Labour faces learning inertia

August 25, 1995

The Labour Party should tread carefully but boldly if it wants to win votes with the idea of creating "learning accounts" to support education and training, according to independent policy consultants.

The notion of individuals, employers and the state all contributing to the cost of education and training by making regular payments into learning accounts in a new national learning bank has gained favour with politicians and academics currently formulating Labour's education and employment policies.

Opposition think tanks are examining the practical implications of such a scheme, and its potential for helping to fund expansion in further and higher education and training.

But research carried out by Full Employment UK, a policy consultancy supported by Training and Enterprise Council leaders, suggests the idea will have to be handled with great care if it is not to fall foul of entrenched attitudes towards training among employers and employees.

A series of consultations with managers and people working in a wide variety of occupations found that many regard themselves or their employees as "dead wood", and do not believe there is a widespread desire or need for training.

Discussions with employees revealed that a scheme which compelled them to make regular contributions into a learning account could draw considerable resentment and would be seen as a waste of money unless individuals had some control over how accumulated training funds were spent and had the option to withdraw their money after a set period.

There were also problems in persuading employers to think of learning accounts as a joint venture in which they had a stake, rather than as "their" (the employees') accounts. Business and industry leaders might react to the introduction of compulsory contributions from them by cutting back on wages, a report on the research findings says.

The report, Labour and Learning Accounts, suggests that a workable model for learning accounts might include: * Individual learning accounts opened in a national learning bank for all payroll workers earning above the PAYE threshold * A minimum employee contribution of Pounds 1 a week, with the option to withdraw contributions after three years * Compulsory employer contributions of Pounds 2 a week per employee * Contributions offset against tax, and interest earned on funds in accounts would be tax-free * Both employers and employees would have to agree how contributions were spent.

The research found that the option to withdraw contributions after three years helped to overcome opposition to making the scheme compulsory. But there was still general concern about the prospect of a lot of "dead money" sitting in unused accounts, and the potential running costs.

Peter Ashby, principal consultant for Full Employment UK, said although there were still many unresolved concerns, learning accounts were still a "commanding broad concept" which had the potential to improve investment and participation in training. The Labour Party would nevertheless need to tackle the key issues before writing learning accounts into its manifesto.

"If they are going to pursue it at all then they should go big on it and make it a flagship policy," he said.

David Robertson, head of policy development at Liverpool John Moores University and a member of several Labour think tanks, said it might be better to launch learning accounts in an educational, rather than training, context.

"They are much more likely to thrive in areas where people feel confident and have some control over the product," he said.

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