The idea of a minimal state, which assumes that anything the public sector can do, the private sector can do better, is about as dead as it could be.

No one, least of all the businessman who chairs the Learning and Skills Council, seems to mourn the demise of the training and enterprise councils, created under Margaret Thatcher in order to hand training back to the private sector.

The Secretary of State for Education, Charles Clarke, thinks the private sector proved “a rather inefficient driver for change” because business is essentially short-termist. Bryan Sanderson agrees.

“It’s particularly true of SMEs (small to medium sized enterprises) because their survival time is so much shorter than an established company,” says the LSC chairman. “In six months they could be bankrupt, so of course they’re short-termist.”

The secret, he says, is “to get clusters of businesses in a particular activity so they can feed off each other. There are several examples around Europe of this, where companies produce excellence by inspiring each other.

If you want classy leatherwork or complicated silk work you have to go to Florence - basically that area. Paris also, and there you find lots of people who do this and they have skills which are passed around. The best UK example is where all the Formula One cars are put together near Oxford.

They bring about pound;3 billion a year into Britain.”

That’s why Sanderson is so keen for his council to create centres of vocational excellence (Coves). “They will encourage this,” he says. “They are some of the best things we are doing. They will attract business around them. Some of them are doing rather well in getting the right relationship with local business. The secret is to make sure it’s consumer - led. If you are providing business with something that they have told you they want, you will get a much better response than if the initiative comes from the Department of this or that.”

By the standards of business leaders only a decade ago, Sanderson is almost dangerously statist. He would like to see the Government being more active in catching those in danger of dropping out.

“The great risk our society has got is that we’re drifting towards a drop-out situation. If you go to some cities in the US, there’s a slice of the population, usually a quite significant slice, 20 per cent or so, who are out of society altogether. They hardly pay taxes, they’re hardly policed, hardly go to school. They get by, but not much more than that - their literacy level is lower than Mexico’s.

“There’s a danger of that in some of our worst urban areas particularly.

It’s not an ethnic issue either - they’re often white. It’s a bit gender-based - much worse for boys than girls.”

Teaching basic skills is the job of the Government, not business, and it must be done properly, or no company training will work. “You can’t train people to operate an engine unless they can read a safety manual. You have to be very, very careful to provide a safety net for those at the bottom who don’t take education seriously, or come from a deprived background, with no books, third-generation unemployed and so on. Those people have to be looked after and if I were Secretary of State for Education I’d have someone full-time on how that was being done, because it’s not being done well enough.”

Basic skills are the job of the state. But business can and should take skills training on from there, Sanderson believes. And it needs careful state encouragement. He says the record is not as bad as some people make out. Big businesses do a lot of training. “But a lot of it is company-specific and not accredited, or only accredited internally. We must try to change that.”

He does not anticipate too much opposition from business. “It’s a myth that companies don’t want to give portable qualifications because they can be taken to other companies. Serious companies don’t worry about that. All companies have to accept that you can’t train staff for a particular job any more because people are going to move. No one’s going to do one task for the rest of their lives. That requires not just job-specific training but add-on requirements like teamwork. I think that’s what successful societies are about.”

Surely, though, companies have to consider the bottom line first, and if it does not benefit the bottom line in the short to medium term, they will not do much training? But it does benefit the bottom line, says Sanderson, because it helps retain staff, and high staff turnover is expensive.

Big companies do not mind some of their trained staff being poached by other firms. “That’s part of the function of a big company,” he says. “They over-train anyway. They’d say that they keep the best. Others would say they don’t but so long as they both believe it, that’s fine.”

Take BUPA, where Sanderson is chairman. “We employ 35-40,000 people in the UK. Lots of them are in care homes and hospitals and are at the lower end of the wage scale.

“If you train, first you improve their performance, and, second, you keep down turnover. So BUPA does a lot of training. The reputation of companies like BUPA is built on having staff who are proud to be there, are customer-oriented and have the communication skills which you need to go with that.”

He is optimistic that the Learning and Skills Council will ensure that more training gets done. “Our local councils are going to bring together the skills needs of local business and then make sure that the educational resource is provided to meet those needs, and I don’t think anyone has had that remit before.

“A large part of our role is to be a catalyst for change and to make sure people are in touch with each other and understand each other. I think the best of the local councils are doing that now.”