In March 2005, the UK government published a white paper outlining new measures to tackle Britain’s skills problem. Chief among these is the National Employer Training Programme, which seeks to put employer needs at centre stage in the design and delivery of training.
On 22 March 2005, the Labour Party government published its latest skills white paper, entitled Skills: Getting on in business, getting on in work, which aims to tackle Britain’s 'skills shortages' and help companies to compete successfully in the global economy. The white paper sets out details regarding the latest phase in the implementation of the government’s skills strategy, which was launched in 2003. It focuses essentially on adult skills and refers mainly to England, although some elements apply to the whole of the UK. The government outlined its strategy for young people in a previous white paper, 14-19 Education and Skills, published in February 2005 (UK0504107F). The adult skills white paper outlines a raft of new initiatives including a National Employer Training Programme (NETP) that builds upon earlier pilot schemes. This feature looks at the background to the NETP and assesses the possibilities for progress.
Background
In recent years, policy-makers in England have wanted to create a more 'demand-led' vocational education and training (VET) system. The idea was first raised in 2001 with the publication of a report by the Cabinet Office’s Performance and Innovation Unit (PIU) on workforce development (UK0307105F). The PIU questioned the conventional policy wisdom that the UK’s skills problem was essentially one of weak or inadequate supply of skills, ie a failing of the education and training system. Rather it argued that part of the problem may have to do with employers’ demand for skills, linked to the fact that many firms were competing through low-skill, low-value added production strategies. The implication was that tackling Britain’s skills problem meant not only delivering the skills that employers need but also levering up employer demand for skills through measures designed to encourage firms to compete in higher-quality markets. By implication, a strategy aimed essentially at supplying more skills and qualifications would not be sufficient to deliver improved economic performance.
The white paper
The new white paper is the latest attempt to realise the vision of a 'demand-led' system that responds to employer needs. The aim is to 'design and deliver publicly funded training and qualifications in a way that is directly led by the needs of employers' and which 'promotes higher levels of investment and commitment in training by employers'. The key levers for achieving this objective include the following.
- A new National Employer Training Programme (NETP) will offer free training for any employee to obtain a first Level 2 vocational qualification (equivalent of five good GCSEs) and/or basic skills. The programme will be introduced across England by 2007/8 and will build on the previous Employer Training Pilots (ETPs), which offered free training for employees to obtain a Level 2 qualification including paid time off work to train and various forms of wage compensation for the employer (UK0302106F). In the NETP, employers will be expected to agree with brokers how much paid time off for training will be available to employees. To date, no decision has been made on whether the national programme will retain an element of wage compensation.
- Two new pilots will test out subsidised support for training towards Level 3 vocational qualifications (ie technical, craft and associate professional level skills). The government will provide GBP 40 million over two years, with employers expected to match this level of funding as well as offer employees some time off to train.
- The government will meet the full cost of tuition for adults studying for a first full Level 2 qualification at a local college or training provider.
- The white paper emphasises the role of the sector skills councils (SSCs) in helping to deliver a more demand-led system. The SSCs are 'employer-led' bodies whose role is to engage employers and providers in addressing skill gaps and shortages and thereby raise the skills of the existing workforce (UK0211105F). SSCs will have an increasing degree of influence on education and training through the development of new 'sector skills agreements' and are expected to play a key role in the design of new vocational diplomas announced in the 14-19 white paper. There are currently 22 SSCs in the UK, with a further three expected to receive their licence in 2005. The white paper sets new targets for the SSCs to meet by 2008 including: 10% more organisations adopting high performance work practices; skills gaps and shortages reduced by 25%; 10% more employees receiving training from their employer; and all SSCs to have in place sector skills agreements.
- The white paper underlines the government’s commitment to create a network of Skills Academies for each sector of the economy. It is assumed that employers will take the lead in developing the new academies, which will 'provide training programmes for young people and adults which, in design and delivery, incorporate the best that is known about working with employers to meet their current and future skill needs'.
Launching the white paper, the secretary of state for education and skills, Ruth Kelly, said: 'Too many adults in Britain still lack basic skills in literacy and numeracy and employers are concerned that they cannot recruit workers with the skills they need to be competitive. We need to tackle this and go even further to support more adults in achieving the higher end technician, craft and professional qualifications our economy needs to compete with the best.' She added: 'Improving our national skills base must be a joint endeavour between government, employers, trade unions, universities, colleges and other training providers.'
Response of the social partners
Employer organisations welcomed the focus on employer needs and a key role for business in the design of training. Sir Digby Jones, director-general of the Confederation of British Industry (CBI), commented: 'The time is right to kick-start a UK skills revolution and this is an opportunity that the country cannot afford to miss. Better skills go hand-in-hand with better business performance. If training is tailored truly to the needs of business then we can make UK staff more dynamic and the UK economy more competitive. If everyone in the UK improved their skill-base by one level, the poorest person in the country would get richer.' Commenting on the proposals for the NETP, he remarked: 'A national programme of basic training that is free and voluntary is a positive step but to help firms make the most of this training it must not require staff to be absent from work for long periods on a one-size-fits-all basis. The training has to be applied flexibly and must take into account the day-to-day needs of business, particularly smaller firms.'
The Trades Union Congress (TUC) general secretary, Brendan Barber, said: 'The white paper sets out ambitious plans to transform the nation’s skills. We need no less than a revolution to end the endemic weakness in our skills base that prevents too many employees from realising their full potential and also acts as a drag on the national economy.' He particularly welcomed plans to increase the number of union learning representatives (ULRs) from around 8,000 today to 22,000 by 2010 (UK0402103F) along with the provision of funding to help develop a new union academy. He said: 'Trade unions will play a central role in driving this skills strategy forward, especially though union learning reps, who are already helping over 100,000 people access training at work each year. This role will be boosted by a new union academy that will see trade unions delivering training for a quarter of a million employees by the end of the decade.'
Commentary
The white paper has been welcomed as an attempt to deliver a more demand-led training system based around the needs of employers that will help tackle skill shortages and deliver a more prosperous and competitive economy. One of the central mechanisms for achieving this is the new NETP, which is premised on the belief that there is extensive 'market failure' which results in employer under-investment in skills, particularly at Level 2, and that there is therefore a strong case for publicly-subsidised training.
One might question, however, the extent to which the NETP fits the picture of genuinely 'demand-led' or 'employer-led' system, given its reliance upon state subsidy. Neither is the case for market failure well established, let alone proven. It may be, for example, that many employees do not get trained to Level 2 because they occupy jobs that do not require a qualification at this level and employers see no reason therefore to provide such training. This may be a perfectly rational decision given their wider competitive strategy and its implications for work organisation and job design. One question that the authors of the white paper do not address is that if investment in skills really is such a powerful driver of improved economic performance, then why are so many employers reluctant to provide for such training out of their own pockets?
Another danger is that the more government intervenes to subsidise employer training, the more employers have an incentive to cut back on their own investments by putting training in the area where the state will pay. If so then the state could simply end up paying for training that would have happened anyway (the classic problem of 'deadweight'). Employers generally like to get their training paid for by government and it would come as no great shock if, as with the ETPs, they were to celebrate the scheme as a resounding success. The real challenges, however, are about getting employers themselves to invest more in training and creating a genuinely demand-led system that seeks to encourage more firms to adopt high-skill, high-value added production approaches. It will be interesting, therefore, to see how far the sector skills councils will be able to engage employers in this broader business development agenda. (Jonathan Payne, SKOPE)