Memorandum 8
Submission from EEF
ABOUT US
1. EEF, the manufacturers' organisation,
has a membership of 6,000 manufacturing, engineering and technology-based
businesses and represents the interests of manufacturing at all
levels of government. With a network of regional offices, EEF
is one of the UK's leading providers of business services in health,
safety and environment, employment relations and employment law,
manufacturing performance, education, training and skills.
CONTEXT
2. The Leitch Review was widely welcomed
as a comprehensive assessment of the UK education and skills system
and the changes that would be needed to meet the challenges of
globalisation. In particular, EEF welcomed recommendations that
placed a greater emphasis on intermediate and higher level skills,
which are especially relevant to the needs of manufacturing. Furthermore,
the report recognised the need to achieve higher level skills
within the existing workforce, in addition to improving the flow
of more highly skilled individuals into the workforce. This is
essential if the UK economy is to compete in higher-value added
activities, which will increasingly rely on knowledge and innovation.
3. The Review proposed moving further in
the direction of a system of demand-led training provision and
correctly identified the shortcomings of the current structure
which tries to predict and provide training provision. It recommended
directing a much greater share of public subsidy for training
through well-informed customers. However, there is more to do
to ensure that the customers of the skills system are equipped
with the information to make choices about the right training
for their business. Train to Gain and Learner Accounts are two
potential mechanisms for achieving this. It also recognised the
current complexity of the learning and skills landscape in England,
including the number of bodies and intermediaries—both sectoral
and regional—that have been established to influence training
provision and funding flows is a significant barrier to employer
engagement with the system. The acknowledgement of the current
confusion and its impact on business was therefore welcome.
4. While the review made a number of recommendations
on the direction of travel needed, it stopped short of providing
a blueprint for reform. In the interim it has taken some time
for government to translate the Leitch Review ambitions into a
policy strategy that would deliver world class skills. The Department
for Innovation, Universities and Skills published an implementation
plan in response to both the Leitch report and last year's machinery
of government changes.
5. The implementation plan placed significant
emphasis on increasing Level 2 skills and on how employers would
be expected to contribute to meeting the UK's skills targets.
Issues around the complex skills infrastructure remained largely
unresolved. A more detailed strategy on developing higher level
skills, planned funding changes and the first meeting of the UK
Commission for Employment and Skills did not take place until
the first few months of 2008. The proposal to replace the Learning
and Skills Council with a Skills Funding Agency, which will route
public funding for skills through Train and Skills Accounts is
a step towards a demand-led system of funding—but this is
not due to be completed until 2010.
6. The delay in reforming the Learning and
Skills Council until 2010 and in routing more funding through
demand-led routes such as Train to Gain has been particularly
disappointing given that this would potentially go some way to
increasing competition in the provider market and improve its
responsiveness.
7. Progress on delivering change has therefore
been somewhat slower that expected. This is of concern given that
the government accepted the Leitch Review recommendation that
employers' progress be assessed in 2010. Yet many of the barriers
to offering more and better training that EEF identified in 20042[29]—lack
of information and lack of appropriate training provision—still
exist. This also raises questions about how well equipped government
is to responding to these challenges—the Leitch Review took
two years to complete and we are now a year and a half into implementation.
In the meantime, our competitors have continued to move forward.
REGIONAL RESPONSES
8. 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.
9. While overall policy is directed at the
national level, regions have two primary functions—determining
skill needs in line with Regional Economic Priorities and providing
the interface with employers and individuals by directing funding
flows and managing the skills brokerage service under the Train
to Gain banner.
10. At the national level, there has been
a lot of focus on the role of Sector Skills Councils, with seemingly
little direction given to change at the regional level. Currently,
RDAs take a lead in ensuring that the skill needs of a region's
economy are met through the Regional Skills Partnerships (RSPs).
The Leitch Review and subsequent implementation plan were published
in the middle of many RSP's planning and delivery cycles, which
meant that many of the RSP's plans were not directly influenced
by the Leitch Review findings. However, most of the RSP's plans
had already identified the need to raise intermediate and higher
skills—in line with the Leitch Review's final recommendations
and suggested targets.
11. EEF has previously expressed concerns
about how effectively the skills priorities identified by RSPs
were translated into a delivery plan for the region by the LSC
and the extent to which LSCs had sufficient discretion over the
direction of public funding. In addition, it is not clear that
there is sufficient employer involvement and engagement. Business
representatives only make up a minority or all of the RSP boards.
The current array of partnerships and regional bodies, many with
employer representation, means that businesses are confused and
unsure about the most effective way to influence the skills infrastructure.
12. The link between RDAs' assessment of
skills needs and LSC funding priorities was not clearly established.
While we support the creation of the new Skills Funding Agency,
which will be focused on delivering funding in response to demand
rather than in response to planning, this raises further questions
about how the work of RSPs will influence funding or training
provision—if at all.
13. The main Leitch Review recommendation
in relation to regions was the creation of Employment and Skills
Boards (ESBs). Again the Leitch Review was light on the detail
of what these boards would look like and what their remit would
be. The implementation plan, however, suggested that these should
be set up according to local need and where they exist they should
simplify the range of local existing bodies.
14. If the boards adapt to local circumstances
and reflect local needs in terms of their exact roles and geographic
coverage, they could potentially have a positive role in finding
solutions to local problems. The boards should ensure that acting
as a representative voice of local employers is a primary purpose
and not try to replicate the roles of Regional Skills Partnerships.
The development of these new boards will only increase the quality
of local employer engagement if they lead to a rationalisation
of other employer representation at the local level.
15. The creation of ESBs at the sub-regional
level has again been variable. Some RDAs have set up ESBs but
the exact design or history of them is unclear. In some cases
it appears that some are simply re-badged from previous skills
groups and may not be employer-led because of this.
16. A lack of direction from government
about the role of ESBs means that many areas have been reluctant
to back the establishment of the boards before they know what
the future holds for them and this is a real constraint on the
effectiveness of the ESB model. Many employers are unwilling to
invest time in engagement with the boards until they know what
the boards are aiming to and likely to achieve.
17. The boards should be responsive to local
need and the model they choose to adopt should depend on local
circumstances. There is, however, a need for more clarity about
the roles of boards. Ministers need to explain what they expect
the boards to do even if how they carry out the role assigned
to them and the models they adopt are decided at the local level.
18. Responsibility for the delivery of the
Train to Gain brokerage service is at the sub-national level.
The successful introduction of a demand-led system will depend
to a significant extent on the quality of brokerage and brokers
and their ability to understand the skill needs of different sectors.
Brokers play a key role in communicating business demand to training
providers by directing business to existing providers or working
with businesses and providers to commission new provision. The
quality of brokers and their knowledge of the needs of different
sectors need to improve as the system beds down and this will
need to be driven at the regional level. In addition, more needs
to be done to improve the communication of the Train to Gain offer
to employers. There is still a perception that it is confined
to funding for a first Level 2 qualification.
19. The government's recently published
Review of Apprenticeships proposed the creation of a new body—a
separate National Apprenticeship Service—to contract with
employers. We are concerned that the proposed brokerage role of
the National Apprenticeship Service, which is separate from a
combined Train to Gain and Business Link system, risks further
complicating business involvement with the skills system. There
is potentially a role for a National Apprenticeship Service in
developing and managing a national matching service—for
employers offering apprenticeships and learners who want to take
up an apprenticeship place. We are concerned that the proposal
for the service's field force to be in direct contact with businesses
will lead to them being approached by two separate sets of brokers
dealing with skills issues. This risks undermining the confidence
of business in the usefulness of either brokerage service.
SECTOR SKILLS
COUNCILS
20. Sector Skills Councils have a vital
role to play in collecting and communicating the skill needs of
their sectors. However, the quality of Sector Skills Councils
depends on the extent of their engagement with and understanding
of the needs of employers of all sizes. Moreover, the attempt
to marry a sector led approach driven by the Sector Skills Councils
with a regional one through the Regional Skills Partnerships has
not been as effective as intended
21. Sector Skills Councils are set to become
more important role in ensuring that the education and skills
system reflects the needs of business. They will play an increased
role in ensuring that the Train to Gain brokerage service is more
reflective of the needs of different sectors and the government's
higher skills strategy will given them an enhanced role in communicating
the needs of industry to the higher education sector. It is important
that the re-licensing of Sector Skills Councils process is rigorous
in ensuring that the bodies are able to carry out these new tasks
effectively and leads to the development of more effective and
influential Sector Skill Agreements. The simplified remit proposed
in the Leitch Review, which identified four key tasks for SSCs
is a good starting point for the UK Commission for Employment
and Skills.
FURTHER AND
HIGHER EDUCATION
22. Both the further education (FE) and
higher education (HE) sectors have an important role to play in
meeting the future demand for intermediate and higher level skills
which was set out in the Leitch Review. The quality of local FE
provision will impact on the ability of areas to respond to the
Leitch agenda. A consistently high quality of provision throughout
the country is important to ensure that all regions can successfully
respond to the Leitch agenda. The development of a system where
funding follows choices made by consumers should lead to increases
in competition and therefore the quality and responsiveness.
23. New ways of delivering higher education
will be key to achieving the Leitch target of 40 percent of the
adult working population qualified to level 4 and above. The target
will only be achieved through the expansion of HE participation
of those who are already in work.
24. A forthcoming EEF survey will show that
some employers are working effectively with HE institutions to
upskill their workforce. Others report a number of hurdles to
working with HE, such as uncertainty about what universities can
offer and a lack of experience in managing such relationships.
These need to be overcome if a new model of HE/employer engagement
is to be rolled out more widely.
25. HE institutions do have an economic impact
on their locality but their marketplace both in terms of students,
research and commercial links are also national and international.
The delivery of the Leitch targets by the HE sector needs to recognise
HE institutions' autonomy and their national and international
reach. The focus needs to be on helping institutions respond to
the needs of business for higher level training and ensuring that
learners receive a high quality education.
CONCLUSION
26. Meeting the challenge set out in the
Leitch Review is vitally important for our future economic success.
The Leitch agenda has led to a flurry of reports and consultation
from national government and the regional level. It is less clear,
however, that policy has so far had any impact on business's experience
of the skills system on the ground. Speeding up the move to a
system of funding that follows demand from employers and individuals
is essential. As is improving the extent and quality of employer
engagement— a vital issue if progress is to be made towards
the targets set out in the report. The 2010 date for the assessment
of employer response to the Leitch agenda is almost upon us, but
the barriers to training which the report identified still remain.
27. Leitch identified the complexity of
the skills infrastructure as a barrier to employer engagement.
This complexity is most acute at the local and the regional level,
which is where most companies engage with the system. Despite
the apparent problem, the government's Leitch implementation plan
makes few suggestions which will lead to significant simplification
and a lack of clarity about the roles of Regional Skills Partnerships
and Employment and Skills Boards is one example where there is
a risk of increased complexity.
28. Overall, a clear picture is yet to emerge
of how the infrastructure and delivery of post-compulsory education
and training at the regional level will respond to the Leitch
agenda of employer engagement in a demand led system. The fact
that little has yet been achieved on making the system more coherent
from the employer's point of view is a significant obstacle to
the delivery of the Leitch agenda at the regional level.
April 2006
EEF (2004) Skills for Productivity—can the
UK deliver?
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