Skills are the vital passport to jobs
Geoff Russell, Chief Executive of the Skills Funding Agency, is sure that skills are the passport to securing and keeping a job and explains why unemployed people deserve the very best collaborative efforts among Government, the FE sector and employers.
Recent headlines make for stark reading: ‘UK unemployment total hits 17-year high’ or still worse ‘Unemployment is the tragic human face of the economic crisis’. As UK unemployment rose to 2.53 million in January, I’m told this is the highest since 1994.
I guess it’s no surprise there’s always been much theoretical debate on the causes, consequences and solutions for unemployment. Marxist thought is that unemployment calls for the abolition of capitalism and a shift to socialism or communism, while classical, neoclassical and the Austrian School of economics focuses on market mechanisms and the ‘invisible hand’ of the market to resolve unemployment.
I would not dream of speculating on where Ministers are in this debate, but I can see that the Coalition Government is keen for markets to play their part in bringing together people needing employment and employers needing staff. But it also recognises a role for creating the conditions for the market to operate by helping unemployed adults gain the skills and qualifications they need to find jobs.
Nonetheless, acknowledging unemployment as a legitimate problem and the critical role of Government in facilitating efforts to address it is only the start. Providing the right tools to support people to find work is essential, but this is a complex challenge.
The Government has recently set out a number of major welfare to work reforms which aim to fight poverty, support the most vulnerable and help people break the cycle of benefit dependency. It is radically simplifying the back to work system and replacing existing employment schemes, pilots and projects with the new Work Programme due to start this summer.
As the economy continues to be challenged, it is vital we accelerate recovery in the jobs market and address skills gaps in the workforce that could restrict how companies take advantage of the upturn and whether individuals find new employment in emerging growth sectors. And FE plays a crucial role here, with an estimated 400,000 unemployed learners in the system – a remarkable achievement. But in the current environment, Government must make sure we help colleges and training organisations to do even more.
The answer lies in flexible systems where, put simply, bits of Government collaborate better to get people back into work. The Skills Funding Agency will work with Jobcentre Plus to help colleges, training providers and Jobcentre Plus offices to work more closely together on the ground.
We will do this through a scheme being piloted this August. For each college and provider, 2.5% of their adult funding allocation (the outcome incentive payment) will be contingent on helping to get unemployed people into work. This payment will amount to about £80 million across the country, but it is merely the targeting device for the more than £3.2 billion adult FE budget the Agency will allocate this year.
It means that those colleges and providers who do not already do so will need to engage with local employers to understand their skills needs. They will also need a close and collaborative relationship with Jobcentre Plus – and vice versa. The new freedoms Jobcentre Plus advisors have and the new rules that make benefits conditional on skills training should help.
But getting people into work is just the start; keeping them in work is the next challenge. As the economy becomes more competitive, balanced and resource-efficient, a highly educated and skilled workforce is an essential component of growth potential. Government can help create the conditions that supply people with the right skills to employers, but it is employers that must invest in their employees’ skills to equip them for tomorrow, and not just for today. Otherwise how can their businesses innovate and succeed? Government does not have the prime responsibility for the skills of UK PLC – employers do.
There was a time when ‘corporate social responsibility’ or ‘ecological sustainability’ were foreign terms for businesses. But now they are written deep into the DNA of business. We need to introduce another concept into the genetic code of business – investment in human capital. We need to make and win the argument that employer investment in skills is not just desirable – it’s essential and makes good commercial sense. We need to get to a place where major skills investment is synonymous with responsible, successful and admired businesses. That way we will enable a more flexible and successful workforce and generate more employment opportunities for those currently out of work.
You will gather by now that I feel strongly about this agenda. So much so that together with the Campaign for Learning I will be running an event in May – ‘Skills for the workless’ – which will explain how the Skills Funding Agency will work in close co-operation with Jobcentre Plus to help those looking for work. We’ll be discussing issues such as the links between the Single Adult Skills Budget and the Work Programme to create Apprenticeship opportunities, income contingent loans for unemployed adults, targeting fee remission on active benefit claimants, job outcome incentive payments and the potential role of full-time FE as a way of reducing youth unemployment.
For the undisputable fact is that unemployed people deserve our very best collaborative efforts to drive up aspiration and opportunity. In today’s highly competitive economy skills are the passport to ensuring that people find and – most importantly – keep a job.
Geoff Russell is chief executive of the Skills Funding Agency, a partner organisation of the Department for Business, Innovation and Skills
Read other FE News articles by Geoff Russell:
Geoff Russell: Translating Apprenticeship interest into ‘real’ apprentices
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