Just before prime minister David Cameron formally announced that #163;250 million of FE funding would be handed directly to employers to commission their own training, Skills Funding Agency chief executive Geoff Russell offered an intriguing insight into how policy is made. He said this pilot scheme had been under discussion for just three weeks.
The decision will give employers unprecedented control over a portion of skills funding, with #163;50 million available to them next year, and a further #163;200 million in 2013. But the reason for the hasty timing of the announcement was hinted at by the prime minister. He linked it with youth unemployment, thus giving him a response to the number of jobless under-25s topping a million for the first time since 1986.
“I know times are tough - especially for young people who are trying to get their foot in the door and launch their career,” Mr Cameron said. “That is why I am determined to do all that we can to give people the very best skills, training and opportunities to succeed; and why, despite tough spending decisions, we are investing in a record number of apprenticeships.
“We are seeing an incredible take-up of these apprenticeship places. I want that to continue, which is why we are taking action to make it easier to take on apprentices, and now we are giving employers the power to take control of the training so that it best meets the skills they need.”
The Department for Business, Innovation and Skills says employers will be required to show how the public money will generate private investment, support apprenticeships and raise skill levels in their industry or supply chain. To date, employers have generally met the requirements for private investment in apprenticeships by “in kind” contributions of time or facilities.
The Department’s record on handling bidding processes so far is not encouraging, said shadow skills minister Gordon Marsden. Labour has attacked the administration of the Regional Growth Fund, for instance, for issuing 10 times more press releases than bids it has approved (just two).
Martin Doel, chief executive of the Association of Colleges, raised an alternative concern: how would the Government ensure employers were accountable for public funds? By next year it will be possible for an employer to control a publicly funded skills system from end to end: commissioning provision, acting as the awarding body and providing the training.
The idea for employers commissioning training came from the UK Commission for Employment and Skills. Charlie Mayfield, the John Lewis Partnership chairman who also chairs the commission, said it was necessary to give employers “ownership” if they were to engage with the skills system.
“We must create more space and encouragement for employers to work within their supply chains, business clusters and with unions, colleges and training providers to develop the skills they need,” Mr Mayfield wrote on the commission’s blog. “The most powerful way to do this is to change the way funds flow through the system, and to place the responsibility and reward for investment more directly with employers.”
One commenter took issue with the logic: “The argument seems to be that the ‘vocational’ system is too complex and that employers don’t understand it. Many consumers don’t understand the banking system, so does that mean that consumers should run the banking system in the UK? I think not.”
Whatever benefits come from putting business in charge of public funds, the move is unlikely to help the problem the prime minister identified: just as most apprenticeships go to people already in work, it seems unlikely that many jobless young people will see the benefit of training cash paid to employers.
