The Government should scrap its "wasteful" Train to Gain programme and give some of the cash to employers who want set up their own apprenticeship schemes, according to a leading think tank.
A report published today by Policy Exchange says the UK's current skills policy is centrally driven and too focused on meeting government qualifications targets rather than delivering the skills that students, employers and the economy need.
It says the billion-pound Train to Gain scheme fails on two counts: in its attachment to government targets and because it subsidises training employers would have done anyway.
The report, "Simply Learning", says: "We recommend that the Government should abandon Train to Gain . There should be attempts to incentivise employers who currently use external provision to develop in-house capacity. A small pot of money could be diverted from the Train to Gain budget to create a discrete strategic fund which employers could bid for to help develop this capacity."
It calls for an end to the Leitch report's qualification targets for 2020 - including more than 90 per cent of adults qualified to level 2 and an extra 1.9 million level 3 qualifications achieved - as they "damage" the UK's skills base by underpinning a qualifications-driven system.
It also calls for a reformed funding system for further education that abolishes the difference between adult learner-responsive funding - most of which goes to colleges - and employer-responsive funding.
Instead, learning accounts should be introduced that would help create a market in FE, giving colleges and other learning providers greater freedom to plan provision locally. The report proposes a return to something like the former Further Education Funding Council.
Echoing proposals in the recent white paper "Skills for Growth", the report says providers must make more information about courses available to students and employers. It proposes a national student satisfaction survey similar to that conducted in higher education.
Providers would also be more responsive to employer needs if sector skills councils (SSCs) were given more funding and the freedom to produce strategic plans for the industries they cover. Government plans to hand responsibility for strategic planning to regional development agencies should be abandoned, the report says.
Tom Bewick, chief executive of SSC Creative and Cultural Skills, said: "I think the role of the SSCs is to become the new managers of the learning market."
Dinah Caine, chief executive of Skillset, the SSC for the creative media industries, said: "People assume SSCs are much better funded than they are, but the core grant is pound;48 million between 25 councils. With additional resource it would be possible for us to produce that strategic input."
A spokeswoman for Network Rail, which runs its own advanced apprenticeship scheme, said in-house apprenticeship schemes might not be right for every firm, but for many they could deliver bespoke training for people for whom jobs would be waiting.
A spokesperson for the Association of Colleges said in-house company training could not always deliver expert tuition leading to a nationally accredited qualification, unless employers partnered high-quality learning providers. The association welcomed the report's call for greater college autonomy.