Lord Sainsbury's response to Budget - 8 March

8 March 2017 David Sainsbury

In today’s (8 March) Budget, the Chancellor has announced significant new investment in the training of young people on technical education courses in further education colleges. This is exciting news for all of us who believe that a good system of technical education can help increase our national prosperity, and provide our young people with many more career opportunities.

The economic argument for such investment is straightforward. If we are to compete in today’s global economy against low-wage countries such as China, our industry needs a highly-skilled technician workforce. Furthermore, beyond the obvious needs of sectors like engineering and manufacturing, many areas of our national life, from the NHS to our armed services, also depend on highly-skilled technicians to operate efficiently. 

But investment in technical education and training is not only an economic imperative.  It is also a social one. We need to offer everyone the chance of a lifetime of sustained employment, and high-quality technical education can deliver such opportunities to many people. By equipping people with the knowledge and skills that employers value it can enable them to get better paid and more secure jobs.

The first report that said that our system of technical education was not as good as that of Germany was in the 1880s. And since then there have been many reports, but the situation has not improved. International comparisons suggest the UK performs well when it comes to producing graduate-level skills. But at the sub-degree, skilled technician level our performance is appalling. By 2020, the UK is predicted to rank just 28th of 33 OECD countries in terms of developing these intermediate-level skills, and there are many studies that show that this deficiency in our technical education system adversely affects our national productivity.

Last year the Government asked me to chair a panel of experts to look at how technical education in England could be put on par with the best in the world.  We looked closely at how and why other countries seemed to be doing so much better than us in this field and two things became very clear. 

Firstly, successful education systems elsewhere have, as a central feature, a well-understood national system of qualifications that works in the labour market, and we don’t have one.  Young people will only work hard to get a qualification, and value it highly when they get it, if employers when recruiting give priority to individuals who possess it.  This means employers must be closely involved in the design of qualifications, but also that young people should have access to high-quality work placements in relevant employers as part of their study programme. 

Secondly, we found that technical education in England has been underfunded for decades, and especially so when compared to other countries.  Funding for 16-19 year olds in England currently pays for only around 17 hours of tuition each week. This compares to 30 hours in the Netherlands and Shanghai, 29 in Norway, and 26 in Canada.  This underfunding limits teacher contact time and hits technical education particularly hard, as specialist equipment and smaller class sizes are often required to equip young people with industry-relevant practical skills. 

Following the publication of my panel’s report last summer, the government immediately announced it would work with employers to design a streamlined, national system of technical qualifications to be introduced from 2019. These new qualifications will be more demanding than ones currently on offer. They will be required not only to equip young people with the technical knowledge and skills modern industry demands, but also provide a bedrock of transferable skills on which a young person can build a lifelong career.   

Colleges and other training providers will undoubtedly face challenges in adapting to the new system: the new qualifications will require demanding standards of teaching and assessment to ensure they maintain the confidence of employers.  But I know from the many conversations I have had with FE leaders that the sector welcomes these reforms and will rise to the challenge of implementing them.

However, to have asked colleges and training providers to make these changes without giving them the resources to deliver the higher standards needed, would have risked failure once again.  Today’s announcement by the Chancellor that he will inject significant sums into a reformed technical education system should, therefore, be welcomed by everyone who wants to improve the life chances of our young people. I am delighted that the government has made this vitally important investment. It is an investment that will help increase our national prosperity and enable many more young people to get better paid and more secure jobs.