Memorandum 17
Submission from the City & Guilds
Centre for Skills Development
1. EXECUTIVE
SUMMARY
1.1 This submission is made by the City
& Guilds Centre for Skills Development.
1.2 It examines the role of regional bodies
such as RDAs and RSPs principally as mechanisms for the articulation
of employer demands, and considers how they can fulfil this role
more effectively. It is suggested that clear communication, flexible
funding initiatives, co-operation with sector bodies and a central
role for regional bodies in training provision decisions can help
to make regional bodies more effective and responsive to employer
demands.
1.3 It is argued that, while the increased
local autonomy for provision proposed in Raising Expectations
is welcome as it will enable local providers to meet local learner
demand, this should not be allowed to confuse the picture with
regards to regional initiatives and the articulation of employer
demand. It is important that all stakeholders should understand
the system and their own point of access to it.
1.4 It is suggested that regional bodies
also have a significant role to play in the provision of regional
intelligence, both in the form of Information, Advice and Guidance
to learners, and in the prediction of short- to medium-term future
skills needs.
1.5 It is argued that ongoing inequalities
between higher education and further education represent a major
stumbling block to the achievement of the Leitch targets, and
that greater freedom for FE institutions would enable them better
to respond to skills needs at the local and regional levels.
2. INTRODUCTION
TO THE
CENTRE FOR
SKILLS DEVELOPMENT
2.1 The Centre for Skills Development is
an independent research and development body which aims to improve
the policy and practice of work related education and training
internationally. Its services are aimed at policy makers, researchers,
practitioners and employers. The Centre commissions, manages and
publishes research, gathers and disseminates good practice, and
funds and delivers projects and consultancy with a skills development
focus.
3. OUR SUBMISSION
3.1 This submission addresses the following
questions:
— Why is the regional level important
in articulating needs for skills training?
— How can we best ensure employers'
demands are an integral part of developing training provision?
— What barriers currently prevent employers'
demands being effectively heard?
— What other functions can best be
performed at the regional level?
— What role can Sector Skills Councils
play in ensuring an effective regional approach to skills?
— How does the need to develop a regional
approach sit with the local and sub-regional focus of Raising
Expectations?
— What international examples offer
possible solutions?
4. THE REGIONAL
AGENDA AND
MEETING EMPLOYER
DEMAND
4.1 Employers should be incentivised to
drive training provision by placing them at the centre of the
system for determining skills priorities. The system must communicate
clearly with employers and give them confidence that any investment
they make will see significant returns and that their demands
will lead to real and rapid change on the ground. This would require
changes to the funding structure as well as the decision-making
structure: research shows that systems become most responsive
to employer demand when employers are given a central position
in decision making and have some control over funding.
4.2 Information about employer demand is
not easy to access. Employers may not think strategically about
the kind of skills they require, and individual companies will
focus more on their own immediate priorities rather than skills
needs across their sector. Employer demand is also difficult to
summarise as requirements may vary widely between and within sectors.
4.3 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. We believe, however, that the regions remain the best level
at which to develop skills strategies that can take into account
the needs of employers. At this level, economic activity is of
a large enough scale to interest larger employers in strategic
inputs and allow co-ordination with national policy objectives,
without being so large that SME voices are drowned out.
4.4 To engage employers effectively, it
is essential that (a) communication is clear, and (b) that employers
are given a real, driving role in the process. The Centre for
Skills Development's recent report, Skills Development: Attitudes
and Perceptions, found that employers in the UK are more concerned
about communication with skills practitioners and policy makers
than their counterparts elsewhere: on average, UK employers rated
the effectiveness of such communication at 5.67 out of 10, compared
to an international average of 6.5. Employers are confused about
the role of RDAs and RSPs, which have tended to lack coherent
work programmes or an adequate strategy to engage with employers
demand (see for example Jeremy Humber's 2005 Review of the Yorkshire
and Humber Skills Partnership).
4.5 International comparisons show that
when employers are in the driving seat of training provision,
the system is more responsive to economic need and more likely
to produce excellent training that leads to good jobs. The Netherlands
and the USA offer instructive examples in this context (Raddon
and Sung, The Role of Employers in Sectoral Skills Development,
University of Leicester 2006). Current arrangements in the UK
place employers in a more consultative role. Raising Expectations
envisions a voice for employers (via RDAs and RSPs) in adult skills
provision, but with the Skills Funding Agency in the driving seat
providing "information and brokerage" to employers.
SSCs offer the possibility to engage employers in a meaningful
way, but they have had mixed success in doing so (see section
5 below). There is little available evidence as to the different
regional capabilities of different SSCs; this is a subject that
needs urgent evaluation.
4.6 Despite current shortcomings, RDAs and
RSPs are well-placed to create and influence an employer demand-led
approach to skills training by forming strategic relationships
with businesses. RDAs have shown that they are keen to develop
this role, as demonstrated by their collective response to the
Leitch implementation report submitted by Dr Lis Smith of the
Northwest RDA. Giving RSPs real teeth by making regionally-determined
employer demand a key driver of training provision would be a
good first step, as argued recently by Stephen Broomhead, CEO
of Northwest RDA, at the DIUS conference "Skills for Employability".
This would mean bringing employers, via RSPs, into a genuine driving
position in the decision making process and giving them at least
some control over funding decisions, as recommended by Raddon
and Sung (2006).
4.7 While the localisation agenda proposed
in Raising Expectations provides a good tool for making
further education more responsive to the needs of students, there
should be clear co-ordination and communication with regional
level institutions to ensure coherence across the whole system
(see section 6 below).
5. THE ROLE
OF SECTOR
SKILLS COUNCILS
5.1 Although the Leitch report recommended
that SSCs should be reformed and empowered at the national level,
clearer articulation is needed of what this will mean at the regional
level. Examples from abroad (such as the Netherlands' network
of "Knowledge Centres") show that the close involvement
of sector bodies in the planning and commissioning process can
raise the confidence of employers in the training system and ensure
that it can respond to their needs. In Raising Expectations,
however, SSCs do not feature in the proposed planning and commissioning
cycle for 16-19 provision.
5.2 SSCs vary enormously in terms of their
institutional origins, preferred routes of training, and the shape
and demands of the markets they serve. Different SSCs will also
have greater relevance in different regions of the country. Empowering
SSCs must therefore mean encouraging them to take the initiative
to engage employers nationally and regionally, while allowing
them the flexibility to do so at the level and scale appropriate
to their circumstances and in a suitable manner.
5.3 In order to enable SSCs to take on this
increased responsibility, close attention must be paid to their
structure and ways of working. In particular, they could not fulfil
an increased role without absolute assurances that employers have
a central and driving role in SSCs. Again, the Dutch example is
instructive: Knowledge Centres are structured to put employers
in the driving seat and are responsible for substantial public
funding. This has made them more responsive to employer demands.
5.4 Strengthening SSCs in this way would
also necessitate a robust system to ensure SSC accountability
for their performance. There should also be a system to ensure
that companies not covered by the current SSC structure are not
excluded from training possibilities; RDAs may be able to play
a useful "safety net" role here. The voices of those
who deliver training and qualifications must also be an integral
part of the system, but we agree with Raising Expectations
that these can best be incorporated at the local and sub-regional
level.
5.5 While empowering SSCs in this way may
require extra funding, there are also other ways to enable them
to play a greater role that would not raise costs significantly.
The USA's High Job Growth Training Initiative (HJGTI) provides
an example of a scheme whereby initial public funding encourages
employers and other stakeholders to make a real commitment to
improving the match-up between skills supply and demand in a particular
industry. The scheme is designed to be employer-led and focuses
on partnerships that support job training for 12 key industrial
sectors. To gain seed funding for an initiative, stakeholders
must present a "challenges and solutions" paper to the
Department of Labour, covering areas such as recruiting young
workers, tapping new labour pools, transitioning (workers from
declining sectors), competency models, training routes, retention
and SMEs. The paper must include detail on the investment to be
made by partners in the proposed initiative. The flexibility of
the scheme means that initiatives can be targeted at an appropriate
geographical area, while the limited public funding means partnerships
are driven by their own objectives.
5.6 Although some of the schemes under HJGTI
are national, most are regionally based. They cover issues ranging
from sales and servicing to recruitment from minority communities.
The scheme offers a structured way for sector bodies to take initiatives
appropriate to their own sector and, where applicable, specific
regions. Giving SSCs access to a similar scheme would help improve
their effectiveness and assure more continuity across the different
SSCs. Giving SSCs this role would necessarily be contingent on
their becoming a more effective mechanism for articulating employer
demands.
5.7 By committing public funding but allowing
sector experts to drive the process of skills provision initiatives,
the HJGTI scheme shows how buy-in can be achieved across all stakeholders,
and particularly among employers. This in turn improves and promotes
the image of sector bodies, and encourages further interaction
by employers. Sector bodies are empowered to carry out initiatives
at the regional level if this is appropriate, helping ensure that
training delivered by the FE sector is determined by the needs
of the local market, rather than government targets, and combating
the perception that the FE sector is unresponsive to employer
needs.
5.8 If RDAs and SSCs were enabled to co-operate
on schemes along the lines of those developed under HJGTI, training
programmes could be developed that respond to both local and sectoral
needs, and that have stakeholder buy-in. This would require the
development of a clear protocol, setting out mechanisms for direct
involvement of employers and other stakeholders and defining clear
divisions of responsibility and accountability. With a clear communication
strategy for employers and providers, this could be a powerful
way to achieve a more joined-up and responsive system of training
provision.
6. JOINING UP
THE LOCAL
AND REGIONAL
AGENDAS
6.1 The local and sub-regional strategies
outlined in Raising Expectations present a good blueprint
for making skills provision responsive to local needs and learner
demands. As currently presented, however, it is not clear how
employer demand will be factored into this system. There is also
a risk of increasing confusion among employers about how to engage
with the system, given that there will be four (sometimes overlapping)
levels of decision making: national, regional, sub-regional and
local.
6.2 In particular, allowing local authorities
to work together in groupings even if they cross regional boundaries
is welcome, as it will enable provision to respond to economic
needs rather than administrative borders. Care should be taken
when implementing this, however, to ensure that employers have
a consistent and clear point of access at which to influence the
system. A proper communication strategy for employers and other
stakeholders will be essential.
6.3 At present, Raising Expectations
proposes that a regional grouping of local authorities, co-chaired
by the RDA, should be responsible for authorising a regional strategy
and for ensuring that it is affordable, consistent, feasible and
demand-led. This is seen as a much more informal institution than
the sub-regional groupings developed to plan provision. If, however,
employers are to be afforded a real role in driving the provision
of education and training at the regional level, the role of this
regional grouping needs to be made much more substantial. To engage
employers fully in provision of training for the 16-19 age group,
they need to feel that they genuinely have the opportunity to
drive the process and to have a clear understanding of how they
can do this. More provision needs to be made for this than under
current plans.
7. OTHER ROLES
FOR REGIONAL
BODIES
7.1 There are a number of further areas
where regional bodies should be strengthened to make best use
of regional knowledge and expertise.
Information, Advice and Guidance
7.2 A universal careers service is not sufficient
without links into local employment markets and local opportunities:
regional structures have a valuable role to play in providing
high quality Information, Advice and Guidance (IAG) to learners
in all parts of the system. To ensure continuity, IAG should also
cater to both young people and adults, as recently recommended
by the National Skills Forum. An unnecessary requirement to transfer
to a new system at age 19 risks individuals slipping through the
gaps and a lack of coherence in IAG provision. A single IAG service
with a decentralised regional structure would ensure standardisation,
improve quality and ease transitions from one stage of life to
another.
Analysis of Future Skills Needs
7.3 Predicting future skills needs can be
useful if it is done on a relatively small scale and does not
attempt to forecast too far into the future. National forecasting
is too broad brush to be of much relevance for commissioning training
at the local or regional level, while local authorities are not
in a position to look beyond the microeconomic level in any meaningful
way. RDAs should be empowered to provide thorough labour market
intelligence to guide decision making processes regarding training
provision.
8. FURTHER EDUCATION
AND HIGHER
EDUCATION
8.1 In recent years, the FE and HE sectors
have increasingly overlapped. The modern UK economy needs skills
traditionally associated with both sectors, and policy makers,
learners and employers therefore have an equal stake in both.
In this context, the Government's announcement of plans to extend
the role of businesses in the funding and direction of HE is welcome.
8.2 As recently highlighted by the National
Skills Forum, there remain huge inequalities in funding for FE
and HE, and in the flexibility accorded to providers in the two
sectors. Although some state control of FE funding is necessary
to accommodate national economic need, this is arguably equally
true of HE, which has traditionally enjoyed far greater freedom.
FE providers would benefit from greater autonomy to be able to
respond better to local demand (from both learners and employers).
Funding for learners and access to loans in the two sectors should
also be balanced, as the current system unjustifiably favours
students in HE. Similarly, facilities such as childcare provision
are much more limited in FE. Unless steps like this are taken
to make FE more attractive to learners, it will be difficult to
reach the skills levels envisioned by Leitch.
8.3 Further Education providers have a long
history of working together with local employers, but have not
always had government support to do so. Recent examples of government
support to help Higher Education institutes co-operate with employers
have been welcome. This kind of support should also be extended
to the FE sector, while still allowing them the flexibility to
make their own decisions on co-operation arrangements.
9. POLICY RECOMMENDATIONS
9.1 Our recommendations can be summarised
as follows:
— Existing regional structures should
be strengthened to develop them as the best point of access for
articulation of employer demand, and this role should be incorporated
as a central part of developing training provision.
— Employer demand should become more
of a driving force in decision making about provision of vocational
education and training. This means putting employers, through
regional structures, in a pro-active position rather than a consultative
role, and giving them at least some control over funding.
— Clear communication strategies should
be in place to ensure employers and other stakeholders understand
the overall system and, most importantly, their own point of access
to it.
— Sector Skills Councils should be
empowered, through flexible funding mechanisms and strong research
capabilities (or resources to commission research), to become
the principal agents for including employer demand in training
provision both regionally and nationally, and should be held accountable
for their performance in this role.
— Information, Advice and Guidance
should be provided in a truly universal service that caters to
both young people and adults, but with a decentralised structure
to enable providers of advice to take into account local conditions
and requirements.
Inequalities between higher and further education
need to be tackled if the core skills requirements of the UK are
to be addressed. This means increased funding and increased freedom
for further education.
April 2008
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