Employers trumped by sector on training

21st May 2010 at 01:00

Private industry's investment in training is many billions of pounds smaller than claimed and dwarfed by public-sector spending, new research reveals in a forthcoming report.

A study by the UK Inquiry into the Future for Lifelong Learning calculated the total expenditure by employers at pound;16.2 billion, far lower than industry claims of pound;39 billion. It excludes the cost of employees' time for training, which accounts for the difference.

Total Government spending, including its funding of FE, training public- sector employees and pound;3.7 billion of tax relief for employers, comes to pound;25.5 billion, in excess of 50 per cent more than the private sector.

If the amount spent by the voluntary sector and individuals is added, the total spent on adult learning rises to pound;55 billion, or 3.9 per cent of GDP.

The figures also suggest that the public sector invests in training at almost twice the rate of private industry, accounting for nearly 40 per cent of expenditure on skills by employers, while only being responsible for 22 per cent of workers.

Individuals should receive tax relief for training along with businesses, the inquiry recommends, suggesting that older people or those in lower skilled jobs could be targeted in particular. And it suggests that the tax relief for businesses should be tied to educational targets on participation and qualifications, in recognition of the support from public funds.

Susan Anderson, director of education and skills at the Confederation of British Industry, said that it was only right for employers to count the time spent training off the job. And she rejected suggestions that business contributed too small a portion of Britain's investment in training.

She said: "Employers are spending a lot of money on training their workforce. They spend as much as they need to spend for their specific needs. What's important isn't how much is spent, but the outcome - which is a skilled workforce."

The CBI would not support extending tax relief for training in the current fiscal circumstances, Ms Anderson said, nor introducing targets for businesses that currently benefit. She said productivity was a better measure of success than qualifications.

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