SCOTTISH COLLEGES and training providers face "huge implications" from the Leitch review of skills in the UK, according to government sources.
College leaders said the review's emphasis on employers' needs has made it a "pedagogy-free zone" from which the broader notion of lifelong learning could disappear altogether and turn training into "an employer closed shop".
The influential report by the Dunfermline-born financier Lord Sandy Leitch, published last week to coincide with the chancellor's pre-budget statement, contains scathing observations about the UK's low-skills economy.
If skills did not increase, "we would condemn ourselves to a lingering decline in competitiveness, diminishing economic growth and a bleaker future for all," Lord Leitch said.
Skills policy in the UK is devolved from the Westminster parliament but the Treasury, which commissioned the review and will fund its conclusions, makes clear it expects "a radical step-change" in all four UK countries.
The aim should be to deliver "world class, economically valuable skills" by 2020.
It is already clear Chancellor Gordon Brown shares this vision. He told employers at the CBI's national conference last month that he expected them to engage more in how young people are trained and to take a bigger role in setting the agenda for FE colleges. He left his audience in no doubt what that meant - more "economically relevant crafts and trades".
If employers are to be in the driving seat, however, they may have to pay a price. Lord Leitch recommends that employers should make a "pledge" to train more of their staff, on a voluntary basis initially. If insufficient progress is made by 2010, a statutory right should be introduced for all employees to have access to workplace training.
The implications for colleges could be considerable, as they face a call from Lord Leitch for a more "demand-led" approach to training based on what staff and employers need, rather than on what colleges choose to supply.
There could be particularly acute pressures for colleges in Scotland which, as one insider put it, "has one of the most supply-led education and training systems in the world".
The emphasis throughout the report is on economically relevant training and skills, so that the only vocational qualifications to be publicly funded should be those approved by the skills councils for the various occupational sectors. All adult skills funding should be routed through mechanisms such as individual learning accounts, the review suggests.
Lord Leitch's report is likely to have a stronger impact next year, if Mr Brown becomes prime minister. The Treasury's statement welcoming the review made this almost implicit, when it said the Government would consider how to resource the Leitch recommendations as part of the 2007 comprehensive spending review.
Mr Brown's increasingly emphatic mantra of "skills, skills, skills" now appears to suggest that what seemed at first almost random policy moves on skills by First Minister Jack McConnell may be part of a much wider UK strategy.
At this stage, the Scottish Executive's response, from Nicol Stephen, the Lifelong Learning Minister, was careful to say only that it would feed the "themes" of the Leitch review into the current consultation on updating its lifelong learning strategy.
Tom Kelly, chief executive of the Association of Scotland's Colleges, labelled the report a "pedagogy-free zone" and said that, while employer engagement in training was fundamental, it made no sense to plan a system on what employers say they want.
"Employers can tell you what they lack today, but can't tell you what they will need tomorrow," he said. "Their interests have to be balanced against those of students and of society. Training is not a straight supply and demand model. So employer engagement, yes; employer closed shop, no."
Christine Fitton, national manager in Scotland for Lifelong Learning UK, said calls for "demand-led" training had been around for a long time, but she believed "the beefed-up role of the sector skills councils to make them approvers of vocational offerings is more likely to create a demand-led system". She urged employers to take the long view of their training needs, so colleges and other providers can plan for changes.
The STUC welcomed the new rights to training for employees, but it also wants them to be given a clear entitlement to paid time off for training during working hours.
Grahame Smith, general secretary of the STUC, criticised the proposal that employers should be given until 2010 to implement a voluntary pledge and favoured a "skills levy" on employers as an investment in training.
The backdrop against which the Leitch recommendations were delivered is a sombre one: out of 30 OECD countries, the UK lies 17th on low skills, 20th on intermediate skills and 11th on high skills; 5 million adults in the UK lack functional literacy; 17 million adults in the UK have difficulty with numbers; one in six young people leave school unable to read, write or add up properly.
The "step-change" Leitch suggests is that by 2020: 95 per cent of working-age adults should have basic skills in functional literacy and numeracy, compared with 85 per cent and 79 per cent in 2005; more than 90 per cent of adults should be skilled to GCSEStandard grade levels or their vocational equivalents, up from 69 per cent in 2005; the number of apprentices should double to 500,000 each year;o more than 40 per cent of adults should be at graduate level or above, against 29 per cent in 2005.