issue.

219.

Mrs. Nelis: I know that Mr Byrne is concerned about the geographical location of pilot training, and I share his concerns, but I am also concerned about the numbers. You spoke about the tail of educational under-achievers. Where are they, and what has been done about them?

220.

Another issue that concerns me and the other Committee members is the decline in traditional industries, and particularly in textiles. In your report you mentioned that something like 2000 jobs per year are being lost in the textile sector, and these are skilled people. How, and in what sector, do you see them being re-skilled, and have you any data to show what happens?

221.

In my constituency of Foyle there have been huge job losses in the traditional industries, and others, over the years, but, according to the information we have, very few of the people who have lost jobs have been offered training by LEDU - and I am talking only about LEDU.

222.

Mr Scott: In relation to your first point - and perhaps my colleagues can help me if I get lost - for some years the top level of school leavers in Northern Ireland have done exceptionally well, but we have also had a large number of young people who leave school without qualifications. However, over the last number of years, that trend has reversed, and we now have a much better ratio of young people leaving school with qualifications. We have virtually solved the problem for those aged 16, however, those who left school some time ago, and who did not perform well, are still either in the labour market or unemployed.

223.

The International Literacy Survey indicated that something like 24% of adults in Northern Ireland have difficulty with basic skills, and the Moser Report about adult basic skills provided further information.

224.

In the autumn, the Department intends to launch a campaign to address that issue, through adult basic education, further education colleges and in other ways, particularly through the local learning community centre approach, with the support of Individual Learning Accounts and the University for Industry products. The Survey and the Moser report are available if you want to see the details. We realise that that is an issue and we will begin to address it, but the proportion of school leavers currently leaving with qualifications is quite high.

225.

Mr Morahan: We have gone from a position of having the worst outcome in the United Kingdom, in terms of people leaving school with no qualifications, to having the best.

226.

The Chairperson: You may not want to comment on this, but there is a cynical view that this improvement, which has happened in statistical terms, has meant that the quantity has gone up but that quality has gone down.

227.

Mr Morahan: That is for the Department of Education. There is other evidence of improvement. The twelfth Labour Market Bulletin, which gives the results from the International Adult Literacy Survey, the Third International Maths and Science Survey, and the Key Stage III tests, and all show startlingly good results for the young people of Northern Ireland. Fortunately, we will not have to carry out such meta-analysis any longer because we are taking part in the Organisation for Economic Co-operation and Development, (OECD) PISA survey, which takes place across 40 countries and results will be available next year. The work in progress will be reported on in the next Labour Market Bulletin (No. 14) in November 2000. That will be the gold standard for information.

228.

Mr Scott: I will deal with the second point, concerning redundancies from traditional industries. Again, the Unit, under Mr Morahan's direction, has carried out in-depth surveys of a number of companies where there have been large-scale redundancies in order to track where people have gone. Mr Morahan can give you copies of that research. We are now beginning to see the way in which people move from one to job to another when these things happen, and how, therefore, we can intervene to help them.

229.

For example, in the north-west at the moment, people are being made redundant from the textile and clothing industry while there is a growth in call centres in the city. Where we see such a match up, we can begin to help people gain the skills required to move to totally different careers. Our approach is to try and find out where the best opportunities for those people would be, and intervene, either through the New Deal - with personal advisors and the jobcentres, - or through our Bridge to Employment programme, which we have used to good effect in the north-west.

230.

Mrs Nelis: People losing their jobs are not within the 16 to 25 age group. Most have been working for 20 to 25 years in industries that are now closing down.

231.

Mr Scott: We recognise that for lots of people, going back into structured education is not necessarily the route they wish to take. We are developing ways - for example, in Derry we have an open learning access centre linked to the local college - where people can study on a one-to-one basis. They can gain experience - for instance in IT skills - which will allow them to change careers without facing the consequence of having to go to a big class in the college. Colleges are beginning to change the way in which they work, realising that those types of people have real difficulty in getting back into structured training. We realise we have a long way to go.

232.

Rev Coulter: In your research, have you found a change in attitude in the grammar school sector from the Victorian idea of directing first-class students into the professions and second-class students into industry? What have you found statistically on the numbers of grammar school students who have done well in their exams going into industry, rather than the professions?

233.

Mr Morahan: Yes, that is the whole issue of parity of esteem for vocational and professional qualifications. A lot more students are going into industry in the private sector in comparison to what there used to be. The full results have been sent to you in the Centre of Research and Higher Education publication, and you can look at the summary. People are going into more diverse careers nowadays, as might be expected. There is some evidence to show that.

234.

Rev Coulter: Secondly, in view of the trauma in the agriculture industry, what has your research highlighted by way of the need to retrain farming people, either to give them part-time skills or to enable them to go into a different industry altogether?

235.

Mr Scott: We have been talking to our colleagues in agriculture about the issue of reduction in farm incomes and the apparent need for those people who work on the land, to take up other skills and to take up second jobs to supplement their income. We have invested in research along with the Department of Agriculture and Rural Development to look at this issue. I am not sure what the timescale is.

236.

Mr Livingstone: Work should be starting at the end of the summer.

237.

Mr Scott: There is a comprehensive survey being carried out, of which skills will be a part. We are looking at the totality of land-based industries to provide us with some feedback on what is happening there, what changes there have been and what the likely skills are that will be needed for the future. At the same time we have also agreed a programme for multi-skilling with the Department of Agriculture and Rural Development. We are spending about a quarter of a million a year on working with the Department of Agriculture to multi-skill people who are pursuing a qualification in agriculture.

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