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A strong skills base is an important element in a productive and sustainable economy and the delivery of better public services. Skills also contribute to social inclusion, because better skilled people are generally more able to fulfil their potential, earn more and use their skills for the benefit of their families and communities. The Learning and Skills Council's National Employer Skills Survey has, however, identified skills gaps in England costing an estimated £10 billion a year in lost revenue. Skills training is required both to fill skills gaps and to keep up with the standards in skills that our international competitors achieve.
The Department for Education and Skills (the Department) spends around £6.7 billion, through the Learning and Skills Council, on employment-related education and skills training in England. The priority for government funding is training up to level 2 (equivalent of five GCSEs grades A*-C), which is designed to improve employability and to provide a basis from which people can progress to higher level training. Employers are expected to pay much of the cost of training above level 2, which has a greater impact on productivity. Collectively employers spend more than £23 billion, including the costs of training and employees' time. However as recently as 2005, the National Employer Skills Survey showed that more than one third of employers provided no training at all for their staff.
Recent reports of this Committee have recommended that public funders and providers of training work more effectively with employers on employment training:
- local Learning and Skills Councils should support training providers who have a good track record of convincing employers of the business benefits of training their staff;[1]
- further education colleges should analyse their local industries, talk to local businesses about their skills' needs and plans, and seek independent feedback from them about the quality of training the college provides;[2] and
- Ufi and the learndirect service should substantially increase direct work with employers within the next two years.[3]
The Comptroller and Auditor General's Report, Employers' perspectives in improving skills for employment,[4] drew directly on employers' views on how they obtain advice on which training to use; what training best meets business needs; how they can be encouraged to support employees in training; and how employers want to influence the development of training. The Committee examined the Department and the Learning and Skills Council on the issues raised in the Comptroller and Auditor General's Report.
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