Examination of witnesses

Paul Kett, Isabel Allgeyer and Philippa Rouse.

Q62 The Chair: Welcome to the committee’s seventh session of its inquiry into people and skills in UK STEM. We welcome three witnesses: Isabel Allgeyer, the deputy director for research talent and European programmes in the Department for Business, Energy and Industrial Strategy; Paul Kett, the director-general for skills in the Department for Education; and Philippa Rouse, migration and citizenship director in the Home Office. Thank you all very much for coming this morning.

The session is being broadcast and a full transcript is being taken; it will be available shortly after the meeting for you to make any minor corrections. If you think of anything during or after the meeting that you did not get a chance to say, we would be delighted to receive additional evidence from you. If you suddenly remember something you wish you had said, please send it to us and we will treat it as evidence.

Thank you very much again for coming, and let me kick off with a question for Paul Kett. We have been talking a lot in our inquiry about the STEM-related skills deficit in the UK, and we are very keen to hear the department’s view on how well we understand what skills are needed and where the existing skills deficits are. Not only do we want to understand the problem, but we are keen to hear what the Government are doing, perhaps through the Unit for Future Skills, to address it.

Paul Kett: Thank you very much for the opportunity to give evidence. First, on the skills deficit, we recognise that it is not a binary question; it does not stand still. We try to ensure that we have a range of data sources available to inform our understanding of it and to inform other actors in the skills system such as providers, learners and employers.

We measure and publish information on starts and achievements in the different skills programmes that we run. We also look at wider flows such as migration, the stocks around those in employment, economic inactivity and so on. We then use those broad insights to target a number of key sectors that have been identified where we in government are concerned about shortages of skills available in the workforce.

We focus on four broad categories, all of which have relevance to STEM. The first we call workforce sectors, which is where we know there are a number of structural challenges, such as very long-standing high vacancy rates and retention and progression issues in those careers, or where structural changes are coming in those sectors.

The next category that we particularly focus on is green jobs, which is largely the sectors that are most affected by the transition to net zero. That is perhaps where STEM skills, particularly engineering skills, feature almost uniformly. I expect you will want to come on to the demand for what we often call the missing middle—the gap in the level 4 or 5 technical skills that are most in demand.

The third area is growth sectors. These are the areas identified at various times as priority sectors for the industrial strategy, the plan for growth and so on. Broadly, these are digital, creative and technology-led industries.

Finally, we have science and tech as an industry area in support of the Government’s ambition to be a science superpower. That includes sub-priorities and sectors such as AI and quantum. Across all of those, there is not one uniform source of information. We work with different industry bodies and groups to convene and share knowledge. I mentioned green skills, in which we have a taskforce involving government—shared by Ministers in DfE and BEIS—education providers and industry leaders to identify the skills demands and gaps and provide a number of recommendations.

Across all of that—you mentioned the Unit for Future Skills—we have recognised that there is a lot of data and information, but bringing it together in a way that makes it easy for all the different actors in the system to use it is perhaps the biggest challenge. That is where the Unit for Future Skills comes in: convening all those different datasets and focusing on setting standards enables us to map those datasets and publish them to local actors.

The final piece of the jigsaw is how we then support that understanding at the local level. We might have a broad understanding of skills gaps at the national level, but jobs, industry and change are in a place, so we need better local planning. Here, we have established local skills improvement plans, which are sub-national areas where we bring together employers and providers to look at the changing needs in their areas. One of the roles of the Unit for Future Skills is to better meet the information needs of those actors at that level.

Q63 The Chair: Thank you for that. We have heard quite a lot from employers about what you have talked about—green skills, engineering skills and digital skills. Advanced manufacturing also came up quite a lot. Does the Unit for Future Skills just look at the apprenticeship-level skills? We heard a lot about digital skills, AI, physics and a number of areas that perhaps have gaps not just at apprentice level but at higher levels.

Paul Kett: It is in no way constrained by level. It has focused predominantly on the areas where we hear most about the skills demand, which is at levels 3, 4 and 5. We certainly recognise more generally that there is growing demand for graduates, particularly in the sciences. We have seen a steady increase in the proportion of graduates having taken STEM degrees. It is certainly something for the Unit for Future Skills to consider, but it would be fair to say that we are hearing and seeing most evidence in the levels 3, 4 and 5 space.

The Chair: Are the Government actually doing anything about the higher-level qualifications in those areas?

Paul Kett: They certainly are. There is a range of things largely seeking to invest more money in high-cost subjects. In terms of the STEM skills in HE, the extra money that has gone into the strategic priorities grant is largely targeted at high-cost subjects and those STEM subjects. We would expect that to ensure that there is no barrier to putting greater provision into the higher education sector.

As I say, we have seen a steady increase in the proportion of courses at degree level in STEM-allied subjects, so we see that shifting, and there is a range of other initiatives that support that. One of our big concerns more generally is about ensuring that STEM subjects attract young people to want to study and pursue careers in them. A big focus of our careers investment is to ensure that STEM features strongly as a positive choice and to address some of the perceptions that people have had about STEM careers in the past. It is an ecosystem approach that is needed and which we are seeking to support.

Q64 Baroness Warwick of Undercliffe: I will ask for more detail now. You have identified where the gaps are and how to approach them. What are the Government undertaking to ensure that the provision of skills training, such as apprenticeships, matches those gaps, both in content and geographically? Are you also satisfied by the way the numbers have increased over the past five or six years?

Paul Kett: I mentioned local skills improvement plans being our main vehicle to show that provision in a place is better aligned to the needs of the economy and employers. We have rolled out the first eight of those LSIP areas, and every area of the country will be covered by next March. That tries to create a dynamic in which providers shift their provision so that it is better aligned to the needs of the economy in those areas. The early signs from those eight trailblazers of a shift of provision are positive. That is the sort of ecosystem that we are trying to get, because we do not think that someone sitting in Whitehall saying, “You need X more places in Y”, is the most effective way of making that system work.

On the responsiveness of different training provision, we have sought to scale up training provision in areas where we know there is demand. I mentioned higher education and using the strategic priorities grant to incentivise provision in STEM. In the college system, we use the funding system to push more money towards more valuable subjects, and that is predominantly STEM subjects. We have stood up new training interventions, which are shorter courses to support needs in what we call skills bootcamps. Those are particularly targeted at shortage subject areas. Digital skills is the biggest of those areas, but we also have them for construction and, in response to a very particular labour market need, HGV drivers. That is how we use those tools.

On apprenticeships specifically, I have two different points to make. First, an apprenticeship is a job first and training second. We try to promote and encourage apprenticeships in different sectors, but ultimately the requirement is that there is a job which the apprenticeship is then attached to. Having said that, we have seen steady growth in the number of apprenticeship starts in STEM-aligned subjects, which I definitely take as a positive. We have also seen improved gender representation in female starts on STEM-related apprenticeships.

Secondly, on apprenticeships and your point about responsiveness, we have found that the pace of technology change means that we need to ensure that apprenticeship standards are keeping pace with changing demands. That is particularly acute in STEM-related subjects. One recommendation from the Green Jobs Taskforce that I mentioned was to look at a different model for updating standards and to pilot that in green jobs areas. We have done that, and we have seen a quicker process to update the standards in relation to green apprenticeships. We are now looking at how we can use that more generally.

On your wider question of whether I am pleased by the growth in numbers, they are largely going in the right direction. In relation to digital skills and the higher technical skills at levels 4 and 5, we are still a long way away from the scale of the demand in the system now and in future. We are going in the right direction, but there is a lot more to do.

Q65 Baroness Warwick of Undercliffe: We seem to have struggled for the last 50 years with increasing the number of those undertaking skills training, not just for the last five. What efforts are the Government undertaking to match those skills with the needs of industry? What engagement do they have to understand the specific needs of industry? I would like to link that to the future skills agenda. How do the Government assess what skills will be most relevant in the medium-term and long-term future, not just now? How can they alert those providing training programmes to the need to respond in future?

Paul Kett: There are two mechanisms that we use to ensure that the employer-and-industry voice is front and centre in the skills system. The first is the design of programmes in the technical and vocational space in particular. Employers have a leading role in setting the specification requirements for our new technical qualifications. I have not touched on T-levels so far; employers are involved in designing those programmes. Each apprenticeship standard has a group of employers, representative of the industries that are relevant to that standard, that sits on the design group that oversees that standard, so we are baking in the employer role in that way. Similarly, the bootcamps are codesigned by training providers and employers as a key part of their design, so we are trying to embed that employer role in the way the system operates. That is a change in the last five years to put employers in the driving seat.

The second area relates to the demand signal. There are two ways in which we do that. I have already mentioned the local skills improvement plans, but a key thing I may not have mentioned is that they are led by an employer-representative body, so they have employers as the galvanising force behind them.

Secondly, we have a range of groups at the national level, broadly by sector, that are looking to bring industry leaders together in those areas. That is particularly pertinent where we have large SMEs. The Digital Skills Council is a good example of that; it is co-chaired by the DCMS Minister and the former CEO and chair of Cisco, Phil Smith, who bring together industry and training providers to help to shape the direction for the system. We have that in a range of other areas, as well as engagement with all the employer-related bodies that you might expect.

I think your follow-up question was on the medium to long term. I would be lying if I said that we had an easy answer to this; whenever anyone tries to predict the future, we tend to get it wrong. However, we are trying to ensure a much stronger engagement with those at the cutting edge of industry and practice, and indeed of higher education and research, involved in the system, so that we can see where those trends are coming. Advanced manufacturing, which was mentioned earlier, is a good example of that through the catapult and what we call the emerging skills programme, which looks ahead to where we would expect to see that growth coming. Also, through the Unit for Future Skills, we are using academic research to help us to understand those future trends.

Lastly, there are one or two areas where, unusually, we are helped by the nature of the economic restructuring that is coming, particularly in the green space, with net zero. We know that to hit net zero by 2050 a set of significant changes must happen that will demand particular types of skills. We are better able, thanks to lots of work with experts, particularly the Committee on Climate Change, on mapping out those demands. I hesitate to say that we have a perfect solution for that, but we are trying to make sure that we have a range of ways of bringing that insight into the system.

Q66 Viscount Hanworth: I wish to ask a question about visas for skilled workers and scientists from overseas, but first I have a prefatory question. We have been told that in recent times there has been an oversupply of doctoral graduates, and that this is a worldwide phenomenon. However, I have the impression that, in the UK, the expansion has been a result of overseas doctoral students and that the number of native doctoral students has not increased. There may therefore be a dearth of native doctoral students. Do any of you have statistics that illustrate my supposition, if I am correct?

Philippa Rouse: The Home Office does not collect those sorts of breakdowns. I wonder if the visa stats might provide that level of information.

Paul Kett: We will certainly know the numbers in the system. As for an extrapolation as to whether there is a lack of demand for those skills elsewhere in the system, I cannot think of an obvious dataset that provides that.

Viscount Hanworth: If it comes to mind, then we would be very grateful. If we impose impediments that prevent doctoral students from overseas from remaining in the country, we may well face a dearth of scientific talent. So my main question is: why is it so expensive for a skilled worker or scientist to acquire an entitlement to come to the UK or to remain in the UK after graduating from university? What, if anything, is the Home Office doing to address this?

Philippa Rouse: It is worth reflecting on how we set fees for our visas in the round. The core principle that underpins the fee structure is that the user should pay, whether that is the migrant themselves or the employer—but not the taxpayer. That is the framework within which we set our fees, very much with the aim of trying to set them at a level that allows us to attract skills and talent to the UK but does not put a burden on the taxpayer. I would be interested in your evidence. We think that the global talent visa in particular is broadly in line with international competitors, but it is difficult to compare different fees, because different visas around the world have different eligibility, different things that people are allowed to do on those visas and for how long, and so on.

In terms of how we set our fees, we publish the unit cost for each fee on GOV.UK. As I say, the fees themselves also incorporate the wider costs of running the borders and immigration system, because that is the framework that we are working within to make it fair to the taxpayer as well as to the user of the system.

Viscount Hanworth: A subsequent question will be on the anatomy of these fees and on international comparisons, so I pass to the next interrogator.

Q67 Lord Mitchell: I also address my question to Ms Rouse. This is clearly an international market for talent. All countries want the best people to work in their country. To get the best people, we need to create an environment that does not inhibit them and give them the wrong signals. First, has a breakdown been published of what contributes to the cost of processing these visas? Secondly, has there been a discussion of benchmarking visa costs to competitor countries? That is an important issue. Thirdly, and quite creatively, what about allowing the immigration health surcharge to be paid over a longer period of time to reduce the up-front costs? Those costs must be a major factor that persuade some people not to come to this country.

Philippa Rouse: To take your last point first, we have done quite a bit of research on price elasticity and we have not found evidence that these are levels have a big impact on people’s decisions to come to the UK; with the global talent visa, it is issues about the work, the research and the job opportunities in the UK. None the less, we publish the unit costs for processing the visas—I can make sure the committee gets that information—and, against that, what we actually charge for the visa fee, which in some instances is higher and in some instances lower. As I say, visa fees often outstrip the unit cost because we are looking to fund the whole of the borders and immigration system by the users rather than by the taxpayer. We are trying to work within that framework to make sure that the fees are fair for all—fair for the applicant, but not a burden for the UK public.

The immigration health surcharge is an annual charge of £624 per person per year that needs to be paid up front. It was a manifesto commitment in 2019 to raise it to a level that in effect means that foreign nationals in the UK are funding their use of the NHS. That said, and coming back to benchmarking, it is quite difficult to compare. If people had to get health insurance instead in the UK, never mind overseas, we think the IHS represents good value for money and gives the migrant access to all services under the NHS as if they were a UK resident.

As to whether we should perhaps allow people to pay in instalments over time, there are real challenges and complexities with that approach. It would mean that the NHS needed to keep on checking that the individual was eligible. It would also create challenges for the Home Office; if someone stopped paying, what would we do then? Would we cancel the individual’s visa? To keep it simple for everyone, including the migrant themselves, the immigration health surcharge is charged up front.

Lord Mitchell: Thank you. Do you recognise that it is an international market, and that to get the best people to come to our country we must set up a system attractive enough for them to come here as opposed to Singapore? We live in a competitive world.

Philippa Rouse: That is partly why we have worked with the sector so closely over the last three or four years, particularly on the global talent visa, to make sure that it is broad and flexible, such that a range of people working in science and tech can access it and the broad and generous entitlements that come with it. We are very much looking at the whole product and what it looks like in attracting people to the UK. The visa fee is one part of it.

We have published some research on the global talent route, which I can send to the committee. It shows the hierarchy and the different things that people who have come through the visa prize. Fees and process were relatively low down their priorities. It was about the roles, the opportunities in the UK and the like. I can share that research with you if it would be helpful.

Viscount Hanworth: However, is it not the case that our visas are much more expensive than those of our competitors?

Philippa Rouse: I am not sure that is the case, but if, as part of your work, you have unearthed some evidence, we are happy to look at it. It is quite difficult to compare like for like. Our visa fee is broadly comparative with that of other countries around the world, particularly given the generosity of the visa. Healthcare costs are difficult to compare. The cost of private health insurance as opposed to access to the NHS makes a like-for-like comparison difficult.

Viscount Hanworth: Those costs also fall heavily on the dependants of an overseas worker.

Philippa Rouse: Indeed. Everyone who comes to the UK on our visa contributes to the NHS through the IHS.

Lord Krebs: We have a briefing from the Royal Society that quotes the cost to an individual and sponsor in the UK for a skilled worker permit tier 2 as £8,490? The average cost of leading science nations’ is £1,360, a difference of 540%. Do you recognise those figures, or do you dispute them?

Philippa Rouse: It depends whether the cost of health insurance is included in that visa fee. I recognise the UK figure, which includes the immigration health surcharge to fund the NHS and, through the skilled worker visa, the immigration skills charge that supports a lot of the work that Paul talked about earlier. It depends whether we are comparing like for like. I would be surprised if those international figures included the cost of healthcare in the US or Australia.

Lord Krebs: Maybe you could check and let us know.

Philippa Rouse: Yes, of course.

Q68 Lord Krebs: I will move on to a question, directed to Isabel, about Horizon Europe and Plan B. As you know, those of us in the scientific research community in academia think that one of the biggest disasters in living memory is probably the failure to associate with Horizon Europe. It is certainly an impediment to any ambition to become a science superpower. Can you update us on what is happening with our attempts to associate with Horizon Europe and, importantly, with Plan B? Can you give us some further detail? A rumour circulating is that Plan B may be heading for cuts in the attempt by the Chancellor of the Exchequer and the Prime Minister to balance the books. Can you confirm whether this rumour is false, and tell us what is happening with Plan B generally?

Isabel Allgeyer: Certainly, and thank you for the opportunity to give evidence. First, the Government’s preference remains to associate with Horizon Europe. That has not changed, and we are doing everything in our power to make that happen. Unfortunately, there have been delays from the EU, as you will know.

You will also be aware that over the summer we entered a formal consultation process with the EU under the EU-UK Trade and Cooperation Agreement. Unfortunately, that process has come to an end without the Commission granting our request to formalise the association that was agreed at the end of 2020 as part of the wider trade and co-operation agreement. That is where we are, but we are still pursuing association. The Government are currently reviewing and considering the next steps to take.

You asked about Plan B. We recognise that the ongoing delays are damaging to the sector. We already have the Horizon guarantee in place, meaning that researchers who successfully applied to Horizon Europe can get their funding, even in this current period of uncertainty. At the last count, at the end of September UKRI had granted about £420 million in grant letters under the guarantee to grant recipients. That is already in place.

We are also developing what you referred to as Plan B—alternative measures. In the summer, we published a comprehensive document setting out our immediate plans. First, there is a combination of immediate steps to provide funding and stability to the sector in the immediate event that we cannot associate with Horizon Europe. This is set out in detail in the document that we published, which we can send to you if you do not have it. That document also outlines the longer-term programmes that we are putting in place in four areas: the flagship talent offer; an ambitious programme on global collaboration; more support for end-to-end innovation; and wider support for the R&D sector. Those longer-term programmes are being developed by engaging with the sector, and we hope to publish more detail soon. In the meantime, as I mentioned, the guarantee remains in place.

Lastly, you asked whether there is any truth to the rumours about cuts in the budget. All I can say here is that we have a multiyear settlement from the spending review in 2021. Clearly, reviews of wider government finances are ongoing, but if there were any changes to public finances, they would form part of the Autumn Statement.

Lord Krebs: I understand that if full association with Horizon does not work out, the Government will try to associate third-country status. What analysis have you done of the impact of that on collaborative research programmes? It is not just the money but the collaborations which are so important to the scientific community.

Isabel Allgeyer: That is correct. In the publication I mentioned earlier, we have committed to supporting until the end of March 2025 all eligible UK applicants who take part as a third-country participant. We will then look at what we will do after that and consult with the sector. That means that UK entities can access those global collaborations.

On assessing the impact, about two-thirds of the programme is open to third-country participants, if they bring their own funding. Our commitment includes that the UK Government will fund the UK entities to take part. We do not control the terms on which third-party participation happens; the European Commission decides. As I am sure you are aware, there is one clear distinction between what you can do as an associated country and what you can do as a third country: the ability to lead consortia. If we cannot associate or participate as third countries, we could not lead consortia, but we could take part in them.

Our assessment is that, even if we cannot fully associate, there will continue to be valuable opportunities through third-country participation under Horizon Europe because of the scale and the nature of what it offers.

We have shared interests in many of these. Areas that are prioritised under Horizon Europe include global health and climate change, which are also government priorities. Therefore, we have assessed that there is an interest for us in continuing to participate in those, hence the commitment to fund third-country participation.

Q69 Lord Krebs: Finally, some countries have programmes to encourage their top talent to return from abroad. Is there any consideration of a similar sort of scheme for the UK?

Isabel Allgeyer: It is our ambition, as set out in the people and culture strategy, to attract, retain and develop the very best talent, and to make sure that that is across all career stages and that they want to work in R&D in the UK. Clearly the wider R&D environment is very important here and, again, the people and culture strategy set out much of how we could make that attractive.

We constantly review our talent offer and the offer to our people, including consideration of what we can do to attract returners, which you mentioned. So, absolutely, we are thinking about how we can attract and support global mobility and make sure that we do not lose people from the UK permanently. We are also thinking about that as we develop the talent offer in the Plan B world that I referred to earlier.

Q70 Lord Wei: Paul, I come back to you. What are the Government currently doing to ensure that training and reskilling are available to those who need it? What are you most proud of doing that you think you should be doing more of, and in which areas might improvement be needed?

Paul Kett: First, we often see an awful lot of focus on the pipeline of skills and how can we improve the curriculum in schools and provision straight into university. One of the most important things to remember is that 80% of the workforce of 2030 is already in the workforce, so that pipeline is not going to make a difference to them. It is about how we provide more opportunities for people who perhaps do not have the high-level skills that we would want them to have and which we would see as essential to driving improved productivity and better jobs.

In that spirit—I have talked a lot about pipeline issues—increasingly shifting to a lifelong learning approach and ensuring that people have access to opportunities to reskill and retain is really important. One of those new initiatives is skills boot camps, which provide that short learning opportunity and are linked to the opportunity for a job or a better job than the one people are currently in. That is being scaled up this year. I am particularly proud of having visited some of those providers and seen the opportunities that they are providing people, and we continue to scale those up. That is a really good opportunity to give people particularly the digital skills that they would otherwise not gain.

Another opportunity, which is not widely known, is for those who do not have their first level 3 qualification. I encourage you to probe this. Anyone can now go to their local college and get a level 3 qualification in an area that is relevant to economic need. It will not surprise the committee to know that it is very relevant to STEM; core maths and things like that are available for free. We have seen greater demand for that than we predicted, but it is still far away from the number of people who could access that provision.

Finally, there is the lifelong loan entitlement. That is not in delivery yet, but the Government consulted on it earlier this year and will respond to the consultation soon. In broad terms, it is quite a technocratic reform of the student finance system, but it will provide people with the opportunity to access student finance in a different way in the future.

In time, it will drive greater provision of shorter courses—more modular approaches—which will support that sense of lifelong learning, which we are a long way from having at the moment and which perhaps are the most important way of reaching people who do not have those skills. We as a nation should be very proud that we are far more highly qualified than we used to be, as a result of the significant increase in the number of those who have degrees, and we have seen lots of people who previously got to level 3—to A-level equivalent—now going all the way to degrees, but, as the committee will be all too aware, we have not shifted further up the spectrum the people who perhaps got only to level 2. That is the big challenge and opportunity that we have.

Q71 Baroness Rock: Paul, I will stay with you for a moment. You just talked about the lifelong loan entitlement. Can you give us a little more flavour of the sorts of courses that you envisage being taken under that loan?

In the same vein, a lot of industry has commented that apprenticeships now seem quite old-fashioned. How are you looking at the current procedure for updating their range and subjects? Both those questions fall a little under “subjects”.

Isabel, I am not quite sure whether this question falls to you or to Paul, but it is about catapults. Are the Government considering giving the catapults a stronger role in apprenticeships and new science and technology skills?

Finally, in the last few weeks we have heard many witnesses recommend reforming the apprenticeship levy so that it can be used more flexibly, and I just wondered whether the department is moving towards that.

Paul Kett: I think we will both have an opinion.

Baroness Rock: I thought you would.

Paul Kett: It is an area of collaboration. First, on the lifelong loan entitlement, at its heart it will provide individuals with a loan entitlement equivalent to four years of post-18 education to use over their lifetime. It will be available in modules and in full courses—higher technical and degree-level, so levels 4 to 6—regardless of where it is provided; it might be in a college setting or in a university.

The details for how the modularisation and so on will work were consulted on earlier in the summer, so I am afraid I have to say “Watch this space” when it comes to the detail of the Government’s response. However, to bring the intent to life, we recognise that there is not enough good-quality levels 4 and 5 higher technical provision. So, in parallel, we have started to stimulate demand in that by working with providers and raising awareness of that provision. We used to have about 500,000 learners studying at levels 4 and 5, but that has collapsed to less than half of that in 10 years. We are trying to turn that around. We trail our G7 competitors particularly at levels 4 and 5 of the higher technical skills, so we are trying to stimulate those qualifications in digital skills, in advanced manufacturing and so on, such that, when the LLE starts to come in, more higher-quality provision is available for people to take.

Your second question was on apprenticeships. I would be very interested in reviewing some of the evidence on the perception of apprenticeships. We have been working really hard to try to change the perception that it is either someone covered in grease in a garage or, at best, someone in a lab coat. We want to show that apprenticeships work across almost all areas of the economy. Actually, some of the big growth areas we are seeing are in data science, cyber and so on. We are seeing from the statistics that apprenticeships are increasingly at higher levels, perhaps in contrast to some of that perception.

However, we are really concerned that that perception pervades. It is a source of great irritation to me when I see something promoting an apprenticeship and it still has the oil-covered mechanic-type image next to it, because that does nothing for the brand of apprenticeships.

We certainly see demand for apprenticeships growing. We have not talked about degree-level apprenticeships. However, interesting data from UCAS this summer shows the number of people registering an interest in degree- level apprenticeships on its system at an all-time high. Some degree apprenticeships are now more competitive than the most competitive degree courses, so we are shifting on that.

The related point was about the pace of apprenticeships. I mentioned that briefly in my comment on green jobs earlier. We recognise the need to ensure that we are more fleet of foot, and we have introduced a more risk-based approach to updating standards. It used to run on a renewal cycle. Instead, we are taking a more intelligence-led approach to saying, “This standard is more likely to be in need of updating”, and we do that more quickly. We are looking at approaches that, for want of a better expression, look at which bits of a whole set of apprenticeships need to be updated more quickly and whether we can do that across a range of apprenticeships rather than reviewing each in turn. We are trying to innovate the way we are doing that.

While I am on apprenticeships, I will answer the question about the levy and then come back to the other part of the question. First, it is not surprising that the committee has frustrations about the levy and a desire for greater flexibility. The Government’s position is that they are not reviewing the levy per se. However, they have been looking at how we ensure that we have good incentives for employer investments and skills in the round, and the levy is part of that.

We have tried to address some of the concerns of levy-paying employers about more flexible apprenticeships, which, for example, enable apprentices to move employers. We are looking at flexibilities in how some of the on-the-job training is done, particularly with regard to standards. We will continue to look at those flexible training models, because ultimately we want apprenticeships to work. They are a job first, as I said, so we need to work with that. Part of the frustration with the levy is that large employers are not able to spend what they perceive as all of their levy. The very design of the system is that is also funds SME apprenticeships to 95%. Part of the system is designed so that there is some subsidy. I tend to challenge employers on that but understand the frustrations on flexibility.

I mentioned catapults earlier. We do not have a specific plan to say that they should play X or Y greater role. I have been impressed by what we have seen on the advanced manufacturing side. The emerging skills programme, by working in partnership with the catapult there, has helped to design the opportunity to have scale and buy-in across that sector in order to have better quality provision. I am definitely interested in them playing a greater role in the ecosystem, and there is some learning to do in that space across the catapult network. If you have taken particular evidence on that, I would be interested to read it as part of your committee’s findings.

Baroness Rock: I have a quick question about those taking levels 4 and 5 and your comment about the number collapsing to half. This is a yes or no question. Is there a sense of urgency in the department to turn that around as quickly as possible?

Paul Kett: Yes.

Isabel Allgeyer: I do not have anything to add on catapults other than that it is an important area of collaboration.

Baroness Sheehan: On this specific point, I was struck at the outset when you said that an apprenticeship is primarily a job, and you have just repeated that. Who designs the requirements of that job? As you have alluded to, we have heard evidence from various people that it is quite prescriptive and does not always fit with the company’s needs.

Paul Kett: To contextualise that, in order to be on an apprenticeship, you need to be in a full-time role. The requirement of the apprenticeship is getting certain experience through that role, but also having a commitment to off-the-job training and assessments. Different apprenticeships have slightly different models. Maybe that off-the-job training can happen in blocks. I was at a college recently that, working with an engineering firm, took all its apprentice engineers to the engineering firm to work on a particular day of the week to flex the firm’s schedule. Those models change.

On your core question about who designs the requirements, I mentioned earlier that every apprenticeship has a standard that is designed by a panel of employers and set by the independent Institute for Apprenticeships and Technical Education. I recognise that often we aim for those involved in that standard to be a broad representation of that industry. The cyber standard, for example, has a range of big-name technology companies involved, such as GCHQ and some cyber specialist firms, which work on that standard. However, there is a whole range of cyber specialist firms, and not everyone will say that it does exactly what they need, so it will never be precise, but we have tried to put the employer in the driving seat as far as possible. I would encourage any employers to get involved in those standards groups, because then their voice will be involved in setting the standard.

Viscount Hanworth: I visited a college in Bridgwater that is associated with the Hinkley Point C power station. It is training a large number of apprentices, who will presumably be dispersed throughout the nuclear supply chain. How is this financed? Is it through the apprenticeship levy, or is there some other special arrangement, to your knowledge? This seems to be a model for other enterprises of a similar nature.

Paul Kett: First, I am delighted that you visited that college, which is excellent. It has a partnership with Hinkley, so it is predominantly levy-funded. As part of the arrangements for Hinkley, additional commitments were made by the consortium around it to support a greater number of apprentices than they needed in order to support the wider supply chain. That was part of the social investment made by those companies. Although a lot of it is through the apprenticeship levy, the “above and beyond” was the employers’ commitment to support the wider supply chain.

Viscount Hanworth: It is the apprenticeship levy but, nevertheless, one involving a consortium rather than an individual company.

Baroness Walmsley: My question is for Philippa Rouse. Before I ask it, can I ask for a point of clarification on the answer you gave Lord Mitchell earlier about the cost of visas? You suggested that visa applicants have to cover the cost of the whole system. Does that mean that a scientist coming to work in our universities or elsewhere has to make a contribution to the cost of the Manston processing centre and hotels for asylum applicants?

Philippa Rouse: Our fee structure aims to make the borders and immigration system as self-funding as possible, but it is not entirely self-funding. Our fees are set at a level to cover not just the cost of processing but an element of border control and enforcement. It does not cover the cost of the whole asylum system.

Baroness Walmsley: Could it make a contribution to our visas being more expensive than some of our competitors?

Philippa Rouse: This is to do with who pays for the system, the user or the taxpayer. At the heart of the system it is the user who pays for it, whether that be an employer or an applicant. That is the framework we are working within, and we try to set the fees at a fair level within that.

Q72 Baroness Walmsley: I see. It sounds a little like the situation in care homes.

Moving to my main question, we have heard several suggestions for additional visa programmes that could be implemented. For example, some countries have implemented flexible visas for remote workers; I do not know whether this is just since the pandemic or whether it was happening before, but they have done that. Beyond the global talent visa, does the Home Office have any plans to introduce additional visa schemes, or is there a danger that it would get too complicated?

Philippa Rouse: That would be my immediate reaction. For the STEM sector, we have the global talent visa for leaders or promising leaders in their field, we have the skilled worker visa for people who have a job with an employer, we have the graduate route, and we have the new high-potential individual route. We think that the right way forward is to keep the system simple and to have a core central offer, rather than a proliferation of lots more visa routes, which will add complexity.

On your specific question about digital native visas, I have a couple of points. Under our skilled worker route, for example, someone could spend up to 180 days a year out of the UK and still be eligible for settlement after five years under that visa route. If someone does not want to settle in the UK, we do not make them. They would be perfectly entitled to work in the UK for, say, just four months a year and elsewhere for the rest of the year. It just means that, after a period of time in the UK, they would need to apply for another worker visa rather than for settlement. We set criteria only for the length of time people need to be in the UK, should they ultimately want to settle, because we want people to be committed to the UK when they go on to settle.

In the global talent visa, we have a bit more flexibility on the 180 days a year needed in the UK. If you are out of the UK for longer, again to do with your role or your research, it does not count against you if you want to get settlement.

Baroness Walmsley: So it has more effect on what happens after the end of the visa for a remote worker than on what happens during the visa.

Philippa Rouse: Indeed, it does.

Q73 Baroness Sheehan: I will also direct my questions to Philippa Rouse and will ask for more detail on the global talent visa, particularly on its admissions criteria. We have heard that it is too difficult for organisations to become visa sponsors and that the recognised list of institutions and awards that can help individuals to qualify is too narrow and too biased towards western institutions. How are these criteria determined, and is there any prospect of changing them?

Philippa Rouse: There is quite a lot to unpack there. We have two separate routes. The global talent route is not a sponsored route. In the skilled worker route, an individual has to have a job with an employer that sponsors them with the Home Office. The global talent route is very much designed for global leaders in their field, either those who are already leaders or those who show exceptional promise.

There are two parts to the global talent visa. People who have been awarded prestigious prizes, such as the Nobel Prize for chemistry or the Fields Medal, can apply straight to the Home Office. For the others applying through the global talent route, it is a two-stage process. The individual would need to go to one of our six endorsing bodies for their endorsement, because those are much better judges of who are leaders in their field than the Home Office is. Then they can go on to apply for their visa.

There are a number of fast-track processes in the global talent route, such as whether an individual has a fellowship or a leading academic role—professor or associate professor—or are leading or part of a team working on a project that is publicly funded. Those criteria are all set with our endorsing bodies: the Royal Society, the British Academy, UKRI, the Royal Academy of Engineering, Tech Nation and the Arts Council.

The global talent visa is a very broad and flexible visa. People do not have to be tied to a particular job; they can study, work, bring dependants and settle after three years. It is designed deliberately to focus on the brightest and the best—the global leaders in their field. The criteria are set by the endorsing bodies rather than by the Home Office, and we keep things like lists of fellowships and lists of endorsed funders under regular review with the endorsing bodies. There is also a catch-all option, such that, if people do not fit within the criteria I have just set out, they can make the case to the endorsing body that they are a talented leader in their field. It is broad, flexible and very much designed with the societies and academies, rather than by the Home Office.

Baroness Sheehan: How often are the criteria reviewed? Are you aware of any shortcomings that you feel need to be addressed?

Philippa Rouse: We have continued to develop the global talent route over the past two or three years. For example, we have extended the number of prizes on the prestigious prizes list. With the endorsing bodies, we keep the lists that make people eligible for fast-track services under regular review and we are in constant conversation with them on this. We keep it under review but also try to make sure that we have the right balance in a set of criteria that gives us control in the system and does not undermine the wider skilled worker route.

Baroness Sheehan: Not only are UK visas more expensive than other countries’, but the process is very complicated. Is there any thought of implementing a concierge service, as other countries have?

Philippa Rouse: Again, I will read the evidence the committee produces with great interest. The research we have done with users of the global talent route in particular suggested that, actually, they do not find it particularly complicated. Clearly, we need to set the criteria, and we have done a huge amount in the last two or three years to resimplify. We have completely rewritten all the secondary legislation that underpins the whole process and we design all our forms with real users. We do everything we can to make it as simple as we can. For example, we make sure that we ask only the questions we need to and go no further, particularly for the global talent route, because people do not need to prove that they can speak English or that they have an employer. These are some fairly short steps.

We touched earlier on the wider question for His Majesty’s Government about how we get out around the world and attract those people to the UK. We talked to our colleagues in BEIS, DIT and elsewhere about some of their schemes and initiatives to attract people to the UK, given that the visa is just one part of the overall package that people consider when they want to come here.

Lord Krebs: How many global talent visas have been issued, per year, over the last three years?

Philippa Rouse: There have been 3,833 visas granted in the 12 months to June 2022.

Lord Krebs: That is 3,000-plus visas.

Philippa Rouse: Yes, almost 4,000 visas, up from 2,659 in the previous 12-month period. Pre-2019, this route was capped at 2,000, so we are seeing some strong growth in the usage of the route now that it is uncapped.

Lord Krebs: Is that number considered to be good or bad?

Philippa Rouse: The Home Office is neutral on that. It is supposed to be for the best talent from around the world to come to the UK, so it is about how the sector itself goes about attracting people to the UK. It is positive to see strong growth in the numbers of applications through this route, but it is uncapped. I do not think the Home Office has a particular number in mind in terms of what a good number looks like.

The Chair: There are a number of suggestions that, at two years, the post-study work visa is too short for someone to get well trained up in a technical job and that five years would be much better. Are there any plans to make such a change?

Philippa Rouse: There are no plans to extend the graduate route. People graduating from UK universities will get four months at the end of their study visa, and then they can apply under the graduate route to get two years if they have an undergraduate master’s, or three years with a PhD. This is designed to be very much a temporary route to give graduates time to get themselves a job in the UK at the skill level that we want to see everyone working at. The requirements of the route reflect the fact that it is only short term, so we do not ask people to prove that they can maintain themselves or demonstrate that they have a job. We think two years is sufficient to give people time to find a role that is equivalent to either the global talent visa or the skilled worker visa. Remember that the skilled worker visa starts at RQF 3, so if people are looking for technical roles at that mid-skill level, they can apply through the skilled worker route, either during or before the end of their graduate visa.

Q74 Lord Rees of Ludlow: I want to ask about precarity for researchers in universities, particularly at post-doc level. This issue is, of course, not directly a government responsibility but is the responsibility of universities and UKRI. Isabel, could you give a perspective on this and how your department sees it?

Isabel Allgeyer: We absolutely recognise that as an issue. It was recognised in the R&D people and culture strategy that we published last summer, which set out some of the steps that we would take to address it. There are a few things to pull out with regard to what is happening there.

UKRI, which has worked closely with us on all this, has started work on a new deal for postgraduate research students, which started with a consultation that has now closed. That is looking at four broad areas: funding and stipend levels; working conditions and rights; routes in, through and out of postgraduate study; and the diversification of access and models. The consultation has closed and UKRI is analysing the responses, which will inform next steps.

That is a key component of looking in particular at the postgraduate precarity that you referred to, but there is wider work ongoing. For example, we are doing a lot to have more flexible and open career paths in R&D, including supporting more flexible cross-sector training opportunities, encouraging more movement across academia, industry and the third sector so that you have a less linear career path, which can be the only one that is often perceived to be available to you.

We are supporting the voices of early-career researchers being heard more. UKRI has its Early Career Researcher Forum, and we provided some funding to the Royal Society to get the Young Academy set up, giving those people a greater voice in the policy debate.

We are doing a lot of work to get more leadership and development opportunities into the fellowships grant funding and so on that people receive to help with career progression. In terms of grants and fellowships, we are looking at what can be done to provide more stability so that people have more stable and less precarious career options. So there is quite a lot happening. It is an issue that we recognise and are working on.

Lord Rees of Ludlow: Your last point about providing more stable career options is the big issue, and is of course a matter for the universities and others. Can you say anything about that particular concern?

Isabel Allgeyer: In BEIS, we work with a number of funders and we fund UKRI and the national academies to deliver various schemes. We work with them on incorporating a lot of the principles of the people and culture strategy into the schemes that we fund through them and the things they offer. As part of that, we are always looking at what can be done to provide more stability and flexibility, including flexibility for people with less standard career paths, such as people on career breaks coming back. That is all part of our ongoing conversations.

Lord Rees of Ludlow: Do you have any thoughts on the PhD programme as normally carried out in universities? Should it be more flexible and include the development of other skills so as to make people better prepared to transfer out of academia into new careers?

Isabel Allgeyer: The new deal work that UKRI is leading is looking at that under the headings that I mentioned, including the routes in, through and out, as well as the diversification of different models of PhD study. That is all part of that work, and I would not want to pre-empt what it will conclude.

Lord Rees of Ludlow: I know that Lord Winston had some questions he wanted to ask on this point. Could you say a bit more about the issue of easier movement between academia and industry? Is it something that the Government can encourage in other ways?

Isabel Allgeyer: Yes. As I mentioned, we recognise that this is an issue and we are trying to do certain things about it, which I will come on to, but obviously it is not an area that the Government themselves can control. There is also a cultural question as to what people perceive to be of value.

We have a number of initiatives, again linked to the people and culture strategy. For example, UKRI and others have been encouraging greater use of a narrative style of CV, such as the résumé for research and innovation, to get people away from looking only at the publication record and to facilitate a broader career path that might include academia, then industry, then back into academia, which is not that common at the moment.

Earlier, I referred to the cross-sectoral training programme. There are a number of things that we fund under various guises—for example, the Higher Education Innovation Funding incentivises universities to engage in work with business. The Academy of Medical Sciences’ FLIER programme looks at encouraging collaboration between academia, industry and, in this instance, the NHS. The UKRI’s Future Leaders Fellowships brings together academia and industry, as do some other fellowships. So we fund quite a few schemes that are looking to break down those barriers.

There is also work under way on better supporting interdisciplinary approaches and helping researchers to acquire skills and knowledge beyond their own discipline and beyond just research. There is the knowledge exchange framework, where, for example, we incentivise people to get more entrepreneurial skills for researchers. There are quite a lot of initiatives to try to break down those boundaries, but it is an issue that will probably take a bit of time to shift—culturally, too, in terms of people’s career perceptions and ambitions.

Q75 Lord Rees of Ludlow: I have a couple of questions about the pre-doctoral stage and the employment status of these people. I understand that in Holland they are employees, which they are not in an English university. What do you think about that? Also, on the balance between overseas and home graduate students, the number of graduate students has gone up a lot, but that is more an increase in overseas students than in home students. Can you comment on that?

Isabel Allgeyer: Regarding their employee status, I again refer to the new deal work that UKRI is doing, which includes a section on working conditions and rights. Those issues are being examined there in the round. I do not have the numbers in front of me that would substantiate whether there are more overseas students or more domestic students going into postgraduate research, but we can take that away. If we have those numbers, we will share them.

The Chair: Do you think that the way the research excellence framework works dissuades people from having careers that move between academia and industry, and dissuades universities from taking people who have had industrial careers?

Isabel Allgeyer: The people and culture strategy identified that we must work with the research excellence framework, as it ensures that we do not have any undue barriers in that regard. The latest round has already made some changes, and more work is under way. The issues that we have identified in the people and culture strategy affect the entire R&D system, in many cases. The way we work is in ensuring that the various sub-strands, as we implement them, work alongside one another, and that we do not hamper progress in one area versus another.

Q76 Lord Holmes of Richmond: Thank you to the witnesses for taking the time to be with us this morning. What mechanisms currently exist to allow departments to co-ordinate on skills, for example, via ensuring that the training fits with the needs identified by BEIS and the Home Office, adapting visa policy to fit with needs for scientists and other high-skilled individuals identified elsewhere? What can be done to improve this?

Paul Kett: There are lots of different mechanisms for that co-ordination to happen within government. I will start from the strategic level and then give an example of more specific approaches.

First, BEIS and Home Office colleagues are an important part of this, and DWP colleagues are crucial to this debate within government, as they oversee the labour market. Within government, I co-chair a labour market steering group, which looks at trends in the labour market and skills demands and skills responses, with my opposite number within the DWP. All the relevant government departments are represented on that group—BEIS, Home Office, Cabinet Office—and what we call sector-lead departments, such as DHSE in relation to their health workforce, Defra in relation to food and logistics, DfT and others. That strategic group looks at our approach and the overall trends in the round. It has been working to ensure that the Unit for Future Skills referred to earlier, although I house that within government, within the Department for Education, works across government, bringing the datasets together in support of our work.

At the beginning I referred to how we have identified the priority sector areas. For each of those, we have leads within the departments, and governance which feeds into that group. They focus on the responders that are needed, either acute or short term.

I gave the example of HGVs earlier. Just over a year ago—I am losing track of time—we knew that we had a particular challenge in the HGV market. DfT looked at issues of pay and conditions in the industry and how we could improve them. The Home Office looked at visa flexibilities. DfE looked at putting on new skills provisions. I mentioned the bootcamps earlier. We scaled those up and provided 5,000 training places. DWP then ensured that, through the jobcentre process, jobseekers with appropriate backgrounds and interests would be referred to those programmes. We have that join-up from the strategic to the operational.

Looking at sectors where the challenge is more medium term, for some of the green skills that we have talked about, we must ensure that we have people with the retrofit skills at the point where we need them. Retrofitting buildings alone would require over 200,000 extra full-time workers in that sector from 2030 through to 2050. Therefore, how do we shift provision, raise awareness of those future careers, and ensure that from both a pipeline and a retraining perspective we are reaching the right people? We have those mechanisms to bring that together. Hopefully, the general and the specific help to bring that to life.

Isabel Allgeyer: I echo that. Our three departments work together very closely on all this. The visas discussed earlier, such as the global talent visa graduate route, were developed and came about through the conversations and collaboration between departments. There was a commitment in the innovation strategy that was published last summer, for example. Innovate UK is working across DfE and BEIS to explore how we can identify the skills needed to exploit fully emerging technologies and then feed that back so that we can ensure that providers are developing the right training opportunities to facilitate that. There are various mechanisms by which we all work together.

Lord Holmes of Richmond: Philippa, do you have anything to add?

Philippa Rouse: Paul and Isabel have covered it. The Home Office are closely plugged in with our colleagues, and no policy is developed in isolation.

The Chair: So nothing can be improved.

Philippa Rouse: I focused on the here and now. Probably a subject for a separate session is our transformation plans for the visa system. Looking narrowly at visas, we are on the big journey, working with the tech sector, in going fully digital and delivering better customer service, as well as increasing security. We have made enormous strides over the past three or four years and have more to do. I am happy to share some of those plans. We are always up for working with the sector, listening and understanding what works well, as we do not want to lose that, as well as where we can make improvements.

Paul Kett: Reflecting on the questions and the evidence today, almost every problem that might present itself as a skills shortage problem will also have things about working conditions, pay, attractiveness of the sector and the role of industry. For me, most important is how we ensure that industry, education and training providers, and government, are working in partnership, nationally and locally. We have lots of examples of where it works well, but they are too much the exception rather than the rule. That is the challenge for us.

One thing we have not talked about today but briefly touched on in our written evidence is institutes of technology, for example, which very explicitly bring together further education colleges, universities and employers to work on particular provision and skills needs, which are almost all STEM. Those models of collaboration, focusing in particular on a place, are some of the most important things we can collectively push to make a difference.

Q77 Lord Krebs: In this inquiry, we have heard a lot of negative comments about this situation for people and for skills in STEM. We have heard about big shortages in many areas and the decline in the number of apprentices and apprenticeships. We have heard of the shortage of teachers for STEM subjects at school and in FE colleges and about the headwinds that face academics in STEM, both in disassociating from Europe and in attracting global talent. Yet this morning you have been much more positive in your evidence, so I want to put each of you on the spot. On a scale of one to 10, where one is that the situation is dreadful and 10 that the situation is hunky-dory, where do you think we are?

Paul Kett: I always hate a one-to-10 question, but all the indicators show that we are attracting more people to choosing STEM-allied subjects. We see that trend shifting. However, some of the challenge is accelerating that at the pace that we are seeing the economy needs. You touched on the single biggest challenge, which is whether we have the great teachers in the school or college system who can train the next generation.

In the FE college system, one challenge is that someone who might teach electrical engineering can earn multiples of the salary they would get teaching in a college in industry. The public sector will never pay enough to close that gap, so we need different models there. It is going in the right direction, but it needs to accelerate radically. So I will say seven, if you want a number from me.

Isabel Allgeyer: A lot of what I talked about was about the issues we identified in the people and culture strategy. I have set out some of the work that is under way to address those. We as government definitely do not think that, if we ticked all those off, all the issues would be magically fixed. A lot of them are more difficult cultural and underlying things that are not all necessarily in the control of government. There is no single lever that we can pull to do that. However, we are trying to shift the dial on what we can control. We also have a ministerial co-ordination group, which sits under the people and culture strategy, to implement that. It brings the sector on board and has sub-groups.

We recognise, and the strategy recognised, that this not something on which the Government can shift the dial themselves. A wider effort needs to get under way. We are making good progress, but it is not the case that, if we finish everything that I have outlined that we are doing, we will fix all the problems. I am probably in a similar space in terms of a number; I would say six or seven. We have good progress and are on the way, but we have probably not cracked it entirely yet.

Philippa Rouse: As my colleagues have said, we are part way through a big period of transformation. We have made significant strides, but there is more to do. From a Home Office perspective, we are trying to make sure that we have balanced some quite different asks and requirements. Our overall goal is to design an immigration system that supports the UK and helps it to get the skills and talent it needs and to deliver on commitments made to the public on control.

There will inevitably always be an element of process on visas, but we have made it faster and slicker, and we can see a way through to making it even faster and slicker—the best in the world. On the basis that we are half way or two-thirds of the way through a big change programme, I would also give it a seven.

Lord Krebs: In final exams, that it is a first.

Viscount Hanworth: Isabel, you told us that we still have the possibility of third-party participation in Horizon projects. You may not be able to answer this question, but what proportion of the Horizon projects in which we have participated have we been the principal investigators or initiators? If it is the vast majority, then this third-party status will not be very significant.

Isabel Allgeyer: I do not have those statistics available now. Do you mean how many we have led particularly in consortia in the collaborative programme?

Viscount Hanworth: Exactly.

Isabel Allgeyer: We can see what we have on that. I do not know if that data is available, but we can have a look.

Viscount Hanworth: My supposition is that we had a disproportionate number of principal investigators.

The Chair: If the data exist, it would be interesting to see them. Thank you so much to our three witnesses for staying so long and answering everybody’s questions. Philippa and Isabel kindly offered to send us further data where it exists, and we appreciate that.