Sacrifice of lifetime learning accounts would be tragic

Mark Corney

During the spring, the Labour party abandoned its commitment to a compulsory system of adult training and lifetime learning. Out went an obligatory framework of employer investment in training and the old-style training levy.

Out went compulsory employer and employee contributions to lifetime learning accounts (LLAs). In came the statutory disclosure of training activities by employers, a new push behind Investors in People (IIP); a voluntary system of employer and employee contributions to LLAs and a University for Industry (UFI).

Seen as the key supply-side measure in Labour's strategy of "voluntarism" within a statutory framework, the education and training world has been waiting for details of the UFI. Last week, the nail-biting ended when the Institute for Public Policy Research, the left of centre think-tank, published its report University for Industry - Creating a National Learning Network.

According to the IPPR, the UFI is a radical initiative to spearhead Labour's plans for a skills revolution. The emergence of flexible labour markets and the knowledge-based economy, means learners and employers must be able to access learning, efficiently and at the time when they need it. The role of the UFI is to supply "learning on demand".

With more than 100 universities, more than 450 further education colleges, and thousands of private sector training and awarding bodies operating in the education and training sector, there is no intention of creating yet another learning institution. Rather the UFI would act as the hub of a national learning network which reaches out to workplaces, homes and local learning centres, including schools, colleges and libraries.

The UFI would act as a broker of information, materials and courses; provide access to user-friendly services on the Internet; commission new learning programmes of strategic importance to the economy and stimulate the mass marketing of learning courses.

By harnessing new technology, the UFI would achieve significant economies of scale in delivering learning materials, which in turn would reduce learning costs to individuals and employers. Greater efficiency, lower costs and providing learning on demand, also implies a crucial market-making role for the UFI, where learning demand is automatically met by learning supply.

The IPPR report also scores particularly highly in emphasising that the source of the training problem within the employer community lies with small and medium-sized enterprises (SMEs) rather than large companies. Not only are businesses with fewer than 100 employees less likely to have a formal plan, they are also less likely to offer their employees on and off-the-job training. Access to lower training costs might encourage them to improve their training practices and even commit themselves to IIP.

For all these reasons, the UFI has the potential to make a difference to the efficiency of the UK learning system. In all honesty, it is beyond criticism. By the next millennium, Britain could be blessed with an Open University and a University for Industry which, together, reach out to thousands of learners and employers.

But the truth is that the UFI is policy-making at its easiest. The hard policy choices relate to the demand-side of learning. On the central questions of how customers should pay for the services of the UFI, and by what means the Government should subsidise learners, the IPPR report simply signposts to work in progress.

Nevertheless, thanks should be given that further work on the demand-side is taking place since the details of Labour's policies are far from convincing. Both Gordon Brown, the shadow chancellor, and David Blunkett, the shadow education and employment secretary, believe that a major source of purchasing power for the UFI services will come from a million Learn as You Earn accounts, where the individual makes a payment of Pounds 25 in return for a Pounds 150 grant from the State. Labour maintains that the Pounds 150m bill for State grants will be funded out of training and enterprise council reserves, although the actual level of TEC cash reserves could be no more than Pounds 30m.

Converting State grants to Learn as You Earn accounts is only part of the problem. Equally important is their long-term sustainability. It is probable that many targeted accounts would remain empty and inactive once the initial grant of Pounds 150 had been spent. Moreover, it is questionable whether targeted accounts worth Pounds 175 could kick-start a culture of lifetime learning accounts, because there is no national system of fiscal incentives and banking facilities to encourage individuals to save and borrow for long-term learning.

Since many targeted accounts might be inactive once the initial state grant has been spent, and targeted accounts worth Pounds 175 could only purchase worthwhile training when the UFI offers cost effective learning packages, the launch of a million Learn as You Earn accounts should be put on hold. Instead, Labour should press ahead with making the UFI a reality, while designing a detailed specification of a national system of LLAs which brings together the functions of saving, borrowing and credit for learning.

Over the past 17 years, UK training policy has been dominated by the numbers game and hitting targets for take-up of new programmes. It would be a tragedy for the idea of LLAs if a Labour Government became hooked on the take-up of a million targeted accounts when a comprehensive specification and plan for the development of a national system of LLAs is needed.

Mark Corney is director MC Consultancy.

Creating a national learning network is available from the IPPR 30-32 Southamspton Street WC2E 7RA (0171 470 6100). Normally Pounds 8, it is on special offer to TES readers: Pounds 5 (inc. pp). Please quote TES offer when ordering.

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