Hundreds of millions of pounds of Train to Gain money is going unspent because employer demand has failed to meet expectations.
While the budget for the free workplace training will rise to pound;163;1 billion by 2010, more than a third of the cash allocated last year went unspent - just pound;163;313 million of a total pound;163;520m budget was claimed.
A similar situation occurred in the first year, when about pound;163;100m went unspent, but the Department for Innovation, Universities and Skills (DIUS) said then that enrolments would pick up after a slow start and continued with plans to increase funding for the scheme.
But even after an pound;163;8m campaign promoting the free courses, employers are still only taking up a fraction of the training on offer.
The Confederation of British Industry said businesses supported the scheme, which funds staff to train in the workplace for a level two qualification, but it was too prescriptive for many companies.
John Cridland, deputy director-general of the CBI, said: “Many employers have already benefited from Train to Gain, seeing improvements in company performance and higher staff morale.
“But Train to Gain isn’t the finished article. Where employers haven’t fully used the funding available, it’s often because of issues around the relevance of the qualifications on offer to firms, too much red tape, patchy brokerage quality and a need for more flexibility.
“These issues need to be ironed out so that employers can help staff reach their full potential, and even more firms can get involved with Train to Gain.”
Colleges said they had predicted that the lack of flexibility and narrow range of courses would prevent employers taking up the training.
Martin Doel, chief executive of the Association of Colleges, said: “Colleges are disappointed but not surprised at last year’s underspend from Train to Gain. We pointed out to the DIUS the potential underspend some time ago.”
He said colleges were calling for provision for adults who wanted to train in a new area, as well as an increase in the range of courses supported. At present, anyone with a level two qualification (equivalent to five good GCSEs) cannot take another course at the same level, which bars career changers or those who need to update their skills.
But John Denham, Secretary of State for Innovation, Universities and Skills, told this summer’s Unionlearn conference that employers must take some responsibility for unclaimed training cash.
“Despite the compelling business case for skills, and the significant offer of government support and funding available through Train to Gain, it is still the case that too many employers do not realise that improving the skills of their staff is one of the most powerful things they can do to drive their businesses forward,” he said.
The department said it was planning to increase the flexibility of Train to Gain in line with the demands of employers and colleges.
New compacts will also put large sums of Train to Gain funding - typically around amp;#163;100m for industries such as construction or hospitality - under the control of the employer-run Sector Skills Councils, whose job will be to encourage businesses to take up the training.
A department spokeswoman said: “The Government must drive up demand from employers for Train to Gain to fulfil our skills ambitions and ensure ours is a workforce with the world-class skills we need to compete in the global age.”
