Business calls for training shake-up

October 1, 1999

Business leaders are to push for a radical restructuring of education and training to create an investment partnership between the individual, state and business.

Employers are to be consulted on a range of proposals for a new "investment framework", which might include a national learning and skills bank. Such a bank, which could incorporate the existing Student Loans Company, might distribute beefed-up individual learning accounts to fund all forms of training. This might involve legislation, such as a training investment act.

The proposals come from the national council of the National Training Organisations. Policy director Tom Bewick said that the ideas were in a very early stage but that ultimately they could be developed into a consultation paper to be issued to employers.

Mr Bewick, who spoke at a meeting attended by employment minister Andrew Smith, said: "I would like to suggest that many of the arguments currently being used about training reform are really leading us nowhere unless they are grounded in what works and what is necessary to deliver a prosperous and inclusive economy."

The aim is to build on the new post-16 education framework set out in the Learning to Succeed white paper. This proposed a national Learning and Skills Council with a budget of about Pounds 5 billion. Some 50 or so local councils would help plan the distribution of the money to colleges and other training providers. The white paper is currently out to consultation.

Mr Bewick said: "The framework will only work if the Learning and Skills Council develops and oversees a strategy to increase total investment in skills and not just ensure the effective channelling of public funds. This is fundamental because it will result in an enormous waste of time and effort if it does not happen."

One of the national council's aims would be to improve the status of work based education and training, giving it parity with the academic route. Individual learning accounts could be used to fund education and training by pulling together investment by the state, individuals and employers. The idea is that they would be backed with low-interest or income-contingent loans.

The national council favours employer contributions to ILAs but balanced by the right of employers to claim training spending back from individuals if they leave the training early. It also suggests that employers would contribute more voluntarily to training if there were bigger financial incentives such as rebates on corporation tax.

NTOs, which represent about 95 per cent of the workforce and include more than 5,000 senior employers, could develop sector workforce development plans to provide a focus for setting out how shared investment would work.

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