REPORT ON THE INQUIRY INTO
EDUCATION AND TRAINING FOR INDUSTRY

SESSION 2001/2002 FIRST REPORT

Ordered by The Committee for Employment and Learning to be printed 20 September 2001

Report: 01/01 R

COMMITTEE FOR EMPLOYMENT AND LEARNING
VOLUME 1 - REPORT AND PROCEEDINGS OF
THE COMMITTEE RELATING TO THE REPORT

TABLE OF CONTENTS

Executive Summary
Recommendations
Introduction
Review of Background Material
Summary of Oral and Written Evidence - Findings
Conclusions
Annex 1 - Paper by Dr H Steedman
Annex 2 - Paper by Dr D Armstrong and Prof J Field
Annex 3 - Paper by Dr E Birnie
Annex 4 - Paper from the National Assembly for Wales
Minutes of Proceedings relating to the Report
List of witnesses who gave oral evidence
List of written evidence submitted to the Committee (printed)
List of written evidence submitted to the Committee (not printed)
Glossary

VOLUME TWO
Minutes of Evidence relating to the Report

VOLUME THREE
Minutes of Evidence relating to the Report (continued)

VOLUME FOUR
Written submissions relating to the Report

Executive summary

Purpose

Northern Ireland's productivity is significantly lower than that of other competitors in the global market place. Further­more, it is somewhat alarming that the productivity of the Northern Ireland economy is only 84% compared to that of the United Kingdom, and just over 50% of that achieved by the United States of America. Education and training have a very important contribution to make in increasing productivity levels, which in turn will reduce social exclusion. At the level of the individual, higher skills usually lead not just to higher earnings, but also to greater self-esteem and fulfilment. Thus, this Inquiry into Education and Training for Industry was initiated under the Committee's powers to initiate inquiries and make reports on policy issues to the Minister, as set out in the Belfast Agreement, April 1998.

The Terms of Reference for the Inquiry were agreed as:

"To examine and make recommendations to improve the contribution of further and higher education and training, including university-based Research and Development, to Northern Ireland industry."

Approach

The Committee agreed to have an extensive consultation on this broad and important subject area and to request written papers from specialist advisers. Oral evidence was taken during thirty-nine sessions, including evidence sessions located throughout Northern Ireland. In addition, evidence was heard from leading organisations from the Republic of Ireland on both education and training issues. The Committee received over one hundred written submissions and wish to express their sincere thanks to all who gave evidence to this important Inquiry.

Main conclusions and recommendations

It is important to stress at this point that the Committee is very supportive of the many initiatives, which the Minister and his Department have put in place since devolution. The Committee's recommendations are designed to further develop and strengthen the contribution of higher and further education and training to our economy and to firmly embed the lifelong learning culture in Northern Ireland. The Committee's main recommendations are set out below.

Literacy and numeracy

Further additional action is needed to correct the low levels of adult literacy and numeracy in Northern Ireland. This will lead to greater social inclusion and industrial productivity. The Committee also stresses the importance of further developments throughout the entire education system to improve the literacy and numeracy standard of the workforce of the future.

Further Education

The Committee considers that a clear strategic direction for the Further Education Colleges is urgently required, to better equip people for work, give the colleges a more manageable range of objectives in a rapidly changing modern economy, and contribute to greater community and social development throughout Northern Ireland. It is important to maintain accessibility to further education provision across Northern Ireland. At the same time there should be more specialisation to attain excellence.

Higher Education

The Committee acknowledges the recent work of the universities to establish good links with both industry and the wider community. This has taken place against the background of declining funding per student and increasing student numbers. The Committee wishes to see further development of these links to enhance both economic development and further widen access to university courses. It is vital that significant additional finances are immediately directed to university Research and Development (R&D) to maintain their international standing and their key role in Northern Ireland's economic development.

Education and industry links

An immediate and greater focus is required to enhance and develop the links and working relationships between all higher and further education providers and all those involved in industry, to maximise the benefits for all. We would encourage further programmes for teacher placements into industry.

Careers education and guidance

An enhanced, independent, effective and easily accessible careers education and guidance service is required, which fully utilises the most up-to-date Information Communication Technology.

Resources

Whilst almost every area of public sector spending claims to be under funded, it is clear from the evidence given to the Committee, that both higher and further education sectors require significant additional financial resources. Extra financial resources are required to alleviate previous under funding and to ensure a greater contribution to economic development in Northern Ireland. Additional public spending and private finance should be regarded as an investment to improve the productivity of industry and society in general.

Skills development and training

A strategic input from the Department is required to monitor, predict and implement appropriate policies to achieve the optimal skills output and avoid potentially serious mismatches between the skills supply and demand of the economy in the future. We welcome the developments initiated by the Department, that have already occurred in this area. These include the recent work of the Northern Ireland Skills Taskforce, and the introduction of no fees for students over nineteen on a broad range of vocational courses. The Committee wishes to see a stronger qualitative analysis of skills training outputs.

The Committee also welcomes the Needs and Effectiveness Evaluation into Training and Vocational Education Needs, which has been initiated by the Department for Employment and Learning in conjunction with the Department of Finance and Personnel and the Office of the First Minister and Deputy First Minister. There is likely to be a significant overlap between the areas covered in our Inquiry and the scope of this initiative. The Committee would urge that the evaluation be conducted rigorously and that it should include a genuinely independent and external assessment of the effectiveness of all government training and vocational education activities.

Our Inquiry has highlighted a shortfall in the availability of skills and in funding for university based R&D in Northern Ireland, when compared to Great Britain. It has also indicated that several key areas, such as the further education sector and the provision of careers education and guidance lack sufficient strategic direction and co-ordination. It is therefore probable that the evaluation will indicate the need for increased per capita spending in Northern Ireland and that the output per pound of public money spent could be considerably improved.

In support of these recommendations, the Committee is fully aware that considerable additional financial resources will be required, and is prepared to work in co-operation with the Minister, and his Department, to explore avenues of resource allocation. However, the Committee would stress the undeniable benefits which will accrue to the Northern Ireland economy and to the eradication of poverty and social exclusion from the implementation of our recommendations. This is especially true for those recommendations that focus on a policy direction to ensure that the systems for education and training in Northern Ireland meet the needs of the twenty-first century. The Committee believes that these recommendations will ensure that the education and training system will be relevant, adequately co-ordinated, of the highest quality and represent value for money. In the late nineteenth century the economy here was at the forefront of world technological and industrial progress. What was once true can be true again. Few challenges facing the Northern Ireland Assembly and Executive are more significant than that of ensuring the best possible contribution from education and training to industry.

Recommendations

The Committee for Employment and Learning make a series of recommendations to the Minister for Employment and Learning, and to the Northern Ireland Assembly following completion of our Inquiry into Education and Training for Industry.

The Committee believes that the speedy implementation of these recommendations will significantly improve the higher and further education and training of our young people, the upskilling and reskilling of our current workforce and the training/retraining of those currently not in work, to prepare them for employment. The outcomes from these recommendations will lead to a more competitive economy, higher self-esteem for individuals and greater social inclusion for marginalised groups.

The Committee's recommendations are complementary to the Department for Employment and Learning's overall aim, "To promote a culture of lifelong learning and to equip people for work in a modern economy", and many of the policies and programmes set out in the Northern Ireland Executive's current Programme for Government.

The Committee fully appreciates the current constraints on public sector finances. We have not attempted to produce detailed costings for our recommendations. The Committee would wish to enter into constructive dialogue with the Minister, following receipt of the Department's response to this Report, to assist the Department in identifying financial possibilities and options for the implementation of these recommendations. This is likely to entail a combination of best management practices and more innovative financial solutions. The outcome of the Committee's recommendations will contribute to the development of a more highly skilled workforce for the developing knowledge- based economy. This in turn will increase industrial productivity and the competitiveness of the Northern Ireland economy.

The Committee's recommendations are presented below.

Skills

n     Recommendation 1 - Further additional funding and resources should be made immediately available to support literacy and numeracy development schemes to correct the poor levels of adult basic skills in Northern Ireland. These schemes should include provision for both personal development and social skills training.

n     Recommendation 2 - Initiate and fund research into developing effective models of workplace basic skills development and the effective sharing of best practice.

n     Recommendation 3 - Develop flexible and dynamic policies to deal with retraining and reskilling in a range of situations, especially large-scale redundancies. These should include fast-track training programmes to address particular sectoral, or geographical areas, of skill shortages.

n     Recommendation 4 - Serious consideration must be given in the current review of the 16-19 curriculum, as to how the relative and/or absolute decline in students studying quantitative and scientific subjects can be reversed, in order to ensure that more people, at secondary and tertiary level, study mathematics and sciences.

n     Recommendation 5 - Develop appropriate conversion courses in mathematics, the sciences and Information and Communication Technology (ICT) that reflect the needs of industry.

n     Recommendation 6 - Greater government support for workplace development, community education and outreach programmes aiming to improve ICT skills, to enable everyone to operate within the ICT driven economy.

n     Recommendation 7 - Rationalise and develop existing initiatives such as the Skills Task Force, Executive Recruitment Watch and the Priority Skills Unit.

n     Recommendation 8 - Develop appropriate mechanisms to support the training requirements of Small and Medium- sized Enterprises.

Further Education

n     Recommendation 9 - The overall further education strategy, should include a 3-5 year strategic plan, be urgently completed and implemented for the further education sector. The strategy should address the key issues of the optimum number of further education colleges in Northern Ireland, and their individual remits, and how to deliver on the objective of acquiring parity of esteem between vocational and academic qualifications (see Recommendation 31).

n     Recommendation 10 - Decisions regarding the development of centres of excellence at individual colleges should stem from the overall strategy for the sector. This should be underpinned by a commitment to innovative schemes, which increases access and supports a geographical spread of provision across Northern Ireland.

n     Recommendation 11 - Where appropriate, support services should be co­ordinated and harmonised to produce cost savings and standardisation of procedures.

n     Recommendation 12 - Urgent need for the provision of a vastly improved common statistical database on students and staff, to reflect trends in personnel issues and record the outcomes for students attending FE courses. The information produced must be consistent across all colleges.

n     Recommendation 13 - Members of Boards of Governors must receive effective training on their roles and responsibilities. The composition of Governing Bodies should reflect the communities which the colleges serve.

n     Recommendation 14 - Further Education Colleges should come under the remit of the Assembly Ombudsman.

n     Recommendation 15 - Increase the overall student per capita funding to the further education sector, bearing in mind equality considerations between the different educational sectors. We welcome the recent financial support improvements for FE students. The current funding mechanism needs to be changed if it is to achieve its objective of delivering high-class vocational training, that is regarded as on a par with academic qualifications.

n     Recommendation 16 - The allocation of funding should be guided by an overall strategic plan for the sector. This will address the issue of funding for centres of excellence, the support of Research and Development, (more likely to be product and process development) and the funding of part-time courses.

n     Recommendation 17 - Closer links with local industry, industrial development organisations, including increased staff participation in the Lecturers into Industry initiative (see Recommendation 37).

n     Recommendation 18 - Increase the availability of places on Higher National Diploma/Higher National Certificate and other courses which lead to professional qualifications in Information and Communication Technology (ICT).

n     Recommendation 19 - Include an ICT module on all further education courses. All full-time students should ideally have achieved the ICT competence level of the European Computer Driving Licence by the time that they complete their course.

Higher Education

n     Recommendation 20 - Increase funding to the university sector to ensure that high quality staff are attracted and retained, and to develop the research base of the universities. This should include increasing and developing matched private sector funding initiatives such as the Support Programme for University Research (SPUR).

n     Recommendation 21 - Further develop links between higher education and business. This includes developing initiatives such as the Teaching Company Scheme; industry and charity sponsored professorial chairs; technology incubation units; science parks; spin-off companies; encouraging entrepreneurship through innovative approaches to programme design and specialist postgraduate programmes.

n     Recommendation 22 - A continued increase in the number of university places especially in areas of skill shortages, in line with the Committee's recommendation in its Report on Student Finance, 12 October 2000.

n     Recommendation 23 - Co-ordination of all initiatives, not only those funded by government, which aim to increase access to higher education. This should have a particular focus on the outreach projects, which link the universities to the community.

n     Recommendation 24 - Monitor the effectiveness and equality impact of the new measures for student financial support.

Other education training providers

n     Recommendation 25 - Further develop partnerships between the education sector and private training providers.

n     Recommendation 26 - An improved, more comprehensive, streamlined and effective National Training Organisation and Sectoral Training Council structure in Northern Ireland to enhance its role in developing a highly skilled workforce.

n     Recommendation 27 - Continuously monitor and develop Modern Apprenticeships to meet changing labour demands.

n     Recommendation 28 - Continually monitor, evaluate and improve New Deal so that it achieves its employment outcomes in the most cost effective manner. We welcome the Needs and Effectiveness Evaluation of Training and Vocational Education initiated by the Northern Ireland Executive. We also welcome the inter-departmental TaskForce on Employability and Long-term Unemployment. The Committee further recommends that the Department considers other training schemes, which would better address the equal opportunities issues surrounding the availability of training.

Qualifications and the curriculum

n     Recommendation 29 - Support the continuing development of the Northern Ireland Credit Accumulation and Transfer System (NICATS) initiative.

n     Recommendation 30 - Include international industry-standard qualifications as components of vocational qualifications.

n     Recommendation 31 - Facilitate an inter-departmental focus to ensure parity of esteem for vocational and academic qualifications.

n     Recommendation 32 - Initiate and fund, as a matter of urgency, a research project to evaluate the three types of qualifications.

Removing barriers to education

n     Recommendation 33 - In principle, the Committee supports the UK Skills Task Force recommendation that learning to level 3 (craft/technician level) should be free of charge to all up until their twenty-fifth birthday, and asks the Department to provide costings in order to determine its feasibility.

n     Recommendation 34 - Continue to develop the Individual Learning Accounts scheme with greater targeting and financial support for those in most need without creating excessive administrative costs.

n     Recommendation 35 - The Committee supports the further development of initiatives to assist with childcare and those with educational special needs and disabilities in order to facilitate increased access to all education and training.

Careers education and guidance

n     Recommendation 36 - The Department must give priority to the implementation of an enhanced independent, comprehensive and up-to-date, careers education and guidance service based on best practice and extensive use of Information and Communication Technology.

n     Recommendation 37 - Greater work related experiences for all teachers, students and lecturers for substantive periods based on the Northern Ireland Business and Education Partnership (NIBEP) model.

n     Recommendation 38 - Increase funding to NIBEP in order that it can further its work in developing links between business and education.

Developing the enterprise culture

n     Recommendation 39 - Urgent completion and effective implementation, at the inter-departmental level, of the Research, Development and Innovation Strategy for Northern Ireland.

n     Recommendation 40 - Substantial funding increases for Research and Development (R&D) to counteract the current and previous low levels of financial support in comparison to our international competitors. Whilst the majority of university R&D funding should be linked to the university Research Assessment Exercise, 10% as recommended by the Northern Ireland Economic Council, should be earmarked for research that is of particular relevance to Northern Ireland.

n     Recommendation 41 - Establish a single unit to co-ordinate and promote government funded R&D in Northern Ireland, including individual bids for Research and Development for all government departments, and develop well-designed research collaboration and technology transfer schemes with other countries.

n     Recommendation 42 - Implementation of a clear structure to give academic staff sufficient incentives and flexibility to take research ideas, and even company start-ups, to commercial fruition.

n     Recommendation 43 - The Department for Enterprise Trade and Investment to match, at least in part, any research funding raised by higher education from the private sector through business-university links, as an incentive to promoting closer links between higher education and industry.

Introduction

Background

Throughout the western world, politicians and governments have come to regard policies to improve education and training as central to their economic strategies. As a means, in fact, to increase economic growth and also to combat poverty. Within the United Kingdom the perception that schools, colleges and universities had "failed" industry and commerce first appeared in the Victorian era as the workshop of the world was challenged by the then newly industrialising powers such as Germany and the USA. In 1997 Tony Blair adopted the mantra "education, education, education", and this seemed to strike a chord with the electorate. Given all this it might be thought that there was little more to say about the contribution of education and training to industry in Northern Ireland or elsewhere.

In fact, there are few tasks more important to the Northern Ireland Assembly and to the Executive than that of upgrading the output from the training and education systems into the economy. The underlying reason for this is that the Northern Ireland economy has one of the lowest levels of labour productivity within the western world, as shown in Figure 1 and detailed in Table 1. We must change that position, and education and training holds the key.

Figure 1 Northern Ireland's productivity compared to other economies, 1999

Source: Northern Ireland compared to UK average from Office for National Statistics figures. Other OECD economies from Department of Trade and Industry. All figures as supplied in a NI Assembly written answer (AQW 3552/00), 16 July 2001, from Minister of Finance and Personnel, Mr Durkan, MLA to Dr Birnie, MLA.

Table 1: Northern Ireland's productivity compared to other economies, 1999.

(Level of Gross Domestic Product per total hours worked (1999), given as a percentage of the UK average level.)

Source: Northern Ireland compared to UK average from Office for National Statistics figures. Other OECD economies from Department of Trade and Industry. All figures as supplied in a NI Assembly written answer (AQW 3552/00), 16 July 2001, from Minister of Finance and Personnel, Mr Durkan, MLA to Dr Birnie, MLA.

Northern Ireland's productivity level needs to be improved in order to sustain the degree of competitiveness that is necessary to maintain the current comparatively low levels of unemployment. Furthermore, without improvements in productivity the economy will not be generating the revenue needed to pay for levels of social and welfare provision. There is now abundant evidence from international sources that increases in education and training provide a powerful impetus, and perhaps the most important contribution, to productivity levels, whilst also contributing to reductions in social exclusion. It is not simply that higher skills are needed; though they are. It is a sobering thought that, even with decades of publicly funded education, it is still the case that around one-quarter of adults can barely read or count. A recent study [1] suggested that the UK position with respect to illiteracy was little better at the end of the twentieth century than it was at the start of that century.

It is true that the case for more effective education and training for industry is subject to certain caveats. Each pound of spending on education and training will not necessarily or immediately be translated into many pounds of higher GDP. Nevertheless, even if outlays on education and training are not sufficient to guarantee faster economic growth and more social equity - they are probably necessary. It is true that certain individuals may experience inappropriate training and education which even leads to them becoming "over educated" relative to the skill requirements of the employment they are currently engaged in. However, the answer to this is not to stop training and educating, but to do so more carefully. Nor do we wish to deny that education and training can have an intrinsic merit, which contributes to social and culture worth. They do not have to be solely justified in terms of economic pay back. Nevertheless, it is true that much of the education and training system is geared up to service the needs of the economy. The significant factor is to ensure it performs that role effectively and efficiently.

Against such a background, the Committee deemed that the contribution of education and training to industry would be a very suitable subject for our second Inquiry. The inclusion of consideration of university-based Research & Development (R&D) gave the Inquiry a very wide scope. Research and Development itself has such a strategic role in contributing to Northern Ireland's future economic performance, that it could not be ignored. Over the course of the decades since 1950, there have been many official inquiries into the interaction between training and Northern Ireland's economic performance. Our own Inquiry was, however, unusual in its close connection with the institutions of devolved government and also in the very extensive opportunity for input from interest groups and the wider public.

Terms of Reference

Taking into consideration the above facts, and that one of the primary roles of Statutory Committees is to advise the Minister in formulating policy, the Terms of Reference for the Inquiry into Education and Training for Industry were agreed as:

"To examine and make recommendations to improve the contribution of further and higher education and training, including university-based Research and Development, to Northern Ireland industry."

Approach

The proposals and Terms of Reference for the Inquiry into Education and Training for Industry were announced in February 2000. Some 400 organisations were asked for their views.

Over one hundred organisations and individuals made written submissions to the Committee. To ensure the best possible access to a wide range of witnesses, three of the public evidence sessions were held outside Parliament Buildings: Nortel at Monkstown, Craigavon Borough Council, and Newry and Mourne District Council. In addition, the Committee made very informative visits to the University of Ulster campus at Magee College and the East Antrim Institute of Further Education. The Committee is very grateful to the hosts for their co-operation and hospitality at these meetings and visits.

In addition the Committee obtained detailed written briefings from Dr Hillary Steedman (London School of Economics and Political Science), Dr David Armstrong (PricewaterhouseCoopers) and Professor John Field (University of Warwick). Dr Esmond Birnie, MLA also visited the USA as part of the International Visitors Program and submitted a paper on aspects of the USA approach to education and training. These are included in Annexes 1 to 3 of the Review of Background Material.

Submissions were made by a very wide range of organisations and individuals including the Department, a wide range of other public sector bodies, business associations and individual companies, trade unions, local councils, further education colleges, universities, awarding bodies, voluntary and community groups.

The Inquiry was suspended on the 11 February 2000 due to the suspension of the Northern Ireland Assembly. Nevertheless, the Committee remained keen to hear at first hand from a wide cross section of organisations and individuals. Oral evidence was taken from June 2000, on the restoration of the Assembly, until June 2001. This was scheduled around the busy workload of the Committee. In all, the Committee heard oral evidence from a total of thirty-nine organisations and individuals.

The transcripts of all the oral evidence sessions are included in Volumes 2 and 3 of the Report under Minutes of Evidence. The written submissions made by those organisations and individuals, which gave oral evidence, are included in Volume 4. Due to the number of written submissions made, it was not possible to publish all the submissions in this Report. However, copies of all the written submissions not published have been laid in the library of the Northern Ireland Assembly.

This was a lengthy Inquiry and the Committee is most grateful to the many individuals and organisations that gave up their time to give both written and oral evidence.

Section 1: Review of background material

This Section provides a background to the Committee's Inquiry, by reviewing some of the previous literature in this field, and highlighting key issues. It must be emphasised that the views expressed here are not necessarily those of the Committee for Employment and Learning. Inevitably much of the literature, which included reports and papers from government departments and agencies and other sources, had a general UK focus. The Committee noted a general deficit of information with a specific Northern Ireland focus throughout the Inquiry, but was aware that this area was being improved. However, where possible the relevance of such studies to Northern Ireland has been highlighted, with reference made to Northern Ireland studies where available.

A number of themes arose during the course of the Inquiry. Skills and training providers were seen as central issues. There was concern over the current level of skills in the workforce and the level of skills needed by the economy, both now and in the future. In terms of training providers, there was particular concern about vocational and craft training and the role of the further education sector. Lack of clarity concerning qualifications and the curriculum was another major theme. Underlying the whole Inquiry was the need to widen access to education and training. In all, eight themes arose throughout the Inquiry, and these have been used to organise and structure the report.

The themes were as follows:

(1) Skills;

(2) Further Education;

(3) Higher Education;

(4) Other education and training providers;

(5) Qualifications and the curriculum;

(6) Removing barriers to education;

(7) Careers education and guidance; and

(8) Developing the enterprise culture.

These provided a template for the consideration of the previous literature.

1.1            SKills

A concern with skills lay at the heart of the Inquiry. It is therefore appropriate to begin by explaining why skills have been judged as so important.

Higher levels of skills benefit three areas: the individual; the company or establishment; and the economy. A highly skilled person earns more, is less likely to be unemployed, and is likely to live longer than somebody with few skills. Higher skill levels, used effectively, raise productivity in companies. Finally, countries with a highly skilled workforce tend to have high economic growth, resulting in greater competition in the global market place.

In parallel with the recent trend of falling unemployment in Northern Ireland and the rest of the UK, is the world-wide phenomenon of rapid technological change and the growth in 'knowledge-rich' jobs. This has led to an increasing disparity between the demand for those who are highly skilled, and those with low or outdated skills. Consequently, even when the economy is fairly buoyant there are a considerable number of people who are marginalised from the labour market as they are unable to take up the new employment opportunities.

1.1.1            Definitions

Suitable definitions can be taken from the National Skills Task Force (NSTF) [2] A skill refers to the ability to do something well, with the idea of competence and proficiency implicit in the term. The NSTF referred to three main types of skills: generic skills; vocational skills; and personal attributes. Underlying and underpinning these were the 'basic skills' of literacy and numeracy. These can be seen as the building blocks on which other skills are built.

n     'Generic skills' refer to transferable employability skills used across a large number of different occupations, eg communication skills, team working, problem solving and the ability to use Information and Communication Technology (ICT).

n     'Vocational skills' are the occupational or technical skills needed to work within an occupation.

n     'Personal attributes' are the characteristics which employers usually seek in their workforce, eg motivation, judgement and leadership.

It is also important to distinguish between 'skill shortages' and 'the skills gap'. The NSTF identified two different kinds of skill deficiency: external skill shortages and internal skill gaps. According to the NSTF, external skill shortages refer to recruitment difficulties that are due to an excess of demand over supply of required skills in the external labour market. An internal skill gap is a divergence between firms' current skill levels and those that are required to meet firms' business objectives. These definitions require further explanation and elaboration.

            External skill shortages

n     Cyclical nature of skill shortages: It has been widely recognised that the reported incidence of skill shortages varies according to the general conditions in the economy, tending to rise during periods of rapid economic growth and falling unemployment, and fall during periods of high unemployment.

n     Sectoral differences: Skill shortages vary across different sectors, and also vary with the size of enterprise. Hard-to-fill vacancies tend to fall into two distinct categories: low paid jobs that traditionally have a high turnover rate in industries that have a poor image (catering, hospital porters etc.); and highly paid occupations that require specific technical skills.

n     The 'quality' of applicants: Difficulties in filling vacancies arise, in many cases, from perceived shortcomings in the 'quality' of job applicants, although there may be no deficiency in quantitative terms.

n     Lengthy training period: In some cases, recurrent skill shortages for certain skilled/highly-qualified positions may reflect the long duration of training required. If training is cut back, perhaps during a period of recession, the impact of skill shortages will be felt some considerable time later.

n     Exceptional growth: Exceptionally rapid growth or change in some sectors of the economy can result in recruitment difficulties.

            Internal skill gaps

These refer to skill deficiencies among existing employees. In many cases internal skill gaps are identified and recognised as such by employers, but in some cases unrecognised deficiencies result in a skill gap that is 'latent'.

An internal skill gap is defined as existing where lack of full proficiency (as perceived by employers) typically involves one-third, or more, of staff in at least one occupational area. Two surveys that looked at this issue found that skill deficiencies were reported in a wide range of technical and practical skills and also in generic skills [3]

The proportion of employees considered by their employers as lacking full proficiency may be quite small, nevertheless the impact on a business can be considerable. This may especially be the case if managers, and others in key occupations, are those lacking in skills.

1.1.2            Research findings into skill shortages and skill gaps

The National Skills Task Force noted that there has been a major shift in skill demand over the last 30 years, from skills related to manual work to those related to cognitive abilities. Generic skills, as defined above, were increasingly in demand, and the demand for technical skills was also high. In addition, skills in the technology sectors at intermediate level were needed. These skills were somewhat diverse, but included a focus on creativity and design and the ability to translate ideas into a saleable product. The introduction of new technologies, particularly in ICT, had driven up skill demands, as had increasing global competition.

The proportion of young people with qualifications had risen substantially over the last 20 years. However, most of the growth in qualifications had been in the academic, rather than vocational field, and most vocational qualifications gained were at a low level - below NVQ Level 3. Furthermore, there had been little growth in the qualifications of the existing adult workforce. Consequently, a large minority of the workforce in the UK had either low or no vocational qualifications. Indeed, one out of every five adults had poor basic skills [4] The UK compared poorly with its competitors in terms of the proportion of its workforce holding vocational qualifications at Levels 2 and 3 [5] It is important to note that qualifications are used as a proxy for skills. It is recognised that many people who have no or few qualifications may be very skilled and experienced in their field of work. However, it is increasingly the case that people who lack qualifications are more vulnerable to changes and developments in the labour market.

Four out of ten skill shortage vacancies were in craft and technical occupations [6] In such instances, employers would have been looking for specific technical skills in addition to generic skills. The main effects of skill shortages for firms were difficulties in meeting customer service objectives, delays in developing new products or services, increased operating costs and difficulties in meeting standards of quality [7]

Regarding skill gaps, surveys indicated that about one in five employers reported them. In the majority of these cases, the employer stated that both generic and vocational skills were lacking. Additionally, research suggested that many current skill gaps were unrecognised by employers and, consequently, the situation regarding skill gaps may have been seriously underestimated [8] The industries most affected by skill gaps have been identified as hospitality, wholesale and retail, manufacturing, transport and communications, financial services and public administration. Skills gaps were least reported in the construction industry and in the education sector. (However, in Northern Ireland, the Construction Industry Training Board reported severe skill shortages in their evidence to the Committee. See Section 2.1.4.)

The incidence of internal skill gaps differs from the incidence of external skill shortages. It has been found that skill gaps tended to lie in relatively low-skilled occupations (such as sales, personal services and operative and assembly work), whereas external skill shortages were at their highest in craft and associate professional occupations. Only a small number of establishments in the NSTF survey reported both kinds of skill problem.

The failure of companies to train and develop staff was the main cause of internal skill gaps in nearly half of those companies reporting such a problem. This presumably reflects an inadequate, or limited, commitment to investment in training on the part of UK management, which was well documented in previous studies [9] Other factors included the introduction of new working practices, the development of new products, and the introduction of new technology. In the survey, only 31% of companies attributed the problem to the inability of the workforce to keep up with change. Problems caused by internal skill gaps often indicate a lack of forward planning by the organisation for the new skills that will be required to implement changes in product development and new services. There is therefore a need for skills development strategies to be integrated with product strategies. However, in some sectors the pace of change is so fast that it is very difficult to plan ahead in a detailed way.

A further difficulty, as noted by the series of Department of Trade and Industry competitiveness strategies in the 1990s, is that UK companies may lack the financial incentives to upgrade their human capital. Given that wages, and other labour costs in the UK (especially in Northern Ireland) are so much lower than in other OECD economies, management may well feel that they can get by with routine products, relatively simple production processes and comparatively unskilled labour. UK companies may therefore be locked in a low level equilibrium: low wage, semi-skilled and low productivity. However, long-term competitive survival demands that this vicious circle be broken.

The main effects of internal skill gaps on companies as identified by the NSTF, were, as with skill shortages, difficulties in meeting customer service targets, difficulties in meeting quality standards, and increased operating costs. In addition, skill gaps among the workforce, particularly at higher level occupations, hindered the development of new working practices and the development of new products and services. In all, both skill gaps and skill shortages reduced business competitiveness.

Although there has been considerable growth in higher education provision in ICT, there is concern about the abilities of some ICT graduates, and about the extent to which the supply of ICT-qualified people can keep up with demand, in terms of quantity and the mix of skills offered.

Personal and social skills are increasingly seen as important for people to be effective in the workplace. As McIntosh and Steedman noted: 'Adequate levels of literacy and numeracy are now seen as necessary for employability but are only really effective if accompanied by a range of softer skills' [10]

           Northern Ireland

The situation in Northern Ireland in terms of overall skill shortages did not appear to be as critical as it is amongst its neighbours, though it should be noted that the regional labour market continued to tighten during 2000-01 [11] A study found that vacancies in 2000 were reported by 21% of employers, compared with 48% in Britain and 27% in the Republic of Ireland. Nevertheless, an increased number of employers reported vacancies, hard-to-fill vacancies, and skill gaps than in 1998. High proportions of current vacancies (64%), were considered by employers to be difficult to fill. The main reasons given for difficulties in filling vacancies were that there were not enough people interested in doing this type of work (21%); poor attitudes, motivation and personality (12%); and a lack of work experience required (10%). More than half (57%) of vacancies were considered to be difficult to fill for reasons other than a lack of skills. A gap between the skills of their current workforce and those needed to meet their business objectives was reported by 15% of employers [12]

The occupational group with most hard-to-fill vacancies was the craft and related occupations (26% of all hard-to-fill vacancies). In sectoral terms, the hotel and restaurant sector had the highest proportion of current vacancies and the highest incidence of hard-to-fill vacancies (23% of these businesses reported recruitment difficulties) [13]

1.1.3           International comparisons

In terms of the level of skills in the population, Northern Ireland compared unfavourably with other regions in the UK and with other countries further afield. The proportion of the workforce with qualifications was lower in Northern Ireland than in the other UK regions. (See Figure 1.)

               Figure 1 - Percentage of working age population in the UK and in Northern Ireland
               by level of education qualification (1998) [14]

                                UK                                NI

               Source: Steedman Annex 1

A further problem was that the qualifications of workers in Northern Ireland tend to be dated (in terms of training content) and, by comparison with other UK regions, more likely to be academic than vocational. In addition, the proportion of the workforce involved in job-related training at any one time tended to be lower in Northern Ireland than in other parts of the UK. One indicator of employer commitment to the development of its workforce lies in the numbers, and proportions, of businesses achieving Investor in People recognition. The Investors in People targets within Northern Ireland have consistently not been met (though some individual sectors have been successful) [15]

It has been known for some time that the workforce in the UK has lower qualifications relative to most other major industrial economies (See Figure 2). A study conducted in the 1980s compared the workforce of Britain, and in particular, Northern Ireland, with the workforce of what was then West Germany. The study found both quantitative and qualitative differences between the two countries. The German workforce was better qualified than its British counterpart, in terms of the relative numbers of Doctoral, Masters, Bachelors and technician level qualifications. It also appeared that the German courses and qualifications were of superior quality and more relevant to industry. It took, on average, more than twice as long to attain a first degree in Germany than in Britain (even the 'polytechnic' course in Germany is longer than the basic British degree). The authors observed that, 'the British enter the workforce relatively unskilled and there is little indication that this is compensated for by superior on-the-job training' [16] Furthermore, the research suggested that Northern Ireland is 'under qualified even by the standards of Great Britain' [17]

A more recent study, which looked at the skill profiles of six European countries, found that the UK and Portugal had the highest proportion of people with low skills.

The authors observed that, 'UK progress in reducing the low skill group has been less spectacular than that of Portugal', and 'the UK can expect to have around 1/5th of the young age group at the International Standard Classification of Education (ISCED) 0/1/2 level [18] by the year 2010 on present trends' [19] These findings suggested that the UK in general, and Northern Ireland in particular, could benefit from a careful examination of education and training systems employed in other countries.

               Figure 2 - Third level, non-university and university, educational attainment (ISCED)                percentage of population aged 25 to 64 by country with at least this level of qualification (1995)

                Source: Education at a glance OECD; Paris 1997 Table A2.1 page 38. Note: Under 25s excluded as a large proportion
                have not yet completed their education. ISCED is equivalent to 1 + A Levels or an Apprenticeship.

1.1.4     Future skill demands

Survey findings from the NSTF pointed to 'potentially serious mismatches between skills supply and demand in the future' [20] Almost half of all establishments surveyed anticipated problems within the following two or three years arising from a shortfall of skills. The majority of establishments anticipating future skill-related problems tended to fall into one of two groups: high-performing establishments that maintained high aspirations as to future skill requirements; and weaker performers that have experienced a recent decline in sales or the market share, and recognised the need for their skill level to improve. In terms of external skill shortages, it tended to be the low skilled and low paid occupations, and higher skilled and technical/craft occupations that were most affected by hard-to-fill vacancies. It was often in the process of making changes in response to market pressures that skill gaps were revealed.

Changes occurring within the employment structure led to the requirement for a proportionately greater number of workers with qualifications equivalent to NVQ Level 3 and above. This move, to an increased demand for skilled and qualified workers, and a decreased demand for unskilled and unqualified workers, is likely to continue. A recent report reflected this pattern of 'skill intensity within job growth' across all sectors [21]

Given that the priorities for future Government spending on education and training lie in basic skills; generic skills; intermediate level skills; specialist ICT skills; maths skills; and the major adult skill gaps, these are discussed briefly in turn.

1.         The International Adult Literacy Survey has indicated the scale of the problem of basic skills across a range of countries. It found that 24% of the adult population in Northern Ireland perform at the lowest levels of literacy [22] The problem in Northern Ireland (relative to other countries) is clearly illustrated in Figure 3. In terms of the UK, it was estimated that very few of those who are functionally illiterate or innumerate take part in a relevant course of study. Part of the problem lies with the fact that many people either do not realise, or will not admit, that they have a basic skills problem.

               Figure 3 - Population (16-65) by IALS Literacy levels (prose literacy scale): Northern Ireland,
               GB 1997, Germany, Netherlands, Sweden, United States, and Switzerland 1995.

                Source: Steedman, Annex 1

2.         Most jobs call for a range of generic skills, personal attributes and technical and job-specific skills, with increased emphasis on more socially oriented generic skills such as communication and team working. The ability to understand and use ICT equipment is now a generic skill of increasing importance, although the current level of generic ICT skills is unlikely to be adequate to meet future skill demands.

3.         The intermediate level skills most valued by employers typically require long programmes of employment- based training for their development. Intermediate skill supplies have, in the past, been hit by periods of recession that have caused employers to cut back on costly and lengthy training - thus storing up problems for the future. Higher intermediate jobs now tend to be filled by graduates. However, employers complain that graduates lack the skills that are most readily acquired through work-based training: work experience, commercial understanding and generic skills.

4.         It is expected that employers will continue to report difficulties in obtaining specific kinds of ICT skills and work experience. Many employers prefer to seek ready-made ICT skills rather than to develop them in-house.

5.         The UK does not produce a sufficient pool of young people with good mathematical skills, yet the ability to work with numbers and solve problems based on mathematical constructs is a vital skill for many occupations.

6.         The majority of the workforce still has a low level of qualifications. While a focus on formal qualifications underestimates the skill levels of older workers, unqualified workers often lack complementary broader knowledge and understanding and wider generic skills. In consequence, they may be vulnerable to changing labour market conditions and unable to make the transition to new jobs [23]

1.2            Further education

It is important that the further and higher education sectors should have a clear vision of the specific and unique contribution which they can make [24] The Department of Education in Northern Ireland (DENI), in 1999, offered the following 'vision' as a basis for discussion:

'To advance knowledge, to enhance individual learning and skills and to enrich the intellectual, economic, social and cultural life of society and the community'.

It also made the important observation that further and higher education sectors, in bringing people together from across the traditional divide, have an important role to play in promoting a more peaceful society. In addition, the Association of Northern Ireland Colleges observed that the aim of Department of Higher and Further Education, Training and Employment (DHFETE) [25] is 'to promote a culture of learning and to equip people for work in a modern economy' [26]

1.2.1     The focus and role of further education

Notwithstanding such mission statements, there may be a lack of clarity in further education's central focus and key strategic aims and objectives. Currently its student population falls into three main groups: vocational, academic, and adult/community education. It has been suggested that the sector requires a clearer strategic direction. In particular, clear guidance needs to be given to colleges on the relative strategic importance of their different student 'constituencies' [27]

It is clear that more people trained in vocational and technical skills are needed. Indeed, further education colleges have been criticised recently for concentrating more on expanding apparently more prestigious higher education work, than on developing studies at the basic and intermediate level, where skill shortages are most severe [28]

1.2.2     The management and funding of further education colleges

According to a study conducted in 1999 [29] there was general agreement among representatives of further education colleges in Northern Ireland that there would be an increased demand for skills in electronics, telecommunications, software, health technologies, tourism, construction and voluntary services. However, only a minority considered that the sector was adequately prepared to address the skill needs of these areas.

The key issues regarding the development of college provision to be able to address such needs were identified as follows:

n     More capital investment.

n     Expansion of HND and other degree level courses, especially in ICT.

n     Course provision to be linked more closely to employer need - and more detailed labour market information needed.

n     More funding especially in capital-intensive occupational areas.

n     More speculative forms of training (eg developing courses that are based on projections of trends in labour demand) [30]

1.2.3     Further education, the community and the economy

The same stud [31] undertaken for DENI, found wide local variation, and major differences between individual colleges in terms of links between the further education sector and the economy. On the one hand, there was evidence of links with local employers in terms of Jobskills, Business-Education Partnerships (BEPs), the provision of job-specific training, and the alignment of qualifications of college graduates to current and future needs of local employers. In addition, some colleges had strong links into the local community and good relationships with local District Councils. On the other hand, there was only a limited amount of co-ordination within the sector and limited integration with the economic development agencies. This rather limited link between colleges of further education and economic development agencies is of concern and in need of improvement. Small and medium-sized enterprises (SMEs), technology and innovation, and tourism are vital to the economy of Northern Ireland. These areas form the focus of three of the main economic agencies, namely the Local Economic Development Unit (LEDU), the Industrial Research and Technology Unit (IRTU), and the Northern Ireland Tourist Board (NITB). The study suggested that developing much stronger relations between the Industrial Development Board (IDB), and its successor agency, and the colleges could enhance the role of further education in attracting inward investment.

           Centres of excellence

It was also suggested in the report that designated centres of excellence should be established, in collaboration with the Training and Employment Agency (T&EA), within the further education network. These should provide applied research to support industrial development [32] (Applied research, as opposed to the more 'pure' research undertaken by universities, is largely characterised by technology transfer.)

1.2.4    ICT and further education

Some colleges have excellent ICT facilities. This is important not only because there are, and will continue to be, demands for skills in ICT, but also because it enables the colleges to benefit from initiatives with a strong ICT focus, such as the University for Industry (UfI). It has been suggested that it will be necessary to expand HND and other third level courses in ICT [33]

1.3           Higher education

Higher education is discussed here in terms of both the UK-wide system and the specific case of the Northern Ireland universities.

1.3.1    The focus and role of higher education

The UK has a strong position in the knowledge-based sector. Universities are at the leading edge of innovation and knowledge creation. 'The role of our universities in the economy is crucial. They are powerful drivers of innovation and change in science and technology, the arts, humanities, design and other creative disciplines. They produce people with knowledge and skills .....They are ..... the seedbed for new industries, products and services and are at the hub of business networks and industrial clusters of the knowledge economy' [34]

            Northern Ireland

The participation rate in higher education in Northern Ireland is 46%, compared with 33% in the rest of the United Kingdom [35] Furthermore, participation is more widely spread across socio-economic classes (see also Section 1.3.3 - Higher education, the community and the economy). The Dearing Report recommended that more higher education places be provided in Northern Ireland, [36] and the Government responded at that time by providing an extra 2,600 places in the universities and teacher training colleges. However, in 1999 the observation was made that, 'the capacity of local institutions and the implications for the number of undergraduates pursuing courses in Great Britain and the Republic of Ireland remain a matter for further consideration' [37] In March 2001, the creation of 1,000 new higher education places over three years from 2002/03 was announced, with the increase in places designed to increase participation from lower socio-economic groups and to address skill shortages [38] This was in addition to the 4,400 places already announced in the Programme for Government.

1.3.2     The management and funding of higher education

Recommendations made for elsewhere in the UK may have a bearing on the management and funding of the higher education system in Northern Ireland. For example, it has been suggested that the HEFCE (Higher Education Funding Council for England) should consider the possibility of a joint teaching and quality assessment to reduce the bureaucratic demands made on institutions and to give a more balanced view of overall performance [39]

There is widespread disaffection across UK universities as to the bureaucratic burden of the Research Assessment Exercise (RAE) and the Teaching Quality Assessment (TQA), with some academics claiming that the RAE stifles original work. One measurable change since the introduction of the RAE is the decline in the number of academics writing books, which count for little in the RAE in many disciplines, whereas publications in peer-reviewed journals are valued highly. Consequently, there has been an increase in journal publications, as academics come under pressure to publish within a timescale that fits in with the next RAE, rather than wait for the completion of a project [40]

The resignation in August 2001 of the chief executive of the Quality Assurance Agency (QAA) highlighted the contentious issues in the area of TQA. On the one hand, the Assessment is seen as a very expensive procedure that is both bureaucratic and prescriptive. Universities UK (UUK), the HEFCE and the QAA argued that a rigorous but cost effective assessment procedure can be developed, that involves an assessment of samples of courses rather than the 100% coverage of courses at present. On the other hand, concern has been expressed that a more limited assessment procedure would not provide effective quality assurance [41]

1.3.3     Higher education, the community and the economy

Higher education institutions contribute to the economy through research, consultancy, Teaching Company Schemes, spin-off companies and technology transfer, science parks, and the production of a skilled workforce.

Higher education institutions are also an important educational and cultural resource for the community and can play a role in addressing social inequalities. The two universities in Northern Ireland are more successful in providing access to higher education for students from lower socio-economic groups than universities in other regions of the UK. Northern Ireland has a relatively high proportion of the population in the lower socio-economic groups (48% of the population of Northern Ireland fall into classes IIIm, IV and V, compared with 45.5% for the UK as a whole). It might thus be expected that Northern Ireland universities would take a high proportion of students from these backgrounds as a reflection of its population. In fact, the Northern Ireland universities do take a disproportionately high number of students from groups IIIm, IV and V - 31.8% compared with the UK average of 28.3% [42] This does not necessarily imply that there is not room for improvement with respect to access.

            Research and Development

The Dearing Report made a number of recommendations which are of relevance to this Inquiry. Dearing recommended that the Government should establish an independent body to advise on the direction of national policies for the public funding of research in higher education, on the distribution and level of such funding, and on the performance of the public bodies responsible for distributing it. The Report recommended that the Government should enable research councils to meet the full indirect costs of projects and programmes, preferably through the provision of additional resources. It also suggested that an Industrial Partnership Development Fund should be established to attract matching funds from industry, and to contribute to regional and economic development [43]

According to the Northern Ireland Economic Council (NIEC), research and development (R&D) in Northern Ireland was too low, both in absolute terms and relative to its major economic competitors [44] There was a lack of co-ordinated and complementary government attention to both public and private R&D in government departments, industry and universities. In order to carry out their own R&D and to be innovative, companies need access to publicly funded R&D through networking, co-operation, and training and knowledge transfers. The report recommended the following:

1.         A single institution or unit of Government should have responsibility for overall co-ordination of R&D policy and funding for R&D.

2.         An annual survey of R&D and innovation in the economy, inclusive of university activity, should be commissioned.

3.         An annual R&D and Innovation Budget and a single programme of publicly funded R&D and innovation activities, goals and priorities should be consolidated, set and monitored.

4.         A co-ordinated R&D and Innovation Strategy should be developed with phased and balanced targets for both public and private R&D and innovation.

5.         An R&D and Innovation Strategy should be fully embedded into a knowledge-driven economic development strategy.

6.            Increased public expenditure should be committed in an appropriately balanced way to encourage both public and private R&D and innovation.

In terms of funding, the report argued that a simple and transparent method of allocating core research funding, based on rewarding excellence, (as defined by the RAE) is the appropriate way forward for Northern Ireland. The proportion of core funding allocated in this way should be about 90%. At least 10% of core funding should be used for strategic regional development purposes. There should be an inclusive R&D and Innovation Strategy for Northern Ireland that informs the use of funding for regional development purposes, and levers additional funding from other public and private sources [45] Other policy initiatives should be funded from outside the core research quantum. In particular, the Higher Education Reach Out to Business and the Community Fund (HEROBC) should be used to meet the particular needs of Northern Ireland. The Department of Enterprise, Trade and Investment (DETI) should fully or partly match, out of existing industrial assistance funds, the universities' incremental external income generation from industry and commerce.

Overall, NIEC argued that increased funding for research and innovation from all public and private sources is required as a long-term policy objective in Northern Ireland.

The Dearing Report recommended that higher education institutions and representatives from industry should examine ways of giving firms, especially SMEs, easy and co-ordinated access to information about higher education in their area. The Report recommended that higher education institutions establish more technology incubator units, within which start-up companies can be fostered for a limited period. It also recommended that the institutions encourage entrepreneurship through innovative approaches to programme design and through specialist postgraduate programmes.

However, concern has been expressed about linking higher education too closely to the 'changing and somewhat capricious demands of market forces' [46]

1.3.4             Information Communication Technology and higher education

The issue of ICT and higher education (and education in general) can be considered from two perspectives: the use of ICT as an educational tool; and the production, through education, of ICT-competent workers and ICT professionals. It has been argued that the increased use of ICT in higher education should not be seen as a cheap option. There are significant costs in developing a proficient ICT system and its essential support mechanisms. The report of the Lifelong Learning Committee in Wales, which looked at, among other things, ICT and higher education, stressed that the use of ICT must be linked to learning outcomes -'learner empowerment is the crucial issue in the use of new technology, not the technology itself' [47] In terms of the production of ICT-competent workers and ICT professionals, the general opinion is that the demand for such people will continue to grow. Fears that the 'computer revolution' is drawing to a close appear to be very premature. The importance of ICT is of particular importance given that:

Perhaps the greatest area of expansion in the next few years will be in 'e-commerce' whereby increasing number of firms will use the Internet to conduct business. This opens up global and domestic markets in new ways and will lead to increased competition from around the world [48]

            Northern Ireland

A study conducted by the Northern Ireland Economic Research Centre (NIERC) found that less than 30% of firms surveyed expressed any difficulty in recruiting non-graduate technical support staff or new graduates in ICT [49] However, 70% had difficulties in recruiting other categories of staff. The highest incidence of shortages was in project management and software development, installation and integration. Shortages in these areas can have a considerable impact on company performance.

Generally, firms were satisfied with both the technical and interpersonal skills of their current workforce, but there was some concern regarding business awareness skills. In terms of new entrants, the highest level of dissatisfaction was with people entering the labour force from post-graduate ICT conversion courses [50]

1.4       Other education and training providers

Skill demand resulting from technological change will probably continue to grow. Consequently it will be necessary for larger proportions of education and training to be acquired in adult life [51] The commitment to flexible and appropriate training provision from employers and public and private providers should be matched by a commitment from individuals to invest in learning throughout their life:

.a new social contract where the right to education is complemented by a new civic and social obligation to undertake learning and self-development throughout life [52]

1.4.1            National Training Organisations and Sectoral Training Councils

The UK Government wishes to ensure that employers invest in the skills and talents of all by setting clear and auditable targets for training.

In this regard, National Training Organisations (NTOs) provide a link between employers and the education and training systems in each country. A consultation document on NTOs proposed a smaller, stronger and more focused NTO network that would concentrate on three core roles: assessing and articulating the current and future skills needs of their sectors; leading action on sector skills development; and actively reviewing progress in meeting skills priorities [53]

In recent years, three new processes have been introduced to support NTO work on skills: skills foresight; skills dialogue; and sector workforce development plans. While the broad picture of skills needs and trends are well known, there needs to be more detailed sectoral analysis as a basis for effective skills planning. Skills Foresight reports document each NTOs analysis of its sector's skills needs. Skills Dialogues work through broad industrial groupings rather than by individual NTOs. A report follows each Skills Dialogue. Sector Workforce Development Plans are strategic documents that cover a period of three to five years. Such a Plan includes a description of the sector and its workforce; stakeholder maps showing roles and responsibilities; key skills issues; the identification of between three and six priorities for the sector; and the expected impact of action on the skills available to the sector. It is important to note that the use of the three processes discussed here varies between the different countries of the UK.

The consultation document claimed that larger and stronger NTOs will be able to propose and provide a test bed for new workforce development policy initiatives. Innovation and creativity will be needed in order to tackle the skills shortage. There were currently no consistent comprehensive performance indicators for NTOs. Consequently, it was proposed that an agreed set of indicators be introduced that will offer a clear focus for NTOs, and assist them in becoming more strategic in their approach [54]

            Northern Ireland

In Northern Ireland, a unique arrangement of Sectoral Training Councils (STCs) in the key private sector areas with strong links to NTOs has evolved. The growth in the regional economy and the impact of growth rates in the Republic of Ireland, has increased North-South mobility. This has driven a need for cross-border recognition of vocational qualifications. Local STCs have played a key role in the process of achieving mutual recognition of NVQs and Irish equivalents in several skill areas, with further recognitions expected [55]

The response by the Committee for Higher and Further Education, Training and Employment to the NTO's consultation paper supported the proposed aims and recommended that a speedy conclusion and implementation plan is put in place in Northern Ireland to address the current gaps. Furthermore, the Committee recommended that the Northern Ireland structures, which should contribute to a better-equipped workforce and a more competitive economy, must be efficient, transparent, easily understood by all, compatible with other countries and also have measurable outcomes.

1.4.2            Distance learning

There is widespread agreement of the value of providing education and training in varied and flexible ways. Distance learning has been heralded as one of the ways in which education may increasingly be delivered. However, distance learning will not suit everyone. It appears to suit the learner who likes to take personal initiative rather than the learner who is in need of support. Furthermore:

Open and distance learning may overcome barriers of distance and working hours, but it is unlikely to address the social inclusion agenda unless there are developments in access and support [56]

Nevertheless, the Open University has had a great deal of success in reaching people who might otherwise have had little or no contact with education provision. Additionally, the UfI learndirect is another initiative that facilitates distance learning, among other things. It works as a brokerage service that attempts to match potential learners to courses. It has developed a huge electronic database of all learning opportunities in the UK, and it promotes learning by marketing both nationally and locally. In Northern Ireland, the Educational Guidance Service for Adults (EGSA) manages the database and UfI's freephone service.

UfI is involved in developing and providing learning materials in certain areas, such as ICT, basic skills, business and management, environment, retail and distribution, and multimedia skills. It emphasises non-traditional learning principles and presents most of the materials in 'bite-sized' chunks. There is a particular focus on using the Internet and individualised learning.

1.4.3            Workplace learning

According to a DfEE report there was considerable variation between employers in terms of the provision of training. One third of all employers provided training for less than 10% of employees, and one fifth provided training for over 90% of their workforce [57] However, there was a well-developed training culture in some sectors. For example, in the ICT sector, 63% of firms in Northern Ireland provided off-the-job training, and 75% provided on-the-job training [58]

Three main reasons are commonly put forward as to why employers do not train their workforce either at all, or to only a limited degree: 'poaching'; the employer fails to recognise, or underestimates, the benefits of training; and finally, financial constraints limit the ability of firms to provide training. The factors which restrict the level of investment in training by employers are likely to be felt most keenly by smaller employers. Small firms are more likely to offer on-the job training, and use informal learning as this reduces costs and causes less disruption to employee productivity.

There was evidence to suggest that companies with recognised training and development systems are shifting their training emphasis towards on-the-job training. This is due, in many cases, to involvement in Investors in People, which emphasises closely relating training to the objectives of the business. Overall, the DfEE report considered that the workplace is becoming more important as a site and source of learning, and that on-the-job learning is becoming more structured and systematic [59]

The Report also noted that on-the-job (informal learning) has both strengths and weaknesses compared to more formal off-the-job provision. Informal learning can enhance job-specific and transferable skills, but may not always offer the depth and stimulation of off-the-job training. Furthermore, it does not usually provide any form of recognition or certification that can be used to support career progression. It has been suggested that the low level of Level 3 qualifications of the UK workforce, in comparison with its competitors, may reflect the propensity for unrecognised and uncertified informal learning. An effective process of accrediting informal prior learning would help to recognise existing skills of unqualified adults. Such a process might help people to take up further learning [60]

The effectiveness of informal learning depends to a large extent on whether a company's way of working, and its reward and recognition system, encourages and facilitates such learning. Important elements include the following:

n     well trained supervisors, mentors or coaches;

n     promotion and performance systems that reward the sharing of information;

n     the introduction of variety and complexity into jobs, which lead to problem solving and decision making;

n     interaction between different departments in a company;

n     systems that encourage the codification and transmission of the outcomes of informal learning;

n     career paths and pay structures that reward coaching skills;

n     national systems for encouraging workplace learning (such as those in Japan and the German Meister system); and

n     the adoption of new work practices, such as team working.

Many of the 'new' work practices that are becomingly increasingly widespread in the UK provide opportunities for informal learning. They promote flexibility and responsiveness and enable productivity gains.

The National Skills Task Force made eleven recommendations, five of which are of particular relevance here:

n     NTOs should actively promote the use of informal learning approaches in firms, particularly SMEs, and develop, promote and fund accreditation of prior learning, to help adults attain formal qualifications building on their prior work experience.

n     New learning networks for SMEs should be developed, built around group training arrangements and University for Industry (UfI) learning centres, to help pool learning resources, strengthen links between industry and learning, and support adult learners in smaller firms.

n     The new Small Business Service should encourage and promote best practice in management and the organisation of work to small firms, through the facilitation of peer-group networks, the involvement of business schools and the training of key managers/workers in relevant management techniques and learning methods.

n     A tax credit should be introduced for small firms who demonstrate a significant commitment to developing the skills of their workforces and to effective business planning through the achievement of Investors in People, and the Government should review the tax position of other employer activities which support workplace learning.

n     The roles and responsibilities of employers and individuals in the promotion, delivery and monitoring of workplace learning should be recognised in a statement of workforce development principles between employer representative bodies and trade unions.

1.4.4            Training costs

The costs involved in training their workforce is a major factor for many companies, especially SMEs. An initiative that attempts to address this problem is that of Job Rotation. This initiative is currently running in Scotland under the management of the Workers' Educational Association (WEA) Scotland. It supports company and staff development by providing free vocational training for selected staff, and supplying and training previously unemployed people as workers to substitute for the staff released for training.

1.5            Qualifications and the curriculum

The UK Government recently announced that it planned to build a 'world class vocational and technical education system' via a major rationalisation of vocational qualifications up to technician level [61] 1.5.1            Recognition of qualifications

The recognition of qualifications can be considered from two perspectives. It is widely stated that qualifications gained in Northern Ireland should be recognised elsewhere in Europe (especially in the Republic of Ireland) and further afield. However, there is also the issue of the recognition of educational and vocational qualifications gained overseas. This is an important factor in terms of equality of access to education, training and employment for people coming to Northern Ireland who have received an education elsewhere. It is also important to the economy that the skills of those that are resident in Northern Ireland are developed and exploited. Connolly and Keenan, who made a number of recommendations regarding education, training and employment for people from minority ethnic groups, suggested that DHFETE should review this issue [62]

1.5.2     The curriculum and the role of industry

There is concern that the teaching of science, at all levels, needs to be developed:

We must start at the base, with better education for all our children in science. And we must open up opportunities for the best research. That means top class research within the best universities and more R&D in industry. Public investment is vital but also making sure we get the best science possible. That means being sure we have the right university structure, that there is a proper funding framework, and that academic careers are rewarding [63]

As children move to secondary school, many lose interest in science. Nevertheless, according to a DTI report, the overall number of young people taking science and technical A levels has gone up in recent years. The situation with first degrees is of more concern. The number of graduates in science, engineering and technology is increasing but not as fast as the increase in all subjects. In Northern Ireland, the number of students taking chemistry and physics fell during the period 1991-1999. Furthermore, there has been a decrease specifically in the number of physics, chemistry and engineering graduates [64] The problem of producing adequate numbers of graduates in mathematics and the sciences is not confined to Northern Ireland and the rest of the UK. A recent report stated that mathematics, science and technology courses have the highest drop out rate in the Republic of Ireland [65]

1.6           Removing barriers to education

The best defence against social exclusion is having a job, and the best way to get a job is to have a good education, with the right training and experience. Tony Blair, 1999 [66]

In order to target social need and address the issue of social exclusion there needs to be a focus on tackling unemployment and increasing employability. Education and training are important to ensure that everyone can enjoy the same levels of choice and life chances. Writing with reference to the experiences of minority ethnic people, Connolly and Keenan argue that it is 'only through a co-ordinated strategy of intervention in relation to employment, training and education that "opportunities for all" can become a reality for all sections of society' [67]

Widening access initiatives are expensive, as additional support mechanisms are required in order to improve student retention. The Committee for Lifelong Learning in Wales made the point that: 'Widening access does not imply opening doors to everyone irrespective of their stage of ability. To do so is to provide heartache for individuals who are subsequently failed or referred in their studies' [68] Providing support for non-traditional students is not just a matter of preserving good retention rates - it is important that students with low levels of confidence are not subjected to experiences in which they may experience failure. Collaboration between the higher and further education sectors is crucial, both in encouraging progression into higher education, and in adapting their supportive techniques for the non-traditional student.

The House of Commons' Education and Employment Committee made the following points, which are relevant to this issue:

We recommend that the Government should give very careful consideration to any further expansion in the number of places in higher education and ensure, before proceeding, that such expansion is fully funded and that existing places can be filled with students who are successfully retained [69]

and

.The Government's priority of widening access and improving retention in higher education should be reflected by sustained overall increases on a per student basis in the level of funding for teaching [70]

The Committee also recommended that funding bodies and individual institutions should consider earmarking funds for outreach activities and pastoral care. This would help to increase access to, and retention within, higher education, particularly for non-traditional students.

1.6.1            Financial barriers

It is accepted that young people from poor families do not want to take on student loans and huge debts. Such aversion to debt may mean that they are deterred from entering further or higher education. However, the fact that many such students would not have to pay fees, suggests a need for more publicity and information regarding this matter. Financial considerations affect students' behaviour in a number of ways. There is evidence to suggest that students from poorer backgrounds choose shorter courses, courses that lead to lower qualifications, select from a limited range of subjects, and avoid the more prestigious institutions. This has been referred to as 'a hidden form of exclusion', and the observation has been made that: 'Discontinuation of grants and the introduction of fees may run counter to policies for widening access or attracting mature students and is therefore discouraging the very students which the Government is keen to attract into higher education' [71]

Many students need to work part-time during term time. Consequently they miss out on some aspects of their course. This leads to a high drop-out rate, which in turn affects the supply of good postgraduates.

Individual Learning Accounts (ILAs) were launched in September 2000 and offer a package of discounts to make it easier for people to take up a course of learning. The discounts are skewed so that certain subjects, such as ICT and maths, attract more generous discounts. By the end of January 2001 almost 11,000 people had taken out accounts, and within a year 20,000 had done so. However, one possible criticism of their allocation is that it is on a 'first come, first served' basis, contrary to the Government's commitment to Targeting Social Need (TSN) and promoting social inclusion [72]

1.6.2     Other issues relating to barriers to education

            Disabilities

Students with disabilities are under represented in higher education. A study in Wales found that only 3.8% of first-year students have a disability compared with 18% in secondary schools. Figures for enrolments on higher education courses in Northern Ireland show that disabled students make up 4% of the student population [73] This is an area of access that needs to be examined.

            Childcare

The House of Commons' Education and Employment Committee recommended that higher education institutions should be prepared to guarantee childcare places to potential applicants with children under school age. In March 2001, the Minister of Higher and Further Education, Training and Employment (now Minister for Employment and Learning), Dr Seán Farren, announced the introduction of a childcare grant to assist students on low incomes with dependant children and help to reduce the disincentive to full-time higher education [74]

            Ethnic minority groups

The study undertaken by Connolly and Keenan indicated that people from ethnic minority groups in Northern Ireland may suffer a range of social disadvantages. The authors made a number of recommendations for action in the field of education, training and employment. For example, they recommended that DHFETE develop a more strategic approach to outreach work with the Chinese community, with the aims of increasing the community's awareness of training and employment opportunities, and of identifying their particular training needs [75]

A further recommendation is that all Government departments, bodies and agencies should develop clear programmes of racial equality training. They also recommended that DHFETE should encourage institutes responsible for teacher training to give suitable emphasis to issues of racial equality [76]

            Travellers

A study of the 'Traveller Economy in Belfast' recommended that statutory bodies, with responsibility for training, should develop 'Traveller-specific' policies that recognise the disadvantages experienced by young members of the Travelling community. Special access measures need to be adopted by DHFETE to support Traveller entry into mainstream training. The Department, in conjunction with Traveller organisations, should develop a Traveller apprenticeship scheme around the skills, knowledge and attitude required for particular identified positions [77] Connolly and Keenan recommended that DHFETE should identify the particular needs of those working, or wishing to work, in the Traveller economy, and facilitate and co-ordinate provision of relevant training [78]

1.7            Careers Education and Guidance

Previous publications have highlighted the problems associated with the current system of careers education and guidance, in particular the sometimes problematic relationships between careers teachers in schools and the Department's careers officers. However there was little agreement on how to address these problems and whether the current system should be replaced [79]

Some careers officers felt that their service was not reaching out to many young people and that 'it needed to be more flexible and break from the traditional 9 - 5 approach.' They spoke of schools, with which they worked, restricting the information which they felt young people should have. One comment from a careers officer was 'the Service Level Agreements that now exist usually mean that the school can dictate what they want. This is not a partnership approach' [80]

There was general agreement that Service Level Agreements between schools and the careers service needed to be reviewed to ensure an emphasis on partnership, development and the achievement of high standards. Additionally, consideration should be given as to how Service Level Agreements between the careers service and both further education colleges and other training organisations can be formalised and periodically reviewed.

A recent report from a Review Committee in the Scottish Executive [81] outlined the need for their careers system to be altered to reflect the modern curriculum and economy. More people were entering higher and further education in Scotland and not making career choices until completing post-secondary education. They were also now expected to change careers paths and develop different skills over their working life, making the focus simply on the first destination of those leaving secondary education less appropriate.

The Review Committee also heard strong evidence of substantial benefits to be derived from national co-ordination of the careers guidance service, especially in the provision of information, improved access and professional development. It noted that 'careers guidance is best received when founded on a solid base of careers education'. Their views were welcomed by the Scottish Executive, and a new, independent, national all-age careers guidance service for Scotland was announced in May 2001. 'Careers Scotland' is to deliver new national standards, one-stop skills advice shops and will maintain the necessary links to provide lifelong learning opportunities and the jobs of tomorrow.

Similarly, following extensive consultation into an Action Plan produced by the Education and Training Action Group [82] a national all-age guidance service was launched in Wales in April 2001, provided by 7 companies operating under contract to the National Assembly. The Group had underlined the importance of ready access to information and advice and proposed the service, operating independently under a common brand across Wales, with a guarantee of services delivered to national standards, to counteract the fragmented range of services at local level.

Given the Government's commitment to social exclusion, it is important that full and equal access to high quality careers education and guidance is available to all. Increased funding, especially directed towards the recruitment of more careers officers and the improvement of ICT resources, is needed to enable the careers service in Northern Ireland to become more effective.

1.8            Developing the enterprise culture

'In the knowledge economy, entrepreneurial universities will be as important as entrepreneurial businesses.' Tony Blair, 1999 [83] The UK is perceived by business to have one of the most competitive economies among the group of the seven leading industrialised nations (according to a survey by the Institute of Management Development). However, the level of business start-ups is significantly behind countries such as the USA and Italy, and the entrepreneurial culture is often not well developed. The UK Government proposes to introduce new policies that will remove barriers to enterprise. It will launch two new schemes to attract business talent and ideas to the UK. One proposal is an Enterprise Scholarship scheme to attract the best young graduates to the UK to start new businesses; the other is to encourage experienced British entrepreneurs abroad to establish companies in the UK. [84]

1.8.1     Higher education and entrepreneurship

The role of higher education is becomingly increasingly important in the push to develop a knowledge- based economy, which is considered to be crucial for the competitive survival of the U.K. in the 21st century. The general academic activities of teaching and basic research feed indirectly into the economy. However, there is an increasing debate as to whether, and to what degree, higher education should be actively and directly involved with the economy. A study undertaken on behalf of the Association of University Teachers (AUT) and the Institute of Education found mixed views on this matter: while 40% of those questioned were in favour of moves to foster a new entrepreneurial spirit in universities, a quarter of academics surveyed were not. The study found that more than half of the academics surveyed do not spend time on activities directly linked with the economy and only 7% spend more than five hours a week in this way. However, more than a third of academics said that their work had involved them in developing links with local or regional businesses. A quarter had been involved in developing business ventures, and a fifth had had contact with university business activities such as science parks and incubator units. Not surprisingly, the degree of involvement in such activities varied with disciplines: academics in science, engineering and technology were far more likely than academics in other subjects to be involved in these sort of activities [85]

According to the study, it appeared that higher education institutions had only partially addressed the issues of recognising and rewarding staff for their involvement in activities related to business and the economy. There were also problems of a different kind that may need to be addressed if further developments in this field are to be successful. There were conflicts of interest between academic freedom and commercial confidentiality. There was a conflict between the goals and interests of academics and businesses: academics were interested in knowledge for its own sake; business parties were chiefly interested in the commercial relevance of research. There can also be conflict between the official agenda of a university (of supporting academic-industry links) and the 'less explicit or internal' agenda (where activities that contribute towards the next Research Assessment Exercise are what really count) [86]

The study concluded that the 'third leg' of funding, HEROBC (Higher Education Reach Out to Business and the Community), which was introduced as an addition to funding for teaching and research, could be effective if its level of funding were to be increased.

            Northern Ireland

Queen's University, in their evidence to the Committee for Enterprise, Trade and Investment, spoke of the University Challenge Fund's capacity to stimulate business start-ups. It pointed out the need for more resources at the very early stages of a business, when there is potential for an idea to be developed - 'to see whether it is worth the investment of venture capital' [87]

There are examples of successful collaborations between universities and business. For example, the Centre for Knowledge Based Systems for Industrial and Medical Applications (KBSIMA) was established in 1995. It is a collaborative venture between the University of Ulster and ICL, which fuses the partners' specialisms in knowledge engineering, bio-engineering and information technology and specialises in research themes with commercial application and exploitable technology development. Two successful spin-out companies have already been formed by KBSIMA (MINEit and the Synergy Centre). Future developments will concentrate on medical informatics and electronic commerce applications, involving both research and technology transfer [88]

Section 2: summary of oral and written evidence - findings

In this Section, the findings from the Committee's Inquiry, based on the oral and written evidence received from a wide range of groups, is discussed.

2.1.            Skills

Many respondents and witnesses to the Inquiry raised a number of issues regarding skill shortages. These ranged from a widespread concern with the shortfall in the basic skills of literacy and numeracy, to concerns about specific professional and technical skills at intermediate and advanced levels.

2.1.1     Basic skills

Literacy and numeracy

Many of the respondents in their written and/or oral submissions referred to the need for an improvement in the level of basic skills [89] Poor standards of literacy and numeracy were frequently commented upon. The observation was made that the high rate of illiteracy in the population indicated serious flaws in the educational system [90]   Many respondents called for the problem of adult illiteracy and innumeracy to be addressed, by allocating more funding and resources. It was noted that the main problem lay with those who had left school some time ago [91]

A need was highlighted for the development of education and training programmes - including basic literacy and numeracy - for particularly disadvantaged groups to assist them in accessing further training and employment. For example, there is a very high level of illiteracy, and a very high unemployment rate, among Travellers [92] Effective educational projects with the travelling community need to be implemented. The needs of the homeless were also highlighted [93] Problems in basic skills in many cases prevent people from developing specific vocational, as well as other generic, skills. Poor literacy and numeracy were a problem among participants in schemes, such as New Deal, which offer training to the unemployed in order to facilitate their entry into the labour market. Many people who were referred to New Deal had basic skill needs and therefore could not attempt a National Vocational Qualification (NVQ) Level 2 [94] which appeared to be the main qualification offered by the scheme. It was noted that for people with multiple barriers to employment (such as alcohol or substance dependency, illiteracy and innumeracy), personal development training can be as important as going through a unit of an NVQ [95]

Clear targets should be set, in association with industry, to address the needs of those with poor basic skills [96] The role of trade unions as advocates for learning should be enhanced. More research should be undertaken into developing effective models of workplace basic skills learning (as provision for basic skills learning was, with a few notable exceptions, very rarely undertaken in the workplace) [97] The curriculum should emphasise skills and competencies; basic skills should be taught in both formal and informal settings [98]

2.1.2     Key skills and generic skills

During this Section, it is necessary to bear in mind that one organisation's use of the term 'generic' or 'key' when referring to skills may not be the same as that of another organisation. The terms 'key skills', 'generic skills' and 'transferable skills' tended to be used interchangeably by some respondents, and in a more specific sense by others. As stated in Section 1.1: 'the National Skills Task Force' (NSTF) used the term 'generic skills' to refer to 'transferable employability skills used across a large number of different occupations, such as communication skills, problem solving and the ability to use ICT'. However the Confederation of British Industries (CBI) referred to 'the six key skills' as being: communication; application of numbers; information technology; improving one's own learning and performance; working with others; and problem solving. The CBI went on to say that other 'generic skills' are becomingly increasingly 'key', such as modern languages and customer service skills. For the CBI, the six key skills and other generic skills were just some of the qualities and competencies that make up 'employability'.

There was widespread acknowledgement among respondents that there have been, and will increasingly be, changing skill requirements. There is a need for new skills for new industries; including problem-­solving skills and a positive attitude to work. [99] However, it was acknowledged that, although there will be changing skill requirements and a need for an increase in skills, not all jobs will require high levels of skills. [100]

2.1.3     Skill shortages and skill gaps

In their discussion of skill requirements, respondents to the Inquiry did not generally distinguish between external skill shortages and internal skill gaps (see also Section 1.1.1). The point was made, however, that it is necessary to distinguish between skill shortages and hard-to-fill vacancies [101] Skill shortages can be due to retention problems, related perhaps to a low wage level and/or poor working conditions, or to the demand from some employers for unnecessarily high qualifications [102] Some concern was expressed about difficulties at the point of recruitment, as well as the need for retraining and upskilling existing staff. There is an urgent need for policies that deal with retraining and reskilling when mass redundancies occur [103] Recruitment can also be adversely affected by political instability in Northern Ireland as a whole, and especially in particular locations [104] Problems of sectarianism can affect the willingness of people to relocate, in order to take up employment. It was argued that all mechanisms that increase flexibility of skill provision, such as in-company training, conversion education, accelerated learning programmes and modular delivery of programmes, must be enhanced [105] In particular, it was suggested that skill shortages be addressed by fast-track programmes of education and training [106]

2.1.4            Sectoral skill shortages

Many of the respondents talked and wrote about the need for increased skills among the existing workforce and among new recruits. However, the Training and Employment Agency (T&EA) considered that though some reskilling and upskilling is needed among the workforce in general, the current skill shortage does not amount to a crisis [107]

Construction industry

Certain industries and sectors in Northern Ireland, such as the construction industry, are experiencing skill shortages more severely than others. These are due, in part at least, to the migration of workers to better-paid positions in the Republic of Ireland. One way to address the problem of the poor image of the industry would be to set entry criteria for jobskills traineeships. This would help to remove the notion that the construction industry is the place for those with no qualifications and no prospects. [108]   The skill shortages do not apply to all jobs within construction, but mainly to the 'wet' trades of plumbing and plastering. Modern Apprenticeships in the construction industry require key skills that many young people do not have on leaving secondary school. One recommendation was that young people should be brought into the construction industry from school and given six months training in key skills [109]

Manufacturing

A major multinational company with a manufacturing site in Belfast reported that levels of skills (as measured by a Savill and Holdsworth test) among its local recruits fall every year [110] In particular, the standard of core basic engineering skills had dropped. The firm had to support additional education in areas of science and mathematics, and needed people with 'traditional' skills such as fitting and sheet metal working. However, its young recruits were bringing little or no experience of the materials or skills needed. The company found that it was constrained by the time taken by new entrants to reach the required level of productivity [111]

Many respondents expressed concern about the quality and quantity of vocational and technical training courses: a reference to the 'dramatic decline in craft skills [112] expressed the views of many.

            Hospitality and tourism

The hospitality industry had difficulties in recruiting staff as, like the construction industry, it had an image problem. The high staff turnover made it difficult for businesses to forecast future skills needs [113] However, some young people were attracted to the 'high-tech' aspects of front office and reception work in hotels. The introduction of the minimum wage had led some employers to gain greater productivity and skill levels from their staff. In terms of preparation for employment, a leading company in this sector criticised the further education provision of training as ill co-ordinated and poorly marketed. Further education colleges were not rewarded for making students employable or securing them employment. Some of the types of training required for this industry, such as advanced culinary skills, did not meet the needs of the industry in Northern Ireland [114]

            The Sciences

A major pharmaceutical company reported difficulties in recruiting people in Northern Ireland with good qualifications in chemistry, to the extent that it recruits from continental Europe [115] There has been a general decline in the number of students taking science subjects at A level over the past 10 years. However, the problem lay not only with the numbers of students choosing to study science at A level, but also with the degree choices that science A level students then go on to make. [116]   For many students and their parents, the obvious route at this stage is into medicine or dentistry, rather than to continue with science.

The University of Ulster stated that skills shortages could at least partly be addressed if more students were to have a background in mathematics and physics. One way to rectify the situation would be to offer conversion courses in mathematics and the sciences [117]

A further problem with the curriculum at secondary level, which impinges on further and higher education and consequently upon the provision of trained scientists, is the widespread provision of double-award science at GCSE, rather than the provision of three single science subjects. This provides inadequate preparation for a science-based career. In addition, there are too few teachers trained to teach science, resulting in poor coverage of these subjects [118]

            Information and Communication Technology

Concern was expressed that there was, and would continue to be, a shortage of people competent and/or qualified in Information and Communication Technology (ICT). Recent research suggested that the shortage of ICT professionals in the UK will double from 49,000 in the year 2000 to 97,000 by 2004 [119] It was claimed that the Skills Task Force had seriously underestimated the future demand for people in this area. [120]   Software engineering, routing and networking were identified as the areas where there will be most demand [121] It was suggested that fast-track training initiatives, such as that taught by Nortel and the initiative run in the Republic of Ireland (FIT) [122] be developed [123] The Queen's University of Belfast (QUB) reported that it was in discussion with the Department of Higher and Further Education, Training and Employment (DHFETE) [124] with regard to developing innovative ways of addressing skill shortages in the field of ICT.

While action was needed to address future demand in this area [125] it was not the only area that will be important in the future - manufacturing and electronics were also areas of growth [126] It was important to keep the growth of the ICT industry in perspective in terms of its affect on the economy and the skills demands it will incur. It was estimated that ICT will create 20,000 jobs in Northern Ireland in a ten year period [127] It was also observed that, though there was concern about skill shortages in ICT, there were people with good ICT qualifications (such as HNDs) to be found working in bars and on building sites. It was therefore necessary to closely match the real ICT needs of industry with educational provision [128]

            Agriculture

The Committee acknowledged the contribution of the agricultural sector to the economy, and acknowledged that there were many concerns regarding appropriate and relevant education and training in the sector. Evidence of skills shortages in the food processing sector was raised by Moy Park, however the Committee agreed to respect departmental boundaries and not make any specific recommendations for the agricultural sector.

2.1.5     Future skill needs

Information about future skill needs must be made accessible to training providers as quickly as possible. The central message that came from respondents regarding skill forecasting was that a co-ordinated and flexible skills strategy was needed. The education and training sector needed effective forecasting models to respond quickly to the changing labour market [129] However, one major employer considered it very difficult to predict skill needs with any accuracy. The best approach would be to ensure that the level of basic skills among the existing and prospective workforce was of a good standard: individual companies tended to train their workers in the particular skills which they needed. [130]

            Delivery of information

Up-to-date information on employment opportunities and skill demands could be delivered promptly by way of a web-accessed database, or through software packages [131]

            Small and Medium-sized Enterprises (SMEs)

The needs of small and medium-sized enterprises arose repeatedly throughout the Inquiry. In the context of skill forecasting it was suggested that an advisory body on skills training for SMEs be established [132]

           New and existing initiatives

The existing initiatives in this field, such as the Skills Task Force, Executive Recruitment Watch and the Priority Skills Unit, should be developed and expanded [133]

In addition, the introduction of the Northern Ireland Credit Accumulation Transfer System (NICATS) will enable employers to respond rapidly to training needs in a focused and cost effective way [134]

            Models of good practice - the Netherlands, Belgium and the Republic of Ireland

According to one respondent, the best skill forecasting systems were in the Netherlands and Belgium where generous resources enable in-depth research to be undertaken [135]

Skill forecasting needs to be followed by appropriate action. The Expert Group on Future Skills Needs (of Forfás) researches and advises on issues associated with labour market needs and fluctuations in the Irish economy. In 1998, it identified a shortfall of 5,400 ICT-qualified professionals and recommended that the government invest 75 million punts to address the issue. This was accepted and action implemented by the government. The Group later identified a shortfall of 1,000 professionals in biology and chemistry, which was again addressed by both the government and the education sector.

Forfás argued that skills forecasting became more accurate each time it was undertaken, as increased knowledge is gained about the labour market. It recommended specific targets to be met by specific dates (it did not use terms such as 'encourage'), and use of the funding mechanism to influence the provision of courses.

2.2            Further Education

The main message from respondents was that Northern Ireland needed a more coherent tertiary education system, with the provision of education and training rationalised in order that the roles of the different sectors be both clear and complementary [136] Far more concern was expressed about the further education sector than about the university sector. However, one recommendation, made by a number of respondents, applied to both sectors. Namely, that student places needed to be increased in both further and higher education. [137]

2.2.1     The focus and role of further education

Each sector could only really be considered in the wider context of the whole education system. Low levels of adult literacy and numeracy skills were a result, in part at least, of past failures by the primary and secondary sectors. More specifically, as we have seen, some concerns about skills related to inadequate teaching of mathematics and science subjects (especially Physics). Another concern for further education, relating to secondary education, was that pupils were encouraged to stay on at school after the age of 16 and take academic courses that, in the opinion of some respondents, may be of little use either to them, or to the economy of Northern Ireland. Furthermore, the view was expressed that there was now a tendency for more able students to reject the further education route [138]

The role of the further education sector and the 17 further education colleges in particular was clearly of considerable concern to many respondents. Further education was referred to as the weakest section, or the 'Cinderella', of the education and training sector, due to the 'academic bias' of the whole education system [139] There was concern that further education lacks direction [140] - colleges tried to do too many things and consequently are less effective in their performance [141] The view was also expressed that there were too many colleges doing very much the same kind of thing, and too few centres of excellence. [142]

            Vocational and craft training

For many respondents, the prime role of further education was to supply good vocational and craft training [143] There was widespread concern that vocational education is seen as a second choice option after academic education. The view that parity of esteem between academic and vocational education needed to be developed was repeatedly expressed.

It was suggested that there has been a gap in the provision of good quality education and training for technicians since the merger of the Ulster Polytechnic with the New University of Ulster in 1984 [144] Arguably, there were no institutions in Northern Ireland on a par with the Institutes of Technology (formerly Regional Technology Colleges) in the Republic of Ireland. Northern Ireland needed at least one such institution, and possibly two or three [145] It was also essential to increase the number of training courses in vocational, technical and craft skills [146]

           Economic development

The role of the further education sector in the economic development of Northern Ireland was also a subject of concern. A dominant view was that the sector needed to be more involved in creating strategies for economic development - it had only a minor input into Strategy 2010 yet it had to respond to it [147] Specifically, it should have an input into the Northern Ireland Development Plan. [148] The role of further education in inward investment also needed to increase [149] The sector needed a three-to-five-year strategy, in order to play an effective role in these areas. [150]

           Higher education in further education colleges

While for some, the prime role of the further education colleges has been to provide good quality training at sub-degree level, others thought it desirable that further education colleges expanded to offer degree-­level courses. An opinion from an Institute of Technology in the Republic of Ireland was that a third-level institution that is not a degree-awarding body cannot establish credibility [151]

2.2.2    The management and funding of further education colleges

Concern about the further education sector was such that many respondents called for a complete review of the sector [152] A number of points about the existing management and funding of the sector were made.

           Incorporation

Incorporation has led to further education colleges being, in effect, businesses in their own right. It has been a major factor in the development of a more positive image for the sector, as the colleges have had to become more business like [153] Since incorporation, colleges had been able to devise more imaginative and innovative ways of meeting industry's needs [154] However, the change was not universally welcomed. Concern was expressed that incorporation will not develop innovation and entrepreneurship [155] though an opposing opinion was that, in Britain, incorporation had led to a leaner, more entrepreneurial system. Incorporation may have eroded the regional role of further education in Northern Ireland, in favour of a narrow specialisation on local requirements [156] and eroded accountability [157] It was also stated that incorporation had been inefficient and wasteful of resources, and the suggestion made that support services in colleges could be centralised [158]  

It was suggested that the composition of the governing bodies of the colleges needs to be reformed, so that they were accountable to the local community and reflected the interests of local employers [159]

As the role of the further education sector was crucial in providing a skilled workforce for the economy of Northern Ireland, decisions about it needed to be made at a strategic level, and not only by individual college principals [160]

            Government Training Centres (GTCs)

There were mixed responses to the recent merger of government training centres with further education colleges. For some, this was a major step forward in the rationalisation of training provision and had led to more innovative and flexible ways of meeting the needs of industry [161] However, a major complaint, regarding the takeover of government training centres by the colleges, was that the colleges cannot provide the training needed by industry quickly enough, if at all. It was no longer possible for companies to look to the GTCs for help in meeting training needs. Consequently, this had resulted in a large increase in training costs for companies [162]

            Funding

The further education sector needed greatly increased funding and the funding mechanism itself needed to be changed. [163] It was suggested that the Further Education (NI) Order 1997 should be amended, as it encouraged rivalry between colleges rather than co-operation [164]   Funding was currently allocated to further education colleges on a competitive basis. The further education sector can either compete or collaborate but cannot do both [165]

The current system of funding offered insufficient incentive for innovation, risk taking and developmental work [166] In addition, as the funding system favoured full-time courses, it did not offer what industry needs [167] Concern was expressed about low morale among lecturers in further education colleges and their poor working conditions and low salaries. Salaries in the sector needed to be raised to be comparable to those paid in industry [168]

Adequate funding was necessary for further education colleges to offer high quality facilities and equipment. This would help to promote the value of vocational training to students [169]

Funding was also needed to establish a business unit in each further education college, similar to the Institutes of Technology in the Republic of Ireland [170] In addition, out-reach campuses of further education colleges needed funding and resources to address local need [171]

2.2.3     Further education, the community and the economy

There are 17 colleges of further education in Northern Ireland (and three agricultural colleges). In the Republic of Ireland there are, for a bigger population, just 13 Institutes of Technology. Many respondents emphasised the important role that the Institutes of Technology had played in the growth of the Irish economy. It was felt that the Irish system should be carefully studied with a view to emulating the best aspects of its structure. One question which then arose was whether Northern Ireland needed 17 further education colleges. Differing views were expressed about the importance of local access to further education. One view, from the education side, stressed the importance of local access, and the placement of colleges for community growth. It was said by one respondent that a town tends to be diminished if it loses its further education college [172] However, it was also suggested that there may need to be some element of centralisation with, perhaps, centres of excellence developed in some locations for certain subjects. [173] An opposing view, put forward by the business side, was that not only were there too many colleges, but that companies did not actually need access to a local further education college [174] A company with particular training needs will seek out the college or training provider that best suited its needs, regardless of location.

The further education colleges' continuing work with community groups was recognised. It was important to continue to resource community projects, many of which had relied on short-term European funding. The Access Initiative (funded by DHFETE) was very important in this area.

Links between the planning of further education and the development of the economy should be enhanced. [175] Some further education colleges should be given support to develop innovative and knowledge-­based small business growth. [176] There was a need for innovative ways of delivering education and training. For example, the urgent need to provide skills to improve farm management and to reskill farmers, perhaps through ICT-based delivery was raised [177] The view was expressed that funding for education and training should be allocated in terms of economic priorities for skills needs [178] However, further education provision should not be unduly dominated by the skill requirements of local employers [179]

            Research and Development (R&D)

R&D within the further education sector was virtually non existent [180] It was suggested that the sector could develop R&D for local SMEs. [181] It could also provide incubator facilities in conjunction with local enterprise agencies [182] R&D should be driven by partnerships with government departments involved in economic policy planning, labour market information, and skills forecasting, and with both higher and further education [183]

            Centres of excellence

Whilst the Institutes of Technology in the Republic of Ireland offered broadly similar programmes, each has developed its own specialism in areas such as tourism or engineering [184] There was evidence that some further education colleges in Northern Ireland were developing along similar lines. Colleges were improving at running specific courses for industry, with certain colleges becoming identified with particular industries. For example, North Down and Ards Institute of Further and Higher Education has provided courses for the multimedia industry, and Newry and Kilkeel Institute of Further and Higher Education for the hospitality industry [185] Centres of excellence needed to be further developed in Northern Ireland [186] The development of centres of excellence must proceed in a co-ordinated and strategic manner, to meet the needs of Northern Ireland as a whole.

            Business, industry and further education: initiatives and partnerships

In the past three years there has been a 27% increase in the number of students taking vocational courses that have strong links with industry, such as engineering, software engineering and computing [187] Some initiatives were considered to have been particularly useful. For example, the Lecturers into Industry initiative had been very successful, and should be developed [188] Colleges should be encouraged to promote 'Managing Diversity' programmes to meet the needs of an increasingly diverse and flexible labour market [189]

An opposing view to the reduction of colleges within the further education sector, is that new colleges should be established within business parks to encourage links between education and industry [190] One suggestion was that local industries and other stakeholders could together fund innovation, engineering and development centres linked to local further education colleges [191]

As the economy of Northern Ireland was so dependent on SMEs, it was important to facilitate their success and development as far as possible. Education and industry could work together in the preparation of business and training plans. Some companies, especially SMEs, needed assistance with this. Small companies were less likely to be able to afford to train their workforce. The difficulty lay not only in direct training costs but also in the indirect cost of providing cover for workers on training courses, whether on day release or for longer periods. The Job Rotation Project (refer to Section 1.4.4), which is in operation in Scotland, facilitated SMEs to release people for training. NIC-ICTU expressed a willingness to run a pilot project on job rotation to assess its usefulness to SMEs in Northern Ireland [192]

2.2.4            Information and Communication Technology (ICT) and further education

Skills in ICT will become increasingly important in all areas of work. Training in ICT at all levels needed to be available and accessible to as many people as possible. The number of courses in computing, electronics and software engineering needed to increase. HND and HNC courses in these subjects needed to expand, and their course content must meet the needs of industry. ICT needed to be taught on all courses in the further education sector. It would be desirable if all students graduating from further and higher education colleges had skills in ICT of at least ECDL (European Computer Driving Licence) standard [193] Financial support was needed for further education colleges - especially those with a rural catchment area - to establish ICT infrastructure and expertise [194]

Family learning programmes in ICT could be developed to enable parents to develop skills in the context of helping their children [195] Community education in ICT was one of the fastest areas of growth of further education in out-reach centres [196] Proposals to develop further education and ICT in north and west Belfast, in the way that Ennis, in the Republic of Ireland, has been transformed by the 'e-revolution' were highlighted [197] These proposals will go some way to avert the situation, feared by some, of a 'digital divide' arising, ie a situation where the socially and economically disadvantaged in society lack access to the opportunities offered by the new technologies.

2.3           Higher Education

There was a relatively high demand in Northern Ireland for places in higher education. NIHEC acknowledged that, while there is an argument for creating another higher education institution, the existing universities could provide more student places. In addition, more higher education courses could be delivered through further education colleges [198] It was clear that there needed to be further collaboration, rather than competition, between the further and higher education sectors [199] The unique role of the Open University is considered in Section 2.4.2.

At the same time, it was unrealistic to expect the two universities of Northern Ireland to produce all the higher-level skills needed by the economy. It will always be necessary to look beyond Northern Ireland for education and training in some disciplines [200]

2.3.1     The focus and role of higher education

In comparison to the concerns expressed by respondents regarding the further education sector, there was relatively less concern with the university sector in Northern Ireland. The standard of graduates from the Queen's University Belfast and the University of Ulster was considered to be good [201] The two universities were increasingly responsive to demands from local industries. As well as incubation units and spin-off companies, successful strategic alliances had been formed with companies [202]

Apart from teaching a wide variety of courses, the universities were involved in research, much of which has a high international reputation for quality. The universities were also involved in company start-ups. In the subjects taught, the universities supported wealth-creating sectors, such as ICT, biotechnology, life and health technology, engineering, and tourism and hospitality, and looked ahead at global trends and future skill demands [203]

2.3.2     The management and funding of higher education

As with further education, the university sector also needed additional funding. There was concern expressed about the level of university salaries - which should rise in line with equivalent positions in industry [204] Ph.D. awards in Northern Ireland must be increased in line with agreed increases in the rest of the UK [205] The funding regulations needed to be more flexible in order to address the problem of low completion rates in some subjects (due to students being 'headhunted' by industry partway through their doctoral work) [206]

Universities needed to address issues of recruitment and retention of staff in key areas and there was a role for industry to assist in this [207] Businesses should consider investing in one or both of the two Northern Ireland-based universities in their own interest, for example by endowments to support professorial chairs.

The introduction of the new funding stream, HEROBC (Higher Education Reach Out to Business in the Community) was welcomed [208]

2.3.3     Higher education, the community and the economy

Students from lower socio-economic groups were better represented in higher education in Northern Ireland than in Britain. However, the number of such students could be increased further [209] The development of the relationship between the universities and the further education colleges will encourage students - including many 'non-traditional' students - to progress to university. 'The Queen's Programme' made links with schools that traditionally had rarely sent pupils to higher education; this scheme, and others like it, furthered links with the community [210] So, too, did the work of the Institute of Lifelong Learning, which widened access to higher education. The Institute is to embark upon a CPD (Continuing Professional Development) Programme that will address the needs of industry and business (including SMEs) in the local economy [211]

Taught programmes with particular relevance to wealth creation skills and competencies should be given priority for expansion [212] Student completion rates for courses, especially in key areas, should be reviewed annually, and strategies developed to improve completion rates [213]

Research and Development

Further expansion of the universities' research base was needed, together with positive action to enable the commercialisation of scientific and technological advances that result [214] The importance of all research - pure and applied - in providing top technologists for industry needed to be recognised. In order to increase the 'spin out rate' (ie commercial enterprises arising from university research) there needed to be considerable investment in the research base [215]

According to one source, Government funding of research in Northern Ireland's universities had fallen by 30%; compared with a 9% increase in Britain over the past seven years [216] Research and development in universities should be funded to meet the twin objectives of attaining international quality and regional relevance [217] There had been significant investment in the universities of the Republic of Ireland aimed at creating world class research centres. The Northern Ireland universities needed more funding if they were to compete [218] A higher level of funding was needed to support research that is relevant to the needs of industry in Northern Ireland [219] Initiatives such as SPUR (Support Programme for University Research) were welcomed and needed to be further developed [220]

As stated previously, the economy in Northern Ireland was characterised by SMEs, with a limited capacity to produce their own knowledge base. Partnerships within industry and between SMEs and higher education should be encouraged, such as a recent initiative undertaken by a number of SMEs to jointly sponsor research at a university research centre [221]

A regional research and development policy was needed [222] incorporating a research committee to identify areas for industrial development [223]

            Centres of excellence

In their written submission, the CBI identified thirteen centres of excellence linked with the universities in Northern Ireland. (Progress in this area has been ongoing. The Department for Employment and Learning was recently advised that the universities were linked to a total of 40 centres of excellence.) The work of the centres needed to be promoted, as there was a low level of awareness among industrialists and business people (though those that used them ranked them highly) [224]

            Business, industry and education: initiatives and partnerships

Existing links between industry and higher education had developed good relations, such as the Teaching Company Scheme [225] QUB already had a Centre for Enterprise, Learning and Teaching (CELT), and planned to establish a professorial Chair in innovation. Increased links between education, business and industry should be promoted [226] The establishment of the Northern Ireland Centre for Entrepreneurship (NICENT) - a joint venture by the University of Ulster and QUB was a further move in that direction.

A criticism was made that companies in Northern Ireland had been slow to recognise the potential of schemes such as the Integrated Graduate Development Scheme (IGDS) offered jointly by QUB and the University of Ulster [227] Closer links were needed between employers and the higher education sector - at the moment, employers did not fully utilise graduate skills.

2.3.4            Information and Communication Technology and higher education

Various ways of addressing potential skill shortages in this field needed to be developed. In order to attract and retain good quality teaching staff at both further and higher education level it would be necessary to offer salaries and resources comparable to those in industry [228] Initiatives such as the University of Ulster's BSc in eBusiness and Connectivity and the Northern Ireland Centre for eBusiness should be developed.

2.4        Other education and training providers

Respondents called for rationalisation of the provision of education and training. It was considered that the role of the different sectors needed to be clear and complementary. There was particular concern that there were currently too many private-sector training providers, some of whom acted as middlemen to administer training and make a profit. The point was made that private training providers could 'cherry pick', whereas education providers in the public sector had to cover all areas of education and training [229] A weakness of the Jobskills programme was the plethora of providers, especially private training sector providers, some of whose standards were open to question [230] One way to address the issue of the standard of training offered by the private sector might be to develop partnerships between the public education sector and private training providers. An example of such a partnership was that forged between Bombardier Aerospace Shorts and BIFHE [231] which required a considerable amount of planning and development by both partners.

In contrast to the criticism levied by some respondents towards private training providers, the work of both voluntary and community-based organisations in providing learning opportunities was praised, and considered to be in need of more support [232]

2.4.1            National Training Organisations and Sector Training Councils

When the statutory Industry Training Boards were disbanded in 1989/90, most industrial activity areas formed Sector Training Councils (STCs) on a voluntary basis. The only remaining statutory body is the Construction Industry Training Board (CITB). Thirteen STCs represented the private sector. The public and voluntary sectors in Northern Ireland were largely represented by National Training Organisations (NTOs), which mainly operate out of England (refer to Section 1.4.1). Around 40 to 45 NTOs (of the 73 that cover the U.K.) have some link with STCs in Northern Ireland.

A complaint was made that childcare and health and social care were not represented by STCs, though these services 'free up' the workforce to meet the government's economic agenda [233] It was suggested that STCs should be placed on a statutory basis, and funded by a training levy on all employers [234] (for an opposing view refer to Section 2.4.4 Training Costs).

2.4.2            Distance learning

The strong commitment to the agenda for lifelong learning and to flexible and innovative ways of providing education and training among the higher and further education sector was emphasised. For example, the University of Ulster had established its own company - UU online - to develop e-based learning. In this Section, the systems of education and training that particularly focus on distance and on-line learning are considered.

The Open University

The Open University is often referred to as the third university of Northern Ireland. As such, it could have been discussed in Section 2.3. However, the Open University's unique experience and expertise in distance learning, placed it more appropriately here. The Open University had considerable experience in on-line learning, which could be further exploited to address future skills needs. A group within the Open University was set up to examine the needs of industry and to develop bespoke training solutions for different industries. It will also be able to tailor courses to meet the needs of individual companies. The Open University could work with further education colleges to develop programmes for companies and jointly develop foundation degrees. It is currently running four courses in particular, which could contribute to improving the skill base of Northern Ireland [235]

            University for Industry and Learndirect

The University for Industry's (UfI) learndirect, was viewed as a cost-effective way to train staff. It avoided the need for day-release; could access 'difficult-to-reach groups; and offered short bursts of learning [236] It was considered to offer great potential for expanding access to education [237] and should be promoted and monitored [238]

2.4.3     Work-based learning

Traditionally, much education and training took place in the workplace. The development of Modern Apprenticeships, work experience, student placements and other schemes meant that a considerable amount of work-based training continued. There was a need for research into the development of effective models of work-based learning [239]

            Modern Apprenticeships

The Modern Apprenticeship scheme was generally viewed favourably, and should be further developed [240] It was considered to have helped to revamp the image of some traditional industries [241] The CITB, among others, declared that 'employer-led' Modern Apprenticeships were the way forward - they increased young people's motivation - but argued that industry should be involved in their framework design. The Modern Apprenticeship scheme was addressing the skill needs of Northern Ireland by placing 70% of apprentices in a priority skills area [242]

However, some cautionary comments were also made. Although the Modern Apprenticeship system should be further promoted, it should be monitored to assess performance. [243] Modern Apprenticeships should include relevant modules of City and Guilds certification [244] There needed to be clarity regarding the introduction of technical certificates to support Modern Apprenticeships [245]

One of the problems about Modern Apprenticeships was the funding system. The first year was funded, but the company had to employ the trainee for the second and third year. This could result in a trainee not being taken on by a company at the end of the first year [246] Some respondents observed a decline in the number of people applying for Modern Apprenticeships. One reason for this was attributed to parents and teachers who encourage pupils to stay on at school to follow an academic path [247]

A further criticism of Modern Apprenticeships was that the apprentices lacked skills in mental agility and manual dexterity. They were taught how to install new parts to a machine, rather than learning how to fix the old part [248]

            Work experience and student placements

Work experience is important for young people at all levels of education and in a variety of fields. The University of Ulster, for example, had a strong involvement in work-based learning, with 3,000 students on placement at any one time. At secondary level, the experiment of 'disapplication' by the Department of Education allowed some of the curriculum, at Key Stage 4, to be replaced by work-related training in a college and/or workplace. Disapplication appeared to improve attendance and motivation at school. This scheme may be expanded in the future to include a wider range of pupils - at the moment it applied largely to 'less able' pupils [249] Both the industrial and educational sectors wanted an increase in the number of work placements [250] A suggestion was made that there could be a centralised system, run by one agency, for co-ordinating student placements [251]

2.4.4            Training costs

Concern was expressed about the costs incurred by employers in providing high-quality training for their workforce. Particular concern was expressed about the threat of poaching, where a company that has chosen to invest in staff training and development loses its well-qualified staff to other companies that offer higher salaries as they have low or negligible training costs.

Some respondents called for a system of training levies or transferable loans to enable all companies to fulfil their role in developing their workforce [252] Whilst a number of respondents agreed that incentives for training were needed, especially for SMEs [253] it was also argued that training levies did not work [254] The experience that led to the winding up of Industry Training Boards in the predominantly SME economy of Northern Ireland was that the cost of administering the levies was 20% to 25% of the income, the remainder being returned to employers in the form of grants. The outcome was awaited of a pilot scheme in England where local employers formed a consortium, measured investment in training, and ensured that, if poaching occurred, money was exchanged between employers to account for the training costs [255]

Tax deductibility of training investment was suggested as an incentive to employers [256] It was felt that the government should give financial support to companies for education and training in some circumstances, such as where there was a need for accelerated learning or a particular problem with poaching [257] There was a warning that government incentives to employers for the promotion of work-based training would need to be monitored to protect employee's rights [258]

2.4.5            International comparisons

The Institutes of Technology in the Republic of Ireland

The system of education and training most frequently mentioned, and considered to be particularly successful, was that of the Institutes of Technology in the Republic of Ireland. The Institutes were considered by many to have contributed to the growth of the Irish economy, and had a statutory responsibility for economic development, links with industry, and a role in inward investment. They had a dual mandate: to be academic centres of excellence and agents for the economic development of the regions [259]

The Institutes were very well financed and resourced, mainly from the Department of Education and Science, with some funding from capitation and INTERREG. There was a great deal of co-operation and communication between the Institutes with many policy responses coming from the Institutes as a group. There were a number of ongoing co-operative ventures. For example, in the border/midlands/west region there was a higher education regional network that included six Institutes of Technology and the National University of Ireland, Galway [260]

A number of respondents suggested that there should be closer co-operation with the Republic of Ireland in terms of educational provision [261] (refer to Section 2.9.2 Government, Education and Industry).

            Community Colleges in the USA

The community colleges of the USA are considered by some to be worth emulating [262]   (refer to Annex 3 for the Chairman's report of his visit to the USA). The colleges have developed an association between students, their parents, a specific industry, and the training provider [263]

            The dual system of Germany

The so-called dual system as applied in Germany was considered to be very successful in producing well-trained technical and crafts people. However, one criticism of the system was that it cannot adjust rapidly to the current pace of change in the labour market [264]   Nevertheless, another commentator agreed that Germany was an especially effective model in the field of vocational skills training, especially in engineering [265]

            Other international models

Australia, France and Japan had systems that addressed the costs to industry of providing training. In Australia and France, a training tax was imposed on businesses, whereas in Japan high costs were imposed on any employee leaving a company [266]

At the same time, the observation was made that, while we can learn from other societies, other models may not readily translate across different social and cultural traditions [267]

2.5            Qualifications and the curriculum

Two main issues arose concerning accreditation and qualifications. Qualifications offered in Northern Ireland should be recognised elsewhere, especially in the Republic of Ireland and the rest of Europe. There should also be parity of esteem between vocational and academic qualifications.

2.5.1            Recognition of qualifications

The main message from respondents regarding qualifications was the need to extend the understanding and compatibility of qualifications. It was said that, while university degrees were generally an acceptable currency, that was not the case for HND/Cs and NVQs [268] It was important to have reciprocal recognition of the qualifications offered in Northern Ireland and those offered elsewhere. It was seen as particularly important that qualifications be reciprocally recognised in the Republic of Ireland and in Northern Ireland [269] However, the need for recognition across the UK, within Europe and even further afield was also expressed. The quality of education and training (including work-based training) needed to be benchmarked against EU and international standards [270]

Northern Ireland Credit Accumulation and Transfer System (NICATS)

Many respondents considered that the clarity of qualifications, both vocational and academic needed to be improved. There was considerable support for the development of a national credit framework [271] NICATS will establish a common language for recording learning, and thus encourage clarity and pathways between academic and vocational education, and help to establish parity of esteem [272]

NICATS was attempting to establish credit equivalence for national qualifications. The UK equivalence project was in the process of looking at NVQs, A levels and GNVQs and their respective units. NICATS will need to articulate effectively with other credit systems. To this end, the NICATS project was carefully observing the European Credit Transfer System and credit agencies in Britain.

NICATS will make an important contribution to establishing the agenda of lifelong learning, through accrediting learning and linking it to a lattice (rather than just a ladder) of opportunity. It has worked closely with business and industry to customise programmes of education and training that are of immediate and specific value to employers. It has also worked closely with the Qualifications and Curriculum Authority. In addition, by accrediting learning that can be taken and added to other awards gained in different work/learning environments, it is also of great value to the employee [273]

2.5.2     Parity of esteem

Many respondents called for the promotion of parity of esteem between academic and vocational qualifications [274] The view that vocational qualifications were not accorded as much status as academic qualifications reflected the wider concern that vocational training and work tended to be less valued than academic training and professional work. Clear pathways of education were needed [275]

In September 2000, revised A levels, AS levels, vocational A levels, and a separate key skills qualification were introduced with the intention of broadening the curriculum. (The name change to 'vocational A level' - from GNVQ advanced - was intended to emphasise parity of esteem.) A monitoring programme has been implemented to look at the impact of these changes. To date, the number of pupils who mixed academic and vocational subjects was not known [276] Young Enterprise Northern Ireland (YENI) was concerned that the introduction of AS levels may conflict with YENI's input into schools, due to time restraints on the curriculum, especially in grammar schools [277]

            Foundation degrees

Respondents to the Inquiry expressed differing views regarding the new foundation degrees. The universities, along with some other institutions [278] welcomed the development of foundations degrees. The universities were working with further education colleges in their implementation. Their development should be based on extensive consultation with organisations in the community [279] A key issue was whether employers understood what a foundation degree represented and whether they would give it currency as a credible qualification. It was suggested that foundation degrees should be termed 'associate degrees' (in line with community colleges in the USA) and have the same status as the degrees of the Institutes of Technology in the Republic of Ireland [280]

On the other hand, there were respondents who considered that the HND was a very valuable qualification and expressed reservations about foundation degrees [281] It was feared that major industrialists and employers would not regard the foundation degrees as 'real degrees' and that consequently a one-year top-up would be needed [282] However, the view was expressed that the foundation degrees might help to overcome the belief that the further education sector is second class [283]

2.5.3     The Curriculum and the role of industry

A number of concerns were expressed about the curriculum for the 14-19 age group. In general, it was considered that the range, or number, of subjects studied was not wide enough. It was also felt that a greater emphasis was needed on subjects such as mathematics, science, technology, ICT and enterprise [284] It was felt that the curriculum needs to be developed to ensure its continued relevance [285] There was also a request that the provision of Irish language teaching be expanded within further and higher education [286]

There was a widespread view that education and training must be linked to the needs of industry [287] For some, this link meant that industry should be actively involved in the process of education and training, both within and outside of the workplace. Employers should be encouraged to take ownership of on-site training and assessment procedures [288] Industrialists should influence the course content and style of third level institutions [289] Industry-standard qualifications (such as MOUS, MCP, CNE [290] should be included in appropriate programmes of further and higher education vocational qualifications [291]

According to one source, district councils, LEDU and local enterprise agencies worked together, but further education, the universities and the T&EA were not currently part of this collaborative effort [292]

2.6            Removing barriers to education

Many different factors act as barriers to learning. In order to increase access to education and training such barriers have to be identified and then removed. It was argued that the education and training system needs to recognise, and ameliorate where possible, the effects of segregation within Northern Ireland. In this regard, the Community Relations Council suggested that it could assist education and training organisations to identify and address barriers that limit or prevent access to education. People needed to be prepared through education and training to handle diversity [293] Human rights and equality mechanisms needed to be entrenched within further and higher education [294]

2.6.1            Financial barriers

Financial problems were a very real barrier to accessing education and training for many people. The problem lay not only in the payment of fees, the cost of study aids, and in the inadequate provision of grants and bursaries. It also lay in the indirect costs associated with studying: taking time off work to study; transport costs; and childcare costs.

Many further education students were outside the scope of discretionary awards and many fell into the benefit trap (that is, if they studied for too many hours a week they lost their entitlement to benefit) [295]

            New Deal

Many women were neither employed nor registered as unemployed. Consequently they did not fall within the remit of the New Deal programme and had to pay for any training undertaken [296]

Individual Learning Accounts

One of the main obstacles to education was the lack of funding for part-time courses. Individual Learning Accounts (ILAs) were made available to part-time higher education students in Northern Ireland and were helpful in providing financial support for students in employment [297] There were calls for ILAs to be further developed and clarified [298] One criticism was that the ILAs were launched with little publicity, and therefore there was a danger that they would be taken up mostly by those already involved in education and training [299]

2.6.2     Social and cultural barriers

The problem of trying to attract people with no interest in studying was acknowledged [300]

It was important to further develop the culture of lifelong learning, especially among sections of the population who were readily overlooked, such as female returners and the low paid. The development of community- based and user-friendly initiatives such as crèches and after-school clubs were an important part of this development [301] In addition, the underemployed needed to be targeted [302] Trade unions could play an enhanced role as advocates for learning and address this issue [303]

Some sections of the population were in particular positions of social deprivation and exclusion. According to the 1995 Report of the Government Taskforce on Travellers, 'the average Traveller will require a minimum of three years training in order to compensate adequately for his/her previous educational and social deprivation' [304]

2.7            Careers education and guidance

There was considerable concern among many respondents regarding the quality of the current careers education and guidance system [305] It was emphasised that the service must be impartial, comprehensive and up-to-date. It was widely recognised that strong and meaningful partnerships between educational establishments and all parts of industry were vital, and it was suggested that industry should take the lead in careers events [306] There was a perception that academic courses were promoted in preference to vocational courses [307] (although this was later refuted by DHFETE, which has responsibility for the careers service. It supports careers education programmes in schools, colleges and training organisations. It also provides advice and guidance to young people and adults through the T&EA JobCentre network). During the course of the Inquiry, the Committee met informally with the Committee for Education and Lifelong Learning from the National Assembly for Wales and discussed the area of careers education and guidance (refer to Section 1.7). Evidence from EGSA highlighted the importance of continuing to improve the service to those adults who did not participate in learning, to ensure that they knew how to maximise the learning opportunities available.

2.7.1            Careers advisers and teachers

Concern was expressed regarding the quality of the careers advice given at secondary school level [308] Evidence from a local company indicated that teachers were unaware of opportunities for chemistry graduates [309] It was even suggested that teachers, and T&EA employees, were the worst people to deliver the service because they had no direct knowledge of the world of industry and commerce [310] On the other hand, departmental officials stated that having the careers service within the T&EA meant that the service could access a wide range of relevant information held by the Department.

There was a view that those giving careers advice required additional training to further their knowledge of both the current and future needs of industry. It was also suggested that all careers teachers needed to be accredited [311] Much stronger links between careers teachers and industry were needed to determine current and future requirements [312] It was important to ensure that they had a comprehensive knowledge about the routes to vocational, entrepreneurial and academic work opportunities. A mechanism needed to be established to feed information about skills shortages into the education system [313]

2.7.2            Increasing access to careers advice

Careers information could be made more available and kept up-to-date via the Internet [314] This will not only increase access but also allow the information to be presented in an interesting and stimulating form for the main target audience of school children. However, it was also important to engage parents, who have a very strong influence over their children's career choice [315] Career Window and employer-led careers events needed to be developed [316]

2.8            Developing the Enterprise Culture

There was a concern, expressed by a number of respondents, that a stronger culture of enterprise and entrepreneurship should be developed, especially in the context of the modern economy. People had to take greater responsibility for the development of their career [317] The lifelong learning agenda dovetailed with the recognition that a job is not for life and, indeed, that a job may have to be self-created. However, while there were a number of comments regarding the importance of promoting enterprise and entrepreneurial attitudes [318] suggestions as to how this might be done were actually rather limited.

Education at primary and secondary level is outside of the remit of this Committee. Nevertheless, as some of the respondents made comments on this sector it is worth noting some of the observations made. It was felt that the development of young entrepreneurs should be promoted in schools [319] It was suggested that business mentors be introduced into schools and that further initiatives should be encouraged between industry and schools. [320] The Company Programme and other initiatives undertaken by Young Enterprise Northern Ireland provided opportunities for young people to learn about self employment and business ownership [321]

2.8.1     Further education and higher education

There were more initiatives in this area within higher education than within further education. As noted earlier, QUB and the University of Ulster had jointly established the Northern Ireland Centre for Entrepreneur­ship. The universities were involved in new company start-ups and the challenge was for such companies to be self-sustaining and developing. A number of respondents highlighted the need to develop incubator units [322] Programmes to encourage students to initiate and support business start-ups needed to be funded [323]

The Northern Ireland Centre for eBusiness at the University of Ulster at Coleraine enabled students to have access to the Virtual University for Small and Medium-sized Enterprises (VUSME) [324]

The University of Ulster proposed to include a compulsory component of entrepreneurship within its undergraduate programmes. It also planned to recruit people to act as entrepreneur role models. There were examples of courses in entrepreneurship from elsewhere, that might usefully be examined. For example, the Particle Physics and Astronomy Research Council (PPARC) provided courses in entrepreneurial skills for its Ph.D. students [325] The University of Ulster was in discussion with the Department of Culture, Arts and Leisure as to how it could support the implementation of entrepreneurship and citizenship in different disciplines. The university was also in discussions with the new economic development agency regarding the possibility of the agency's involvement in future student and business plans.

2.9            Partnerships and collaborations

Many respondents referred to the need for greater communication and collaboration between different organisations in order for the needs of the Northern Ireland economy to be met and for the development of lifelong learning.

2.9.1     Inter-Departmental co-operation

A number of respondents expressed the hope that the concept of a 'joined-up government' would become a reality in practice. Throughout the Inquiry, respondents made rather envious references to the Republic of Ireland, in terms of different aspects of its education and training systems. One comment was that 'the Republic of Ireland has 'joined-up' policies and a clear idea of where the economy is going' [326]

It was said that Government agencies should facilitate rather than provide services, and that their policies and funding programmes needed to be more integrated [327] There were a number of suggestions made in this area. DHFETE, the Department of Education (DE) and the Department of Enterprise, Trade and Investment (DETI) should closely co-operate [328] DHFETE and DETI should establish an inter-departmental strategy to promote links between colleges of further education and departmental agencies [329] Partnerships were needed between DETI, the Industrial Research and Technology Unit (IRTU) and DHFETE regarding the HEROBC funding, and enterprise development [330]

DHFETE needed to work with the Social Security Agency and local social economic projects to develop opportunities for education and training [331] Stronger links, at regional level, were needed between the various government departments and the new economic development agency [332]

            The Training and Employment Agency (T&EA)

A number of comments and criticisms were levied at the Training and Employment Agency. It was accused of operating in isolation and not consulting with other agencies and institutions [333] There was a call for better links to be developed between the T&EA, further education colleges and training centres [334] and for partnerships between the T&EA and NTOs to be established to implement fast-track training to address skill shortages. In terms of the engineering sector, efforts of government departments and agencies, especially DETI, needed to dovetail with those of the T&EA and the Engineering Training Council to adopt a sectoral approach. [335] More strategic links were needed between the T&EA, the Local Enterprise Development Unit (LEDU) and the Tourism Training Trust [336] Close liaison was needed between the T&EA, the Northern Ireland Skills Task Force and training providers so that providers can respond rapidly and appropriately to skills shortages [337]

2.9.2            Government, education and industry

There was widespread desire for more contact and collaboration between the Government, the education sector, and industry [338] Education and training providers, industry and Government need to work together to achieve broad societal objectives in a co-ordinated way. [339] A number of suggestions were made in this area.

           Economic development

Linkages between the planning of further education and the development of the economy should be enhanced, with more formal links needed between the further education sector and DETI [340] Further education should be integrated with the inward investment activities of the Industrial Development Board (IDB) [341] DHFETE should further develop its aims - to support the economy, widen access and increase participation in education and training, and improve quality and raise standards - with a detailed two-to-­three year operational plan [342] Partnerships should be developed between businesses, statutory groups, schools and colleges, with a 'one-stop shop' needed for training and local economic development [343] Incentives were needed for companies to develop partnerships with other companies and with the further education sector [344] The role of private training organisations needed to be included as part of a wide strategic approach, especially with regard to further education [345]

A unit should be developed and properly resourced within DHFETE with responsibility for ensuring that the education and training system responded to present and future skill needs [346] Research and development should be driven by partnerships between government departments, the universities, and the colleges of further education [347]

           Trade Unions

Partnership was needed between DHFETE, further education, employers and the trade unions [348] The role of trade unions in the field of education and training should be enhanced [349]

           Cross-Border co-operation

There was a call for greater cross-border co-operation between educational institutes [350] In particular, it was suggested that partnerships should be developed with the Institutes of Technology in the Republic of Ireland, with a view to joint delivery of education on an all-Ireland basis with joint staff development [351] A fund should be established for the development of North-South education and training co-operation, and North-South science parks should be developed [352]

           Business-Education partnerships

Business-Education Partnerships were generally viewed favourably and should be developed [353] The Northern Ireland Business Education Partnership (NIBEP) needed to be better funded, in order for it to effectively incorporate primary, secondary, further and higher education. The CBI was keen to support partnerships between business and education at all levels, and was supportive of NIBEP. There was also a call for schools-colleges-business clusters to be established [354]

2.9.3            Successful initiatives

A number of schemes and initiatives have already been referred to throughout the report. Others that were considered by respondents to be worthy of further development are briefly detailed below.

Bridge to Employment, which had an 80% success rate, [355] was viewed favourably [356] The Teaching Company Scheme, considered to be a useful bridge between education and industry, was also highly valued [357] The Graduate Conversion Programme, which had a 75% success rate [358] should be regularly reviewed, as should Jobskills [359]

The Scottish Executive allocated £3.2 million for teacher placements, to give 10% of teachers in all sectors the opportunity to spend two weeks in industry over the next three years. In contrast, there were no more than 200 one-week placements for Northern Ireland's 21,000 teachers. This area needed to be addressed, together with giving schools the security of guaranteed cover for classes [360]

Finally, the CBI suggested that challenging targets be set for the uptake of Investors in People awards in Northern Ireland.

Conclusions

Following detailed analysis and consideration of the oral and written evidence the Committee agreed the conclusions and the associated recommendations, which are set out below. They are presented under the following key areas:

(1)        Skills;

(2)        Further Education;

(3)        Higher Education;

(4)        Other education and training providers;

(5)            Qualifications and the curriculum;

(6)            Removing barriers to education;

(7)        Careers education and guidance; and

(8)            Developing the enterprise culture.

Skills

Basic skills

The low level of adult literacy and numeracy among large sections of the community must be improved. Poor adult basic skills are a barrier to employment and contribute to economic disadvantage and social exclusion. It is important to develop and build upon the experience of organisations with a history of working in this area.

n     Recommendation 1 - Further additional funding and resources should be made immediately available to support literacy and numeracy development schemes to correct the poor levels of adult basic skills in Northern Ireland. These schemes should include provision for both personal development and social skills training.

n     Recommendation 2 - Initiate and fund research into developing effective models of workplace basic skills development and the effective sharing of best practice.

General skill shortages

Even if there is an economic downturn in 2001-02 it is possible that the labour market will remain tight in a number of sectors. All mechanisms that increase the flexibility of skills training provision should be co-ordinated and enhanced in order to upskill and reskill the current workforce. The modular delivery of training and education programmes should be further developed to enable people with a range of work, family and other commitments to undertake learning on a part-time basis.

n     Recommendation 3 - Develop flexible and dynamic policies to deal with retraining and reskilling in a range of situations, especially large-scale redundancies. These should include fast-track training programmes to address particular sectoral, or geographical areas, of skill shortages.

Skill shortages - Mathematics, scientific subjects, and Information and Communication Technology (ICT)

There is an increasing need for educational providers, government agencies and the media to work together to increase scientific awareness. In particular, there is a need to enhance common understanding of how science and technology impact, both positively and negatively, on our everyday lives. Whilst the primary responsibility for these matters lies with the Department of Education, we would recommend that the ongoing review of the 16-19 curriculum gives close attention to the trends in student numbers that indicate a continuing decline in students studying quantitative and scientific subjects.

There is a need for both ICT-competent workers and ICT professionals. It is important to match the real ICT needs of industry with educational and training provision.

n     Recommendation 4 - Serious consideration must be given in the current review of the 16-19 curriculum, as to how the relative and/or absolute decline in students studying quantitative and scientific subjects can be reversed, in order to ensure that more people, at secondary and tertiary level, study mathematics and sciences.

n     Recommendation 5 - Develop appropriate conversion courses in mathematics, the sciences and Information and Communication Technology (ICT) that reflect the needs of industry.

n     Recommendation 6 - Greater government support for workplace development, community education and outreach programmes aiming to improve ICT skills, to enable everyone to operate within the ICT driven economy.

Skills Strategy

A co-ordinated and flexible skills strategy is needed. The education and training sector needs effective approaches to forecasting, to enable it to respond quickly and appropriately to the changing labour market. Northern Ireland is predominantly a Small and Medium-sized Enterprise (SME) economy and this needs to be taken into account in any consideration of future skills needs. Training can present a number of problems to SMEs. Training costs can be particularly burdensome for such companies; it can be more difficult to release staff for training when there is little cover; and, for the same reason, management may find it hard to keep up-to-date with changing trends in the labour market.

It is important that information collected on future skills needs is rapidly collated and made widely available to all, especially through the Internet.

n     Recommendation 7 - Rationalise and develop existing initiatives such as the Skills Task Force, Executive Recruitment Watch and the Priority Skills Unit.

n     Recommendation 8 - Develop appropriate mechanisms to support the training requirements of Small and Medium-sized Enterprises.

Further Education

Rationalisation of further education

It is essential to ensure that all sectors within the field of education and training are complementary and form a coherent whole. The further education sector is the area about which the Committee has the greatest concerns. The Committee considers that the sector currently attempts to do too many things and consequently lacks direction, a classic case of "mission creep". The further education sector should concentrate on supplying effective vocational and craft training at all levels, including degree level, to contribute to the development of the lifelong learning culture. The successful provision of education and training is of crucial importance to the economy of Northern Ireland. The FE sector is not adequately prepared to address the current skill shortages or the skill supply and demands of the future. Vocational education is still seen as a poor second choice after an academic education. The Committee recommends the Department continues to address this issue of parity of esteem between vocational and academic education.

The Committee has concerns over the increased costs of administration and procurement as this is no longer centrally organised and is the responsibility of individual colleges. Decisions regarding the broad future of further education should not be left solely to individual college management teams and Boards of Governors, but should be shaped by an overall strategy, which is currently being developed by the Department for Employment and Learning.

Further Education specialisation

The Committee believes that local access to Further Education Colleges is vitally important to underpin social inclusion and accepts the importance of continuing the provision of a range of high quality training and educational services, which are geographically spread across Northern Ireland.

The Committee recommends a more strategic focus for the FE sector, in supplying high quality vocational and craft training at all levels. We also believe that further movement in the direction of college specialisation in support of particular sectors of the economy and the development of centres of excellence is necessary. This strategy will help to secure the role of the FE sector in the provision of an appropriately educated and skilled workforce to meet the needs of the twenty-first century. In order to promote increased access for students from across Northern Ireland, consideration should be given to a proposal for all students over 16 to receive assistance under the Concessionary Fares Scheme.

n     Recommendation 9 - The overall further education strategy, should include a 3-5 year strategic plan, be urgently completed and implemented for the further education sector. The strategy should address the key issues of the optimum number of further education colleges in Northern Ireland, and their individual remits, and how to deliver on the objective of acquiring parity of esteem between vocational and academic qualifications (see Recommendation 31).

n     Recommendation 10 - Decisions regarding the development of centres of excellence at individual colleges should stem from the overall strategy for the sector. This should be underpinned by a commitment to innovative schemes, which increases access and supports a geographical spread of provision across Northern Ireland.

n     Recommendation 11 - Where appropriate, support services should be co­ordinated and harmonised to produce cost savings and standardisation of procedures.

n     Recommendation 12 - Urgent need for the provision of a vastly improved common statistical database on students and staff, to reflect trends in personnel issues and record the outcomes for students attending FE courses. The information produced must be consistent across all colleges.

n     Recommendation 13 - Members of Boards of Governors must receive effective training on their roles and responsibilities. The composition of Governing Bodies should reflect the communities which the colleges serve.

n     Recommendation 14 - Further Education Colleges should come under the remit of the Assembly Ombudsman.

Funding

The issue of funding for the further education sector needs to be addressed. The sector suffers from low morale among its workforce due, in part, to lower salaries compared with secondary school teachers, and poorer working conditions. Current funding arrangements also favours full-time rather than part-time courses. A more buoyant further education sector could take a stronger role in supplying the training, R&D and technology transfer needs of local industry and, with the development of distance learning, industries and businesses further afield.

n     Recommendation 15 - Increase the overall student per capita funding to the further education sector, bearing in mind equality considerations between the different educational sectors. We welcome the recent financial support improvements for FE students. The current funding mechanism needs to be changed if it is to achieve its objective of delivering high-class vocational training, that is regarded as on a par with academic qualifications.

n     Recommendation 16 - The allocation of funding should be guided by an overall strategic plan for the sector. This will address the issue of funding for centres of excellence, the support of Research and Development, (more likely to be product and process development), and the funding of part-time courses.

A number of Further Education Colleges have developed mutually beneficial relationships with local businesses, these need to be further developed across all colleges. Colleges also need to further develop their links with industrial development agencies and develop their staffs understanding and knowledge of local industry needs. Current best practice in this area should be shared throughout the sector.

n     Recommendation 17 - Closer links with local industry, industrial development organisations, including increased staff participation in the Lecturers into Industry initiative (see Recommendation 37).

Information and Communication Technology (ICT) and Further Education Colleges

The development of proficiency in ICT at all levels is very important. The Committee makes the following two recommendations with respect to ICT and further education.

n     Recommendation 18 - Increase the availability of places on Higher National Diploma/Higher National Certificate and other courses which lead to professional qualifications in Information and Communication Technology (ICT).

n     Recommendation 19 - Include an ICT module on all further education courses. All full-time students should ideally have achieved the ICT competence level of the European Computer Driving Licence by the time that they complete their course.

Higher Education

Issues of funding and of developing links between the higher education sector and industry echo those concerns referred to in the further education sector. Funding per capita has decreased over the last decade, coinciding with an increase in the demand for higher education places. It is also important that there should be effective collaboration, as opposed to competition, between the higher and the further education sectors. The Further Education Colleges should not feel they have to change themselves into mini-universities. It is important both for economic and cultural reasons that Northern Ireland universities can aspire to, and reach levels of international excellence, whilst also catering for particular regional needs. Higher education in co-operation with the further education sector and in collaboration with industry must play a greater role in addressing the current skill gaps.

Our universities remain an important educational and cultural resource for the community and have a role to play in addressing social inequalities. Good examples of this role include outreach programmes, which have recently been developed by the universities to promote links with schools that hitherto have been under-represented at higher education institutes.

n     Recommendation 20 - Increase funding to the university sector to ensure that high quality staff are attracted and retained, and to develop the research base of the universities. This should include increasing and developing matched private sector funding initiatives such as the Support Programme for University Research (SPUR).

n     Recommendation 21 - Further develop links between higher education and business. This includes developing initiatives such as the Teaching Company Scheme; industry and charity sponsored professorial chairs; technology incubation units; science parks; spin-off companies; encouraging entrepreneurship through innovative approaches to programme design and specialist postgraduate programmes.

n     Recommendation 22 - A continued increase in the number of university places especially in areas of skill shortages, in line with the Committee's recommendation in its Report on Student Finance, 12 October 2000.

n     Recommendation 23 - Co-ordination of all initiatives, not only those funded by government, which aim to increase access to higher education. This should have a particular focus on the outreach projects, which link the universities to the community.

n     Recommendation 24 - Monitor the effectiveness and equality impact of the new measures for student financial support.

Other education training providers

Training providers outside the formal higher education and further education sectors need to complement the work of these sectors, rather than be in competition with them. The role of employer organisations with responsibilities for training should be strengthened and the Sector Training Councils and National Training Organisations structure in Northern Ireland needs to be developed to address the current gaps. The final structure should have a key role to play in developing a better-equipped workforce, and a more competitive economy, which will also help in reducing social exclusion.

n     Recommendation 25 - Further develop partnerships between the education sector and private training providers.

n     Recommendation 26 - An improved, more comprehensive, streamlined and effective National Training Organisation and Sectoral Training Council structure in Northern Ireland to enhance its role in developing a highly skilled workforce.

n     Recommendation 27 - Continuously monitor and develop Modern Apprenticeships to meet changing labour demands.

New Deal

The Committee is concerned at the large numbers of New Deal participants allocated to personal advisers and the lack of proper tracking systems in place to monitor the outcomes from the New Deal programmes. Furthermore, the overall flexibility of the New Deal to cope with a wide range of abilities, from those with literacy and numeracy difficulties to high flyers, has been questioned. The scope of the training grant is also of concern. Concern also exists with regard to women who are not registered as unemployed and consequently do not fall under the terms of the New Deal Programme. We acknowledge the improvements that the Minister has implemented as part of UK-wide programme of change in the scheme and the areas under consideration, but urge further urgent progress.

n     Recommendation 28 - Continually monitor, evaluate and improve New Deal so that it achieves its employment outcomes in the most cost effective manner. We welcome the Needs and Effectiveness Evaluation of Training and Vocational Education initiated by the Northern Ireland Executive. We also welcome the inter- departmental TaskForce on Employability and Long-term Unemployment. The Committee further recommends that the Department considers other training schemes, which would better address the equal opportunities issues surrounding the availability of training.

Qualifications and the curriculum

The quality of the education and training offered in Northern Ireland needs to be comparable to that in Europe and elsewhere and recognised as such. It is important that any changes in the 16-19 curriculum dovetail well with any reform of the transfer procedure at age 11. The Committee is concerned that in the 14-19 age group, vocational qualifications are not given parity of esteem with academic qualifications.

n     Recommendation 29 - Support the continuing development of the Northern Ireland Credit Accumulation and Transfer System (NICATS) initiative.

n     Recommendation 30 - Include international industry-standard qualifications as components of vocational qualifications.

n     Recommendation 31 - Facilitate an inter-departmental focus to ensure parity of esteem for vocational and academic qualifications.

Higher National Diplomas (HNDs)/Higher National Certificates (HNCs) and Foundation Degrees

The Committee encountered differing views regarding the comparative value of HNDs/HNCs and the new foundation degrees. Support for retaining the HNDs/HNCs largely came from industry, while support for the foundation degrees was generally strong within the further and higher education sectors.

n     Recommendation 32 - Initiate and fund, as a matter of urgency, a research project to evaluate the three types of qualifications.

Removing barriers to education

In the light of what is known about the demand for skills and current trends in supply, it is clear that increasing access to good quality education and training programmes is of paramount importance. All current funding mechanisms across FE and HE need to be continuously reviewed to ensure they are not a barrier to access. We agree with the view that it would be desirable for all young people to aim for at least a level 3 (craft/technician level) academic or vocational qualification and to acquire positive attitudes to lifelong learning.

n     Recommendation 33 - In principle, the Committee supports the UK Skills Task Force recommendation that learning to level 3 (craft/technician level) should be free of charge to all up until their twenty-fifth birthday, and asks the Department to provide costings in order to determine its feasibility.

n     Recommendation 34 - Continue to develop the Individual Learning Accounts scheme with greater targeting and financial support for those in most need without creating excessive administrative costs.

n     Recommendation 35 - The Committee supports the further development of initiatives to assist with childcare and those with educational special needs and disabilities in order to facilitate increased access to all education and training.

Careers education and guidance

The Committee stresses the crucial importance of this service. We are concerned that, although a review was conducted in the mid-1990s, there have only been limited improvements since that time. We would recommend that the Department completes its consideration and response to the "Fulton Report" (2001) with some urgency. Contrasting policies in other areas (e.g. Wales and Scotland) should be considered and emulated where appropriate. Both Wales and Scotland have opted for career guidance to be delivered to national standards, to counteract the fragmented range of services at local level. The Committee would be keen that the Department promotes a system in Northern Ireland that delivers a centrally co-ordinated, independent, high quality service that reflects the new curriculum and the economy. Quality must be monitored centrally, but access to the service must be across all ages and as close to the customer as possible. Teachers must receive experience in the range of careers relating to their specialist subjects using a partnership approach with local industry, and the new industrial development agency. A model of good practice is the Lecturers into Industry Initiative. To date, Northern Ireland has significantly lagged behind other parts of the UK in this respect. The influence of parents over the career choices of their children must not be underestimated.

n     Recommendation 36 - The Department must give priority to the implementation of an enhanced independent, comprehensive and up-to-date, careers education and guidance service based on best practice and extensive use of Information and Communication Technology.

n     Recommendation 37 - Greater work related experiences for all teachers, students and lecturers for substantive periods based on the Northern Ireland Business and Education Partnership (NIBEP) model.

n     Recommendation 38 - Increase funding to NIBEP in order that it can further its work in developing links between business and education.

Developing the enterprise culture

The Committee for Employment and Learning consider that a stronger culture of entrepreneurship, innovation and creativity is a vital ingredient for the successful development of the knowledge-based economy in Northern Ireland. As an incentive to promoting closer links between higher education and industry, the Committee would support the Northern Ireland Economic Council (1999) suggestion, that the Department of Enterprise, Trade and Investment should provide full or part matching funding of that acquired by the higher education sector in Northern Ireland from commercial and industrial sources. The Committee welcomes and supports the recent initiatives undertaken by the Department for Employment and Learning, and put in place by the Queen's University of Belfast and the University of Ulster. Experiences from elsewhere demonstrate that if university staff are given adequate personal incentives which allow them to share in the profits emanating from their research, this can provide an incentive for entrepreneurship. However, we fully recognise that more support is needed to ensure that Northern Ireland gains maximum benefit from innovation and new technology. We commend and support the initiatives of Young Enterprise Northern Ireland and the Northern Ireland Business Education Partnership (NIBEP), and recommend further developments in this area. It is vital that the culture of innovation and creativity is developed as a core theme throughout our entire education system. A high quality and internationally recognised Research and Development base is an essential platform for the successful development of the enterprise culture.

n     Recommendation 39 - Urgent completion and effective implementation, at the inter-departmental level, of the Research, Development and Innovation Strategy for Northern Ireland.

n     Recommendation 40 - Substantial funding increases for Research and Development (R&D) to counteract the current and previous low levels of financial support in comparison to our international competitors. Whilst the majority of university R&D funding should be linked to the university Research Assessment Exercise, 10% as recommended by the Northern Ireland Economic Council, should be earmarked for research that is of particular relevance to Northern Ireland.

n     Recommendation 41 - Establish a single unit to co-ordinate and promote government funded R&D in Northern Ireland, including individual bids for Research and Development for all government departments, and develop well-designed research collaboration and technology transfer schemes with other countries.

n     Recommendation 42 - Implementation of a clear structure to give academic staff sufficient incentives and flexibility to take research ideas, and even company start-ups, to commercial fruition.

n     Recommendation 43 - The Department for Enterprise Trade and Investment to match, at least in part, any research funding raised by higher education from the private sector through business-university links, as an incentive to promoting closer links between higher education and industry.

Annex 1

Dr Hilary Steedman
London School of Economics and Political Science

September 2000

This paper tries to provide an overview of the main challenges facing Northern Ireland in the field of education and training for skill and competence development in the coming decade.

Perhaps the most important general point to make at the outset of this paper is that a respected body of research now maintains that raising skill levels of the population produces a 'win win' situation for the country concerned.

Countries such as Germany or Sweden, where over 80 per cent have a recognised skill, have higher productivity and less income inequality than the UK (Nickell and Layard 1999). Firms benefit from higher skill levels because they then experience less difficulty in moving up-market and/or into new product areas (Prais 1995), but individuals and society as a whole also benefit . Problems of social exclusion are fewer and less extreme.

In the UK, by contrast, although in many respects the economy is one of the more successful in Europe, the incidence of poverty is vastly higher than in the rest of Northern Europe. Many UK citizens are being left behind while average living standards continue to improve. Low pay at the bottom end of the workforce is a direct reflection of low productivity. Raising the skill levels of the whole population will therefore not only help firms to prosper but will help to address the problems of social exclusion.

This paper is structured as follows. Section 1 presents some evidence of how technology is driving and changing the demand for skills and competence within advanced industrialised economies. Section 2 situates the skill stock in the UK (including Northern Ireland) within a wider international context. Section 3 summarises the implications of changing demand and briefly reviews some of the critical areas and responses identified by the UK government in the recent Final Report of the Skills Task Force.

The problem for policy makers in confronting the challenge of raising skill levels is first - What skills? And second - What level? Answering these questions has become all the more difficult because advanced economies find themselves in an unprecedented period of technological change. Furthermore, Lundvall (2000) maintains that the rate of change is currently accelerating - as anyone who aims to fully exploit the potential of the Internet and other new information and communication technology knows to his or her cost.

The pervasiveness of electronic control, information and communication technology in all areas of economic activity has led to the characterisation of the emerging pattern of activity as 'the knowledge economy' (OECD 1996). Our understanding of the full implications of the knowledge economy is still very imperfect. We can be sure, however, that the pace of the changes unleashed by the potential of ICT will not slow in the short and medium term. We can also, therefore, be sure that countries which aim to benefit to the full from exploiting the potential of the knowledge-based economy must continually expand the skills of their population. What then, are those skill implications?

The emerging knowledge-based economy offers an increasing supply of well-paid abstract job tasks, often under flexible labour market contracts, requiring significant education and training (Eliasson 2000). The potential of technological advance and change intensifies and complements competitive pressures which affect both the traded goods sector of the economy (globalisation) and the non-traded goods sector (privatisation leading to competitive pressures and heightened consumer expectations). Soete (1996) warns that important policy challenges arise from this shift in the focus of the economy towards knowledge- based products. In particular, he warns that it is likely that large parts of the labour force will be excluded from the process of wealth generation by virtue of their inadequate levels of skill and competence. The extent to which this process is already underway can be shown from the following table (Table 1)

Understanding of the practical implications of these changes can be helped by concrete examples based on recent case studies.

Houtkoop (1999a) analysed a series of case study visits made to firms in Sweden, the UK and the Netherlands employing a predominantly low-skilled workforce. In the newly-privatised UK Railway Company visited for the project - whose staff were predominantly without formal qualifications - intensive training in social and communication skills was being provided for staff with direct contact with customers (formerly passengers!).

In a privatised UK Water Company, new EU water quality standards required the introduction of IT equipment on a very large scale in an industry where the workforce was also predominantly without formal qualifications. This precipitated redundancies and early retirement and significant investment in the training and upgrading of the remaining employees.

In the Netherlands one of the case studies concerned a major brewery. Over the past seven years the brewing process has become more complex because of automation and centralized process management. In earlier times, employees merely carried out routine tasks, connecting tubes, closing valves, or, in packaging, loading cardboard into the machine. Now, the brewing process is monitored and directed from a central process terminal. In packaging, the employee not only loads cardboard but has operates the machine as well. Parallel to these technological developments, the company initiated organisational change in a push for more cost-effective production. As a consequence the organization moved away from a line organization, and individual workers had to assume more responsibility themselves. Employees had to learn how to work as a self-directing team whereas before there had been one responsible supervisor for each team who told them what to do. The number of supervisors was halved. Thanks to the profitability of the company and the possible negative repercussions of mass lay-offs, the company decided to massively upgrade the skills of the existing workforce.

In the TSER-NEWSKILLS programme of research, Mellander (1999a and 1999b), in a study of manufacturing in Sweden, found that technical change is the single most important factor influencing the decline in demand for the low-skilled group, while (unfavourably developing) relative wages was the second most important factor .

The TSER-NEWSKILLS programme concluded that, with the exception of Portugal, labour-market demand for individuals with no education or training beyond compulsory schooling (henceforth ISCED 0-2) has continued to fall - relative to the average of demand for all skill levels - in the European countries included in the study (McIntosh and Steedman 2000)^. This continuing fall has been accompanied in all countries by continuing reduction in the supply of skills at the ISCED 0-2 level. It therefore seems clear that the supply in the workforce of individuals with low skill levels continues to exceed demand and, on most predictions will continue to do so over the coming decade. As a consequence the OECD has set the International Standard Classification of Education Level (ISCED) 3 standard as the minimum level with that new entrants to the labour market should aim at achieving (OECD/CERI 1997).

The demand for individuals with qualifications at Level 3 and above has increased over the past two decades in the UK and demand appears to have kept pace with or even outstripped the increase in supply over this period. The gap between the lowest paid and the highest paid workers widened dramatically over the 1980s and has not lessened in the 1990s. The relative employment share of non-manual workers increased in the 1980s and pay of non-manuals also increased relative to manual workers. These combined movements strongly suggest an increased demand for higher level skills (Machin 1996).

In the Final Report to the UK government of the National Skills Task Force (DfEE 2000) three main areas of growing skill demand were identified.

• Basic skills of literacy and numeracy were increasingly required for even quite simple jobs in manufacturing and services
• The 'softer' skills of, for example, dealing with customers, team working and problem solving were considered increasingly important by many employers surveyed for the Report especially when planning expansion or product innovation.
• Technical and other associate professional skills and graduates with some advanced knowledge of mathematics were also greatly in demand
• There was a particularly strong demand for IT professionals at all levels

It has already been explained that the past decade and a half has seen a substantial fall in the proportions of the UK population having no education or training qualifications beyond those of the compulsory school ie individuals at ISCED Level 2 or below^. The UK is not the only country to have experienced such a fall. In other European countries a fall has also taken place over this period; in most countries the rate of decrease has been faster than in the UK. This fall is almost exclusively the result of more educated younger people entering the working age population and older less educated individuals leaving. Table 2 shows the position of the UK and four other European countries over the past 13 years (eight years for France and the Netherlands). The UK continues to have a much higher proportion of the population without further education and/or training after the end of compulsory schooling at age 16.

Yet the countries with low proportions of low skilled in 1985 (Germany and Sweden) had made greater progress than the UK in reducing these to quite low levels by 1998.

We can look at changes in the 'skill profile' of the UK population by three separate levels in Figure 1.

Figure 1

Figure 1 shows the reduction in the proportion with no qualifications obtained after 16 noted in Table 2 above but also shows remarkably strong growth in the proportion gaining qualifications from higher education. The crucial 'intermediate skills' category (A-level and/or some further training) has grown much less. This is the category singled out in the Skills Task Force employer survey as causing concern because of skill shortages.

How closely does the 'skills profile' of Northern Ireland correspond to that of the UK - and how do these compare with other countries? A study carried out at the CEP to update the 1994 Skills Audit (DfEE 1994) has been extended here to show separate figures for Northern Ireland^.

Figure 2

Figure 2 shows that the profiles of the two populations are very similar. In particular, both populations share the tendency to low proportions in the intermediate skills category (Level 3). Northern Ireland is slightly below the whole of the UK in proportions at Levels 2, 3 and > Level 3. However, it is well-known that the UK lags behind other European countries in proportions with education and/or training beyond the compulsory school level. Table 3 shows proportions in the UK and NI at Level 2 and above and at Level 3 and above in comparison with France and Germany.

It can be argued, of course, that qualifications do not tell us what the skills of the population are in reality. For one thing, they tell us nothing about what additional skills may have been acquired in the course of adult life but which have not been formally certificated. Although for Table 2 a special analysis has been used to try to allocate qualifications having the same standard to the same level in each country, we can still doubt whether comparisons based on categorisation of qualifications alone tells us accurately where we stand in relation to other countries. This is where the International Adult Literacy Survey (IALS) initiated jointly by Statistics Canada and the OECD can prove helpful in comparing the consistency of international comparisons and in assessing how GB and NI stand in relation to other countries.

In each country, a randomly selected national sample of adults aged 16 and over completed tests designed to assess literacy on a scale ranked 1-5. Level 1 denotes a very basic level and 5 denotes the sort of literacy skills that might be associated with a university graduate. In keeping with this more sophisticated definition of literacy - viewed as a continuum rather than as a condition that adults either do or do not have - three separate literacy scales were used to assess how well adults could 'use printed and written information to function in society'. The prose scale tested the ability to extract information from a piece of continuous prose - for example, at Level 1 the task was to interpret instructions on a box of aspirin; the document scale tested ability to cope with the sort of text found in the workplace; the quantitative scale tested ability to apply arithmetic operations to numbers embedded in printed materials. At Level 1 the task was to perform a single operation such as addition for which the problem is already clearly stated or the numbers are provided.

In Figure 3 below, the sample in each country surveyed has been divided according to the highest education/ training level attained using the ISCED scale (see Appendix A) For each ISCED grouping the average literacy score on the IALS prose literacy scale was calculated.

Figure 3 shows two things. First, when the population is grouped by ISCED levels, the greatest differences between countries occur at below ISCED Level 2. This group, defined in GB and NI as those with no qualifications, has a much lower average score than those at this level in Ireland, the Netherlands and Sweden. At the higher levels, however, the differences in average literacy score between the European countries are rather small. We can, therefore, have some confidence that by measuring populations according to their stock of qualifications held, we are also measuring increases in skills that are useful in employment.

To gain an idea of how NI stands on literacy and numeracy skills we can also compare NI directly with GB and a range of other leading industrialised countries. Table 4 shows this comparison

Table 4 shows that the literacy levels of NI and GB are very similar, in fact, allowing for sampling error, there are no significant statistical differences between them. However, where differences between countries are of the order of 5 per cent or more, the difference is highly likely to be significant, and this will be even more likely for differences greater than 5 per cent. It can be seen that the US, GB, NI and German-speaking Switzerland have the highest proportions at the lowest literacy level, Level 1. German-speaking Switzerland compensates by having high levels at Levels 2 and 3. The US, GB and NI have proportions at Levels 4&5 (the highest levels) which are on a par with other countries. Sweden is an outlier in this comparison. While we have no reason to doubt that Sweden scored more highly than any other country tested, the size of the difference is open to some doubt. This is due to cultural attitudes to test-taking and slight differences in administration of the tests (Carey 2000). After the differences at Level 1 the most striking difference is at the crucial Level 3 (intermediate skills area) where GB, NI and the US are particularly weak.

The UK has a larger group with no further education and training after compulsory education than in other European countries and this holds for Northern Ireland also. Proportions in the UK and NI population with higher education qualifications compare well with other European countries and, more recently, with the US. As a result of the increasing use of ICT and the need for greater flexibility and innovation in all areas of business, the demand for graduate skills shows no sign of slackening at present. Good levels of ICT competence and an A-level standard in mathematics are particularly sought after by companies in the fast expanding banking and finance sectors. The fierce competitive environment in which almost all businesses operate in the globalising knowledge economy has all but eliminated jobs which can be carried out by individuals without basic literacy, numeracy and ICT skills. This trend is of particular concern to the UK because of the high proportion having low skills in these areas (confirmed by the IALS survey and the Moser Report (DfEE 1999). The UK stands out from other countries in having relatively low proportions of the population with good levels of intermediate skill (ISCED 3). Unmet demand for associate professional competence, technician, supervisor and middle management skills is of particular concern to UK business as a result of this feature of the UK skills distribution. This applies also to Northern Ireland. Bringing together what we know about the demand for skills in the UK , stocks of skills and competence and current trends in supply it is clear that there are three priorities for policy makers:

• Ensure that all adults active in the labour force acquire good literacy, numeracy and ICT skills and actively engage in lifelong learning
• Ensure that all young people aim for and that most ultimately attain at least a Level 3 academic or vocational qualification and acquire positive attitudes to lifelong learning
• Continue to expand higher education with particular emphasis on graduates having a high level of ICT competence and sound understanding in mathematics; higher education should lead to positive attitudes to lifelong learning

By developing the skills of individuals we make them more productive, better able to contribute to society and enjoy a fulfilling life. If business can draw upon a rich pool of skill appropriate to business needs the productive potential of skilled individuals will be realised and business will flourish. The policy priorities outlined above aim to satisfy what we know will be the medium and long-term skill needs of the economy for broad generic skills and good technical and social competences. Government has a particular responsibility to take a longer-term perspective on skill and to direct investment to this end since individuals and business frequently lack the information or means to do so.

But business also has urgent short-term skill requirements. Government can contribute to helping business satisfy these requirements in a number of ways.

• Improve information flows from firms to individuals and from individuals to firms concerning skill demand and supply. A well-functioning careers advice service for young people and adults which makes full use of the potential of the internet is essential. A simple, well-understood and reliable system of skill certification is another essential component of a strategy for improved signalling
• Provide effective incentives to publicly-funded education and training institutions to respond rapidly and flexibly to business skill requirements by the provision of on and off-site training courses
• Encourage business to plan ahead for new skill requirements or replacement of skills by, for example, encouraging employer-led apprenticeship programmes and the re-training of adult employees

Other (more interventionist) strategies to help meet business skill requirements have been used in other countries and might repay further study.

In Appendix B of this report I reproduce the main recommendations of the UK government-appointed Skills Task Force. In this section, therefore, I emphasise what I think are the crucial recommendations and crucial challenges in implementing these recommendations.

The Skills Task Force fully recognised the main weakness of the UK education and training system, namely that so many young people gain no further useful level of qualification/skill following compulsory education. International comparisons clearly show that other countries do much better. The Skills Task Force accepted that 'the absence of a fully developed vocational route in England has been one of the main reasons why attainment amongst less academically inclined young people has historically been so low'. A vital proposal, therefore is to strengthen the apprenticeship route, create a level playing field between the funding of the employer and college-based vocational routes and provide a path into Higher Education for those following a vocational route to Level 3.

The importance of this policy area cannot be over-stated. All the important planks of government policy for developing young people's skills depend on ensuring that all aim for a Level 3 qualification and that most achieve it. This will assure good employability for all who study to this level, a good supply of vital technician and associate professional skills and a good supply of young people to continue into Higher Education.

I believe that, to achieve these goals, a great deal of work will be needed to strengthen employer organisations with responsibility for training (NTOs) and that employers should make an increased financial contribution to providing these increased resources for NTOs (Steedman, Gospel and Ryan 1998).

The Task Force recognises that NVQ qualifications alone provide an inadequate basis for a full programme of vocational and technical training to Level 3. This led to an earlier Skills Task Force recommendation for the development of 'vocational certificates specifying knowledge and understanding which are related to occupational standards and which can be taken alongside those qualifications attesting competence'. These certificates are now under development by the Qualifications and Curriculum Authority. In addition to encouraging more young people to reach Level 3 and beyond by the apprenticeship route, the Task Force recognises that some will need or want to study full-time in college for a full vocational qualification, and recommends that Learning and Skills Councils should aim to encourage increased concentration of resources on the most relevant occupational areas.

Incentives are the key to the government's proposals for young people and for adult learning to improve basic skills. The Skills Task Force urges the government to go further in removing direct financial obstacles to learning (fees). The Task Force observes that other European countries and the US achieve higher levels for young people by keeping them longer in some form of education and training than is the case here where fees must be paid after the 19th birthday. The Task Force therefore recommends that learning to Level 3 should be free of charge for all to their 25th birthday.

It is recognised however, that removing such obstacles and other financial obstacles for adults and young people will not necessarily lead to greater participation. My view is that adults in particular will require a variety of incentives and innovative non-threatening teaching and learning situations using ICT to the full. Many adults with literacy and numeracy difficulties are in work for all or part of the time. In particular I consider that employers have a key role to play in encouraging their employees to improve basic skills by providing more stimulating work situations (job rotation, simple projects) which in turn give rise to an incentive to improve basic skills.

Finally, the Skills Task Force expresses particular concern about 'e-skills' - skills for e-commerce and industry which are needed in all sectors of the economy and not just in the ICT producer sector. This should be a priority for government and the sectors concerned working together to rationalise qualifications and provision and broadcast clear signals to individuals that there are good rewards to be gained from investment in these skills.

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DfEE (1999) A Fresh Start: Improving literacy and Numeracy (Moser Report)

DfEE (2000) Skills for All: Proposals for a National Skills Agenda Final Report of the National Skills Task Force

Eliasson G (2000) 'Developments in industrial technology and production - competence requirements and the platform theory of on-the-job learning' in CEDEFOP AGORA IV The low-skilled on the European labour market: prospects and policy options - Towards a minimum learning platform CEDEFOP, Thessaloniki, 2000

Houtkoop W (1999a) 'The Position of the Low-Skilled in Firms' Max Goote Centre, University of Amsterdam, mimeo TSER-NEWSKILLS Working Paper No. 3

Lundvall B-A (2000) 'Europe and the Learning Economy - on the need for reintegrating the strategies of firms, social partners and policy makers' paper given at the Seminar 'Towards a Learning Society: Innovation and Competence Building with Social Cohesion for Europe' 18-30 May 2000 http://in3.dem.ist.utl.pt/learning2000

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Mellander E (1999a) 'The Multi-Dimensional Demand for Labour and Skill-Biased Technical Change' Mimeo, Industriens Utredningsinstitut, Stockholm TSER-NEWSKILLS Working Paper No. 20

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OECD (1996) Employment and Growth in the Knowledge-based Economy, Paris

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Steedman H, Gospel H and P Ryan (1998) Apprenticeship: A Strategy for Growth Special Report, Centre for Economic Performance

Two methods of classifying educational qualifications are used in the tables and charts presented in the report. Table 1, Table 2 and Figure 1 use the following classification (referred to as the ISCED classification) Figure 2 and Table 3 use slightly different definitions which were developed to try to ensure maximum equivalence of levels across countries. This re-classification was carried out for the UK government’s Skills Audit undertaken in 1995/1996. The classifications used have the following rough equivalence