Skills that Work for Wales

A skills and employment strategy

Jon Waters

Skills Strategy team, WAG

Overview

• Why are skills important?

• What’s the problem?• What are we doing

about it?• What will success look

like?

Why are skills important?

• Prosperity depends on employment and productivity – and both depend on skills

Source: APS / LFS, Stats Wales June 2008

Employment rate by highest qualification achieved

0102030405060708090

100

Noqualif ications

Qualif ied tobelow level 2

Qualif ied toNQF level 2 or

above

Qualif ied toNQF level 3 or

above

Qualif ied toNQF level 4 or

above

Per c

ent

Why are skills important?

PRODUCTIVITY

0.6% increase in value added per worker

PRODUCTIVITY

0.6% increase in value added per worker

TRAINING

1% increase inproportion of workers trained in an industry

TRAINING

1% increase inproportion of workers trained in an industry

EARNINGS

0.3% increase in wages

EARNINGS

0.3% increase in wages

Dearden, Reed and Van Reenen (2006) The Impact of Training on Productivity and Wages: Evidence from British Panel Data. Oxford Bulletin of Economics and Statistics.

• Productivity refers to how well a firm or an economy uses its resources – how much output is achieved for each input.

• Training has a bigger impact on business productivity than on workers’ wages.

North East

North West

Yorkshire

East Midlands

West Midlands

Eastern

London

South EastSouth West

England

Wales

Scotland

N. Ireland

UK

68

70

72

74

76

78

80

82

80 85 90 95 100 105 110 115 120 125

%a

ge

Em

plo

ym

en

t Ra

te

Productivity - GVA per hour worked, compared to UK

What’s the problem?

Source: Office of National Statistics- GVA data 2006; Employment data Q4, 2007

• Wales is a relatively low employment and low productivity economy

We want to move towards the top right

What’s the problem?

• Poor workforce skills are a big part of the explanation

Source: National Survey of Adult Basic Skills in Wales (2004), Skills for Life Survey (2003)

Source: Annual Population Survey / Local Labour Force Survey

Wales has worse literacy and numeracy than most English regions

Wales has fewer people qualified to Level 4, and more people without qualifications, than either England or Scotland

What are we doing about it?

• We’ve been making progress, especially on unemployment

Source: Annual Population Survey / Local Labour Force Survey

Source: Labour Force Survey

What are we doing about it?

But two independent reviews have told us that we need to “raise our game” on skills - the Leitch Review...

The Review sets out a compelling vision for the UK. It shows that the UK must urgently raise achievements... and recommends that it commit to becoming a world leader in skills by 2020.

This means doubling attainment at most levels of skill. Responsibility for achieving ambitions must be shared between Government, employers and individuals.

What are we doing about it?

And the Webb Review...

More needs to be done, especially for...– people without basic skills– learners aged 14-19 who do not have a full choice

of opportunities– employers who don’t find the skills system

responsive to their needs– young people and adults who are not in

employment, education or training

What are we doing about it?

Sir Adrian Webb’s 7 Fundamental Principles include..

• Employer influence must increase greatly in the 14-19 phase, be paramount post-19 and must drive strategy and the performance of providers

• New approaches to funding are essential

What are we doing about it?

Skills that Work for Wales is our response

• It covers the whole spectrum of skills, from the early years to adult learning

• We need to ensure that...– children get a better start in life– young people have richer opportunities – and there’s more investment in adult skills

• BUT we’re also asking more of individuals and employers

• Make sure that young people have better opportunities– Flying Start, Foundation Phase, 14-19 Pathways, Welsh Bac

• Target funding on priorities– Post-16 fees policy

• Invest in basic skills– New GCSEs, entitlement, Employer Pledge

• Help more people into work– Integrated skills & employment services

Elements of the strategy #1

Elements of the Strategy #2

• Invest in workforce development– Expanding Workforce Development Programme, strengthen

apprenticeships, integrate skills & business support, Sector Priorities Fund

• Invest in high-level skills– HE review

• Shaping the system– WESB, UKCES, SSCs

• Transforming the learning network– Quality and Effectiveness Framework– Collaboration and new models of delivery

What will success look like?

• We’re working with WESB to develop a new generation of indicators

• We’re interested in things like…• Outcomes for individuals

– Better skills– Progression into employment

• Outcomes for employers– Employer satisfaction

• Outcomes for institutions– Success rates– Inspection grades