Memorandum submitted by the Association
of Accounting Technicians (AAT)
SUMMARY
1. The Association of Accounting Technicians
is pleased to have the opportunity to give evidence to this inquiry.
As a large specialist membership and awarding body we bring a
particular perspective to the debate around post-16 skills training.
2. We have set out our evidence under the
headings used in the call for evidence. The key messages that
we want to put before the Committee are:
— Post-16 skills policy must be inclusive
of all age groups.
— The most important measurement of
success for skills strategy should not be a qualification numbers
game, but the impact on individual, organisational and national
productivity.
— Sector Skills Councils do not adequately
represent cross-sectoral skills such as accountancy.
— Progression to higher-level skills
must be given equal priority and will be at risk if colleges are
not supported to develop the culture and commercial skills to
market fee-based Level 4 provision.
— Bureaucracy should be minimised to
allow strong partnerships between employers, providers and awarding
bodies as the most effective way of ensuring the relevance of
provision.
— The skills based element of apprenticeships
should be covered by any relevant competence based qualification,
not just an NVQ.
— The QCF is not the best way to rationalise
qualifications. A genuine demand led market would ensure that
only robust, relevant qualifications flourish.
ABOUT THE
AAT
3. The AAT (Association of Accounting Technicians)
is the only UK-based professional body dedicated to the education,
training, development and support of accounting technicians. The
AAT's qualification and membership develop relevant and practical
accounting and finance skills for life. The AAT has a total membership
of over 110,000, including student, full and fellow members.
4. The AAT provides an innovative competence-based
accounting qualification based on national occupational standards
for accounting. The qualification has been designed to improve
the employability of AAT members and to support the efforts of
employers to raise the standards of performance in the workplace.
5. There are two pathways to the AAT Accounting
Qualification: the NVQ/SVQ pathway and the Diploma pathway. Both
lead to the same outcome: competent accounting technicians. The
difference lies largely in the assessment methodology as the NVQ/SVQ
pathway is most suitable for students working in accountancy who
can produce work place evidence and the Diploma pathway is more
suitable for those who, for various reasons, are not able to produce
work place evidence. Both pathways test competence. The Diploma
pathway includes a new unit on professional ethics.
6. Both qualification pathways are organised
into three levels of competence up to Level 4. The qualification
offers total flexibility and choice. The three levels of the qualification
(for both pathways) are externally accredited by the UK regulatory
agencies: the Qualifications and Curriculum Authority (QCA) and
the Scottish Qualifications Authority (SQA). The AAT will be awarding
its 250,000th NVQ/SVQ in spring 2007.
7. The AAT is also supporting the Government's
drive to widen the choice and take-up of vocational qualifications
in the 14-16 curriculum with "AAT in Schools". In this
initiative, the AAT facilitates partnerships between centres already
offering the AAT qualification to adults and schools wishing to
expand their package of options for 14-16-year-olds. For the first
time, this age group has access to a well-established progression
route leading all the way to the chartered accountancy qualifications.
CONTEXT
8. The AAT acknowledges the overall skills
shortages in the UK that are identified in the Leitch report.
In our own field there are some 500,000 people undertaking accounting
technician roles of whom less than 30% have advanced technical
qualifications. In terms of demographics the AAT is concerned
that Government policy and funding remains focused on the younger
age groups. The AAT's qualification for example has proved very
popular with mature people seeking an opportunity for retraining
or when returning to the workplace after a period of absence.
With the increasing need for us all to work to a greater age and
the requirement for all ages to contribute to the economy, it
is vital that the needs of all generations to acquire skills are
addressed.
9. The AAT believes that the measures currently
used to judge the success of skills strategy tend to be too orientated
towards a qualifications numbers game. It is our view that to
really understand whether the strategy is working; on an individual
level, organisations need to have effective performance management
systems that can measure how the acquisition of skills impacts
on performance; on an organisational level and across the economy,
it is important to be able to measure how the acquisition of skills
impacts on productivity and economic performance.
NATIONAL POLICY/ISSUES
10. The Leitch report has already suggested
that there needs to be a shift of emphasis over time towards more
people gaining qualifications at Levels 3 and 4. The AAT supports
this proposition. It is to be hoped that the ongoing developments
in the 14-19 curriculum and targeted improvement in the schools
system can bring us to a position where there is no longer a need
for so much resource to be devoted to gaining basic skills post-school,
thus allowing the necessary resources to be allocated to support
this shift.
11. The 50% into HE target needs to be clarified
in terms of the wider skills agenda. Currently there is confusion
about whether the target refers to the attainment of qualifications
at Level 4, however and wherever studied, or to what is traditionally
understood as attendance and study at a University or equivalent
HE institution. The AAT believes that what is most important is
that people of all ages are gaining qualifications that are fit
for purpose and can impact on performance, individually, organisationally
and nationally. Crude targets of HE participation, in our view,
do not help that goal. In our case we actively encourage young
people to consider undertaking our qualification through to Level
4 while working, as an alternative to University.
12. The Leitch report places great emphasis
on the link between funding and the responsiveness of the system.
The AAT understands the rationale behind his proposal that all
funding should be demand led through Train to Gain and SSC control
of qualifications. We still do not believe however that the gaps
in the SSC system have been recognised. Accountancy is one significant
example of an area of employment that is not represented within
a SSC. There are an estimated one million accounting jobs across
the economy in large and small organisations, public and private,
in all sectors of the economy. Any funding system must be flexible
enough to ensure that the need for cross-sectoral skills such
as this is addressed.
13. The AAT agrees that the balance of funding
particularly for higher-level qualifications should shift towards
the learner and employer. Experience suggests however that there
is a risk to continuity in any dependence on financial contributions
from employers. The reality is that in any downturn in company
performance training budgets are the first to be cut. Thus learners
are liable to bear the brunt of the costs.
14. The AAT is also concerned that while
significant resources are to be devoted to support the demand
side of the equation through Train to Gain, little thought and
no resources have been given to supporting the supply side, the
Further Education Colleges in meeting the challenges of demand-led
funding. We already have some evidence that colleges are focusing
on directly funded provision and ceasing to offer courses that
they have to "sell" at full cost in order to maintain.
15. In accountancy, students are able to
work through to the highest technician qualification at Level
4 and then progress on to chartered status. We believe that this
route, as an alternative to university, is very valuable in opening
up opportunities for progression to a much more diverse range
of people. We fear that this may be under threat unless FE colleges
are supported and encouraged to develop the culture and necessary
commercial skills to compete in this environment.
SUPPLY SIDE
16. The AAT welcomes any reform of the supply-side
system that reduces bureaucracy. It has been our experience that
the LSC has been inconsistent in the application of principle
and lacks customer focus.
17. If the system is to work effectively
in becoming more responsive to meet the skills needed in our economy
it requires an innovative and responsive supply side that is not
just a passive provider—a supply side that has the freedom
and flexibility to work with employers to innovate in the design
and delivery of courses and qualifications. Unfortunately the
dead hand of bureaucracy all too often stifles innovation because
it does not fit a predetermined template. The lighter touch that
is envisaged in the Leitch report is to be welcomed but the AAT
believes that there will still be too much bureaucracy that will
act as a barrier to the development of effective direct relationships
between awarding bodies, providers and employers.
DEMAND SIDE
18. A truly "demand led" system
would look much less regulated, effectively becoming a free market
in qualifications and providers. Popular courses/qualifications
and high quality providers would survive and flourish. Unpopular
courses and poor providers would ultimately go to the wall. Unfortunately,
as is implied by the question on the desirability of employer
incentives below, the growing skills gap with our competitors
is not providing sufficient impetus to drive demand. When global
employers have the option to move jobs to other parts of the world
where skills are available and at lower cost there will be a requirement
for a level of centralised co-ordination of demand and supply.
19. The AAT's experience is that the SSCs
have not provided an effective route for employers to shape skills
training. In part this is a function of the concern raised above
that the nature of SSCs does not easily address cross-sectoral
disciplines such as accounting. But it is also our experience,
as a professional body as well as an awarding body, that having
a direct relationship with employers is most effective in ensuring
the relevance of our qualifications. The development of the Diploma
pathway to run in parallel with the NVQ was an example of an active
and responsive partnership between the AAT as an awarding body
with providers on the supply side and employers and learners on
the demand side.
20. The AAT's view is that the most effective
way to incentivise employers is to be able to explicitly demonstrate
the benefits to the bottom line that a more skilled workforce
will bring. Unless they are convinced of that fundamental link
this country will never bridge the skills gap with our competitors.
Secondly it is important that they are involved in an active partnership
in the design and delivery of qualifications that are relevant
to their workplace.
21. The reality of the learner experience
in seeking skills training is that what is available is provider
led and funding driven. The AAT provides comprehensive information
in the form of written and online materials to assist potential
students in making their study choices. As a membership organisation
the AAT has a very direct relationship with its student members
offering them guidance and support.
APPRENTICESHIPS
22. Accounting apprenticeships are linked
to the AAT's NVQ qualification. They are potentially an excellent
way to combine the acquisition of skills and knowledge with relevant
employment. 2,089 people completed Apprenticeships in accounting
in 2006 (an increase of 34% over the previous year). Accounting
is one of the success stories of apprenticeships, with a very
good take up rate.
23. The main improvement that the AAT would
recommend would be greater flexibility around the skills element
currently demonstrated by the Apprenticeship framework's requirement
for an NVQ. We would argue that knowledge and skills can be demonstrated
through the completion of any relevant NVQ or other competence
based qualification.
24. The AAT believes that there is currently
not a sufficiently joined up system to deliver apprenticeships
and that coverage is very uneven both in terms of sectors and
locality. In order to achieve sensible growth, priority needs
to be given to a better system of brokerage that can plan and
identify apprenticeship opportunities in a more systematic way.
QUALIFICATIONS
25. The AAT understands the concerns again
highlighted by the Leitch review, that there may be too much complexity
in the system and too many qualifications. We believe, that in
addressing this issue the priority should be to recognise and
draw from high quality qualifications that are valued by employers
and learners alike.
26. The AAT is not convinced that the QCF
is the right approach to rationalising qualifications. All our
experience points to employers continuing to rely on well-established
qualifications. We have no evidence that employers wish in the
future to rely on a wide variety of individual units, implemented
in different ways by different awarding bodies.
27. We believe that this is an area in which
a genuinely demand led market approach should be left to encourage
the development and success of qualifications that are understood
and valued by employers and learners while qualifications that
do match those criteria will naturally fail.
January 2007
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