HISTORIC PRESS RELEASE : Chancellor announces skills at centre of next Spending Review [July 2003]

The press release issued by HM Treasury on 9 July 2003.

Raising skills levels will be central to the next Spending Review, announced Chancellor of the Exchequer Gordon Brown today.

Speaking at the launch of today’s National Skills Strategy, Gordon Brown said:

“That we have this morning leading industrialists, educationalists and Trades Unionists alongside a dozen Ministers, Cabinet Ministers and MPs is a testimony to the importance, not just of the Skills White Paper Charles Clarke is launching this morning, but a testament to the growing and central importance of education, training and skills to the whole future of the British economy.

“Entrenching stability and tackling excessively high levels of unemployment were the necessary starting points in 1997 of our strategy for growth and prosperity.

“Having made progress in entrenching stability and raising employment our national priority must be to ensure a flexible economy by raising skills levels.

“Only by becoming number one for our skills will our economy become number one for its success.

“Tomorrow, I will present to Parliament further measures for labour market flexibility, which alongside this new Skills Strategy, will aid the push towards our objective of full employment.  But everyone here knows already that skills – particularly in basic and intermediate qualifications – are, today the British Achilles’ heel, the most worrying inflexibility of all within our labour market and this is the first comprehensive strategy for years to tackle the problem.

“Today we find that there are almost 600,000 vacancies in the economy. The North East, which used to have few vacancies, has today over 10,000.

“There are not just vacancies in the South East but in every region. In Wales there are nearly 15,000, in the West Midlands 24,000, in Scotland over 25,000 and in the North West nearly 30,000.

“And in every region we are short of important skills today. While around 25 percent of the UK’s workforce have degree level skills, there are still 8 million men and women with low or no skills – 20 percent of 18 to 24 year olds.

“In some Local Authorities, nearly 100 per cent of 16 year olds are participating in education or training. In others – Salford, Milton Keynes, and Harrow – it is less than 70 per cent.

“Some Local Authority areas in our country have nearly 65 per cent of 16 year olds with 5 A*-C GCSE, others have less than 30 per cent.

“And we also need a step change in the skills of the 80 percent of those in today’s workforce will still be there in 2010.

“So as well as the new measures and the new partnership announced by Charles today:

• Including the entitlement to free training for anyone without a good foundation of employability skills;
• Targeted support for those at higher level skills such as technicians, to get the training they need;
• Better information, advice and guidance on skills, training and qualifications; and
• The new National Skills Alliance and regional devolution of skills budgets,

“We are extending the Employer Training Pilots from six to twelve areas, around a quarter of the country, offering incentives for firms to give their staff paid time off to train towards basic skills and NVQ Level 2.

“And with apprenticeships, which a few years ago were dying, already rising to 220,000, we today offer finance so that by 2004 over a quarter of young people aged between 16 and 22 will enjoy an apprenticeship with even more benefiting by the end of the decade, giving every young person who works hard and tries hard the chance of an apprenticeship or college or university.

“I can say today with certainty that skills are going to be central to the next Spending Review and I look forward to continuing to work closely with Charles Clarke, Andrew Smith and Patricia Hewitt, as well as with all of you here, from CBI, TUC, Small Business Council – central and local government, employers and employees as we take this strategy forward.”