We now know the outlook for the UK economy after the Chancellor of the Exchequer presented his autumn statement. It will have come as no surprise to anyone that much of the forecast was pretty depressing reading. Economists and the statistics have been showing us for some time that the situation for the economy has been very difficult. The forecasts for the coming year show that growth is certain to remain very low and recession is a real risk, especially with the turbulence from the difficulties in the Euro Zone.
One of the most visible effects of the current economic climate which has been heavily reported on is youth unemployment, now topping one million 16-24 years olds. This has yet again highlighted the need for investment in training and skills. With a growing squeeze on public sector budgets and a significant reduction in government investment in skills there is a greater than ever imperative for the private sector to invest in training and skills.
Earlier this month, trade union officials, leading academics, and leaders of the UKCES, SSCs and employer groups met in a seminar at the TUC to look at the issue of skills investment. What is clear, and strongly endorsed by those attending the seminar, was that growth was the key to resolving our current economic problems; skills are a key component to that growth; and employee engagement is vital to raising skills.
Part of the discussion looked at the need to make the money we already spend on training work for us better. The Government already provides over £4bn in tax relief for companies providing training, yet extraordinarily there is no monitoring of the way this money is spent and what it is used for. The Government don’t even keep records of the applications made. Proper use of this money could make a huge difference, if we were to start ensuring it was targeted at groups that really needed the training, providing training in core areas and keys skills.
A good example of this need for refocusing was made at the event by John Rodgers, Chief Executive of Skills for Health, who highlighted that support staff make up 40% of the health sector workforce and deliver 80% of patient contact but receive just 4% of the health sector training budget. It is likely that studies across other sectors will show up similar disparities in the delivery and focus of training.
A change in the way we handle this tax relief would provide a big investment in skills in the key areas needed without the need for extra funding. Working with the businesses applying would help them target their training in a way that would help develop and grow their businesses.
It is not just through tax relief either that we are seeing large amounts of government funding going to employers. A further £250 million of government money is also being made available to business that was previously going through the FE system, allowing businesses more control over where their training for staff is sourced. Again we need to ensure there is proper monitoring of this money and proper use to ensure it goes where it is needed. If we don’t look carefully at this funding switch we will be missing a huge opportunity to drive up employer engagement and risk causing great uncertainty to the FE sector.
Surveys of business spend on training show that overall, despite the economy, it had been holding up but is now slowing and lower earners are even less likely to receive training. Helping the most disadvantaged, as the summer’s civil unrest showed, is essential if they are to bridge the skills gap into work. For sustainable longer term growth we must have a strategy for skills and investment that encourages employers to be far more ambitious in their training plans and targets. The current economic crisis is fuelling a radical rethink in the eurozone. We need some similarly radical thinking about how to engineer a step change in employer investment in skills. Many more companies should match the best in their sector. All employees get a decent chance to up skill. And as a nation we should ensure that nobody is shut out of employment because they lack the chance to learn.
Tom Wilson is director of unionlearn, the TUC’s learning and skills organisation
Read other FE News articles by Tom Wilson: