The skills gap has "bedevilled our economy for years", says Mike Campbell, director of strategy and research at the Sector Skills Development Agency (SSDA). "Employers and training and education providers have been shouting across fences at each other for ages."
The SSDA aims to end all that, by achieving first dialogue, then action. According to Campbell, "the employers would say they can't get staff trained in the right way, to the right level, and in fact, in recent years, the providers' main short-term interest has been served by getting students and trainees enrolled on courses. The truth is, they haven't needed to prioritise the employability of the results."
The need for employers and providers to ensure that skills gaps are matched by the right number of appropriately skilled employees was the force behind the establishment in spring 2002 of the SSDA, a company limited by guarantee and a non-departmental public body. Campbell explains the organisation's remit: "We have had to develop a new network of Sector Skills Councils [SSCs] which, together with us at the SSDA, form Skills for Business. The aim is for business and the public sector to get the skills they need, with each SSC being essentially demand-led, and steered by the employers."
The individual Sector Skills Councils represent slices of the economy, each covering a minimum of half a million people. "Anything smaller than this is not realistic," says Campbell. The sectors that already have their own skills councils include construction, energy and utility, financial services, IT and telecoms, education, science and engineering, health, plus 15 others, making 22 out of a prospective 25 - "quite an achievement", claims Campbell, in three years.
Each Sector Skills Council has started as a result of groups of employers coming together to "express an interest" in transforming themselves into a one-voiced council and making a bid to the SSDA. Once accepted, the fledgling council is given up to £200,000 to build a plan and establish processes, including a board, that enable it to bring a proposal to the SSDA.
Campbell uses the Sector Skills Council for the audiovisual industries as an example of the process. Skillset, as it has called itself, represents for the first time as a unified whole the fragmented world of broadcast, film, video, interactive media and photo-imaging. Alongside the big names, the industry has many small companies driven by creative vision but lacking technically qualified personnel and people with an understanding of how the business side operates. "One of the main issues with this sector is simply skills - recruiting people with the appropriate skills and then retaining them in a sector where, despite expectations, the average wages are not that high," says Campbell.
While many people are leaving education with some sort of media studies qualification and trying desperately to get into TV or film and earn a mint, the employers are searching equally desperately for some practical knowledge and hard-nosed business sense. As Channel 4's Stuart Cosgrove said at the launch of Skills for Media, now named Skillset Careers, the jobs advice wing of Skillset, "the so-called 'creative industries' are a hugely popular career choice for many young people. But a lot don't even know how the industry works."
Campbell explains that, so far, each sector seems to take about nine to 12 months to sort itself out, with a board mainly of volunteer big-hitters, and an executive; each council has to ensure representation from the trade unions, professional organisations, and trainers and providers. It is then given the task of setting training standards, discovering and promoting centres of excellence in colleges, and working with training providers to deliver the required skills.
"The core business of a Sector Skills Council is to firmly nail down the action to meet skills needs," says Campbell, whose first jobs were in the hotel and catering trade. He then became involved in research economics, founding the Policy Research Institute at Leeds Metropolitan University and developing the institute's consultancy in studying labour markets.
"The SSDA also aims to drive up the demand for skills in the workforce," he says. "We want to raise employers' expectations in people, and to encourage them to invest in their workforce - it's making the business case for skills, in fact."
Campbell has a nice line in comparative statistics, which he rattles off with ease. "If we trained up just another 1 per cent of the current workforce - and by "training up" I mean under- taking any form of education or training while in work - we would add £8bn to GDP. We're less productive as a country than every EU member bar Greece, Portugal and Spain. Research shows this is in part to do with our comparative lack of skills."
He wants graduate numbers to continue rising. "Even with a fivefold increase in the number of graduates in the UK over the past 30 years, the wage premium for graduates remains - it's the highest of all the OECD countries. We still need huge numbers of graduates." He urges businesses to look at what's happening on an international level. "Obviously, the UK can no longer compete on price alone with the Far East and China. We have to sell skills, and knowledge, and quality."
Commenting on Chancellor Gordon Brown's most recent Budget, Campbell welcomes the way it "highlights the importance of skills to the challenges we face". And that's not all: "The Leitch review - due to report in spring next year - will examine the future needs and priorities for the UK economy up to the year 2020. A white paper just published sets out reforms to put employers' needs centre stage. The new National Employer Training Programme will play a key role in all this, and Skills for Business looks forward to working with our partners to make the programme a success."
Despite the SSDA's programme being on track, there have been headaches in getting some sectors to stay talking to each other. The Sector Skills Council for education - known, not altogether snappily, as the Lifelong Learning Sector Skills Council - has had "huge birth pains", according to Campbell. Its chief executive, David Hunter, wrote about his "frustrating" experience in the Guardian last year, pointing out that parts of this sector are far more used to being in competition with each other. Higher education, further education, work-based learning and so on are more often engaged in a fight for bums on seats to maintain their funding - now they are being asked to work together at a strategic level as employers of a million people.
Campbell bristles at the idea that the SSDA is another expensive, bureaucratic quango. "We are lean and mean," he says. "Given the scale of the agenda, and the importance of the role - and it is essential we get this right - our total budget of £60m is tiny. It's small compared to, say, the Learning and Skills Council. If we want British business to get the skills it needs, it is vital we oil the wheels in this way. We're not a bureaucracy. We are the ones making the bureaucracy responsive to the needs of business."