Money makes the skills go round: subsidised training

Employees in England received 162 million days of training last year, according to the government’s latest National Employer Skills Survey. But as we all know, training costs. The ideal, of course, is for someone else to pay, and for thousands of employers this is just what is happening.

Learning and Skills Councils

In England, the main recipients of subsidised training are small- and medium-sized enterprises (SMEs), with the money drawn mostly from the Learning and Skills Council (LSC) and the regional development agencies (RDAs).

The LSC is the organisation responsible for making England better skilled and more competitive, and it distributes government funding to the 47 local LSCs. They choose how to distribute it – making decisions based on local needs.

One of the LSC’s current objectives is to reduce, by at least 40%, the number of adults in the workforce who lack NVQ 2 or equivalent qualifications, by 2010. And, with an overall budget of more than £10bn to achieve this, its 2006-07 spend on work-based learning will be just over £1bn.

Another £230m is being spent on the council’s Train to Gain service. This offers a free skills audit and a lead to appropriate training providers and funding. Basic numeracy and literacy courses and qualifications up to Level 2 may be free; companies with less than 50 employees can get wage compensation; and there is funding for NVQ Level 3 and other qualifications.

Regional development agencies

The nine RDAs across England are financed by six government departments, including the Department of Trade and Industry and the Department for Education and Skills, through a budget called the Single Pot.

Once it is allocated, the RDAs can spend the funding as they see fit, depending on their own priorities and targets. This includes subsidising training for companies in their regions, and in the mid two quarters of 2005 they collectively helped more than 107,000 people to gain new skills.

The regional and local approach makes sense as there will often be different business profiles in different areas. The South West of England RDA has, for instance, recently offered marine businesses a free analysis of their training needs, together with a grant of up 50% towards the cost of courses, whatever the provider or level of qualification. Meanwhile in Wiltshire, 150 people from more than 80 tourism businesses received training in the past year.

Business Link

A common way to find funding and a training provider is through the government-backed Business Link, which helps new and small businesses. It bids for funding from its local LSC or RDA according to which programmes are being run in the locality. This varies widely across the country, as do conditions, such as the type and levels of training, and the percentage of cost, if any, required from the client.

One recent pot of funding channelled through Bedfordshire Business Link helped pay for a leadership and man-agement programme for managing directors in SMEs with under 250 staff.

Sue Munn, Bedfordshire’s management development adviser, says: “The type of training that went through on that programme was strategic planning marketing and finance. The MDs underwent individual training needs analyses from which personal development plans were drawn up, and we assisted in finding the right provision for them.”

Munn says Business Link’s first step on any programme is to meet a company, offer information and diagnose their needs. “Once we have established that the company is eligible, the amount of funding will depend on the programme; it could be 30% of the total, or 50%, or 70%. However, we don’t deliver the training: we have a portfolio of training providers on our business consultants’ register whom we have vetted.”

Independent training providers

Depending on the topic, you may find that Business Link directs you to a specialised training organisation. Polymer Training Limited (PTL) supplies training and development to the plastics and associated industries around the globe.

Technical adviser Trevor Oliver says: “In the UK, some of our training to SMEs is subsidised through RDAs and LSCs and it usually has to result in a recognised qualification. The current target for adults is Level 2, and we offer NVQ, BTec, SASL and City & Guilds accreditation.”

He says his clients really appreciate PTL’s ability to deliver this sort of subsidised training. The employee gets a qualification, the company improves its skills base, and financial support from RDAs and LSCs reduces some of the barriers to training the workforce.

There are added benefits too. As part of the initial assessment, the funder will look at learners’ accredited prior learning and this will always pick up literacy and numeracy skills. So by default, people may get some subsidised basic skills training as well as the higher level training.

Another specialist training organisation, PERA, is a technology-based, not-for-profit training and consulting organisation. Subsidies typically come from Business Link or direct from LSCs and RDAs. Training specialist Sharon Marshall echoes the message that funding depends on what is available in the region at the time.

“Sometimes the LSC puts out a tender for running particular training programmes and if we have one of these contracts and it matches the company’s requirement, we can offer them training either free of charge or at subsidised rates. A 100% subsidy is sometimes possible on lower-level training, such as basic skills, but the higher the skills, the higher level of match needed from the employer.

“However, direct requests for funding to support a specific client’s training needs cannot normally be met as funding is usually allocated to providers following a competitive tender exercise.”

Chambers of commerce

The British Chambers of Commerce (BCC) network is a long-established source of subsidised training. It offers a full blend of learning from traditionally-taught courses through to e-learning and training needs analyses to discover what employers need.

As a nationwide network, BCC is one of the largest government-funded training providers in the UK. Last year it used funding from the LSC and Jobcentre Plus to train more than 13,000 employees. A wide range of areas is covered, including accountancy, engineering, retail, communication, waste management, IT, and international trade.

In the last budget, the chancellor announced changes to make further education college courses more useful to employers, and the British Chambers of Commerce welcomed this, calling for any extra subsidies to be made available not only through colleges, but also through private training providers.

“Employers need flexible, tailored training, which is often better delivered by independent training providers who can work with the business to identify their needs,” says president Bill Midgley.

But whoever delivers the training, and whoever funds it, subsidised training is a valuable source of help, and employers should make sure they don’t miss out.

by Maureen Moody

Case study: Economatics

Economatics is an engineering products manufacturer based in Sheffield. Four years ago, when Bruce Cantrill was responsible for the sales operation, he accessed a training subsidy from the South Yorkshire LSC for his team to acquire NVQ4 sales qualifications.

Cantrill says the programme was extremely valuable. “It covered things like presenting to the client, undertaking proper quotations, legal aspects of doing business – each month focused on a different subject area. First, the team would do role plays and the trainer would meet with individuals to monitor progress. Each month there would be group feedback. The trainer acted as their mentor and the whole thing worked really well. It cost about £7,000 for the team of eight sales people and we received a subsidy of 40%.”

Now he is group marketing director at Rotherham-based cable design company DPG Form Fittings, Cantrill goes to free local Business Link breakfast training briefings on topics such as registering designs and intellectual property. He is also now sourcing training for his team. But although DPG is not a large company, it is part of a larger group, which means that it has been turned down for subsidies. “We have around 150 people and we turn over 6m-7m, but when we say we’re affiliated to a 300m group, we’re told we’re not eligible.”

This does not discourage him, however, because each round of funding has a different set of parameters. “We’re currently talking to the local college, which thinks we might be able to get 40% funding on marketing training.”

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