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John Denham - Work Skills - QEII Conference Centre
London - 12 June 2008

Check against delivery

Introduction

I was surprised to see someone I know in the film clip we just watched - Geoff Price of VT who I have known for years talking about helping people to progress. Geoff was a shop steward who set up the first union learning centre. His experiences and that of the other speakers in the other short films really show how important this all is.

This is a celebration of the first anniversary of the Skills Pledge. And it is a day on which we are launching a Command Paper on welfare and skills - for those of you, probably most of you, who don't know what that is, it's when we lay a policy document before Parliament, setting out our intentions.

The welfare and skills system is certainly not perfect. Stephen Timms and I both know that too many gaps exist between the support provided by Jobcentre Plus and that provided by colleges.

That does not always make it easy for people to move firstly from unemployment into work and progress with training to better jobs. Nor does it help employers get the staff they need without at least sometimes having to look overseas .

So change is needed. And I welcome events like this because you give us impetus for change. At a similar breakfast discussion, last year, employers such as Network Rail told me that they delivered very specific training that they would like to see accredited and nationally recognised.

We took that on board and made it happen and now Flybe, McDonalds and Network Rail all have accredited qualifications. And many other employers now get some recognition for in-house training.

Ten years ago, the drive was simple: to get people who were unemployed into work. When this Government came to power, there were 1.9 million unemployed. Over the last ten years , we have helped 2 million people into work. The number claiming unemployment benefit is now the lowest since 1975. We are currently at 75% employment - one of the highest rates ever - and that means that we can raise our aspirations. This is why we have increased our employment target to 80%. The problem now is not shortage of jobs but shortage of skills.

That's why we must help people gain the higher skills they need to get the jobs of the future. This is essential as more and more jobs require specialised skills.

James Purnell and I also recognise that the current system is too inflexible to accommodate the complexity of the modern workforce where continuous training is needed and there are few jobs for life.

Command Paper - Work Skills

Work Skills, our command paper, sets out a radical package of measures that will make training more flexible and accessible for individuals and for employers. Our main proposals are:

  • Develop for adults a system where they can get access to a personal skills account, plus better advice, support and information about training.
  • Setting out how we will progress with making willingness to up-skill a condition of receiving out-of-work benefits, and
  • Set out how we intend to give more power to councils and employers to find local solutions to skills needs.

Better advice, information and support on careers and training entitlement

I know from my constituency work that there is a need for information to help people address issues that are holding them back. Like housing, childcare or tax credits. Or being interested in changing careers but not knowing where to start or how to progress.

Our new adult advancement and careers service (aacs) will help provide that advice. The new service will provide:

  • Joined-up advice on training, careers and job opportunities, including self-employment and setting up their own business
  • Advice on other barriers to progression, like understanding tax credits, pension or transport issues
  • An online service where users can identify skills needs
  • A 'skills health check' to assess individual skill needs against job requirements and personal aspirations.

It's not only the advice we're changing, but also the skills system and the funding that underpins it. Looking at 18 year olds in particular, everyone understands that in higher education, students can take a qualification with public funding. Advice and guidance are readily available. We can't yet say this for those young people who don't go to university and that's why I am determined to ensure that those who do not go to university get advice about training and substantial financial support.

So we are extending from this Autumn the support for 19 - 25 year olds - supporting them either full-time at a college or other training provider or, for the first time, if they are combining training with work. At the moment, employers who use Train to Gain have to pay 50% of the cost - now it will be free.

It's worth saying that the value of that funding for a young person who does not have at least level 3 (A level) qualifications would be free training worth around £7,000.

That £7,000 will be available to young people through a skills account [just looking for a way to draw in the concept of skills accounts and avoid the textual bits that are wrong] We want skills accounts to be available to young people and then rolled out. From 2010, all adults will get support up to Level 2 to help people to develop higher level skills We will be testing a fuller service in the months and years to come. And by 2010 the accounts will route around £500 million to individuals.

Time to Train

Employers, too, have much to gain from these reforms, with their clear focus on the needs of their business. There's more work that we need to do.

The new entitlements to in-work training will make it easier for employers to access training for their young workers, whether through apprenticeships, Train to Gain or FE colleges.

And we are channelling £1 billion for skills training through Train to Gain, where employers control the spending.

Since 2006, Train to Gain has engaged 90,000 employers, enabling almost half a million employees to begin learning programmes. Both employer and learner satisfaction with the service are high; 78% of participating employers would recommend it to other employers and 82% gave an overall satisfaction score of 8 or more out of 10. My challenge is to get this message across to employers who have not yet made use of Train to Gain funding or advice.

We are prepared to look at new ways to do this. We are working with Sector Skills Councils to make sure that the Train to Gain offer is the right one for their employers. We have already agreed a package worth over £65m to support employers in the science, engineering and manufacturing technologies SEMTA sector. And we will announce more deals like that one with other key sectors, shortly.

And to ensure that individuals and employers have access to the skills which will be required in the future, we are funding an extra 1200 apprenticeships in sectors which are expanding.

All this fits in with work to shape training provision to the needs of employers. We are reforming vocational qualifications to provide what employers need and so that employers and individuals alike can have confidence in them. This should help people fit training around their busy lives. And it should make the qualifications more valuable to business and individual alike.

I suspect that because you are in this room you won't need this message but I will say it anyway because it is important.

We want to empower employees to have a serious dialogue with their employer about training.

The Prime Minister has announced that we will consult on proposals to give employees the right to request time to train from their employers. This right to ask plus the more personalised adult careers service and the new skills accounts will increase the chances of millions of people for better paid, more sustainable jobs.

However, as Government continues to improve its skills support, and funding, expectations on people to acquire the skills they need for work are changing, too.

Some people on benefits who lack the skills to work will now be required to attend the training to help them get a job. We have to make sure that when people sign up for benefits they sign up for skills as well. Addressing their skill needs, where that is preventing someone from returning to work is an important part of receiving an out of work benefit. It is not right to me or, I believe, the average taxpayer that those without the necessary skills to work simply remain indefinitely on benefits without any effort to gain skills.

Better public services and more local decision-making

In providing a more personalised welfare and skills system across the board, we recognise that Local Authorities and employers have a better idea of what training provision is needed in their local areas and local labour markets and what will work best. In return for devolving responsibility and budgets to local councils, we expect them to push harder with the skills agenda.

We know we can't change everything, everywhere overnight but what we will do progressively is to:

  • streamline the system, devolving responsibility to local partnerships that show strong employer involvement;
  • pursue new opportunities for joint local working; and
  • raise our ambitions on how our services will have improved by 2010-11.

In 2007 we deliberately adopted a light touch approach to Lord Leitch's proposals for Employment and Skills Boards (ESB) to allow partners up and down the country to develop models that suited them. The ESBs are most effective at the level of labour markets, which tend to be larger than local authorities and smaller than regions. This is often a vehicle for employers to be involved in decision-making at different levels and in a way that best meets local needs.

So that you can see the direction we are hoping to move in, I would like to end by telling you about what we are doing in two of the UK's major cities.

In Manchester, DWP and DIUS will work with the new Multi Agency Agreement and Local Authorities to provide training for those on Jobseekers' allowance for more than 6 months. This will involve innovative commissioning bringing together LSC, DWP's Flexible New Deal and Working Neighbourhoods Funding held by Local Authorities. We expect this to help around 30,000 people overcome barriers to getting a job.

And in the West Midlands - with Local Authorities and employers - they are also developing a co-commissioning approach, bringing LSC funding including Train-to-Gain together with the Flexible New Deal, and linking employment and skills with wider services, such as health. Customers who remain unemployed after six months will be able to benefit progressively from enhanced provision at all stages of the flexible New Deal, starting next April. We expect this to help 75,000 people.

For those of you who are familiar with the way Job Centre Plus and the LSC have developed over the years you will realise what a big change these examples represent.

I hope that you will feel as I do that together these proposals - the skills account system and adult careers advice, the skills as a condition of receiving out-of-work benefits, and devolving more power to councils and employers will help us meet the skills challenges of the future. Thanks.