South West Regional Skills Enterprise and Employment Analysis 2007/2008

Final Report

4.4 Level 3 Skills

Alongside this review, SLIM has conducted a Review of Level 3 Skills in the South West (Level 3 Review). This section draws on the main findings of that report.

Level 3 skills(23) are seen as critical in terms of future prosperity, yet it is also an area where the UK lags behind its economic competitors and where employers report skills gaps. A major challenge for the UK, in relation to its competitors, is that most people qualified to Level 3 gain these qualifications by the time that they are 19; there is very little Level 3 achievement beyond that age. Level 3 is both a passport and an end in itself but is dominated, even perhaps distorted, by the huge and continuing presence of the A' level.

Government has stated that one of its priorities is to put a stronger emphasis on progression to, and investment in, skills at Level 3 and above, because that is where many of the national skills gaps lie.

The 2005 Skills White Paper stated that:

We must substantially raise our ambition for the number of people who gain Level 3 skills and qualifications. By 2012, some two thirds of all jobs (both new and existing) are expected to require qualifications at Level 3 or higher. Some of our most pronounced skills gaps relative to France and Germany are in the crucial category of technician, advanced craft, skilled trade and associate professional skills requiring Level 3 qualifications. That is constraining growth in productivity. For many people, qualifications at Level 3 represent the way to a better standard of living through gaining highly marketable occupational skills. We will determine, in the light of the review by Lord Leitch, what ambition we should set for the future proportion of young people and adults achieving Level 3 qualifications(24).

The recently published Leitch Report has concluded that higher intermediate skills are increasingly critical to the success of business, with high private returns. The review recommends shifting the balance of intermediate skills to Level 3, more than doubling the rate of attainment of Level 3 skills by adults. The Review estimates that additional annual investment in skills up to Level 3 will need to rise to around £1.5-£2 billion by 2020 if the UK is to achieve world class status at basic and intermediate levels.

In terms of current demand, the need for Level 3 skills is focused in a number of sectors, as identified by the Level 3 Review. It will be critical for partners to come together to determine solutions to these needs. However the issues go wider and also concern the nature and scope of government policy in this area.

There is not universal agreement that there is a demand for increasing numbers of workers to possess Level 3 skills. Nevertheless, according to the Leitch Interim Report(25), over the period to 2020, it is anticipated that demand for what it defines as ‘intermediate occupations’ is likely to remain significant as older workers retire, even if these jobs will account for a declining share of employment. By 2014, projections carried out for SSDA Working Futures research assumes that at least two-thirds of jobs will call for a minimum of intermediate level skills at Level 3 or above(26).

Based on these figures, clearly Level 3 is destined to make a continuing, sizable contribution to regional productivity for some time to come. The challenge is how to develop the most appropriate mechanisms to guarantee a match of supply to potential demand for Level 3 training.

At 16%, the South West has a proportion of the adult population skilled to Level 3 which is higher than the national average (14%). In fact, the adult population of the region is generally better qualified than the national average, with greater proportions qualified from Level 1 through to Level 4+ and fewer without qualifications (11% in the region compared to 16% nationally).

Currently, substantial investment and subsidies are available for adults attaining their first Level 2 qualifications. Level 3 provision is less well supported.

The Level 3 Review concluded that:

• The region should look at ways to harness ESF and RDA funds for Level 3 provision aimed at meeting the needs of priority sectors, and which supplement LSC funding in this area.
• More flexible training opportunities are also required to meet employer needs and full qualifications are not always desired by employers. There should be greater scope to mix and match according to employer needs, without diminution of funding.
• There is a wide variety of practice in relation to delivery of Level 3 provision across the college network. Yet the scale of Level 3 provision, including that funded by individuals and business, is not fully understood. It will be important to share best practice in funding and developing such provision, particularly in relation to harnessing business and individuals' investment.
• Employers need to be further involved in Level 3 development so that supply meets demand. Again there is a range of practice across the provider network and best practice needs to be harnessed. Train to Gain may provide further opportunities for this.
• There is a significant gender gap in terms of the possession of Level 3 skills, with fewer women than men possessing them. Looking at Trade Apprenticeships, of which some are at Level 3, the gender differential is even greater, with 82% held by men.
• It is critical that careers advisors gain a better understanding of the occupations that require Level 3 skills, the trends in demand for Level 3 skills and the types of qualification and provision that are available.
• Measures need to be taken to improve completion and success rates of apprenticeships and vocational Level 3 qualifications.
• Much needs to be done to ensure that those with vocational Level 3 qualifications are able to progress to HE.
• Apprenticeships are a crucial method of delivering work-focused intermediate skills. Action needs to be taken to raise the take up of apprenticeship within the region, with specific initiatives aimed at SMEs and measures taken to improve completion rates. The Apprenticeship Task Force was of the view that completion rates could be improved primarily through better initial referrals.

The Sector Analysis emphasises the importance of improving the supply of Level 3 provision and driving demand for Level 3 provision which tend to be viewed as a single dynamic by SSCs. That said, there are some sectors, such as Financial Services and Lifelong Learning where the skills need is more evident and there is less concern about driving demand.

Overall, two concerns tended to dominate: a need to keep up with changes in technology and business processes; and changes in job roles being driven by new organisational requirements and, in the public sector, policy change. There were also concerns in highly-skilled sectors such as Cogent about employee turnover, and the need to retain staff with Level 3 qualifications as many employees face retirement.

SEMTA are clear that although a variety of skills gaps exist in the sector, it is technical and practical engineering skills at Level 3 and Level 4 that are most lacking. For Automotiveskills, the rapid pace of change in vehicle technology is driving a need for more advanced skills. Advances in medical technology are changing skills requirements in health. Skillset similarly are concerned about the ability of large numbers of freelancers and self-employed staff, who have difficulty finding out about and paying for training to keep up with rapid technological development in the industry.

It is not just advances in technology and processes that are driving the increasing need for Level 3 skills. Changes in consumer demands and expectations have a major role. Improve identify a trend towards increasing employment and increased skills levels for both food scientists, technologists, engineers and electricians and the traditional ‘crafts’ such as cheese makers, craft bakers and butchers. For Skills for Health workforce transformation is driven by both the need to respond to a better informed and more demanding public but also health policy around patient choice, public health, elimination of waiting and changing financial regimes. This is driving the creation of new roles and a need to multi-task. Simply keeping up with changes in legislation, organisational remits and the growing need for partnership working is changing roles within occupations covered by Skills for Justice and Skills for Care and Development. The Cogent sector faces challenges from the increased focus on improving environmental stewardship with staff required to learn significant new technologies and processes to decrease carbon footprints.

The emphasis on growing skills needs but also on rapid change, points not just to a need for initial training increasingly to Level 3 but also the need for ongoing CPD opportunities.

Conclusion

The supply of Level 3 skills in the region will need to improve to meet the predicted shortfall of Level 3 skills nationally. Priority sectors identified by the Level 3 Review should form the focus of attention within the region.

(23) Two or more A' level s or equivalent; NVQ Level 3; BTEC National; Ordinary National Diploma (OND); Ordinary National Certificate (ONC); City and Guilds Advanced Craft; and 3 or more Scottish highers.
(24) Skills: Getting on in Business, Getting on at Work, March 2005, DFES, p18
(25) Leitch Review of Skills. Skills in the UK: the long term challenge. Interim report. HM Treasury, Dec 2005.
(26) Working Futures 2004-2014: National report, by R Wilson, K Homenidou and A Dickerson. SSDA, Feb 2006.