Workforce Development goes centre stage

Workforce Development will be one of the first major initiatives of a Labour Government if re-elected in the next Parliament. The Government’s main economic objective in its first term has been to secure a stable level of growth and rising employment. But it was already half way into the Parliament before it identified that low productivity was the main structural factor that has inhibited greater prosperity.

Productivity in the USA is 45% higher than in Britain, 19% higher in France, and 7% in Germany. The Government has identified poor skills as one of the main causes for low UK productivity but so far their approach to this problem has been incremental:

• The National Curriculum in schools was revised to become more vocationally relevant and, whilst Education Business Links have been expanded, it is not clear whether these have had any marked impact. A/AS level qualifications have also been introduced alongside vocational A-levels and the key skills qualification.
• Individual Learning Accounts were launched and tax incentives created to encourage employers to contribute. These are on course to reach the Government's one million target but, with a start-up value of just £175, they have limited purchasing power and the Government has not committed itself to sustaining and expanding ILAs.
• A goal to raise the participation rates in Higher Education to 50% by the end of the decade. However, this goal will only have an economic impact if accompanied by a significant shift in universities’ curriculum towards vocational learning.
• ‘Learndirect’ has been launched with advice services and online learning materials aimed at adult learners. Despite some 900 new learning centres, a take-up rate of 70,000 in nine months is not very rapid progress.
• Work permit rules have been eased to allow firms to import workers offering skills in acute shortage areas. This can only be a temporary solution: it undermines the economies of countries that are ‘exporting’ their skilled workers and relies on Britain having a competitive advantage over other countries adopting similar measures.

By the Summer of this year, the Government should start to devise a new policy based on the results of at least three investigations; a joint CBI and TUC enquiry into intermediate and technical skills; the Learning and Skills Council's Workforce Development plan; and the recommendations of a substantial initiative from the Cabinet Office's Policy Innovation Unit.

What are they likely to conclude? If sufficiently bold, they should should propose changes that genuinely engage employers and learners, and cut across inhibiting departmental boundaries in Government:

• Using rebates or credits of corporation tax and National Insurance contributions to encourage employer investment. And extending the tax breaks available to individuals to encourage personal investment in learning;
• A spectrum of funding mechanisms across different industry types; these could include the statutory levy/grant model that currently works well in construction and engineering; a voluntary contribution system like the film and broadcasting industry; the status quo which is favoured in industries that have a small number of large firms; or new models of investment that could be organised by strategic sector skills organisations that should arise from reform to the NTO network.
• Massively expanding the ILA concept so that individuals come to think of their portable personal learning account in the same way they might think of a portable personal pension.
• Substantial spending to rectify basic literacy and numeracy deficiencies. The scale of the problem, and hence measuring any success, is difficult to quantify, the LSC has a target to help 750,000 people overcome their barriers by 2004, which represents barely one in nine of the seven million who need the help.

There is a consensus emerging that fifteen years of pure voluntarism on the part of employers has led to low investment and to poaching rather than training staff. Whilst many assumptions about the balance of responsibilities between Government and the private sector need to be changed, a cultural adjustment is also required on the part of individuals. Much of the USA's dramatic lead in productivity is attributable to the high levels of personal investment in education and training. For over a century, in Britain, we have assumed it is someone else's responsibility. Wrong. From now on, it is a joint endeavour.