A pound;300 million recovery fund to co-ordinate training nationally is needed to help the UK out of recession and end the "stop-go" skills provision that has blighted the economy for years, according to a forthcoming report.
The paper, to be published by the Learning and Skills Network next week, also calls for the return of individual learning accounts, repackaging the pound;1 billion Train to Gain budget as a system of tax credits, pound;3bn to ease the capital funding crisis in colleges and the lifting of the cap on university tuition fees.
Written by Tom Bewick, chief executive of the sector skills council Creative and Cultural Skills, the paper promises to convey "practical solutions" that can be delivered immediately and tailored to suit different employment sectors in order to "build in competitiveness as we emerge from recession".
It calls for pound;300m over two years to set up a sector skills recovery fund, run by the 25 sector skills councils, that will ensure the delivery of skills that employers and employees need.
"Now is the time to overcome Britain's historic propensity to opt for `stop-go' training practices that leave lasting damage in terms of sub- optimal levels of productivity, performance and growth," the paper says.
It argues that the smartest and most cost-effective way to deal with the economic and skills problems is through the sector skills councils, which are close to employers in every industrial sector. But it says the councils are not funded to support companies through the recession.
"In such unprecedented times, it is necessary to reconsider the whole basis on which they will need to work with employers over the short to medium term," it says.
The sector recovery fund would have a range of roles, including stimulating demand for apprentices andor graduate internships, relocating redundant apprentices, establishing sectoral apprenticeship companies in collaboration with further education colleges to ensure young people get the training they need, and grants to companies to retrain employees.
Money to finance this work should come from the Department for Innovation, Universities and Skills and, specifically, from the Train to Gain budget. "What's needed is a much greater focus on helping business build the strategies and people to develop the skills that will ensure the UK's success when this recession ends."
It also argues that training is best served by a shift away from a "bureaucratic policy framework" to a system of financial incentives. "The UK cannot simply legislate for a training culture. In recent years, we have confused a good state of training with the creation of a training state. They are not the same thing."
Individual learning accounts - scrapped in 2001 after it emerged the system was vulnerable to fraud - are key to incentivising learning and training, it says. The paper proposes handing over administration of the accounts to a major financial institution. Accounts could cover all forms of learning, including higher education fees, and be rolled out from 2011.
It also calls for an immediate pound;3 billion injection to ease the capital funding crisis in further education. This would allow colleges which have applications in principle to proceed with their buildings: "Without some proper redress, FE will continue to be the neglected middle child in our learning and skills system."
John Stone, chief executive of the LSN, said: "Whether readers of the report believe that a sector-based approach is the whole answer or that it should be but one of a raft of measures, Tom Bewick's call to think ahead, protecting and developing the UK skills-base, is both timely and important."
l UK Employment and Skills in a Global Recession will be launched at LSN's research conference on April 21, 1 Whitehall Place, London SW1A 2HD.