34 employers share pound;67m from skills funding

But question marks remain over businesses’ cash contributions

14th September 2012, 1:00am

The transfer of up to pound;250 million of government skills funding to employers, who will be able to directly commission their own training, will begin with 34 businesses sharing pound;67 million, it was announced this week.

The first successful bidders, including Siemens, BAE Systems and Nissan, will more than match this funding by contributing a combined total of pound;98 million, the Department for Business, Innovation and Skills (BIS) said. A total of 11,000 new apprenticeships will be created.

It is the first time that employers will make funding decisions, instead of money passing to colleges and training providers.

Nissan has pledged to create 14 training programmes for 3,000 staff within the company and with its suppliers. Manchester Airport has proposed creating an academy for school leavers, offering coaching, employability skills, work experience and qualifications. And Rolls-Royce is involved in a project to increase the demand for engineering skills and double the number of female apprentices.

A key requirement for the bids was that they drew in extra funding. However, BIS confirmed that employers will be able to use “in kind” contributions, such as equipment, premises and employee time off for training, which historically have proved almost impossible to quantify. “The pound;98 million employer investment is a mix of cash and in-kind investment. The exact split for each individual bid will be subject to our ongoing grant negotiations,” a spokeswoman said.

The independent review of FE fees led by Chris Banks in 2010 reported that these difficulties meant contributions from employers were not measured and that businesses avoided cash contributions. In 2008-09, the report found, colleges were only able to collect pound;75 million from an employer- responsive budget of more than pound;1 billion.

Ministers are enthusiastic about the possibility of the bids supporting small businesses, however. While few of the winning bids themselves are from smaller companies, several promised to train their entire supply chain.

Business secretary Vince Cable said he had seen the benefit of companies training their supply chains on a visit to Germany. “So I am particularly excited that we have received a number of bids to do the same in the UK,” he said. “The breadth and scope of these projects show how central skills are to our long-term competitiveness, across all sectors and in all corners of the country.”

As well as the creation of apprenticeships, the bids are expected to support the awarding of 27,000 full-time vocational qualifications. But the figures also show that employers are keen to use the funding to pay for work that will not lead to qualifications: the bulk of the places - 49,000 - will be for other “learning experiences” such as work placements.

“We wanted the pilot to be built around an open and flexible offer for employers so that they are able to develop their own training programmes to meet their needs,” a BIS spokeswoman said.

The employer-owned commissioning programme was designed by and is overseen by the UK Commission for Employment and Skills. Its chairman, Charlie Mayfield, said: “We want to encourage employers to take the lead in designing, developing and delivering the training and employment solutions they need.”

BIS was keen to reassure FE providers that many of the bids are “collaborative” and involve colleges, as well as private training providers and national skills academies, rather than simply siphoning part of the skills budget away from them.

“We believe that quite a number of colleges have been involved in the bidding process, so we are hopeful that this will be reflected in the successful bids,” said Teresa Frith, skills policy manager at the Association of Colleges. ”[We] are hopeful that greater employer ownership in skills through these pilots will help to potentially improve collaborations between colleges and employers, which should ultimately benefit the employees directly, as well as the business.”

More successful bids will be announced in October, followed by a second round of applications for the remaining pound;183 million.