12 June 2009

Eleven years after he first laid out an industrial strategy for the UK as Secretary of State for the DTI, Lord Mandelson gets the opportunity to do the ‘BIS’ again as head of the latest new super Ministry: the Dept for Business, Innovation and Skills and a lot more besides. The political and economic climate may be different to 1998 but the objectives are familiar: employer engagement, new technology and skills.

Lord Mandelson emerges as one of the main beneficiaries of the latest Ministerial merry-go-round. Not only does he get the chance to lead the Government’s UK recovery plan but he also becomes First Secretary, in effect Deputy PM. “Our members will be pleased that Lord Mandelson is staying and happy that his dept is getting a larger responsibility,” declared the Director-General of the CBI. Others seemed less pleased. HE unions appeared concerned that without a mention in the Dept’s title, HE might go off the radar: “we will be seeking re-assurances that both further and higher education have clear and defined roles in the new dept.” Others agreed with another professional body leader, John Dunford of the ASCL; “with a new government likely to be in place in under a year, with its own priorities and plans, to begin a major civil service dept restructure now seems futile and a waste of taxpayers’ money.” He had a point; the £7.1m used to set up DIUS just two years ago would come in very handy now.

Even within Parliament there have been reservations. “Machinery of Government changes should be subject to a process of consultation and Parliamentary approval,” tutted the Chair of the Public Accounts Committee, while Phil Willis, Chair of the Select Committee that has been monitoring DIUS over the last couple of years, feared for Science: “the real casualty of this ill-thought out re-organisation is the nation’s strategic science base.”

DIUS may go down as the shortest lived dept in history but it has had its moments. The Innovation Nation Report, the review of HE, the integration of skills and employment and the nascent new skills system may all stand the test of time. But while it has had to toil away with a limited budget at the widgets and screws of the UK skills base, the DCSF, with a larger budget, has been able to seize the headlines. In effect, the two depts came to reflect the traditional divide in the English education and skills system: the glamorous theoretical against the more mundane practical; academic versus vocational.

Earlier this year, the DIUS Select Committee in a somewhat critical report, did concede that much of the dept’s work “may take years, if not decades to realise.” That realisation will now take place within a new dept and a new strategy.

This new strategy was in fact laid out two months ago when on the eve of the Budget, Gordon Brown and Lord Mandelson launched a new strategic plan “to invest in Britain’s economic and industrial future.” The plan spelt out in a Paper entitled ‘Building Britain’s Future: New Industry, New Jobs’ argued that “the Government had decided to strengthen its industrial policies and the way it supports Britain’s economic renewal and future growth.” Arguably, this was the moment when BIS was born. as Last week’s Number 10 statement on BIS confirmed this: “the new dept is the institutional realisation of the approach to promoting UK competitiveness and productivity as set out in the New Industry, New Jobs Paper of April 2009.”

Understanding this Paper then will go a long way to understanding the new dept.

The theme of the Paper is about looking to the future: “this is a moment to re-establish a sense of optimism for the future.” As such it identifies four priorities.

The first, innovation, carries into the title of the new dept and is likely to remain a key driver under Lord Mandelson. The Paper confirms continued support to many commitments in the Innovation Nation Report, notably protecting and raising investment in science and research, rolling out Innovation Vouchers to help employers engage with the skills system, supporting a new HE Research Excellence Framework and helping the Technology Strategy Board as it develops opportunities in areas like the digital economy, advanced manufacturing and clean technology.

The second, skills, is also carried in the title of the dept and is clearly a major objective for it as in: “assess the changing skills needs of the UK economy, especially the intermediate and high skills vital in a global economy and design policies to meet them through public and privately funded lifelong learning.” The context for this has recently been set in the UK Commission’s annual audit on progress against the Leitch ambitions, ‘Ambition 2020.’ The Paper remains equally committed to the Leitch demand-led model but with greater emphasis now on a skills system that “not only responds to demand but is also able to anticipate it as well.” Along with a new HE Framework due out shortly, the Paper promises another skills Paper, described as an ‘active’ skills Paper, which may surprise those who hadn’t seen any of the previous skills Papers as particularly passive.

The third priority, finance, takes us a bit away from skills and more into the business end of the dept by focusing on the financial support and advice needed to help SMEs in particular with start-ups and enterprise activity generally. A further review is promised. While the fourth priority, infrastructure, deals with much of the technical infrastructure needed to support UK business and economic recovery. Reports are due out shortly on Britain’s digital infrastructure and energy usage, further guidance will follow on regional planning and provision including announcements on city-region pilots while the next stage of the UK Commission’s simplification of skills services to employers is due out this autumn.

The Paper thus provides a useful starter for ten as the new dept starts to roll its collective sleeves up and sweeps into action. It will be interesting to see how DCSF and BIS work together; by all accounts one of the Secretaries of State was happier with the changes than the other. What is significant however, is that for the first time, the world of education and training now has two of the leading figures in Government heading up its two depts. It’s a big moment but don’t expect a quiet life.

© Edexcel Policy Watch 2009. Steve Besley is Head of Policy at Edexcel. Policy watch is a service intended to help busy people understand developments in the world of education. Visit Edexcel at www.edexcel.org.uk