UK skills focus should now be on re-skilling says post-Leitch report

Scholars of the dismal science, otherwise known as economics, will have a more than passing acquaintance with Scottish economist Adam Smith, his theories and his works, including the division of labour.

Smith conducted an experiment at a pin and needle factory in Studley, Warwickshire, in the 1770s to show how the division of labour could raise productivity. Instead of each worker producing needles and pins from raw material to finished product, Smith broke down the process into parts and allocated each to different workers, so that they specialised in one particular element. The result: before this change the factory made 1,000 pins and needles a day, afterwards it churned out 48,000 – the kind of increase in productivity many company owners would give their Range Rovers for today.

Apart from proving what the division of labour could achieve in terms of output, Smith also inadvertently showed that de-skilling could actually raise productivity. And, if productivity rises, then, given other factors such as the [re?]distribution of the greater wealth that should ensue, prosperity should rise.

This old anecdote came to mind as I was reading the recent report of the House of Commons Innovation, Universities, Science and Skills Committee (IUSSC) about the post-Leitch skills needs of the UK. Or, as the committee called it: “After Leitch, implementing skills and training policies”. One of its telling comments is: “It may well be that increased skills lead to an increase in prosperity, but there is a surprising lack of evidence to support that conclusion.”

Of course one of the main tenets of the Leitch Review was that greater skills acquisition would lead to a more prosperous UK. But the truth is that although skills may be a necessary condition for prosperity, they are not a sufficient one. If this major tenet of the review  is flawed where does that leave skills acquisition in the UK?

The committee feels that the focus should switch from the upskilling recommended by Leitch to re-skilling, to help individuals acquire the skills they need to find jobs in a world that is changing because of the current downturn. Those who drive the skills agenda, principally the government, should also focus more on the role of training providers outside the educational sector, says the report, and consider radical reforms to the Train to Gain service, as well assessing what will happen when the Learning and Skills Council is abolished in 2010.

“Skills policy could be the key factor which determines how and when the UK economy recovers and grows,” says the committee. “The government must accept this and drive the agenda forward.”  

As the report says, the government has been obsessed with pursuing a growth in qualifications rather than addressing the skills needs of employers and individuals – look no further than Tony Blair’s ridiculous target of sending half of 18- and 19-year-olds to university. We are now seeing the fruits of this policy coming into a jobs market which will offer little to many of them – an indication in itself that the pursuit of qualifications does not necessarily lead to work and prosperity.

In the post-Leitch environment we are seeing reality finally being grasped, not least by the IUSS committee. It calls on the government to:

  • address the issues of re-skilling
  • set “milestone” targets to reflect the importance of re-skilling
  • evaluate all aspects of the Train to Gain programme and to ensure the national Audit Office – a body with teeth – audits its activities and performance
  • assess the disruption that will follow the abolition of the LSC and to clarify what will follow
  • ensure that the Skills funding Agency and the National Apprenticeship Service work together
  • act quickly to provide access to training for unemployed people.

Truly though, now that we are at the fag end of the Brown regime, it’s difficult to see how the government can find time to deal with all the issues raised by this report.

Therefore it makes sense for it to focus on few that are achievable. Perhaps getting a grip on Train to Gain and making sure it meets current and near-term needs is the most feasible option. As Adam Smith showed, focusing on essentials can yield wondrous results, though not necessarily prosperity for all. Farewell then, Lord Leitch. 

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