House of Commons - Re-skilling for recovery: After Leitch, implementing skills and training policies - Innovation, Universities, Science and Skills Committee

Re-skilling for recovery: After Leitch, implementing skills and training policies - Innovation, Universities, Science and Skills Committee Contents

3 Delivery structures and programmes

National structures: Learning and Skills Council

74. There are many organisations involved in the delivery of skills from the Government at the top to individual trainers or employers on the ground. At the national level, the most visible is perhaps the Learning and Skills Council (LSC) which began work in 2001[119] to build "a dynamic and successful further education system for England".[120] It told us that recently it had introduced new regional structures and partnership teams "to improve its ability to respond to the economic development agenda, and the needs of regions and sub-regions".[121] The LSC works with the RDA in each region and publishes a regional commissioning plan, with investment and sector priorities.[122]

75. These changes in the LSC's focus are the latest in a series made since the organisation's establishment. The impact of this continual process of change was commented upon by witnesses. The Centre for Enterprise, for example, argued "In August 2005, the LSC's Agenda for Change programme led to the creation of a regional infrastructure for the organisation but at the same time created a degree of organisational turbulence that meant the LSC increasingly focussed on meeting targets rather than on the planned strategic development with regional partners. The LSC has not been consistent as to whether its role is in the regional implementation of national policy, or as a part of a more sophisticated model of regional policy development within a national framework".[123] SEMTA reported that "in our experience, the LSC at a regional level is still struggling to change its approach from one focused on delivery of basic skills and Level 2 qualifications, to one based more closely on articulated employer need".[124]

76. Following the decision by the Government in June 2007 to move funding for 16-19 year olds to local authorities, the Government issued a consultation paper in March 2008 which proposed the abolition of the LSC and its replacement by a Skills Funding Agency (SFA) which will be "a funding body, not a funding and planning body."[125] The SFA is scheduled to come into operation in 2010, with the LSC responsible for ensuring the smooth transition from one organisation to the other. These further changes raised renewed concern among witnesses to the inquiry, both in terms of the proposals themselves and also in terms of the prospect of yet more upheaval. The Association of Colleges claimed that "In 2010, the single LSC regional structure will have as many as four replacements:

sub-regional partnerships of local authorities to co-ordinate and, in some areas, to fund 16-19 education (Raising Expectations White Paper, (Cm 7348) paragraphs 3.25 and 3.38);
a regional planning group for 16-19 education organised by the new Young People's Learning Agency which brings together all the local authorities and sub-regional partnerships in the area. The new Skills Funding Agency and RDA will also be represented (White Paper, paragraph 3.23);
regional arms of the new Skills Funding Agency which will handle competitions for funds, capital funding and liaison with regional organisations (White Paper, paragraph 8.19);
and sub-regional arms of the National Apprenticeship Service (NAS) which will manage a field force and relationships with employers and other organisations (World Class Apprenticeships: Unlocking Talent, Building Skills for All, paragraph 4.11)".[126]

The AoC commented "The disadvantages of a regional structure has been its occasional remoteness from local issues and a longer chain of command in which national decisions have to pass through regional offices and then local partnership teams. However, whatever these disadvantages, the new arrangements risk becoming more complex and even less coherent".[127] Others agreed, and several witnesses expressed strong support for the LSC in its current form, including Steven Broomhead, Chief Executive of the North West Development Agency, who argued:

I very much regret the fact that the LSC is actually going to disappear by the end of 2010 … they have put the right structures in place, they have got the right alignments in place, they have got the right enabling structures in place, they have got relationships now quite well-established around local authorities and particularly around the sixth form funding of capital schemes … Employers are hardly mentioned in the Raising Expectations document and employers cannot believe what is going on … You do not need this enormous upheaval which is going to be very costly at a time when the public purse is under enormous pressure, so, if that is my 'Save the LSC' speech to you, Chairman, that is it. [128]

77. Chris Humphries of UKCES agreed that employers were unhappy with the uncertainty created by the proposed change, adding that "Even many of my commissioners have been meeting with ministers, saying, 'You have just made far more complex a system that you have asked the Commission to try and simplify, and that is going to pose real challenges'."[129] Dr Collins of the Association of Colleges was more forceful: "There is a general view at the moment that the new arrangements are either a pig's ear or a dog's breakfast and need to be sorted out with a degree of operational clarity to make sure that we do not lose the progress that the Learning and Skills Council has made over the last six or seven years."[130]

78. In late July 2008 DIUS announced that the policy would go ahead, although there is still work to be done on developing the business model, organisational design and relationships with other agencies of the new SFA.[131] Some further information was produced by DIUS in December 2008 in FE and Skills Reforms: an update, which included a Post 19 Learning and Skills Delivery Chain, summary of new roles and responsibilities and functions.[132] The changes will create new pressures on RDAs and other partners at the regional level. As the TUC pointed out: "RDAs and SSCs will need to work even more collaboratively if the new demand-led system is to operate effectively, especially as the planning role of the LSC will no longer exist. RDAs, SSCs and the new regional LSC Councils only have two years to prepare for this scenario and they need to focus on building a stronger demand-led system for adult skills at the regional level."[133] We note in particular that the LSC regional boards have themselves only just been set up and will now have as a priority preparing for the post-LSC landscape.

79. It has recently been announced that the Skills Funding Agency and the Young People's Learning Agency will both have their HQs based at the current LSC national office in Coventry.[134] The new National Apprenticeship Service will be part of the SFA.[135]

80. 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.

Regional structures

81. The Leitch targets are national ones, as are the programmes designed by Government to achieve them, but the regions are the focus for delivery. The ability of regional and sub-regional strategies to address skills issues effectively will be central to whether the Leitch agenda is realised in anything approaching its ambitious form. Despite this, as the Association of Colleges noted, "The Leitch review reinforced the existing trends to give more influence to employers via Sector Skills Councils while saying very little about the role of regional organisations in skills."[136]

REGIONAL DEVELOPMENT AGENCIES

82. At the heart of regional delivery in England are the nine Regional Development Agencies (RDAs). The RDAs are required to report to Government on their region's achievement of basic, intermediate and high level skills. They have always had a role in the skills agenda but the post-Leitch reforms and the Review of Sub-National Economic Development and Regeneration published in July 2007 have led to new responsibilities for RDAs in the single integrated regional strategy, especially with the transfer of the responsibility for skills brokerage from the LSC by April 2009.[137]

83. The RDAs are expected to work closely with regional partners such as the LSC, Jobcentre Plus, SSCs and HEIs. They were responsible for developing Regional Skills Partnerships (RSPs) in which the partners align their funding in support of agreed priorities that support the regional economic strategy.[138] Currently, the RDAs are reviewing the role of the RSPs and how these can better support the local Employment and Skills Boards. The RDAs also need to develop links with the UKCES on issues such as the SSCs, the integration of employment and skills agendas and the reform of qualifications.[139] Some regions have also developed a Skills Action Plan focussing specifically on Leitch (for example, the West Midlands).[140] In other regions there is a priorities statement.[141] For higher skills, the RDAs have a role in delivering the High Level Skills Strategy which aims to improve alignment between HE, business demand and regional need.[142]

84. David Cragg of the LSC told us that in the West Midlands "we have now got a fully integrated approach with skills embedded firmly through a really profoundly and collectively developed Regional Skills Action Plan embedded firmly within the Regional Economic Strategy; it represents the best step forward we have seen since the RDAs were established".[143] However, others were more critical of the performance of RDAs. Ufi reported that "the RDAs do not always work well with Regional LSC given their focus on Level 3 skills and above and the LSC's priority to focus funding on Level 2. This often creates tension in the regional planning process."[144] In addition, "RDAs have a broad remit; we believe they are strong in reinforcing messages but weak on implementation of policy".[145]

85. It appears that the level of engagement of RDAs with HE and FE at the local level has been variable as well, despite the critical nature of this relationship. The OU told us that "it is not clear to the University if the contribution HE can make to the skills agenda has been fully valued across all RSPs. In some regions there has also been unnecessary competition between organisations as to which organisation should take the regional lead on skills".[146]

86. The effectiveness of the RSPs came in for particular criticism. Universities UK noted that "the RSPs and related committees may be more efficient in some regions than in others, and their effectiveness in delivering this agenda may need to be monitored".[147] On behalf of business, the EEF complained that "it is not clear that there is sufficient employer involvement and engagement [on RSPs]. Business representatives only make up a minority of all of the RSP boards."[148] The Chair of the Yorkshire RSP conceded "I do think there is a real lack of clarity from the Government as to what the role of the RSP is".[149]

87. In the case of the SSCs and RDAs, the difficulties are often over the differences between the regional and sectoral approach to skills. The Alliance of SSCs argued that "Recently, the Regional Development Agencies (RDAs) have shown a greater willingness to engage with sectoral skills issues; but in the past the picture has been patchy."[150] One difficulty was that:

Currently each RDA chooses a limited range of economic sectors to prioritise. SSCs who are on the priority list often build good working relationships with the RDA. But in each region the majority of sectors will not be a priority and will effectively be 'shut out'. This approach risks the disillusionment of employers who are not part of a favoured sector and makes it harder for SSCs to engage employers.[151]

The priorities chosen are also "plan-led, not demand-led".[152] We heard from SEMTA that "Our experience so far is that there is little improvement in the approach of RDAs in promoting the Leitch findings. In some cases, RDAs have reduced staffing in support of the skills agenda".[153] In other RDAs,

there are more encouraging signs that the overall approach of Leitch is welcome, but activity is slow, and there is a frustrating amount of dialogue which has yet to demonstrate how the targets will actually be achieved in practice. 'Leitch' is becoming a popular term invoked by some RDAs, but a little more detail and more in terms of delivery plans would inspire greater confidence that they are willing to change their approach in support of it.[154]

In particular, SEMTA regional staff felt that RDAs were not giving the Sector Skills Agreement the appropriate authority to inform strategy, direction and funding.[155]

88. It is perhaps invidious to name those RDAs which appear to be performing better than others but one witness summed up the position well. Dr Wright of the Association of the British Pharmaceutical Industry told us:

The north west has got a very good relationship with some of the companies in that area and has been very responsive. It is fair to say that the companies up there have taken an active and proactive approach to that relationship. There are some others where we have seen some positive ideas, for example in the south east and east of England. My slight hesitation and worry is that there is a level of duplication and trying to compete with each other there as well. Somehow, what we need to do is allow them to build on the strengths or the needs of their local community while also joining them up in a more coherent structure. Other than that, apart from a few good examples, we have not been hugely impressed by the RDAs.[156]

Other positive examples offered to the Committee were the establishment by the London Development Agency of the London Multi Agency Team which was described by Energy and Utility Skills as "an innovative regional model for collaboration between London Regional Learning and Skills Councils, Jobcentre Plus and other partners as appropriate".[157] The West Midlands and East Midlands were also praised by EU Skills.[158]

89. Summing up, the City and Guilds Centre for Skills Development suggested that "Existing regional structures for delivering skills and training have not achieved their full potential, due largely to a perceived lack of clout and a failure to communicate to employers how the system works and what they can expect from it".[159] The Centre believed these problems could be overcome by clear communication and by giving employers a real, driving role in the process, citing international comparisons such as the Netherlands and the USA to prove their point.[160] A more radical solution would be to remove responsibility for skills from the RDAs altogether: neither Professor Wolf nor Professor Unwin could see any role at all for them.[161] Alternatively, the principal of North Lindsey College called for RDAs to take "a more prominent role in overseeing the skills agenda", arguing that "they need to do more in championing enterprise and entrepreneurship and to work with colleges in addressing local and/or sub-regional initiatives".[162]

90. 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.

SUB-REGIONAL BODIES

91. At the sub-regional level, the Government is developing a new format of Multi-Area Agreements, Local Area Agreements and Employment and Skills Boards. It has stated that

We are committed to the principle of commissioning and planning happening at the right level in the system. Most planning will happen at the local level; this will allow the system to be flexible and responsive to learner needs. The sub-regional and regional levels will be used to aggregate commissioning plans across an area for certain providers, if appropriate, to ensure the single commissioning conversation.[163]

In its second memorandum to this inquiry, DIUS argued that: "MAAs are emerging as the key tier with regard to skills—they cover geographical areas which make real sense in terms of skills and travel to work and provide a vehicle for significant interaction between central and local government in a number of policy areas."[164]

92. This message has yet to reach beyond Whitehall. MAAs were barely mentioned in evidence and much of the comment on ESBs was at best equivocal. The Centre for Enterprise reported that "progress in terms of establishing ESBs has been tentative as regions await guidance from the national level signalling support (or otherwise) for ESBs and providing a steer on the role they should play".[165] This uncertainty can be seen in the view expressed by the representative of one ESB who told us that "I believe that the voice of the employer is being lost in these new structures. You can now go to employment and skills boards that would not even have an employer representative on them from the private sector".[166] The SSCs also had concerns that "there are currently too many consultative and planning bodies at the regional level and below, and the development of Employment and Skills Boards (ESBs) threatens to make the confusion worse", and that "proliferation is inefficient and is likely to lead to employer 'consultation fatigue'".[167] They called on the UK Commission for Employment and Skills "to take an overview of the system and licence ESBs to ensure accountability for delivery at the local level".[168]

93. Chris Humphries of UKCES commented:

We have a very confused system. We have RDAs, we have regional skills partnerships, we have employment and skills boards that are operating at a sub-regional level and we have multi-area agreements that are operating at another level. We have not yet anchored on an appropriate sub-national structure and we are in a process of change. I think the concern people have is that they are not sure where the end destination is on all of this.[169]

This was supported by many other witnesses, including the representative from the RDAs, Steven Broomhead, who warned that "I think we have a very complex duplicating mess at national, regional and sub-regional levels at the moment in terms of planning, and what we should have is evidence-based prioritisation and inclusivity about what those policies are at a regional level, and we do not have that and it is likely to get worse."[170] The Engineering Employers Federation agreed that:

The complexity of the skills infrastructure is most acute at the regional and sub-regional level. As this is the level at which most companies engage with the system, action on improving coherence at this level should have been a priority. There remains a lack of clarity about the future shape of the regional infrastructure and the role it will play in delivery of the Leitch Review targets.[171]

94. It is vital that this situation is addressed. The lack of clarity over the regional dimension of the implementation of the Leitch agenda may well arise from the near-silence of Leitch himself on regional bodies but it is now incumbent on the Government and on UKCES to resolve this. As a first step, we recommend that the Government issue 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.

SECTORAL AND SPATIAL PLANNING AT THE SUB-NATIONAL LEVEL

95. There is debate over whether the regional level is the most appropriate focus for the delivery of the Leitch agenda. The Association of the British Pharmaceutical Industry argued that "Regional structures for delivery of skills training are of limited value to an industry which acts globally and where many employees are recruited on a national, and frequently international, basis".[172] Others were of the view that regions were "too large, too diverse in their skills needs, profiles and provision to allow these mechanisms to operate effectively; skills needs are not homogenous across the region, but highly dependent on the economic geography and the skills base of sub-regions".[173] Professor Wolf told us: "I really do not think we need a regional level. That is just another layer of bureaucracy which is not helpful. What you want to do is get down to the level where individuals are responding to the local market and making their own decisions within the context of where they live and where they are operating."[174]

96. There is also a need to align the sectoral approach advocated by Leitch, with so much responsibility for leadership and defining demand placed on the SSCs, with the regional approach of existing delivery structures. The Alliance of SSCs argued that there is a requirement for a strategic interface between SSCs and RDAs, since "leaving 25 SSCs to negotiate independently with nine RDAs is a recipe for confusion".[175] They also warned that while they "accept that the regional approach will lead to competition between RDAs this cannot be allowed to prevent a joined up national approach to skills.".[176] The SSCs argued that "The connection between regional structures and the sectoral approach is crucial to the success of skills delivery. We expect that the UK Commission for Employment and Skills (UKCES) will make recommendations on how these can be improved."[177]

97. We believe that the question of the correct level for the delivery and planning of skills may be one with a different answer in different circumstances. It is clear that if the agenda is to address worklessness hotspots effectively, then the strategy employed must be a very local one to allow for targeting special assistance on pockets of unemployed, out of education young people in generally affluent and highly-skilled areas. Strong local leadership is needed in such cases to ensure that the programmes reach their target audience. Yet, countering this, colleges aside, training providers and employers organisations are likely to think on a much larger geographical scale and would not welcome too much variation between the offer and planning structures in different parts of the country or even parts of a city. 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.

Complexity

98. As we have seen in discussing the regional structures for skills delivery, a constant refrain is that the system is too complex. This is evident in the multiplicity of planning organisations, leading to duplication, confusion and employer fatigue, and is demonstrated by the excellent charts provided to us by the National Audit Office, which show just how complicated the landscape is for employees, those not in work, young people and those delivering training.[178]

99. Dr Wright of the ABPI told us that "from our perspective that there is what you could call a patchwork quilt of skills support, provision and information" and that "It is difficult for us to know exactly … what needs to be done and to get a response".[179] Like other witnesses, Dr Wright had tried to map out "who we engaged with and who we needed to interact with and influence to have an impact at the employee who came through the door."[180] Such attempts were described by those who had made them as "really difficult",[181] "mind-boggling"[182] and "almost incomprehensible".[183] Chris Humphries of UKCES related that when the Chairman of UKCES was first appointed, "something like sixty-seven organisations with skills in their remit wrote to him to tell him it was essential that the Commission worked with that organisation because they were the heart of skills development in that particular sector or area and [he] had not heard of any of them until that point".[184]

100. This problem is set to become worse in the near future. Chris Humphries told us that:

The system has got more complex over the last six months, not less, with the changes in the machinery of government, the splitting of the departments, the move to devolve part of 14-19 to the level that 19+ is operating at … I do not think there is an employer in the land who understands what the elements of the new system are, particularly pre-19.[185]

SEMTA agreed that "in England the system is facing extraordinary upheaval and change over the next three to five years … While many of these [initiatives] are directly linked to achievement of the Leitch targets, it means creating a landscape of astonishing complexity and perpetual change." It added: "There is perhaps a danger that, unless properly funded, the energy required to create the mechanisms necessary to achieve Leitch may sap enthusiasm for the actual delivery".[186]

101. Another danger is that the complexity of the UK's skills system may directly harm the country's international competitiveness. Dr Wright of the ABPI warned that Singapore, Switzerland and other countries "are making it easier for our companies to go in and get the skills they need, not more complex. They are able to deliver the skills that they want in a more coherent way and provide a package for investment."[187] Teresa Sayers of the Financial Services Skills Council agreed that "If you consider firms which operate in a global context, the complexity of operating within a UK context is absolutely mind blowing for them."[188]

102. There are two separate issues involved here: complexity of planning organisations or structures (national, regional and local bodies with overlapping roles) and complexity of delivery mechanisms (the interface with employers and individuals). On the first, we asked the then Minister about the complexity of the system, particularly in relation to the different layers of regional, national and local planning. He was passionate in his defence of the status quo, citing the importance of skills at each level from the local community to the national picture and challenging us to identify "what bits should we stop?"[189] He argued that "this is all about the success of people understanding how important skills and training is" and concluded that "of course there is a tension there between local and regional sometimes and certainly sector-led pushes, but it is all necessary to get us to the right place".[190]

103. On delivery mechanisms, we note that in its update to Raising Expectations, DIUS states that it is "committed to reducing bureaucracy" and that it has "started work with the Bureaucracy Reduction Group to address complexities and bureaucracies from the FE and skills perspective".[191] UKCES has also been charged with responsibility for a simplification project which has identified six concerns from employers around: difficulties of access for employers to the system; complexity of programmes and initiatives; too restrictive constraints on individual programmes and initiatives; excessive bureaucracy in administrative arrangements for programmes or initiatives; complexity of structures and organisation; and rapidity of change.[192]

104. The first report from this project was published in October 2008, setting out proposals to "(relatively) quickly provide a much simpler interface between employers and the public skills system, concealing much of the complexity in order to deliver a simpler and much more responsive service to employers—sometimes called 'hiding the wiring'".[193]

105. A second stage is promised for a later date to develop "longer-term proposals that will fundamentally simplify the underlying programmes and structures, and ensure a much more employment-responsive service to employers that integrates employment and skills services in the most effective and sustainable way—'rewiring the circuit board'".[194] The simplification report concludes by stating that "Further work by the UK Commission on longer-term changes will be undertaken during 2008 and 2009."[195]

106. 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. The DIUS Director General argued that "If we can make the service simple then actually it does not matter that we have lots and lots of organisations helping us to identify their skills needs".[196] On the contrary, we believe that merely "hiding the wiring" still leaves a complex organisation underneath which slows down decision-making and responsiveness.[197]

107. 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.

Devolution

108. Responsibility for skills is a devolved matter and as UKCES told us "there is a different pattern of employment, unemployment, social inclusion and exclusion, productivity and competitiveness in different parts of the UK".[198] SEMTA warned in evidence that "There is an inherent risk that the Leitch proposals are implemented in different ways and leading to different outcomes across the four UK nations. Our companies which cross the borders of the 4 nations are concerned that different interpretations of requirements, and timescales for implementation, of Leitch will mean more confusion and result in employer disengagement".[199]

109. UKCES is, as its name suggests, a UK-wide body and DIUS has tasked it with seeking "to establish a relationship of mutual respect and trust with governments across the UK."[200] Its Chief Executive suggested to us that this put the Commission in a position of strength, allowing it "to monitor and learn from a number of different laboratories in which different things are being tried in order to get the system right".[201] Interestingly, a particular gain may be in comparing policy impacts in Scotland or Wales with a view to examining their relevance to the English regions which are of similar size. Chris Humphries told us that the World Bank had suggested that "running an education system in population groups of 3-7 million may be the way to ensure quality, progress and effective operations".[202] He saw "a real opportunity to learn from the ways in which different parts of the country respond to the different challenges they have when using employment and skills as drivers to get the whole system to perform better".[203]

110. 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.

Government programmes

TRAIN TO GAIN

111. In March 2005 the Government announced its plans to introduce a National Employer Training Programme to "give employers real choice over the training they offer their employees", which become known as Train to Gain.[204] DIUS referred to it as the Government's "flagship service to support employers in England, of all sizes and in all sectors, to improve the skills of their employees, unlock talent and drive improved business performance".[205] The service provides access to skills advice for businesses through 'skills brokers', colleges or training providers.

112. The Government states that since the programme was fully rolled out in the autumn of 2006, nearly 83,000 employers have engaged with Train to Gain, with 76% being 'hard to reach', exceeding the 51% target. Almost 185,000 learners have achieved a qualification.[206] The Government plans that funding for Train to Gain will increase from £520 million in 2007-08 to over £1 billion by 2010-11.[207]

113. In November 2007 the Government published Train to Gain: A Plan for Growth which set out reforms to the programme. These include "working with partners at national and regional level to consider the best way to improve performance measurement, looking at other indicators such as productivity, tackling disadvantage in particular groups and other economic and social factors. New measures and flexibilities include broadening out skills brokerage to cover all sizes of employer, and flexibilities for people recruited through a Local Employment Partnership (LEP)".[208] The DIUS memorandum noted that the Train to Gain brokerage service is to be integrated into the Business Link network from April 2009.[209]

114. DIUS's audited accounts for 2007-08 show that it underspent by £284 million on its grant to the LSC in that year.[210] It has been reported in the media that much of this can be attributed to underspending on Train to Gain.[211] This implies that the programme is not operating effectively or that its potential has been overestimated, and we received a series of criticisms in the submissions to the inquiry. These focussed on what Train to Gain offers, its lack of flexibility and its unintended outcomes in terms of deadweight. For example, witnesses told us in oral evidence that "there is a lack of understanding of what the Train to Gain offer now is"[212] and agreed with the proposition that there is an inherent contradiction between the structures of Train to Gain and the nature of courses and training that employers want—short, sharp courses and not necessarily leading to qualifications.[213] Electronics Yorkshire told us:

There is a clear mis-match here between some qualifications funded by mainstream initiatives such as Train to Gain, and the skills required by industry. Very often the qualifications on offer are not in demand and the skills in demand are not offered through the public purse.

One way to address this might be through accrediting short, technical courses, however the process to gain accreditation can be extremely long-winded and time consuming, in some cases, the elapsed time needed outstripping the 'life time' of a course in a fast moving industry. Even with an accredited course, there is still no guarantee of funding being available.[214]

115. The "broker" system came in for particular criticism. One FE provider told us

Because it [Train to Gain] is target driven and qualification driven its market place in practice is primarily large employers. Taking a delivery team into a large factory and enrolling learners is a good model, ie high numbers of employees accessing 'on the job' training, particularly Level 2. However, the same employers are not as responsive when you talk to them about Level 3, Level 4 skills. The brokerage system for Train 2 Gain has been a complete shambles and another waste of public money.[215]

116. Chris Humphries of the UKCES summed up the concerns: "I think we have designed a system with too many rules, that the employer experience starts with the broker who is incentivised on getting to the next stage, so could exaggerate what is on offer and the employer then finds from the provider that actually what is on offer does not quite meet the employer's needs, and we do not have a system that offers an all-through service."[216]

117. We note that those representing individuals also expressed disquiet about Train to Gain. The Equality and Human Rights Commission was "concerned about how this demand-led system will serve to support those currently deficient in skills, the hard-to-reach, and those at the margins who have failed to make—or be heard in—demands for skills acquisition and progression opportunities to date."[217] They called for the Train to Gain brief to be "extended to give funding and brokerage support to employers for skills training for different groups at different levels to secure progression and best use of employees, not just skilling at levels for current roles."[218]

118. Finally, some witnesses argued forcefully that Train to Gain, far from increasing skills, was having a serious negative impact on the UK's skills base. Dr Collins of the Association of Colleges told us that "you could probably say that the number of skills being followed by adults in total has gone down because essentially the Train to Gain focus on employer-led provision, which has not been fully taken up in the sense that there is more money unspent in that budget each year than has been allocated to it, has been at the cost of individuals themselves pursuing qualifications outside of their employer-driven framework".[219] Looking to the future, Mick Fletcher, an education consultant, argued that the current Train to Gain approach of accrediting existing skills could be harmful to the UK's long-term skills development:

three or four years downstream, when we have found all those people who are skilled but not qualified and labelled them, which may do them a little bit of good but not a great deal, we will find we have a bigger task then of training people who need training, which certainly would benefit them and benefit their employers, but we may well have disposed of many of the teachers who would have done that.[220]

119. David Cragg from the LSC, which is responsible for Train to Gain, accepted some of the criticism, agreeing that the current system was "too patchy" but he added:

I think there is less and less deadweight and more and more evidence of genuine added value, and I think that comes through all the satisfaction surveys from employers themselves and from individuals taking part in Train to Gain … if you look at the scale of take-up tackling some of the fundamental issues of low-skilled people in the workforce, in particular, then the numbers are now starting to be very encouraging … The long-term issue will be whether we can see more and more co-investment … especially at Level 3 and at Level 4 because, ultimately, that would be the litmus test as to whether it works.[221]

Steven Broomhead of the RDAs suggested that the deadweight issue could also be ameliorated through the integration currently underway of the skills brokerage for Train to Gain and the RDAs' business support to provide a single number for businesses to ring on any number of issues. He thought this would be particularly important for small and medium enterprises "who have no culture of providing that sort of training".[222]

120. A recent report by OFSTED was also reasonably positive about Train to Gain, stating that "The survey found that Train to Gain was successful in raising employees' personal skills and knowledge and in providing them with qualifications to recognise their vocational competence." However, it acknowledged "Areas remain for improvement in the design and delivery of the programme. The provision of skills for life training was a particular weakness. Those employees with language, literacy, or numeracy (skills for life) needs rarely received sufficient training or encouragement to improve their skills. Around a third of the providers surveyed were unclear about the extent to which skills for life provision was eligible for funding through Train to Gain" and added "Data on qualification success rates were not collected systematically by all the providers."[223] It also stated "The survey found little evidence that the programme was driving up the demand for training among employers."

121. The Government has moved to address some of the issues raised through the development of compacts with the SSCs. The compacts are agreements between DIUS, the LSC and sector bodies which give the SSCs greater flexibilities within Train to Gain, such as sector-specific joint marketing with the LSC and a relaxation of the rules around funding only first qualifications in certain priority areas, in return for a commitment by the SSC to work within their sector to increase take-up of the skills pledge, apprenticeships, full level 2 and 3 qualifications and Skills for Life.[224] The first compact, with SEMTA, was signed earlier this year and ten in total should be in place by the end of 2008. Chris Humphries of UKCES applauded the concept but was sceptical about the process:

I think the concept behind sector compacts is to try and give employers a better choice, a better way in which to link their strategic needs with their training requirements with the system. I think the weakness at the moment is that it still does not try to start from the needs of the business in relation to strategy and skills and, if it did and what we designed was a response that met their needs, but tariffed in such a way that it gave meaning to [the] suggestion earlier about getting employers to pay for those higher-level skills that they get most return from, in other words, if you had a tariff and a tripartite responsibility built into the funding regime around a training plan from the company, you could create something that still sticks to many of the concerns about basic skills and moving up the higher-level skills ladder, but does it in a way that is responsive to it and, therefore, produces a better impact on the business.[225]

As we have already noted, there have also been recent flexibilities introduced for SMEs to help them train their staff using Train to Gain.

122. 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 re-training 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.

123. 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.

APPRENTICESHIPS

124. The Government has recently reviewed apprenticeships and announced plans for a National Apprenticeship Service, with a "significant regional and sub-regional role". The aim is "to meet the goal set by Lord Leitch of expanding the number of apprentices in learning to 400,000 in England by 2020; and to honour the entitlement to an apprenticeship place for all school leavers who meet the criteria by 2013".[226] A new national apprenticeship vacancy matching service is to be tested in three regions from October 2008.[227] In its update to Raising Expectations, DIUS stated that "We recognise that raising the number of employers offering Apprenticeships is critical and we will make it easier for employers to improve the range of Apprenticeships by enabling them to include their own accredited qualifications; and by introducing a pilot wage subsidy programme for small businesses, to make it more attractive for them to offer high quality Apprenticeship places."[228]

125. In parallel to this inquiry we have been conducting pre-legislative scrutiny of the draft Apprenticeships Bill and we offer detailed comments on apprenticeships in the report relating to that inquiry.[229] Witnesses to this inquiry questioned the suitability and impact of the existing apprenticeships programme, expressing concerns particularly about the validity and value of programme-led apprenticeships and about the position of women in apprenticeships.[230] We also heard views on the new arrangements. For example, the Alliance of SSCs was concerned that "the ambitious expansion target risks diluting the quality of apprenticeship delivery.[231] Looking to 2010, a number of witnesses, especially from FE colleges, believed that Train to Gain and the new apprenticeship service should be brought together. The 157 Group argued that "The new Skills Funding Agency should integrate the Apprenticeship programmes into its wider funding of Train to Gain as an all embracing package for employers and dramatically simplify the paperwork involved in the whole employer engagement process".[232]

126. As the select committee shadowing DIUS, we have particular concerns about adult apprenticeships which fall under the responsibility of DIUS (DCSF is responsible for 14-19 year olds). Here, there are issues of parity of funding and esteem. At present funding for adult apprenticeships is lower than for young apprenticeships and Rolls Royce called for the funding to be equalised between the 16-18 year apprenticeships and the over-25s.[233] The Alliance of SSCs suggested that making the funding equal would both "support Leitch's aim of upskilling the current adult workforce" and, by simplifying the offer, "encourage employers to engage" with the apprenticeship programme.[234] It seems to us that, in general, there is a risk of "traditional" apprenticeships, aimed at young people, being prioritised at the expense of older workers. We believe that the relationship between 14-19 and adult apprenticeships should be kept under review. 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.

127. Another area of particular concern to us is that higher level apprenticeships are not receiving the same attention as entry levels. The lack of evidence presented to us on higher level apprenticeships speaks for itself as to their profile. 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.

128. Finally, we have heard evidence in the parallel inquiry about widespread re-badging in the apprenticeship programme whereby existing employees 'convert' to apprenticeships. We examine this subject in more detail in our report on the draft Bill.

QUALIFICATIONS REFORM

129. Reform of vocational qualifications has been underway for some time. The Qualifications and Credit Framework (QCF) is designed to be a new way of recognising achievement through the award of credit for units and qualifications in England, Wales and Northern Ireland. Every unit and qualification in the framework will have a credit value (one credit represents 10 hours, showing how much time it takes to complete) and a level between Entry level and level 8 (showing how difficult it is).[235] The Qualifications and Curriculum Authority conducted tests and trials of the new system between September 2006 and June 2008, involving learners, employers, awarding bodies, sector skills councils, colleges and training providers. On 14 November 2008 DIUS announced a new flexible QCF which was welcomed by the Association of Colleges and the LSC.[236]

130. One factor often cited as a disincentive to employers providing/supporting training is the Government's focus on whole qualifications. For example, the Alliance of SSCs argued that "Currently, government funding is tied to whole qualifications, which often do not match specific skills needs, and the vast majority of SSCs consider this puts learners and employers off further training".[237] The QCF is intended to meet some of these concerns by allowing learners to take modules which are specifically relevant and, in time, build these towards a whole qualification. Some witnesses wanted to develop credit frameworks still further to encourage students to undertake training, especially at higher levels. The Council for Industry and Higher Education argued that:

If we are serious as a nation about enabling learners of all ages and backgrounds to develop higher level skills, to acquire learning when and where it suits them and to explore and progress around the climbing frame of learning, then systems of credit accumulation and transfer have to be implemented and be made compatible across the country. Individuals need to be able to have the learning and skills they have acquired in the workplace validated and credited, go on an in-house or external course whether provided by a private sector provider, a College or an HEI and build further credits.[238]

131. We support the current emphasis on qualifications reform, both of the system and of individual qualifications. If successful, this work has the potential to produce valuable long-term benefits, but we recognise that this is a long-term project which will not in itself deliver an increased demand for skills. The history of earlier attempts at reforming vocational qualifications suggests that it takes a considerable time for employers in general to understand and value the changes. Moreover, some of the goals that are being pursued, such as the certification of informal learning in the workplace, are technically difficult and may provide benefits that are uncertain when weighed against the costs of delivering this kind of certification. 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.

119 www.lsc.gov.uk/aboutus/ Back

120 Learning and Skills Council, Annual Report and Accounts for 2007-08, HC (2007-08) 783, p 2 Back

121 Ev 122, para 4 Back

122 Ev 122, para 11 Back

123 Ev 227, para 15 Back

124 Ev 204, para 20 Back

125 Department for Innovation, Universities and Skills, Raising Expectations: enabling the system to deliver (referred to in this report as Raising Expectations), Cm 7348, March 2008, para 28 Back

126 Ev 256, para 17 Back

127 Ev 256, para 18 Back

129 Q 237 Back

130 Q 327 Back

131 Raising Expectations: Enabling the System to deliver, Update and next steps, section 3.14, available at www.dcsf.gov.uk Back