Friday, 05 February 2010 06:57 Sector Skills Councils (SSC) offer a twenty-fold return on the investment put into them, according to new research.

Baker Tilly, the leading Third Sector specialists, which investigated the impact economic impact of SSCs, found they provide on average more than 100 million pounds every year from funding of only five million pounds.

Jim Clifford, head of charity and education advisory services at Baker Tilly, says: "This is a very strong result, but one which passes the sense test when you consider the depth, spread and reach of the SSCs. They reach across the UK, into education, industry, and social welfare."

The review sampled four SSCs: Cogent, for science-based industries, Energy and Utility Skills, covering the gas water and power industries, People 1st, for the hospitality, leisure, travel and tourism sectors and Skills for Health, which supports the health sector.

Mr Clifford says its success will boost the use of social return on investment (SROI) methodology, which measures the social and financial value created by a non-profit, non-government organsiation or business, for evaluating social impact.

He adds: "The SROI methodology was effectively adopted in an Office of the Third Sector publication in May 2009. It looks set to become the mainstream approach, albeit requiring some further development through work of those, like Baker Tilly, who are applying it carefully to real life organisations.

"To my mind it is workable and insightful. If you are looking for a quick-fix, plug-in-the-numbers approach, this is not it, but then I question whether social impact can be approached by formula. For an organisation seeking the better to understand the effects it is having on its sphere of operation, and convey that view to its stakeholders, SROI works."

The review also highlights the opportunity for developing collaboration models between SSCs and other organisations to improve effective delivery. This contrasts with calls from the government to cut the number of SCCs, and Baker Tilly is encouraging them to consider collaboration first rather than merger.

The Alliance of Sector Skills Councils, which represents all 25 licensed UK Sector Skills Councils SSCs, launched the review earlier this week at its first ever national conference.

For footage of the two-day conference, see below:

Skills Minister Kevin Brennan tells FE News about skills for the future

Sector Skills chief John McNamara on Alliance conference

Jason Rainbow