The Northern Ireland Assembly - Report on the Inquiry into Education and Training for Industry

The Chairperson: Thank you very much for coming, Ladies and Gentlemen, you are very welcome. This is the first formal evidence session we have had outside of Parliament Buildings. We appreciate the fact that Nortel has given us this room for the afternoon. This is a very appropriate setting for considering the whole link-up between further education, higher education, training and industry. I understand you would like to make a presentation and then answer questions from the Committee.

509.

Mr Masterson: The Confederation of British Industry (CBI) has a broad membership base, with representative companies from all sectors of industry, commerce and service sectors. We are a long-established organisation in Northern Ireland. Our role is to create an environment within the United Kingdom for business to prosper in the enterprise environment. Indeed, we in Northern Ireland like to ensure that we do just that with the members that we have, drawing on the substantial resources available to us from the CBI nationally.

510.

In a local dimension, the CBI certainly places a very high priority on the question of education and training. That has been one of the great strategic advantages as to why businesses are here and do well. It is the current message coming out of Northern Ireland and is used to good avail. We see that reflected in comments from our members.

511.

We are pleased to have the opportunity to talk to you, within the remit of your Committee. We are also thankful that we have had the opportunity to make a submission to your inquiry. We are gathering data and information from our membership base, and we hope to have that finalised in November. Our intent today is to give you some insight into some of the key issues that are important and are driving us. I will hand you over to Nigel Smyth, our director in Northern Ireland, who is going to do that.

512.

Mr Smyth: I have circulated the substance of the presentation and it will take about 10 to 12 minutes to go through it. The areas I want to cover are the changing world that companies are all operating in; our vision for education and training; some of the key elements of a successful education and training strategy; what we believe to be some of the key areas of weakness in Northern Ireland - areas to which the Committee should be giving particular attention - and, finally, university research.

513.

If we look at the changing world, we are aware of the increasing globalisation of markets and intensive technological change, largely driven by IT improvements. We are seeing much more demanding and competitive markets, with much more transparency. Companies are under intensive pressures to improve productivity and meet the needs of increasingly demanding customers. This will require a change in skill requirements, to address productivity growth, technology needs and the need to be more innovative in all companies. Average skills will need to increase, but it is fair to say - and we will be highlighting this in our evidence - not all jobs are going to be high-skilled. There is going to be very substantive growth in the personal and protective services category, and customer interaction skills probably need to be improved. Companies need to attract and retain the best people. They are going to have to be world-class, and people are going to be the key in providing competitive advantage.

514.

We will be emphasising in our submission and presentation the importance of key skills - there are six key skills that I will refer to. We see these as being increasingly important over the next 10 years. From our perspective we want to see the system moving from one which has been traditionally supply-driven to one driven by informed individuals. We will be stressing the importance of peace and political stability, which is vital to attract the best people and, indeed, the families of the best people, because Northern Ireland's image is not as we would like it to be.

515.

Our draft vision, and I emphasise draft, as we are going through our own consultative procedures at present, is about a system that creates high expectations. It provides every individual with the ability to achieve the relevant knowledge, skills and values appropriate to their needs, which enables them to make informed choices for lifelong development and employment. From that, we have emphasised two core elements to delivering that vision. The first is all about the ability to add value in the work of individuals. We have defined employability and set out the range of qualities and competencies required. It is important to stress that traditionally there is a strong focus on qualifications, but we are stressing that it is more about values and attitudes.

516.

Basic foundation skills are obviously crucial. There are six key skills that should form, or be integrated into, all education and training, at whatever level. There are other generic skills, which are becoming increasingly key for customer service skills and language training. There is then more relevant knowledge and understanding to particular jobs and job-specific skills.

517.

Another key area of the strategy is to ensure that the education and training system is relevant to the needs of the economy. We will emphasise the importance of having some consensus on strategic direction for the economy and the impact that would have on education and training. We see 'Strategy 2010' as important in that respect. A target should be set for education and training relevant to that strategy.

518.

The second theory involves business. I welcome and support the reinvigorated Northern Ireland Business Education Partnership (NIBEP). We are keen to support partnerships between business and education at all levels, from primary all the way through to further and higher education. These are improving, but there is room for further improvement. Importantly, we must have a coherent qualifications framework, one that employers and employees can understand, where individuals can move between the various routes, and it is mapped out and marketed very well to both employers and employees.

519.

The next issue is careers education and guidance. We put a strong focus on that, particularly if we want to see informed individuals. They should be aware of the needs of the economy and the opportunities open to them; they should know what companies expect of them, and they should be responsive to economic needs, particularly when things are changing so rapidly. We need mechanisms to highlight and identify emerging skill shortages or changes in the economy to ensure that courses are relevant and that we are putting the resources in the right areas. We welcome the establishment of the Northern Ireland Skills Task Force to address that. By having effective training and development in employment, training levels in companies have been increasing over the years. We will show evidence of that, but there is further to go - we lag behind the rest of the UK in this respect.

520.

We are strong supporters of the Investors in People standard. We got off to a slow start but are improving at a fairly rapid rate, although there are still some problems. We would put that in the context of employee development in terms of education and training. This needs to be viewed in the broader sense - people development, the leadership and culture of organisations, the involvement of individuals in companies, and the whole area of work organisation.

521.

Turning to particular weaknesses in the Northern Ireland system, it is well known that adult literacy and numeracy levels are a problem. Individuals are good at hiding this. Many companies sift this out at an early stage, so there is probably a lower percentage in terms of those who are employed, and evidence supports this. Many operatives still have this problem, and companies tend to identify these problems only when they are starting to move into multi-skilling and moving these people up in their organisations.

522.

Key skills are important. Feedback shows that IT skills are improving, but there are still serious weaknesses in areas such as problem solving and individuals taking responsibility for their own learning and communication skills. Therefore we must emphasise the importance of the six key skills. There is a general feeling that in Northern Ireland and parts of GB the depth of learning is too narrow - we narrow down too early. The system in the Republic of Ireland and Scotland is wider, and the CBI would welcome that.

523.

The next issue is how attitudes and individual responsibility can be changed. We are concerned that too few people in the UK take responsibility for their learning. As individuals we spend less time on learning, and there are significant barriers to learning. We can outline the problems and the challenges for public policy of increasing the demand for learning, particularly as we try to develop a culture of lifetime learning.

524.

Strengthening vocational and technical education and training - the role of further education - is a sector that has been lacking direction. It has been a key driver in the Republic of Ireland and a key strength in their economy. We see some inconsistency in output, and links with industry are very mixed. There are some good practices and some not so good. We would like to see the further education sector given a stronger economic focus.

525.

We have a research paper regarding links between higher education and business. Intellectually these are generally good, but we would like to see an improvement in key skills. It comes back to that again. Problems have been identified, and there will be an increasing need for key skills. Graduates should be coming out with a better awareness of the world of work. We are keen to see more work placements, and companies are keen to provide that opportunity.

526.

In terms of skills shortages, we will be emphasising a tighter and more competitive market than that which exists at the moment. It will be driven largely by general economic growth and specifically by the growth in the information and communications technology (ICT) sector, and the impact of the strong growth of the Republic of Ireland's economy. It is important that we monitor this whole area of opportunities and vacancies carefully.

527.

It is all relevant to the role of careers guidance, particularly in areas such as IT, electronics and across the construction sector. We have received feedback from companies in other sectors stating that they cannot get workers. Is that because there is a skills shortage, that vacancies are difficult to fill, or can businesses not afford to pay the going rate because there is a more competitive market?

528.

We will also touch on cross-border issues. We think the strategy for Northern Ireland should take account of what is happening in the Republic. There is also the issue of the recognition of qualifications.

529.

We certainly have a desire to see universities as the jewels of the Northern Ireland economy, particularly if we are to develop into a knowledge-based society. A review of the research assessment exercise indicated certain weaknesses from an economic development perspective, but it is improving. We would like to see better definitions of quality and excellence. We would also like to see higher levels of funding going into research but would emphasise that they have to be relevant to the needs of industry in Northern Ireland.

530.

Recent research has highlighted that 13 Centres of Excellence are linked with universities in Northern Ireland. There is a low level of awareness of these Centres by companies, and it needs to be highlighted that some of these are specialised. Businesses that do use these Centres tend to rate them very highly, so there is obviously some value there. It is a similar situation with our various support programmes to try to facilitate links between businesses and universities. Once again there are low levels of awareness, but companies that are actually tapping into them also rate them highly.

531.

Our survey focused on companies with up to 100 employees. These companies indicated that universities need to become more customer orientated and responsive to their needs. We would be keen to see comprehensive marketing strategies by the two universities, outlining how they are going to market their resources. We also need to highlight to companies the benefits of getting involved in these linkages. It is not always the universities' fault, and there is obviously an issue here for companies. They must recognise the need and be prepared to get involved with the universities.

532.

Finally, I included some of the feedback from our research to give the paper a bit of flavour. There are some serious concerns. Typical comments include "the work ethic seems to be lacking in a majority of applicants; working on the shop floor is not exciting enough for young people; discipline and timekeeping has fallen; new employees come with basic skills but have no idea about timekeeping, attendance or how to communicate without shouting; and graduates now expect to be offered a job on the strength of their degree." We will be putting that in the context of our employability - a degree is OK, but you need to have the values and key skills.

533.

Thank you, Chairman, I hope that gives you a flavour of where we are coming from, and we will be delighted to respond to questions.

534.

The Chairperson: Thank you very much, Mr Smyth. What you have said will provoke quite a bit of thought and reflection on our part. We will now have questions from the Committee.

535.

Mr J Kelly: Regarding your comments about a higher level of funding, we have spent a lot of time discussing student funding and third-level education. There is a perception that because students get so much out of education, they should be obliged to give more back to society. I note that you have quoted David Blunkett: "To achieve stable and sustainable growth, we will need a well-educated, well-equipped and adaptable labour force".

536.

You have said that you would like to see more funding, but it would have to be relevant to industry's needs. Should there not be a stronger relationship between industry and third-level education in terms of funding as industry has, in many ways, a social and moral obligation to put into third-level education as much as it is getting out of it?

537.

Mr Masterson: I will open that up to members on this side of the table to respond to in a moment, but I would like to comment from my own perspective. There is strong evidence of substantial involvement by industry at the moment. The question is, of course, is it enough, and could it be more? The volume of activity involves more than just supporting all of those programmes which are reliant on the year-out placement in industry. The bulk of degrees from the University of Ulster at Jordanstown (UUJ) are supported by organisations training undergraduates, but there are organisations which have seen the need to move towards direct funding of research activity in universities. There is evidence from recent years of companies in the modern technology sector directly funding universities, although I stand to be corrected should evidence from the other sectors prove contrary. The question is, where does industry's obligation start, and where does it stop? I will throw it open to my colleagues to give some examples.

538.

Mr J Kelly: I take the point that industry is inputting into education, but it is only those that do well in the "beauty parade" that get funding, the "Cinderellas" do not. Should there be a more cohesive approach from industry in terms of third-level education?

539.

Mr Smyth: I am not sure if I can answer that question. If I could just make clear my reference was to university research and development funding, but we would like to see industry contributing alongside Government and universities.

540.

Regarding the other comment about graduates, I am sure you do not want to go back to your debate on tuition fees. There is a market for graduates in companies, and we believe they will get paid decent wages. At the moment graduates are getting significant pay increases, certainly in sectors like accountancy and information technology.

541.

One of the dangers of the current system is that everybody has focused on this academic route; we would like to see a stronger further education sector. We would like people to get a degree, but not necessarily when they are aged 21. We would like to see more people going into companies, being educated over a period of time and eventually getting a level-four degree. That is where we need to get cohesion between the two and ensure that everybody is getting a fair crack of the whip.

542.

Mr Owens: I cannot add very much to that, but there is a balance to be drawn. We mentioned employability, and education covers much more than business. Your question was about whether business should fund, or assist in funding, education. Business can contribute in many ways to student education, and I take the view that business takes people from the education system and educates them further - bringing individuals through either by higher education or further education. Students are coming out with qualifications, but there is a much wider education process to be taken on. Business is investing heavily in that area.

543.

The Chairperson: An article in 'The Irish News' this week reported how Nortel has 40 new scholarship and sponsorship opportunities for undergraduates from Queen's University and the University of Ulster. The question is whether other companies should be doing that.

544.

Mr Masterson: It is something of a chicken-and- egg situation. Which comes first? Does a company actively help the university or further education college, or is it as a result of the procedure? If business linkages are built with colleges in local communities, employers will be typically responsive to the college needs within the constraints. Our role is not to fund education, but it can be to contribute. The building of those linkages will, in my view, result in that type of funding, as in the case of Nortel. The building of those linkages resulted in universities having a need which they shared with Nortel.

545.

Mr Owens: PricewaterhouseCoopers takes in 30 graduates each year and puts them through a three-year training contract. Therefore, there is an additional three- year education process. Those individuals come out with a degree and then have to do three years after that, before they go into the wider accountancy field.

546.

Mr Carrick: If the CBI is taking a regional strategic view, how is that, in turn, permeated in a meaningful manner at local level. I am thinking particularly of the 26 district councils who are all competing under their economic development programmes and how an overlap might occur. That is not the best use of energy - 26 councils all trying to do the same thing. I would be interested in Nigel Smyth's comments on that.

547.

He also said that there were significant barriers to learning and made reference to the lack of direction and inconsistencies between vocational and technical education in training and the role of further education. Could he also expand on those issues?

548.

Mr Smyth: In reply to Mr Carrick's first point, we do have to get it right at regional level initially, but I do not think that we are at that stage yet. It is hoped that with the Skills Task Force and other initiatives we will have a better idea of where we are going. Below that, and this was one of the recommendations of 'Strategy 2010', there should be local clusters of schools and further education colleges, et cetera. In our submission, and in a submission earlier in the year, we did emphasise that we must get the regional focus right first of all and then start focussing at the local level.

549.

It needs to be looked at, possibly under the umbrella of the Northern Ireland Business Education Partnership. There are various initiatives taking place in the north-west and in other areas, and the Northern Ireland Business Education Partnership is probably the key body that can facilitate that at local level. However, we should focus on getting the regional focus right first.

550.

As far as barriers to learning are concerned, we will be putting some of the material in as written evidence in early November. We are not aware of the Northern Ireland figures, but the National Adult Learning Survey indicates that 50% of adults chose the answer "Nothing would encourage me to learn." We must be realistic, as there are key barriers to learning, such as interest in learning and time for learning. There are 24% of non-learners and 32% of learners who see time as a barrier. There is a whole range of parameters, and we will give you more details on that. It is easy to say that many people who are economically inactive should be in employment. Many of those may not want -or may not be prepared- to learn, to get the employability skills that are required.

551.

We have not done as much structured research on the further education sector as we recently have on the higher education sector. Over the last 12 months, a number of consultations on the further education sector highlighted some very good practice in particular sectors - whether printing, electrical or engineering - where companies and the Further education sector, especially colleges, are working closely together. The outputs from this co-operation have been highly rated by local companies.

552.

In other areas, some companies are very concerned with the outputs. Some people do not have the technical skills - which is surprising, particularly if you look at the NVQ standards. Companies also face issues such as attitudes to work. These key skills keep coming up again as weaknesses, in the people they are turning away. We asked about the people they did not recruit, and they said "They are very poor".

553.

To be honest, we have not done detailed research on this, compared to what we have been doing in the higher education sector. There is a fairly mixed picture out there. If we could bring everybody up to the best standards, we could really make a difference.

554.

Mr Masterson: Ms Whiteside, coming from an organisation in the Craigavon region, may want to comment on the first element and on the linkages to councils outside the Greater Belfast area.

555.

Ms Stewart: Her company is doing quite a bit in terms of associating schools with local economic development through the Craigavon Development Organisation.

556.

Ms Whiteside: Another important link is the Southern Education Business Partnership. That partnership and the understanding from it, forges a strong link from which both sides benefit.

557.

Mr Carrick: I agree with that principle, but are we really making a mark with it? Coming from the Craigavon area, I think that only a select few are involved, and we are not really hitting the wider public.

558.

Ms Whiteside: Do you mean people in education?

559.

Mr Carrick: Yes.

560.

Mr Smyth: We do not have the mechanisms right. We keep getting invited to one-day conferences, which are very nice, but you are not going to get senior business people coming to spend a whole day to talk about general education issues. We need to be a little bit cleverer and get the regional level right. When it comes down to the local level, we also need to be careful and cleverer by using IT or having meetings in the evening to see how we might link people in. We need to make sure that we share a common agenda.

561.

Our organisation finds that getting input from senior business people is becoming increasingly difficult, because they are under greater pressures. Management is getting thinner and to achieve that strategic input, we are having to be more innovative. There is a message in that for everyone which needs to be given more thought.

562.

Mr Carrick: We need to make a greater impact, and I agree that huge demands are placed upon business and business managers at community level. To expect them to come along in the evening and repeatedly give up two or three hours is quite demanding. Diaries are full, and we are not making the impact we ought to. Some people are fully committed to the principle, while others think it is a good idea but have no time to support it.

563.

Mr Masterson: Are you referring to economic bodies?

564.

Mr Carrick: Yes.

565.

Mr Owens: It was not long ago that we recruited only graduates into the professional services industry. A few years ago we changed this policy and started to bring in non-graduates, although most have a third- level education. We realised that to recruit those people we had to talk to them while they were in secondary school. We visit as many secondary schools in our areas as we can, to let them know about our business and the type of work that goes on, in an attempt to bridge the gap between career advice and the workings of business.

566.

Mr R Hutchinson: You are saying that you do not need a degree to be successful in business. There are capable children who, for their own reasons, are not able to attain a higher level of education. However, do you agree that many of these children would benefit the business sector in Northern Ireland?

567.

Mr Owens: Absolutely. Mr Smyth mentioned the difference between skills shortage and hard-to-fill vacancies. Hard-to-fill vacancies are really an inflationary process. People with experience and capability are being poached. Salary expectations become unrealistic for a lot of companies, and when you employ people with high expectations, they will let you invest in their training and then move on. All organisations want to retain good employees who have good basic skills but do not want to be the boss. Therefore, you have to target a different audience.

568.

Mr Hutchinson: Are you suggesting that they show greater loyalty?

569.

Mr Owens: I am not suggesting that, but Mr Smyth mentioned that graduates expect to be taken by the hand because they have a degree, when, in fact, they are only beginning to learn. Many people without degrees are totally employable. We then invest in their training and education while they are employed with us, as do many other companies.

570.

Mr R Hutchinson: That is very encouraging.

571.

Mr Masterson: It is more about stability, because they are more likely to stay. That is a good thing, and it is something that organisations in Northern Ireland with parts of their broader companies elsewhere will say - there is greater stability in Northern Ireland. Of course, this can also be a weakness, because you need a degree of turnover.

572.

Mr R Hutchinson: Do you agree that a view exists that unless you have a higher level of education you are not really wanted? You must also break down this barrier and not give the impression that you want someone who has been to a grammar school or university. There are capable people who, through no fault of their own, seem to get a slap in the face every time they apply for a job because they have not had a higher education. They are the people in Northern Ireland who actually do the work, unlike some who are sitting with degrees the length of their arm.

573.

Mr Smyth: We certainly agree. Every two or three months we do a business confidence survey, and some of those surveyed identified skill shortages and the fact that there were difficult-to-fill vacancies. Most of these are for operatives, electricians, bricklayers and construction workers. I would not like it to be thought that we believe that everybody has to come out with a degree. In the future, degrees will not be necessary for many of the jobs on offer - particularly in the service sector.

574.

Mr R Hutchinson: I am very pleased to hear that.

575.

Mrs Carson: I am a member of this Committee, but I am afraid I had a very low level of primary education. I was amused by what you said, Mr Smyth, about people not being good timekeepers or attenders and not knowing how to communicate without shouting.

576.

I think you already know that there is a problem at the top end of the education system, but I think the problem starts at the basic level. Children are coming into school having had no training in how to sit down or lift a pencil and apply themselves to thinking or reading. Nowadays they are encouraged to be themselves. They spend some time at one type of play and some time at another. In the current system, children as young as four or five are not applying themselves to responding to any form of discipline. However, that is an issue for another day. Your problem is to find operatives and people who are employable in different industries. Industry should congratulate itself for having survived 30 years of trouble.

577.

We may have had problems, but we are moving away from that, and we have something to build on despite the background of the troubles. I do not think we should put ourselves down too far in that respect. As Mr Hutchinson suggested, the education system here is such that people who have degrees are lauded as being special, but others with manual skills are treated like second-class citizens. That is the barrier you have got to get over.

578.

One Fermanagh person said to me - and I do not mean this in any derogatory way - that we will always need "sheughdiggers". There will always be a need for someone who knows where to dig then digs it and digs it properly.

579.

I think that we have to go back to basic skills and training. As Mr Owens said, there needs to be linkages with schools. Pupils should be brought to see you and your workplaces. They should be given the chance to see what industry looks like. You should not confine yourself to secondary schools, you should go to grammar and primary schools as well. There is a feeling that nothing is produced in Northern Ireland, that we have Government agencies here, but we get everything else from other places. Industry is producing something, and you should be creating the culture that it is acceptable to work in industry and that people who do so should be proud of that fact.

580.

Mr Masterson: I agree with a great deal of what has been said. From the comments we have made today, and what you will be getting from us in November, you will see that we value the further education sector as being critically important.

581.

From our perspective, it is not all about the higher education sector. We are concerned that there may be people who have been trying to get into the higher education sector and do degrees as opposed to going along other routes - in the past, the technical sector might well have provided for this. We can identify with that theme.

582.

Ms Whiteside: I would like to comment on work experience and visiting schools. There is an onus on people in education and in business to ensure that the interface between business and education is a meaningful one. Pupils should have work experience that is worthwhile. Equally, the student's expectations should be realistic in that they should realise that they cannot go into a solicitor's office and take charge of a case for a week or go into a business and negotiate a deal.

583.

Mr Beggs: I have a degree, and I have worked in industry, but I have also put on a set of overalls and driven fork-lift trucks, and it is apparent to me that society needs to place greater value on manufacturing industry and on business in general and interact with it. You commented on the weakness in Northern Ireland's system and the need to strengthen the vocational and technical educational sector. We have already been advised that Northern Ireland is weak in this area compared to the rest of the United Kingdom, and even weaker compared to Europe. You said earlier that further education lacks direction and that there is a need for better careers guidance. Do you agree that we seem to have a disproportionate focus on the academic route in Northern Ireland and that not everyone is going to be a scientist or have a degree? What would encourage students to take up the career opportunities which undoubtedly exist? For example, there is a shortage of bricklayers, plumbers and electricians. These craft and technical skills can lead to good career opportunities. I have also heard that employers generally do not value HNDs to the appropriate extent. They are treated almost as an intermediate route to getting on to a degree course. The CBI needs to address that issue with its members. Does our careers guidance service for schools need to be changed to give constructive advice on the current needs of industry and employers? There was a similar critical comment last week on careers guidance in the skills sector.

584.

Mr Smyth: Careers guidance has to be seen as independent, relevant and of good quality, and it has to be accessible. That is central to letting individuals make informed choices. We should have a more cohesive service, linking the various parts of the careers service together. We need to strengthen links with employers. From current research it seems that many large employers have had no contact whatsoever from careers people, and that concerns me. We should, perhaps, look at how we could use the Internet to give people an idea of what jobs entail and how they operate. Using the Internet would be a very effective, efficient means of illustrating opportunities to young people and showing them what skills they need or what sort of environment they will be working in. The whole image of manufacturing is very negative.

585.

It is a very different world now, as there are more progressive and technology-related companies. It is critical for those who are giving advice to be aware of the changing needs and the role of industry. It must be customer-focused, and it must have quality standards. Careers advisers also need to be accredited.

586.

In 1994 a major review was carried out on careers guidance, and we thought that that was the answer to all our questions. Unfortunately, as is often the case in Northern Ireland, it was not implemented, however, I understand that it is presently being revisited. The review is looking in detail at careers education in the school system, but we believe that this is just as important in respect of adults, particularly when lifetime learning is being considered.

587.

Mr Beggs: Can someone comment on the fact that businesses do not place enough value on HNDs?

588.

Mr Masterson: In the past, this has been affected by supply and demand. Not long ago, supply was in abundance and values dictated who was given the first call. In addition, the education system was restructured, and the old polytechnics were replaced by universities. Statements were made, even in those colleges, about the importance of getting a degree, rather than a HND.

589.

However, the market has now changed, and we have moved back again from abundant supply in certain areas to a short supply. HNDs are being sought in fields for which courses are in short supply. The role of the further education sector and related qualifications has been played down, and emphasis has been placed on the higher education sector and the replacement of polytechnics by universities. Employers have perhaps been responsible because they operated in a demand/ supply situation, but the education authorities have also played their part.

590.

Mr Owens: I agree. The perception that you must have a degree has been introduced by those who have degrees ¾ our generation probably started that trend. A company would be very silly to advertise for staff with degree-level qualifications only. There is now a movement towards third-level education ¾ an HND in business studies and administration could be much more focused and relevant than a degree in geography or another unrelated subject. There is a realisation that it is important to gain third-level education, but not just a degree.

591.

Current trends are leading to a decline in the manufacturing sector, however this is outside the control of business; it is caused by globalisation and the expansion of the Web. Third World countries are now marketing their excellent capabilities in precision machining and in the aerospace industry - that would have been unheard of in the past. Business in Northern Ireland is having to reinvent itself ¾ machine shops have been replaced by total-solution companies. People are using their high level of skills and sub contracting manufacturing jobs to other countries at a lower cost, and that trend is going to continue.

592.

Mr J Kelly: I hope we are not downgrading the concept of degree courses, as that would be a mistake. For example, the first degree course in nursing is a great advance for the industry. We should not look at education in a narrow way; the structure of degrees has been ineffective, but that is no reason to abolish them.

593.

Mr Beggs: If more emphasis were placed on HND courses, people with these qualifications could fulfil the required role, and having achieved this, they could continue their lifelong learning at their own leisure and progress to their chosen level.

594.

Mr Byrne: I welcome the CBI's presentation, which has highlighted a number of key issues of concern, amongst which is the lack of generic key skills. We need to remedy this problem, because academic qualifications alone are not meeting employers' needs. The training system must include these skills. What are your views about general skills training? Should we be aiming to provide a mixed style of training which is neither basic nor academic but a combination of practical electronics and theory? Will stronger collaboration be necessary between the industries seeking the workers and the training providers? The further education sector could have a better role there.

595.

With regard to research and development, it is fair to say that in Northern Ireland we have not had a culture of good collaboration between universities and large employers. Often the large employers with scale three or scale four plants did not have their own Northern Ireland research and development departments and did not interface with universities. How can that be improved?

596.

There seems to be a 64% dependency on the public purse. What can we do to lessen that public sector dependency? What is the CBI doing to change the general culture of management? If you look at the United Kingdom economy generally, there has, in the past, been a reluctance on the part of management to change its attitude and culture. It has been slow to adapt, and this has often led to the "them and us" attitude, which meant that we have not always had the aggregate net benefit that we should have been getting.

597.

Finally, I agree with Mr Owens's comments about PricewaterhouseCoopers's employing people at 16-plus and then putting them through further education colleges to do the Accounting Technicians course. Some colleges have been very successful in placing people who are on two-year Accounting Technician courses in an accounts office one day a week, and some of these people have gone on to become fully-fledged accountants.

598.

Mr Masterson: You made several points. The first was to do with the creation of a better skills-based workforce and what we can do about that. My colleagues may want to pick up aspects of that.

599.

The other points were on university links and the dependency on the public purse and what can be done there. I will start with your first point - the creation of better skills.

600.

Ms Whiteside: I will pick up on the technical skills side. There are two elements to this - technical skills and the softer employability skills. Reference was made some time ago to the fact that industry in Northern Ireland was declining, and one of the keys to holding industry here must be the technical side. There is room for us to work closely with further education to enhance the attractiveness of technical courses and technical skills, either at degree level or HND, whichever is relevant.

601.

Mr Byrne: It could also be at HNC level.

602.

Ms Whiteside: Yes, it could. We need further education colleges to work alongside employers at HNC/HND level. People who are looking for employment in their local area and who do not have the urge to go to the mainland should be trained locally to enhance the technical side of the business.

603.

Mr Byrne: Where must the impetus come from? Should it come from the further education sector or from industry? Who is going to take the leap into the dark to build this collaboration?

604.

Mr Masterson: Do you mean who is going to help determine the skills required?

605.

Mr Byrne: Who is going to devise a mechanism that will provide the skilled people that we will need in the future?

606.

Mr Smyth: A great deal of this will come out of local partnerships. It has been well recognised over the last year or two that we have been inputting to the development of the new curriculum, and we will see key skills coming through there. Job skills have key components, and there is a particular qualification of key skills. That has not yet happened in modern apprenticeships. Many of the NVQs have links with employers as part of that.

607.

I want to refer to the issue of discipline that we discussed earlier. I received a telephone call this morning about a small company in the Antrim area that was prepared to take on a young guy from a difficult background who was doing an NVQ Level 2 in IT. He spent five weeks on an induction course and then began his first week of work in the company. This small company spent a great deal of time preparing him, and it had a project orientated for him, but after a week he disappeared on sick leave. He went back to the training centre two days later, because he found that the work in the company was too hard. When he is at the training centre he stops in the afternoon and goes home, yet he still gets his training money. That is not creating the discipline that is required in the work place.

608.

Mr Byrne: I accept your point. You want the training organisations to be more disciplined and regimented towards young people, and you want young people's attitude towards work to improve.

609.

Mr Smyth: Yes. Everybody should be aware of the importance of key skills. Key skills are now built into a number of courses and training programmes, and on the back of that, many people will spend time on work placement, among other things. This is not yet happening in modern apprenticeships, but it is hoped that it will happen in the next six months.

610.

Key skills are very important to employees. All education, training and any courses undertaken should be able to incorporate them into the training, whether it is in a university or in more specific job-related training.

611.

Mr Byrne: I agree with that. It is very important that your organisation feeds this concern right into the Department, because the policy decision makers - who are usually academics - see things only in a less than total way. It is important, therefore, that employers get their views fed in at the highest level.

612.

Mr Masterson: We take that on board, and it is reflected in the business/education partnerships. To add to what Nigel said, Nortel holds in great store the strong linkages that now exist between the Training and Employment Agency, the further education colleges and the training centres. We hope to see the training centres becoming more responsive in predicting what skills are needed.

613.

The training centres in the area in which I grew up produced a lot of welders. I often wondered why so many kids came out with welding skills when there was no great demand. I hope that we have learnt from that, but it should also be remembered that training and anticipation is a good thing. It is hoped that there will be better linkages in respect of the needs of modern industry through the T & EA's linkages with the colleges and training centres.

614.

There were other elements to the question regarding the university links not being good. I disagree with that. There are a number of organisations, not just Nortel, who have membership. One of the great differentiators about doing business in Northern Ireland is the responsiveness of the local universities to the demands of local industries, should local industry make the demand.

615.

But how do we make that more proactive? Many industries in Northern Ireland are utilising that, and that is one of the great values of being in business here - the responsiveness of those colleges who make the call, particularly the universities. There has been some evidence of successful companies that have grown out of Queen's University in the past, which were fostered by early linkages with industry.

616.

Mr Owens: A couple of trends are emerging from the two main universities - the introduction of the incubation and spin-out companies. They have taken that a stage further in that there are now strategic alliances with other professional firms - software development firms, among others. That is working very successfully in extending the education process and bringing business skills and some of the employability skills in to those areas. There are models there that are worth looking at and are worth considering for application in other aspects of the education process.

617.

Mr Masterson: The third element to your question concerns our role in and around the public fund. We touched on that earlier to some degree.

618.

Mr Smyth: We see that as being important in respect of the growth in the private sector. Investors in People emerged out of an initiative by the CBI. Investors in Training - the idea of having this standard - goes back to 1989, and we have been slightly slow to take that one up. More recently we have been promoting a benchmarking model called "Head Start" which will identify this, and it goes further than Investors in Training. It looks at the whole area of employee involvement, leadership, culture and various other things. On a personal level, I am concerned that there is too much focus on education and training, particularly by the T & EA. We need to look much more widely at leadership, management, work organisation and employee involvement. Those seem to be ignored. I am a little bit worried that we are putting a great deal of investment into specific education training, when, in fact, the whole organisation should be re-engineering itself. We will be raising that issue.

619.

On the matter of management, that was one area that was left out of 'Strategy 2010'. The whole process was speeded up, and the group looking at skills and education had no opportunity to look at management. The Management Council has now been set up, and it is to be hoped that it will address that. We have not yet got that issue right in Northern Ireland.

620.

Mr Dallat: The CBI does not have to sell its expertise. You have a critical role to play in this process, so I will seize this opportunity to mention four things I think are important.

621.

In a former role as a teacher, I spent very little time in industry. I wonder if it is wise to rely on teachers, who have very limited opportunities, who come into a place like Nortel to find out what the real world is about. I would certainly welcome a lobby from the CBI to encourage the Department to create a greater opportunity for teachers to get out there, get on the overalls and white coats and find out what is really going on. It is very difficult to teach something without practical experience.

622.

My second point is that I am aware that you have input into the curriculum, and I think that is brilliant. It is critical, because I know - again from past experience - that parts of the curriculum are so outdated it is unbelievable. I hope you also have input into the exams, because they are also old-fashioned.

623.

My third point is about careers guidance. We talk about it in isolation; it is almost like religious education - a particular time allocated to it. I know that in some progressive schools posters are put up in various classrooms, but they have not gone beyond that by integrating career guidance into every subject. People can do a subject for 10 years and not know what the job opportunities are.

624.

You gave evidence to another Committee about literacy and numeracy problems, which shocked but did not surprise me. I hope you do not let go of that one. It is a shame that in any society it is left to industry to teach people to read and write. I know there is no more humiliating experience for any individual than not to be able to read and write. Some of those people have hearts of gold as far as industry is concerned. Embarrass and shame Government into doing something about that, and find out who is responsible for allowing it in the first place.

625.

My last point is that we still reserve places for the directors at the front of the building. Let us get rid of that and treat everybody in industry equally. Let us share the jobs around and let everyone be equal. I am not suggesting that the Japanese got this right - they probably did not - and I think we can do it better rather than commit someone to doing one job for 30 years.

626.

This Committee also needs to be shaken up. There should be benefits to come out of this; it should not be just a one-off meeting. Let us do it in partnership; we can make a success of it.

627.

Mr Masterson: We will take a lot of those comments on board, for we agree with them. We would like to work in partnership with this Committee on an on going basis. We are enthused by the opportunity to move something forward.

628.

You have touched on a number of issues. As one who is close to a careers agenda, I will make a comment on that and then pass to my colleague. A review of the careers service is currently being carried out which the CBI is having an input to, and no doubt your Committee will be looking at the outcome of that. It is clearly a question of resources in schools. As the employers' body, we recognise resources as a major issue in and around education. There were problems particular to careers, because we have an overloaded curriculum. No doubt it is a question which you will be returning to when that Committee reports. We are very mindful of that as employers.

629.

Mr Smyth: I want to comment on the teachers. The CBI nationally was involved in something called "Understanding British Industry". In GB, 10% of teachers were placed in industry for a week each year, but in Northern Ireland it was less than 1%. When we saw Mr John McFall two and a half years ago, he was astounded, as he thought that this happened in Northern Ireland but found out that it did not. It did not take place because of the lack of funds for teachers. NIBEP sees that as one of its key strategic objectives, and it is to be hoped that it will be addressed, although not, perhaps, to the extent we would like.

630.

We do provide a great deal of documentation. We do push this through to the Department's officials. We are sure that the Assembly will now listen to us, more so than has happened in the past. A number of the things that you have touched on are very close to our hearts, and we have been trying to cover most of them.

631.

Mrs Carson: Mr Smyth stated that nothing was done about reports that were submitted in either 1997 or 1998. How many reports has the CBI produced and put forward to the Department of Education about which nothing has been done?

632.

Mr Smyth: Perhaps I misled you. In 1994 a careers review was undertaken jointly by the Departments, which produced a whole series of recommendations, but I understand that only a very small number have been implemented. If all of them had been implemented, we would be much further forward now.

633.

Mrs Carson: Where did that stick and stop?

634.

Several Witnesses: It was with civil servants.

635.

Mrs Carson: There was no local accountability to push it through?

636.

Mr Smyth: There is no debate on that. The whole reason for there being an Assembly is that these things can be raised and somebody will have to be accountable. Without doubt, somebody is likely to say "You did that report last week, and it has just got buried". There used to be no forum for debate and raising the issue to see if progress had been made.

637.

Mrs Carson: Were you referring to one report only?

638.

Mr Smyth: Yes. I referred to other CBI reports that were put forward on a whole range of issues. Obviously other people will be putting issues forward too, but we hope that some of these things have and will be taken up, although it will take a bit of time.

639.

Ms Stewart: I was involved in a review of business education links as long ago as 1992, and it took about three years before it was even partially implemented. As well as the lack of accountability, the structure of the Department did not help in that the T & EA was part of the Department of Economic Development, but with particular training responsibilities. Then there was the Department of Education, and there was an element of falling between two stools. That was linked in with the lack of accountability. Certain issues tended to be pushed around the different bodies involved.

640.

Mr Byrne: There is now a new Department which brings together further education, higher education, and training and employment, as well as parts of the Department of Economic Development and the Department of Education. Have you any comments to make about that? Ms Stewart has said that she welcomes it.

641.

Is this new Department, which will merge skills training with higher and further education, considered to be one that will result in a better synergy?

642.

Mr Smyth: Initially, I imagine it will. However, what is of concern here is that the Department of Enterprise, Trade and Investment will be considered as more of a super-agency, and there may be elements of management, development and Investors in People which we would prefer to go into that one agency. Indeed, we welcome bringing together the higher and further education sectors.

643.

The Chairperson: There are three areas which have not been mentioned as yet. First, how do we stop certain businesses free-riding on the training system, in that they will rely on people being trained elsewhere without paying for this themselves? That would be a rational, if not a socially responsible way for an individual business to act. There is evidence that some significant employers in Northern Ireland have not trained up their own staff, but have instead relied on bringing people in from outside, particularly from the rest of Great Britain, on a temporary basis. You may be able to guess the company to which I am referring.

644.

Secondly, in 'Strategy 2010' the research and development target aims at raising Northern Ireland's GDP rate from 0·6% to 1·5% within 10 years. That is a worthy objective, but is it a realistic one in your estimation?

645.

My third question relates to where we are sitting in Nortel. Media coverage has debated the supply of IT skills relative to demand and, in particular, the debate arising from the Northern Ireland Economic Research Centre report, including John Simpson's interpretation of it. From Nortel's point of view, is there a shortage of IT skills, and if so, at what level? With such differences between graduates and those attaining sub-degree technician level or beyond, this raises the possibility that we simply lack people who, despite being IT literate, are not necessarily IT specialists.

646.

Mr Masterson: The majority of that last question is aimed specifically at Nortel, and they will have an opportunity to speak to you on this matter.

647.

The Chairman: Do you feel that we should deal with that?

648.

Mr Masterson: Mr Owens from PricewaterhouseCoopers would be able to give an independent view on that first question.

649.

Mr Owens: We tend to be one of the larger providers of professional services. We bring in 30 to 40 students each year, train them and then suffer from those free riders who unload them. Understandably, it is hard to fill vacancies, because some of these people can receive twice the salary just to move. People can afford that, because they have not invested in this training. We invest in the training and pay a competitive rate, but to provide free rides on the back of those offering twice the rates is totally out of the question. I cannot give you an answer on how to stop it. Our method, unfortunately, is to reduce the intake. As a result, that impacts on the ability of the economy to bring through qualified people and sustain that.

650.

That is a practical and realistic solution, but it is not the best approach, so I would prefer not to take it. It might be a good idea if, through the education system, we rewarded those who are prepared to invest and to enter the education system earlier ¾ we could run dual courses with degree courses, but that would be difficult to do, because a degree course is already challenging. We may need to take a radical look at training methods, as well as the education and follow-on professional services.

651.

The same difficulties are being experienced in the precision-machining sector of the aerospace industry, although not because of skill shortages. These vacancies are hard-to-fill, because someone else is paying twice or three times as much as they can. They have every right to do that if they can find a market, but unfortunately it impacts on output.

652.

Mr Smyth: There is no single answer to this. We need to encourage a broader training culture in areas such as Investors in People. The training levy does not work, because the same problems prevail in the construction sector where a levy is paid. Incentives are needed, especially for smaller firms, but it is not only smaller firms that do this. It is a challenging question to which we do not have the answer at the moment.

653.

Mr Masterson: New organisations need to get up and running quickly. They need experienced people, and they try to get experienced recruits. With graduates, there is a significant lead-in time before they become quality people in industry. Perhaps organisations should be encouraged to routinely take on graduates early in their career.

654.

To come to the second part of your question on 'Strategy 2010' and the research and development target. Growth in the last year in Northern Ireland based on new introductions and IDB successes has taken place in industries that will contribute to its development and secure its position as a resource provider. This compares favourably with other parts of the world, where there is a shortage of resources. When organisations want someone to meet their resource gap, we must ensure that we can supply them.

655.

Mr Smyth: Is this achievable? We should certainly be moving in this direction. Over the next ten years, growth in existing sectors will take place in knowledge and research and development type industries. We are starting to see some spin-offs from the IT industry, and there is more potential here. We could then develop the university/industry links in the traditional indigenous sectors - and we should certainly be moving towards that. However, we have not looked at that as a separate issue.

656.

Mr Owens: Technology based training (TBT) will help here. It opens up a whole new array of training and accessibility.

657.

The Chairperson: This meeting has been extremely helpful. We are at an early stage in this inquiry, and we look forward to receiving your written submission. We may want to meet with you again to discuss these issues in more detail.

658.

Mr Masterson: We appreciate the opportunity, and we will give you a more comprehensive input in November.

659.

The Chairperson: Thank you very much.

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