John Hayes, Conservative Shadow Minister for Vocational Education.

Employers and potential learners pay the price for the Government's failure on skills. A recently published survey by Lloyds TSB shows that skills gaps are business's greatest concern, greater even than the threat of a terrorist attack. 48% said they have experienced difficulties in recruiting qualified workers. Yet simultaneously, UK unemployment is continuing to rise - climbing by 27,000 to 1.71 million in the three months to September, and 1.24 million 16 to 24 year olds are not in education, employment or training: a rise of 15% since 1997.

Too many businesses are held back by skills gaps; too many young people are left behind, deprived of the training they need to succeed. Lord Leitch, whose final report on skills was published recently, is right to argue that the Government's supply-driven approach to skills has failed and that the only way to deliver a better match between the supply and demand for skills is through a demand-led system "“ driven by business and learners. Indeed, I have made this case repeatedly since becoming Shadow Minister for Vocational Education.

Leitch has many interesting and constructive things to say about the way forward but there are also important gaps in his thinking.

A fundamental weakness is that Leitch has little to say about how we can engage more people in adult education. His desire to "embed a culture of learning" depends on facilitating the opportunity for lifelong learning.

This contrasts sharply with the daily reality of courses cut and the thirst for learning thwarted. This is a glaring omission given that Leitch's own analysis of demographic trends suggests that up-skilling and re-skilling the existing workforce is becoming vitally important as fewer young people enter the job market.

And Leitch doesn't have anything to say about adult community learning and the role it plays in delivering social justice, an important part of his remit.

Courses aimed at some of the most vulnerable members of our society "homeless and disabled people and those with learning difficulties" are being cut, simply because they do not lead to a formal level 2 qualification. By contrast, Conservatives value adult learning because it builds democratic citizenship, it adds to individual and communal well-being and because it is often a bridge to employment. Its erosion must end.

Perhaps the most glaring structural omission from the report is that it effectively ignores the bureaucracy which stifles the delivery of training and prevents the development of a genuinely demand-led system. I share Lord Leitch's view that Sector Skills Councils (SSCs) should be at the heart of employer engagement, driving the system. But Leitch says little about the Learning and Skills Council and its relationship with the SSCs. Although, if Leitch has his way vocational qualifications will have to be accredited by SSCs, the LSC will still hold the purse strings. Surely, to separate planning and funding in this way is simply not tenable. Such a separation will limit power of employers to drive the system through parallel structures that will lead to further confusion.

Leitch's second glaring structural omission is his failure to say almost anything about FE colleges.

This is particularly surprising given they are the main vehicle by which training is delivered. Leitch could have recommended the empowering of FE as a means of reducing bureaucracy. After all, Sir Andrew Foster's report on FE last year recommended "less centralisation and moves to greater self-regulation".

Neither does Leitch propose pruning the number of organisations that currently have a monitoring, inspection or improvement role in FE. Though the Adult Learning Inspectorate is merging with Ofsted, a new body, the Quality Improvement Agency has also been established, bringing the total number of bodies back up to a staggering 17. And yet another quango emerges in the report, the Commission for Employment and Skills, with, no doubt, a burgeoning network across the nation.

Lord Leitch recommends Train to Gain as the best way of funding training.

He wants to "route all public funding for adult vocational skills in England, apart from community learning, through Train to Gain and Learner Accounts by 2010." But what he doesn"t say is that, alarmingly, the Institute of Fiscal Studies research has shown that 85% of provision on the Train to Gain pilots would have been provided without Government funding. This problem of deadweight cost in Train to Gain helps to explain how Labour's policy has the unlikely outcome of more public spending resulting in fewer adult learning places.

Given that Train to Gain brokers are now focusing on "hard to reach" employers it is vitally important that, as these employers are not experienced in delivering training, brokers ensure that the training provided is of the highest quality. We must also establish a level playing field for different providers. While FE colleges are increasingly subject to regulation, independent providers are not. FE should be able to compete for Train to Gain funding on an equal footing.

The Further Education and Training Bill, which has begun its journey through Parliament, will subject FE to even more central control by giving the LSC draconian new powers to axe college governing bodies, principals and managers.

Remarkably, although Lord Leitch concludes that the skills crisis makes "the case for action compelling and urgent" the Government has made it clear that the FE Bill will not be amended to reflect his recommendations. It looks as if Lord Leitch's report may have been kicked into the long grass and so the opportunity to establish a genuinely demand-led is in the long grass with it.

That's bad for adult learners, bad for business, bad for Britain.

John Hayes, Conservative Shadow Minister for Vocational Education.

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