John Denham spoke to the CBI's Skills Summit on the 12th September.  This is what he said:

I’m delighted to be here as the first Secretary of State in the new Department for Innovation, Universities and Skills.

I know that it is difficult to strike up an intimate relationship with 400 members of an audience from a podium, but I do want to underline the importance that I and my ministerial team place on understanding your needs as employers and on getting a system that can deliver what you need.

The new Department – created as one of the first acts of a new Prime Minister – gives skills – alongside with colleges, universities, science and innovation – a new and direct voice in Cabinet.  That means giving employers concerned about skills a voice in Cabinet.

The formation of DIUS does not mean that past policies, past ministers, or any of the department’s key areas of work have failed. Indeed there is much to celebrate in our further and higher education sectors, our science and innovation record and of course our approach to skills.

If our benchmark was comparing today with a few years ago, this could be a very complacent speech; full of mutual congratulation and back-slapping!

But the problem – as Sandy Leitch pointed out – is that neither the past, nor even the present should be considered as the benchmark for success.

It is what we must achieve in the future.  And that is not set just by our own aspirations, but by what other people in other countries are doing or intend to do.

We’re all aware of the litany of challenges. A globalising economy. Climate change. The accelerating pace of technological development.  A world in which people, money and knowledge are increasingly mobile. Powerful emerging nations with huge resources and justifiably great aspirations.

These challenges can bring a sense of insecurity to businesses and individuals.  Such global change can have the harshest impact on those least well-equipped to respond.

We can, though, create the new opportunities in response to a changing world. We can and should ensure that no one gets left behind.

But only if we make the most of the skills and abilities of every single citizen.

Only if we carry out world class research and scholarship.

And only if we translate new knowledge into successful businesses and public services.

That is the reason for a new Department which brings those aims together in a single focus. 

We no longer have one Government Department looking at how science and innovation can lead to successful businesses and strong public services, and a quite different Department looking at how we can develop the skills to support and deliver them.

Responsibilities that had been scattered across Whitehall have now been brought together in one place. That presents a tremendous opportunity – for all of us.

In shaping innovation policy across government.  In shaping research and fundamental science. Our role in setting the policy for intellectual property. In investing directly, through the Technology Strategy Board and the Energy Technology Institute, in the translation of research into innovative products and services.

And our role in ensuring, with you, that the skills needed to exploit innovation to the full are there.

So it would be wrong to think that the formation of DIUS simply means that government skills policy has been transplanted to a new department with a new letter heading. If it does we will have failed.

We have seen a decade of strong economic performance.  The public and private sector has seen innovation and the deployment new technology.  We have a higher education sector that is the envy of much of the world.  In further education, success rates have risen dramatically.

Together we have achieved much since 1997, with 2.6 million more people in jobs, 1.7 million more adults with literacy and numeracy qualifications and record numbers in our universities.

But there is still huge challenge ahead.  We are not yet doing enough – in education, in business, or in Government.

We must be in the world’s premier league for skills. At present, in the OECD, we rank 18th in the proportion of our people who have only low skills, 20th for intermediate skills and 11th for high skills. To be competitive in a global economy, to reach 80 per cent participation in employment and to offer new opportunities to people in work, we must do better.

"World Class Skills" – our response to Sandy Leitch’s Review – sets out how, with individuals and employers, we will bring about a skills revolution and close the gap between where we are now and where we need to be in 2020.

So what are the obstacles?

There are three areas to understand and to tackle.

First, the sheer scale of the challenge that Sandy Leitch set out so well.

Second, changing the culture around training and our deep seated attitudes towards it.

And third transforming the training system to meet employers’ needs.

We are all beginning to understand the size of the challenge, but let me remind you of some of the numbers.

Lord Leitch’s targets, which we have accepted, are hugely ambitious.

We want 95 per cent of adults to achieve functional literacy and numeracy by 2020 - 1.1 million more people achieving that over the next three years.

We want more than 90 per cent of adults to be qualified to at least level 2 by 2020, nearly one and a half million more adults achieving a full level 2 for the first time over three years.

We want over half a million more people reaching level 3 over three years.

We want more than 40 per cent of adults qualified to level 4 and above by 2020, 1.25 million over the next three years.

This is absolutely not just an agenda about adults with poor basic skills, out of work, or on benefits.  It is about skills at all levels.  It is about the young woman studying science at university as much as to the middle aged man who can’t read.

By 2020 there will be very few low skilled jobs.  And the people in them risk cycling between work and benefits, creating a constant a struggle for them and for their families, their employers and the economy as a whole. 

I know that later you will be told employers can’t be responsible for failings of schools. And that’s why we have the drive to raise school standards; with greater emphasis on functional skills. But we also need to share a problem: 70% of men my age are out of the school system. We can argue whether it’s Harold Wilson’s or Macmillan that is responsible. We are funding 100% of those who need basic skills training.

Enhancing all our skills so much, so rapidly, will take more than the effective use of public and private money, more than changes in the way in which we organise and deliver training, and more than our overhaul of qualifications so that all employers rate them and individuals feel they are worth striving for. It will take a culture change in attitudes towards training and skills.

In the years to come, when somebody complains that they are in a dead-end job, their best friend must ask what they are doing to improve their skills. When employers express frustration at the skills of their employees, others will ask what they are doing to train them.

And as individuals and employers accept their responsibilities, they must know the Government will accept ours.

To help change the culture we have launched the ‘Our future - It’s in our hands’ campaign - our most ambitious communications campaign ever.

We are creating a genuine careers service for adults.
Creating Skills Accounts.
Making clear what rights individuals have to train.

You can help change the culture by signing the ‘Skills Pledge’. 

Since the Prime Minister’s launch in June, nearly 250 employers, covering over 2 million employees, have made the Skills Pledge. 
Companies like BT, Superdrug, McDonalds and Sainsbury.  Every central Government Department. 

And I am delighted to announce that Tesco has today demonstrated its commitment to the skills of their workforce and made the Skills Pledge, meaning that a further 300,000 employees are covered.

Last week, we started of a series of regional ministerial meeting hosted by the CBI.  All the DIUS Ministers will take part in jointly promoting the skills pledge, the train to gain programme, and apprenticeships. And to hear what employers are saying.

I’m not sure if this level of personal ministerial involvement with the CBI is unprecedented – but it can’t be usual. And you will see it as we do – an important priority for our Department.

Thirdly – we must make the training system operate more effectively. 

For that it must be employer led.  Able to deliver what employers want at every level and in every area – from basic skills and employability to management and leadership skills and postgraduate programmes.

We are remodelling the whole training system around that goal.

Skills that you need – whatever level and whatever type – when and how you need them.

I want to talk about four areas that will help to make this happen.

1. Train to Gain.
2. Higher level skills.
3. Giving employers more control of the system, and recognising the good training that employers already offer.
4. Apprenticeships.

First, ‘Train to Gain’.

A premium service providing impartial advice to employers and training tailored to meet their needs. By 2010, a third of the adult skills budget will be routed through Train to Gain.

Train to Gain today marks its first anniversary this week.  In the last year the service has engaged over 52,000 employers, helping nearly a quarter of a million workers improve their skills. 
The Train to Gain budget is rising from £200m in the first year to nearly £1 billion by 2010. 

We’ve been criticised, not least by the CBI, for not moving faster to expand the Train to Gain budget.

But I’ve got to be honest. My worry today is not that we have too little money in Train to Gain.  It is that employers may not seize the opportunity of the budget we already have.

You can’t have an employer-led system without employers who are prepared to lead.

My worry is that too few employers, particularly those who don’t train staff in-house, will come forward and take the chance to really shape the training system.

The principle of Train to Gain is simple. It enables employers, backed by public money, to get the training they need, delivered in ways that suit them.   It provides free training in literacy and numeracy for those who need it, and free training to gain a first full level 2 for those who don’t have qualifications.  But it also goes much wider, in helping employers design and source the full range of training they need.  From 2008-09 we will provide matched funding for Level 3 qualifications as well.  We are piloting support for HE level programmes, and there is support for Management and Leadership for smaller firms.

I’ve been listening to employers complaining about inflexible, provider driven training since I first stood for Parliament in 1983. We’ve now got the real chance to do something very different, let’s not waste it.  Grasp the opportunity.  And if, for some reason, it’s not working in the way I describe, let us know and we will make the changes necessary.

Lower level skills and qualifications are a priority for us.  But we are just as concerned to meet your needs for higher level skills as well.  That means changing the way universities and FE colleges delivering higher level skills programmes work with employers. 
There are many good examples of universities that have re-examined how they can deliver what employers want.  Many employers have taken a fresh look at what higher education can offer.  But we are nowhere near reaching the full potential of such collaboration.

The rapid growth in Foundation Degrees, all designed with employer input, shows the potential demand from employers for higher level skills training.  And over the next three years, we, through HEFCE, will fund 15,000 new places co-funded with employers. We want this funding to support more HE institutions to work more closely with employers. And more employers see the value to business and their employees of investing in higher level skills.
The third area I wanted to highlight is reform of vocational qualifications.  It is clear that while some are well established and respected, others don’t carry the full confidence of employers.

We have a major overhaul of the sector skills councils underway in which employers will have a strong voice. And the reform of the qualification framework will make it easy to see what any qualification really covers. In the years to come, we want to directly measure employer confidence in qualifications.

But we need to go further.  Employers believe that we should be more willing to accredit high quality training schemes they run themselves. The issue was picked up by Leitch; our support was clear in World Class Skills.

I’ve already made it clear that I want to move ahead quickly on this. As a result, I’m pleased to say that, today, the QCA is launching a consultation about how a national system of accreditation of employers’ schemes would work in practice.

And I want to offer the opportunity particularly those leading employers who have offered to work with the Government, through Local Employer Partnerships, to offer jobs to people who are currently unemployed or on incapacity benefit.  This has been described as the ‘Jobs Pledge’.

When I met some of these employers with the Prime Minister recently they pressed us to accredit in house schemes.

These companies are directly supporting Government priorities and we should respond to them.

So today I’ve written to the QCA asking them to fast-track the accreditation of training run by appropriate companies taking part in the Local Employer Partnerships and who have made the Skills Pledge. We should use a group of companies to develop accreditation in practice; making sure proper credit is given for good training, whilst safeguarding employees who, after all, need to know that their qualification would be recognised by other employers too.

That’s a series of commitments to genuinely make a difference. And of course the Commission for Employment and Skills led by Sir Mike Rake will also ensure that the employer voice is heard and guides this process.

A further important issue to think about is Apprenticeships - one of the real success stories of the last decade.  Since 1997 we have more than trebled the number of Apprentices in England to 250,000.  Completion rates have more than doubled in the last 5 years from just 24% in to 63%.

But we want to go further, and make Apprenticeships a natural and equal alternative to a straight academic route in to a career, open to both young people and adults. 
In the Prime Minister’s speech to the TUC this week, he highlighted the importance of this programme and his desire to dramatically expand what we can achieve together.  He highlighted our ambition for over 500,000 high quality apprenticeships across the UK by 2020 and a nationwide service matching employers to the people who are able to take up these opportunities.
There is a key role here for the CBI, as a member of the Apprenticeship Ambassador Network, to promote the benefits of apprenticeships across industry and increase investment in skills.
Finally let me deal directly with one issue that has caused some comment from employers since we published ‘World Class Skills’.

That is the way we underlined the contribution that raising skills can have in tackling social exclusion and improving social mobility.  It has led some to ask whether the focus on business needs has been lost; or whether business is now being asked to support training for social reasons.

Let me be quite explicit. That is not the case. The business case for raising skills stands, as it always has done, in its own right. And we have not moved a single penny from our planned investment in employer driven skills to broader social objectives. Nor are we asking you to do so.

But I’m going to be quite honest with you. Those of us who care passionately about raising skill levels have weakened our case by not making it clear that if we raise skills to meet the needs of business, we also raise the ability of individuals to get better jobs; we enable families to have higher incomes; by increasing the opportunities open to parents we know we will raise the aspirations of their children.  And if we fail to raise skill levels, a large pool of people will remain unattractive to employers and a drag on economic performance.

Many people in this room will have bemoaned the low profile skills get in public, media or political debate. 

We need all the support we can get. And if we can get support from those who care passionately about social justice and inclusion, without diverting business from its job, then we should do so.

In closing my comments here today, let me just remind you of some key issues that I want you to remember.

We have a major task ahead if we are to realise our ambitions for 2020. We can only do this if we work together.

We must tackle a culture that often doesn’t appreciate the real value of skills.

Perhaps most importantly though, we must make sure that we have a training system that works effectively, delivering the skills that you need – when, where and how you need them.