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Let public dictate their skills needs

The idea of demand-led funding seems, on the face of it, to be beyond reproach. Who would not want money to be spent on the people who most wanted an education? But, as the Learning and Skills Council's annual accounts reveal, the reality does not live up to the rhetoric.

Instead of money flowing to where it is needed, we have seen a centrally planned bureaucracy pumping up the funding of a favoured project to a degree that exceeds its appeal to students and employers.

Huge amounts of money have been pledged to Train to Gain years in advance. By 2010, the budget will reach amp;#163;1 billion.

And yet the system, which relies on employers to place their workers on free courses to improve their skills, is struggling to attract enough students. In the first year, it underspent by about amp;#163;100 million; this year by more than amp;#163;200 million. As the funding increases, so does the gap between supply and demand.

It is a rare part of Government which finds it difficult to spend money, so this is an achievement of sorts.

But when the budget was underspent by about a third in the first year of Train to Gain, it was passed off as teething troubles.

So far, the response of ministers has been to promise increasing flexibility with higher level qualifications, custom-built qualifications for particular industries or opening up the system to people taking level two qualifications a second time to change career or update their skills.

Reading Lord Leitch's ominous warnings of the disappearance of unskilled jobs and the UK's declining position in world education, it is easy to understand why ministers are determined that the billions of pounds spent on post-16 education should be focused on meeting these challenges. The tragedy of this is that a thriving and popular part of education has paid the price, as traditional adult education lost more than a million places in the rush to shift colleges' work to Government priorities of accredited qualifications and skills for employment.

So, while we have weak demand from the employers' side, individuals have shown themselves in the past to be keen to learn. If businesses will not take up the free training, why not let the public decide which skills they would like to learn instead?

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