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Innovation Economy: Skills

Volume 802: debated on Monday 16 March 2020


Asked by

To ask Her Majesty’s Government what assessment they have made of (1) the skills required for a successful innovation economy, and (2) whether the education system is structured to deliver a workforce equipped with such skills.

My Lords, the Government want the UK to be a science and research and development superpower, increasing our research and development spending to 2.4% of GDP by 2027. The Government are constantly assessing the skills required to deliver this ambition. We are prioritising STEM, digital and technical education; creating a new £3 billion skills fund; and reforming the global talent visa so that we can create a fast-track scheme for top scientists, researchers and mathematicians.

My Lords, the innovation foundation Nesta and the OECD have identified three skill sets required in an innovation economy: technical, behavioural and creative-thinking skills, the process by which we generate, critique and refine ideas. Their research shows that pupils who study art at school are more likely to develop these skills. Do the Government recognise the contribution of arts-based learning to the wider innovation economy? Given that creative thinking is identified as a core innovation skill, will she commit to reviewing the department’s decision to opt out of the PISA 2021 test for creative thinking?

My Lords, as part of our ongoing commitment to arts in schools, we are continuing funding of about £85 million a year for a range of music and cultural education programmes. Cognitive science shows that a knowledge-based curriculum is then the foundation for stimulating the critical thinking and creativity that we need. That is why the focus of our curriculum is on getting that bed of knowledge on which all students, including arts students, need to build. The Government believe that the short, online, intensive survey by PISA is not sufficient to give us a realistic indication of creative thinking in our students.

My Lords, as so often, the Minister made no reference to further education in her initial reply. Given the importance of FE in delivering skills training, will she say something about how the Government will tackle the problem of lack of trained staff in the FE sector, following the enormous cuts made to it? I know that the House will welcome the extra funding that has been provided for FE, but it will be useless if we do not have the relevant and appropriately skilled staff to do the training needed.

I am grateful to the noble Baroness for raising the role of FE, which often does not get mentioned in this space. Yes, £400 million has been invested into the estate, and I think that more money was announced in the Budget. There has not been a specific fund to skill up the FE workforce as well, but one initiative that the Government have embarked on are the new institutes of technology, 12 of which have begun to open from September 2019. They are an innovation of employers, universities and the FE sector. The Government are committed to the role of the FE sector in delivering the skills that we need for the future.

One of the problems highlighted by the noble Baroness, Lady Bull, in other Questions is transitioning from schools into apprenticeships, particularly in the creative and media sector. In an Answer to a Written Question from me, the Minister said that nearly half a billion pounds in the apprentice levy budget is unspent from 2018-19. Can she undertake to use some of that budget to enable creative and media companies to provide a route to work for this important group of people?

I am grateful to the noble Lord; I expected that this Question would highlight the role of the creative and arts sector. There has been a specific initiative in the apprenticeship space, which I have mentioned before in your Lordships’ House, because of the difficulties of a 12-month apprenticeship when we have an industry sector that has a lot of sole traders. We have therefore devised the apprenticeship training agency—I think that is what it is called—to be one employer, so that a number of placements can be created. We are committed to delivering apprenticeships in the creative sector.

My Lords, will the Minister outline what the Government are doing to ensure that future skills needs are better understood nationally?

My Lords, it is essential that this is both a local and a national approach by the Government. A national skills and productivity board has been announced and is in development, made up of experts sitting at a national level. There are now 36 skills and advisory panels—similar name but different function—at local level, which include the FE sector and employers, so that at local level we can provide the skills that the local economy needs.

My Lords, does the Minister agree with the statement from Innovate UK on its website that

“One of the most frequently-overlooked yet crucially important elements of innovation is design”?

If so, will the Government address the currently precarious and actually pitiful position of design subjects in schools, where design and technology in particular has 67% less GCSE take-up and 43% fewer teaching hours than 10 years ago?

My Lords, the Government are committed to all those sectors with a skills gap: there is design, the automotive sector and engineering. What I just outlined at local and national level is to ensure what is being developed in qualifications and skills. That is why employers are involved in ensuring that apprenticeships match the needs of the economy.

My Lords, is the Minister aware that about 70% of people graduating from Russell group universities now end up working for SMEs and similar smaller companies? That is totally different from the position 20 years ago and is one reason for the strength of our economy.

Yes, SMEs are a huge part of our economy. Along with the FE sector, the biggest single contribution the Government make to research and development for businesses is what is called the R&D tax credit. In the latest figures that I have, £4.3 billion was paid to businesses for that tax credit for their R&D spend, but £2.3 billion of that was to small and medium-sized enterprises, so this is not just about big business and universities, it is about the FE sector, local skills needs, and small and medium-sized enterprises.

My Lords, what are the Government doing about the skills needed to reach a zero-emissions, low-carbon economy?

My Lords, through the education sector, that is part of what is taught in our schools—there is the environmental science A-level—but in terms of what the Government seek to deliver, it is part of our priority to develop the industries we need to deliver that commitment.

My Lords, I declare my interest as chairman of the William Morris Craft Fellowship Committee. What is my noble friend doing to ensure that more young people in our schools are aware of the immensely rewarding careers available in the skilled crafts?

My Lords, the Government are investing in the Careers & Enterprise Company, there is a careers strategy nationally in schools and it is part of the Ofsted framework, but we leave it to teachers to determine who they should invite in through our various initiatives. I am sure that that is one that many schools would want to invite participants into.