Investing in Skills: taking forward the Skills Strategy

1. Employers already contribute a great deal to learning, through informal training support, time off for learning, and incentives to train.  It can even cost money to encourage employees to take up learning opportunities (through workplace campaigns) so there are many hidden costs to employers which do not relate directly to formal course costs.  Any increase in employer contribution must be reflected in improvements in delivery, choice, quality, and range of learning offered by FE.
2. In developing the national fee assumptions, priority must be given to meeting the national skills requirements. While it is clear that the government focus is currently the level 2 PSA targets, sufficient resource and planning must be set aside to meet Sector Skills Agreement priorities. Colleges and providers will need funding mechanisms that will enable them to respond effectively to employer requirements. In engineering, manufacturing and science the skills requirements are predominantly at level 3. Therefore we feel the LSC funding arrangements need to reflect a capacity to deliver at level 3.
3. Overall we have a strong preference for the development of funding proposals that establish a level playing field between colleges and other providers, such as GTAs and employers. This would allow employers to choose training from the institution that best meets their needs.  Group Training Associations are already in place with the level of employer engagement to which we believe all training providers in FE should aspire.  It is essential that the work at GTAs is incorporated into the development of FE as a whole.
4. Continuing with funding streams based on historical supply-side differences, will only perpetuate the current inequality and will not lead to a sustainable demand led training system.
5. Science, engineering and technology are expensive in terms of delivery of provision, requiring highly skilled staff, sophisticated equipment and space. In short this type of provision is expensive. It is essential that those FE providers who cover these subjects have the extra expense of delivery recognised in any funding formula.
6. The consultation paper addresses complex funding issues. Details of how work-based training will be addressed are incomplete, and do not take account of Sector Skills Agreements that are being developed by Sector Skills Councils (SSCs) to articulate the skills requirements of employers. We are also unclear how the proposals would build on the experience gained from the Employer Training Pilots.
7. Creating a new funding infrastructure for colleges and training providers is well overdue but must be seen in the context of the bigger picture of other important LSC funded programmes.
8. The advice and guidance which individuals receive will have a key impact on whether the Skills Strategy as a whole, and the revised funding structure in particular, is successful in improving skills levels in Britain.

12 October 2004