Sort out the skills muddle before throwing more cash at it

Many column inches have been devoted to bemoaning the skills of young people today. But what of the skills of those who left school years ago and are working? Despite the perception in some quarters, business is investing heavily in skills, spending an annual £33bn, according to the Sector Skills Development Agency (SSDA).

The government has also recognised the need to raise its game on workforce skills, yet rarely has there been such a high degree of disconnection with business as on this issue.

In the past five years, a number of bodies and institutions have been charged with understanding business skill needs, translating these into sectoral and regional strategies and, ultimately, determining the supply of training. However, few of these organisations have really grasped the nettle and engaged with the employers, regions or sectors that they are supposed to represent. In a system that claims to be business-led, few employers understand how it works and do not see it as a system that has successfully married demand for training with supply of training provision.

Many firms also struggle to link training with their overall objectives, to identify which providers can best meet their needs, and to get them to respond. A large part of the problem lies within the complexity of a system that falls short of understanding what firms need and how they go about developing skills. Without this information, there will always be a disconnect between the demand and supply of training.

The Treasury’s current review of future skill needs, the introduction of a number of skills academies, and a review of further education will all, mostly likely, fail to bear fruit unless the bureaucracy and confusion in the learning and skills sector is resolved.

At a time of rising pressures on government spending and increasing taxation, we cannot afford the waste that is associated with the muddle of well-meaning, but overlapping, public bodies with ill-defined objectives involved in the skills arena.

One question the government needs to answer is whether we really need to separate the planning and funding of provision at the regional level between two bodies, when surely one would do? Regional Skills Partnerships do the planning and the regional Learning and Skills Councils (LSCs) hold the purse strings. Ultimately, decisions are made by those with the money.

Second, we need to equip the Sector Skills Councils (SSCs) to provide leadership on the skills and training issues of the industries thatthey represent.

We would do this by merging the SSDA with the LSC and giving it responsibility for skills issues that are common across business, such as management, IT and business improvement. This would leave the individual councils free to focus on their particular sectors. Reducing the number of SSCs back from the current, thinly resourced 25, would also give them more clout.

Despite all the activity by various institutions, there is still a gap in the market for providing clear and impartial information to business – the customer of the education and skills sector. Many firms lack information and end up with training that does not fit the bill, and suits the providers more than the employer or the individual. The government’s Train2Gain initiative could make a difference – by putting more money in the hands of employers and providing clear information about what is available.

Both the government and business are investing in the skills of the workforce. However, before the reviews of skills and training conclude that current levels are not enough, we need to ensure that what is already being invested is being well spent.

Martin Temple
Director general, EEF

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