LondonHighly Skilled A strategy for increasing higher education’s provision of skills to London’s workforce Contents

Foreword 2 Summary 3 The case for intervention 4 The market for Higher Level Skills 5 Higher Level Skills provision to businesses 6 London’s Higher Education Institutions 7 The way forward 8 Functions and actions of the London Higher Business Development Unit (LHBDU) 9 What does success look like? 10 Staged implementation of the LHBDU 11 The partners 12 Membership of the London Higher Skills Board 13 Foreword 2

London has one of the largest and most diverse clusters The London Higher Skills Board was tasked with guiding of universities and higher education (HE) colleges in the the project.The Board brought together a group of senior world, employing over 55,000 staff and teaching nearly business people and heads of universities and HE colleges, 400,000 students from around the world. Its global alongside representatives from the Sector Skills Councils reputation is second to none, with more international and Lifelong Learning Networks, and observers from students coming to London to study (86,000) than to any HEFCE and the Greater London Authority.The main aims other world city. Its research base attracts £700 million of the project were to research the market for HLS per year of funding of which £90 million comes from provision to employees in London, to identify the key outside the UK. barriers to fulfilling market potential, and to propose a strategy for increasing the share that London’s HE Yet the HE sector’s substantial intellectual and capital institutions (HEIs) currently extract from this market. resources have so far played only a small role in raising the skills of London’s workforce. Employers in London currently This publication highlights the key findings from the invest £2.3 billion per year on Higher Level Skills (HLS) research, which was delivered for the London Higher Skills training and professional development for their staff, but Board by independent consultants Grant Thornton.The only about £64 million (less than 3%) of this is spent with conclusions and recommendations, in particular for the the capital’s universities and HE colleges. formation of a new and dedicated Business Development Unit, are fully supported by the Board. London Higher, London First and the Learning and Skills Network (LSN) decided to explore the potential to expand the role of London’s universities and HE colleges in this Anthony Salz market. To do so would bring clear and substantial Chair, London Higher benefits to employers and employees alike, as well as to Skills Board the institutions themselves.This would in turn make a May 2008 major contribution towards providing the HLS that London’s workforce needs if the capital is to remain competitive in a truly global economy. Using funding support granted by the Higher Education Funding Council for England (HEFCE), the three partner organisations initiated a major research project in the autumn of 2007. £2.3 billion the amount employers in London currently invest per year on HLS training and professional development for their staff 3 Summary

Higher Level Skills (HLS) - the skills associated with higher education - benefit the individuals who achieve them, the businesses they work in and the UK economy as a whole. They facilitate innovation, prosperity and regeneration, driving forward the competitive position of the UK.

Our mission The LHBDU will help build the capability and capacity of In order for the UK to be able to compete effectively in the London’s HEIs, so that they can increase the level of global economy, it is imperative that the percentage of the transactions with business. It will undertake the existing workforce with HLS increases. following activities: A) identification and understanding of the market: London’s universities and HE colleges have a major part to play in helping to achieve this critical goal by increasing • identification of supply – understanding which HEIs their provision of HLS to the workforce. supply the professional development market, and identifying those HEIs who want to participate in The market for HLS in London is estimated to be £2.3 the LHBDU and understand their current market billion. However, HEIs have a less than 3% share of this offering, including an employer facing website to and developing these institutions’ provision is a challenge: promote the registered HEIs and signpost providing HLS to the workforce has not been a traditional employers to named points of contact area of focus for most HEIs and therefore there are barriers • identification of demand – understanding the to overcome. demands of London’s business sectors, identifying market gaps and identifying early adopters willing Based on original research, and taking into account to engage with HEIs through the LHBDU developing policies in London and elsewhere, the strategy explained in the remainder of this publication will help to B) marketing activities to provide a consistent message of overcome those barriers. It will also enable the many the benefits of HEI provision and long term marketing positive examples of good practice to be exchanged and support for HEIs lessons learned elsewhere to be shared. C) provision of employer engagement information and guidance to HEIs to assist in delivery The strategy D) facilitation of collaboration to support HEIs to enhance The centrepiece of the strategy is to set up a business their offering to employers.The LHBDU will facilitate development service for London’s universities and HE collaborative working between HEIs with other HEIs, colleges - the London Higher Business Development Unit Further Education Colleges (FECs), Lifelong Learning (LHBDU). This structural intervention will bring clarity and Networks (LLNs) and commercial providers as well as focus to the London HEI provision of HLS, supporting HEIs collaborative ventures with employers or groups of to increase the quality and quantity of transactions with employers employers, and promoting the institutions to employers. E) source and disseminate examples of good practice to ensure that lessons are learned and that success stories are shared with employers and HEIs to encourage participation in the market. The case for intervention 4

The Leitch Review of Skills identified that over 70% of the UK's 2020 workforce have already completed their compulsory education and called for an increase in the number of adults qualified to Level 4 and above from 29% in 2005 to 40% by 2020.

The importance of Higher Level Skills The Department for Innovation, Universities and Skills HLS are the skills associated with higher education, for (DIUS) reinforced the Leitch Review with the publication example training at degree level, equivalent or above, and of two papers, (one in July 20072 and one most recently in executive and professional development courses, including April 20083), both highlighting the Government’s short courses. commitment to the HLS agenda.

Skills development has moved up the Government’s Employer Engagement agenda in recent years with two White Papers on Skills In addition to the supply of top quality graduates and published in 2003 and 20051. postgraduates, London’s HEIs already have strong links to business and industry. Activities such as contract research, The Leitch Review of Skills, commissioned by the consultancy and intellectual property exploitation provide Government in 2004, highlighted the need to increase the the foundation on which HEIs can build their workforce percentage of the UK workforce with HLS if the UK is to development offer. compete effectively in the global economy, particularly as competition grows from emerging economies such as Now is the time to build upon this strong foundation and India and China. further extend the links between business and HEIs to the training and development field. Whilst many HEIs already It concluded that the growth of skills at Level 4 and provide HLS to the workforce, there is now the opportunity the skills needs of employers could only be achieved to increase this provision dramatically. through rebalancing HE priorities to become more flexible and responsive. 1 DFES (2003), 21st Century Skills: Realising our potential. DFES (2005), Skills: Getting on in business, getting on at work. 2 DIUS (2007),World Class Skills: Implementing the Leitch Review of Skills in England. 3 DIUS (2008), Higher Education at Work – High Skills: High Value.

The universities and higher education colleges in London are a world class cluster and can play a major role in ensuring that ‘‘the skills challenges described by Lord Leitch are met in London. Professor David Latchman ’’ Master of Birkbeck, and elected Chair of London Higher

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of the UK’s 2020 workforce 70%have already completed their compulsory education 5 The market for Higher Level Skills

London HEIs’ income from HLS training to employers represents about 3% of the identified market.There is, however, a large potential market for employer-led skills development and scope for the HE sector.

The market for Higher Level Skills Consequently, there will inevitably be competition in the The market for HLS in London is estimated to be £2.3 supply of graduates to the London market that is not billion. Yet income to London HEIs from HLS training to restricted to London based institutions, but encompasses employers is estimated to be, very approximately, only HEIs nationally and internationally. £64 million - a market share of less than 3%. HEIs in London may well need to adopt different market Although this strategy is aimed at London’s universities entry strategies from their counterparts elsewhere in the and HE colleges, it is recognised that these HEIs should country, differentiating themselves on quality and value and will aim to access more than the London training and (as against in-house/private provision) rather than development market. meeting an incipient demand.

The London picture Social and economic factors London is different from the rest of the UK. It is a global This strategy is both timely and critically relevant with the city and competes in the global market. Its high value skills agenda in London being driven by: industries such as the financial and business services cluster are outstanding, as is its role in the political and • an ageing working population and the need Government arena. to provide opportunities for lifelong learning to enable the workforce to remain productive Its HE sector shares the national agenda of closer working for longer with industry and of developing a more demand-led provision. However, employers are well placed to attract • the rise and intensity of economic competition, graduates from elsewhere in the country and abroad and, including the emerging markets of India and China with some exceptions, do not face the same pattern of skills shortages. • the shift to a knowledge-based economy and the accelerated pace of innovation and technology contributing to a labour market in need of HLS.

Reorienting higher education institutions to widen the scope of what they do to support employers represents a significant cultural challenge.We know that effective ‘‘targeted support will be essential and believe that the Business Development Unit will be well placed to do exactly that.

John Stone Chief Executive, Learning and Skills Network’’ Higher Level Skills provision to businesses 6

Partnerships, collaboration, commercial awareness, information, guidance and the right relationships are all critical to providing businesses with high quality provision.

Current provision The recurring themes that define ‘strong’ employer Historically, HEIs have not played a significant role in engagement are: providing HLS to individuals already in work. Private sector • relationships at the right level – when working together training providers currently capture the vast majority of it is critical for businesses and HEIs to have support the expenditure by businesses on training and workforce from the top of both organisations development, though even this is dwarfed by the internal costs incurred by firms in providing training for their staff. • partnership working – having strong relationships between the HEI and the business assists in developing There is a real opportunity for businesses to top quality courses access an untapped resource and take advantage • contact points – businesses need to know who to of the expertise that exists within HEIs.As is the case for contact and how to make contact; those who are the competitiveness of the UK economy as a whole, contacted must also respond in the appropriate way individual businesses will require increasing levels of skills within their organisations to compete internationally. • consortiums and collaboration – often, great courses are developed when two or more HEIs collaborate so Furthermore an increase in suppliers in the training and unique provision can be delivered.This extends to development market should drive higher quality provision collaboration with FECs, LLNs and also to groups and lower prices. of employers • commercial awareness – HEIs need to know Good practice what courses are needed, to understand the demand Provision of HLS to the workforce from HEIs is increasing, and to be well informed in their discussions with for example through Foundation degrees and the HEFCE employers. funded pilot projects aimed at increasing HLS provision to the workforce. This strategy builds on all these lessons by: • facilitating the development of relationships and There are many examples of good practice relating to collaborative partnerships Foundation degrees, degrees tailored specifically to employers’ needs and bespoke short courses. • offering employers a single information hub about HE provision in London, and named points of contact in HEIs • assisting HEIs with the information and guidance they need to offer top class provision.

The partnership between higher education and employers, both from the public and private sectors,is crucial for delivering ‘‘the higher level skills which the economy of London needs in the future.Developing this partnership,to identify employer needs and ensure appropriate educational provision,is a key strategic priority for the London Higher Skills Board.

Professor Deian Hopkin Vice Chancellor & Chief Executive, London South Bank’’ University 7 London’s Higher Education Institutions

The scale, strength and diversity of the HE cluster in London is unparalleled anywhere else in the UK or Europe.

Key strengths Barriers London’s 40 plus HEIs offer businesses an impressive range Despite the opportunity that exists there are barriers to be of diverse high quality provision.The institutions present overcome to create a truly responsive and competitive both a world class reputation and a true enthusiasm to marketplace. As HEIs have not historically had workforce help create a top class workforce, hence London’s development within their remit, the corresponding employers have access to an unbeatable and, to a large incentive structure for the institutions and those that work extent, currently untapped resource.The opportunity to in them is not yet fully in place. DIUS is considering this on create long term successful partnerships is ripe. a national level and the wheels are now being turned.

The focus on ‘employer engagement’ Similarly HEIs do not currently always have the appropriate The remit of London’s HEIs has historically focussed on the resource in place to deliver responsive provision, and there supply of high quality graduates and postgraduates and, remains work to be done on breaking down cultural more recently, on research, innovation and knowledge differences that can still exist between HEIs and employers. transfer with business through research collaboration and Finally, providing HLS to the workforce can be a risky area consultancy work. Now these links are growing further and for HEIs as it is difficult to gauge demand, accrediting HEIs are looking to expand their provision of HLS to the certain types of courses can have complications, and existing, as well as the future, workforce. upfront costs can be high.

The benefits to HEIs are clear: increased transactions with Drivers businesses will enable the institutions to diversify their To overcome these barriers and secure a winning income streams and credible links with business can have partnership between London’s HEIs and the business a positive effect on the reputation of the university or HE world, this strategy is driven by the principles of: college as its expertise is promoted. • identifying and supporting HEIs who want to excel in this market and enabling employers to understand Furthermore, a greater knowledge of business will enable who to contact and how to make contact with them academics to have a deeper understanding of the skills that undergraduates and postgraduates will need on • providing those HEIs with the necessary information entering the world of work, and establishing links to and guidance to allow them to do this businesses may improve an institution’s success at • encouraging all HEIs to participate in this market and attracting the best students. demonstrating to employers the unique talent, skills and provision that exists on their doorstep and helping HEIs to shape this provision in the future to meet the business needs of tomorrow.

London has a world class cluster of universities and higher education colleges and is the leading world city for business.However ‘‘the full potential for interaction between business and higher education institutions is far from realised.We hope this strategy will be a catalyst towards realising this potential,attuning high level skills provision to the needs of employers and identifying more opportunities in the Continuing Professional Development market for London’s higher education institutions. Baroness Jo Valentine ’’ Chief Executive, London First The way forward 8

The centrepiece of this strategy is to provide a structural intervention that brings clarity and focus to the HEI provision of HLS - the London Higher Business Development Unit.

Current and future trends The London Higher Business Development Unit This strategy is timely. We are now seeing increasing (LHBDU) numbers of HEIs wanting to strengthen their activity in Key to the success and sustainability of the LHBDU will be this market and this agenda is a Government priority. the support it achieves from London HEIs as member organisations and the continued value it provides. The Secretary of State’s grant letter to HEFCE published in February 2006 gave a strong steer on developing employer In achieving its outcome to increase the quality and engagement. It asked for ‘radical changes in the provision of quantity of transactions with employers, the LHBDU HE through a strategy of growth which would incentivise will act equally and fairly in the interests of all its provision which is wholly or partly funded by employers’4. member organisations. This was supported further in the 2008 grant letter which committed funding of £15m in 2008-09, rising to £40m It is anticipated that the LHBDU will be hosted by London in 2009-10 and at least £50m in 2010-11 in order to Higher, as the representative umbrella organisation for ‘accelerate progress towards a new relationship between HEIs in London and the natural host of the strategy. employers and higher education’5. The strategy and governance of the LHBDU will be driven The Government’s commitment to this approach was by a dedicated board, bringing together at the strategic reiterated in 2007. In July 2007 the DIUS led World Class level business, HE and key stakeholder interests. Skills: Implementing the Leitch Review of Skills in England advised that ‘…all HE institutions need to grow The LHBDU board will need to work closely with the their capacity to engage on a large scale with employers in London Skills and Employment Board (LSEB).The LSEB, is ways adapted to their different profiles and missions’. chaired by the Mayor of London, and was established to provide leadership in improving adult skills and The DIUS HLS strategy Higher Education at Work – High employment in London. Skills: High Value, released in April 2008 further re- emphasised the strategic importance of this agenda and It is recommended that a member of the LHBDU board the timeliness of a London strategy. (perhaps the Chair) also sits on the LSEB board.

4http://www.hefce.ac.uk/news/hefce/2006/grant/letter.pdf 5http://www.hefce.ac.uk/news/HEFCE/2008/grant/letter.htm 9 Functions and actions of the LHBDU

The LHBDU will perform the following functions and actions:

Function Actions

Identification and understanding of the market: • Mapping of existing initiatives and activity. • identification of supply – understanding which • The registration of institutions that are actively HEIs supply the professional development market, looking to engage with specific employers. and identifying those HEIs who want to • Have an employer facing website.This would participate in the LHBDU and understand their include a point of contact at each registered HEI as current market offering, including an employer well as promotional descriptions. facing website to promote the registered HEIs and • Identification of market gaps and early adopters. signpost employers to named points of contact • identification of demand – understanding the demands of London’s business sectors, identifying market gaps and identifying early adopters willing to engage with HEIs through the LHBDU.

Marketing activities to provide a consistent • Development of a marketing strategy to promote message of the benefits of HEI provision and long London HE as a workforce development solution. term marketing support for institutions. • Development of a campaign to raise awareness of the HE solution. • Annual showcase event to celebrate good practice which includes an awards ceremony that rewards and publicises HEIs’ work with employers. • Provide market analysis - competitor and customer analysis.

Provision of employer engagement information and • Information provided and sourced from the Sector guidance to HEIs to assist in delivery. Skills Councils (SSCs) regarding the mapping of London employers’ skills needs. • Provision of information relating to ongoing work about relevant issues eg accreditation of work- based learning. • Legal information and support to develop appropriate business and delivery models.

Facilitating collaboration to support HEIs to • The LHBDU will run new (and utilise existing) enhance their offering to employers. events for stakeholders eg employers, HEIs, FECs, LLNs and commercial providers. • The LHBDU will facilitate secondments ie embedding academics in business and businessmen in HEIs, eg via two-way secondments.

Source and disseminate examples of good practice, • The LHBDU will source good practice case studies. to ensure that lessons are learned and that success • Good practice will be disseminated via the website stories are shared with employers and HEIs to and the annual showcase event. encourage participation in the market. What does success look like? 10

The success of the LHBDU will be measured by the value and number of training and development contracts London’s HEIs attract from employers.

Outcomes • support the award of new contracts for HEIs The LHBDU will: Provide a service for London’s HEIs that • have a successful marketing campaign supports them to increase the quality and quantity of • have the first secondments in place transactions with employers and markets these institutions • stage the first good practice showcase and awards to employers. ceremony. The success of this strategy will also be measured by an overall sustained increase in the training and development Implementation market being captured by HEIs and increased numbers of The staged implementation of the LHBDU will begin in students enrolling from a workplace environment.This 2008 with full delivery commencing from 2010. success may mean the LHBDU will be required to be in Implementation is dependent on adequate funding being existence for a fixed term period only. secured – the three original project partners, London First, London Higher and the LSN, will develop the case for support and will approach potential funders.The actions By 2010 the LHBDU will: at each stage are described in the table overleaf.

• have an external facing website in place to signpost employers and provide a focal point for the marketing campaign • feature initial good practice on the website to encourage involvement from HEIs and businesses 11 Staged implementation of the LHBDU

Set up (2008 – 2009) Development (2009 – 2010) Delivery (2010 onwards)

• Recruitment of (interim) post to • Development of the LHBDU • Marketing campaign. head set up the LHBDU. website and online resources. • Attendance and coordination of • Landscape mapping. • LHBDU launch event, promoting employer events. • Consulting with delivery the benefit of HEI HLS provision. • Facilitating secondment partners, particularly SSCs. • Sourcing and sharing good opportunities. • Collating employer engagement practice. • Updating and delivering information and guidance. employer engagement • Developing a marketing strategy information and guidance. and consistent message of the • Sourcing and sharing good value / benefit of HEI provision. practice. • Defining operational and • Annual showcase of good governance arrangements of practice and awards ceremony. LHBDU. • Ongoing performance • Appointing a delivery team. monitoring. • Defining operational targets and Key Performance Indicators (KPIs). The partners 12

Grant Thornton was jointly commissioned by London Higher, London First and the Learning and Skills Network to undertake a major employer engagement research project funded by HEFCE. The aims of the research project were to understand the demand for, and supply of, HLS in London with a view to developing a strategy to address the issues identified.The three partner organisations jointly advocate the development of a HLS strategy for London to increase the volume and value of HLS training contracts that London’s HEIs have with employers.

London Higher is a membership organisation that The Learning and Skills Network (LSN) is an independent promotes and acts as an advocate for London’s higher not-for-profit organisation committed to making a education. It represents over 40 publicly funded difference to education and training. LSN aims to do this universities and higher education colleges in London and is by delivering quality improvement and staff development the largest and most varied of the regional university programmes that support specific government initiatives; associations in the UK. London Higher works closely with through research, development, staff training and the London Development Agency, the Greater London consultancy; and by supplying this support directly to Authority, the Association of Colleges London and with the anyone with an interest in high quality education and business sector and London First. training.The support is always practical and delivered by Visit www.londonhigher.ac.uk skilled staff with a close appreciation and understanding of the education world. Visit www.lsneducation.org.uk

London First is a business-led membership organisation. We work with and on behalf of our members, the capital’s major businesses in key sectors such as finance, Grant Thornton is a leading financial and business adviser professional services, property, ICT, creative industries, with offices in 30 locations nationwide and more than hospitality and retail, together with higher education 25,000 individuals and 15,000 corporate and institutional institutions and further education colleges. Our influence clients. Grant Thornton are the UK member of Grant is built upon the breadth, depth and calibre of our Thornton International, one of the world's leading membership, who collectively represent over a quarter of international organisations of independently owned and London's GDP. Our credibility comes from our informed, managed accounting and consulting firms.These firms in-depth policy development, supported by proactive and provide a comprehensive range of business advisory creative campaigning, as well as from our record of services from around 520 offices in over 110 countries achievement.We innovate, developing practical and timely worldwide.The project team was drawn from Government solutions to London's strategic challenges. Infrastructure Advisory (GIA), which is a department of Visit www.london-first.co.uk around 140 staff focused on public sector consulting, with particular expertise in economics, finance, policy and strategy. Visit www.grant-thornton.co.uk

500businesses in London were surveyed as part of the London Higher,London First & LSN HLS research project 13 Membership of the London Higher Skills Board

CHAIR Jackie Lawlor Anthony Salz Head of People Development, Royal Mail Group Executive Vice Chairman, NM Rothschild & Sons Ltd Clair Murphy London Regional Adviser, Higher Education Funding BOARD MEMBERS Council for England John Attree Director, London First Peter Navin Managing Director, Lloyds TSB Professor Robin Baker Director & Chief Executive, Ravensbourne College Kate O’Connor of Design and Communication Deputy Chief Executive, Skillset

Dick Coldwell Noel Otley Chair, Foundation Degree Forward Chair of The Creative Way (the Lifelong Learning Network for the Thames Gateway) & Principal, Havering College of Tony Evans Further and Higher Education Policy Adviser, Greater London Authority Dave Podmore Jane Glanville Head of Master Vendor Service (Learning),Accenture Chief Executive, London Higher Professor Adrian Smith Tracey Hahn Principal, Queen Mary, University of London Managing Director, Merrill Lynch (member until December 2007; replaced by Kate Richards, Head of John Stone Compensation & Benefits, for remainder of project) Chief Executive, Learning and Skills Network

Professor Deian Hopkin Baroness Jo Valentine Vice Chancellor & Chief Executive, London South Bank Chief Executive, London First University (member until January 2008; replaced by Brad Coales, Director of Employer Engagement, for Amanda Whiteford remainder of project) Head of Learning & Development,Tube Lines Ltd

Professor David Latchman Master of Birkbeck, University of London and elected Chair of London Higher £415 million the income to London HEIs from business, research,consultancy,training and facilities rental which is over 20% of the UK total The London Higher Skills Board acknowledges the input from the following in the production of this strategy:

Graeme Duncan Business and Education Manager, London First

Naz Khan Projects Officer, London Higher

GRANT THORNTON PROJECT MANAGEMENT TEAM: Karl Eddy Partner

Stephen Gifford Director

David Edwards Director

Julia Rich Manager

Peter Smith Manager

Dan Farag Manager London Higher Member Institutions 2007-8

Birkbeck, University of London* Royal College of Art Brunel University Royal College of Music City University Royal Holloway, University of London* Conservatoire for Dance and Drama School of Oriental and African Studies, Courtauld Institute of Art* University of London* Goldsmiths, University of London* St George's, University of London* Guildhall School of Music and Drama St Mary's University College,Twickenham Heythrop College, University of London* Thames Valley University Imperial College London The Central School of Speech and Drama* Institute of Education* The Institute of Cancer Research* King’s College London* The in London Kingston University London The Royal Veterinary College* London Business School* The School of Pharmacy, University of London* London Metropolitan University Trinity Laban Conservatoire of Music & Dance London School of Hygiene & Tropical University of the Arts London Medicine* University College London* London South Bank University University of East London Middlesex University University of Greenwich Queen Mary, University of London* University of London* Ravensbourne College of Design and University of Westminster Communication Roehampton University *Colleges of the University of London Rose Bruford College Royal Academy of Music*

Senate House, Malet Street, London WC1E 7HU T: 020 7664 4840 E: [email protected] London's higher education institutions offer an extensive range of courses. Visit www.londonhigher.ac.uk Electronic copies of this report and also the three research projects which underpin the strategy outlined in this document are available at www.londonhigher.ac.uk/publications.html This research was funded by the Higher Education Funding Council for England (HEFCE). Design and Print by Abbey DPM. © London Higher 2008 HLSS0608