Firms plan to cut training budgets

12th December 2008 at 00:00
Workers who want training may have to rely on colleges rather than their employers

More than one in eight businesses plan to cut spending on training, putting pressure on colleges' efforts to earn more income through fees.

But according to a snapshot survey by the Confederation of British Industry (CBI), while 13 per cent plan to cut spending, most are planning to maintain their spending. Half say they will be reviewing whether they are carrying out the right training to improve profitability.

Six per cent of employers are intending to increase spending on training, despite the economic downturn.

Richard Wainer, head of education and skills at the CBI, said: "Training spending isn't going to fall off the edge of a cliff. During the recession in the early Nineties, many firms were continuing to invest, and to increase their investment in training, rather than decrease it."

He said the difficult economic conditions might encourage greater take-up of the free Train to Gain programme, but only if the increased flexibility proposed by government allows employers to get the training they want.

There will also be Pounds 79 million of pre-redundancy retraining available through Train to Gain to try to reduce the time spent out of work, announced in the pre-budget report.

Mr Wainer said: "There is a lot of public funding, particularly through things such as Train to Gain. But the issue is that they will still have to make sure the sort of skills on offer meet their needs. It's free, but there's still an opportunity cost for a lot of firms, in terms of time off from the workplace to train."

The survey did not look at specific industries, but Mr Wainer said the CBI expects construction, property, finance and retail to be affected most, potentially reducing training opportunities during the recession.

If employers are taking a close look at value for money, colleges may be in a good position to take advantage. They have a higher proportion of provision rated good or outstanding - at 71 per cent compared with 58 per cent in work-based learning.

According to the National Employers Skills Survey, 84 per cent of employers are satisfied with the training they receive from colleges.

The Association of Colleges (AoC) says 66 per cent of large employers use college training, although large numbers of smaller employers do not and work-based training providers are more commonly used.

But Julian Gravatt, assistant chief executive of the AoC, said employers' needs were specific and training providers cultivated different specialisms. The target to raise 50 per cent of the cost of adult education via fees from employers or individuals would be difficult in a recession, he said.

"The Government wants to double apprenticeships over the next 10 years, to expand the amount of employer funding in higher education and the amount of fee income going to colleges," said Mr Gravatt.

"Those are three big issues that depend on employers. If you look at the fate of a company like Woolworths, survival is pretty much what we are all after at the moment."

Failing to meet the fee income assumptions of the Government could end in a reduction in the number of courses attracting any public funding, he said.

Opinion, page 4.

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