Skills cash goes unused by half of employers

19th April 2013 at 01:00
They prove slow to take up direct funding for innovative projects

A major initiative to give employers a greater role in skills training has been cast into doubt after it emerged that fewer than half of firms have so far provided evidence of recruiting any trainees.

The government first announced flagship plans almost 18 months ago to give funding directly to employers proposing innovative training projects. But figures revealed by ministers have prompted concern about slow take-up by those approved to take part in the scheme.

In response to a parliamentary question from Labour peer Lord Knight of Weymouth, ministers said that of the 37 projects approved in September only 17 have started to claim funding. A further 11 have a contract in place, and some projects may have started to deliver training but have not yet made a funding claim. Three employers have withdrawn altogether, the UK Commission for Employment and Skills (UKCES) told TES.

The body set out employer ownership as its "long-term" vision for the skills system two years ago. Under this arrangement, money that used to be allocated to providers, who would then attract businesses, was instead offered to employers directly in a bidding process run by the UKCES and the government. Employers could then control how they spent the money to meet agreed outcomes.

But while the UKCES believes the pilots are working well, its own report last month said the initiative is "not scalable and remains a small part of a system where inertia restricts the ability for young people to forge careers".

The lengthy bidding and contractual process has prompted calls for a full evaluation of the programme before any further funds are committed beyond the #163;340 million already pledged.

But Simon Perryman, executive director of the UKCES, said the pilot, which has just closed its second round of bidding, is on schedule. "We are very pleased with the projects so far," he said. Because funding claims are only quarterly, more employers may already be delivering training without having yet filed a claim, he added.

Mr Perryman said the bidding process could not be shortened because of the volume of applications - 260 were received in the first round of bidding. "It's interesting to see how much appetite there is for ownership of skills by employers," he said.

But he added that the commission plans to speed up the contractual process, which includes ensuring that the funding to employers does not breach European Union rules on the state propping up private business and carrying out due diligence on providers who may not have already been approved for Skills Funding Agency funding.

"Although we are very supportive of colleges and training providers - many do an excellent job, although they don't all do an excellent job - this is about working with businesses who really know what they want and need, and getting them to work together as an industry," Mr Perryman said. "They don't always want to go back to the people who have done training in the past. They want to look for more efficiency."

Lord Knight said that he believes the employer ownership pilots are progressing slowly because they remain too centralised. "The lack of take-up and delivery of these pilots is of clear concern. UKCES are doing their best but the design of the scheme by the government is still too centrally driven. I think direct funding to employer consortia would be much more sensible and effective," he said.

Julian Gravatt, assistant chief executive of the Association of Colleges, said the government should be wary of transferring more of the adult skills budget into schemes such as the employer ownership pilots.

"There is a danger in deciding that the adult skills system doesn't work before it's had a chance to try things out," he said. "All these reports that the highly centralised current system doesn't work - is the evidence really that clear? There should be an independent evaluation of the pilots before they extend it."

Mr Gravatt said that if the Richard review results in variable prices for apprenticeships, that could also lead to a competitive bidding process, like the nine-month bidding process for employer-run projects.

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