Matthew Hancock – 2013 Speech to OFSTED Conference

Matt Hancock
Matt Hancock

Below is the text of the speech made by Matt Hancock, the then Minister of State for Skills and Enterprise, at the Novotel in Hammersmith, London on 5 September 2013.

Thank you very much for the invitation to speak to you today. I’m particularly keen to come here because I have a simple message: you matter. The job you are doing matters, and it’s vital you do it right. You are a vital part of our ambitious reforms across academic and vocational courses. You matter to me, to pupils, to the future of our nation no less – and I want to take a few minutes to explain why.

Half of 16 year olds enter the vocational education system but in the past the need for vocational education to be inclusive has removed the focus on the need for quality.

We need a vocational education system that is rigorously high quality, motivating people with any level of prior attainment to get the skills they need to reach their potential and prepare them for working life, so that it becomes the norm for school leavers to go to university or into an apprenticeship.

This drive for quality is an enormous challenge for the skills system.

While the top students in colleges are as well served as the top in academy sixth forms, the average is lower and the tail of poor performance much longer.

90% of young people who leave school without a C or higher in both English and maths have still not reached this level by the age of 19.

Businesses cannot find young people with the right skills. Just today James Dyson set out how he could employ more young people if they had the right skills. Our reforms will and must rise to that challenge.

We are doing this through a relentless focus on improving rigour and responsiveness to employers needs.

We need rigour to improve the quality of vocational education, which has been ignored for too long. The academic reforms that this government has implemented are essential to ensuring GCSE and A levels give young people the right skills and knowledge. We now need to bring that same resolve and ambition to vocational education, driving up quality and with it the esteem in which technical qualifications are held.

And we need providers to be responsive to employers needs, not to central command and control. We have given colleges the freedoms and flexibilities they need but this is not enough. Autonomy for providers must be matched with accountability.

So our vision is rigour and responsiveness, delivered by autonomy and accountability.

And that’s where you come in.

There are three ways to hold providers to account:

First, we are giving learners the information they need to make the right choices. By providing high quality and timely information to learners about schools, colleges and training providers, students can make an informed choice about which providers suit their needs and aspirations. We are focusing more on progression and value added – on where a course gets you – instead of completion rates so that providers put their time and energy into helping learners progress onto the next stage of their career.

Second, we are implementing new and tough minimum standards. These minimum standards will force providers to drive up the quality of their classroom provision, workplace provision and apprenticeships. Alongside these minimum standards, we are taking a much closer interest in the financial performance of colleges to ensure that learners are protected.

Third, we are using a tougher intervention regime across the sector. I am delighted to see Sir Michael Wilshaw and yourselves taking an ever-increasing interest in the quality of skills providers. Within skills there is some outstanding provision, as your inspections have already shown, but there is still too much provision that is falling short of what is required. So I am increasingly using Ofsted grading to determine access to funding. You cannot access funding for our new traineeships unless you are rated ‘good’ or ‘outstanding’ by Ofsted. I believe that this puts the right incentives in place for providers. The new Further Education (FE) Commissioner, who reports to Ministers, will challenge failing FE colleges and institutions over their capacity and capability to improve, and in cases where the college or institution cannot deliver, we will take tough action. Your role in providing evidence to support action, whether from inspections or monitoring visits, will be crucial.

So our three core accountability tools – high-quality information, minimum standards, and tougher inspections – rely on the ability accurately measure quality. This becomes even more critical as we begin to base our funding decisions on the judgements of Ofsted.

So it falls to you to deliver tough but fair judgement on vocational courses.

Tough in that you don’t let up on need for high quality and high expectations in vocational provision.

Fair, recognising that excellent vocational learning can be different in nature from academic.

We know that government itself must also deliver on its promises if we are to promote successful and aspirational vocational education.

We have removed poor value qualifications at 14 to 16, and are now removing them at 16 to 19. Our new qualifications, including Tech Levels, will be more rigorous, developed according to standards set by employers and have widespread recognition and transferability. The new Tech Bacc will be a central feature of our future accountability system.

Excellent vocational education and training must keep pace with, and actively develop, new learning technologies. We look to you to support the skills system to embrace these technologies, and to understand the value they bring to learning and the learner experience.

We are redesigning our apprenticeship system following Doug Richard’s review earlier this year. Our upcoming reforms to apprenticeships will lead to higher quality employer-led provision in the workplace, while Nigel Whitehead’s review will ensure adult vocational qualifications are fit for purpose.

Alongside our major reforms to apprenticeships, we have recently launched traineeships for those who cannot yet hold down a job, but are within six months of being able to. We expect traineeships to play a major role in tackling NEETs and supporting Raising the Participation Age (RPA).

I believe that these reforms together with the work of Ofsted can genuinely transform FE into a rigorous and responsive sector.

I would like to thank all of you for the dedication and commitment that you put into your work in FE and beyond. I know that the role of Her Majesty’s Inspectors (HMIs) is demanding and requires a special range of qualities, so thank you for the professionalism and commitment that you bring to this role and I look forward to seeing the impact of your work in the coming months and years.

Matthew Hancock – 2015 Speech on the Future of Manufacturing

Matt Hancock
Matt Hancock

Below is the text of the speech made by Matt Hancock in London on 26 February 2015.

It’s a pleasure to be here at the EEF today, and to be addressing you, the people who’ve designed, built, and welded together the British recovery. I want to begin by thanking EEF for inviting me to speak.

You are tireless advocates for UK manufacturing. Even though no-one knows what your initials stand for, we all know what you stand for: supporting the manufacturing businesses that are crucial for the future of our economy.

The people in this room, you enrich our society by exporting, by investing, by creating jobs.

Your success is mission critical to our vision…

Of a country that pays its way…

– that is more balanced, by sector, by geography…

– here we strive to be the best place in the world to start and grow a business…

– in so doing become the most prosperous major nation upon this earth…

I am proud to be part of a government with this long-term economic plan at its heart, which strains day and night to champion your interests. We will back you, not just with rhetoric – though we will unashamedly do that. We will back you with action.

You told us you needed a more balanced economy, with more growth outside the South East.

We’ve listened and we’re creating the Northern Powerhouse, with jobs growing faster in the North East and North West than in London.

You told us you needed action on energy costs.

We’ve listened and introduced a £7 billion package of support, including compensation for energy-intensive industries to stop industry simply moving overseas.

You told us you needed more high quality, employer-led apprenticeships.

We’ve asked leading companies in aerospace, automotive, life sciences and food, to rewrite the apprentice rulebook. Already young people are starting on these new trailblazer Apprenticeships, rigorous and responsive to employers’ needs.

You told us you needed a modern industrial strategy: custom-made policy support for all industries which require government to take a long-term view.

From the new sector councils, to our Catapult innovation centres, to funding partnerships for the latest technology – in partnership, we are delivering.

And today we publish our Manufacturing Supply Chain Action Plan which sets out our next steps to strengthen supply chains further.

We believe in manufacturing, not because we see you as producers rather than predators, not because you’re a handy source of tax, but because we believe in British business.

I don’t care whether you’re a FTSE giant, a mid-cap mittelstand, or a micro-business you run off your kitchen table, whether you’re based in London or Londonderry, whether you work at a desk, a factory, or drive a white van. What matters to me – what matters to us – is that you provide things other people want to buy. You solve other peoples’ problems.

And my first question is ‘what can we do to make it easier to help you to do business?’

In some areas this means government doing less. Less taxing, less regulating, less spending the country can’t afford.

In this parliament we’ve delivered the most competitive corporation tax in the G20, doubled the annual investment allowance, and taken 400,000 small businesses out of employer NICs altogether with our Employment Allowance.

We’ve taken £10 billion off the cost of domestic red tape and are on track to be the first Government in modern times to reduce the burden of regulation.

I want to thank the EEF in particular for your strong support for our Focus on Enforcement programme in which you tell us how we can improve the way regulations are inforced.

Our action on red tape has included cutting employment tribunals by 80 percent, freeing thousands of firms from unnecessary inspections. It’s part of a wider drive to remove unnecessary burdens.

We’ve even removed the age restrictions on the sale chocolate liqueurs.

Because we all know the sad sight of a group of teenagers, sat on a park bench, off their heads on a box of Thorntons.

Tackling regulatory burdens will also form part of our plans to reform Europe, and address uncertainty over Britain’s unhappy relationship with Europe in the next parliament, once and for all.

And we’ve kept interest rates low and our economy safe by not deviating from our deficit reduction plan. I want to thank you, very personally, for the support you gave us when siren voices insisted we abandon course. You stuck with us and we saw it turn out right.

And you know it’s not enough just to stop at that. It’s not just about government doing less.

There are some things government needs to do more of: on skills, finance, infrastructure and science.

So we are unabashedly interventionist.

Take science. Working alongside business and using the best independent research, we have identified eight great technologies where the UK has the capability to become a world leader: from robotics, to regenerative medicine.

We are backing them and we are doing so alongside private sector investment.

For years Britain had a reputation as a place where ideas were born, but where commercial deployment happened elsewhere. We are ending that, supporting great ideas all the way from the lab to the marketplace.

On finance, we’ve introduced tough new regulations for the City, to clear up the mess from the crash.

And we’ve established the British Business Bank, the first of its kind in the UK, with a mandate to unlock new forms of business finance, including new challenger banks.

The Business Bank also manages our successful Start-Up Loan programme, which has helped start 25,000 small businesses so far.

On skills we have put in place radical long-term reforms.

When we came into government, so-called ‘programme-led’ apprenticeships meant that some apprentices were not required to spend any time in the workplace at all.

We’ve changed the rules so that every apprenticeship must be a paid job, in a real workplace, lasting at least 12 months, and with high quality off-the-job training.

Some predicted that tackling quality in this way would lead to a fall in the quantity of apprentices.

In fact, the number of people doing an apprenticeship has doubled since the election. We have already seen the two millionth Apprentice in this parliament.

I’m proud of this rejuvenation of an ancient concept – in the next parliament we have committed to three million high quality, employer-led Apprentices.

This pro-youth, pro-opportunity agenda is working. Youth unemployment is falling at record rates. Apprenticeships are a partnership between government and business for the betterment of both the economy and society. In that sense they are a metaphor for our wider approach.

Because you are the ultimate source of society’s prosperity, any sensible Government has an obligation to support you to succeed. After all, business, done right is a force for good in society. But businesses in turn have obligations to the free enterprise society of which they are a part.

Markets are free and competitive only in a strong framework – of law and reasonable behaviour. It’s a reciprocal arrangement, something for something.

Here’s the way I see this deal:

– we’ll keep taxes low, but we expect them to be paid in full

– we’ll keep Whitehall off your back, but we expect you to pay your suppliers on time

– when the economy’s in a slump we’ll understand if you can’t manage a pay-rise, but when it’s growing that’s exactly what we want to see

I have huge faith in that partnership because of what it has achieved so far:

– three quarters of a million new businesses, since 2010
– 1.8 million more people in work
– 2 million apprenticeships
– the fastest growth in the G7
– world number one for research citations
– record numbers going to university
– record numbers from the poorest backgrounds going to university
– record numbers of women, young people, older people and people from ethnic minorities all starting their own business
– business investment up
– exports to China up
– wages rising
– energy bills falling
– the deficit halved

Yes there is more to do. But. That is what is at risk if we were to abandon our long-term economic plan. And I want to talk very frankly for a second about that risk.I thought about whether to do so in this speech. It would be better if I didn’t have to. But I come from a small business background. I know from personal experience what it’s like when the economy goes wrong and it affects your business and your family.

And now, I’m privileged to be in a position to try to stop it happening to others.

We will to stand up for small business on late payment. We’ve already legislated to require large companies to publish their payment terms. This transparency will allow us to highlight the best, and also admonish the worst sort of behaviour. It will help us make prompt payment a boardroom subject, as it needs to be.

We must change UK payment culture. Unacceptable payment terms must stop. Why should long payment terms be deemed acceptable business practice here when they are not in many of our major competitors, like Germany?

From this week, all public sector contracts must by law pay on 30 days, and the 30 day terms must be cascaded down the supply chain.

Today I can announce we will go further.

I don’t want to legislate to interfere with a contract law that is used throughout the world. But I am not prepared to take further legislation off the table if payment culture doesn’t improve.

We are rewriting the Prompt Payment Code.

Now it will say that 30 day payment terms are to be the norm of acceptable behaviour in the UK, with 60 days as the maximum in all but exceptional circumstances. This revised Code will have teeth, with a new enforcement body which will be able to eject companies that fail to live up to the new standards, and potentially with the power to levy fines.

I have written to major firms to explain that new transparency measures will make a company’s payment terms a reputational issue. Now I expect all major UK companies to sign up to the tougher new Prompt Payment Code and tackle this problem once and for all.

For ultimately, a contract law people can trust, where agreements signed up to are reasonable, and are then followed, is good for businesses large and small.

We expect the very best of British business because of working with you and believing in you, that is what I see.

Over these past five years we’ve come a long way. Our country is heading in the right direction, thanks to that partnership with you.

Together we will lay the roads and rail our country needs to grow, we will equip our young people with the skills they need to succeed, and we will rebalance the economy so that it is divided not by wealth but by economic specialism.

And while the right policies are important, just as important is a government which understands that business is the ultimate source of our wealth, security and freedom as a nation. That without the entrepreneurial drive to solve other peoples’ problems, and be rewarded for doing so, without the constant transfer of ideas from drawing board, to assembly line, to catalogue and shop window, nothing else is possible.

We understand, and we know that with right support from us, you can make Britain the most prosperous major economy in the world. And in reaching that goal we will always be by your side.

Matthew Hancock – 2015 Speech on Open Data

Matt Hancock
Matt Hancock

Below is the text of the speech made by Matthew Hancock, the Minister for the Cabinet Office, in Berlin, Germany on 10 December 2015.

Thank you to the Konrad Adenauer Foundation for hosting me to speak today. The Konrad Adenauer Foundation has done excellent work to build foundations between Germany and the UK for 50 years. It’s a great honour to be here.

(Guten Tag. Wir bedanken uns bei der Konrad Adanauer Stiftung, die mich heute als Gast eingeladen hat, hier zu sprechen. Seit fünfzig Jahren macht die Stiftung ausgezeichnete Arbeit, um solide Grundlagen zwischen Deutschland und England zu schaffen.)

And for me, there’s something very special about coming to Germany to talk about open data, because this country was the birthplace of a much earlier data revolution.

In about 1450 a Mainz goldsmith – Johannes Gutenberg – perfected the mechanical printing press.

Gutenberg’s process radically cut the cost of copying information.

And because the process itself could be easily copied, the number of printed texts in Europe exploded: from virtually none in 1450 to around 20 million by 1500.

The result of that technological improvement was the birth of mass literacy, the rise of mass culture, and ultimately, the end of feudal society.

Now, with the shift from paper to pixel, the cost of storing and copying information has once again fallen dramatically, to almost zero.

We are already in the very early stages of the next data revolution.

Its contours are visible in everything from smart energy, to driverless cars, to the sharing economy.

And just as government had a key role to play in the rise of print – repealing censorship laws and developing the principle of copyright – so too we have the power to unlock the awesome power of data.

It’s a whole new area of challenging policy and challenging political questions:

  • how to protect privacy
  • how to enable improvements
  • how to keep data secure
  • how to unlock its value

The UK has gone further down this path than most other governments around the world.

So today I want to set out some guiding principles on open data, based on the lessons that we’ve learnt and where we can go next.

Usability

The first principle is that openness on its own is not enough; data also has to be usable.

In the early years, our UK data strategy was deliberately focused on volume. We wanted to get as much data as possible out into the open.

Today we’ve published over 20,000 datasets on our government data portal.

This was a great way of building early momentum.

Government officials are trained to ask: where’s the evidence base, what’s the justification for doing this?

But with open data, the only way you can assemble an evidence base is by publishing it first.

For example, some were sceptical about the idea of crime maps: interactive maps showing recent crimes in a given area.

No one would be interested in local crime figures, they said.

In fact, the website was so popular with the public that it crashed on the day it went live. Now people use it for all sorts of reasons. Open transport data makes it easier and quicker to navigate our cities. Open education data helps people choose options and drive up standards in schools.

So quantity does matter. The more data you publish, the more evidence you’ll find of its usefulness, and that’s critical for changing attitudes within government.

But what we’ve learnt is that quality, reliability and accessibility are just as important.

Indeed, open data that isn’t usable isn’t really open at all.

Think back to the printing press.

It transformed Europe not just because printing was faster than copying out by hand, but because books were printed in vernacular languages not just in Latin.

Today the modern equivalent of printing in Latin is publishing a key dataset as a PDF.

So our focus now is on developing common data standards for use across government.

On auditing our data, so we can be sure of its accuracy and integrity.

And on modernising our data infrastructure, replacing competing and often contradictory datasets held by different government departments with a series of high quality data registers that can be used across the public sector.

Government as a consumer of open data

Yet the best way of all to guarantee to the usefulness of open data is if we as governments use it ourselves.

And this brings me onto my second principle: open data should be treated not as an optional extra – something that’s ‘nice to have’ but inessential – but rather as a key driver of public services reform.

When we started to publish open data in the UK we thought of it mainly as a tool of accountability, a way of being more transparent about where taxpayers’ money was going and how well it was spent.

Government using our own data, ‘hundefutter’, or dogfooding as it is called in English, also ensures that we publish high quality data because we know what it feels like to use it. This is taken from a US Chief Executive of a dog food company who ate a can of his own product to prove its quality.

And it absolutely does deliver greater accountability.

When we started publishing travel data, for example, we found that senior officials became much happier to book themselves into economy class on long-haul flights.

But what we’ve learnt since is that open data can also be used to improve the effectiveness of public services.

Deaths in coronary artery surgery dropped by 21% after publication of surgeons’ performance data.

Publishing contract data allowed one of our officials to find £4 million in savings in just 10 minutes, simply by spotting that several government departments had all been buying the same expensive report.

Openly available demographic data has been used by government agencies in everything from forecasting pressure points in doctors’ surgeries, to finding the best locations for defibrillators.

And this is before you even get to the entirely new services that have been built by innovators outside government using government data.

Travel apps, property valuation software, a home swap service, food hygiene ratings for online takeaway platforms, footfall simulations for retail businesses, a service to check whether your second-hand bike’s been stolen – these are just a small fraction of the applications that have so far been engineered by third parties using government data.

Our focus is on making sure that every part of government, at every level, understands how data can help us achieve our objectives, whether as consumers or compilers of open data.

This is all based on a very clear principle: government data is a public asset and should be used for the public benefit.

Collaboration

But we can’t do it alone, and this brings me onto my third principle: being open to collaboration – and challenge – from the wider community.

In the UK we’ve worked closely with the Open Data Institute, an internationally recognised research and education body, co-founded by 2 of our most eminent data scientists, Sir Nigel Shadbolt and Sir Tim Berners-Lee.

They play a dual role: holding us to account for delivering our open data programme, and connecting us to the leading businesses and innovators progressing this field.

We’ve found them incredibly valuable partners:

  • in identifying the datasets with the greatest potential
  • helping to demonstrate the business case for the release of those datasets
  • as an incubator for the start-ups which go on to use them

But as well as collaboration within countries, we can also benefit from collaboration between them.

Open data is a powerful weapon in the fight against cross-border crimes like fraud, corruption and money-laundering.

By working together and standardising our approach, we can compare more data across borders, design better policies and make it harder for crime to evade detection.

Trust

Data is power, which is why governments have traditionally hoarded it. But even in open form it must still be handled responsibility.

And this brings me onto my fourth principle, which is trust.

Citizen trust must be at heart of the open data agenda.

If the first duty of government is to keep citizens safe, then the first duty of a digital government is to keep citizens’ data safe.

We will only realise the full benefits of an open, data-driven economy if we can show people that their personal data is safe, secure, and handled with utmost care.

So one of the most important things we can do as a government is develop a strong ethical framework – in partnership with civil society – so policymakers and data-scientists can be sure that they’re getting this right.

This is a key priority for the UK.

Yet far from being in conflict, more openness and better security actually go hand in hand.

Both require effective data management: knowing exactly what you own, cutting out duplication and making sure it’s properly audited.

And both require a clear focus on data integrity: making sure that data can’t be changed or corrupted.

On this, as on so much else, we are committed to working closely with our European partners to secure that trust: on the successor to Safe Harbour, so companies can safely transfer data to third parties outside the EU.

And on an EU data protection package that protects the rights of citizens while, crucially, supporting innovation.

So these are my principles for living the open data revolution.

Make it usable, make sure that government itself is a user, collaborate, and put citizen trust front and centre, remembering always that data paid for by the citizen belongs to the citizen.

Conclusion

With half of Berlin closed up and walled off for nearly 40 years, this city knows a lot about the value of openness.

Now we must bring down the wall on government data, returning to citizens what is rightfully theirs, using it to solve age-old problems and unlock brand new possibilities.

Unleashing the free flow of information, innovation and ideas in the service of human progress.

It won’t be easy, it will take time, effort, patience and debate, but we in the UK are looking forward to working with you in Germany to make it happen.

Matthew Hancock – 2014 Speech on Reforms to Vocational Education

Matt Hancock
Matt Hancock

Below is the text of the speech made by Matthew Hancock, the Minister of State for Skills and Enterprise, at Wellington College in Berkshire on 20th June 2014.

Thank you very much for that introduction. It’s great to be here.

In this country – and, for that matter, in this room – all our fast and furious debates about schools, teachers, exams, curricula, are overshadowing an unsung success story.

Britain’s educational Achilles heel – our failure to provide world-class vocational education – is finally getting fixed.

The reforms this government is introducing are potentially the most profound and far-reaching since the 1944 Education Act – affecting thousands upon thousands of young people every single year.

This is a huge change. It’s a massive opportunity.

Hiding in plain sight

It is a vital subject, but it hides in plain sight.

GCSEs, A levels and university – that’s not just the typical path for most journalists, it’s the typical path for their friends, their families, their colleagues, their children and, for that matter, the politicians and business leaders they spend all day writing about.

More than half of young people study vocational courses at some stage of their education – either before or after 16.

But for far too long and far too often, vocational education has been overlooked and undervalued.

So I’m here today to redress the balance.

I want to celebrate this country’s excellence in vocational education just as we celebrate its academic achievements.

I want to champion the new norm – when every young person leaving school or college can choose between university or an apprenticeship, confident that each option is just as well-respected and gives them just as great a start to their future.

And I want to encourage everyone in our education system – and our society – to join me. To celebrate and champion success – and to celebrate and champion our young people who are working harder, and going further, than ever before.

Rigour and responsiveness

We know that education is increasingly important. Data released by the ONS just this week showed that the more educated people are, the more likely they are to be in work – while fewer than half of those with no qualifications are employed.

So this government is taking urgent action to improve our education system.

You know about the academic reforms: to GCSEs, A levels and the curriculum.

But here’s a well-kept secret: everything we’ve done for academic qualifications, we’ve also done for vocational qualifications. And we tackled vocational first.

One of our first priorities in government was to ask Professor Alison Wolf to review the quality of vocational education.

She produced one of the most important pieces of work on the subject.

Her report found that between a quarter and a third of young people – 350,000 teenagers – were being fobbed off with poor-quality qualifications that were not valued by employers and did not prepare them adequately for employment or further study.

It was a tragic waste of talent, on an industrial scale.

No more.

We accepted and implemented every recommendation in the Wolf report, and in some cases went even further. And 3 years on, standards have already started to rise.

Higher standards from 11 to 19

We are breaking down barriers between academic and vocational education. Because life and work need knowledge, skills and behaviours.

Our new national curriculum has much more relevant, practical content.

Under the old curriculum, pupils often spent most of their time talking about making things. Under our new curriculum – they’ll actually make them.

In design and technology, for example, the old curriculum made pupils discuss how to plan a meal – but didn’t require them to cook anything. To discuss how they might design a product – instead of actually designing it.

Now, they get real-life experience in a kitchen or a workshop, cooking, soldering, 3D printing – getting to grips with real processes.

The same goes for computing. The old curriculum taught pupils how to use existing programs. Now, they will learn how to program – how to write software for themselves in different languages like HTML and Java, to create search algorithms, set up a computer network, and encrypt devices.

Under the previous system, there was also an explosion in poor-value vocational qualifications – the sort which claimed, falsely, to be ‘equivalent’ to several GCSEs; but which were completely irrelevant in the workplace.

Acting on Alison Wolf’s recommendations, we set out clear requirements of non-GCSE KS4 qualifications – and as a result removed a staggering 97% of them out of league tables.

So we stripped them out of league tables. From 3,175 vocational qualifications available to 14- to 16-year-olds, now there are just 186. And we’re working with awarding organisations to make sure these qualifications meet the needs of industry and demonstrate real rigour and quality.

Technical Awards and TechBacc

We’ve scrapped the confusion of different pathways, at 14, 16 and beyond – and brought in a new, rigorous, ambitious vocational offer from 14 right through to 19 and beyond.

As I announced earlier this week, between 14 and 16, new Technical Awards – each one genuinely equivalent to a GCSE – will bring much greater rigour to the learning of hands on skills, putting practical and vocational and academic qualifications on the same level playing field for the first time.

With external marking; graded, not pass or fail; developed in partnership with employers; they will offer young people the chance to develop the real-life, practical skills and knowledge which employers value.

From 16 to 19, alongside or instead of A levels, students can study new, rigorous Tech Levels – every single one endorsed by employers, trade or professional bodies.

For the most talented, those Tech Levels can form part of our Technical Baccalaureate, or TechBacc – a new league table measure recognising the achievements of young people who study Tech Levels, level 3 mathematics and an extended project qualification.

On Wednesday we announced that some of the first high-performing schools and colleges to offer the TechBacc will carry out pioneering work with local employers as our TechBacc Trailblazers, spread across the country from Barnet to Blackpool.

The final part of the puzzle is a new category of Substantial Vocational Qualifications – intermediate qualifications designed for 16- to 19-year-olds who wish to progress immediately into a skilled trade, or to prepare for a related Tech Level.

All of these qualifications will need public backing from employers and rigorous assessment, giving students confidence that the qualification they’re taking is worthwhile.

But the path is now simple: GCSEs and Tech Levels at 16, then A levels or Tech Levels as the occupational options at 18.

And of course, from the age of 16 onwards, our reformed apprenticeships, now being designed and delivered by top employers, offer young people real, paid jobs for at least 12 months with meaningful training – creating the skilled professionals of tomorrow.

The building blocks of adult life

All of this work is designed to make sure that our vocational education is truly world class.

But the most important vocational skills are simple. Good maths and English.

They are essential in every job – from professors to plumbers, fighter pilots to firefighters.

But under the old system, 300,000 18-year-olds were starting adult life without crucial English and maths GCSE at grades A* to C, every single year.

Without, in other words, the bare minimum that most colleges or employers would demand as a matter of course.

Once they fell behind at 16, the overwhelming majority had fallen behind for good.

Fewer than 1 in 10 young people who didn’t achieve at least a C in maths or English GCSE at the age of 16 went on to reach that level by age 19. More than 90% never managed to catch up.

No wonder that fewer than a quarter of adults in this country have the maths skills we expect of our 16-year-olds – or only just over half in English.

Last year, the OECD released a sobering verdict on the scale of England’s problems.

It found that 16- to 24-year-olds in this country are among the least literate and numerate in the developed world.

Out of 24 nations, they ranked 22nd for literacy, and 21st for numeracy. England was the only country in the survey where young people performed no better in English and maths than their grandparents, whose education finished many decades before.

English and maths at the heart of our system

So we are putting English and maths right at the heart of our education system.

English and maths GCSEs are being reformed, for first teaching in schools from September 2015, to make them more stretching and more ambitious – with a greater focus on problem solving in maths, and spelling and grammar in English.

Our new 16 to 19 study programmes – building on the Wolf Review’s recommendations – ensure that students who don’t get at least a C in English and maths GCSE by age 16 must keep on working towards them.

From September this year, these higher requirements for maths and English will become a condition of 16 to 19 funding – and it’s been great to see how well 16 to 19 providers are responding.

Conclusion

By linking the education system much more closely to the world of work: with more relevant, respected qualifications, more employer influence over courses, and more focus on English and maths for all students, we are – at long last – ensuring that all young people, no matter what path they choose, get the best possible start in life.

We will close the great divide between vocational and academic education.

No longer are we allowing thousands of young people to be left behind, or left out.

This is an economic necessity. But more than that, it is a matter of social justice. Clear pathways. Straightforward choices between high-quality, valuable courses. Bringing together vital knowledge, skills and behaviours. That is our policy, and the goal to help every child – every child – reach their potential.

Thank you.

Matthew Hancock – 2014 Speech on Apprenticeships

Matt Hancock
Matt Hancock

Below is the text of the speech made by Matthew Hancock, the Minister of State for Skills and Enterprise, in London on 2nd June 2014.

It’s a great time to be talking about apprenticeships.

Apprenticeships are on the rise. For the first time, a whole new generation are seeing apprenticeships as the route to a brighter future.

As we hear the welcome news that our economy is on course to grow faster than any other advanced economy, as we hear that employment is at a record high and wages catching up with inflation, now is the moment to enhance, strengthen, and back our apprenticeships and our apprentices to make real this goal: that all young people when they leave school or college should go on either to university or into an apprenticeship.

Now is the time to reform our apprenticeships system, to make it truly world-leading and to put apprentices at the very forefront of economic growth in the years to come.

So that side by side with university, apprenticeships are the norm for young people leaving school.

Alongside that goal, I want apprenticeships to become the first choice for businesses, professions and employers of all kinds across the country to train their next generation of skilled staff.

And increasingly the first choice for Further Education providers, as all the evidence shows that this intrinsic linking of work with training works to prepare people for their career.

I know that that is what everyone in this room is working hard to achieve and I want to thank you for all of your efforts.

We must remember how far we have already come in driving up the quality of apprenticeships over the last few years.

When I started in this role, so-called ‘programme-led’ apprenticeships meant that some of our apprentices did not have the all-important link to a real employer that must be at the heart of every apprenticeship.

Some apprenticeships lasted 6 months or less, providing minimal training for entry level roles, rather than aspiring to create the highly skilled professionals of tomorrow.

And perhaps most worryingly of all only half of apprentices in England reported receiving off-the job training and 1 in 5 said that they received neither on-the-job nor off-the-job training.

We have tackled these issues head on to drive up quality.

Now, all apprenticeships must be real, paid jobs from day one. They must last for at least 12 months and they must involve meaningful on-the-job training.

And this is already paying off.

Since 2010, we have stripped out over 172,000 short duration apprenticeships and almost 14,000 so-called ‘programme-led’ apprenticeships without jobs.

I was told, with certainty and passionate belief, that tackling poor quality would lead to fewer apprenticeships.

But has raising the bar on quality dented the number of opportunities available?

No. The number of people participating in apprenticeships is at a record high.

Lower quality apprenticeships have been replaced by higher quality apprenticeships.

Having risen sharply, the number of starts has remained at half a million even as low quality provision was stripped out. As duration has increased, the numbers participating in an apprenticeship have continued to rise.

Over the last 4 years, the number of ‘full apprenticeships’ – excluding those of under a year or without a job – that number has doubled among 16 to 18 year olds and trebled overall.

The proportion of 16 to 18 apprenticeships is rising, and the fastest growth is in higher level apprenticeships, preparing young people to become the next generation of pilots, accountants and space engineers.

By raising standards, ensuring apprenticeships are rigorous and demanding, we prove their worth to employers and to potential apprentices.

And the truth is this: driving up rigour and responsiveness creates more high quality apprenticeships.

The number of employers offering apprenticeships has risen every year of this Parliament, and the number of small employers involved is at record levels.

We are putting rocket boosters under the Apprenticeship Ambassador Network, getting more employers and the idea of apprenticeships into schools and working to change the culture of the whole country. And today we are launching a new online toolkit to help employers in recruitment of people with disabilities into apprenticeships. We are on track for 2 million apprenticeship starts over the Parliament.

We are getting behind apprenticeships like no government before us: making changes so they are an unimpeachable part of our country for the future.

And I want to go further: expanding higher apprenticeships – funding 20,000 more and providing an extra £20 million for apprenticeships at degree level, all the way up to the equivalent of a Masters.

So we are not just making a reality of apprenticeships and university becoming the norm young people leaving school, but combining the 2 to offer the best possible start to careers.

And as we drive up standards in apprenticeships, so we must also prepare young people with the skills, experience and behaviour employers are looking for.

AELP was one of the first voices calling for a programme for young people not yet ready for an apprenticeship or a job.

And in collaboration and consultation with you, in August last year, we introduced Traineeships. From policy idea to initial implementation in just eight months, we wanted to get the programme started, and grow and refine it based on what we learned. In the first 6 months over 3,000 traineeships started. More and more employers getting on board. Momentum is growing. From this coming academic year, we’re extending traineeships to young people up to 24, and making delivery more flexible, while retaining the controls to ensure a high-quality programme, helping more and more young people prepare for the world of work.

The changes that we have made mean that today we have an apprenticeships programme that we can all be rightly proud of. Those of you, providing apprenticeships today, are providing not just a bigger, but a higher quality programme than ever before.

There are more people in apprenticeships in this country today, working for more employers and in more sectors, than ever before.

Apprenticeships are popular with young people and that popularity is growing.

Top apprenticeships are more competitive than undergraduate places in the best universities and last year alone, apprenticeship applications rose by almost 50%.

Most importantly, they are also popular with employers.

More than 95% of organisations that employ an apprentice tell us that they are reaping the benefits in areas like increased productivity, improved staff morale and streamlined recruitment.

But I am not restful. While there are more employers involved than ever before, there are millions more that aren’t. Yes, 10% of businesses now employ an apprentice. But that means 90% don’t.

We want to build on the changes we have already made to place employers at the centre of apprenticeships and to further drive up quality.

We want to make sure that every single apprentice receives the high quality training that they need. That every apprentice who completes is a fully rounded professional in their field.

I think of our apprenticeship reforms like the digital switchover for television.

The existing apprenticeships programme, like analogue television, is popular, successful and loved by millions.

But technology is moving on and we have a unique opportunity to step up, to switch over and to create a high definition programme that will lead the world in the decades to come.

And all this is being driven by one simple insight.

For too long, the antennae of the apprenticeship system have been pointed towards government and towards committees that have tried their best to act on behalf of employers. What if we were to retune the system to pick up directly on the clear signals from employers about what they need.

To encourage employers of our apprentices to work together with providers to design the training they receive.

That would create apprenticeships that are higher quality than ever before and that deliver exactly the skills and knowledge that employers need for their future workforce.

Automatically responsive, with the taxpayer, employers, and apprentices working alongside each other.

This isn’t a vision of the far away future. It’s already becoming a reality in this room and right across the country.

More than 400 employers are already part of our Apprenticeship Trailblazers. Large and small companies working together to design new standards – developed by employers for employers.

Some of the most successful companies in the country, from PwC, Microsoft, Jaguar Land Rover and BAE Systems to smaller businesses such as The Test Factory and Walter Smith Fine Foods and many, many more are already at the forefront of this work.

The first 11 new apprenticeship standards were produced by these companies in March, creating a world-class basis for occupations from software developers to engineers, aerospace fitters to lab technicians.

They are working together to design rigorous systems of assessment for their future apprentices.

In each case these will include a clear test at the end of the apprenticeship, ensuring that every successful apprentice has the skills, knowledge and behaviour required to be a fully rounded professional in their field.

And in each case it will include grading, giving apprenticeships the stretch and kudos they need to take their place as the equal of other routes to a successful career.

The Trailblazer employers are also working with training providers including colleagues in this room.

And my message to you, to the providers of training is very clear:

You have a crucial role in the new system. Working with employers yet more to deliver the training their apprentices need to reach the rigorous new standards.

Today, you provide more than just training. You are the salesforce. You guide employers through the system. At your best, you work with them to design training that suits their needs.

In the new system, the role for these wrap around services will be in many cases greater, not smaller.

You will be the salesforce for new apprenticeships. You will support employers, responding to their needs, building long term relationships between employers and the training they and their apprentices value.

I see this in the best providers now. I want to see it in all providers in the future.

The cost of bringing any product successfully to market is made up only in part – and often a minority part – by the raw materials. The design, the marketing, the logistics, these are all part of the price of any product – and I have no doubt they will be part of your future apprenticeships too.

So my vision is clear. Committed employers leading every aspect of the apprenticeship system to ensure that it supports growth across the economy. Enthusiastic providers delivering the highest quality training so that apprentices can reach the rigorous standards employers set.

And our reforms are gaining momentum.

Following hot on the heels of the first Trailblazers, employers from 29 more industries came forward to develop new apprenticeship standards in our second phase, which will be submitted and published this summer.

We will not stop there.

We will launch a third phase of Trailblazers in September. So if employers in the industries you work with want to get involved, take control and design apprenticeships that work for you, just let us know.

By maintaining this momentum, we will see the first starts on these new apprenticeship standards by the start of next year.

By September 2017, every apprenticeship start will be on a new employer-designed standard.

Building on Industrial Partnerships, tied to the Industrial Strategy, joined up across the economy.

But we are not just putting employers in charge of designing apprenticeships. We are also giving them control over how they are funded.

At the moment, government – by funding training providers directly – holds the purse strings.

How different would it be if employers were able to apply exactly the same principles to apprenticeship training as to any other business decision. Discussing and negotiating directly with you to agree the best quality training to meet their needs.

That is exactly what our changes to the funding system will achieve. By putting funding in the hands of employers, they will be free to work with you to secure the most effective opportunities for their employees.

It doesn’t mean every employer will negotiate every price. When I go to Tesco I don’t negotiate the prices, and I guess you don’t either. But they know sure as anything I can go to Waitrose next door if I want, and that drives value for money. Getting away from a price fixed by government is a key part of these reforms – to drive value and get the most out of the public funding that’s available. Instead of looking to government and regulators, industry will set new models of delivery, using new technology to the full, innovative, responsive, and led by employers.

At the same time, we will dramatically simplify the funding system for employers and providers alike.

Just as we are replacing apprenticeship frameworks hundreds of pages long with short employer-designed standards, so we will replace hundreds of funding rates and pages of guidance with a simple grid on a single sheet of A4.

We are working already with Trailblazers to test the funding approach over the coming year, based on some clear and simple principles.

These Trailblazing funding rates are not set in stone. As the saying goes, values can go up as well as down.

But they are the rates we will use for the first Trailblazers. They are based on 3 clear principles.

First, business and government share the benefits of apprenticeships and should therefore share the costs. For every £1 an employer puts into training an apprentice, we will provide £2. These employer co-payments will be mandatory.

Second, to ensure the best value for the taxpayer, we will cap the amount of government funding. Five simple caps broadly based on the training required for that apprenticeship standard. These are not rates: they are caps.

Third, we will pay an additional incentive payment in 3 key areas:

– for completion of the apprenticeship

– for small businesses with fewer than 50 employees

– for apprentices aged 16 to 18

We will fund Higher Apprenticeships on exactly the same basis as any other. This will provide significantly more funding – and much simpler funding – for apprenticeships at these levels.

In total, we will provide substantial funding alongside employers – up to £29,000 for the most stretching – although the majority will be a lot lower – embedding rigour and enabling our new apprenticeships programme to be truly world leading.

As you know, in March this year, we set out 2 options for how the funding will get to employers. One would use the Pay as You Earn system, building on the existing model which employers of all sizes know and use.

The other would set up a new system of Apprenticeship Credits, pooling government and employer funds in an online account which employers can use to buy training for their apprentices.

I want to thank everyone – including many in this room – who took the time to respond to our consultation.

We are considering all the responses now and taking the time to get this right.

Organisations representing over half a million businesses responded to the consultation supporting the principles of our funding reform. We will take time, to get the details right. We will ensure the system is super simple for employers – especially small employers – and ensure you can work with employers so they don’t take on extra burdens. I never forget that I am also the Minister for Small Business. The new system must work for small businesses too.

But gone are the days when an employer doesn’t know the value of training paid for by the taxpayer. Gone are the days when employers’ contributions go uncollected.

The principles of employer co-funding, and a price set by value not by government, are crucial for the future of employer ownership.

Employers pay for what they value, and value what they pay for. Co-funding will lead to richer relationships with employers, deeper collaboration and partnership. And higher quality with generous government subsidy that can attract many of the 90% of employers who don’t yet have apprentices to join our movement for apprentices. And as you know, once employers take on an apprentice, they tend to get hooked.

I have heard the voices raising concerns. Some are the same who said the measures we’ve taken so far to drive up quality would hit numbers. Some of the concerns I share. We must make the system work for small business. It must be super simple. I hope this robust reassurance shows that we will listen, but we are absolutely determined to proceed.

For this is a huge opportunity. It’s a huge opportunity for you, to engage, grow, and deliver for your customers: the employers and apprentices who work for them. It’s a huge opportunity, for Britain to become that high skilled economy we all crave and apprenticeships that are the envy of the world.

And it’s a huge opportunity to millions of future apprentices, to know that apprenticeships will deliver, higher quality across the board, skills relevant to the future, and give everyone in our country – everyone – the opportunity to reach their potential.

So get alongside. Let us go forward together.

The road ahead will not be easy, but for that goal, it is surely worth travelling.

Matthew Hancock – 2014 Speech on the Creative Industries

Matt Hancock
Matt Hancock

Below is the text of the speech made by Matthew Hancock, the Minister of State for Skills and Enterprise, in London on 30th May 2014.

Introduction

Thank you very much.

Hello and welcome to the Makegood Festival.

I am delighted to be here today at this fantastic showcase of culture, creativity and entrepreneurship.

It’s a pleasure to see so many startups in the creative industries – and so many people who have benefited from their training with School for Startups, experience and sheer hard work.

For many of you here, this weekend represents the culmination of a year’s hard work, launching your creative business. And it is a celebration of the intensely powerful spirit of creativity and entrepreneurship that we find in Britain today.

I’m sure it’s been inspirational.

It’s pretty inspirational for me.

This weekend Makegood will play host to some of the finest new creative that London has to offer, with a line-up of speakers with a dedicated following from across creative industries.

Small businesses

Startups and small businesses like yours are the lifeblood of our economy.

In every single village, town and city in Britain, enterprising and hardworking people – like everyone in this room – are putting their energy, enthusiasm and creativity into brand new businesses.

In fact, more people than ever are rolling up their sleeves and going for it: almost 500,000 new businesses were started last year.

We are backing all of those new businesses – and all of you – every step of the way.

By extending small business rate relief until 2015 and introducing a new Employment Allowance to put up to £200 back into your business. By cutting unnecessary red tape, saving businesses over £1.2 billion already. By making it easier to access finance, like our new start-up loans. And easier to take on young people, by abolishing national insurance contributions for people under 21 from April 2015.

We want Britain to be the best place in the world to start and grow a business, bar none.

That’s my goal. Supporting you, and others like you, to grow.

Creating a stronger, more secure and more prosperous Britain.

Creative industries

All of you have a huge part to play in this.

Because the creative industries are one of the most vibrant parts of our economy – and one of our greatest strengths as a nation.

In 2012 alone, the creative industries contributed £71 billion to the economy – around 5% of UK total GVA. They’ve developed services exports worth £15.5 billion – 8% of UK services total in 2011.

In the 5 years between 2008 and 2012, they grew by 15%, almost 3 times more than the economy as a whole.

Over 100,000 creative enterprises provide 1.7 million jobs, 5% of UK employment in 2012. And if we count creative jobs across all sectors, the ‘creative economy’ provided 2.5 million jobs, 8% of UK total employment in 2012.

Because creative businesses and people help drive growth and exports in all kinds of industries – through good advertising, marketing, innovative design, software, new business models and so on.

And that’s without mentioning British films, performing arts, music, video games, crafts and fashion – from the world-leading names showcased in our GREAT campaign, which give this country such an incredible reputation from country to country and continent to continent.

These all fly the flag for Britain across the globe. And events like this are a brilliant chance to recognise their success – and spot the stars of the future.

Government is right behind you

The government is right behind you.

Over the last few years we’ve made sure that creative businesses have received special, targeted support.

Corporation tax relief has helped to secure £5.5 billion investment in a thousand British films – as well as supporting growth in TV production, animation, video games and regional theatre.

And we have provided £2.4 billion of public investment in the arts and culture in the four years since 2011 alone.

We are also making sure that creative businesses – and all businesses come to that – can rely on the sort of reliable, quick, high-quality communications infrastructure they need to survive. As I’m sure every one of you will be able to confirm, if you are well connected, and trade online, you can work from and sell to anywhere in the world – if not, it’s almost impossible to clear that first hurdle.

So we have provided £530 million to stimulate commercial investment and bring high speed broadband to rural communities; and provided £150 million to establish super-connected cities across the UK. We’re also investing up to £150 million to improve the quality and coverage of mobile phone voice and data services.

Of course, the best people to advise creative businesses on how to achieve success are those who have already done it. So we’re working with the industry on how we can encourage this vital sector to grow – including in the Creative Industries Council, chaired by Nicola Mendelsohn of Facebook – and I am looking forward to seeing the upcoming creative industries strategy written by employers for employers.

And the School for Creative Startups – who are behind this festival – are doing a fantastic job of training and backing creative entrepreneurs. I’m sure everyone here will want to thank them for all their support so far. The range and number of startups showcased here shows how successful they’ve been – and I’m sure they’re not stopping yet.

Small businesses

We want to make sure that we help, and don’t hinder. And we know that’s what you want too.

As the first government in modern history to reduce the overall amount of regulation, we’ve targeted 3,000 rules to be scrapped or amended – making it easier for businesses to survive and thrive.

And because businesses have told us that they want a tax regine which supports enterprise, a workforce with the right skills for the job, and better access to finance – that’s what we’re doing.

Thanks to our new Employment Allowance, 450,000 small businesses will pay no national insurance at all – allowing entrepreneurs to keep more of what they earn; meaning more cash for running and growing a business and creating new jobs.

And we’ve created one of the most competitive tax regimes in the world – including through the Seed Enterprise Investment Scheme and Annual Investment Allowance.

Access to finance

But I know that creative entrepreneurs often find it particularly difficult to get finance. They’re often strong on creativity, energy and enthusiasm – with loads of high-value intellectual property – but few tangible assets.

That is where our new British Business Bank is helping.

Around a third of venture capital from Enterprise Capital Funds has gone to creative and digital small businesses.

The Bank’s Enterprise Finance Guarantee has enabled loans to more than 500 creative businesses. The Business Finance Partnership, a public / private co-investment scheme for alternative and peer-to-peer lenders, is also playing an important role.

And 23% of all Start-up Loans have been offered to new businesses in the creative industries.

But money isn’t the only factor.

Skills

Alongside proper finance, you need a highly-skilled, well-educated workforce.

Research from a successful creative cluster in Brighton suggests that the most successful creative businesses are led by people with a combination of creative, digital and business skills.

And while we know that creative businesses thrive on diverse talents, we also know that doors have not always been open to people from all backgrounds, especially those without degrees.

This is now changing for the better.

Five years ago there were virtually no apprentices in the creative industries – there are now over 4,200.

We have driven up the quality of training every apprentice receives and now offer grants of up to £1,500 to firms that hire an apprentice.

New higher-level apprenticeships, equivalent to university study, have been developed by industry, for example in fashion, textiles, advertising and software development.

And the £15 million, publicly-funded Creative Employment Programme is supporting up to 6,500 new apprenticeships, pre-apprenticeships and paid internships in creative organisations.

But to make sure these changes make a real impact, we need to put employers in the driving seat – so that they are empowered to take responsibility for training and development, working with employees, freelancers, trade unions and training providers to make sure that their staff develop the skills they need to succeed.

Conclusion

These changes – and the other action I’ve outlined today – are just part of the work this government is doing to encourage creative start-ups, help small businesses grow and attract more talent into the creative industries from more diverse backgrounds.

Many of you here today are showing what can be done.

I wish you every success in the future.

Your success doesn’t just benefit you it helps the whole creative economy, the whole UK economy, to grow stronger and fairer, building a more prosperous country for all of us.

Matthew Hancock – 2014 Speech on Vocational Education

Matt Hancock
Matt Hancock

Below is the text of the speech made by Matthew Hancock, the Skills Minister, at the UK Commission for Employment and Skills event at Plaisterers’ Hall in London on 30th April 2014.

Thank you, it’s a pleasure to be here.

It’s good to see an event celebrating employers and UKCES working together.

And a livery company is a good place to do it. Because these guilds tell the history of our economy.

From the medieval trades – fletchers, cordwainers or girdlers – through the early modern clockmakers, spectacle-makers – and the playing-card makers, obviously – down to the 20th-century companies of actuaries, consultants and bankers.

And the newest company of all, just a year old, is the Worshipful Company of Educators.

That couldn’t be more appropriate.

Because employment is at a record high, we’re set to grow faster than any advanced economy this year, and wages are rising faster than inflation.

And if we want to make the most of that – we need a strong education system.

People need the right skills to get jobs. And employers need skilled people to grow.

If we’re to do that, we face 2 challenges. I want to talk today about what we’re doing to rise to them.

The first challenge is the divide between academic and vocational education.

And the second, the divide between education, and work.

The divide between academic and vocational education

Taking the first – the issue is partly about attitudes.

We still hear talk of children being ‘non-academic’ or as ‘unsuited’ to vocational careers.

But any employer will tell you good literacy and numeracy are the most basic requirements for any employee.

So it’s just wrong to say a technical education is an opt-out of high standards.

And it’s just wrong to say high standards are somehow irrelevant to workplace skills.

I defy anyone to find any good job that does not need a combination of knowledge, skill and behaviour. We must equip young people with all these.

But even worse than the mindset – the divide was a matter of policy, too.

Vocational courses had no minimum standard for English and maths.

And governments tried to run a skills bureaucracy from the top down – deciding who should study what, at each level and for how long.

It was cumbersome and clumsy: and it failed.

By 2010, somewhere between a quarter and a third of all young people were on poor-quality qualifications.

Hardly surprising, then, if vocational routes lost value and status, compared to academic.

…which we want to end

We are determined to end this divide – by restoring rigour, across all education.

Now, regardless of whether they’re in school, college or workplace training – all students will now study maths and English right up to 18, to at least a C at GCSE.

And look at some of the new institutions we’re creating.

Since January we have announced new colleges, in important sectors like rail, nuclear and software.

These will be elite institutions, and they will blur the lines between vocational and academic.

They will provide relevant, technical skills – alongside top-quality academic study.

They will take students on from a young age – but go right up to university level.

They aim to be the best in the world – so they are not just an alternative to the best universities, but are elite peers, collaborators and competitors, too.

And today I can announce that we’ll be setting up the first new FE college for over 20 years.

Prospects College of Advanced Technology will involve employers as never before, providing cutting-edge technical education in engineering, aviation, rail and construction to young people over 16.

When it’s fully up and running, it will serve over 1,000 students and 1,200 young people on apprenticeships – making it one of the largest group training associations in the country.

Parity of esteem is a nice phrase: these colleges will make it a reality.

And just as technology has transformed industry after industry, it’s coming to education. New assessment, learning and planning tools can help refine teaching – making it more measurable, and driving up standards.

So we set up the Education Technology Group – alongside a group for FE, and new capital funding for broadband in colleges – to explore what more we can do.

And at every level, we are restoring faith in vocational qualifications.

We’re stopping funding per qualification passed – which encouraged chasing easy certificates. We’ve introduced grading to all apprenticeships. It’s absurd to say there aren’t different levels of ability for vocational skills: anyone who saw my welding at the Skills Show a few months would agree.

Grades must be valid, of course – but no skill can’t be graded. And in time, we want grading across the system – for better, finer measurement of achievement, and for clear, aspirational goals for students.

We’ve filtered out poor-value qualifications: over 6,500 will have funding removed.

The qualifications recognised in performance tables will be those explicitly supported by universities and employers.

That means employers can trust qualifications.

And it means young people face smarter choices, and better prospects.

And they’re starting to notice. We have a record number of young people in apprenticeships. The majority of young people say they want to do an apprenticeship when they leave school. The top apprenticeships are already as competitive as the top universities.

That’s promising. But we want to go further. And our reforms aim to create a new norm: where young people choose university or an apprenticeship – where we end the divide between academic and vocational education.

The divide between work and training

Turning to the second divide: there’s a gulf between work and education.

Again, this was a matter of mindset and a product of policy.

As governments thought they knew best, vocational courses lost sight of the needs of business, and academic courses lost sight of practical context.

Now, we’re making the entire system much more responsive to employers: Tech Levels, yes, and new GCSEs in English and maths which will be much more functional too.

This link between work and education must be based on stronger qualifications, and it can be helped by stronger relationships too. We’re strengthening careers advice – so that it’s more inspirational, with a more dynamic, refreshed National Careers Service coming this autumn.

Our guidance to schools is much firmer about the need to engage employers. No school now has an excuse not to be engaging local employers. And no employer has an excuse not to engage their local school.

And we know some young people aren’t ready for work, or a full apprenticeship. So we created traineeships – to ease that transition.

Just this week, we had a trainee, Yusuf, start in my office in Parliament – and several other MPs have taken on trainees, too.

We’re giving genuine power to employers to shape training: like our apprenticeships trailblazers, who are writing the new apprenticeship standards.

Employer-owned pilots

And today, I am delighted to announce the next stage of our employer ownership of skills pilot.

Under this scheme, employers combine their own money with government funding, to invest in the training they need.

It’s simple, direct, and focussed.

The second wave of funding started last year. Figures released today show that the first projects will create over 5,000 traineeships.

Like National Grid – who plan to provide over 3,000 – or Everton Football club, who plan 1,600 – though let’s hope that after Everton, the trainees have better careers than their former managers.

Today, I can announce the next projects: an extra £5 million going direct to employers.

Companies like Kostal, leading a new advanced manufacturing programme in Sheffield; Blackpool Pleasure Beach, investing in tourism training; and Freedom Communications in Watford, in business technology.

These companies know their training needs best: so now, they get the budget.

We’ve learnt a lot from the first rounds of funding about how to support employers. And we know that some sectors have specialist skills.

Like the automotive sector – a great British success story of recent years.

So I can also tell you that learning the lessons from EOP, we will establish a new permanent employer-owned fund and are making the first call for applicants, for companies in the car industry supply chain.

From next week, they can submit proposals to get money to train – to tackle skills shortages, and go on to ever-greater things.

We will make £10 million available immediately – and will offer a further £10 million later in the year.

I know you’ve spent time today showing what employers can do when they get directly involved in training. That’s exactly the spirit of our reforms – and these new announcements aim to find, fund and fuel even more.

Conclusion

So that’s what we want.

To end the divide between vocational and academic. It’s a false divide: only rigour in both will help our young people.

And to end the divide between training and work. It’s a dangerous divide: only responsiveness will help people get jobs, and help employers grow.

And if we can do that – think of what’s possible.

What livery companies may come in the future, no one can say.

But I hope that if we’re in this hall in 10, or 20 or 30 years, we’re still talking about the success stories of this decade – of a time when we ended the divides that have held us back.

Matthew Hancock – 2014 Speech to Federation of Small Businesses Conference

Matt Hancock
Matt Hancock

Below is the text of the speech made by Matthew Hancock, the Minister of State for Skills and Enterprise, to the Federation of Small Businesses Conference held in Manchester on 28th March 2014.

It is a pleasure to be here, and I want to start by wishing the FSB a very happy 40th birthday. You are tireless advocates for small business and I know everyone in this room is grateful for the work you do.

The FSB came into being at a difficult time for this country. In 1974 inflation spiked at 18%, and England had a dreadful football team.

I’m happy to report progress. Today inflation is 1.7%.

It’s a pleasure to be here because for me it’s almost coming home. I was born and grew up just down the M56 at Chester. And I grew up in my family’s small business. Those dinner-table conversations about the future of our firm helped shape me as a politician.

So I know from my heart that small business isn’t just a job, but a way of life.

And to all those who’ve put their time, talent and capital into running a small business, my message to you is that this government is backing you to the hilt.

Being small forces you to think big, to take risks and innovate. It’s why you create the vast majority of new jobs each year.

And it’s why you’re at the heart of our long term economic plan to create a more secure and prosperous Britain.

We saw in last week’s Budget that the plan is working. It’s there in the numbers.

1.7 million new private sector jobs and 500,000 new businesses have been created No major developed economy is recovering faster than Britain.

Crucially, a balanced recovery. The latest GDP figures show growth across services, manufacturing and construction, and unemployment down in every region.

But it isn’t just about the numbers. What drives economic recovery is a belief that things will get better. So it’s incredibly encouraging to see the results of the latest FSB survey: 2-thirds of businesses expect to grow in the next year; a quarter plan to export more. And a marked improvement in access to finance.

Even the floods couldn’t dampen the animal spirits of British business.

And you might expect me to stand here and claim all the credit for the recovery on behalf of the government.

But I won’t…

…Because this recovery isn’t made in Whitehall, it was built in the business parks and garage offices, in the white vans and workshops, in the mills and market squares of Great Britain.

It’s thanks to you that we have record numbers of people in work.

Indeed, the lesson of the crash is that government must respect the limits of its power over the economy.

We can’t abolish boom and bust, we can’t deliver sustainable growth simply by flicking a switch in the Treasury; what we can do is to set the framework in which private enterprise can flourish.

And while the recovery is welcome, there is much more to do.

My role as Minister for Skills and Enterprise is not to create the jobs and businesses, but to be on the side of those who do.

How we are helping small businesses today

That’s why last year we launched Small Business: GREAT Ambition – our commitment to make it easier for small firms to grow.

And why we’ve taken action on the issues that you’ve told us matter to you most.

Like a tax regime which supports enterprise, a workforce with the right skills for the job; access to finance, and – through deregulation – getting government out of the way where it hinders instead of helps.

Take access to finance.

We all know money is tight. So where funds are available we’ve been careful to target them at small firms.

British Business Bank schemes are now supporting £600 million of investment each year.

Start-Up Loans have already committed over £80 million and today I’m proud to announce we’ve offered the 15,000th Start-Up loan.

Our £200 million Growth Accelerator Programme has supported over 12,000 small businesses so far, and we aim to support up to more than double that.

Businesses tell us this programme is making a real difference. In its first year, almost 9 in 10 firms that used it thought the Growth Accelerator helped increase their turnover. 97% would recommend it to others.

But while government assistance can give many firms the leg-up they need, tax cuts can reach even more.

It’s why we’ve cut the main rate of corporation tax from 28% to 23%, falling to 20% by 2015 – the joint lowest rate in the G20. Just this week I voted for lower corporation tax again.

It’s why we’ve introduced the new Employment Allowance which, from next month, will save you up to £2,000 on your National Insurance bills – a cashback on jobs.

Letting you keep more of what you earn means more cash available for what really matters to you: running and growing your business, creating jobs.

This summer the Office of Tax Simplification will be reporting back on what more can be done to improve the competitiveness of UK tax administration.

That’s my holiday reading sorted.

Of course, it isn’t just about government doing more. There are some areas where we need to do less.

I’m proud that we’re the first government in modern times actually to reduce red tape. We’ve saved businesses over £1 billion so far by cutting or reforming regulation.

What does that mean in reality?

When we came into office there were rules governing the precise design of ‘No Smoking’ signs, rules requiring a license if you wanted to show a film in school…

There were even age restrictions on the sale of chocolate liqueurs.

…Because we all know the sad sight of a group of teenagers, on a park bench, off their heads on a box of Thorntons.

Too often in recent times process and box-ticking replaced common sense and personal responsibility.

And since every new hire is a risk, we have reformed employment laws and employment tribunals so businesses – especially small businesses – have greater confidence in taking on new staff.

Our tribunal reforms are working. Jobs are up and the number of cases taken to tribunal is down 80%. The only work being hit by our tribunal reform is the workload of employment lawyers.

More to do

But we’re determined to do more.

You told us you wanted action on the cost of energy.

We listened, and in the Budget we announced a £7 billion package of support, including compensation for energy intensive industries with higher electricity costs resulting from green levies.

You told us that business rates should be more responsive to property values, and that you wanted more simplicity for ratepayers.

So we cut £1,000 off rates for retailers, and we’re going to review the whole way business rates are levied.

And as the economy recovers and your books fill up, we know that prompt payment is essential. So we will strengthen the rules on transparency, so everyone knows where they stand.

In the mean time we will keep pressing more companies to sign up to the Institute of Credit Management’s prompt payment code. Over 1,500 signatories are now committed to pay their suppliers on time, including the majority of FTSE100 companies.

Floods

Being on the side of small business means being there in a crisis too.

So we worked overnights and over weekends to put together a £10 million Business Support Scheme to help flooded properties, with grants of up to £5,000 to make buildings more resilient in the future and 3 months of automatic business rate relief.

In the Budget we increased funding for flood defences by £140 million.

Tackling these sorts of emergencies means everyone pulling together. And I want to pay tribute to the FSB’s work advising and guiding on issues like handling insurance claims. Helping to make life that little bit easier during an incredibly stressful time.

Budget

And of course while last week’s Budget will go down in history as the ‘Savers’ Budget’, saving and investment are 2 sides of the same coin. They’re both about planning for the long term, deferring the reward, taking responsibility for the future.

This government believes that the way to build a stronger economy is to trust people with their own money. And whether you’re saving for your pension pot, or investing in your business, we want to help.

So we froze fuel duty, now 20p lower than planned, and we’re extending the Investment Allowance, increasing it to £500,000 too.

But it isn’t just about investment in capital. The iPhone costs Apple around $180 to manufacture and assemble. It sells for 3 times as much, thanks to the design of that great British success story, Sir Jonny Ive.

In a world where value is added on the drawing board as well as the production line, investment in people is just as important.

So we are expanding apprenticeships and it’s a central mission of my job to drive the education system and employers closer together: making education more rigorous and more responsive to employers needs.

We will continue to do more.

You never stop looking for new trends, new markets, new opportunities. It’s what’s seen you through this recession, and it’s what’s pulling us into recovery. In turn, we will never stop looking for new ways to help you fulfill your ambitions.

Today I’m delighted to announce further progress on clearing away the barriers to growth.

When it comes to business policy, we don’t believe Whitehall has all the answers. Our Entrepreneurs in Residence scheme has brought entrepreneurs into the heart of government for precisely this reason.

So today we are launching our search for 2 new Entrepreneurs in Residence, to take the scheme into a second year.

The first will advise us on how to help small businesses achieve the scale-up and exports we all want to see.

The second will work with us on the exciting new industry of Synthetic Biology, which we believe has huge potential for the life sciences and energy sectors.

But as everyone in this room knows, coming up with ideas is the easy bit. The biggest challenge faced by any entrepreneur is getting them to market.

That’s why we’re determined to create a financial ecosystem which nurtures enterprise, one which bridges the gap between concept and commercial reality.

When it comes to financing great new products we in government want to lead by example.

Technology is poised to change education as radically over the next decade as it has changed everything else over the last. So today I can announce that the Technology Strategy Board is launching a new education technology design competition to give small firms with innovative ideas for EdTech products the chance to turn them into a reality.

Celebrating small business

Which is why I want to highlight 1 fantastic grass-roots initiative which has got the whole country taking notice of what small businesses offer. Last year’s Small Business Saturday – the first ever in the UK – was a huge success, with thousands of businesses taking part across the country and almost £5 billion spent on the day. I’m thrilled that today, we can mark the launch of Small Business Saturday 2014, which will be on 6 December.

With the support of the FSB, the media, and other supporters – I know we can make this year’s event even bigger than the last. Government will certainly be doing its bit to back Small Business Saturday. I urge all of you to get involved.

But celebrating is one thing, hard contracts is another. For some firms the greatest prize we can offer is fair access to the government’s £230 billion public procurement business. The FSB has led the call on this and we are making progress. Today I’m glad to report we’re taking more action.

I can announce that by October we will have legislated to make contract opportunities accessible in one place online, to remove a whole thicket of bureaucracy by abolishing pre-qualification questionnaires (PQQs), and to drive fair payment down the supply chain by requiring prime suppliers as well as procurers to pay within 30 days.

My message to public bodies and small suppliers is get ready, the changes are coming – it’s time for government to be open for small business.

But if we’re going to tackle unnecessary complexity in the way small firms interact with the state, we also need to get our own house in order.

We’re committed to making sure our business support schemes are easier to find and more relevant.

At the start of this year we set up a ‘star chamber’ of some of the wisest and most experienced minds, and me, to bring together and simplify government’s portfolio of business support. By June we will announce our intentions, so that reforms can be completed by March 2015.

We will be working with businesses and the FSB to make sure this new service is user-friendly for you: the customer, and fully integrated locally, connected to business schools and growth hubs across the country.

All of these measures, all of the actions taken in the Budget and in between, each one may be important, but they are but individual stones in something much bigger. Every measure matters, but I believe they are each part of a greater whole. For our aim is not a list of measures. Our aim is that each measure is a stone in the great cathedral to the culture of enterprise that we are building.

Yes, each stone plays its part – but together, stone by stone, we are striving to build something bigger than any one of us. A self-confident nation, enterprising and ambitious. A culture of enterprise which celebrates success without criticising failure, where we can build opportunity for our children and children’s children. Building that culture is no quick task. Yes it is happening but so to is it yet fragile. And I want on behalf of all future entrepreneurs, to enlist your help in that task. Today I pledge myself to do all in my command to support enterprise. I hope you will join me in that task.

Thank you.

Matthew Hancock – 2014 Speech at ‘You’re Hired’ Conference

Matt Hancock
Matt Hancock

Below is the text of the speech made by Matthew Hancock, the Minister of State for Skills and Enterprise, at BBC Broadcasting House in London at the BBC’s ‘You’re Hired Conference’ on 3rd March 2014.

Thank you very much for that kind introduction.

It’s an enormous pleasure to be here today to celebrate the start of National Apprenticeship Week 2014.

Now strictly speaking, I should start by taking issue with the title of today’s event.

And with a certain programme – and a certain Peer of the Realm – which have done more to bring apprenticeships into disrepute than any politician could imagine.

But I wouldn’t dare incur the wrath of Lord Sugar – nor the withering lip curl of Nick and Karen.

Because we’re not here today to talk about those apprentices but about real apprenticeships, new and improved for the 21st century.

I want to mention today the history of apprenticeships.

The reforms we’re making to drive up standards.

And how all of you – and everyone at the BBC – can help.

Breaking the stranglehold on social mobility

After all, why do apprenticeships matter?

Yes, they’re important for our economy, and good value for the taxpayer.

But centrally they are about spreading opportunity and about giving everyone the chance to reach their potential.

Seventeen years ago, Andrew Adonis – now a lofty Lord, then a (relatively) lowly policy adviser – published ‘A Class Act’.

In it, he forensically skewered the myth of Britain’s classless society.

He and fellow author Stephen Pollard pointed to the rise, ever since the 1960s, of what they dubbed “a new elite of top professionals and managers, at once meritocratic yet exclusive”.

They warned of this phenomenon in 1997 – and, contrary to the words of that administration’s theme song, things would only get worse.

The glittering prizes of society went increasingly to a tiny, self-selecting minority.

Overwhelmingly, university-educated – indeed, often from just a handful of world-famous universities.

And overwhelmingly the alumni of some of the most ambitious, academic schools in this country: which is to say, in the world.

This educational elite went on to nab a huge proportion of the top jobs in society.

This led directly to what I’ll call the ‘Gove question’: when will a state educated man, or woman, finally make it to edit the Guardian?

New norm

So we want things to change. And there are signs that they’re starting to.

In recent years, the percentage of young people in England going to university has reached a record high.

Young people from disadvantaged backgrounds are now 70% more likely to enter university than in 2004.

This is a credit to the hard work and dedication of thousands of teachers, all over the country.

It’s a sign of success in turning around failing schools and giving people from the toughest backgrounds access to the same sort of ambitious, stretching education as their wealthier peers.

And it proves that new tuition fees – a government loan, only to be repaid once you start earning – are not scaring young people off.

On the contrary – even since our new tuition fees were introduced, application rates have reached new highs – in particular for young people from the poorest backgrounds.

Because they understand that investing in their future – and not paying a penny back before they earn £21,000 a year – is a one way bet.

Apprenticeships – then and now

But this university dominance wasn’t always the case.

Back in the 1950s, the main route into many jobs – in industry, engineering, construction, and all sorts of other businesses – was an apprenticeship.

Ex-apprentices like Sir Anthony Bamford, chairman of JCB; John Caudwell, founder of Phones4U; Charlie Mullins, founder of Pimlico Plumbers and many others, all started their careers as apprentices – and went on to reach the very top of their professions.

One in 5 employers on the City and Guilds list of the Top 100 Apprenticeship Employers currently have former apprentices on the board and former apprentices, on average, make up almost a third of their senior management.

But that old-style apprenticeship model was based overwhelmingly in heavy industry. In 1950, a full 60% of apprenticeships were in manufacturing.

They were unprepared and unsuited for vast swathes of the post-industrial economy – and when the world changed, they no longer worked.

By the time I was growing up – in the 1980s – apprenticeships had withered on the vine.

As universities expanded, more employers started to demand a degree – so more young people decided to go to university.

Those without a degree found it harder to access the best jobs; harder to break into the professions; harder to succeed without the same qualifications as everyone else.

And as the old, heavy industries declined, by the early 1990s, apprenticeship numbers had dropped down to their lowest ever.

Education as the key to success

But things are finally balancing out.

Because the only way to effect wholesale change is to break open the routes to success.

To make social mobility a reality – and to allow young people from every background an equal chance to reach the top.

That means improving schools, so that every child in the country – no matter where they live, or what their background – enjoys the sort of high-quality, rich, rounded education hitherto reserved only for the very rich.

It means driving up the standard of qualifications, both academic and vocational – so every young person knows that their hard work and commitment will lead to qualifications which command respect among employers, universities and colleges.

It means opening up the routes into professions – showing that a university degree isn’t the only way to start a top flight career – and that apprenticeships, traineeships and vocational training can be just as rewarding, and can lead just as far.

It means a new norm – for every young person finishing full time education to go to university, or to start an apprenticeship, knowing that either option will give a fantastic start to their future.

Our job in government is not to push people one way or the other, but to ensure there are good choices for both.

Driving up standards, rigour and responsiveness

When apprenticeships hit the bottom of the curve, in the 1990s, the government of the day brought in crucial reforms – introducing paid, on the job training, leading to nationally recognised qualifications, across more industries than ever before.

And since 2010, numbers are sharply up.

We took urgent steps to make sure that every single apprenticeship was higher quality, more rigorous and more responsive to the needs of employers.

Endlessly complicated bureaucratic barriers preventing companies from taking on apprentices have been simplified or removed.

Now, there’s just a simple, 3-step hiring process – accessible to small and medium sized enterprises, as well as big business.

And some of this country’s leading employers and trade bodies are taking the lead – as trailblazers – in designing new apprenticeship standards.

Already quality – and demand – are rising. Last year, over half a million people started an apprenticeship – almost twice as many as in 2009 to 2010; and more than 3 times as many as in 2002 to 2003.

During 2012 to 2013 there were 868,700 people undertaking an apprenticeship – the highest recorded in modern history.

And apprenticeships are spreading to reflect the modern economy. In total, apprenticeships now cover more than 170 industries.

Of course, that still means engineering and manufacturing.

But also advertising and nuclear decommissioning, publishing and catering, arts, media, retail, law, IT and much, much more.

Just last week, I was lucky enough to meet the first ever cohort of space engineering apprentices at the National Space Centre, in Leicester – who were hugely excited about starting their training this week.

Even the Civil Service – historically the home of Sir Humphrey – now offers 2 fast tracks into the heart of government, 1 for university graduates, 1 for apprentices.

BBC is leading the way

Standing here today, in another bastion of tradition – the oldest and largest national broadcaster in the world – it’s a pleasure to see the BBC working with the wider industry and leading the way.

Committed to hiring 170 apprentices a year by 2014 – 2 years ahead of target.

Launching your Stephen Lawrence BBC Training Programme – in partnership with the Stephen Lawrence Charitable Trust and Job Centres – giving young people not yet ready for apprenticeships or other jobs the chance to take up a traineeship, to get meaningful work experience and extra training in English, maths, and how to get on in the workplace. Traineeships are a stepping stone to future success for young people, businesses and the wider economy – and they really help to unlock young people’s potential.

It’s great that the BBC has taken a lead, with industry partners, in designing and launching 2 entirely new apprenticeships in technology and production management – supported by the government’s employer ownership of skills pilots.

Also great news are the announcements we’ve just heard from Tony Hall about the apprenticeships in journalism, business and legal, launching soon – on top of the BBC’s biggest ever, the Local Apprenticeship for 45 young people in local radio stations all around the UK.

And it’s fantastic that you’re working with us and other leading broadcasters to develop new apprenticeships in your sector.

Winning friends and influencing people

I’ve seen for myself that success begets success – that hiring apprentices makes an organisation more enthusiastic about apprentices, and more likely to hire more in the future.

It’s certainly something I’ve noticed with MPs – as soon as an MP gets an apprentice, they become passionate evangelists for apprenticeships, inside and outside Parliament.

But they’re not the only ones.

82% of employers with apprentices say they would recommend the scheme to other employers.

And 89% of employers surveyed said that if they were just starting out in their career now, they would choose to do an apprenticeship.

This is a huge vote of confidence – and a huge endorsement of our changes to the system.

And as a cheerleader for change.

But there’s still further to go.

And that’s where everyone here has a role to play.

Because the BBC is better qualified than almost any other employer to help raise the profile – and the prestige – of apprenticeships.

Not just those working in your own organisation; not just Lord Sugar’s acolytes striding purposefully up escalators, holding their phones out in front of their faces.

But real apprentices, working in real companies – all over the country, from all sorts of backgrounds.

They are the ones who could and should be featured in all sorts of BBC programming, showing young people all over the country what opportunities are available to them, and where those opportunities could lead.

I’d love to see more apprentices being shown across programmes from ‘Today’ to ‘Top Gear’; ‘Holby City’ to ‘Horizon’.

Because apprenticeships – and the young people who take them – are becoming a part of our national life.

You can help us give them an even higher profile.

Again and again, my department has noticed an incredible spike in interest whenever apprenticeships are mentioned in news bulletins and current affairs programmes.

And that interest is overwhelmingly positive.

Like apprentices themselves, and their friends and family, proudly getting in touch to explain how much they’re enjoying their apprenticeships, and how much they’re learning every day.

Conclusion

Apprenticeships are about busting open opportunity, promoting social mobility, and of course preparing the economy for the jobs of the future.

As we heard just yesterday, apprenticeships boosted UK business by £1.8 billion last year – and, on average, each apprentice delivered a boost of £2,000 to their employer.

Today’s apprentice could be tomorrow’s director of the board; or tomorrow’s Director-General, come to that.

So we must take every opportunity to show off the excellent work taking place, all over the country; and to give young apprentices confidence that their choice has just as much kudos – and just as bright a future – as any other.

Thank you.

Matthew Hancock – 2014 Speech at UKCES/Work Foundation Skills Conference

Matt Hancock
Matt Hancock

Below is the text of the speech made by Matthew Hancock, the Minister of State for Skills and Enterprise, at Deloitte in London on 3rd March 2014.

Thank you Ian, it’s a pleasure to be here.

I want to talk today about the link between employment and skills. To argue employers can’t find the skilled staff they need, because our skills system lacked rigour and responsiveness.

And I want to explain our response – about how we can tackle this gap – and suggest that we have a once in a generation opportunity to get there.

Growing importance of skills

We all know that an effective skills system is an economic necessity.

What’s new, though – and what’s interesting – is that it’s becoming more important than ever.

You may have seen the other week that Whatsapp, a messaging service, was bought by Facebook for $19 billion.

That’s about the same value as the clothes shop, Gap.

Gap has 135,000 employees.

Whatsapp has 55.

And that’s a sign of the times: because technology and globalisation are changing the shape of our labour market.

And as the number of jobs grows, we need to ensure our young people can get those jobs. We can be a highly educated nation that wins those jobs.

At the moment, something wrong.

At the moment, though, something is wrong.

Youth unemployment has come down – dropping by almost 50,000 in the last 3 months of 2013.

But it remains too high.

Yet at the same time, we have employers saying they can’t get the skills they need.

A recent study by McKinsey, for example, found that around a quarter of employers had left entry-level vacancies unfilled.

A third had lost out on business opportunities because they couldn’t find recruits with the right skills.

Why is this?

How can we simultaneously have young people out of work – and employers that can’t get the right workers?

What’s going on?

It could be the lingering effect of the 2008 crash – an extended economic hangover.

But look at the long-term trend.

From 1992 to the late 1990s, youth unemployment was on a gradual downwards curve.

Then in the early 2000s, it started to rise again. Even as GDP grew, at no point since 1997 did youth unemployment drop beneath 10%.

So what is the problem?

It could be regulation: employment law making it harder for businesses to create jobs – protecting existing workers to the exclusion of others, especially young, entry-level workers.

That’s certainly the pattern we see in southern Europe – regulation strangling new businesses, punishing those trying to break into work – workers’ rights trumping the right to work.

So in Britain, we’re reducing unnecessary red tape – offered strong incentives to hire, removing barriers, like making it 2 years before an employee can go to a tribunal.

Some people say it’s spending on training.

But spending went up over the past 10 years – and as we’ve seen, so did youth unemployment.

So spending alone clearly isn’t enough.

If we’re trying, then, to explain why have both youth unemployment – and employer demand for work – we can see:

– it’s not just about a short-term response to recession

– nor is it simply a matter of money

So what is it?

Problem is poor skills.

There’s a clue in the OECD’s latest adult skills survey. In most countries, younger adults have better literacy and numeracy than older generations.

That’s because they improved their education systems over time – keeping pace with a more competitive world.

But in the UK, overall, our young adults did no better than their grandparents.

I’m sure you saw the report when it came out. But it’s worth stressing just how astonishing it is that the generation that grew up with Twiggy did better than the generation that grew up with Twitter.

We stagnated. And too many of our youngest generation are leaving education without essential skills.

And not skills employers need.

But just as important, too often our young people have the wrong skills.

And to understand why, we have to look at the recent history of further education.

In 1992, colleges were freed by Kenneth Baker – taken out of local authority control.

But from the late 1990s, central control gradually grew.

Governments produced confident predictions of what jobs we would have.

A vast skills bureaucracy took those predictions, ran them through a magic number machine – and came out with skills and training requirements.

They then passed them on to further education providers: dictating what courses they could offer, at what level, and for whom.

It didn’t work.

Because the idea that bureaucrats sitting with a computer and calculator issuing edicts would create the workforce with the right skills was – at best – naïve.

So what do we do?

So if the question is why we have youth unemployment at the same time as employer demand – the answer is the structure of our skills system.

If it produces young people with low skills and the wrong skills – we shouldn’t be surprised if employers can’t get the right people.

We’ve got to fix it.

And we’re doing that in 3 ways. You might call them the 3 Rs:

We’re bringing in responsiveness, rigour – and we want a revolution in attitudes.

Responsiveness

First, responsiveness.

In the past, governments responded to skills gaps by creating more complexity.

When their predictions didn’t work out, they invented new sector bodies, quangos, or intermediaries – all purporting to ‘speak for business’.

Instead, we’re giving genuine power to employers to shape vocational education.

Look at apprenticeships.

Instead of being designed by committee, using complex frameworks – we want clearer, better standards, written by employers.

Our first 8 trailblazers are already helping us prepare reformed apprenticeships.

Designed by employers for employers.

They’re household names in sectors from finance to food, aerospace to auto engineering – and are all committed to developing higher-quality apprenticeships that are more closely linked to their needs.

We’re promoting employer ownership of skills – giving them direct control over skills budgets.

We’re encouraging colleges to look out to their community – and build better links with business – and a month ago, announced new elite colleges driven by real demand in nuclear, rail and advanced manufacturing.

All of these things make the system more responsive to the needs of business.

Rigour

Our second aim is rigour.

Rigour means expecting high standards of everyone. Everyone.

Employers expect GCSE maths and English as a minimum: and as the OECD makes clear, at the moment, it is the most basic skills that some of our young people lack.

So now, we’re making sure that all students will keep studying maths and English to 18 – at to at least a C at GCSE – whether they’re in a school, college or workplace training.

And we know that some young people aren’t quite ready for a full apprenticeship or job.

So we created traineeships – to ease that transition to work.

Because we are determined to get to a position where employers no longer say – we can’t find young people who can count or spell or have the right attitude for the job.

Rigour means improving qualifications, too.

We’ve stopped the system of funding per qualification passed – giving a perverse incentive to chase the certificates that students can pass more easily. Now, we provide funding per learner.

And Alison Wolf’s review found that somewhere between a quarter and a third of young people – some 350,000 teenagers – were on poor-quality qualifications.

So last year we filtered out poor-value qualifications for 14 to16 year olds – removing more than 3,000 courses.

We’ve done the same for 16 to 19 year olds this year – removing 3,403 courses.

And more than 1800 adult-age courses were removed from funding, too.

Instead of these reams of poor-value qualifications, we are focussing on those that really represent achievement.

From 2016, a new set of approved qualifications will be taught – with only those winning the support of universities and employers included in performance tables.

These include new tech level qualifications, the core of the TechBacc programmes, which will be taught from this autumn – giving a high-quality alternative to A levels. Each 1 endorsed by employers.

And I am delighted today to announce new TechBacc trailblazers.

Just like our apprenticeships trailblazers we have 8 post 16 schools and colleges who have agreed to develop their technical subjects with local employers. We’re funding them to explore how their courses can reflect the real world of work – and raise quality even further.

All of this means employers can trust qualifications – and that students are more likely to enter into training that leads to a good job.

Culture

So we are bringing responsiveness and rigour to the system.

In time – those 2 principles can lead what I hope is an even bigger change.

A change in attitudes towards training.

An under-performing skills system has 1 big problem: it builds its own momentum.

After all, in response to skills shortages, employers have options.

They can train up people themselves.

They can hire abroad – or find immigrant labour.

They can poach trained staff from competitors.

Or they can rifle through their supply chain, and poach from there.

So what does each boss and business do?

Who would be the first business to train – the first to risk them losing their trained staff?

Why train if no-one else in your sector does?

There is an alternative.

Look at countries like Germany. They have the opposite culture.

An employer seeking staff has the same set of options: train, import, or poach.

But because most companies assume their role is to train their staff – there is no penalty in training.

And that, in turn, makes training more likely. Ultimately training is good for business.

That’s the culture we must inculcate.

Our reforms – rigour and responsiveness – aim to break out of a low-training culture – and into 1 where there is a comparative advantage in training.

Because if qualifications are meaningful and high-quality, we make training a better, more reliable investment – more likely to help the bottom line.

If every young person entering the world of work has essential literacy and numeracy, employers no longer think of training as remedial – making up for failings of others – but can see it as something of higher value.

And if the system is responsive to employers’ needs – if enough heads of HR and CEOs and CFOs see they’re getting the people they need – then apprentice by apprentice, course by course, business by business we will hammer away at a low-training culture until eventually we can sound its death knell, and bring the high training culture we need

Conclusion

And there’s never been a better time to do it.

Turning the economy round is no easy task. We have much more to do. But things are moving the right direction.

And combine that promise of growth with everything else.

A global economy that rewards skills as never before.

Comprehensive reform of our vocational education based on rigour and responsiveness.

Put all those things together – and we have a once in a generation chance to crack it – to fix the system.

A once in a generation opportunity to get vocational education doing what it’s supposed to do – give students real, valued training – and give employers the skilled people they need.

That, to me, is a very good reason to look forward to our future.