Business will pay if courses meet needs

March 28, 2003

Employers may be required to pay more towards the cost of training in universities and colleges, but only if institutions make their courses more relevant to employers' and students' needs, education secretary Charles Clarke said this week.

The government would like to review the balance of contributions to training costs between employers, the state and students. It might even consider introducing regulations that would compel employers to add to their current £20 billion a year training bill.

But Mr Clarke, who was unveiling a progress report on the government's long-awaited skills strategy, told a conference in London that such a move would not be contemplated until colleges and universities started to offer the kinds of courses employers wanted.

He said that colleges and universities were still not cultivating links with employers or working closely with them in the design of their curriculum.

Foundation degrees did not meet the training market's demands because there were not yet enough of them on offer, and vocational courses in further education were in urgent need of an overhaul, he said.

In a press briefing, Mr Clarke said that he thought there was "a lot of prejudice" in higher education against two-year and vocational degrees, which were likely to be popular with employers.

He said: "I see this as the single biggest challenge in the higher education white paper."

Mr Clarke said he thought it was "appropriate" to discuss how much employers were contributing to training costs - 93 per cent of further education costs are covered by the state and 7 per cent by employers. In countries such as New Zealand, employers contribute the lion's share, he said.

Mr Clarke said: "We have to ask why are people prepared to pay in some circumstances and not in others. It is because of the value they perceive they are getting or not getting."

Some employers might not object to paying more under a regulatory regime as long as they received high-quality training in return, he said.

But he told the conference: "To be blunt, I think we have a long way to go.

You have too many employers who think that what is being taught in colleges and universities is not relevant to them."

The progress report sets out the government's thinking on the main elements of its skills strategy, expected to be published in June. It says that the estimated8 million people who have yet to gain a level-2 qualification, and young adults returning to learning to gain level-3 qualifications, will be the priorities for funding.

The increased rate of return on higher-level skills and qualifications "may point to an expectation that individuals and employers should contribute more to the costs of their training, reflecting the greater benefits they receive", it adds.

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