Appendix: Government response
Part 1: INTRODUCTION AND RESPONSE TO THE SUMMARY
1. The Government welcomes the Select Committee's
report into the implementation of skills and training policies
following the Leitch Review of Skills in December 2006. We are
pleased that the Committee shares our view that the skills agenda
is critical to the success of UK companies and the UK economy
and makes a difference to the lives of millions of people.
2. We agree that the current economic climate provides
a changing context for our skills strategies and policies and
that we should constantly be finding ways to improve the system
and the way it works. Skills policy is undoubtedly one of the
key factors that will determine how resilient the country is and
how quickly we can respond to opportunities in the future. But
it is important to make clear that improving the system—transforming
FE and HE—is not solely in response to difficult times.
Our plans and strategies go beyond that. They will prepare individuals
and businesses to take advantage of opportunities as they arise
in an upturn, and also build the framework we need to make a reality
of our ambition to be world class in skills.
3. In light of this, we have considered the Committee's
recommendations carefully and set out our response to each in
Part 2. We also set out a brief response to the issues highlighted
in the Summary in this Part 1.
4. We are pleased that the Committee welcomes so
many of our recent policies such as our reform of the Qualifications
and Credit Framework and our focus on strategic skills and a new
industrial activism.
5. We are also pleased that we are able to accept
many of the Committee's recommendations. Indeed, in many cases
we were reassured to find the Committee recommending activities
that are already in hand. This is particularly true in the case
of the central issue of "re-skilling" and "up-skilling".
Of course we believe that we must do both of these things. Indeed,
we have already made considerable resources available for re-skilling
by relaxing the funding rules for Train to Gain to support SMEs
and those made redundant during the current downturn.
6. However, we are also mindful of the need to ensure
that the UK is well-positioned to compete in growing industries
as conditions improve in the future. One recommendation we strongly
disagree with is the suggestion that we should now resile from
the ambition of a world class skills base. We do accept that we
should look at a wider suite of measures for determining what
counts as world class, and will do so with the help of the UK
Commission for Employment and Skills. But at a time of economic
downturn it is more important than ever that we raise skill levels
to ensure we are stronger and more competitive in the upturn.
Given a finite budget, the exact balance between using resources
to drive re-skilling and up-skilling will always be a difficult
judgement call and we will continue to review how we can best
deliver against both the UK's longer and shorter term needs.
7. The Committee was much swayed by calls from practitioners
for simplification. We also recognise that this is a major issue
and would remind the Committee that this was our first request
to the UKCES when it was formed. It is into the second stage of
its work, having published its initial findings and recommendations
last year. UKCES is continuing this process addressing the complexities
in the system and will report in December 2009.
8. The transition from the LSC to the Skills Funding
Agency (SFA) is part of this simplification process. The SFA will
simplify the system through a streamlined and integrated service
for employers and learners. The National Apprenticeships Service,
Train to Gain, the Adult Advancement and Careers Service, and
services for learners delivered through FE will all sit under
the SFA umbrella. But we do agree that we need to create clarity
about the roles of the many different organisations in the new
funding landscape as soon as possible. We regularly engage with
national and regional partners both so they can influence the
future shape of the SFA and to keep them informed of developments.
We also publish a monthly bulletin to update our stakeholders
on progress and plan to hold a series of events around the country
over the next few months for stakeholders and LSC staff to ensure
they have the chance to influence the design and operation of
the agency.
9. The Committee recommends sharpening Higher Education
Funding Council for England's (HEFCE) regional focus to improve
HE/FE collaboration. This too is work in progress. The Funding
Council has strengthened the role of its regional consultants
to reflect the emerging regional agenda. In our recent grant letter
we asked HEFCE to support the HE sector to work with national,
regional and local networks to help deal with current economic
circumstances. We will continue to explore with HEFCE how it can
support the regional role of universities.
10. We also agree with the Committee that trade unions
play a vital role in workplace learning and we will continue to
support them. We have increased the funding available for union
learning from £2 million in 1998 to £21 million in 2009—so
that by 2010 there will be 22,000 reps helping more than 250,000
workers into learning each year. We also note the Committee's
comments that the new adult advancement and careers service needs
to be high quality if it is to be a success. Ten prototypes for
the new service are underway, testing ways in which advice on
careers and skills can be integrated with other sources of advice
on tackling barriers to learning, and these prototypes will inform
the final design of the service. The Prototypes are examining
a broad range of approaches through a range of delivery channels
including telephone, face to face and online, working with partners
including local authorities, housing associations and the voluntary
sector. It is, of course, our intention that it should be a universal
service, able to serve diverse target markets including skilled
people with professional and managerial experience that need advice
to change career.
11. Our main point of disagreement with the Committee
is its recommendation for radical reform of the Train to Gain
programme. Recent evaluations have shown that Train to Gain is
an extremely successful programme and that it has a powerful beneficial
impact on both learners and employers. Employer satisfaction
with the programme is high with 93% of those who have accessed
the programme saying they have been satisfied with the training
and training provider, 65% saying it improved the long term competitive
advantage of their business and 77% saying they would use the
service again in the future. Learners also value the service highly,
with overall satisfaction higher than 90%. And they are benefitting
from the training. Approximately a quarter of learners, from the
longitudinal group, received a financial award (pay rise, promotion
or bonus) from their employers. In wave 3 of the evaluation approximately
45% of new learners reported receiving better pay and approximately
35% reported being promoted as a result of their participation
in training.
12. We have also announced a series of vital and
timely new flexibilities to the programme that are already benefitting
employers and employees. These recent flexibilities have been
widely supported by employers and trade unions as well as by colleges
and training providers. We do recognise that we can further improve
the service and are working to do this but see this as incremental
improvement rather than radical reform.
13. Much progress has been made since the Committee
heard evidence in October 2008. We welcome this opportunity to
respond in turn to each of the recommendations.
Part 2: NOTES ON CONCLUSIONS AND RECOMMENDATIONS
THE LEITCH AGENDA—PRINCIPLES
It may well be the case that increased skills
lead to an increase in national prosperity but there is a surprising
lack of evidence to support the conclusion. There is clearly a
need for more research to establish whether or not there is a
causal relationship. This would help to justify the commitment
of considerable public expenditure on training and skills development.
Nevertheless, even without this evidence, we note that no voices
have been raised to question the principle that it is right to
aim towards a more highly skilled workforce, both in terms of
individual benefit and for the wider good (paragraph 23).
14. We were surprised by this recommendation as we
believe there is substantial evidence that increased skills lead
to an increase in national prosperity. We know that skills are
just one driver of productivity, alongside investment, enterprise,
innovation and competition. These factors have a complex relationship
and it is difficult to isolate the contribution each makes. However
we know that skills is a key lever, and estimates are that skills
can account for up to a fifth of productivity differences with
key competitor nations including France and Germany. Skills impact
on productivity directly, by increasing human capital. But they
also have a spill over effect, by impacting on the productivity
of other workers and by encouraging greater investment and innovation.
The joint DfES/DWP paper a Shared Evidence Base The Role Of
Skills In The Labour Market concluded just that, stating that
there is a wealth of evidence to suggest that skills and qualifications
confer substantial advantage to individuals, the economy and society
through the improved chances they provide for employment.
15. At the individual level, research,
i.e. Jenkins et al (2007), The Returns
to Qualifications in England, Updating the Evidence Base on Level
2 and Level 3 Vocational Qualifications), clearly shows the
link between education and training and productivity. Those with
higher qualifications earn more on average than similar people
with lower level qualifications, reflecting their higher level
of productivity. Average wage returns to academic qualifications
are high and similar for men and women: 26-29% for first or foundation
degrees; 14% for 2 or more A-levels; and 9-11% for 5 or more GCSEs
A*-C. Young people under the age of 25 who attain an NVQ Level
2 earn wage returns of more than 20%. There is also evidence (De
Coulon and Vignoles 2008, An Analysis of the Benefit of NVQ2
Qualifications Acquired at Age 26-34) that attaining
an NVQ2 in adulthood leads to wage returns of around 20%. These
returns are even higher (33%) for lower ability individuals. Jenkins
et al also find that attaining a vocational qualification at level
2 or level 3 leads to a significantly higher probability of being
employed, again suggesting that these skills are valued in the
labour market.
16. We know that people holding qualifications are
much more likely to be in employment, and less likely to be unemployed,
than those with no qualifications. Those qualified to level 2
have an employment rate of 74% compared with 48% for those with
no qualifications. And research (Dearden et al 2004 An In-depth
Analysis of the Returns to National Qualifications Obtained at
Level 2) finds that the wage returns to vocational qualifications
are higher when delivered through the workplace.
17. Other research (McIntosh 2007, A Cost-Benefit
Analysis of Apprenticeships and Other Vocational Qualifications)
finds that Apprenticeships also raise significantly the productivity
of workers. A Level 3 Apprenticeship yields average wage returns
of 18% while the returns to a Level 2 Apprenticeship is 16%.
18. It has also been shown (Dearden et al 2005 The
Impact of Training on Productivity and Wages: Evidence from British
Panel Data) that skills contribute more to productivity
than can be measured by higher earnings. In a sample of British
industries, a one percentage point increase in training is associated
with an increase in value added per hour of about 0.6% and an
increase in hourly wages of about 0.3%.
19. As well as increased skills leading to an increase
in national prosperity, we also believe that increasing skills
levels has wider social benefits. In particular, that it drives
greater social mobility, ensuring individuals can get on because
of their talent and hard work, and not just because of their background.
Giving everyone in our society the opportunity to develop their
skills will help us tackle social exclusion and create a fairer
society in which everyone has the opportunity to realise their
full potential. By helping people improve their grasp of the basics,
we help them develop the platform of skills they need to find,
stay and progress in work. We help them to improve their earnings.
We help them to play an active role in their children's educational
development. And we help them to play an active role in their
community.
20. Although we will continue to keep abreast of
the latest research and developments in this area, and use this
as we develop policies and programmes, we do not intend to fund
new research to investigate the causal relationship.
We recommend that UKCES review the collection
of data on skills needs across sectors and regions and apportion
responsibility for ensuring that it is collated and made available
in a readily accessible format (paragraph 35).
21. We agree that we need good quality, reliable
and up to date data on skills needs and have already asked UKCES
to review how this information is collected and to ensure it is
available to those who need it.
Shared responsibility and responsiveness to demand
comprise a sound philosophy for the development of skills in the
UK workforce. The difficulties arise in translating them into
practical policies for implementation. To avoid "demand-led"
and "partnership" becoming meaningless jargon, these
difficulties have to be addressed (paragraph 36).
22. We recognise the challenges of developing these
important principles into practical policies. But we do not believe
that the term 'demand-led' has become meaningless jargon. To be
clear, demand-led means that the system should be responsive to
the needs of employers and of individuals, so we can be sure that
the people who need skills can ask for and access the training
they need.
23. For employers we are ensuring that training providers
are targeting and tailoring their offer to meet business needs.
Through Train to Gain we have put buying power and information
into employers' hands, giving them better access to a wider range
of opportunities for improving the skills of their employees and
the productivity of their business. We are customising the Train
to Gain offer further by agreeing Sector Compacts with employers
which addresses specific sector priorities.
24. For individuals, we are introducing a national
system of skills accounts. Pilots in the South East and East Midlands
in the current academic year, and trials across all regions in
2009-10, will lead to full rollout of accounts from 2010-11. Like
Train to Gain for employers, accounts will give adults the power
to choose the training they need, commissioning that training
direct from providers. Supporting their choices, adults will also
have access to the new adult advancement and careers service,
which will provide personalised information, advice and guidance
on careers and skills, as well as advice on tackling the barriers
that can prevent people from taking up learning, such as childcare,
understanding employment rights, personal finance skills, and
so on.
25. We also know we need to go beyond the purely
short-term, bottom up, approach of Train to Gain and widen what
we mean by demand led. We need through our strategic skills work
to produce a more sophisticated picture of demand, including medium
and long term demand. Over the coming weeks we will set our "skills
activism" approach which will enable us to take the initiative
in skills development to make sure we come out of recession in
a stronger position, ready to take advantage of opportunities.
26. To achieve this we need a collective idea of
our areas of competitive advantage, the priorities for greatest
growth potential within the economy. By identifying and agreeing
what they we can move forward. But we also need to be clear what
tools and levers we have to ensure UK businesses can maximise
opportunities as they arise, which might include for example identifying
emerging skills gaps or mismatches between supply and demand and
moving quickly to fill them; using government levers including
procurement and investment in a more deliberate way to create
confidence and generate investment; and taking action on the ground
through the SFA to meet the demand we identify.
LEITCH TARGETS
We believe that capturing the acquisition of employability
skills within Government targets and therefore attracting Government
funding for such training should be examined by UKCES as part
of its ongoing work on employability (paragraph 42).
27. We agree that capturing this is important. DIUS
will be taking forward the recommendations in the Commission's
first employability report, relating to the approaches to teaching
and the training of teachers, to improve learners' employability
skills. Phase two of the Commission's employability study is underway
and will look at issues related to funding and targets for employability
provision within colleges and other providers.
28. Delivering economically valuable skills was one
of the key themes of the Leitch report, and became one of the
main focuses of our skills strategy. Whilst aiming to meet our
current set of PSA targets, we are committed to ensuring that
the qualifications we deliver provide individuals with the skills
they need to gain employment and to progress once in work.
29. We are part-way through a massive programme of
vocational qualification reform. All SSCs have produced Sector
Qualification Strategies which set out the qualifications which
are valued by employers in their footprints. In future, the only
VQs which will be accredited and funded in England will be those
approved by SSCs. This will help to ensure that the quality, status
and economic value of vocational qualifications rises over time.
30. We are also accrediting employers' own training
in order to increase the number of learners with the high quality
learning and skills that employers need to maximise their productivity.
We want it to be easier for employers to attract, retain and develop
employees with the skills needed for business success. And recognition
of employer training will increase the opportunities and options
for employees to study for a recognised qualification.
We are concerned that the conflation of skills
and qualifications in the targets may lead Government to assume
that a qualifications strategy is an adequate substitute or proxy
for an overall skills strategy. This may drive up levels of attainment,
improve the UK's position in international league tables and contribute
towards improved economic performance but a real skills and training
strategy would focus more on skills utilisation by companies to
achieve high performance working practices and so raise productivity
(paragraph 50).
31. Our strategic aim is to ensure Britain is able
to compete in a global market place by increasing our productivity
through improving skills. In order to demonstrate our progress
towards this goal, we need to be able to measure it. We do not
yet have a way of measuring skills directly that would enable
us to compare our skill level with other nations. So we use qualifications
which offer a sound, quantifiable, and well-recognised proxy.
The evidence we have linking qualifications to higher wage returns
indicates that they are a reasonable proxy for skills.
32. But this does not mean we have a "qualifications
strategy" rather than a "skills strategy". Indeed
we are taking several steps to change the way that we accredit
and fund training. Accrediting employer training is one example,
so too is the process of delivering unitised modules of learning
through a reformed Qualifications and Credit Framework and Train
to Gain so that individuals can take modules rather than full
qualifications.
An important step which could be taken would be
to broaden the Leitch targets to include re-skilling. The current
focus both within the targets and in entitlements on funding for
a first level 2 qualification means that those who need to update
skills, either because they have been out of the labour market
for some time or because their job no longer exists, may not be
supported. This situation is set to become even more pressing
as the recession bites and redundancies force people to seek to
move to other sectors in which their current qualifications are
irrelevant. The Government has made some progress with its Sector
Compacts and assistance to SMEs, but these initiatives need to
be assessed and potentially broadened (paragraph 59).
We recommend that the Government examine and develop
ways to include the absolute number of qualifications gained rather
than "firstness" alone in the skills targets, to reflect
the importance of re-skilling. We also recommend that the Government
should set out broad milestones indicating its aspirations for
progress towards the 2020 targets in the light of the current
economic situation (paragraph 60).
33. We recognise the importance of re-skilling, particularly
for specific groups of people and particularly during the recession.
That is why considerable resource has been made available for
re-skilling by relaxing the funding rules for Train to Gain to
support SMEs and those newly made redundant; by enabling employers
through Sector Compacts to tailor Train to Gain to meet the needs
of their sector and employees; and by integrating the employment
and skills systems. In addition, the LSC investment strategy includes
provision for a significant amount of re-skilling activity and
for those seeking repeat qualifications.
34. In order to increase our competitiveness and
ensure we are ready to make the most of the upturn when it comes,
we must drive up our productivity by raising our skill levels.
We must not take our eyes of this goal. We direct resource particularly
towards Level 2 qualifications because this is often the basic
level of qualification needed in the workforce. The evidence supports
the view that government funding is best spent in this way, as
those who are already well qualified are more likely to be able
to attract investment from their employer, or to invest in themselves
to realise the returns.
35. Our aspirations for making progress towards the
2020 ambition remain unchanged.
GOVERNMENT IMPLEMENTATION
Given the importance of this area of policy to
the economy, it is important that the substantial sums of money
spent on skills programmes demonstrably add value, not just deadweight
cost. We await the Public Accounts Committee report on Skills
for Life with interest and support the need for research into
the effectiveness of DIUS programmes to improve skills levels
(paragraph 65).
In view of the large amount of money spent on
skills by the Government and the importance of the programme,
it is essential that there is a proper evaluation of the outcomes
of all aspects of Train to Gain. We recommend that the Government
report to us on an annual basis on the use of resources within
the skills agenda and on the evaluation of their effectiveness,
potentially involving the National Audit Office (paragraph 67).
36. We agree that high quality research into the
effectiveness of skills programmes is important. Our strategy
is firmly rooted in evidence leading to informed decisions about
where and how to invest government funds. It is precisely to maximise
additionality and avoid deadweight that we have focussed on supporting
people to achieve first full qualifications, rather than just
repeat training, because that is where the market failures lie.
And in rolling out the national Train to Gain programme, we have
successfully focussed on working with hard to reach employers
and have engaged with more than 70,000 to date (that is 74% of
total employer engagements against a target 51%. As we develop
and implement the skills strategy we are keen to ensure it achieves
the outcomes we expect and offers good value for money. Those
with higher qualifications earn more on average than similar people
with lower level qualifications, reflecting their higher level
of productivity, and as we have already outlined above the returns
to training in the workplace are significantly higher than in
colleges.
37. On Train to Gain specifically, the LSC and DIUS
are in the process of quality reviewing a third wave of evaluation
reports and are planning further evaluation activities and considering
future information needs. Alongside these evaluations, information
on Train to Gain starts and completions is published in quarterly
Statistical First Reviews. The last one was published on 18 December
2008: http://www.thedataservice.org.uk/statistics and the
next, entitled Post-16 Education & Skills: Learner Participation,
Outcomes and Level of Highest Qualification Held is due to
be published on 26 March.
38. To date we have undertaken a full employer and
learner evaluation of Train to Gain, the results of which were
published in May and have been followed by a second wave of learner
evaluation in October 2008 The results were very positive, with
78% of employers who had taken up training through the service
indicating that they would recommend it to other employers. Satisfaction
with the brokerage service is at 83%, and learner satisfaction
is also very high, with 77% satisfied or extremely satisfied with
the overall 'experience'. And as we have already outlined, it
is having a positive impact for individuals—approximately
a quarter of learners, from the longitudinal group, received a
financial award (pay rise, promotion or bonus) from their employers.
In wave 3 of the evaluation approximately 45% of new learners
reported receiving better pay and approximately 35% reported being
promoted as a result of their participation in training.
39. We are also rigorously evaluating the apprenticeships
programme. We already know it gives us excellent value for money,
as outlined in the 2007 McIntosh Research Report, A Cost Benefit
Analysis of Apprenticeships and Other Vocational Qualifications
and there are plans to bring that work up to date. The LSC also
has a comprehensive evaluation programme, including an evaluation
of the Vacancy Matching Service currently out to tender and an
evaluation of Adult Apprenticeships due to report in the summer.
We expect the LSC to report by the end of March on two key projects
identifying sectors for expansion of apprenticeships and the benefits
to the individual of completing an apprenticeship. This shows
SkillSmart retail, ConstructionSkills, SummitSkills and People
1st as significant growth areas for apprenticeships.
40. These are just two examples of the rigorous way
we test and evaluate our programmes. In addition, the UK Commission
for Employment and Skills will be publishing an annual "state
of the nations" report from this year and we publish an annual
Departmental Report. We do not, therefore, think there is a need
to report annually on the use of resources within the skills agenda
over and above what exists already.
41. We note the Committee was looking forward to
the PAC report on Skills for Life, which was published on 29 January
2009. Government is preparing a formal response to the PAC Report
which will be published on 20 March.
GOVERNMENT VISION
We recommend that the Government set out a clear
picture of how the landscape of delivery structures will look
once all its reforms are complete, from the point of view of planners,
providers, employers and individuals in order that all involved
are aware of the organisational end-point of the journey. The
vision we call for should articulate how it is intended to meet
both of the relevant departmental strategic objectives in the
2020 skills delivery arena (paragraph 71).
42. We agree that clarity about the future skills
landscape is very important and we are sharing as much information
as we can, as soon as we can. Significant and detailed communications
took place in December 2008, to confirm in more detail the business
models for both the YPLA and SFA. This included publication of
three documents on the DIUS website—'FE and Skills System
Reforms: an update'; 'Machinery of Government Change: 16-19 and
post 19 Education and Skills Reforms' and 'The Adult Skills System:
Reforming the Delivery Chain'. In addition, we publish monthly
bulletins about the progress with the programme and hold regular
stakeholder meetings with both Ministers and officials. We are
pleased that FE and Skills Reforms: an Update was seen as helpful
by the Committee and attach a diagram at Annex 1, which sets out
how we envisage the national, regional and local landscape will
look once our reforms are complete. We have also developed a detailed
Communications Strategy and are planning a further round of detailed
communications over the next few months.
43. But it is not entirely for the Government to
set out how things should eventually look. We have set out in
this response the work of UKCES on simplification, which is explored
more fully at paragraph 70. Work will also continue with partners
both inside and outside government to discuss how we can achieve
maximum clarity; cut out unnecessary overlap; and make clear how
all elements within the system need to work together for the benefit
of students and business. And a dialogue with our national and
regional partners on the design of the Skills Funding Agency will
continue, with an expectation that more information on its structure
will be published in the spring.
44. This work is important as we continue to tackle
strategic skills gaps and shortages within the economy to meet
immediate needs and for economic growth. We will clarify the roles
and responsibilities of bodies and ensure that barriers and bottlenecks
to supply, including those found within the structure of industries
and markets, are both identified and resolved as quickly as possible.
UKCES and the new SFA will both have important roles in this regard.
45. And we know it is important that, in the delivery
of high level skills, all parts of the landscape (HE, FE and private
providers) work together. We will be addressing this issue as
we follow up the high level skills strategy, on which we consulted
last year.
Taken together with the changes to relax rules
regarding funding of training by SMEs, the Secretary of State's
speech to the CBI in October 2008 indicates a welcome change in
emphasis and a recognition of the realities of the UK's skills
problems. We hope that it will lead to a greater willingness to
work with employers, particularly UKCES, and those who represent
the concerns of individuals to adapt Government implementation
of the Leitch agenda to observe the spirit of increasing skills,
rather than the letter of the prescription. We welcome this contribution
to the evolving post-Leitch agenda (paragraph 73).
46. The Government is glad the Committee recognises
that we are focussing on the realities of the UK's skills problems.
Government is fully committed to engaging and working with employers
and those who represent individuals to adapt implementation of
our policies and programmes. As this response makes clear we already
work very closely with employers, particularly on our Train to
Gain and Apprenticeships programmes. For example, as a direct
result of our employer engagement activity we have flexed the
Train to Gain offer to support employer need, adapting the programme
to help address the additional pressures small businesses are
under during the recession and to prepare them for business opportunities
in the future.
47. We have introduced National Skills Academies
(NSAs) to
put employers in the driving seat of the skills system. In return
for their sustained investment, employers are able to suitably
flex the system and decide which provision and which providers
would best meet their needs. As such we expect NSAs to be the
catalyst that drives the transformational effects throughout the
FE system.
48. We are also taking forward our strategic priorities
on a number of fronts using a "skills activism" approach,
which we have outlined above. That will include identifying and
using government levers more effectively so we develop skills
in sectors of greatest economic importance and growth, for example
we will:
- Agree which sectors offer the
greatest opportunities for significant growth where we should
be focussing our efforts;
- Minimise migration so we can help our own people
gain the skills needed to fill the jobs available;
- Investing in major infrastructure projects including
building schools and houses as well as major projects such as
cross-rail and the Olympics;
- Influencing inward investment by creating the
stability and longer term planning horizon for companies wherever
possible, increasing confidence and making investment in skills
more worthwhile;
- Where possible creating a market for skills,
for example by clearly supporting nuclear power, areas of significant
economic strength such as high value-added manufacturing, high
value-added services, creative industries, clean technologies/environmental
adaptation/low carbon, broadband/digital and life sciences.
Together, a set of actions such as this could have
a powerful impact on employers' confidence and ability to invest
in skills. We will set our skills activism approach in the weeks
ahead.
49. We have already stated our recognition of the
importance of adapting policy to meet the skills needs of the
UK. At a macro level that means maintaining a focus on up-skilling,
measured through qualifications, whilst supporting employers and
individuals who need particular help during the recession. We
have already indicated how we are using our resources more flexibly
to achieve that.
50. We are keen to work with the Commission to get
a better understanding of collective employer need. Our intention
to strengthen the employer voice in the system has already been
shown to be effective through the Commission's simplification
report; and the Commission clearly has support from all four Governments
across the UK in providing employer-informed advice. That support
and advice will be invaluable for further developing and shaping
current and future policy.
NATIONAL STRUCTURES - LSC
The abolition of the LSC and the establishment
of the Skills Funding Agency is likely to lead to considerable
further disruption and the reward for this is as yet uncertain.
The Government must be clear on the role of the SFA, including
at regional level, and communicate this vision to its partners
in skills delivery to avoid disaster. It is difficult to see how
the regional LSCs set up recently can operate effectively without
a definite transition plan, and the LSC as a whole will struggle
to avoid being regarded as a lame duck partner, unable to make
long-term commitments or start new initiatives with any credibility.
We recognise that the Government is determined to push ahead with
this change but we believe that maintaining stability within the
system should now be the prime consideration.
We recommend that the Government move quickly
to resolve the issues around the role, organisation and relationships
of the new SFA and that it redouble its efforts to communicate
this information to the LSC's regional partners, who need early
and absolute clarity. Each region needs to be assisted in developing
a plan for how the structures will work under the new arrangements
post-2010. We also note that even if the Skills Funding Agency
and National Apprenticeship Service are co-located in Coventry,
effective mechanisms must be put in place to ensure that they
work together (paragraph 80).
51. The Government recognises the Committee's concerns
around the creation of the SFA. The transition will be managed
very carefully and the Learning and Skills Council (LSC) will
play an important role in that. We are working closely with them
to ensure that the move to the new structure is as smooth as possible.
To that end, the LSC has produced a strong transition plan that
is now being considered by Ministers, and we have an overarching
Joint Programme Board (comprised of senior officials from DCSF,
DIUS, the LSC and local authorities) overseeing the transition
work and reporting to Ministers in both DCSF and DIUS.
52. We have published three documents on the DIUS
website which provide more information on the SFA. This includes
'FE and Skills System Reforms: an update'; 'Machinery of Government
Change: 16-19 and post 19 Education and Skills Reforms' and 'The
Adult Skills System: Reforming the Delivery Chain'. We also publish
monthly bulletins about the progress with the programme and hold
regular stakeholder meetings with both Ministers and officials.
53. In the meantime, we are confident that the LSC
has the capacity to continue delivery of its work programme, including
supporting employers and individuals through recession and through
this transition period.
54. The SFA will be a stronger, streamlined, more
flexible and responsive organisation. It will work more closely
with DIUS and have a clear focus on its funding role, making it
capable of listening and adapting quickly to shifts in economic
conditions in order to meet the needs of employers and individuals.
The Agency will ensure that the FE and skills system is learner
and employer driven, providing choice and ensuring coherent and
accessible services at every level. It will be responsive to employers
through Train to Gain and the Apprenticeship service; and to the
individual through a universal Adult Advancement and Careers Service,
Jobcentre Plus, and a strong FE sector of colleges and learning
providers working together to deliver high quality learning.
55. We are also taking the opportunity as part of
the transition to simplify systems and reduce bureaucracy. This
includes developing a single account management process for funding
and performance management of providers; streamlined data collection
and reporting; new management systems to transform the services
received by students and prospective students; and a single point
of access for employers through a one-stop-shop approach through
Business Link.
56. We are continuing to discuss the evolving design
of the SFA with national and regional partners. We are committed
to ensuring that partners can understand and inform the SFA's
design to ensure that it strongly supports the regional and sub
regional skills agenda.
57. More information on the SFA is available in 'FE
and Skills Reforms Up date' and we also publish a monthly
bulletin to update our stakeholders on progress with the programme.
We will set out further communication dates shortly, including
for communication of transition plans; and over the next few months
a series of events will be held around the country for stakeholders
and LSC staff to ensure they have a chance to influence the design
and operation of the Agency.
58. The National Apprenticeship Service (NAS) will
be housed in the SFA to ensure we deliver a joined up service
to learners and employers. Both will have common underpinning
services including, for example, data collection and reporting,
and contract management. This will streamline arrangements for
colleges and providers and ensure the NAS can focus on what it
needs to do to support learners and employers.
REGIONAL STRUCTURES
We recognise that the RDAs have an important role
in economic development and business improvement and, within this
context, they should have a clear focus on skills and in stimulating
demand through planning rather than delivering programmes. But
they are not yet achieving their full potential and overall performance
is inconsistent. To drive up the quality of skills planning by
individual RDAs we recommend that the Government commission an
analysis of what is happening region by region and report on best
practice and areas of weakness (paragraph 90).
59. Regional Development Agencies (RDAs) do have
an important role to play in skills, ensuring that gaps are identified
and addressed by partners in the regions in line with the Single
Regional Strategy.
60. We accept there is more RDAs can do to drive
up the demand for skills and inputting to regional strategies
and to that end we are discussing how we can make improvements
with SEEDA, the newly appointed lead on skills for the RDA network.
We recommend that the Government issues full guidance
as to the roles and responsibilities of each relevant regional,
sub-regional and local body involved in delivering the Leitch
agenda, with an indication of where this is likely to change post-2010.
This would allow all parties a better understanding of what the
current and future organisational arrangements are and would assist
a move to the next stage of identifying how these arrangements
could be improved. In order to avoid unnecessary proliferation
of employer representative bodies, we further recommend that Employment
and Skills Boards be licensed by UKCES (paragraph 94).
61. We know that the skills landscape can be confusing,
particularly given the number of bodies with different responsibilities.
We are addressing that through the UKCES simplification plan and
the business model for the Skills Funding Agency.
62. Employment and Skills Boards (ESBs) are one element
of the landscape, and we plan to publish criteria for ESBs seeking
statutory powers later this year. Alongside the criteria, we will
set out the roles and responsibilities of each relevant regional,
sub-regional, and local body involved in delivering the skills
agenda, and how that might change post-2010.
63. We do need to ensure that ESBs play a clear role
in the system. We believe they can operate most effectively at
the city region level where they can have an important strategic
role to play to identify priorities and ensure that the employment
and skills system is more joined up and responsive. Where ESBs
can demonstrate strong employer leadership in support of a clear,
evidence-based strategy we will encourage them to apply for strategy
setting powers around adult skills, working along similar lines
to the London Skills and Employment Board. We are considering
mechanisms to ensure that strong employer leadership is in place
before ESBs can seek statutory powers.
The Department for Work and Pensions needs to
operate on a sub-regional basis, working very closely with DIUS
to achieve this, particularly given the current economic situation.
We also recommend that UKCES issues new guidance on setting up
and maintaining effective local partnerships to deliver and plan
skills, including the balance between sectoral and spatial planning
at the sub-national level. This should include examples of best
practice (paragraph 97).
64. We agree it is important that DWP and DIUS work
closely together at each spatial level—local, regional and
sub regional—and welcome a recommendation which supports
our work with DWP on better integrating the employment and skills
systems. We should also make clear that the UKCES reports to both
Departments and is in itself a stage of simplification by bringing
together the SSDA and NEP.
65. Trials of an approach to an integrated employment
and skills system started in the West Midlands in September 2008.
It now extends to Cambridgeshire and Suffolk, Norfolk, Greater
Manchester Central, Greater Manchester East and West and Hampshire
& Isle of Wight. In March 2009, trials will start in Central
London and Southwark, Lambeth and Wandsworth.
66. In planning and carrying out these trials, there
has been extensive and close joint working between DWP, DIUS,
Jobcentre Plus and the LSC—at regional and local level as
well as nationally. Early experience in the trials has highlighted
the importance of strong joint local and regional management to
address issues as they arise in implementing a new way of working.
The trials are enabling us to develop the way in which we do this
and also feed lessons into the later-starting trials and future
wider implementation.
67. At the regional level, Jobcentre Plus and the
Learning and Skills Council are working with RDAs and Regional
Ministers to deliver a targeted response to the downturn. DWP
and DIUS have allocated £158m to support those affected by
the downturn. This will include provision of 40,000 pre-employment
training places for those under notice of redundancy and newly
unemployed people, together with improved advice and guidance.
LSC and JCP are also working closely together to deliver 75,000
employment-focussed training places to JCP customers who reach
the 6 month claim point on Jobseekers Allowance. In both cases,
the additional training places will roll out from April 09.
68. The Departments and delivery bodies are also
already working to ensure that the regional and sub-regional aspects
of integrated service delivery are fully explored in the design
of the Skills Funding Agency.
COMPLEXITY
The UKCES simplification project is an important
and timely piece of work and we welcome the first stage of its
results. It is addressing the right sort of questions. However,
we would like it to expand into two further areas. First, it should
specifically address the difficulties faced by individuals in
accessing training. Secondly, we strongly believe that the project
needs to move more quickly to address planning structures as well
as delivery bodies and programmes (paragraph 106).
69. The UKCES Simplification Plan set out proposals
for a range of actions to simplify the skills system from the
employer perspective. The Government has accepted all the proposals
in their report and we are working closely with the Commission
to implement them over the coming year.
70. The proposals which form phase 1 of the simplification
work include making more effective use of skills brokers and web-based
tools to make it easier for business to access publicly-funded
training. This will make it easier for employers to access skills
provision, which in turn should drive up demand for skills and
lead to an increase the numbers of individual employees receiving
training.
71. Other recommendations are around engagement with
SSCs to ensure that different sectoral needs and priorities are
recognised and supported within a single Train to Gain offer,
and development of a co-ordinated, cross-department programme
of work to reduce current contracting and financial management
bureaucracy by two thirds.
72. The Commission is talking to employers to seek
their views on what phase 2 of the simplification work should
cover and will bear the Committee's recommendations in mind as
they take this work forward. UKCES plan to report their stage
2 findings in December 2009 and it is likely to provide insights
into the planning and funding systems but the focus will remain
on the employer perspective.
73. For individuals, simplification of access will
be addressed through the new Adult Advancement and Careers Service.
The Service will be for everyone—including professionals,
lower skilled and workless people—and will make sure people
are able to access the system and get the right advice about what
is available and how to get it. Skills accounts will be an integral
part of this new Service, and we will ensure that simplification
of the customer experience remains at the heart of their design.
Access to the Adult Advancement and Careers Service and Skills
Accounts will be key components of the offer to jobseekers under
the new integrated employment and skills service.
We stress that an important factor to be considered
in advocating change is the need for a period of relative stability,
in institutions and programmes. This, as much as anything, would
encourage employers and other players to sign up to the Leitch
agenda and to the associated targets for greater investment in
skills. Constant change creates uncertainty and, as the wider
economy currently demonstrates all too well, uncertainty tends
to undermine the confidence that is needed for investment to take
place. We fully support UKCES's plea for ministers to adopt "five
key principles on what not to do in future" to avoid the
"tendency for the system to regress":
- no new disconnected initiatives;
- no separate contracts for different elements
of the Train to Gain service;
- no different reporting or monitoring rules
outside the current set;
- no new business-facing brands beyond Business
Link, Train to Gain and Apprenticeships; and
- no new agencies beyond those already announced
(paragraph 107).
74. We recognise the Committee's call for a period
of relative stability. But we need to balance the benefits such
stability would bring—in terms of employers getting involved
in skills and training their staff—with the reality of a
rapidly changing world. In the last 12 months the environment
has changed significantly from one of economic growth and investment
to one of recession. The role of skills has begun to shift as
a result. As well as pursuing our strategy to up-skill to promote
increased productivity and economic growth, we need to support
and enable businesses and individuals who are suffering in the
difficult economic climate. We know that firms who train are more
likely to survive recession and enter a period of growth in a
much better position. We also know that some individuals will
need to train or re-skill as the economic base changes.
75. That means we must introduce flexibility to meet
those other needs. To not do so risks too much. That is why we
have flexibility under certain sector skills compacts for up to
30% of qualifications to be repeats; a reform of the Qualifications
Credit Framework to allow modular qualifications; and flexibility
through Train to Gain for people who are newly redundant and SME
staff to support re-skilling.
76. We are also pursuing our agenda to encourage
employers to commit to skills and skills development. The Skills
Pledge gives employers the opportunity to make a public commitment
to help their employees improve their skills Almost 10,300 have
taken it up to date, covering more than 5.4 million employees.
And the National Skills Academies (NSAs) programme is focussed
on engaging employers, consulting on what they need and delivering
it effectively. Sixteen successful academies are delivering learning
opportunities which employers need to more than 880,000 learners
during their first five years of operations.
77. We do recognise that it can sometimes be difficult
for businesses to understand and access what is on offer from
Government. So we are streamlining publicly funded business support,
using Business Link as the main route of support for companies.
This service offers impartial advice and helps businesses access
products and services to help with a whole range of issues including
finance, innovation and skills.
DEVOLUTION
We would like to see UKCES adopt a role of disseminator
of best practice throughout the UK and act as a source of expert
advice to employers and Government on the differences between
skills policies and delivery mechanisms in the four nations (paragraph
110).
78. The Commission already works closely with each
of the four UK nations, providing expert advice to the highest
levels of Governments. It is part of its remit to be a source
of advice to Government—playing an active role in learning
about the relative impact of different policies and practices
and accelerating the transfer of best practice across the four
nations. But it is the role of Business Link, SSCs and the NES—not
the UK Commission—to act as a source of expert advice to
employers.
GOVERNMENT PROGRAMMES: TRAIN TO GAIN
In the current economic downturn it is essential
that Train to Gain, as the main source of Government funding for
skills development, is made flexible enough to deal with rapid
adjustments for people who have been made redundant and need quick
retraining and with businesses anxious to develop in response
to new challenges. Aspects of Train to Gain are currently failing
to satisfy the different demands of employers, individuals and
value for money for the taxpayer. Unless there is a radical re-focusing
of the programme one of the central planks of the Leitch reforms
will be lost (paragraph 122).
79. Train to Gain is completely employer-responsive.
Since its launch in April 2006, more that 100,000 employers have
engaged with the programme, supporting over 570,000 learners to
begin learning with over 290,000 of those people already achieving
a qualification. We plan to invest £925 million through Train
to Gain in 200-10, which will support around 950,000 learners.
By 2010-11, we will be investing over £1billion. This investment
is extremely important given the evidence (highlighted earlier
in this response) about the high returns to training in the workplace.
80. Government has been able to use this successful
programme to respond quickly to the change in economic climate,
recognising the importance that training can play in helping individuals
and employers cope, and putting the economy in the best place
for the upturn when it comes. We have already set out some of
the ways in which we have reconfigured Train to Gain in the last
few months to achieve that flexibility.
81. We have introduced flexibilities for SMEs to
help them through the recession and emerge stronger when the upturn
comes, funding units in business critical areas, funding retraining
and upskilling, and introducing a leadership and management offer
for employers with 5-250 employees. Morgan Dias in Sheffield is
an organisation that is making good use of this flexibility training,
for example, a senior manager in business development techniques.
82. We have opened access so that people under notice
of redundancy, or moving from unemployment into work, can access
funding for qualifications even if they already have qualifications
at that level. We have developed a package of support using ESF
funding for 2-8 weeks of employability training to support those
who have been made redundant, and are funding an extra 75,000
places for those who have been unemployed for 6 months.
83. These—together with the individual support
through Jobcentre Plus—represent a strong offer to individuals
and to employers to help them with skills development through
difficult times. We will continue to flex the programme in response
to employer's needs.
84. We are confident that Train to Gain meets the
current needs of employers, and will continue to respond as those
needs change. Feedback from the 100,000 employers who have already
accessed the Programme is very positive and indicates that they
welcome the new flexibilities. The latest evaluation shows that
93% of employers who have accessed Train to Gain have been satisfied
with the training, and the provider who delivered it and 78% who
had taken up training through the service would recommend it to
other employers. And John Cridland of the CBI said recently that,
"Train to Gain is exactly the product we need at this time
... "
85. Further statistical and evaluation information
on Train to Gain—including the beneficial impacts and latest
date on take up—is included in Annex 2.
Train to Gain will only achieve its aim of producing
long-term improvements in competitiveness if its brokerage service
is more closely tied to helping firms develop more ambitious business
plans and more tightly linked to wider economic development and
business improvement services. It has to deliver what employers
want: a consistent offer across the country, with greater understanding
amongst brokers of sectoral interests and flexible funding for
courses. The National Audit Office is currently reviewing the
Train to Gain programme and we look forward to the publication
of its findings. In view of our earlier recommendations on evaluation,
we will be particularly interested in the NAO's conclusions on
the extent to which Train to Gain has led to increased overall
skills levels (paragraph 123).
86. We agree that the brokerage service must be closely
linked to assisting businesses in this way, particularly in the
current economic climate. But it is important to note that more
than 80% of employers currently using the brokerage service have
been satisfied with the service they have received.
87. We know we can improve on this and that is why
from April 2009 access to support will be made easier for businesses
by bringing together the current Train to Gain brokerage service
with Business Link to provide a fully integrated information,
diagnostic and brokerage service. Business Link will be the primary
access channel to "Solutions for Business" the Government's
portfolio of business support products which includes skills and
innovation. Brokers will give quality-assured advice and information
about improving the skills of their employees, from basic skills
right up to and including high level skills; helping them to find
the training they need and identifying whether they qualify for
government funding through Train to Gain.
88. We are working closely with the UKCES to implement
the proposals put forward in their simplification report in October
2008, building on the integration of brokerage with Business Link
to make it easier for employers to access information about training
and how it can help their business.
APPRENTICESHIPS
We recommend that the Government review funding
for adult apprenticeships and report on measures to encourage
and strengthen them, particularly as demographic change will reduce
the number of young people in the workforce (paragraph 126).
89. We support the need for strong and effective
adult apprenticeships. Employer demand is high and adults are
increasingly attracted by the opportunity to re-train and gain
new skills. Removal of the upper age limit two years ago has helped
produce a large increase in adult numbers and clearly states our
commitment to develop skills of all ages through apprenticeships.
90. Funding for adult apprenticeships is not a barrier
for employers or individuals. The number of adult apprenticeships
increased 50% last year and demand is strong. The White Paper
21st Century Skills: Realising our Potential
(published in July 2003) set out our intention that employers
and learners should contribute towards the cost of their course,
in light of the returns they derive from learning. Further
Education: Raising Skills, Improving Life Chances (March 2006)
confirmed our intention to increase learner and/or employer fee
contributions to 50% by 2010-11 for those not eligible for free
provision. Lord Leitch's Review of Skills (December 2006) reaffirmed
the importance for a shared responsibility to invest in skills,
with employers and learners asked to contribute most where they
see the greatest private returns.
91. We have no evidence that lower unit funding for
adult apprenticeships has either dented their popularity with
employers or affected performance. Starts have been consistently
increasing, up to the 225,000 in 2007-08 (from 65,000 in 1996-97)
and a record high. Of those, 27,000 were aged over 25, that is
compared to only 300 in each of the two previous years.
92. With 74% of the 2020 workforce already having
left school, apprenticeships will be an important key to training
people to do jobs that are vital to the UK economy, both now and
in the future.
We recommend that the Government collate and publish
data on the development of high level apprenticeships and take
immediate action to raise awareness of the opportunities if take
up is not satisfactory (paragraph 127).
93. We are committed to development of higher level
apprenticeships where there is clear demand from employers. Sector
Skills Councils have responsibility to look across their sector
and understand skills needs. They are well placed to encourage
employers to think about their training needs, and promote appropriate
ways for them to be met. Sector Skills Councils also develop higher
level apprenticeships where demand exists such as in engineering.
94. More important is that all apprentices should
have clear progression routes into higher level skills and education.
This may be a foundation degree or professional qualifications.
Employers and sectors will decide which are appropriate. The
Specification of Apprenticeship Standards in England, on which
we are about to consult, proposes a requirement that all apprenticeship
frameworks outline clear progression routes into higher level
skills.
QUALIFICATIONS REFORM
We welcome the new QCF and its emphasis on a modular
approach. We believe that serious consideration needs to be given
within the qualifications reform process to the accreditation
of prior learning and to accommodate non-traditional courses leading
to the acquisition of skills at an appropriate level, such as
bite-sized courses or part-time or informal training (paragraph
131).
95. We welcome the Committee's support for the Qualifications
Credit Framework (QCF) and endorsement of the modular approach.
The approach increases flexibility within the system and enables
learners to study in 'bite-sized chunks', at a pace and a time
which suits them, and to build up a training portfolio with no
learning ever lost. The recent support package for SMEs in England
through the Train to Gain programme includes access to units on
the QCF, which SMEs tell us they value, enabling their employees
and their business to benefit from smaller, focussed training
courses.
96. We also recognise the importance of accreditation
of prior learning. There are real benefits to be gained from recognising
existing skills and formally accrediting them so that are transferable.
Individual colleges already do this, and we encourage providers
to use Accreditation of Prior and Experiential Learning standards
as is used with the Higher Education system. The Government has
also opened up new routes for employers to have their training
accredited by Ofqual. So far, over 200 employers have benefited
from the scheme which has the endorsement of the Confederation
of British Industry. On the day of the announcement that the first
three employers would receive awarding body status, John Cridland
said: "Today marks a significant milestone on the road to
reforming qualifications so that they better reflect the skills
and competencies employers and employees need."
97. Our judgement remains that government funding
is best invested in training which enables learners to progress
to a qualification. That gives a broader range of skills which
have an economic impact, it gives individuals formal recognition
of the skills they have gained, provides a platform for future
learning and we know that training leading to a qualification
is more transferable giving greater benefit to learners. Those
benefits are less significant for bite size or unaccredited learning.
We also know that learners appreciate achieving a qualification;
93% of learners in Train to Gain said that achieving a qualification
was the main motivational factor in them deciding to do training.
EMPLOYERS: REPRESENTATION AND ENGAGEMENT
Great things are expected of the creation of UKCES
and we will keep a close eye on its development to assess whether
it is delivering, including scrutinising its Five Year Strategic
Plan, which will be issued before the end of 2008-09 (paragraph
136).
98. The UKCES is performing a very important role
and Government supports the Commission in its work focussing on
key strategic priorities. We have been able to attract a Board
of a high caliber with such a broad range of representation from
the private, public and third sectors, and from the trade unions.
The UK Commission, led by Sir Mike Rake will have an unprecedented
opportunity to influence the employment and skills systems of
the four nations of the UK, helping our systems be more responsive,
relevant and high performing for the 21st Century.
99. We look forward to its first significant annual
report—the "state of the nation"—to be published
later this month.
SECTOR SKILLS COUNCILS
We recommend that UKCES directly address in its
annual report the structures through which key generic skills
will be promoted (paragraph 142)
100. In carrying out its role in relation to Sector
Skills Councils (SSCs), the Commission is responsible for ensuring
that arrangements are in place to deal effectively with cross-sector
skills and activities. It will address the structures through
which key generic skills will be promoted, and a joint group has
been established with the Alliance of SSCs to tackle this.
101. Lord Leitch's report highlighted the challenge
of ensuring consistent performance across the SSC network and
the UK Commission has Government's full support in achieving this
aim. SSCs are required to identify and meet the skills needs of
their sectors with sector specific solution—and this includes
sector needs for generic skills such as management and leadership,
and customer service. The SSC re-licensing process includes an
independent assessment of the SSC's performance in meeting their
sector's skills needs, and SSCs will need to provide strong evidence
of achievement in order to be re-licensed.
102. Management and leadership and employability
skills will be important priority areas for the UK Commission
going forward and to this end it is establishing a direct strategic
relationship with key cross sector bodies. The Commission is also
already undertaking work on employability skills and published
a report The Employability Challenge in February this year.
103. DIUS programmes help SSCs to provide sector
specific solutions, in particular through Train to Gain, which
provides funding for generic skills training, such as management
and leadership. Train to Gain Sector Compacts give employers flexibilities
designed to meet the specific skills needs of their sector. In
return, SSCs commit to securing an increased take-up of skills
training by employers, including increased take-up of generic
skills.
We recommend a review of SSC financing alongside
the SSC relicensing process, although we stress that this should
serve to speed up the process of relicensing and not to delay
it (paragraph 144).
In the light of the need to align sectoral demand
with regional planning, we recommend that UKCES examine the regional
capacities of individual SSCs as part of the re-licensing process
(paragraph 145).
We await the outcome of the UKCES relicensing
of Sector Skills Councils with interest. In the interests of transparency
we recommend that once the relicensing process is complete that
all advice given by the National Audit Office in its role as independent
third party assessor is made available to this Committee (paragraph
146).
104. Government does not see a case for reviewing
SSC financing.
105. The UK Commission will need to ensure that,
in parallel with completing the relicensing process, it puts in
place effective arrangements for the continued performance management
and regular review of SSCs' performance. It will also ensure that
the funding arrangements for SSCs support the continued improvement
and development of a high performing network of SSCs, including
that the funding support is focussed on SSCs' core remit.
106. The relicensing process includes robust third
party assessments of SSCs by the National Audit Office. The assessments
and subsequent reports will reflect the tests set out in the SSC
Relicensing framework (Empowering SSCs—Employer driven
skills reform across the UK). The NAO assessments and UKCES
SSC relicensing recommendations to Government will not provide
a systematic appraisal of SSC capacities across the regions.
As part of the relicensing process all SSCs are required to work
with key stakeholders, including regional partners, to progress
skills priorities. Regional partners have been encouraged to submit
evidence on SSC performance as part of the relicensing process.
107. The National Audit Office will produce an overall
narrative report for each SSC assessed against the relicensing
framework. All the reports will be in the public domain and available
to the Committee. There will not be any additional advice from
the NAO to the UKCES. The UKCES will make recommendations to Government
based on the NAO report, a Commissioner visit and a panel review
of each SSC's performance.
PRIVATE SECTOR ORGANISATIONS
In addition to the SSCs, the Government and UKCES
need to work with not just the major organisations such as the
EEF and the CBI, but also with less formal clusters and consortia
such as Electronics Yorkshire and smaller sector bodies (paragraph
147)
108. SSCs and RDAs already work across the whole
employer landscape, engaging with major organisations and less
formal clusters and consortia. Mechanisms already exist for these
organisations to feed in through the appropriate SSC.
EMPLOYER ENGAGEMENT AND PARTICIPATION
We note that the Government has backed away from
compulsory training for the time being but this may be the last
chance for the voluntary approach. Given that the performance
of different sectors may itself be highly variable, rather than
kick compulsory training into the long grass the Government should
look at other ways to encourage employer participation, such as
considering companies' training policies and practices during
procurement processes. In sectors where significant progress has
not been made by 2014, compulsion must be seriously considered
(paragraph 156).
109. The compulsion issue is part of the remit for
UKCES to consider in 2014 and we await their advice. And we are,
of course, raising the participation age so that from 2013 all
young people will be required to participate in education and
training post-16. In the meantime, we will continue to support
employers and sectors under a voluntary approach.
110. That is why we are moving forward with legislation
in the Apprenticeships, Skills, Children and Learning Bill
to give employees in Great Britain a statutory right to request
time to train. This will give employees the right to a serious
dialogue with their employer about their need for training and
skills development. It will prove a powerful incentive for employers
and employees to properly consider their training needs and to
build a stronger future for their organisations and themselves.
Employees' requests could be to undertake accredited programmes
leading to a qualification, or for unaccredited training to help
them develop a specific skill relevant to their job. The new right
is vital to further extend and embed the culture of training in
British business and could benefit around 25 million employees.
111. We agree that it is important to look at different
ways of engaging with employers and encouraging them to participate.
Our current approach includes, for example, the Skills Pledge—a
public commitment made by an employer to help their employees
improve their skills. This in turn helps the employer recruit
and retain the best people and increase productivity, quality
and competitiveness. And we are encouraging employers to invest
by including skills and training as requirements in public procurement
processes. Through this we will encourage all those who work on
Government contracts to identify and develop the essential skills
they may currently lack and for Government to consider the positive
benefits of this when awarding contracts. This will have benefits
for those who use public services, the individual employee and
for the employer.
SMALL BUSINESSES
We welcome the Government's decision to refocus
Train to Gain on SMEs and relax restrictions on its use. This
is an important first step in developing skills engagement with
this sector. The development of employee development centres within
clusters of small enterprises also has potential and should be
evaluated at an early stage to inform decisions on whether it
should be rolled out more widely. These initiatives also need
to be incorporated into a comprehensive strategy for adapting
skills policies to SMEs, led by UKCES and DIUS (paragraph 158).
112. SMEs are vitally important to the UK economy.
Our Train to Gain offer, including the highly successful management
and leadership programme, has enabled small businesses to develop
their workforces. The new flexibilities we have provided are specifically
to help address the additional pressures small businesses are
under during the recession and to prepare them for business opportunities
in the future. We will test out with partners the role that employee
development centres can play in supporting clusters of small enterprises,
within the wider Train to Gain offer.
113. We will continue to examine how our skills policies
can meet the needs of all employers, including those in the small
business sector, in consultation with Sector Skills Councils and
other employer bodies as appropriate.
TRAINING PROVIDERS: HIGHER EDUCATION
The role of HE within the Leitch agenda, in particular
its relationship with employers, appears to us to be a major point
of weakness within the implementation of the Government's policy
on skills. Recent years have seen considerable increases in the
number of students going to university and acquiring level 4 skills
which should make the Leitch target of over 40% of the adult workforce
holding such qualifications by 2020 challenging but within reach.
However, there are doubts about whether industry co-funding of
50% will be forthcoming in the quantity required to meet annual
targets of 20,000 places; as HEFCE's own memorandum acknowledges
in setting its objectives for the next three years, one of which
is "Testing the policy of employer co-funding to get beneath
the welter of opinion and anecdote to establish hard evidence
on the willingness of employers to pay for the 'right' higher
level skills product." The current economic downturn may
make this level of employer investment even harder to attain (paragraph
171).
114. Higher Education Institutions (HEIs) do excellent
work with employers. Their publication 'Standing Together' developed
as a joint Higher Education response to the economic downturn
is indicative of their desire to work more closely with employers.
We need them to develop their relationships, as has been illustrated
in the stepping higher document jointly published by CBI and UUK
in October 2008. We need to ensure that HEIs build on this practice
to offer support and training that is flexible, relevant and responsive
to the needs of learners and employers. The latest higher education-business
and community interaction survey shows that UK HEIs received £2.64
billion from business and community interaction in 2006-07. This
is a 17% rise from the last survey (for 2005-06). We will be
setting out action to build on the good practice already evident
as we follow up last year's consultation on higher level skills.
115. We expect to publish shortly a follow-up document
to the consultation on high level skills last year. It will set
out what we are doing to respond to the consultation outcomes,
set firmly in the context of HE supporting business and individuals
in the economic downturn and the new Government policy of industrial
and skills activism. It will look forward to, and be compatible
with, the publication of an HE Framework this summer.
116. All HEIs have a role to play in the skills strategy—whether
around teaching and learning, or strengthening links to employers
to further enhance the nation's knowledge transfer, enterprise
or research activity. Government, through the Higher Education
Funding Council for England (HEFCE) is supporting HE institutions
to work with employers both helping HEIs to test their willingness
to co-fund the development of HE provision responsive to their
needs, and supporting the building of the capacity of institutions
to respond to existing and future levels of employer demand.
117. The HEFCE's employer engagement pilot projects
have demonstrated substantial demand matched by financial support
from employers, with 10,000 co-funded places contracted with HEIs
for the 2008-09 academic year, a 50% increase on planned places.
Although the rates of employer co-funding have varied during
this pilot with only a limited number achieving the full 50%,
we are confident that a significant number of individuals will
benefit and the principle of co-funding can be embedded. HEFCE
recognise the potential impact of the recession on these projects
and will monitor impact. In addition, in late January 2009, HEFCE
has announced a £50m Economic Challenges Investment Fund
to support individuals and business. It will lever a wider contribution
from the HE sector (including from Universities VAT windfall)
to help employers, employees, and others help employers with their
workforce development as a route to economic recovery. At present,
the anecdotal evidence is that employers generally are seeking
to maintain their investment in workforce development and their
take-up of co-funded provision appears to be holding up. However,
the situation is volatile and the strength of employer demand
could change.
118. National Skills Academies (NSAs) are also about
transforming learning provision to better meet employers' skill
needs. All NSAs have recognised the importance of higher level
skills and progression to level 4 and above and have set out strategies
to increase the volume of training at higher levels. Some, for
example, the NSA for Nuclear, are directly funding additional
Foundation Degree places to meet the needs of the sector. Foundation
Degrees (FDs) will make up the bulk of new growth in Higher Education
in the near future. FDs are developed jointly with employers based
on skills needed in the workplace. We aim to have 100,000 Foundation
Degree enrolments by 2010.
119. Forecasts by the Institute for Employment Research
show that, of the 12 million jobs expected to become vacant between
2004 and 2014, 6 million will be in occupations most likely to
employ graduates. Employers value higher education and the 'graduate
premium'; over a working lifetime, the average graduate will earn
over £100,000 more (after tax and in today's valuation) than
a similar individual with two or more A-levels is an indication
of this.
If the level 4 target is to be reached, then the
relationship between HEFCE and the regions has to be sharpened.
DIUS should ask HEFCE in its Annual Grant Letter to develop its
regional activity, and HEFCE should be required to quantify its
activities in its Annual Report (paragraph 172).
120. We agree with the Committee. This has been increasingly
recognised in policy in recent years, not least in the opportunities
created by the Higher Education Innovation Fund and our new University
Challenge initiative. The Funding Council has already strengthened
the role of its regional consultants to reflect the emerging regional
agenda. In our recent grant letter we asked that HEFCE to support
the HE sector to work with national regional and local networks
to help deal with current economic circumstances. We will continue
to explore with the HEFCE how it can support the regional role
of universities, taking into account conclusions that emerge from
the current debate on the future of HE.
DIUS has promised to publish an analysis of the
labour market demand for STEM skills. We hope that HEFCE will
be explicitly enabled to build upon this analysis to encourage
and deliver provision of STEM higher level skills. We also ask
HEFCE to provide us with an update of the work it has done during
2008 on developing STEM skills in response to the tasks set in
the 2008 DIUS Grant Letter (paragraph 174).
121. Encouraging the supply of STEM graduates has
been one of the Government's key priorities. There has been good
growth in applications from prospective undergraduates in these
disciplines recently, and our research performance remains strong.
Overall the number of STEM graduates and postgraduates has increased
significantly in recent years. Between 2002-03 and 2006-07:
- the number of STEM first degree
qualifiers from UK HEIs increased by 11% (excluding OU). 24% increase
in STEM Other Undergraduate qualifiers;
- there was a 58% increase in mathematics masters
graduates, and a 55% increase in engineering masters graduates;
and
- the number of STEM Masters qualifiers increased
by 35% and the number of PhD qualifiers by 18%.
122. The UK produces more science graduates per head
than many of our international competitors. Our focus in STEM
subjects is reflected in the recent Grant letter from the Department
asking HEFCE to develop an integrated programme to raise demand
for STEM and to continue to recognise the importance of the recommendations
by Lord Sainsbury.
UKCES will also need to look at the attitudes
of employers towards HE and recognise that raising awareness of
HE opportunities and increasing employer demand is not solely
the task of the HE sector but requires greater commitment from
employer organisations as well, as has been acknowledged by the
CBI (paragraph 175).
123. Developing high level skills demands a shared
investment—by Government, higher education (HE), individuals
and employers. There are many good examples of employers working
together with HE—on the design and development of Foundation
Degrees for example. The 'Stepping Higher' publication, produced
jointly by the CBI, UUK and HEFCE contains substantial evidence
of collaboration and, in the current context of the recession,
the HE sector is engaging even more closely with business. The
re-licensed SSCs have a major contribution to make both in articulating
employer needs but also in encouraging employers to play their
part in getting involved with HE. As we take forward our High
Level Skills Strategy, we will reinforce these messages and build
on the good practice already evident.
FURTHER EDUCATION
FE colleges should be accorded sufficient ability
and autonomy within Train to Gain to devise the courses needed
in their areas and should be encouraged to develop a truly responsive
employer engagement process (paragraph 183)
124. Through Train to Gain we are already creating
a more responsive FE system and the enhancements and additional
flexibilities we are introducing (see paragraph 82) will
enable FE colleges and providers to work even more flexibly and
effectively with employers to deliver the skills they need.
125. Under the new arrangements we are putting in
place with the creation of the Skills Funding Agency, colleges
and providers will have much greater flexibility to deliver the
education and skills required in their local communities. They
will not be constrained by detailed plans nor burdened with unnecessary
bureaucracy or oversight by the system and will be able to use
public funding to respond to local circumstances. It will remain
the role of Sector Skills Council to identify the skill outcomes
that employers most need, as a basis for designing vocational
qualifications that add real economic value.
We recommend that the Government review research
on FE/HE collaboration and commission clear guidelines on how
to ensure its effectiveness at the regional level, including a
greater focus on progression (paragraph 188).
126. HEFCE and LSC are working together to enhance
and increase demand for higher level vocational learning and skills
through for example complementary investment decisions and joint
research and use of data.
127. A key role for the new Skills Funding Agency
will be to facilitate progression and advancement at all levels
from basic skills to higher level skills and into Higher Education
and sustainable work and we will work with them on strategies
to improve FE/HE collaboration.
JOINT FUNDING OF FE/HE?
There is an appealing logic to the idea of a single
FE/HE funding agency but we have not taken sufficient evidence
to identify all the undoubted difficulties which such a move would
create. A single funding agency, even one operating two distinct
streams of funding, would no doubt lead to irresistible pressure
for a different model for the FE sector with less central direction
than at present. We conclude that this is an idea whose hour has
not yet come but one which should not be dismissed as without
merit (paragraph 190).
128. Although it is important that the LSC and HEFCE
are able to work effectively with each other, we do not think
they should merge. Further Education and Higher Education institutions
are very different bodies. They have different histories, different
legal status and different governance arrangements. They have
different levels of autonomy and hence different relationships
with Government. For all of these reasons, we think it is entirely
right that we have different funding bodies and arrangements for
the two sectors.
129. But FE institutions and HE institutions do collaborate
closely and we are keen to encourage and promote this where it
is in the interest of learners. And we have ensured that the funding
arrangements that are in place are capable of doing this. For
example, HEFCE funds HE provision in over 100 FE institutions.
PRIVATE SECTOR PROVIDERS AND IN-HOUSE TRAINING CAPACITY
We urge DIUS, UKCES and the SSCs to work with
bodies such as the Chartered Institute of Personnel and Development
to explore how the role, standing and capacity of the training
function within employing organisations can be strengthened and
developed (paragraph 191).
130. We welcome the Select Committee's proposal that
we, UKCES and the SSCs should work with other bodies to strengthen
and develop the role, standing and capacity of employers' training.
That is why we have since April 2008 been running through QCA
the Employer Recognition Programme, building on an earlier successful
pilot. This programme responds to Leitch by allowing employers
to seek accreditation for their own internal training, where it
meets the quality assurance requirements and adds clear economic
value. This programme uses the Qualifications and Credit Framework's
(QCF) flexibility to allow employers develop qualifications/units
which recognise their bespoke training.
131. The pilot phase resulted in four employers—McDonald's,
Flybe, Ministry of Defence and Network Rail being recognised as
Awarding Organisations, and a further sixty employers being recognise
by getting their training onto the QCF. In this financial year,
QCA have recognised six employers as Awarding Organisations in
their own right, seven employers working with an existing Awarding
Body, three Trade Associations, bringing with them 155 employers.
We expect the programme to build on these successes in the coming
financial year by attracting more employers to have their own
training formally recognised.
132. We need to ensure investment in the current
and future UK workforce develops the high-quality leadership and
management skills we need, so we can compete effectively in the
global economy and provide employment opportunities in the UK.
The UKCES has an important role to play here and the Commission
will work in partnership with Government to consult leading employers
and academics on the best way to achieve this, building on our
current knowledge about leadership and management development
and practice in the UK.
133. In order to ensure skills are used productively,
we will also need to promote managerial capacity, through action
at the sector level with leadership and management bodies including
the Chartered Institute of Personnel Development. And we will
expand on the UKCES work on high performance work practices, the
utilisation of skills and promoting the Investor in People standard.
We recommend that DIUS commission an audit of
private sector training providers to ensure that its plans for
the implementation of Leitch are based on accurate calculations
as to capacity and capability in this sector (paragraph 192).
134. DIUS has overall responsibility for the capacity
and capability of the FE system to meet the needs of the country,
and this includes the implementation of the Leitch strategy and
achievement of targets. The LSC has for some years kept testing
the private training provider market through the letting of contracts
for Train to Gain and apprenticeships—and have always been
able to secure the necessary volume of response, with rising quality.
So there is no evidence to suggest that there is insufficient
capacity and capability.
135. If Parliament agrees to the dissolution of the
LSC and the appointment of a Chief Executive for Skills Funding
(as set out in the Apprenticeships, Skills, Children and Learning
Bill), the SFA will have a role in future in responding to identified
skills gaps and ensuring that provision is available in each area
to meet the identified needs of learners and employers.
INDIVIDUALS
The issues of worklessness and under-employment,
and especially the challenge of supporting those wishing to return
to work either with or developing adequate skills to do a job
with progression after a long period outside the workforce (this
particularly applies to women) must be given much higher priority.
This is an area where strong continuing joint working between
DIUS and DWP programmes and policies will be essential. We hope
that the UKCES research project leads to firm recommendations
to Government on how to simplify access and reduce delay in providing
training, especially to the unemployed, and that the Government
is prepared to act to address these crucial issues. Individual
voices, not just those of the currently employed and employers,
must be heard (paragraph 197).
136. The Government agrees that the issues of worklessness
and underemployment must be given high priority—especially
in the current economic climate. That is why our targets and strategy
have consistently prioritised enabling the low skilled and unqualified
to obtain skills for life and first Level 2 qualifications, because
they operate as the basic thresholds of employability skills that
employers value. We have made excellent progress. Since 2000-01,
more than 2.8 million adults have improved their basic skills.
Latest figures from the Office For National Statistics (released
in December) show that 299,000 adults achieved full level 2 qualifications
in 2007-08 and 127,900 adults achieved full level 3 qualifications.
These are record figures for adults achieving vocational qualifications.
137. We have made a clear commitment to bring the
employment and skills systems together in a better way to tackle
these issues for the out of work and inactive.
To this end DIUS and DWP are working jointly
to develop an integrated employment and skills service. The aim
is that everyone who is out of work will readily get the help
they need to address their skills needs, find employment and progress
in work through continued skills development. Benefit claimants
will be encouraged and signposted not just to get into work, but
get on in work. Welfare rules and systems will support sustainable
employment and progression.
138. An integrated employment and skills service
will also encourage and incentivise employers to support continuity
of training for new recruits who wish to continue with any training
started or to progress with their learning once in work
139. Work is already underway trialling key aspects
of the service, including skills screening using a dedicated diagnostic
tool—a comprehensive Skills Health Check. The trial is specifically
aimed at Jobcentre Plus customers who have a skills need that
forms a barrier to sustainable employment. It aims to provide
a responsive and easy-to-use service that helps these individuals
understand and address their skills needs, so is directly addressing
the Committee's aspiration.
SKILLS ACCOUNTS
We strongly support Skills Accounts and the principle
that real funding should be placed in the hands of individual
learners to empower them to engage with their learning. At present
however vagueness as to how the Accounts will operate risks both
confusion and a lack of impetus. Skills Accounts that merely became
a paper or online accounting exercise, listing achievements or
entitlements, without new funding initiatives or incentives would
be sterile and quite inadequate to address the issues Lord Leitch
highlighted in his Report. We hope that once the operational effectiveness
of the programme has been established through the trials, the
Government will be more ambitious in its plans for skills accounts
to justify the importance placed on them by Ministers and by key
policy papers such as World Class Skills (paragraph 201).
140. Government welcomes the Select Committee's support
of skills accounts as a means of engaging and empowering people
to learn. Our aims for accounts are ambitious. Over time, we want
adults to have the power to choose the training they need, commissioning
that training direct from providers. Skills accounts will put
that power in people's hands, either through a personal webspace
or via an adviser through the new adult advancement and careers
service (aacs). The aacs will provide personalised information,
advice and guidance on careers and skills, as well as advice on
tackling the barriers that can prevent people from taking up learning,
such as childcare, understanding employment rights, personal finance
skills, and so on.
141. A skills account will give people access to:
- a way of finding out how much
Government funding you qualify for to support learning, either
to cover or help with the cost of fees, and in future to access
other forms of learner support (eg. Adult Learning Grant);
- a secure facility for storing a record of your
skills and qualifications, and plans for future learning, accessed
via your Unique Learner Number;
- a facility to compare different provision, including
its quality, and potentially in the future to book a course;
- access to all the tools and support offered by
the adult advancement and careers service.
142. By connecting people to the information they
need about funding, courses and providers, and giving them greater
power to commission training direct, skills accounts will change
the learning and skills landscape in a fundamental way, addressing
the issues highlighted by Lord Leitch. But accounts are just one
of a suite of mechanisms that will influence the responsiveness
of providers to the choices of individuals. The Framework for
Excellence will include an element that covers learner responsiveness,
and the Adult Learner Responsive funding model will continue to
evolve to deliver real in-year redeployment of funds to follow
learner choice.
143. Skills accounts will be the way in which adults
engage with both current and future funding entitlements and trials
of accounts in the academic year 2009-10 will be used to pilot
new rights-based entitlements for those returning to work after
five years or more of caring, and for those on in-work benefits
and on low incomes. The design and development of both the existing
and planned trials of skills accounts have been informed by focus
group feedback, and we will continue to use this approach in order
to ensure that we develop accounts to maximise learner choice
and motivation.
ADULT ADVANCEMENT AND CAREERS SERVICE
Much is riding on the effectiveness of the new
AACS and we recommend that the Government report on the trials
and consult individuals, employers and training providers on their
experiences of using it in 2009 before the system is made universally
available in 2010 (paragraph 204).
144. We are evaluating the advancement network prototypes
and trialling aspects of the new service. We agree with the recommendation
that we report on these trials and will consult widely on the
lessons emerging so that the service we roll out from 2010 has
the best chance of making a real difference to peoples' lives.
We believe strongly that a single Careers Service
should cater for young people and adults. It should not be the
case that individuals have to access a new service simply because
they have reached their 19th birthday. We therefore recommend
that in at least one of the trial areas a unified Careers Service
is provided for young people and adults and feedback obtained
on which model is more effective (paragraph 205).
145. We do not agree with this recommendation. Adults
and young people have different needs and demand different solutions
reflecting the responsibilities they have and the barriers they
face. Whilst we recognise that there are examples of effective
all age services, for example in Wales and Scotland, we believe
that adults and young people are best served by services that
are designed around their distinct needs. We will, therefore continue
to develop distinct information, advice and guidance services
for each age group. Where there are clear areas of common interest
we will build on those, and expect services locally to connect
as appropriate to provide a service that is seamless for young
people and for adults.
THE RIGHT TO REQUEST TIME TO TRAIN
We recommend that the effectiveness of the right
to request time off for training be monitored and reported annually
(paragraph 207).
146. The aim of The Right is to increase dialogue
between employees and employers, to promote discussions which
result in more training. We do not wish to place a significant
reporting burden on employers and do not feel that an annual reporting
requirement would significantly help our understanding of how
The Right is being used.
147. We do plan to monitor the effectiveness of the
policy through evaluation and by its inclusion in business surveys
as appropriate, the results of which will be published.
LIFELONG LEARNING
We believe that lifelong learning is an important
area of policy where effective solutions must be found. It brings
many benefits, both to the individual and to the economy, and
it will be a disaster if the Leitch targets lead to a concentration
on the quick wins of qualifications for school-leavers at the
expense of older workers who have just as much aptitude and ability.
We note that NIACE is currently holding an extensive inquiry into
lifelong learning, with the intention of reporting in 2009. We
look forward to the outcome of that report at which time we may
well return to this subject again (paragraph 212).
148. We agree that lifelong learning is important,
with benefits both to the individual and to the economy. That
was one of the major findings of the Leitch report—that
we cannot just rely on the flow of young people, but have to support
the stock of adults to gain new skills as well. The Government
has been acting consistently on that principle.
149. Government has invested unprecedented amounts
in our education system over the last decade (a 53% rise in funding
to FE colleges and a 23% rise in HE), and we believe it is absolutely
right to prioritise Government funding to help people get into
or on at work. That is why funding is directed away from short
unaccredited courses towards courses leading to qualifications
which add greatest benefit for learners and employers. However,
just because a course is not funded by Government does not mean
that it does not or no longer exists. Last year for example, 550,000
adult learners were recorded by the LSC who did not receive any
public funding, including many previously subsidised by the taxpayer
but now rightly funded by employers for courses like health and
safety at work.
150. We do recognise the important contribution of
informal adult learning to society. That is why we have ring-fenced
£210m for informal adult learning. We have protected funding
for specialist colleges—£40m in 2008-09. And we have
increased funding for Unionlearn from almost nothing ten years
ago to £21.5 million per year, with 20,500 trained Union
Learning Representatives who last year alone helped over 200,000
workers back into learning.
151. Government also funds UK Online centres, used
by two million people per year, at a cost of around £9 million
per annum. And there are a vast range of other opportunities on
offer. Floodlight prospectus lists more than 1,100 courses in
Spanish in London alone—one of the short courses which used
to be most heavily subsidised. Membership organisations such as
the National Trust offer professionally organised courses. The
University of the Third Age (U3A) is expanding fast with over
716 local U3A branches established and total membership already
rising to over 209,000.
152. Building on the findings of our recent consultation,
we are now working with partners, including NIACE, to develop
our policy proposals and strategy for Informal Adult Learning
in the 21st Century, which we shall publish shortly.
It will set out ideas and proposals by which the Government and
its partners can improve quality and access to provision for all
learners, including those who may face difficulties in participating
due to lack of money, mobility or access to relevant courses.
Meeting the needs of older learners, as well as families and communities,
is a key theme in our strategy.
ROLE OF THE UNIONS
We welcome the expansion of unionlearn and support
the closer involvement of the unions in encouraging the key brokering
role of the unions in the development and take-up of opportunities
to raise skills levels within the UK workforce (paragraph 216).
153. We are pleased the Committee welcomes the expansion
of Unionlearn. Trade Unions and their Union Learning Representatives
have a vital role in encouraging people to learn and in driving
up demand for learning and skills.
154. Union Learning Representatives aim to help over
250,000 workers into learning each year. With real-life experience
and credibility in the workplace, they inspire trust and foster
ambition giving people the confidence to seek new ways to improve
skills. They are instrumental in boosting employer participation
in the Skills Pledge and Train to Gain, helping ensure that business
and their employees to have access to skills training.
155. That is why we will continue to support the
Union Learning Fund and unionlearn to develop and promote the
work of the Representatives. And it is why we have increased the
funding available for union learning from £2 million in 1998
to over £21 million in 2009—so that by 2010 there will
be 22,000 trained Representatives helping more than 250,000 workers
into learning each year.
CONCLUSION
The economic climate makes it more imperative
not less that skills levels are raised. As the UK comes out of
recession, people will be needed who can pick up the new range
of jobs which emerge at that time. An emphasis within skills policy
on re-skilling is therefore vital. We are also concerned that
the current policy of supplying skills and expecting businesses
to utilise them, rather than tackling skills shortages or approaching
skills as part of a wider national economic development plan,
will not hold up in a shrinking economy where the major drivers
of the financial, business services and retail sector have stalled.
The Government will have to consider how to build more flexibility
into its support for training and also more direction to ensure
that the UK concentrates its skills development in areas for which
there is current and future demand (paragraph 218).
156. This response makes absolutely clear Government's
support for re-skilling. We have for some time been acting on
precisely the principle the Committee now endorses—developing
a demand-led approach focussed on the needs of employers, and
getting away from a supply-driven approach. But the system has
to be able to manage both re-skilling and up-skilling—to
help the UK bear the recession and make sure we are well positioned
to take advantage of the upturn. Working with employers we will
assess the economy to identify those sectors and sub-sectors where
there is a strong underlying prospect for growth and employment.
We will continue to develop our offer to make sure we have the
right incentives and support to encourage that as we come out
of recession.
157. We will help and support employers to assess
the employment and skills strengths and weaknesses in their industries
and what steps we need to take together to build capability and
take advantage of new market opportunities in the future.
158. We are already working through the UK Commission
for Employment and Skills, leading Industry Associations and Sector
Skills Councils to support employers in better anticipating future
demand, and developing a more responsive skills training system
to meet challenges such as the low carbon economy, technological
change (bioscience etc), major national projects (Olympics, Crossrail,
house building, nuclear build etc). We are working to jointly
invest in developing these skills now. This includes the Commission's
work to understand how to stimulate more effective skills utilisation
in the workplace in the future and by so doing enhance UK productivity
and performance.
159. We have already announced a new training offer
for SMEs through 'Train to Gain' to help develop core business
skills needed now and for the upturn. And we are flexing the Programme
to make sure that it meets the current needs and demands of employers.
160. The development of sector compacts also allows
for more funding to be invested in skills areas specific and relevant
to different industry sectors, in order to help some employees
benefit from higher level skills in areas vital for that industry
and for the wider economy. National Skills Academies are about
creating a network of employer-responsive training providers,
who will not only transform the supply of training, but also increase
employer ambitions and demand for skills, and raise employer investment
in skills—some £131 million of their own resources
to their NSA to date. Government is increasingly looking to the
NSA network (now 16 in the key sectors of the economy) to start
taking on the role of organising demand more strategically and
influencing the LSC as necessary. With NSAs in the key strategic
skills areas, they are well placed to respond to emerging skill
needs.
161. Through a continuing focus on strategic skills,
we will particularly support sectors with the potential for growth—sectors
such as manufacturing; aerospace; knowledge based industries such
as pharmaceuticals, biotechnology and science which have created
over half the new jobs in the last 20 years; low carbon technologies
with a potential one million new jobs over next 20 years.
We want to see this review succeed. There is no
time for a new start as long as our competitors continue to advance.
The Government must work to ensure the success of its skills agenda
through the clear communication of its vision and through practical
measures to enable employers and individuals to recognise and
reap the benefits of higher levels of skills (paragraph 219)
162. We are pleased that the Committee shares our
strong desire for success. We must work hard to realise our ambitious
skills agenda—communicating the vision clearly and developing
practical measures for employers and individuals that work for
the real world. Since we are now seeing real success being achieved
through Train to Gain, new qualifications and the other reforms
we have put in place over recent years, it would be damaging,
destabilising and counter-productive to abandon all that for "new
start". We need consistent, determined delivery that builds
on what has been achieved so far, to support learners and employers
gain the skills they need to contribute to national economic success
when the economy recovers.
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