Industry 'refuses to pay for training'

November 14, 2003

Tony Tysome reports from the Association of Colleges conference, Birmingham

College heads accused employers of blocking progress on the government's skills agenda by refusing to invest more in training.

A shortage in the funding needed to meet the government's targets for up-skilling and re-training the workforce could be addressed only if employers changed their attitude and began to make a greater contribution, delegates heard.

Ministers should consider introducing compulsory minimum qualifications for all trades, or tax incentives or grants for training, to get more employers to contribute to the skills agenda, AoC officials suggested.

Further and higher education minister Alan Johnson, who spoke to the conference on Tuesday, agreed there was a case for employers to be contributing more to training. "It must make sense for us to pursue this, given that we believe the government should not be involved in funding training where employers should be funding it themselves," he said.

An AoC-commissioned survey of 200 business leaders from a range of sectors countrywide, found that while two-thirds of them agreed that companies should be "obliged" to spend more on training, most were not willing to put this view into practice in their own firm.

Faced with a series of options for their own business in a good year, 61 per cent said they would be very likely to invest in equipment and premises, but only 31 per cent would give the same priority to their training budgets.

In terms of priorities, lower bank charges (20 per cent) and utility bills (17 per cent) rate higher than better skills in the local community among business leaders surveyed.

John Brennan, AoC chief executive, said: "These findings suggest that business leaders would welcome more pressure on them to invest in improving the skills of their workforce.

"Ministers have been reluctant to restore compulsion through training levies but they need to consider practical ways to encourage businesses to do more to address their own skills deficits.

"Colleges are increasingly tailoring the content and accessibility of courses to the needs of business. But if Britain is to narrow the skills gap with its European neighbours, we need ways to encourage business to invest in training, including tax credits."

A spokesman for the Confederation of British Industry said the survey's findings were at odds with the CBI's perception of business leaders' views on compulsory training.

He said: "Businesses already spend about £23.5 billion a year on training. But it is not so much what you invest in training that counts but the extent to which that training actually improves skills."

Mr Brennan said that £19 billion of what employers said they spent on training went on trainees and supervisors' wages and about half of the rest went into companies' own training facilities.

"The problem is that they are not investing in new skills. They are spending less on training than the public sector," he said.

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