WORLD CLASS SKILLS: The Leitch Implementation Plan

Skills accounts
Adults career service, and
Real power for employers (and virtually no strings attached)

Andy Dean

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Introduction

The Government today unveiled major new plans to help over 4 million adults learn new skills and improve existing ones over the next three years. The plans will help make Britain’s workforce one of the most skilled in the world by 2020. ‘World Class Skills’, published yesterday in response to the Leitch review of skills, will introduce new legislation to strengthen the current funding entitlement for adults to training in basic literacy and numeracy, giving adults a legal right to free training for the first time.

It will also create Skills Accounts, giving people greater choice over their learning. The Accounts will be available to help eligible benefit claimants to access training that will support their return to work.

A new adult careers service will offer tailored employment and skills advice that better meets the needs of low-skilled and unemployed adults.

For employers, benefits will include a new Commission for Employment and Skills and reformed Sector Skills Councils to give employers the opportunity to exert real influence over both the content and delivery of skills and employment programmes. This includes driving the reform and development of vocational qualifications.

On the supplier side the big news is the role out of the ‘new higher standard for employer responsiveness and vocational excellence” with full launch next spring. This will replace the CoVE model and coupled with the Framework for Excellence and National Improvement Strategy sets a pretty demanding set of criteria that providers will need to meet if they are to operate successfully in the post Leitch market place.

Reading between the lines the future for the LSC does not look rosy, what with local authorities taking their 14 – 19 funding and what’s left might be chopped up between RDAs, Jobcentre Plus and Local Authorities. You have to sympathise with them… I don’t think they have had a bedding-in phase since they were first set up…

The Leitch Review - Reminder

The report sets out the Governments more significant achievements to date and then embraces lord Leitch’s rather negative assessment of the state of UK skills:

“But as Lord Leitch’s review set out, we still have a mountain to climb. Although the UK has narrowed the productivity gap with our major competitors, we still lag behind the most successful economies. A major reason for this is weaknesses in our skills base. More than a third of all adults in the UK don’t have the equivalent of a basic school leaving certificate. 6.8 million people have serious problems with numbers, and 5 million people aren’t functionally literate.”

It is worth casting our minds back to Lord Leitch’s main recommendations to see whether they have found their way into this report:

• Increase adult skills across all levels. Additional annual investment in skills up to Level 3 will need to rise to £1.5-2 billion by 2020. Increased investment is required in higher education, but costings are difficult to project accurately; - yes (well an extra £1.3billion by 2010/11 anyway).

• Route all public funding for adult vocational skills in England, apart from community learning, through Train to Gain and Learner Accounts by 2010. – No but yes but no… Train to Gain gets a big boost and a broader remit but is not sole route for all vocational skills, Learner accounts are to be introduced (piloted). Colleges and other training providers will be protected for the time being.

• Strengthen employer voice. Rationalise existing bodies, strengthen the collective voice and better articulate employer views on skills by creating a new Commission for Employment and Skills, reporting to central Government and the devolved administrations. The Commission will manage employer influence on skills, within a national framework of individual rights and responsibilities; - Yes, employers get big opportunities under the implementation plan.

• Increase employer engagement and investment in skills. Reform, re-license and empower Sector Skills Councils (SSC). Deliver more economically valuable skills by only allowing public funding for vocational qualifications where the content has been approved by SSCs. Expand skills brokerage services for both small and large employers; - Pretty much Yes, only those qualifications which meet the SSC standards will be put onto the Qualifications and Credit Framework… SSCs may get the chance to introduce levys (presumably saving the Government from having to do it).

• Launch a new ‘Pledge’ for employers to voluntarily commit to train all eligible employees up to Level 2 in the workplace. In 2010, review progress of employer delivery. If the improvement rate is insufficient, introduce a statutory entitlement to workplace training at Level 2 in consultation with employers and unions; - Yes, over 150 organisations already signed up to the Skills Pledge which is linked to level 2 entitlement.

• Increase employer investment in Level 3 and 4 qualifications in the workplace. Extend Train to Gain to higher levels. Dramatically increase Apprenticeship volumes. Improve engagement between employers and universities. Increase co-funded workplace degrees. Increase focus on Level 5 and above skills; - Yes, kind of… Train to Gain is broadened, Apprenticeship places are to increased (already announced), Train to Gain will help employers access Apprenticeships and there is a commitment to getting more employer funded HE places, no mention of level 5 in report.

• Increase people’s aspirations and awareness of the value of skills to them and their
families. Create high profile, sustained awareness programmes. Rationalise existing fragmented ‘information silos’ and develop a new universal adult careers service; - indeedydoody, lots here about revolutions and supporting individuals, the Adult Careers Service is on the way by merging the advice services of learndirect with next step providers and working in partnership with Jobcentre Plus.

• Create a new integrated employment and skills service, based upon existing structures, to increase sustainable employment and progression. Launch a new programme to improve basic skills for those out of work, embedding this support for disadvantaged people and repeat claimants. Develop a network of employer led Employment and Skills Boards, building on current models, to influence delivery. - Yes, you’ll have a UK Employment and Skills Board though there will be no central support or licensing of Employment and Skills boards but employers are free to set them up and the idea is recognised as being of use. Plus they’ll consult on merging skills brokerage and business support from April 2009. Basic skills will remain a key focus.

So in most cases that is a pretty resounding ‘yes’. Now we’ll have a look at the report in more detail.

Ambitions

The targets that Government have set themselves are certainly challenging, particularly the 2020 ones, for England, it means by 2020 they would need:

• 95% of adults to have the basic skills of functional literacy and numeracy, up from 85% literacy and 79% numeracy in 2005;
• More than 90% of adults to have gained at least a level 2 qualification, up from 69% in 2005; with a commitment to achieve 95% ‘as soon as possible’;
• To shift the balance of intermediate skills from level 2 to level 3 with 1.9 million more people achieving level 3 by 2020;
• Deliver 500,000 people a year in Apprenticeships (in UK);
• More than 40% of all adults to have a higher education qualification up from 29% in 2005;

While the new cross-cutting Public Service Agreements for skills and employment will be announced in the autumn, current thinking is that by 2011, England will be aiming for:

• Participation in full-time education amongst 16-18 years olds to rise to 84%;
• 89% of adults to be qualified to at least level 1 literacy, and 81% to be qualified to at least entry level 3 numeracy;


• 79% of adults to be qualified to at least full level 2; and
• 56% of adults to be qualified to at least full level 3.
• By 2014, 36% of adults to be qualified to level 4 and above.

They are substantially increasing the proportion of public funding for adult training that is ‘demand led’. Notably Train to Gain employer training funds will be around £440 million in 2007/08, rising to more than £650 million in 2008/09 and projected to rise to more than £900 million in 2010/11. Taking account of other work-based employer training programmes by 2010/2011 the total amount of employer-focused funding will be around £1.3 billion.

In return for this increased level of investment, they will expect individuals and employers to take “much more responsibility for improving their own skill sets and qualifications”.

Individuals

The need for high quality IAG is recognised and Leitch’s recommendations are taken on board. These could be the most significant of all the changes in terms of impact upon individuals needs and careers.

The new Department for Innovation, Universities and Skills (DIUS) will work with the Department for Work and Pensions to create a ‘joined-up employment and skills system’. This will entail merging the information and advice services of learndirect and next step providers into a new universal adult careers service in England, working in partnership with Jobcentre Plus.

The new careers service will be there to ensure that everyone is able to access the help they need to take stock of where they are in achieving their goals and ambitions, and to get the support they need to advance themselves and achieve their full potential.

Jobcentre Plus will work with the new adult careers service and the Learning and Skills Council to ensure that every customer gets the right balance between job search and training to improve their employability.

The need for more flexible provision is noted and a promise given that flexible training for individuals will be offered in a way that can be combined with their job search and continued alongside work. They intend that Train to Gain brokerage and employer training funds will play an important part in supporting this objective.

The Skills Accounts envisaged by Leitch are to be piloted, these should give individuals greater ownership and choice over their learning, motivating them to gain skills and achieve qualifications, enter work and progress in employment. In more practical terms, when they open a Skills Account, individuals will be able to access the full range of adult information, advice and guidance services in the new universal adult careers service and will also receive an account number and account card, which will help people to understand the levels of investment going into their training, and whether it’s coming from them, their employer or the state.

Employers

“Treating employers and individual learners as the customers of the skills system is central to the idea of a demand-led approach. Through the measures set out in this plan, we will give employers the opportunity to exert real leverage and decision-making over both the content and delivery of skills and employment programmes.”

Ultimately employer involvement will be used to build confidence in the qualifications and learning programmes provided by universities, colleges and training providers, and theoretically open the door to increased employer investment in skills.

There will be a new UK Commission for Employment and Skills that will be fully operational in 2008. It will provide a vigorous, expert, and external challenge to the employment and skills system at all levels, to ensure that it is delivering the services that employers and individuals need. Significantly - It will also report to Government in 2010 on whether a statutory entitlement on training is appropriate, and whether further institutional change is required to deliver a better integrated employment and skills service. In England, the UK Commission will advise Government on skills and employment strategy and targets; assess progress; ensure that employment and skills services are integrated to meet the needs of individuals and employers; and oversee the performance and reform of the SSCs.

The remit of the SSCs will be more sharply focused on: raising employer ambition and investment in skills at all levels; articulating the future skill needs of their sector; and ensuring that the supply of skills and qualifications is driven by employers.

Importantly - Only those vocational qualifications which meet the standards set by the SSCs will be put onto the Qualifications and Credit Framework. This is intended to help build employers’ confidence in the programmes and qualifications offered by universities, colleges and training providers.

In some of the most careful language to be found anywhere in the report the spectre of Training levys is raised – “The government will consider whether it would be beneficial to introduce new enabling legislation to make it easier for SSCs to introduce levy schemes where they consider that these would help improve skills and productivity in their sector, where a clear majority of employers in the sector support them, and where impact assessments are positive.” That’s ‘no’ to levys then, eh…

Employers further gain in that it will easier for them to have their own in-house training programmes accredited through the Qualifications and Credit Framework. Government want a Skills Academy for each sector by 2012.

The Higher Education Funding Council for England is supporting a range of projects in HE institutions to develop employer engagement, will fund an additional 5,000 student places in 2008-09, co-funded with employers. - In return, they want employers to increase their investment in skills, training and qualifications at all levels. “We expect employers to be active in using the opportunities set out in this plan to shape the skills and employment systems to meet their needs.”

New Partnership in the Workplace

Much is made of the new Skills Pledge - a public, voluntary commitment launched in June 2007 whereby any organisation that signs up to the Skills Pledge undertakes to support their staff to get basic literacy and numeracy skills, and also to work towards achieving their first full level 2 qualification in an area that will be valuable to the employer. This is the core requirement for the pledge, optimistically the plan then goes on to say that “many organisations will want to extend their commitment to a higher level of training and skills beyond this.” Time will tell, to date, more than 150 employers - including all central Government Departments, the armed forces, the police force, Ford Motor Company, McDonalds, BT and Sainsbury have committed to the Pledge, which means that more than 1.7 million employees are already covered.

All employers making the Skills Pledge will be able to access Government support to deliver their Pledge commitment through the Train to Gain service, including the support of an independent skills broker to help them assess their training needs and source the right provision for them, and free literacy, numeracy and first full level 2 training for their staff.

“And if it doesn’t work” – I hear you say… (probably because it won’t – I’ll apologised in 2010 if it does) they will review whether this voluntary approach is working and whether the time has come to introduce a statutory entitlement to workplace training in
England (clue – it has and indeed did in about 1978)

Lord Leitch was at pains in December to express that the Train to Gain service should be ‘a’ if not ‘the’ primary conduit for adult skills training. This is not recommended but Train to Gain will become “a much broader service that will help employers of all sizes and in all sectors to improve the skills of all their employees, as a route to raising the performance of their businesses. It must also help employers and employees in disadvantaged communities, as well as those in more prosperous areas.”

Given the enormous potential benefits to their businesses, employers will be expected to pay towards the costs of this wider training effort.

There’s not much here for Trade Unions or workplace representatives through the significant achievements of the Union Learning Representatives are at least noted. “We will encourage Union Learning Representatives to work with employers to make the Skills Pledge, to draw up action plans for delivering the Pledge, and to help more employers and employees to access Train to Gain brokerage and funds for training.”

Finally through the consultation on Business Support Simplification, skills brokerage and business support brokerage could be combined into one ‘seamless service’ from April 2009.

Young People

The major focus of the Leitch Review was on training and skills for adults. This was because 70% of the 2020 workforce is already beyond the age of compulsory education. There is already a major programme of reform under way in education and training for 14-19 year olds. This programme includes rolling out new Diplomas in a number of broad occupational areas that have been developed with the SSCs, which should help young people to develop the skills they need for work and higher level study.

These changes are making basic English, maths and ICT skills the cornerstone of young people’s education, integrating them into Diplomas, Apprenticeships and GCSE English, maths and ICT, as well as creating a stand-alone qualification. Not forgetting the proposals to raise the participation age to 18, so that all young people would be required to continue in education or training until the age of 18

There will be an expansion of the Apprentice system in England Introducing a new entitlement to free training for those aged 19-25, in order to help more people in this target group to achieve their first full level 3 qualification. The Train to Gain brokerage service will help employers access the Apprenticeships scheme.

The Welfare Reform Green Paper

Coming out with the Leitch implementation plan is the Welfare Reform Green Paper. Highlights are:

• The new “jobs pledge” aiming to find employment opportunities for 250,000 people currently on benefit is at the heart of the Green Paper.
• Major employers in both the public and private sectors have given a commitment to offer guaranteed job interviews for people who have been on benefit and who are ready and prepared to work.
• Building on the Freud Report on welfare reform published earlier this year, the Green Paper sets out proposals to make much greater use of expertise across the private, public and voluntary sectors to help benefit claimants. Work and pensions secretary Peter Hain said: “Those facing particularly severe barriers to work will now get fast-tracked help. Others who have a history of long-term benefit dependency could face tougher responsibilities from the start of their claim.”

Together with the Leitch implementation plan this Green Paper sets out proposals for a newly integrated employment and skills system, with a more personalised, flexible and responsive New Deal offering new support to job seekers in return for new responsibilities to do all they can to help themselves. Government will support the family, not just the individual; and a new social contract for lone parents will put tackling child poverty at the heart of our welfare system.

Government Review of sub National Economic Development and Regeneration

The review outlines plans to refocus both powers and responsibilities to support this, giving local authorities a greater role in ensuring economic opportunity for all. Alongside this responsibility local authorities will have strengthened powers and incentives to support prosperity, reinvigorate the economic performance of our towns and cities, and make changes to work more effectively with business to better support businesses and business growth. This will help to spread the strong economic renaissance in city-centres and towns up and down the country. Key changes include:

• Concentrating neighbourhood renewal funding more closely on their most deprived areas;
• proposed new duty for local authorities to analyse the economic circumstances and challenges of their local economy. This will help them to provide clear economic vision and leadership;
• Supporting groups of local authorities in city regions to work effectively and accountably together through new Multi-Area Agreements (MAAs), and pool economic responsibility on a more permanent basis;
• Greater devolution to regions of powers to influence investment priorities, through a new extended round of Regional Funding Allocations to give regions a greater say on how spending is prioritised including for transport and regeneration investment;
• Sharpening the role of RDAs with a clear focus on increasing economic growth, with increased scrutiny by local authorities and simplified and strengthened performance management by central government. RDAs will also be expected to delegate funding to local authorities where possible;
• Funding for school sixth forms, sixth form colleges and the contribution of FE colleges to the 14-19 phase will transfer from the Learning and Skills Council (LSC) to local authorities' ring-fenced education budgets; and
• Giving Regional Development Agencies a greater role in meeting business support needs to help simplify the number of schemes down to no more than 100 by 2010.

There are some interesting paragraphs on targets as well… which I go into in more detail in below…

And Finally … some thoughts on levys… sticks… and targets “

This arrangement would not create any new obligations on employers, since the case for new legislation around workplace training will be reviewed in 2010.” Is a phrase seen more than once in the report. There is a real attempt here to try not to worry employers and indeed to try and give them a genuine say (via SSCs) in training provision. The carrot and stick approach that will no doubt await reluctant ‘individuals’ will not face reluctant ‘employers’, they will just see the carrot… the stick (training levys etc) is effectively in cold storage but may be brought back if needed after 2010. In the meantime it could fall to the SSCs to introduce Levys… but they will need a majority of their employers to agree… so don’t hold your breath…

The big drawback for employers of course is that they are now ‘expected’ to get in involved. Just how optimistic a view this is we’ll know by 2010 – when the Commission for Employment and Skills will report on whether a statutory entitlement on training is appropriate.

Yesterday Andy Burnham (Chief Secretary to the Treasury) gave a speech exploring Public Sector Reform. Andy has an NHS background so much of the emphasis was on health, however some of the messages could be equally important for Education. The overall message was one of less targets… I’ll say that again (as I can’t believe it either) less targets. He says: “We’ve seen over the last ten years the importance of those at the frontline understanding why politicians have set the objectives that we have, and not feeling alienated by targets being imposed on them… because of that, we propose to make radical changes to improve the framework for Public Sector Agreements.” He then fleshes out some of the details… including moving away from top down priorities and more local ownership (I’m thinking Regional Skills Partnerships, Colleges, LSCs (for a little while at least – I give them three years) and Train to Gain Brokers. Clearly targets will still exist – but there will be “a reduction on the reliance on nationally set targets. There will be fewer of them and more set at a local level and they will be… more focussed… upon the goals that we all want to see as a society.”

This chimes well with the review mentioned in the section above and most significantly in these two paragraphs:

4.20 The problem is made more acute by the fact that some agencies have a complex set of objectives, which can potentially pull them in a number of different directions. In the case of the RDAs, the lack of clear focus is compounded by the RDA Tasking Framework, which comprises 12 PSA targets and 10 key output targets. This complex arrangement can potentially reward nugatory activity, create conflicting incentives for RDA activity and undermine their focus on delivering sustainable economic growth.

6.92 The single over-arching growth objective will be aimed at increasing regional GVA per head, consistent with the Government’s Regional Economic Performance PSA, for which the RDAs are the principal delivery agents. It will replace the current basket of 12 PSAs and ten output targets which are currently set as objectives for the RDAs. The growth objective will be underpinned by five outcome-focused performance indicators. Consistent with the drivers of productivity and employment, and in line with the indicators being developed for the Regional Economic Performance PSA, these indicators will be:

• GVA per hour worked, as a measure of productivity;
• Employment rate, showing proportion of the working age population in work;
• Basic, intermediate and higher level skills attainment, to show skills levels, consistent with the Department of Innovation, Universities and Skills’ targets on skills;
• Research and Development expenditure as a proportion of GVA, as a measure of innovation; and
• Business start-up rates, as a measure of enterprise.

What was that saying about interesting times…

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