18th April 2018
Scope of the inquiry
Over the past two decades, government has been concerned with improving science, technology, engineering and mathematics (STEM) skills in the UK workforce to help improve productivity and economic growth. The current government’s 2017 Industrial Strategy policy paper recognised the importance of STEM skills for the future of UK industries.
According to a recent report by the National Audit Office, the government is currently unsure of the nature of any STEM skills shortage as estimates vary. The report also found evidence of a STEM skills ‘mismatch’ with some areas—for example technicians—experiencing higher demand than others.
Although some initiatives to address STEM skills shortages have been successful there remain problems. For example, women remain underrepresented in STEM courses and jobs, and in 2016 only 24% of those with STEM degrees were working in a STEM field six months after graduation.
The Committee will ask representatives from the Department for Education and the Department for Business, Energy and Industrial Strategy about their understanding of the current STEM skills shortage, whether current initiatives are performing adequately, and how to ensure past problems in developing STEM skills do not recur.
Questions from Gillian Keegan MP
Chair: Welcome to you. I will hand over to Gillian Keegan to kick off.
Q10 Gillian Keegan: Mr Chisholm, how critical do you think delivering the STEM skills agenda and getting this right is to our future productivity and economic development as we leave the European Union?
Alex Chisholm: Thank you for the question. The short answer would be: very critical. I think you have probably had a chance to take a look at the industrial strategy White Paper we published in November. You will see within that that, in describing the future course of the economy, we do think that STEM skills are going to be very important in some promising fast-growing sectors such as aerospace or life sciences or renewable energy. Obviously, all of those draw very much on STEM skills.
Overall, the knowledge intensity of the economy is growing and the technology component is growing. As we have seen from lots of different sources, the emphasis on digital skills today is as important as literacy was in former years.
Q11 Gillian Keegan: Yes, I agree. If you get this wrong, what impact will it have on your ability to deliver the industrial strategy?
Alex Chisholm: I think it is really critical, as I say.
Q12 Gillian Keegan: Will it mean that it completely won’t get delivered?
Alex Chisholm: Well, there are lots of elements to the industrial strategy.
Q13 Gillian Keegan: Can you deliver it without skills though?
Alex Chisholm: Without skills, no. It is one of the key foundations.
Q14 Gillian Keegan: So it is actually not just highly critical, but crucial. Without that foundation, would you agree that you would not be able to deliver your industrial strategy?
Alex Chisholm: Yes, we need a skilled workforce, no question.
Q15 Gillian Keegan: Mr Slater, how critical do you think it is to deliver these skills for the future of our economy and solving our productivity puzzle?
Jonathan Slater: Very important indeed. We are working very hard to continue to grow the number of skilled people in STEM subjects as they leave school, college, apprenticeships and higher education.
Q16 Gillian Keegan: So would “very important” be important enough when it is actually one of the key pillars of delivering our future economic success?
Jonathan Slater: No, sorry, we are saying the same thing. Jonathan needs the skills to be generated for the success of his strategy; I am working as hard as I can to secure them.
Q17 Gillian Keegan: Is there anywhere else we are going to get these skills, or are we completely dependent on you and your delivery of these skills to be able to be successful with our industrial strategy?
Jonathan Slater: My contribution is to grow the skills of the workforce in England. Improving the productivity of the country has more aspects to it than that. Clearly, there are a number of ways we can improve productivity, which Alex can speak to. We don’t just rely upon the workforce within the country.
Q18 Gillian Keegan: Do you understand how important the workforce is to delivering productivity improvement in today’s digital economy?
Jonathan Slater: Absolutely, I can’t see anything more important within the work we do in schools, colleges, apprenticeships and HE.
Q19 Gillian Keegan: So we have gone from quite important, very important, highly important to crucial.
Jonathan Slater: I am not seeking to have a conversation with you about adjectives.
Q20 Gillian Keegan: I think it is crucial, from my background of 30 years in tech in international business. I tell you, it is crucial—one of the most crucial things to get right. Bearing in mind that you get what you measure, how comfortable are you feeling that you have the right measures in place to be able to know what it is you are trying solve? I ask that to Mr Slater first.
Jonathan Slater: How clear are we about measuring the skills we are growing?
Q21 Gillian Keegan: The skills we have, the skills we need and the skills we are growing. How comfortable are you that you have the measures in place to start this process?
Jonathan Slater: We have a lot of good information about the current level of skills and how they have been growing over time. There is inevitably always more that it is useful to have. The NAO Report helpfully identifies some further work that we can do—for example, at its most straightforward, being as clear as possible what we mean by STEM in the first place. I can have a conversation with you today, if it would be useful, about the extent to which the numbers of kids leaving school and college with maths qualifications at level 2 have increased, what has happened at level 3, what has happened at levels 4 to 6, what is going on in apprenticeships, tracking that over time, and forecasting what is going to happen in the future. That is my job to do. It is also my—
Q22 Gillian Keegan: So are you measuring the right thing? I agree there is some great improvement in maths, but are you measuring the right thing, bearing in mind the skills required to deliver the industrial strategy?
Jonathan Slater: What are you thinking of that we might not be measuring?
Q23 Gillian Keegan: Well, you have three levels of measures going on already: from the Royal Academy, EngineeringUK and the NAO, which very helpfully came up with another idea. Maths is one aspect, but there are very many different aspects of digital, science and technology sector-based skills that will be required. Maths is one input to one level. It is great that it is going up, but the skills you need move way beyond maths.
Jonathan Slater: Totally, I just gave that as one example.
Q24 Gillian Keegan: So how are you measuring the skills you need, which are way beyond maths?
Jonathan Slater: I will bring in Paul Kett in a second, if I can, because he is leading the work we are doing on the subjects recommended by the NAO on how to secure a consistent, comprehensive definition of STEM. Currently, we have a lot of data on levels 2, 3 and beyond for each of the component parts of STEM—not for just maths but computer science, engineering, IT, biology, etc. As the NAO has quite rightly pointed out, there is an inconsistency with which different organisations define STEM.
Q25 Gillian Keegan: Did you not know that before?
Jonathan Slater: We did know it before and there was debate that took place with the House of Lords Select Committee back in 2012 about the pros and cons of getting everybody to agree—not just within Government but in organisations well beyond Government—on a consistent definition of STEM. There were debates to and fro about the pros and cons of that. We agree with the NAO that seeking a consistent set of definitions would be a good thing to achieve. That is what Paul’s cross-departmental group is doing. But it is not just a Government task; it requires collaboration with the Royal Society and others, because we do not own all this stuff. Again, Paul can talk you through that if you find that helpful.
Q26 Gillian Keegan: Six years strikes me as quite a long time to know there is a problem in how you measure it and define it. You mentioned 2012, but in 2018, we are still admiring the same problem.
Jonathan Slater: The Government at the time did not agree with the House of Lords on that point. The good news is that the Department for Education and BEIS agree with the NAO now, and we are cracking on and doing it.
Q27 Gillian Keegan: You have three choices to start with. Which one are you using as a base: the Royal Academy, EngineeringUK, or the NAO? How will you go about defining this and when?
Paul Kett: The work we are doing at the moment is mapping the existing definitions that are used. There are a number of different definitions used by different Government Departments, and even within the Department for Education in different phases of education. We have done that mapping work—it started before the NAO Report but we used that Report as the basis on which to secure agreement that we should adopt a more consistent approach. That mapping work will inform what that consistent approach is. So far, we have identified across those different definitions a very high degree of commonality, but there are some areas where there are differences.
We are now working through whether it makes sense to move to a single definition or whether, as per the NAO recommendation that recognises a single definition is not necessarily the right answer, being really clear about the different definitions of different phases is essential. As a minimum, we will get to that clarity and transparency. Whether we get to a single definition will depend on that mapping work.
Q28 Gillian Keegan: Can I ask a question? The mapping work that is based upon some pre-existing work that has been done is also pre-industrial strategy—yes or no?
Paul Kett: Yes, it will be pre-industrial strategy. I will go on to two further points. First, building on Jonathan’s point about working with the sectors, we are working very closely with the Royal Society, who have started a piece of work on mapping existing definitions and also taking account of some of the international comparisons—this is not a problem unique to the United Kingdom and to England. We are aligning our work with that of the Royal Society so we can show that our approach is consistent and engages with industry. That has been welcomed by the Royal Society and others.
Secondly, whatever work we do, one of the other commitments that we recognise we need to make in response to some of the NAO work is about being clear what we mean by STEM in a particular set of circumstances. Although we talk about STEM often in its broader sense, actually, our initiatives may well be focused on particular elements within STEM. The example that you gave in relation to mathematics is a good example of that in the schools system, where we have really prioritised mathematics, and also physics, as areas where we were underperforming.
Q29 Gillian Keegan: I’m glad you mentioned international comparisons. Apart from the Royal Society, which probably is a little academic as a delivery vehicle, how else are you going about getting international comparisons? I ask because one of the greatest examples of an economy being turned around, dependent on high-tech R&D, is Taiwan. How are you looking at where we will be competing for global talent?
Paul Kett: We have established in the Department for Education a small team that did not exist until last summer.
Q30 Gillian Keegan: What skill sets do they have?
Paul Kett: I know you mentioned that the Royal Society was perhaps rather academic, but we had a secondee from the Royal Society as part of that team, as one example, and we have drawn in skills from across the Department.
Q31 Gillian Keegan: Are there any with STEM skills or a tech background themselves?
Paul Kett: Certainly with STEM skills; I am not sure about tech backgrounds, but I know within the civil service we are certainly making use of the STEM skills we have in the Department.
Q42 Gillian Keegan: Moving on from Ms Moran’s point, what concerns me is that I could say exactly the same thing about 50 businesses that I have spoken to in many different sectors. The core problem is actually obvious on this panel. You say sciences and maths, which is an important element, but they are not the future skills that will drive the industrial strategy and our differentiation.
What are you doing? You have got rid of all the skills boards that you had. What are you doing to make sure that you learn from businesses what they need? They have a future view. They could give you lists. The NAO has had a go here. That is the answer. What are you doing to provide that answer?
Jonathan Slater: We are training at all levels—from primary to secondary and through to adult education—as many people as we can persuade to take advantage of each of the different component parts of the STEM subjects. That is what we are seeking to do. We are not trying to second-guess what the needs of the economy will be in Harwell in 10 years’ time. That is not our role. Our role is to increase the supply into the labour market of not just mathematicians, as you say, but each of the different component parts of the STEM agenda. We need to make sure that the curriculum—
Q43 Gillian Keegan: The Report focuses on post-16, so let’s focus on that. In fact, let’s really focus on 18 through to the workplace, which is where you take these core skills and make them into something that is going to improve the economic development and solve the productivity puzzle. Let’s just focus on that. What are you doing to make sure you have got the right things for business?
Jonathan Slater: It starts with apprenticeships, where we are putting in place—
Gillian Keegan: That is not very encouraging, is it? Look at apprenticeship starts.
Chair: Page 29, figure 7.
Q44 Gillian Keegan: Apprenticeship starts in engineering and manufacturing technologies and construction are slightly ticking up, but the ones that are critical to delivering our industrial strategy and our future economic competitiveness—ICT, science and maths—are going nowhere.
Jonathan Slater: I was seeking to answer your question about what we are doing about it.
Q45 Gillian Keegan: You answered that; you said apprenticeships. I would say: no, you are not.
Chair: Let us see if Mr Slater can answer.
Jonathan Slater: You are rightly drawing to our attention the fact that between 2015-16 and 2016-17, the number of science and mathematics apprenticeships fell from 500 to 300—absolutely. What are we doing about that? We are putting in place apprenticeship standards to meet the needs of employers in the future. That is unlike the previous apprenticeship regime, in which the standards that were set for the training that should be done were not set by employers, and where apprentices didn’t have to do one day a week of training off site as part of their apprenticeship.
What we put into place from 1 April 2017, at the end of that dataset, to try to turn the story was a new apprenticeship regime in which standards were set by employers with a minimum training requirement. What we did was to say that for all of those STEM apprenticeships there should be an extra cost in securing their delivery.
The average apprenticeship is costing about twice as much to deliver from the previous regime in the data that you are looking at, because we are looking for a much higher quality product—one that is defined by employers. If it is a STEM apprenticeship, in particular, we are saying that at level 2 we will pay an extra 40% and at level 3 we will pay an extra 80%, so that we can incentivise a significant turnaround in those numbers, which, as you say, are not very good.
Q46 Gillian Keegan: No. I have spoken to a number of businesses about this new model, which of course everybody is engaged with. The core problem, linking back to being successful in delivering skills for the industrial strategy, is the length of time it takes for businesses to get these standards agreed and the processes they have to go through. That is common. What you are not doing is keeping up with the demand—the 300 that are waiting to be classified, which are all the new skills. Do you have enough resources to do this, to keep up the pace with business?
Jonathan Slater: There are more than 280 new standards in place, running above the trajectory that the Department has—
Q47 Gillian Keegan: How many are waiting to be put in place?
Jonathan Slater: Of those, 141 are STEM. We are particularly trying to focus our efforts on STEM. It is absolutely true, as you say, that not all of the standards have come through as quickly as we had hoped. There are more to come, precisely because it is critical that the standards are set by employers to meet their needs.
Surprise, surprise—different employers have got different needs. The task that the Institute for Apprenticeships have been given is to seek agreement, subject by subject, and it is taking longer than they thought. They have accepted that in some cases their systems were not as efficient as they should be, and they have worked hard with businesses to speed up that process. That is where we have got to so far.
Gillian Keegan: I think the complaint about efficiency is actually that the common denominator is more likely within your Department or within the Institute for Apprenticeships.
Q48 Caroline Flint: On apprenticeships, I listened closely to what you said, Mr Slater, about employers setting the standards. Does it worry you that a recent report by the think-tank Reform found that almost 40% of the 250-plus apprenticeship standards approved since 2012 do not reach the international or historical definition of an apprenticeship?
Jonathan Slater: The changes that we brought into place were in April 2017, so the author of the report is focusing primarily on the framework regime that applied, as you say, from 2012 onwards. The step change that we brought into place in April ’17, which has been going for 12 months, moves from frameworks to standards, with a completely new bar at a much higher level of requirement than was placed hitherto. So, I would accept the challenge as regards the previous system, but not as regards the current one.
Q63 Gillian Keegan: Just so you understand how glacial your progress is or how ineffective your strategies are, I did a manufacturing apprenticeship 30 years ago and girls accounted for 20% then. That was 30 years ago, before any of your strategies kicked in. This is a fast-moving environment. If you pick up any industrial strategy from any industry sector, you will see global talent as the number one thing they need. You are in a race and you don’t seem to have started it. What are you doing to speed up the progress of some of these well-known issues?
Jonathan Slater: Do you want to carry on talking about apprentices or shall we talk about another one?
Chair: Apprenticeships, I think.
Jonathan Slater: You were describing the world as it was in 2016-17. The question is whether we can make it any better under the new regime. I have been working hard since I took on responsibility for this 18 months ago to see if we can make this system work much better than what went on before.
The fact that I am referring to the cultural issues that transcend apprenticeships specifically should not be taken as any sign of a lack of energy on my part to tackle this issue with all of my energy. The sort of things we are doing in the Department are the sort I saw for myself a couple of months ago in a school in Camden. That work started at 11 years old, ensuring that all girls, as well as all boys, were doing engineering from the age of 11 all the way through, supported by STEM ambassadors, funded by Alex’s Department, with women coming in from industry to excite and energise.
Q64 Gillian Keegan: I accept there are some good individual initiatives and that is what you talk about. But we are talking about a strategy across the country. Flat lines do not normally indicate energy.
Jonathan Slater: So, you are describing the position of the past six years. The question is, can we turn it round now? That is the challenge, isn’t it? I am talking about what we have been trying to do in the past 12 months since that five-year flat line. I am not saying it will turn around immediately; I would be foolish to do so. I am describing all the things we are seeking to do to turn it upwards. I am saying we have success in other fields: the 18% increase in the number of girls doing science A-levels, as well as maths A-levels, demonstrates that you can turn the thing round. When I was at school, maths A-level was a subject for losers; now it is the most popular subject. We can turn this round.
Q67 Caroline Flint: When you talk about the previous regime, are you talking about the one that started in 2012?
Jonathan Slater: It didn’t start in 2012. It finished at the end of 2016-17. So, those last five years’ flat-lining numbers that you have been looking at were under the previous regime, which ended on 31 March 2017.
Caroline Flint: When did that previous regime start?
Gillian Keegan: In 2012-13, according to this.
Caroline Flint: That’s what I thought.
Gillian Keegan: Maybe one year earlier.
Q114 Gillian Keegan: Can I just challenge something you said? You said that this is only a problem at the age of 14. I think it is a problem at the age of 16 as well. If a school has a sixth form, you have exactly the same built-in competition. This is designed to fail or to have pupils that they are happy to let go. It will be the same at 16.
Jonathan Slater: I absolutely see that if you are in a particular constituency or a particular area of the country where there is a choice between a school sixth form and an—
Gillian Keegan: Most places do have that choice.
Jonathan Slater: If there is a choice between an FE college and a sixth form, you will get competition between the two. Clearly, one needs to get the best combination of complementary provision from the two, rather than duplicating each other.
Q115 Gillian Keegan: But you built in a system that is designed to fail, because school funding—I go through all the school funding and they are all very worried about school funding. The thought of trying to replace students at the age of 14 or 16, which are absolutely crucial to you keeping to your budgets, is a nightmare for them. They are not incentivised at all to support your strategy. They are incentivised to support their own school funding.
Jonathan Slater: The institutes of technology are seeking to address a gap in the market, which I was discussing earlier with Layla Moran: an absence of high-quality technical skills being taught post-16. This will not be duplicating work that is done by school sixth forms. It really won’t.
Q116 Gillian Keegan: It is the same pupils. That’s the point. The point is that it is the same pupils, and pupils mean money.
Jonathan Slater: Typically, I would expect that of the kids who are doing these T-levels, some of them will make a choice to switch from A-level to degree, of the sort that your typical school sixth form might do, but the real focus here is the provision of a good quality service that does not currently exist, in which you have a whole multiplicity—array—of post-16 FE provision.
Q117 Gillian Keegan: Nobody is disputing that, but do you not understand that these pupils are a captive market within the existing organisation that they start with—the school? That school has the ability to sell whatever they do next. They have a massive incentive to keep them there. They will always believe that they can offer a better education than anybody else anyway. You have built in a system that is going to design—no matter whether it is the best thing for the child, the industrial strategy, or anything else. Do you not accept that this will be as unsuccessful as the other attempt?
Jonathan Slater: A combination of school sixth forms and further education colleges is not a new concept. It has been with us for decades, hasn’t it?
Q118 Gillian Keegan: Yes, but we have a specific mix of types of pupils going into types of areas. What you are trying to do is to get the brightest pupils into a new area. The brightest pupils are economic drivers, but they are the brightest as well.
Jonathan Slater: The purpose of the reform is not to replace A-levels. It is not to seek a reduction in A-levels; I am not seeking to reduce the number of kids doing A-levels at all. There are about 13,000 technical qualifications, of enormous variety and complexity, which I am trying to turn into 15 routes that are highly invested in, which will provide better quality FE provision. I do not expect school sixth forms to be in that market particularly; I expect there to be plenty of work for both.
Chair: You use the word “market” and I think that is one of the challenges. The free schools approach is one of the things that has opened up that market in education. I am going to bring in Layla Moran and then come back to Ms Keegan for the last points.
Q136 Gillian Keegan: Perhaps because I have worked in tech for 30 years, or maybe because I am aware of the global challenges we face, I feel very uneasy that we have a set of strategies that are flawed in design and not well integrated to deliver the industrial strategy, which we started by agreeing was crucial. I am looking for hope. In the report, that lack of integration is understood. You have a STEM lead and there will be a board that will try to integrate all those activities across Government. Who is responsible for that and what is the make-up of that board?
Paul Kett: I chair that group. We recognised, after the Green Paper on the industrial strategy but before the White Paper, that we needed to convene across Government all the activity that is going on. We started off by bringing together—
Q137 Gillian Keegan: Who is on it?
Paul Kett: Representatives from the Department for Education, the Department for Business, Energy and Industrial Strategy, the Treasury, Research Councils UK, the Department for Transport—
Q138 Gillian Keegan: Maybe I could ask the question a bit more specifically. Who is on the board who understands STEM, skills delivery, the needs of business and the industrial strategy?
Paul Kett: We have representatives from across Government Departments—
Gillian Keegan: From their skills and experience.
Paul Kett: They are a mixed range of civil servants from a—
Gillian Keegan: You can say nobody if it is nobody.
Paul Kett: No; I wouldn’t want to kind of—they are the policy experts in their Department on these areas.
Q139 Gillian Keegan: Has anybody worked in industry—in science or technology?
Paul Kett: I genuinely do not know, in terms of the specific people who are around that table.
Q140 Gillian Keegan: I would recommend that you look at potentially adding those skills.
My second question is about the skills advisory panels, which are also where I am looking for hope. We got rid of the other industry-led sector skills boards more than a year ago, and we have had a vacuum for a while—it might be a convenient vacuum, but it will not help you to deliver your strategy. The new idea is to have skills advisory panels in conjunction with the LEPs—I am not sure what the driver for that is. They are critical to you understanding what you are solving. How are they going to work in practice and when will they be in place?
Jonathan Slater: The idea of the skills advisory panels is to use them to identify the skills needs of—
Q141 Gillian Keegan: I understand that. When will they be in place?
Jonathan Slater: We are setting up seven of them now. I was going to try to answer the question about why they are based in LEPs, because that brings together local employers in the area, so why not work with them?
Gillian Keegan: Some of them work well and some of them work terribly.
Jonathan Slater: We are spending the next six months putting the first seven in place: five LEPs and two combined authorities, Greater Manchester and the West Mids. What we are doing at the moment is designing those arrangements with those seven bodies, with a view to learning what works, what doesn’t and then rolling out across the rest. The idea is, where their capacity is weak, to help them to improve it—precisely for the reason you have described—and sharing what we have nationally and drawing up the data that they have locally so that we can get a much better sense, area by area, of what the skills needs of the local economies are.
Q142 Gillian Keegan: When can you tell us, on measurable objectives, how successful they have been?
Jonathan Slater: We will have the first seven running in six months’ time. After a year of operation, we can report back about how the first year has gone.
Paul Kett: We are planning an evaluation in August 2019.
