Interaction between colleges and employers needs clarification and a closer relationship to regional strategy. Maria Hughes, the agency’s research manager, said: “There’s no shortage of ideas, but it’s the first time targets have been set and there’s a lack of familiarity with the process.”

Colleges are used to targets for participation and achievement, but employer engagement is a new element in the three-year development plan negotiated with the local Learning and Skills Council.

Ms Hughes’s report, “Reviewing the Impact of Employer Engagement Targets”, published this week, looks at how the process has gone so far in a number of areas across the country.

The aim is to get colleges and employers working together to improve the nation’s skills. Business gets the skills it needs, providers can focus on what the market wants and learners become more employable.

But local LSCs and colleges do not always see eye to eye on what counts as employer engagement. The report said that providers often felt that local LSCs thought too much in terms of numbers of employers and income, and failed to include European Social Fund or Government Office-funded training, which benefited business but was not directly paid for by it.

Even so, Ms Hughes discovered more than 20 types of targets that covered everything from work experience, basic skills, apprenticeships, return to learning and employer involvement in curriculum development to a percentage increase in income from employers.

Some regions lacked a coherent strategy, she said. Colleges were often set targets without much reference to labour market information or the policies of other organisations, such as Regional Development Agencies or Sector Skills Councils. Also, some of the targets did not seem very challenging.

Nevertheless, Ms Hughes is optimistic. The report found a willingness amongst providers and local LSCs to work together and makes a series of recommendations.

Local LSCs need a clearer strategy for involving employers. They already have information on provision but they should build up closer contacts with RDAs, SSCs and employers to develop their planning role.

Providers vary enormously and guidance is needed on how their particular strengths can fit into an overall strategy. The LSDA therefore suggests dividing activities into three broad areas: * the employer as stakeholder, who takes part in the development and management of learning through such activities as work experience, advising on curriculum and assessment or becoming a governor

* the employer as consumer, who buys diagnostic services and staff training

* the employer as strategic partner, who collaborates in broad development and planning.

Development risks should be more widely spread. A college might spend a lot of energy working with a small employer who goes out of business. “Is that successful because the college has learned something, or unsuccessful because no training was given?” wonders Ms Hughes. “It might be better to work with the LSC, then you would have strategies to deal with this.”

Work-based learning providers were not required to have targets, but some local LSCs encouraged them to do so, and Ms Hughes supports this.

* Employers and providers will have to cooperate more closely in future, the Education Secretary Charles Clarke told the LSDA summer conference in June this year.

The Government could not be solely responsible for funding training for a socially just and competitive economy. We need to “move to a more demand-led system in which colleges are increasingly raising funding from a variety of sources, particularly from employers,” Mr Clarke said.