Let’s tip our hat to the government for saying in the Industrial Strategy green paper that there will be flexibility for the new Institutes of Technology to adopt different models suited to their local needs. But judging from some of the reaction, not everyone has read that bit!

There was naturally plenty of attention given to the £170m which will be allocated as capital funding across the next three years. Ministers understandably want higher level technical education to be available across all areas of the country while they also made it clear that most of the new Institutes should grow out of existing high quality provision.

AELP fully supports this approach, but some have interpreted the proposals from an institutionalised perspective even though the government looked to employers to take the lead in the early IoT examples such as the one for the HS2 railway. We think that with CBI support, the initial approach should be continued, i.e. employer based and provider supported. The support can come from a university, a college or an independent training provider or a combination of these – whatever is appropriate and best.

Independent training providers with their expertise and experience are ready to be active partners in the establishment of each of the new Institutes of Technology and we look forward to working with the LEPs in advancing the government’s plans. Our training provider members work with 350,000 employers and so the links to make quick progress happen already exist. We can avoid wasting time and reinventing the wheel if the plans tap into this vast resource. Buildings are really important focal points, but we must not forget that some of the best training and development is in the workplace. This is about being world leaders in the development of skills with our outstanding employers in an innovative and flexible 21st century way. Different and successful models certainly exist already and the new IoTs must build from these examples.

There has been criticism that £170m isn’t enough but we feel that ministers have judged the level of investment about right. With less than two months until the start of the levy, we are seeing strong evidence that employers in the STEM sectors will be using apprenticeships to train young people to higher level technical skills. Many businesses are also reviewing their traditional graduate schemes to ascertain whether they might get better value from introducing higher or degree level apprenticeships. In two years, we estimate that at least half of the levy proceeds will be reinvested in apprenticeships at these levels. So while we certainly support giving young people a choice between classroom based and work based learning, the requirement to invest more capital in IoTs is tempered by the fact that many colleges and providers are already offering good quality technical and professional education.

This week the national media have given plenty of coverage to two employer surveys by the CIPD and Linkedin respectively on the impact that the Brexit vote is having on recruitment. The CIPD survey found that sectors of the UK economy which are heavily reliant on EU nationals are starting to experience skills and labour shortages, with research suggesting that the squeeze could be down to fewer EU workers seeking jobs in Britain in the wake of the vote. Even worse, a quarter of the 1,000 employers in the survey fear that many of the EU nationals, whom they currently employ, are considering leaving Britain in 2017. The Adecco Group CEO is right to point out in response to these developments that employers should be looking at apprenticeships and retraining not just as a long-term strategy but as a solution to what is happening now.

While the Industrial Strategy has some very useful proposals on addressing skills, the government has just reminded us again that the levy means a change to a more employer demand led system. It may therefore be the right time for the whole of the government funded FE and skills infrastructure to be made more responsive to employer and learner demand. Brexit is a complete game-changer and flexibility has to be the watchword in responding to the labour market challenges that our departure from the EU presents.

Mark Dawe, Chief Executive of the Association of Employment and Learning Providers

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