Conclusions and recommendations
The Leitch agenda: principles
1. 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)
2. 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)
3. 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)
Leitch targets
4. 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)
5. 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)
6. 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)
7. 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)
Government implementation
8. 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)
9. 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)
Government vision
10. 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)
11. 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)
National Structures: Learning and Skills Council
12. 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)
Regional structures
13. 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)
14. 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. (Paragraph 94)
15. 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)
Complexity
16. 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)
17. 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)
Devolution
18. 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)
Government programmes: Train to Gain
19. 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.
(Paragraph 122)
20. 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)
Apprenticeships
21. 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)
22. 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)
Qualifications reform
23. 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)
Employers: representation and engagement
24. 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)
Sector Skills Councils
25. We
recommend that UKCES directly address in its annual report the
structures through which key generic skills will be promoted.
(Paragraph 142)
26. 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)
27. 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)
28. 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)
Private sector organisations
29. 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)
Employer engagement and participation
30. 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)
Small businesses
31. 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)
Training providers: Higher Education
32. 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)
33. 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)
34. 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)
35. 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)
Further Education
36. 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)
37. 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)
Joint funding of FE/HE?
38. 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)
Private sector providers and in-house training
capacity
39. 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)
40. We recommend that
DIUS commission an audit of private sector training providers
to ensure that its plans for the implication of Leitch are based
on accurate calculations as to capacity and capability in this
sector. (Paragraph 192)
Individuals
41. 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)
Skills Accounts
42. 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)
Adult Advancement and Careers Service
43. 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)
44. 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)
The right to request time to train
45. We
recommend that the effectiveness of the right to request time
off for training be monitored and reported annually. (Paragraph
207)
Lifelong learning
46. 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)
Role of the unions
47. 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)
Conclusion
48. 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)
49. 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)
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