The Bank of England has been issuing banknotes for over 300 years. If you look closely at any of their banknotes you will see a ‘promise’ to pay the bearer the sum of the face value of the note. That promise gives us trust in the value of their notes, and the knowledge that others will accept them when we want to use them. It is this trust that gives banknotes their value.
Qualifications are, in a sense, the currency of the skills system. They also signal trust and offer value. A lot of effort is devoted to measuring and maintaining their worth.
A desire for monetary stability is why the Bank of England puts controls in place, such as setting interest rates, to help sustain the value of money over the long term and enable businesses to invest with confidence.
Stability is important for qualifications too. Awarding bodies that we regulate are required to make sure that standards are consistent, both over time and between similar qualifications. Students starting a course today need to be confident that the qualification they hope to be awarded will have the same value as those that have been awarded in the past and that will be in future. That those qualifications will continue to act as a signal of their achievement, and as their passport to further learning, employment and career progression.
Stability is also important for qualifications for another reason: to provide awarding bodies with the confidence to invest in improving their qualifications. We want them to develop their infrastructure, including their use of technology and the skills of their staff. We want them to invest in research and product development that will make tomorrow’s qualifications more valid, more reliable and better delivered. That needs a regulatory approach that is sufficiently stable so that investments can deliver returns.
There is a useful comparison too between the wider vocational system and the economy. Like the economy, the vocational system is a complex and interlocking web of actors, incentives and behaviours. One has money as its unit of exchange, the other has qualifications.
And just as money is the wrong place to start talking about the economy, so qualifications are the wrong place to start talking about the vocational system. I have said in the past and I will say again: qualifications are not the most important part of the system. Qualifications reform is not a panacea: it will not improve teaching, nor will it influence students to choose career paths that suit the needs of local economies. Qualifications cannot create highly skilled jobs. To influence those things others need to take action, using different approaches.
Instead we should start with what the wider vocational system looks like - the ambitions and objectives of employers, policy-makers and others across England and in Northern Ireland, where we also regulate - and then consider how qualifications can and must play their role in supporting those ambitions.
It seems to me that there is, at present, some consensus about many of our ambitions for the vocational system, even in the run-up to a General Election.
And although I would not want to downplay the differences of view between political viewpoints, I think most policy-makers would agree on a number of things:
- that the UK has historically been seen as a leader in education, but must do more to develop and value the skills that are needed to compete in a globalised economy
- that employers need to be at the centre of the vocational system, designing, delivering and overseeing vocational training
- that good quality apprenticeships are of pivotal importance
- that employability skills, or soft skills, such as team-working, are as important as role-specific skills in many jobs.
And the developing devolution agenda in England creates new and important debates such as, how far should local control of skills funding and priorities go within a framework of national standards and qualifications designed to support labour mobility? As the vocational system evolves and diversifies we will play our role advising and supporting those taking on new responsibilities.
This broad consensus is of real value from a regulatory perspective. It gives us the opportunity to try and create a stable vocational qualifications system: good, valid qualifications offered by skilled, responsive awarding bodies, that employers can trust. A system that is stable, yes, but not fossilised: a system that can respond to different employer needs as they emerge, as well as to changes in policy.
So I want to talk today about how we are regulating to achieve these objectives: to put qualifications in their place as an important part – but not pulling the strings – of a healthy vocational system.
I am going to focus on three broad themes that guide our approach: first, the role of employers; second, the need for high quality information about qualifications; and finally the need to regulate for the world as it really is, not the world as we might like it to be.
First, then, the role of employers. It is easy to say that employers should be at the heart of the vocational qualifications system. Few would disagree with that sentiment.
But what that does mean? Employers are not a homogenous group. Different sectors have different needs, and play a variety of roles within the system. We use ‘employers’ to mean a whole range of things: everything from an entire sector to a large company to individuals who work with training providers to bring real-world experience and advice to students.
So there are diverse and complex requirements, and the qualifications system needs to be able to cope with that.
How? Well, for starters we cannot impose a single model and expect employers to work round us. The way we regulate and the way qualifications are developed must be flexible enough to cope with the real world that business inhabits. We must also demonstrate that, in return for employers’ efforts in defining the skills that should be assessed, qualifications will help them identify with confidence people who have those skills.
Skills, not qualifications, must be the starting point. Because if vocational qualifications are not assessing the skills employers have said they need in new employees, then those qualifications will fall at the first hurdle.
Let me emphasise two important points here.
First, we are not assuming that all new recruits should arrive ready to start the job on day one. It depends on the nature and level of the job, of course, but in general there will always be a role for employers to continue developing the skills of new staff once they are in post. Employers tell us that for some roles, they are looking for recruits who are literate, numerate and show the right level of discipline and commitment to learn how to do the job; the rest can be taught. And for those important ‘soft skills’ that are so difficult to reliably assess, the vocational system as a whole needs to think about how they can best be developed and valued.
Second, we are not assuming that there can only ever be one way of defining the standards for any particular job role. Different sectors may want to take quite different approaches. In the past, there was a view that government-licensed Sector Skills Councils could define a set of standards on behalf of every employer in their industry. But that has not worked in all cases. Employers should be able to work with others in their sector in whatever way suits them to define these skills – whether that is through Industrial Partnerships, apprenticeship trailblazers, National Colleges, professional bodies, Sector Skills Councils or their own independent groups.
If there are no detailed common standards, that is likely to place more responsibility on employers to train new recruits themselves, and may limit mobility once people are already in employment. We know that the UK Commission is considering these issues at the moment, as set out in their recent, ‘Growth through People’ report and through its work on the future development of National Occupational Standards that align with labour market need.
But whatever the standards look like, what matters to us is that the standards that underpin qualifications are owned by employers not awarding bodies, and that anyone taking a qualification knows exactly what it does - and does not - qualify them to do. And we will consider strengthening our regulatory expectations here to make sure that qualifications are based on skills standards that employers genuinely own.
Let me illustrate how this might look in practice by imagining two different sectors – let us call them the widget-makers and the gizmo-makers.
The widget-makers are a proud sector, even though their core product is often derided. They have evolved since their medieval origins and the sector is now dominated by a small number of big firms. These companies have a long history of working together on skills development within the industry and the National Occupational Standards for the widget-makers are well understood and used. Any awarding body that wants to develop a qualification for the widget industry has a solid starting point: a set of skills which should be the basis of all the qualifications used in the industry.
The employer’s role does not end there, though. There is a commitment in the widget industry to training and to recruiting apprentices, and all the widget factories have links with local colleges supporting work-based learning and helping students recognise the soft skills that are not assessed by qualifications. The widget-makers also recognise the importance of feeding back their views to awarding bodies on how the qualifications are working in practice.
So here Ofqual’s job is reasonably straightforward: our requirements that qualifications have user support, and are evaluated on the basis of user feedback have been met. Our role is to make sure that the assessments against those standards are valid and reliable, so that employers can trust that those who get the qualifications truly deserve them.
The gizmo-makers, by contrast, are a diverse sector with lots of small employers. Making gizmos is a specialist, prized skill, and different companies do it in quite different ways. There are no recognised industry standards and each employer wants rather different things from people entering the industry. There is little tradition of investment in skills, constant skills shortages and fierce competition.
Awarding bodies wanting to work with the gizmo-makers have a major challenge: they have to find representatives of the industry to work with to define the skills needed, even though there is no culture of industry collaboration. And when they do, the employers in the industry cannot agree what they need anyway. Some qualifications have been developed by awarding bodies working with a handful of employers, but none of the qualifications are widely recognised. Because of this they may be little used and awarding bodies could eventually decide to withdraw them.
This could play out in a number of ways:
One scenario could be that the gizmo-making companies simply live with no clearly defined skills standards. And because they cannot signal the skills that new recruits need, suitable training is limited and the right qualifications do not exist. Employers continue to spend considerable time and money training new recruits and when people want to move between companies, they often have to be re-trained. Skills shortages continue and getting into the industry in the first place requires applicants to demonstrate general skills and the right attitude.
Another scenario is that the gizmo-makers conclude that the skills crisis in the industry, exacerbated by the withdrawal of what qualifications there were, means that they must create a pipeline of qualified entrants to the industry. This needs credible qualifications. So they come together to invest in the development of standards that are useful to them all. They deal with their differences by agreeing core standards with a set of options that allow for flexibility. Awarding bodies use those standards to develop qualifications that both students and the industry can have confidence in.
And in this scenario the gizmo-makers do not just develop the standards, but take ongoing responsibility for reviewing them, and the qualifications based on them: that critical feedback loop that allows qualifications to be tested against what really matters - that they meet the needs of employers.
I could make up some other examples to illustrate different scenarios. But I think two general points are made by the fictional widget and gizmo makers:
- first, employers being in the lead is not straightforward or uniform
- and second that qualifications are a part, but only part, of a wider landscape, involving many players, each needing to work effectively for the whole to behave as it should.
As Ofqual, the UK Commission, employers, colleges and others come together to make sure there is a genuine line of sight from training to the workplace, we will all raise our expectations of genuine employer buy-in to qualification standards. This may lead some sectors to reconsider their historical approaches to skills and industry collaboration. And we make no apology for that.
My second theme is the importance of information about qualifications. Qualifications operate most effectively as a signalling device, for both for buyers and users of qualifications. Those who are choosing qualifications – colleges, employers and students themselves - need to be able to access information about what the qualifications do and do not mean, and what progression opportunities they might provide.
And those who are using qualifications - employers or universities looking to recruit applicants - need to be able to find information about what the qualification does and does not mean about the person who holds it.
The starting point for understanding any qualification is the title. Often people will not look much beyond the title. So an ideal title would capture the essence of a qualification without being too long. Where a qualification’s title is understood in an industry, people should be able to trust that it means what it appears to. The NVQ title, for example, is well-established in many sectors as signifying occupational competence, and it would be confusing to change it. So as we reform the system, we are proposing to allow the NVQ title for occupational qualifications to remain, even if the way we regulate them is to change.
Sometimes, though, the title is not enough. People may want to know about the broad level of demand of the qualification, or how big it is.
So I can announce today that we are proposing - and will shortly be consulting on - a new descriptive framework for qualifications. The detailed prescriptions of the current Qualifications and Credit Framework will go - though the qualifications developed under it, if they are good, can stay. Every Ofqual regulated qualification will come within one framework and will be assigned a level and a more accurate size value.
This will not force change to qualifications - we intend to continue using the levels people are familiar with. But it will help people understand how our qualifications relate to each other, and it will give employers a broad indication of the level of challenge of the skills that the holder of the qualification has demonstrated. And if they are looking to release students for study, the qualification’s size value will give an idea of how long they will be out of the workplace.
Returning to my analogy with currency: just like money, qualifications cross borders. There is no equivalent of the euro for qualifications, but there is something like a currency converter: the European Qualifications Framework, or EQF. Our proposed new framework will be referenced to the EQF so people can understand how our qualifications relate to those taken in different European countries.
A framework can be valuable to help people understand a qualification - what it does and does not mean. But it does not say anything about what someone had to do to get the qualification - the types of skill they now have. It certainly does not indicate equivalence. It would be unwise for anyone to assume that two qualifications are interchangeable just because they happen to be at the same level. The two qualifications might be of very different sizes, have very different purposes and be testing completely different skills and knowledge.
But how can we help the wise buyer find out more about what a qualification does and does not signify? They might want to find out about the standards on which the qualification is based or the purpose for which the qualification was designed. If this information is not readily available, then the qualification is not able to play its proper role as a signalling function.
Well, we know that employers can find it difficult to get access to the information they need about qualifications. Nigel Whitehead identified that in his report for the Government on vocational qualifications fifteen months ago. Since then we have been working with the Skills Funding Agency and others to make the information we each publish more responsive to the needs of users, including teachers and employers. And we will be launching a prototype of our new register, which will bring together more accessible information about qualifications, in May – look out for it.
My third and final theme it that we need to regulate for the world as it is, not the world as we might want it to be. The vocational system is complex, diverse, sometimes imperfect. There are conflicts and incentives that may get in the way of good educational outcomes. A good qualification depends not just on good design, but on good implementation, good teaching, good assessment, and good, regular review.
Our regulatory approach needs to recognise and reflect this complexity. It must focus on whether qualifications achieve their purposes, and not prescribe how they might get there.
We have learnt from the lessons of our predecessor’s introduction of the Qualifications and Credit Framework (QCF), the vocational qualifications framework we inherited. The developers of the QCF assumed that a unitised, credit-based structure was right for all qualifications. They assumed that quality could be assured by imposing a rigid set of design rules. They required awarding bodies to invest in a huge and hurried redevelopment of their qualifications, which, as it turned out, did little to improve quality or validity. As our review published last summer showed, the QCF rules had to go.
But our plan to remove those rules will not be another swing of the pendulum. We are taking a different approach: no longer are we saying that the regulator knows best. We will not impose a different set of design rules. And we are certainly not requiring awarding bodies to change all their existing qualifications.
Rather, we are saying: what matters is outcomes. Are the qualifications good? Are they valid? Do they meet employer needs? Do they enable progression? Are they being regularly reviewed, at every point of their lifecycle? Above all, do they lead to good education and training outcomes? Not assuming that a particular structure, or a particular model of assessment is right. Not saying that everything has to be unitised - but not saying either that nothing can be. What matters is what works, what is good.
A qualification, and its assessment, should measure what it needs to measure. Decisions about the assessment approach: whether compensatory or mastery; computerised or paper-based; statistical or judgement-based; are all made around the professional and technical skills to be assessed. Not imposed by a one-size-fits-all solution.
We are very clear that if current qualifications - including those designed to meet the QCF rules - are sufficiently valid, and the awarding bodies can demonstrate that, then there is no need to change them. But if they are not sufficiently valid, then they need to be improved, or be withdrawn.
We are implementing these changes in a careful and considered way. We are taking the time to get them right, to think through the implications, to understand the costs and the risks, and to check our approach with awarding bodies and others, seeking to minimise unnecessary burden. So that we get a regulatory system that focuses on validity, without going through another QCF-style convulsion.
And we will be constantly testing whether our approach is actually working. Talking to employers, teachers, users, awarding bodies and others to see whether our assumptions and approaches are right. Testing whether our regulatory approach enables and encourages qualifications that are sufficiently valid and meet the needs of employers. So we can make sure the system evolves and responds, as it must.
Let me finish where I started. Just as the Bank of England has responsibility for one key part of the economy, Ofqual has responsibility for one key part of the vocational system. Our job is to try and make sure that qualifications are good, that people can have confidence in them, and that they support the wider vocational system. That role - overseeing and providing leadership to the vocational qualifications system - is critical, and a responsibility we take seriously.
Because if we can get it right, if we all play our parts wisely and well, we know that qualifications will make an important contribution towards improving vocational education and training, developing skills, and so contribute to economic growth.
Thank you very much.