Another View - Levies could lead FE into a brighter future

30th July 2010 at 01:00
Compulsory payments would help stem cuts and support investment in training

It might be a surprise that the UK Commission for Employment and Skills (UKCES) has escaped the battalions of axemen stalking Whitehall. Not only is it a hated quango, but it was closely associated with the leader of the former regime, Gordon Brown. One might have expected it to be first up against the wall.

But if its continued existence is justified, it is at least in part because of the unique international perspective it offers. In the day-to- day melee of education debate, it is easy to forget how forward-looking our system is regarded by some of our competitors. Easy, too, to forget how we are still failing to deliver improvements quickly enough.

The Government now faces what seems like a double bind. If it keeps spending on skills, how will it cut the deficit? Yet a failure to spend on skills will damage the long-term economic competitiveness in a way that will depress future tax receipts and leave the UK unable to invest in its future (p29).

The choice is between managing the decline of one of the world's main economic powers or taking a large bet on future economic growth to play its part in reducing the deficit. Until now, the coalition Government has pretended cuts are the only option. In the autumn spending review, it must remember the power of skills to drive growth.

Although Britain may not be gaining ground in the skills race, it has been running fast enough to keep pace with the pack. The hundreds of millions of pounds spent so far have had an effect: that the UK is likely to hit its target of 95 per cent achieving literacy standards is heartening.

But the scale of investment needed to start gaining on competitors is beyond what anyone could hope for in this political environment. More is needed, and the UKCES report makes it clear that private business has not pulled its weight.

Chris Banks, the former Learning and Skills Council chairman, has offered interesting proposals to tie public funding to private investment, ensuring that employers cannot benefit from subsidy without putting in a stake themselves. It is a welcome idea, as long as those who really cannot afford it are not excluded.

But at best, based on the proposals for 5050 matched funding, this is only likely to bring in an extra pound;4 billion - a substantial sum in absolute terms, but not one which would provide the transformational investment needed to catch the UK's rivals.

The UKCES report is not hopeful on this count: all options for increasing employer investment have either weak evidence for their effectiveness or substantial risks. So far, all that has been tried is the toothless Skills Pledge, which offers companies the appearance of valuing training without any penalty if they fail to put down hard cash.

It goes against this Government's laissez-faire instincts, but it should look again at compulsory levies, which work well in construction, to ensure that one of the industries most vulnerable to short-term economic shocks invests in its long-term future, and that workers with the lowest prior attainment improve their skills.

The main argument against levies is that they are "deeply unpopular" with employers. But if industry leaders are reluctant to invest in the future to the extent that we need, can we afford to sit back and watch the whole country fall behind?

Joseph Lee, E:

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