NEWS FOCUS in this edition

Gordon’s Pre-Election Giveaway!
Yet another Skills White Paper

Gordon's Pre-Election Giveaway

The countdown to the general election began with Gordon Brown's ninth Budget since Labour came to power in 1997. Any budget timed before an election is bound to be controversial and this was no exception. While Gordon announced his budget was part of his determination to "secure stability and growth", the Tories were quick to call this the "vote now, pay later budget". With the inevitable slanging match now in full swing we try and get behind the scenes and look at what the budget promises for skills, learning, employment and enterprise.

With Gordon now re-established himself on the front line of the election campaign, it's not surprising that there is a lot in the budget aimed at boosting productivity. Central to the Treasury's agenda, it's not surprising that this is a budget with a lot to say about a range issues that will impact on the economy of the region, including:

- A range of announcements on Skills (see Skills White Paper article below)
- Enhanced arrangements to support young people
- Changes to the benefits system to encourage more people into employment - Job Seekers Allowance and Incapacity Benefits
- A range of initiatives aimed at deprived areas
- Measures aimed at supporting business and cutting red tape.

A review of responses to the budget from a range of "non political" commentators shows a good deal of support for these changes. The proposed reduction in red tape has been welcomed by City Analysts, although a degree of cynicism remains about whether promises will be delivered.

The measures in relation to welfare benefits are not unexpected and reflect the fact that whilst unemployment figures are at record levels and with the UK for all intents and purposes at the full employment, there remains significant levels of inactivity in parts of the labour market and worryingly high levels of people on incapacity benefits (see SLIM Comments Edition 1).

Skills

· The National Employer Training Pilots are to be rolled out into a National Employer Training Programme to be rolled-out from 2006-07 to cover the whole country by 2007-08 (see Skills White Paper below).
· Funding to support a new Union Academy (see below)
· A step change in capital investment in the Further Education sector. An additional £350 million investment will be made over 2008-09 and 2009-10 to support the longer-term transformation of the further education sector. The Budget also sets the challenge to employers to significantly raise their investment in the sector to £100 million by 2015 and take a more active role in design and delivery of training.
· An allocation of £80 million over two years to pilot a negotiated Learning Agreement for 16 to 17 year olds in work with no training in eight areas of the country from April 2006.
· An allocation of £20 million over two years in pilot areas to boost employer and work based learning pre-16. This will offer an extra 20,000 opportunities across the pilot areas for 14-16 year olds to benefit from better vocational learning either in colleges or with employers.

Union Academy

Drawing together the strands of existing union learning activity, the TUC plan to launch a Union Academy (set out in its report A Union Academy: Adding Value to the Union Card), to increase the capacity of unions to help members recognise the value of learning and training opportunities and drive a step change in the level of learning and development delivered through unions. The unions are committing significant resources of their own to the development of the academy and the Government will provide additional funding to implement the proposal, £1.5 million in 2006-07 and £3 million in 2007-08 to support the TUC as it develops its plans for taking these proposals forward.

Business Coaching

Regional Development Agencies' (RDAs) plans for the development of business coaching focused on businesses with high growth prospects.

Welfare Benefit Reform

Here we will see:
· improvements to incapacity benefits linking rules, including an automatic guarantee of entitlement to the rules on a move into employment; a single, extended linking rules period of 104 weeks; and immediate re-qualification for the rules on a return to benefit;
· following the Low Pay Commission’s recommendations, the adult rate of the National Minimum Wage will rise to £5.05 per hour from October 2005 and £5.35 from October 2006;
· examining the scope for improving Jobseeker's Allowance sanctions and the potential for a fixed fines system, to maintain an effective balance between rights and responsibilities by improving the capacity to respond swiftly and effectively in cases of non-compliance;
· supporting young people not in education, employment or training;
· accepting the recommendations of the National Employment Panel's report on measures to promote employment and small business growth for ethnic and faith minorities. The Government will develop proposals for implementing these recommendations, including the establishment of Centres of Vocational Excellence in Entrepreneurship;
· a package of measures to help simplify and improve Housing and Council Tax Benefit by making further improvements in administration.
· plans to extend Child Benefit and Child Tax Credit from April 2006 to unwaged trainees on work-based learning programmes arranged by the Government.

Skills White Paper

Not a month goes by it seems without yet another Skills White Paper. And hot of the press comes, "Skills: Getting on in business, getting on at work", focusing on the skills of adults already in work, or seeking to enter the labour market. This fleshes out many of the Chancellors Budget announcements and rolls out a further phase of the Government's Skills Strategy. Here we give you a flavour for the changes ahead.

National Employer Training Programme

Top of the agenda is the roll out of the Employer Training Pilots (ETPs) to be called unsurprisingly the National Employer Training Programme (NETP). This will be rolled-out from 2006-07 and will cover the whole country by 2007-08. At the heart of this programme is the intention that employers design and deliver publicly-funded training and qualifications to meet their needs. Evaluation of the Employer Training Pilots has convinced the Government that this way of delivering training for adults does work.

The programme is intended to be offered through an independent and impartial brokerage service acting on behalf of employers. Basically, the idea is that employers will be able to chose which one of a range of "quality assured" local providers they wish to work with. Interestingly the Government has acknowledged the concern amongst colleges and other training providers that brokers might potentially become a new barrier of intervention between an employer and a training provider. The broker’s primary role is to set up a training relationship to meet the employer's needs. Once that is in place, it is for the employer and the training provider to work directly together without needing any mediation by the broker.

The development of a skills brokerage model is already underway in the South West led by Business Links and the Learning and Skills Councils (LSCs). But this is at an early stage of development and questions remain about its practical implementation. There is always a danger that the new system, when it is established may undermine already effective relationships between training providers and the employers. What is certain is that the role of brokerage is high on the agenda, the challenge is to make it work effectively in a market place that is inherently competitive and sometimes messy.

ETPs guaranteed that, where employers were prepared to offer their low-skilled employees paid time to train up to level 2 qualifications, the costs of this training will be fully subsidised. However, there was mixed evidence on the impact of wage compensation, offered in all but one pilot to help employers meet the costs of giving staff paid time off to train. However, some early evidence suggests that it may be important in initially engaging those employers who would not usually provide training. The White Paper announcement says nothing about the role of wage subsidies, if any there will be in the National Employer Training Programme.

Like the pilots the core of the programme will be delivery in the workplace of free skills training up to the first full Level 2 qualifications. This will include training in functional literacy and numeracy and language up to Level 2.

In the longer term White paper states that there may be a case for routing an increasing proportion of mainstream LSC funding for adult training via this programme. There is also, in the longer term, an intention to enable brokers to include within integrated packages an element of subsidized support for Level 3, although the White Paper is cautious about the speed of this recognizing limited resources (in other words don’t get your hopes up, it may never happen). In the short term Government will be investing an additional £20m per year to trial in two regions an element of funding onto the NETP budget that brokers can use to make towards a contribution to Level 3 training delivered in the workplace.

Special support for Small and Medium Sized Enterprises (SMEs), will see the NETP supporting leadership and management development. Leadership and management skills are an area of relative weakness, particularly at middle manager level. NETP will therefore support leadership and management in SMEs meets those needs, with a focus on coaching and on-the-job development. The intention is to support over 17,000 SME managers by March 2008.

In conclusion, ETPs have been widely regarded as a success and the intention to roll this out nationally will be welcomed by many. No doubt the debate will reign on using this as a model for distributing funds for adult learning and the devil, as always will be in the detail. It was ever thus!

Higher profile for Sector Skills Councils

Through Sector Skills Councils, the White Paper stresses a stronger for employers and focuses on:
· the importance of employer-led Sector Skills Agreements, drawn up in collaboration with all sides of industry, setting out an action plan to drive up skill levels in each sector. This will also be the vehicle for getting agreement with LSCs and HEFCE as to how they will reflect sector priorities. Four SSCs launched their agreement in parallel with the White Paper and a further 6 have embarked on the development of their agreements. For further update see www.ssda.org.uk.
· Strengthening links between Higher Education and Sector Skills Councils.
Establishing a network of Skills Academies, supported by sector-focused Centres of Vocational Excellence. Theses will Skills Academies will link with the existing Centres of Vocational Excellence (CoVEs) in colleges and with Specialist Schools to provide national, regional and local networks which can deliver the new lines of learning for 14-19 year olds and better skills training for adults. Models for these are provided by the Fashion Retail Academy, supported by the Arcadia Group and the Automotive Academy in the West Midlands
· Developing sector qualification strategies as part of the new Framework for Achievement. Included in this will be an extension of Apprenticeships to a broader range of sectors and employers. There will be trials of Apprenticeships for Adults in Health and Social Care, construction and engineering.

Skills for Adults

This spells out the priorities for the next phase of the Skills Strategy. Literacy, language and numeracy skills is the top priority, with a stronger focus on gaining functional skills in English and maths to level 2 standard. There will be increasing prioritisation within the allocation of LSC funds, Skills for Life programmes leading to Level 2, and focus available LSC funds on those basic skills programmes that incorporate the Skills for Life standards. One of the challenges for the region will be knowing where best to target its efforts. The region’s Skills for Life Strategy highlights the fact that efforts are currently driven by targets which often bear little relationship to need. Our knowledge and understanding of where needs are is relatively poor and there is a commitment within the region to improving our understanding of this. Online assessment for basic skills which can be integrated into programmes of teaching and learning will continue to be developed, making assessment more accessible.

Level 2 entitlement. The NETP will be the key employer-led programme for ensuring that learners actually deploy their skills. At the core of the programme will be the offer of free training in literacy, language and numeracy skills, and free tuition to help employees gain their first full Level 2 qualification. Similarly, the New Deal for Skills will incorporate full Level 2 programmes with a clear work focus. The original Skills Strategy, made a commitment to introduce a ‘Level 2 entitlement', that would offers for the first time to low-skilled adults a guarantee of free tuition to achieve their first full Level 2 qualification. This entitlement is currently being trialled in the North East and South East regions, and aim to offer an integrated package for the learner, combining the entitlement to free tuition, with better information and advice, and for priority full-time learners a grant to help meet the wider costs of learning. Where a learner without a full Level 2 is capable of studying straightaway at the higher Level 3, they are able to ‘jump’ straight to study at that level.

Sounds great. When can we get it? Well, In 2005-06 the Government will use the experience of the trials to develop the capacity of the further education sector to deliver the Level 2 entitlement. The availability of fully funded first Level 2 qualifications will be expanded in all regions, working towards the entitlement being available nationally from 2006/07. The LSC will introduce from September 2005 in all regions the arrangements which will be needed so that a wide range of colleges and training providers can offer the entitlement from 2006/07. Using 2005/06 as a transition year in this way will allow colleges to undertake the necessary reshaping of programmes in preparation for full national introduction of the entitlement.

Level 3. The Skills in England 2004 Report, showed our key national skills gaps are
at Level 3, so a priority of the White Paper is to strengthen support for many more people to achieve a Level 3 qualification. The Leitch review of long-term skills needs through to 2020, will assess projected long-term skills needs by level and by sector, determining and the proportion of young people and adults who will need to achieve a full Level 3 qualification. In the meantime the focus will be on developing the Level 2 entitlement described above so that it can support any low skilled adult wanting to progress directly to their first Level 3, rather than being limited to a Level 2. This will be the same for NETP. Each Regional Skills Partnership (RSP) has been asked to agree, in the light of Sector Skills Agreements as they come on stream and the relevant Regional Economic Strategy, their Level 3 priorities. The existing funds available from LSC, Regional Development Agency (RDA), European and other budgets to support Level 3 programmes will be identified, and deployed to focus on those priority areas. The RSP will be asked to leverage public funds by seeking funding contributions from employers. A joined up budget perhaps?

The Equal Opps Bit

Lots said about the needs of a diverse group of learners, but in terms of actual action the most significant developments are…….

Information, Advice and Guidance. The aspiration, "a universally available, highly respected, and well used service offering linked information on jobs, qualifications, training and related services such as childcare. It would make use of the existing wide range of web-based self-assessment and diagnostic tools, but would also give guidance online, over the telephone, or face to face for people wanting help to identify the best way of getting on. It could provide supplementary guidance services that people pay for, alongside a core of free services". But before we can get it, you guessed it, we need a "review". To be undertaken jointly by the Department for Education and Skills (DfES), the Department for Work and Pensions (DWP), the DTI, the LSC, Ufi learndirect, Jobcentre Plus, and the Sector Skills Development Agency (SSDA). It will develop a business plan by the end of September 2005, which will identify relevant databases and information sources, and how they are best linked; the number and type of staff that would be needed; the potential role of face-to-face guidance services, where they are best located, and how they are best managed; and the scope for charged as well as free services.

New Deal for Skills will provide an integrated package of skills for those who have significant skills gaps. The trial of the new Skills Coaching service and Skills Passport, is intended to provide a one to one service for low skilled benefit claimants. From 2006 the Learning Option will be trailed as part of range of welfare programmes for those out of work.

Further Reform of the Supply Side

Colleges and training providers have already been undergoing a process of reform as part of the Success for All Strategy. The White Paper is more of the same in many ways, building on the results of Inspections and he Strategic Area review processes, recently completed by local LSCs. Quality Improvement Agency for Lifelong Learning, as set out in the 14-19 White Paper will be fully operational by autumn 2006.

Bigger role for Regional Skills Partnerships

The White Paper recognises the importance and growing influence of the Regional Skills Partnerships., in the south West , the South West Enterprise and Skills Alliance (SWESA) and has invited them to address four new areas:

· To review the current range of brokerage and business support services in their region, and how they can best operate to provide an integrated, high-quality service for employers. To some extent this is already underway in the South West with the development of the Skills Brokerage Strategy which forms a key priority of the SWESA.

· Within the national design framework for the National Employer Training Programme, to consider how the programme is best deployed within the region. Some regions have taken the initiative to extend the principles of the Employer Training Pilots more widely. For example, the Northern Way group of regions (North East, North West and Yorkshire and the Humber) have identified it as a priority for their joint action plan.

· To assess how the regional partners can best support achievement of the reforms set out in the 14-19 White Paper.

· Perhaps most significant, as this does represent a major change of focus, to review how higher education can best be integrated in the work of RSPs. Whilst HE is already engaged as a partner in the SWESA the degree of integration at the policy level is minimal at present. It certainly makes sense to improve the degree of co-operation and integration of this major partner in skills and learning policy.

Government has requested responses by Autumn 2005, so expect a flurry of consultations.

Links

Full Pre – Budget Report (also available in Sections)

Full Budget Speech

Centre for Social Inclusion's Briefing
http://www.cesi.org.uk/news/shownone.asp?nID=22

The Guardian's take on it
http://www.guardian.co.uk/budget2005/story/0,15595,1439448,00.html

The FT's take on it
http://news.ft.com/cms/ba0bbdfe-8982-11d9-aa18-00000e2511c8.html

Your Comments

What are your views on the latest Government proposals?

Name: Amanda Davies-Cross
County: Devon
Comment: Seems to be an awful big emphasis on Essential Skills teaching but where are they going to find quality tutors when providers rely on staff on hourly paid contracts with no holiday pay (included in hourly rate), no sick pay (often not even SPP) and no job security. This sort of work is really only an option for those who want a top-up income which all too often means the wrong type of people coming in to the industry for the wrong reasons. When is the Government going to address this issue and provide learners with quality provision?

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