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Home > News > December 2006 > 06 December 2006

Lord Leitch publishes final report

Lord Leitch has published his final report, 'Prosperity for all in the Global Economy: World Class Skills', which examines the UK's long-term skills needs.

The report recommends that the UK commits to a new vision - to become a world leader in skills by 2020.

Publishing the report, Lord Leitch said: "In the 19th Century, the UK had the natural resources, the labour force and the inspiration to lead the world into the Industrial Revolution. Today, we are witnessing a different type of revolution. For developed countries that cannot compete on natural resources and low labour costs, success demands a more service-led economy and high value-added industry.

"In the 21st Century, our natural resource is our people - and their potential is both untapped and vast. Skills are the key to unlocking that potential. The prize for our country will be enormous - higher productivity, the creation of wealth and social justice.

"Without increased skills, we would condemn ourselves to a lingering decline in competitiveness, diminishing economic growth and a bleaker future for all. The case for action is compelling and urgent. Becoming a world leader on skills will enable the UK to compete with the best in the world. I am optimistic."

The report says that in a rapidly changing global economy, with emerging economies such as India and China growing dramatically, the UK cannot afford to stand still. Despite having made good progress over the last decade, aspects of the UK's skills base remain weaker than those in other developed economies, for example:

  • Out of 30 OECD countries, the UK lies 17th on low skills, 20th on intermediate skills and 11th on high skills
  • 5 million adults in the UK lack functional literacy
  • 17 million adults in the UK have difficulty with numbers
  • More than one in six young people leave school unable to read, write or add up properly

The report says low skills levels can hold back productivity and growth and, if not addressed, will result in increasing inequality and the marginalisation of some groups within the labour market. The report projects that, even if current targets are met, by 2020 the UK's skills base will be inferior to that of many other developed nations. It concludes that a radical step-change is necessary.

If the UK is to become a world leader in skills by 2020, the report says this means increasing skills attainment at all levels by 2020 so that:

  • 95% of working age adults have basic skills in both functional literacy and numeracy - rising from 85% and 79% respectively in 2005
  • More than 90% of adults are skilled to GCSE level or to vocational equivalents - rising from 69% in 2005
  • The number of Apprentices in the UK is boosted to 500,000 each year, with improved quantity, quality and esteem for intermediate skills
  • More than 40% of adults are skilled to graduate level and above - up from 29% in 2005

The report suggests 'Economically valuable skills' must be delivered through a demand-led approach, facilitated by a new culture of learning, and an appetite for improved skills amongst individuals and employers.

To attain these goals, the report says the system must become more efficient, responding to market needs, and Government, employers and individuals must all engage and invest more in skills development. The report identifies necessary institutional reforms and simplification.

Lord Leitch recommends radical change across the whole skills spectrum by:

  • Increasing skill attainments at all levels
  • Routing public funding of vocational skills through Train to Gain and Learner Accounts
  • Strengthening the employer voice on skills through creation of a new Commission for Employment & Skills, increasing employer engagement and investment in skills, reforming Sector Skills Councils who will simplify and approve vocational training
  • Launching a new 'pledge' for employers to voluntarily train more employees at work. If insufficient progress has been made by 2010, introduce a statutory right for employees to access workplace training
  • Increasing employer investment in higher level qualifications, especially in Apprenticeships and in degree and postgraduate levels; significantly more training in the workplace
  • Raising people's aspirations and awareness of the value of skills, creating a new universal adult careers service to diagnose skill needs with a skills health check available for all
  • Government to introduce compulsory education or workplace training up to age 18 following introduction of new Diplomas and expanded Apprenticeship route
  • Integrating the public employment & skills services to deliver sustainable employment, enabling more disadvantaged people to gain skills and find work, developing employer-led Employment and Skills Boards

According to the report, the prize for achieving this new ambition is huge - a more prosperous and productive society, with higher rates of employment, and lower levels of poverty and inequality. The report estimates a potential net benefit of at least £80 billion over 30 years, equivalent to an annual boost of £2.5 billion.

Commenting on the Leitch Review of Skills, TUC General Secretary Brendan Barber said: "The TUC welcomes the Leitch Review of Skills as an ambitious and coherent strategy to revolutionise workplace learning and eradicate low skills by 2020. This means that the clock is ticking for the one in three employers who fail to train. Those employers are now on notice to clean up their act by 2010, or the new individual right to workplace training will be implemented.

"Lord Leitch's call on employers to publicly pledge their commitment to increase skills sends a strong message to those employers who short change staff, and the UK economy, by refusing to train. The commitment to compulsory education and training up to age 18 and more funding for Apprenticeships will give many more young people a flying start to their working lives. The new right to workplace training would transform the lives of millions, especially low skilled and low paid workers, as well as boosting Britain's competitiveness.

"The TUC, and its learning and skills organisation unionlearn, will step up our campaign to ensure everyone has the opportunity to learn at work throughout their lives and revitalise Britain's skills base."

The CBI welcomed the Leitch Review of Skills and said that business is ready to play its part in improving the UK's skills base.

Reacting to Lord Leitch's final report, Richard Lambert, Director-General of the CBI said: "Nobody reading the Leitch report could deny that we have to raise our game on skills if the UK is to seize the opportunities that globalisation brings and mitigate its downsides, at a time when jobs for the unskilled are becoming more scarce.

"Currently, too many employers remain confused and bewildered by the skills infrastructure. There is a clear need to ensure a better match between publicly-funded courses and the training and development that employers and employees are looking for.

"Companies will wholeheartedly endorse Lord Leitch's central tenet that the skills needs of employers - and their employees - should be put at the heart of the UK's adult training system. Leitch is right to advocate that training should be demand-led, and that public funds should only go to those vocational courses accredited by employer-led Sector Skills Councils.

"Business already spends £33 billion a year on training and is more than willing to play its part in upskilling the workforce further to safeguard the UK's competitiveness. The CBI will encourage its members to respond to Leitch's call for employers to help their employees gain a basic skills and GCSE-level qualification by using the Government's 'Train to Gain' initiative.

"There is no magic bullet that will solve the UK's skills shortfalls. These are long-term challenges requiring long-term thinking. Despite suggestions that compulsion could be revisited, Leitch is right to have focused on incentives and reforms, rather than compelling firms to train, for which a good case has never been made. As Leitch highlights in today's report, a blunt 'one size fits all' form of compulsion is unlikely to be effective."

"Lord Leitch's report provides a blueprint for reform that could, if fully implemented, put us on course to improve the UK's skills profile dramatically over the course of the next two decades. It is now up to Government to deliver Leitch's vision."

Alan Tuckett, director of the National Institute of Adult Continuing Education (NIACE), said: "The ball is now firmly in the employers' court. If the government accepts Lord Leitch's recommendations, there can be no excuses if they fail to deliver. NIACE is ready to help them rise to the challenge.

"There is much to welcome in the report and we are pleased that the Leitch review has endorsed so much of the analysis we and others offered. The recommendation that government consider a statutory entitlement to workplace learning in 2010 if progress is slow means that employers will be compelled to take training seriously."

External link

The final report of the Leitch Review of Skills, 'Prosperity for all in the Global Economy: World Class Skills', is available at: http://www.hm-treasury.gov.uk/leitch

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