Editor's comment

A stark choice faces Gordon Brown at the Treasury following publication of two reports in close succession. Does he go for spending on pensions as Lord Turner's review demands? Or is his priority the urgently needed training for work that Lord Leitch calls for in his review of skills for the UK to 2020?

The Chancellor's pre-budget statement suggests he cannot do both. A five-year squeeze on public spending will put unrelenting pressure on employers and individuals to foot most of both bills. Lord Leitch's skills predictions are not optimistic. Nor is the solution cheap. He says current government targets are ambitious and difficult to achieve, but they still won't keep us competitive in global markets over the next 15 years.

Additional training would cost the Treasury at least pound;1.5 billion for basic level 2 (GCSE-equivalent) skills, pound;3 billion for level 3 (A-level) and pound;9 billion for level 4 (higher).

Mr Brown accepts that the relationship between education and productivity is one of the weakest links in the economy. He has expressed publicly his confidence in further education to deliver - given the resources.

But Lord Turner says there is an equally urgent need for pound;2.5 billion additional cash for pensions. He wants a compulsory 4 per cent from employers, 3 per cent from individuals and 1 per cent from the taxpayer. To complicate matters, he says pensions reforms won't work unless older people are trained for available work to earn the cash.

If you spend money on pensions where is the money for skills? Government policy is for employers to buy more courses from colleges. However, the pound;670 million of grants for employers under the Train to Gain scheme won't stretch that far. Firms will have to dig deep in their pockets.

But who is the 4 per cent compulsory minimum pension levy aimed at? Small firms with no pension schemes in place - exactly those who fail to train staff because, they say, they don't have deep pockets.

As the report from David Sherlock, head of the Adult Learning Inspectorate, says in his annual report, the picture of basic skills training is far from rosy. Despite a dramatic improvement in skills training, much of the spending on basic numeracy and literacy has not gone where it should. There is still a basic skills mountain to climb.

There is only one conclusion to all these messages - any adult education outside strictly limited government targets will face further significant cuts for the foreseeable future.

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