Memorandum submitted by Alliance of Sector
Skills Councils
EXECUTIVE SUMMARY
1. In April 2010, the Skills Funding Agency
(SFA) will take over the responsibilities of the Learning and
Skills Council (LSC). It will become the overarching agency delivering
funding and direction to the Further Education (FE) sector. The
Alliance welcomes the Business, Innovation and Skills Committee's
inquiry into the new Skills Funding Agency and government policy
in respect of Further Education funding.
2. The Alliance wishes to propose that SSCs
play a central role in allocating funding for workforce development.
As the organisations licensed to research and articulate the employer
voice on skills, and working closely with regional partners to
ensure a strong sectoral/spatial interface, they are uniquely
well-placed to determine priorities and allocate resources.
3. The current system of FE funding is overly
complex and may in some cases lead to a lack of appropriate commercial
freedom for providers. Although there are many very positive examples
of how FE providers are working closely with employers, all too
often providers are unable to respond because of a slow and bureaucratic
funding system which employers find baffling and frustrating.
4. The Alliance also wishes to make the
following points:
— Listening to the needs of employers will
be key to achieving the aims of the Skills Funding Agency.
— The new system needs to take into account
the views of employers especially in relation to complexity, poor
communication and coordination, clarification of roles and responsibilities,
bureaucracy and poor data management.
— It will be important that the National
Apprenticeship Service can work in a coordinated way with the
SFA, Young People's Learning Agency and local authorities, as
well as with other bodies in the skill system such as Regional
Development Agencies and Sector Skills Councils.
— The Alliance believes employers need
a strategic voice in the skills system, and that engagement with
employers on skills issues is something that is done best on a
sectoral basis. Spatial elements are still important in determining
skills supply and demand and the current perception of "competition"
between the sectoral and spatial dimensions is not helpful and
it is important that policy makers understand this.
— The Alliance is committed to working
with Regional Development Agencies, as is demonstrated in the
current work of the new joint SSC/RDA Forum. There is still work
to be done to ensure that there is an effective interface between
sectoral and spatial skills needs and delivery. Employers need
effective delivery mechanisms at a local level that meets the
strategic direction that has been agreed with their Sector Skills
Councils.
5. More detail on these points is included
below. Thought also needs to be put into the issues of progression
from FE into Higher Education and the aligning of FE and HE funding
streams to help providers and students alike. The current separate
HE framework and funding councils make it difficult to deliver
programmes involving NVQs and foundation degrees.
ROLE OF
SECTOR SKILLS
COUNCILS AND
THE IMPORTANCE
OF SECTORS
6. Sector Skills Councils, as employer-led
organisations covering the whole of the UK, are in a strong position
to comment and make proposals on an effective and simplified employment
and skills system and on Further Education funding mechanisms.
More detail about SSCs and the Alliance is included in the Annex
below.
7. The successful implementation of a national
skills strategy will depend on the active involvement of employers.
For that reason the Alliance highlights the importance of taking
a strategic sectoral approach which puts employers, who identify
with sectors above all, in a central role.
8. Listening to the needs of employers will
be key to achieving the aims of the Skills Funding Agency. Responding
only to the needs of individuals is likely to result in the provision
of skills in areas where there is little or no demand within the
employment marketplace. This would be detrimental for learners
as well as for employers, regions and the wider economy.
9. The Alliance suggests that the skills
system requires a truly demand-led approach, on a sectoral basis,
which puts employers in the pivotal position. A clarification
of roles and responsibilities within the skills landscape is required
for a more efficient system, as is a clearer expression of what
exactly "demand led" means in this context, and how
the voices of employers and sectors will be implemented.
THE NEW
SFA AND YOUNG
PEOPLE'S
LEARNING AUTHORITY(YPLA),
AND THE
ROLE OF
LOCAL AUTHORITIES
10. The Alliance is concerned about the
complexity and issues that will occur as a result of the split
between the SFA and the YPLA and the handing over of responsibility
of pre-19 funding to Local Authorities. There is still uncertainty
about the ability of the planned new system to deliver what is
required.
11. The big issues which do not appear to
be addressed in the new system are:
— Complexity. There is a real danger that
the new system will be just as complex and baffling as the old
one, with too many organisations with overlapping and unclear
roles. There are an increasing number of employer-facing organisations
working in each region, and this poses significant difficulties
for clear and consistent engagement and communication with industry.
— Poor communication and coordination across
the system leading to employer dissatisfaction with the system
and disengagement. Poor communication is already causing difficulties,
as nationally the SFA is aware of SSC work and projects but may
not always reflect this when working regionally.
— Confusion about roles and responsibilities
leading to gaps and duplication. For example, please refer to
the comments below on employer engagement.
— Bureaucracy. Bureaucracy is an understandable
result of the current objective, target and funding system but
it is important to get the balance right between an appropriate
level of administration for the system and ensuring that this
does not disable the system and disengage users.
— Extremely poor and un-timely data leading
to funding control issues and poorly informed decision making
throughout the skills system. Thorough and timely Management Information
is key to ensuring that the system is managed properly and that
fluctuations of demand can be accounted for without over-zealous
capping of provision. The Alliance highlights the importance of
the SFA being able to understand how to make a demand-led system
work within a finite but flexible budget.
12. SSCs have an excellent breadth and depth
of Labour Market Intelligence (LMI) but this is currently underused
by Government and its agencies. Especially with the removal of
the LSC research facility from the SFA, the Alliance hopes that
SSC LMI will be used as a primary resource to inform future planning
and funding rounds. This is an argument for greater resource and
recognition for SSCs and the value they add.
13. The Alliance advises the SFA to clarify
its intentions with respect to the Training Quality Standard (TQS)
as soon as possible. Recent TQS awareness-raising seminars revealed
a quite widespread uncertainty as to whether TQS would/should
be maintained as an "official" quality mark for training
providers and a sign-post for employers. Also there is concern
as to whether it could survive at the current level of applicant
costs, and in the absence of any linkage of TQS either to LSC/SFA
funding streams or to other QA processes such as Ofsted's. The
recent UK Commission report "Hiding the Wiring" made
similar points.
THE ROLE
OF THE
UK COMMISSION FOR
EMPLOYMENT AND
SKILLS, THE
NATIONAL APPRENTICESHIP
SERVICE AND
NATIONAL EMPLOYER
SERVICE
UCKES
14. SSCs are working with UKCES to ensure
that the skills system is employer-led. There is a clear need
for over-arching role of the UKCES in ensuring an effective skills
system across all agencies to link with the sectoral priorities
established by employers through their SSCs.
National Apprenticeship Service
15. The National Apprenticeship service
sits outside both the Young Person's Learning Agency and the Skills
Funding Agency as a result of the split of pre and post-19 funding.
It will be important that the NAS can work in a coordinated way
with the SFA, YPLA and local authorities, as well as with other
bodies in the skill system such as RDAs and SSCs. Work is already
underway within the South East on developing a strong relationship
between the South East Alliance and the South East NAS where an
memorandum of understanding has been signed and each SSC has been
allocated a NAS "buddy" to facilitate closer working.
A priority area of work is developing closer working with Local
Authorities.
National Employer Service
16. BIS are intending to make the National
Employer Service an enhanced service tasked with raising participation,
raising employer engagement and delivering new apprenticeship
programmes. The Alliance hopes to see the NES maintain the progress
it has made with large employers who value the tailored support
the NES offers.
17. The NES is one of four routes that employers
and individuals can access skills alongside Train to Gain, Adult
Advancement and Careers Service and direct provision. It is important
that for employers that the roles of NES, NAS and Train to Gain
brokerage are clearly defined and there is no duplication in their
employer engagement. Employers find it frustrating to be contacted
by different organisations with little or no coordination between
them. Ease of access to the system is still an area where employers
wish to see improvement.
THE RELATIONSHIP
WITH REGIONAL
DEVELOPMENT AGENCIES
AND THEIR
STRATEGY SETTING
ROLE
18. The Alliance believes employers need
a strategic voice in the skills system, and that engagement with
employers on skills issues is something that is done best on a
sectoral basis. SSCs are employer led, and are licensed as being
very capable of expressing the views of employers in their sectors.
However, the Alliance believes that spatial elements are still
important in determining skills supply and demand. The current
perception of "competition" between the sectoral and
spatial dimensions is not helpful and it is important that policy
makers understand this.
19. The Alliance is currently working with
Regional Development Agencies, as is demonstrated in the work
of the new joint SSC/RDA Forum. However, the recent White Paper
"Skills for Growth" provided little clarity regarding
how regional and sectoral priorities will be balanced by the SFA.
Finding ways of successfully delivering the sectoral agenda will
be especially important, given the new spatial role on skills
that the RDAs were given in the recent skills White Paper. The
SSC LMI portfolio is fundamental to ensuring that both sectoral
and spatial skills needs are met, and this is a key strand of
work for the Forum.
20. It is important to ensure that there
are sense and reality checks in place to ensure that the strategy-setting
is correct for individual sectors as well as for the regions and
the whole nation. RDAs have a tendency to lean towards higher
level skills whilst the funding body would be set a lower level
skills focus and the right balance needs to be struck. The SFA
posts which will sit within the RDAs will be key here.
21. The Alliance welcomes the opportunity
to build on this brief response to the enquiry into FE funding
and the Skills Funding Agency and the Chair of the Alliance, the
Chief Executive of the Alliance and the Chair of the Alliance
Supply Side Strategic Group will be happy to give oral evidence
to the Committee.
Annex
THE ALLIANCE OF SECTOR SKILLS COUNCILS
The Alliance was established in April 2008 as
the collective voice of the 25 SSCs, the employer-led organisations
on skills for sectors across the UK economy. Its strategic priorities
and objectives for 2009-12 are as follows.
— To position SSCs collectively for optimum
impact and act as a catalyst for change within the skills and
employment system.
— To enable SSCs collectively to deliver
their unique role in ensuring that standards and qualifications
meet employers' needs.
— To position SSCs collectively as the
authoritative voice on sectoral Labour Market Intelligence.
— To be a catalyst, leader and co-ordinator
for raising skills in priority cross-sector areas and for linking
with sectors not covered by SSCs.
— To provide first class services for Alliance
members and to enable them to raise their capacity, capability
and performance.
By working together as a strong Alliance, SSCs
have positioned themselves for increased impact which is more
than the sum of the parts. Through this joint working the SSCs
will be recognised for their key role in achieving a world-class
workforce in the UK and being a leader in skills development that
meets the needs of employers of all kinds across public, private
and independent sectors.
The Alliance of Sector Skills Councils is largely
funded by the subscriptions of its members. It is a company limited
by guarantee and a Scottish charity with offices in London, Cardiff,
Edinburgh and Belfast.
SECTOR SKILLS
COUNCILS
SSCs are independent, employer-led and UK-wide
organisations that are advocates for their industries and identify
and tackle sector-critical skills needs. There are currently 25 SSCs
covering approximately 90% of the economy. SSCs are the most recently
quality assured bodies in the skills system and the only organisations
actually licensed to represent their sectors' employers on skills
issues. SSCs provide a unique channel to reach employers who will
only engage with those who understand their specific needs and
circumstances.
SSCs all work towards the following four key
goals:
— reduced skills gaps and shortages;
— improved productivity, business and public;
— increased opportunities to boost the
skills and productivity of everyone in the sector's workforce;
and
— improved learning supply through National
Occupational Standards, apprenticeships, and further and higher
education.
SSCs have been established and developed during
the last five years and in that time they have built strong working
relationships with the UK Government and the devolved administrations,
and important skills stakeholders such as the UKCES, Confederation
of British Industry, the Institute of Directors, Federation of
Small Businesses, trade union bodies, funders, providers and awarding
bodies. They have played a leading role on a range of skills issues,
including:
— working with employers to identify future
skills needs;
— developing skills and training solutions;
— developing and maintaining National Occupational
Standards;
— influencing and shaping the future development
of qualifications;
— designing Apprenticeship/Modern Apprenticeship
frameworks;
— encouraging greater investment in training;
and
— providing labour market information that
assists in long-term business planning.
The unique selling points of the Alliance of
SSCs in a complex landscape are as follows:
— SSC footprints include 1,707,885 enterprises
and cover approximately 90% of the workforce across the UK, which
gives us strength in breadth;
— Alliance members have in total 350 very
senior employers from every sector of the UK economy on their
individual SSC boards, and this gives us powerful leverage;
— SSCs have a robust and distinctive evidence
base for skills development in their sectoral Labour Market Intelligence
(LMI);
— by working together as an Alliance we
can map skills across the economy—and thereby facilitate
mobility and redeployment between sectors; and
— employers naturally cluster and work
collaboratively on a sector basis. This is evidenced through a
wide range of successful sector-base intiatives—ranging
from 14-19 Diplomas to Apprenticeships.
11 January 2010
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