Unskilled workers tend to remain unskilled because of the time and cost involved in gaining a basic qualification. From the employers’ perspective, there is little incentive to foot the training bill, because the return on investment is thought to be limited. Other factors that compound the problem include childcare commitments among female staff, and an antipathy towards learning among people who left school without any qualifications.
As a result, 6.4 million adults in the UK lack Level 2 qualifications such as GCSEs or NVQs, which are regarded as the foundation for further learning.
Chancellor Gordon Brown summed up the problem in his pre-Budget speech in December. “For decades, low skills have been our Achilles heel as a modern economy – and the post-War laissez faire training system has not and will not meet the skills needs of the future,” he said.
He outlined the Government’s solution to the problem, promising to pay for every adult who missed out at school to acquire a Level 2 qualification. This is regarded as an essential pre-requisite to gaining intermediate Level 3 skills, where the UK lags behind its major competitors. Just 28 per cent are qualified to this level, compared with 51 per cent in France and 65 per cent in Germany.
The free tuition offer forms the core of the National Employer Training Programme (NETP), which will be rolled out across England next year. The aim is to reduce the number of unskilled workers by 2.4 million by 2010.
NETP is a radical departure from previous Government training schemes targeted at this issue, giving employers greater choice and control over how they are delivered.
David Greer, skills for employers director at the Learning and Skills Council (LSC), says: “Too often, the relationship between the needs of the individual and the needs of the employer have been based on expecting people to turn up at their local college.”
However, unskilled workers are unlikely to do this of their own accord and, even if they did, the course they chose would not necessarily match the needs of their employer.
Under NETP, training providers will be expected to deliver with minimum disruption to the business. “If, for example, you have logistics staff working a night shift, we would expect the providers train during or around that shift,” says Greer.
Another key difference to previous schemes will be the way suitable training is identified and implemented.
“There’s been quite a lot of support and funding for employers, but it’s often difficult to work your way through the maze of what colleges and training providers offer,” says Greer.
Under NETP, advisers and brokers approved by Government agencies, such as the LSC and Sector Skills Councils, will identify the training that is needed and where it can be obtained.
This is expected to be particularly helpful to businesses with fewer than 250 staff because they often lack the HR and training infrastructure to organise and promote training. They are also less likely to have sufficient numbers of trainees to make a training programme viable.
Greer says that one solution will be to organise joint training schemes either with the companies they supply, or with other small companies in their immediate vicinity. Larger companies may be easier to deal with, but he argues they are also prone to ignoring the training needs of unskilled workers. “Evidence suggests they are more keen to invest in higher level skills than lower level skills,” he says.
NETP will start next year, but the existing employer training pilots already provide a good indication of how it will work. Initially launched in 2002, pilots now cover 20 of England’s 47 LSCs, involving nearly 16,000 employers and 110,000 employees.
One encouraging result has been a 70 per cent completion rate, but there is still no hard evidence of a quantifiable impact on business performance.
“The evidence of the business benefits at Level 2 has been quite sparse, even at national level,” says Greer.
He expects independent research into the pilots later this year to confirm the LSC’s belief that there are direct benefits.
“Because we are trying to convince hard-nosed businessmen, the evidence we use has got to be independent and very rigorously researched,” he says.
However, the pilot schemes do suggest clear benefits for the participants. Evaluation by the Institute of Employment Studies shows that many have either received a pay raise or a promotion. “The most commonly reported benefits focused on the learners in terms of increasing their confidence and providing them with important business-related skills,” says the report.
It also highlights how employers were significantly more likely to recognise the importance of training to their business and more willing to train less-skilled workers in the future.
This is a key feature of NETP, which is designed to create a new culture of learning rather than simply broaden the base of workers with Level 2 qualifications. Government funding will be provided for Level 3 training and above, but employers will have to meet an increasing proportion of the costs.
“Where you benefit most as an employer, you can expect to pay most,” says Greer. “If at Level 3 and above you get more rapid and more bottom line identifiable benefits, it does not seem unreasonable to expect you to pay more. What we are saying is that the Government and the LSC will fund training where it is not happening due to market failure.”
Regional development agencies and Sector Skills Councils, as well as LSCs, will play a key role in identifying where these failures are.
Under the pilot schemes, employers are entitled to compensation for working time that is lost to training. This will not necessarily be included in NETP, but Greer says compensation has not proved important for businesses on the pilot schemes. The Treasury has allocated nearly £200m to meet the cost of NETP during its first two years, and the Department for Education and Skills is expected to provide a further £100m.
To meet its target of reducing the number of unskilled workers to 4 million in 2010, the LSC estimates it will need to spend around £400m-a-year. That means that some of its existing funding allocations will have to be transferred from other areas of its budget.
Greer stresses that ETP will only succeed if the Government’s investment in Level 2 training triggers more private investment in Level 3 and above.
“There’s not enough taxpayers’ money to pay for all this training – everybody has to raise their game,” says Greer. “We are trying to achieve a sort of cultural revolution.”
Doubts about quality
One of the biggest concerns facing the National Employer Training Programme (NETP) is whether it will attract sufficient training providers who meet the required quality standards.
Under the new pilot scheme rules, providers lose half their overall fee unless the trainee completes the course.
Graham Hoyle, chief executive of the Association of Learning Providers, says this is a huge increase on the 10 per cent that was withheld in the past.
“The reason you don’t get successful completion is not because of the training providers, but because the individual has left their job or the company transferred them,” he says. “The programme already has the highest success rate of any Government-funded training scheme, so you don’t need this incentive.”
However, the Learning and Skills Council’s David Greer (right) argues the new payment method will be an effective way of raising the current levels of completion from 70 per cent to 80 per cent. “Pilots are all about exploring and investigating new ways of doing things,” he says. “We consulted with a bunch of providers and they were prepared to go with the grain and see how it would help.”
Meanwhile, Hoyle also warns that if his members are to meet NETP’s demands for flexibility, they must be given greater access to funding streams.
“At the moment, there’s a whole range of funding streams available to colleges and only a minority available to the providers,” he says.
Although colleges often sub-contract the work, he argues that this will be unnecessarily restrictive when operating NETP.
Case study: East End Foods
Ethnic minorities are among the most hard-to-reach groups when it comes to basic workforce training, but hundreds of businesses employing people from this group have been attracted to the pilot schemes. At East End Foods in West Bromwich, 160 employees have received tuition in English language speaking and writing through a pilot called train2gain, which covers the West Midlands conurbation.
The company, which specialises in importing ingredients for Indian cuisine, became aware of the scheme when seeking help with manual handling and food hygiene training.
Technical manager Sajid Hussain says: “The main aim was to improve the written and language skills, but to incorporate that into the other training.”
He feels that one of the main advantages of the programme was its flexibility. Although compensation was paid for the time taken out by training, it was not a deciding factor.
Some workers reacted negatively because they felt their English was already sufficient for the job they were doing. But he adds: “We have now got staff to a level where they can fill out forms and understand where they fit in the whole picture. It makes the company run much more smoothly.”
Case study: Laing O’Rourke
Although the impact of the pilot schemes has been greatest among small companies lacking any training infrastructure, big business is benefiting as well.
At construction company Laing O’Rourke (LOR), hundreds of employees are improving their numeracy and literacy skills, as well as gaining NVQ Level 2 qualifications.
Assessment and training is provided by Laing O’ Rourke Learning World – a joint venture between LOR and Construction Learning World.
CLW finance director, Tracey Mitchell, says that although LOR’s employees already have a high level of construction skills, they are being NVQ-certified as part of a national drive to improve standards in the industry.
“There’s little resistance from the operatives to getting a qualification, because they know it will help them in the future,” she says.
LOR is investing in training throughout the country, but the free funding provided by the pilots means the training can be done in greater depth.
Around 500 LOR employees are due to go on the free2learn pilot in Berkshire, with most coming from the Terminal 5 construction site at Heathrow Airport.