Welcome to the first of our new 'SLIM Comments', a series of monthly newsletters aiming to give you a little more depth on the important issues of the day and in particular to explore them from a South West perspective. In each you will find a review of the key issue or issues that month (News Focus) and a more detailed 'Slim Comment' section looking in depth at the regional evidence that sheds light upon the main story covered.

For the first two editions we will be sending these to all of our long-suffering SLIM-Lines recipients, but early next year we will ask you directly whether or not you wish to subscribe to this service separately.

On behalf of SLIM, may we say that I hope you find this new service useful and interesting and that we can continue to assist you in your work.

Regards

NEWS FOCUS in this edition

Mr Tomlinson's report,
Mr Turner's report, and
Mr Trotsky's advice

Tomlinson

Mike Tomlinson has finally got round to publishing the much awaited and no doubt soon to be implemented/watered down/opposed* (*depending upon whether you read the Mirror/Guardian/Telegraph) report on the future of 14 – 19 Education. The report calls for a diploma at four levels of difficulty to replace GCSEs and A levels by 2014. The reform would also spell the end of school league tables. Students would progress at their own pace, earning credits towards the certificate, with the brightest encouraged to pursue the hardest courses. Be in no doubt, this would be a major shake-up of young people’s education and with an election likely in Spring 2005, the government has placed Education right back at the top of the political Agenda. The report sums up why it has needed to be bold:

"It is our view that the status quo is not an option. Nor do we believe further piecemeal changes are desirable. Too many young people leave education lacking basic and personal skills; our vocational provision is too fragmented; the burden of external assessment on learners, teachers and lecturers is too great; and our system is not providing the stretch and challenge needed, particularly for high attainers."

Reforms are said to be needed to:

• Raise participation and achievement – for participation at 17, 2002 data rank the UK 24th out of 28 OECD countries with a participation rate of 76%. More than 5% of young people reach the end of compulsory schooling with no qualifications. Particular care will be needed to ensure that we raise the disproportionately low participation and attainment of some minority ethnic groups.
• Get the core right – the literacy and numeracy and Key Stage 3 strategies are improving basic skills among our young people, but there is still more to do to ensure that all young people have the skills needed to succeed in higher education (HE) and the workplace.
• Strengthen vocational routes – the existing patchwork of vocational qualifications fails to provide coherence and progression for learners. Too many are of uncertain quality and fail to provide clear progression routes to further learning and/or employment.
• Provide greater stretch and challenge – this year, 22.4% of A level entries achieved an A grade. Higher education admission officers and employers complain they are finding it increasingly difficult to distinguish between top flight candidates and learners themselves are being held back by the lack of opportunity to demonstrate their full potential.
• Reduce the assessment burden – excluding the National Curriculum and vocational qualifications other than GNVQs and VCEs, there were around 7.5 million subject entries in 2004, with 57,000 examiners. The sheer volume of assessment creates a formidable burden at all levels of the system and is only partially off-set by the benefits derived from assessment.
• Make the system more transparent and easier to understand for learners, universities and employers – too many learners lack a clear route map through the system, and end-users are often unclear about the relevance and value of qualifications which young people hold.

Of course we've been here (or on similar ground at least) before… anyone remember Lord Dearing's (1995) non-baccalaureate… or the Higginson report (1988) which recommended moving from three A-levels to five, and if we delve even further the Butler Act (1944) that envisaged three kinds of schools: grammar, secondary modern and technical – the third never actually happening… and even as far back as 1894 a Royal Commission reported that schooling in Germany was "overwhelmingly superior ... the dense ignorance so common among workmen in England is unknown".
Thanks to a conspiracy of costs and reluctant customers (anyone really expect some Universities to recognise a vocational qualification?), previous attempts have fallen by the wayside. And now another big customer, the CBI, is unconvinced, fearing changes won’t address literacy and numeracy problems. Perhaps it is a very English problem… "our culture (as Education Guardian noted recently) seems unable to accord vocational and technical achievements the same respect as academic ones. These are deep, intractable societal problems - if they were easy to solve, they probably would have been solved already."

Various responses to the Tomlinson Report can be found at:

CBI

FSB

TUC

Learning and Skills Development Agency

University Vocational Awards Council

Qualifications and Curriculum Authority

UniversitiesUK

University of Cambridge

You can get a copy of the Tomlinson Report from:
http://www.14-19reform.gov.uk/

Pensions

Also big in the press this month and only just dislodged from top-spot by the Tomlinson Report is of course the pensions crisis. Interest has been stimulated by the first Pensions Commission or Turner report, with most commentator’s suggesting the Chancellor needs to 'dangle a large carrot' to persuade us all to either work longer or save more… so once again well done Fleet Street for capturing the true gravitas of the situation by comparing it to a large root-vegetable:

• 57 billion shortfall
• 4.6 million people are not saving for a pension, even though they have been offered generous schemes by their employers.
• Among small businesses, "there was little or no interest in pensions".
• Official figures suggest a dead stop in the climb of state retirees finding work.
• Despite its 300 pages, the broad thrust of the report is simple. We are living longer than Beveridge envisaged when he laid the foundations of the modern welfare state in the 1940s and that means our pensions have to go further.
• Mr Turner estimates that 12 million people are not saving enough.
• Of the 12 million, 60% are not contributing to a private pension at all.
• In 1995 there were about 5.2 million active members of final salary schemes, yet by 2000 this figure had fallen to about 4.6 million.
• Mr Turner says millions of low and middle income earners will plan to retire at 65 only to find their pension pots will fund a low income.
• If we want pensioners to be on average as well off as today, but keep retirement ages unchanged, the percentage of GDP transferred to normal retirement age pensioners would have to rise from 9.9% today to 17.5% in 2050.
• If Government were to foot the bill through a higher state pension it would eventually require such a big increase in taxation that it would kill the economy stone dead.

It's not hard to see how this has happened, it was Leon Trotsky who said that "old age is the most unexpected of all the things that can happen to a man" hitting the nail on the head when it comes to explaining just why we’re not saving enough. Though you could also add that for him unpleasant ice-pick incidents could be equally as 'unexpected'. Whichever way you look at them the facts are worrying, (except possibly upside-down, when they are just confusing).

Recommendations on pensions policy will be set out in the second report, publication anticipated in Autumn 2005. It is likely that it will recommend some combination of:

• Saving more individually and through schemes
• Greater savings by Government
• Longer to wait before retirement

Pensions – the SLIM Comment

Q - How may the pensions crisis be felt in the South West?

A - Quite severely given the depth of the demographic challenge facing the region.

Information available from the 2003 mid-year population estimates shows the age structure of the region is 'older' than other English regions, with 24% of residents aged 60 or over compared to 21% nationally.

Age structure – mid 2003 population estimates

Source: ONS

This ageing profile is compounded by the evidence suggesting that the population aged 60 and over has increased much faster in the South West than the average seen for England, 17% compared to 12% 1.

So, given this demographic challenge, the impacts of which although universal experience across the UK but likely to be particularly felt in the South West, the report proposes that some mix of higher taxes/National Insurance contributions, higher savings and a later average retirement age is needed.

The issue of raising the average retirement age is one which must also take into account plugging the existing 'leakage' from the labour market.

Looking at the labour market participation of working age people, rates fall once people reach 50 years and onwards to retirement age. It is possible that, as the age profile of the region gets older, the leakage may increase. Indeed, whilst the employment rate for those aged 50 and over is higher in the South West than England as a whole and has been increasing, the improvements are typical of those in other age groups 2.

So, the employment rate of older workers has only marginally eroded the gap with that of all people of working age over the last decade.

Employment rate by age – Sept 03 to Aug 04

Note: four quarter average
Source: Quarterly Labour Force Survey, NOMIS data service, ONS

Encouraging and enabling more people to remain in employment longer requires cuts across a number of employment issues. The Third Age Employment Network (TAEN) publication 'Challenging Age'3 highlights a number of issues that often prevent the participation of older workers in the labour market:
» actual or perceived discrimination;
» lack of training opportunities;
» cost of training;
» inadequate information, advice and guidance for older workers to enable them the remain in or go back to work;
» older workers are often targeted for low paid employment.

Many of these challenges for older workers are well documented and are significant barriers to labour market participation of older workers. The ability for employment to be flexible is one that may also be important as part-time working and self-employment are often attractive routes for those of pre-retirement age.

Indeed, a recent study by the Department for Work and Pensions (DWP) found that the proportion of people in work decreased at a slower rate for those in self-employment than for those who were employees4.

There will be other pressures as a result of the demographic challenge as well as that surrounding pensions; housing, health and transport to name but three.

References:
1,2 South West Observatory, State of the South West 2004, September 2004.
http://www.swo.org.uk/State_of_the_South_West/index.asp

3 TAEN, Challenging Age – Executive Summary, Department for Education & Skills

4 Department for Work & Pensions - Factors affecting the labour market participation of older workers, Research Summary, November 2003.
http://www.dwp.gov.uk/asd/asd5/summ2003-2004/200summ.pdf

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