A new report has been published recently by the Sector Skills Development Agency (SSDA), demonstrating that the future could be bleak for the UK's productivity without major training changes.

The research report, written by Professor Ewart Keep from the Warwick Business School, is called "Market Failure in Skills" and demonstrates that as in anything else, sensitivity to the demands of individual sectors must be maintained and developed to guarantee a relevant policy initiative. This follows in the wake of numerous Government comments calling for greater employer participation in education development and implementation.

Why the Deficits?

The report also addresses concerns about the breadth of understanding and research in this area. The research cites a perceived dearth in research on the exact causes and effects of skills deficits in different sectors. Indeed, the report states that it believes "market failure" is no more than just one cause of skill supply and usage issues as faced by different areas of the marketplace. A controversial note is injected with the comment that Britain's skills level (remaining stubbornly low in comparison with competitors) remains at this low level because this is exactly what many employers wish.

The skills demands of many sectors vary, and from position to position as well. An employer would naturally not wish to sponsor a programme of training that would enable an employee either to claim a justified pay rise due to a rising skills level, or even leave for a better position thus forcing the company to recruit a new employee who they would be forced to train all over again. Thus, cost comes into the debate, with companies often reluctant to initiate a project that will see a massive investment from them without a reciprocal commercial benefit. Social conscience is a fine thing to have, but in the world of business the margin of profit is always the first and primary concern.

According to this report, then, Government policy makers can often be guilty of attempting to impose a "one size fits all" mindset into a multifaceted situation. As many of these initiatives would prove to be both ineffective in meeting the skills agenda of individual employers and would be partially paid for by the taxpayer, it would appear that if these findings are substantiated they will act as a catalyst for a change in Government thinking, possibly even to a more flexible and responsive attitude.


The author of the report, which is one of a series entitled Catalyst to be published by the SSDA, said: "The Sectors Skills Councils (SSCs) are helping to ensure that courses and skills are tailored to parts of the economy. But policy has not yet caught up. Sector skills growth needs to be given emphasis, as vocational does not automatically mean employable. Some skills are in demand and some are not. The broad-based approach to skills needs to be replaced with a wider range of sector-based interventions."

The report also speaks of the need for FE colleges to be afforded greater freedom in meeting the demands of employers. Professor Mike Campbell, the Director of Strategy and Research at the SSDA, said: "The aim of the Catalyst series is to promote debate on crucial skills and productivity issues so as to inform the way that skills are developed and valued. "Market Failure in Skills" is the SSDA first report to examine the importance of moving to a more employer-led, demand driven approach to skills. Skills are only good if they are the right ones and that can only be ensured by employers being intimately involved in their demand, development and delivery."

As the Government are currently going through consultations for the White Paper in education, this would seem to be a timely reminder to the nation's elected representatives that whilst there may be only two colours in Whitehall, there are a multitude of greys in the "real" world.

Jethro Marsh

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