National Initiatives which Provide Support to the Social Partners to Enable Them to Participate in Social Dialogue on Training - United Kingdom

Source: Department of Education and Skills

Skills Strategy White Paper

21^st Century Skills: Realising Our Potential: Individuals, Employers, Nation

Forword

Summary of the Skills Strategy

1. Overview: The Skills Challenge and How We Will Meet It
2. Skills for Employers, Support for Employees
3. Skills for Employers - The Sector Role
4. Skills for Individuals
5. Reforming Qualifications and Training Programmes
6. Reforming the Supply Side - Colleges and Training Providers
7. Partnership for Delivery
8. Delivering the Strategy

Forword

1. The skills of our people are a vital national asset. Skills help businesses achieve the productivity, innovation and profitability needed to compete. They help our public services provide the quality and choice that people want.They help individuals raise their employability, and achieve their ambitions for themselves, their families and their communities.
2. Sustaining a competitive, productive economy which delivers prosperity for all requires an ever growing proportion of skilled, qualified people. We will not achieve a fairer, more inclusive society if we fail to narrow the gap between the skills-rich and the skills-poor.
3. In addition, as the Prime Minister and the Chancellor said in setting out the Government's position on the single currency, skills underpin labour market flexibility, which is an important part of the assessment for deciding whether to join the Euro.
4. Increased flexibility is necessary to ensure that the economy could respond quickly and efficiently to changes in economic conditions inside the single currency area, should the Government conclude that the economic tests for entry have been met and recommend entry to the British people. An important dimension of that flexibility, identified in the EMU assessment, is the extent to which the supply of skills in the labour market matches the skills that are in demand from employers, and the efficiency with which mechanisms are in place to eliminate mismatches in the demand and supply of different skills when they emerge.
5. Across the European Union, the importance of skills has been recognised in the economic reform agenda agreed at Lisbon in 2000.The UK is a strong supporter of that agenda. Many of the topics addressed in this White Paper are issues of shared concern for all European countries. As well as setting out a national Skills Strategy, this document is a contribution to the work we are engaged in with our European partners Foreword to the Skills Strategy in tackling the challenges of skills and mobility across the Union, where it is vital that we identify best practice and share our experiences.
6. We all know that skills matter. But we also know that as a nation we do not invest as much in skills as we should. Compared with other countries, we perform strongly in some areas, such as higher education. But we have major shortfalls in other areas such as the broad foundation skills needed for sustainable employment.The distribution of skills is uneven across the population. Far too many young people and adults are hampered by their lack of skills from getting secure, well paid jobs and all of the social and personal benefits that go with them.
7. This is a national problem, but it also has to be addressed at both the regional and local level. Variations in the skills base of different regions are a major factor in explaining regional variations in productivity. The problems and priorities of one region are not the same as those encountered in another. Addressing these will require maximum flexibility and discretion at the regional and local level to innovate, respond to local conditions and meet differing consumer demands.
8. We are under no illusion about the scale of the challenge. To raise our skill levels to compete with the best in the world requires millions of people, as employers, employees and individual learners, to see skills, training and qualifications as helping them to realise their goals in life and at work.
9. This Skills Strategy aims to address that challenge. Our ambition is to ensure that employers have the right skills to support the success of their businesses and organisations, and individuals have the skills they need to be both employable and personally fulfilled.
10. Success will not come quickly. This is an agenda for sustained effort over the long term, through to 2010 and beyond. It will not be gained through piecemeal initiatives. What is needed is a sustained and co-ordinated effort. By building upon what is already there and setting a framework within which the various players are clear about their contribution, we can make much faster progress towards the shared objective.
11. To achieve that, we need to act in five key areas: 
    • We must put employers' needs for skills centre stage, managing the supply of training, skills and qualifications so that it responds directly to those needs. 
    • We must raise ambition in the demand for skills. 
    • We will only achieve increased productivity and competitiveness if more employers and more employees are encouraged and supported to make the necessary investment in skills. 
    • We need a new social partnership with employers and unions, and a much stronger focus on driving up skills and productivity in each sector of the economy and in each region. 
    • We must motivate and support many more learners to re-engage in learning. For too many people, learning is something that stops when they leave school. Learning new skills, at work and for pleasure, must become a rewarding part of everyday life. 
    • We must make colleges and training providers more responsive to employers' and learners' needs, reaching out to more businesses and more people, and providing training in ways that suit them. Creating a truly demand-led approach means reforming qualifications, reforming the way we fund colleges, and reforming the way we deliver training. 
    • We must achieve much better joint working across Government and the public services. This is not just a strategy for the Department for Education and Skills, but a shared strategy involving the Department of Trade and Industry, the Department for Work and Pensions, the Treasury and the range of agencies involved in training, skills, business support and productivity. Government must lead by example, in the way that we work and in our own role as employers.
12. As a Government, we have an ambitious agenda for transforming our society and economy. Much of that agenda is dependent on developing ever higher skills, in our young people, in the workforce and across the community. In preparing this Skills Strategy, we have consulted widely to identify the major obstacles and build on the many creative ideas for improvement.We welcome the commitment of many partners who have helped to shape this strategy. We will carry forward that partnership in turning the strategy into action.

Tony Blair
Prime Minister

Charles Clarke Patricia Hewitt
Secretary of State for Education and Skills Secretary of State for Trade and Industry

Gordon Brown Andrew Smith
Chancellor of the Exchequer Secretary of State for Work and Pensions

Summary of the Skills Strategy

AIM

1. The aim of this national Skills Strategy is to ensure that employers have the right skills to support the success of their businesses, and individuals have the skills they need to be both employable and personally fulfilled.

CONTEXT

2. Since 1997, the Government has developed policies based on the interdependence of social justice and economic success. Record low levels of unemployment have been achieved, with low inflation, and high investment to modernise public services. Nonetheless, our economic productivity and competitiveness remain well below those of major competitor nations. One reason is that there are some serious gaps in our national skills base.
3. The global economy has made largely extinct the notion of a 'job for life'. The imperative now is employability for life. Competing on the basis of low wage costs is not an option.We must compete on the basis of our capability for innovation, enterprise, quality, and adding greater value through our products and services. All of that is dependent on raising our skills game.
4. Over the past six years we have made major progress. From Sure Start and universal nursery provision through to higher education, we have developed a reform agenda to raise standards for children and young people throughout their initial education. These reforms, coupled with record investment, will deliver a future flow of higher skilled, better qualified young people into the labour market. Summary of the Skills Strategy
5. We have also worked to raise skill levels amongst adults already in the workforce. The Learning and Skills Council is bringing a new coherence to the strategic planning and funding of adult learning across colleges and work-based training. Regional Development Agencies are focusing on knowledge and skills as key drivers of economic regeneration.

THE CHALLENGE

6. Despite these real improvements, our skill gaps remains stubbornly persistent. Output per hour worked is around 25 per cent higher in the US and Germany and over 30 per cent higher in France than in the UK. While we compare well at higher education level, our percentage of the workforce qualified to intermediate skill levels (apprenticeship, skilled craft and technician level) is low: 28 per cent in the UK compared with 51 per cent in France and 65 per cent in Germany.
7. The recent Treasury assessment of the five economic tests for UK membership of the European single currency noted that a highly educated workforce with a culture of lifelong learning is more likely to adapt to economic change.1 Improving the level of skills, particularly among those with the lowest skill levels, is a focus of the Government's agenda for enhancing flexibility in the UK.
8. We have particular skill gaps in basic skills for employability, including literacy, numeracy and use of IT; intermediate skills at apprenticeship, technician, higher craft and associate professional level; mathematics; and management and leadership. Employers have long been concerned that they are not getting recruits with the skills they want.
9. So we must do more. In developing this strategy, we have listened carefully to the concerns of employers, trade unions, colleges and other partners. They have challenged us to create a coherent policy framework focused on the needs of employers and learners. We need to mobilise the full commitment of Government, its agencies, education and training providers, employers, unions and individual learners. Isolated endeavours will not be enough.
10. The strategy is not predominantly about new initiatives. It is about making more sense of what is already there, integrating what already exists and focusing it more effectively. Our overriding goal is to ensure that everyone has the skills they need to become more employable and adaptable. 

WHAT WILL WE DO TO HELP EMPLOYERS AND LEARNERS?

11. We will work with employers and employees to:
    1. Give employers greater choice and control over the publicly-funded training they receive and how it is delivered. Evaluation of the current Employer Training Pilots will inform the development of future national programmes to support skills training.
    2. Provide better information for employers about the quality of local training by introducing an Employer Guide to Good Training.
    3. Improve training and development for management and leadership, particularly in small firms centred around the new Investors in People management and leadership model.
    4. Develop business support services to ensure that employers have better access to the advice and help they want, from the sources best placed to provide it, bringing in a wider range of intermediaries.
    5. Expand and strengthen the network of Union Learning Representatives as a key plank in encouraging the low skilled to engage in training.
12. For individual learners, we will:
    1. Create a new guarantee of free tuition for any adult without a good foundation of employability skills to get the training they need to achieve such a qualification (known as a 'level 2' qualification).
    2. Increase support for higher level skills at technician, higher craft or associate professional level (known as a 'level 3' qualification), in areas of sectoral or regional skill priority.
    3. c. Pilot a new form of adult learning grant, providing weekly financial support for adults studying full-time for their first full level 2 qualification, and for young adults studying for their first full level 3 qualification.
    4. Safeguard the provision in each local area of a wide range of learning for adults, for culture, leisure, community and personal fulfilment purposes, with a better choice of opportunities to encourage adults back into learning.
    5. Provide better information, advice and guidance on skills, training and qualifications, so that people know what is available, what the benefits are, and where to go. f. Help adults gain ICT skills, as a third basic skill alongside literacy and numeracy in our Skills for Life programme.
13. A key means of raising our game on skills is through the Sector Skills Council network. We are on track to establish 23 Councils by summer 2004.The Councils will be a major new voice for employers and employees in each major sector of the economy. We will support the development of sector skills agreements, setting a longer term agenda for raising productivity in each sector, the skills needed for international competitiveness, and how employers might work together on a voluntary basis to invest in the necessary skills.
14. The Sector Skills Councils need to be major contributors at regional as well as national level. There is a strong regional dimension to the skills problem.Variations in the skills base of the regions are a major factor in explaining regional variations in productivity. Regional Development Agencies lead in producing Frameworks for Regional Employment and Skills Action (FRESAs) designed to address the skills and employment needs of employers and individuals in the regions within an economic, demographic and social context.

HOW WILL WE BRING ABOUT THESE CHANGES?

15. To achieve these gains, we need to take concerted action to reform the supply and delivery of publicly-funded education and training.
16. We will reform the qualifications framework so that it is more flexible and responsive to the needs of employers and learners by:
    1. Strengthening and extending Modern Apprenticeships, as a top quality vocational route designed to meet the needs of employers. We will lift the current age cap, so that adults will be able to benefit.
    2. Reviewing, through the work of the group led by Mike Tomlinson, the vocational routes available to young people, and strengthening the focus on their employability and enterprise skills.
    3. Making qualifications for adults more flexible by dividing more learning programmes into units and speeding up accreditation of new qualifications.
    4. Introducing a credits framework for adults, to help both learners and employers package the training programmes they want, and build up a record of achievement over time towards qualifications.
    5. Making it easier for people to gain the skills they need by reviewing in each sector the need for new adult learning programmes to develop generic skills for employment.
17. We already have in place the major Success for All reform programme to raise the effectiveness of further education colleges and training providers. We will build on that by:
    1. Reforming the funding arrangements for adult learning and skills, to give training providers stronger incentives to work with employers while reducing bureaucracy. This will include introducing a new approach to setting fees and raising income.
    2. Supporting the development of e-learning across further education, with more on-line learning materials and assessment.
    3. Helping colleges build their capability to offer a wider range of business support for local employers.
    4. Broadening the range of training providers, by bringing within the scope of public funding those private providers who have something distinctive and high quality to offer.
18. We recognise that Government must lead by example, showing that we and our delivery agencies can work more effectively together at national, regional and local level in providing coherent services for skills, business support and the labour market. We will:
    1. Form a national Skills Alliance, bringing together the key Government departments with employer and union representatives as a new social partnership, and linking the key delivery agencies in a concerted drive to raise skills.
    2. Link implementation of the Skills Strategy with the conclusions of the Department of Trade and Industry Innovation Review, so that both skills and innovation work together as two key drivers enhancing productivity.
    3. Integrate the work of Regional Development Agencies, the Sector Skills Council network, the Small Business Service, the Learning and Skills Council and Jobcentre Plus, inviting the Regional Development Agency in each region to develop innovative proposals for effective collaboration. The focus will be on simplifying the system for employers and learners, improving value for money, raising aspirations and responding to local and regional skills needs.
    4. Strengthen the partnership between the Learning and Skills Council and Jobcentre Plus, with a stronger push to support skills and training for benefit claimants, and provide a better integrated service for employers.
    5. Build up education and training opportunities for offenders through closer working between the Prison Service, the Probation Service, the Learning and Skills Council, Ufi/learndirect and other partners.
    6. As a major employer in our own right, the Government will invest in the skills of our staff to achieve our public service objectives.

Chapter 1: Overview: The Skills Challenge and How We Will Meet It

AIM AND VISION

1. This strategy seeks to ensure that, across the nation, employers have the right skills to support the success of their businesses and organisations, and individuals have the skills they need to be both employable and personally fulfilled.
2. We aim to:
   1. Improve the UK's productivity and standard of living. That will contribute to the Government's central economic objective of raising the rate of sustainable growth across all English regions, to achieve rising prosperity and a better quality of life, with economic and employment opportunities for all. It will also support our wider efforts to encourage economic reform in Europe.
   2. Build a better society by helping people gain the skills to work productively in the private, public and voluntary sectors, supplying the goods and services people want.
   3. Help individuals acquire and keep developing the skills to support sustained employability, more rewarding lives, and a greater contribution to their communities.
3. A better skilled workforce is a more productive workforce. We must improve our productivity, and our ability to support sustainable development, if we are to compete successfully in today's global market. Improving skills will not be sufficient on its own to drive greater productivity. But taken together with enterprise, competition, investment and innovation, it has a crucial role to play.
4. Government cannot do this alone. We need to build a new Skills Alliance, where every employer, every employee and every citizen plays their part. No business should be left behind because it lacks the opportunity to improve the knowledge and skills of its staff. No individual should be denied the chance to realise their potential for want of opportunities to invest in their own skills.
5. This is not only an economic challenge. It is just as much a social one. By increasing the skill levels of all under-represented groups, we will develop an inclusive society that promotes employability for all. When people are better educated and better trained, they have the chance to earn more and use their talents to the full, both in and out of work. They are better able to use their skills for the benefit of their families and their communities. There is strong evidence to suggest that improving skill levels can reduce the risk of unemployment, and bring broader social returns in terms of reduced crime and better health.

WHY DO WE NEED A SKILLS STRATEGY?

6. We have many strengths in the way we develop skills, learning and qualifications in this country. Thanks to recent school reforms, our young people compare well internationally in their literacy, numeracy and science skills. We are as good at developing highly skilled graduates as the best in the world. Our universities have greatly improved the spin-out benefits from their research, in supporting innovation and new product and company development.There is a rich range of opportunities for adult learning. We have a highly flexible labour market, and low levels of unemployment.
7. But despite these strengths, the way we develop skills and their contribution to productivity remains a serious weakness. French, German and US workers produce between a quarter and a third more in every hour they work than their British counterparts. Output per worker is 16 per cent higher in France, and 31 per cent higher in the US. The recent Treasury assessment of the five economic tests for UK membership of the European single currency noted that a highly educated workforce with a culture of lifelong learning is more likely to adapt to economic change. Improving the level of skills, particularly among those with the lowest skill levels, is a focus of the Government's agenda for enhancing flexibility in the UK. Inside or outside the European Monetary Union, but particularly within a single currency area, individuals need the skills to adapt to increased competition and to compete for a wide range of jobs in a changing economic environment. Table 1 summarises the key skills gaps.

Table 1 Labour force skills, total economy, 1999

Source: O'Mahony and De Boer (2002) Britain's relative productivity performance: update and extensions, NIESR

8. In March 2003 we published an analysis of the nature of our skills challenge. The key problems we identified were that:
   1. Employers feel they are not getting recruits with the right skills.
   2. We have particular skills gaps in:
      1. Basic skills (including literacy, language, numeracy and computer skills) which provide the foundation for further learning.
      2. The percentage of the workforce with intermediate skills (associate professional, apprenticeship, technician, or skilled craft or trade level).
      3. Mathematics which is an essential basis for further technical training.
      4. Leadership and management skills.
   3. There is too often a mismatch between what employers and individuals want, and the courses and qualifications available through publicly-funded colleges and training providers.
   4. Equally, many private and public sector organisations undervalue how a better skilled, trained and qualified workforce can improve their 'bottom line' performance. Such organisations can experience a 'low skills equilibrium', producing low value- added products and services, making it harder for us to compete internationally.
   5. Many individuals do not see how better skills, training and qualifications can help them achieve their personal goals, whether for financial rewards through better jobs and higher wages, for supporting their families and communities, or for their own personal fulfilment.We are concerned that skills and learning initiatives are not reaching all of society. We want to increase the skill levels for all under- represented groups and encourage all individuals to improve their employability. This is crucial for women workers who now constitute 44 per cent of the workforce, yet are typically locked in a narrow range of low level manual occupations and in part-time work where training opportunities are limited. It is also an issue for ethnic minorities, agency workers and other disadvantaged groups who have low skill levels. Lack of investment in training can restrict their career options and ability to achieve rewarding, stable jobs.
   6. Many believe that the Government and its agencies do not approach skills and productivity issues coherently. That makes it difficult for employers and learners to understand what support is available and how to access it.
   7. The respective roles and responsibilities of Government, employers and individuals in terms of paying for and organising training and qualifications remain unclear.

HOW WILL WE TACKLE THIS CHALLENGE?

9. The Skills Strategy aims to address these deep-rooted and pervasive problems. During the course of the past six years, significant progress has been made in our quest to make high quality lifelong learning a reality from the cradle to the grave. Annex 1 draws together the main strands:
   1. In schools, our literacy and numeracy programmes have achieved real improvements in pupil performance.
   2. At GCSE and A level, exam results have risen significantly.
   3. Our specialist schools programme, and curriculum and examination reforms, have increased the emphasis on equipping pupils with the skills, knowledge and understanding they need for employability.
   4. In higher education, there has been a major expansion in student places. We have introduced Foundation Degrees as a new vocational option. We have encouraged universities to work closely with business and employers.
   5. In further education, student numbers have increased. We are reforming the quality and responsiveness of colleges and training providers. We have established the Learning and Skills Council as a powerful new body for planning and allocating over £8 billion which the state spends each year on post-16 education and training.
   6. Our Skills for Life programme is tackling poor levels of literacy, language and numeracy skills among adults.
10. All of this represents a lot of hard work by schools, colleges and universities, resulting in real improvement.
11. The White Paper builds on the extensive skills and adult learning reforms put in place since 1997. It addresses frequently articulated concerns of employers, trade unions and providers. They have challenged us to create a coherent policy framework which supports frontline delivery and develops an education and training system which is focused on the needs of employers and learners. Isolated individual initiatives will not be enough, since such endeavours have not had sufficient impact in the past. We need to draw together all the major partners. We need also to connect the many existing programmes and activities, so that they form a shared, sustained and determined programme for change.
12. So this strategy is not predominantly about new initiatives, but rather about making more sense of what is already there, integrating what already exists, and focusing it more effectively.
13. The key themes which characterise this strategy are:
    1. Putting employers' needs centre stage. Skills are not an end in themselves, but a means towards supporting successful businesses and organisations. We must give employers more support in accessing the training they need, and more influence in deciding how that training is provided. This is what we mean by a 'demand-led' system.
    2. Helping employers use skills to achieve more ambitious longer term business success. The Skills Strategy is not just about meeting the demands for skills that employers already have. We must also help those employers who want to increase productivity, to upgrade to higher value-added products and services, or to set up new, higher value businesses, to secure the higher level skills needed to achieve those ambitions. Our new sector skills agreements described in chapter 3 will be central to this.
    3. Motivating and supporting learners. We will make it easier for those adults who most need extra skills by offering them a new entitlement to learning. We will prioritise our resources, with the ambition that over time we help everybody who wants them to gain at least the foundation skills for employability, with better support for young adults to gain more advanced craft, technician and associate professional qualifications.
    4. Enabling colleges and training providers to be more responsive to employers' and learners' needs. Our best colleges and training providers already show abundant creativity and commitment in meeting local needs. But too often 'the system' gets in their way the framework for planning, funding, monitoring, qualifications and student support does not give incentives or clear signals to support active, effective reach-out to meet needs.
    5. Joint Government action in a new Skills Alliance. We will link up the work of the key Government departments involved with economic and skills issues the Department for Education and Skills, the Department of Trade and Industry, the Department for Work and Pensions, and the Treasury. The same collaborative approach will apply at regional level, between the Regional Development Agencies, the Learning and Skills Council and their partners. We will establish a new Skills Alliance, bringing together Government departments, agencies and representatives of employers and employees, to create a new social partnership for skills.
14. The Skills Strategy is primarily a strategy for England, reflecting the devolution of responsibility for education and training to Scotland, Wales and Northern Ireland. Each has developed its own strategies for skills and lifelong learning. However, some elements of this strategy have implications for the Devolved Administrations, notably the work of the Sector Skills Councils (which have a UK-wide remit) and the proposed sector skills agreements. The strategy has been developed in consultation with them and is consistent with the direction of their policies for skills.

WHAT WILL WE DO TO HELP EMPLOYERS AND LEARNERS?

We will strengthen the supply of skills to deliver what employers want in the way that they want it

15. The best British employers are world-leaders, producing high value-added goods and services with innovative, productive and enterprising workforces. But if we are to sustain our place as a leading global economy, we need to increase the proportion of organisations focusing on high value-added, high specification products where jobs require advanced skills and training, and pay correspondingly high wages. It is not for the Government to tell private business what products and services to invest in. But it is the Government's role to offer support to businesses to increase productivity and invest in innovation, so that they stand the best chance of success. That means encouraging and helping employers to invest in skills and training in a more strategic way, linked to business strategies, human resource strategies and product-market strategies.
16. We will work with employers and employees to:
    1. Give businesses greater choice and control over the content and delivery of the training they receive. Government investment in such training should particularly address areas of market failure, by supporting employers in training their low skilled workers. Evaluation of the current Employer Training Pilots, which focus on supporting training for those with low or no qualifications, will inform the development of future national programmes to support skills training.
    2. Provide better information for employers about the quality of local training. We will introduce an Employer Guide to Good Training, offering straightforward quality and performance information from each local Learning and Skills Council about local colleges and training providers. The 'business.gov' website will be developed as a prime source of on-line information and services for business.
    3. Improve training and development for leadership and management, particularly in small and medium sized businesses. With Investors in People, the developing network of Sector Skills Councils (known as the Skills for Business Network) and other partners, we will develop a new programme, linked to the new Investors in People Management and Leadership model.
    4. Develop business support services to offer employers better information about where to get help. We will strengthen the existing Business Link network so that it offers better support in linking higher skills to stronger business performance, with clearer signposting of what help is available and where to get it, bringing in a wider range of intermediaries.
    5. Support the expanding network of Union Learning Representatives. Unions can play an important part in raising the profile of training and skills as an investment in organisational success. Learning representatives in the workplace have proved effective in encouraging the low skilled to engage in training, as well as supporting those with higher level skills and encouraging continuous professional development.
    6. Strengthen the Modern Apprenticeships programme to make it more flexible, lifting the age limit so that more older learners can participate and bringing in a wider range of employers.
17. A key means of raising our game on skills is through the new Sector Skills Council network known as the Skills for Business Network. The network will be the main voice for employers and employees in each sector, identifying sector skill needs and how best to meet them. New sector skills agreements will have powerful leverage over the 23 supply of training and skills at regional and local level. They will need to be based on excellent analysis of skills, productivity and labour market trends and gaps. We will strengthen support for individual learners, with better information, clearer targeting of funds, and more help to return to learning
18. Significantly more young people in England leave education or training by the age of 17 than in most other developed countries. The legacy of this high drop out rate is that too many adults lack minimum levels of basic and employability skills, and are not interested in further learning. They often lack the necessary support to re-engage in learning and are the least likely group to receive training from their employers. We must target funding on those areas where skill needs are the greatest, while still providing a framework which motivates and supports adults to want to engage in skills training and qualifications at all levels from basic skills to higher education.
19. For individual learners, we will:
    1. Create a new entitlement to free learning for anyone without a good foundation of employability skills to get the training they need to achieve such a qualification. Those who do not have a qualification at level 211 are less likely to get secure, well paid jobs, and are more likely to suffer disadvantage and exclusion.
    2. Provide targeted support for higher level skills at technician, higher craft or associate professional level. This support will be focused on those who are developing their skills and qualifications to level 312, in priority areas to meet sectoral and regional skill needs. The support will be provided through the new regional skills partnerships, and delivered by the local Learning and Skills Councils.
    3. Pilot the delivery of a new learning grant for adults in further education. This will be modelled on the existing education maintenance allowance for 16-19 year olds. It will be aimed at adults studying full-time13 for their first full level 2 qualification, and young adults studying full-time for their first full level 3 qualification.
    4. Safeguard the provision in each local area of a wide range of learning for adults, for culture, leisure, community and personal fulfilment purposes. While giving priority to better work-related skills training, each local Learning and Skills Council will have a defined budget to work with others to support that range of learning, including learning for pensioners.
    5. Provide better information, advice and guidance on skills, training and qualifications, so that people know what is available, what the benefits are, and where to go. To achieve this, we will combine the network of local advice partnerships with the national advice helpline provided by Ufi/learndirect.
    6. Provide a better choice of opportunities to encourage adults back into learning. That will draw together the network of 6,000 UK online centres, 2,000 Ufi/learndirect centres, and the many community, college and local authority learning programmes.
    7. Develop opportunities to gain skills in using Information and Communications Technology (ICT). Basic ICT skills will become a third area of adult basic skills, alongside literacy and numeracy within our Skills for Life programme. We believe that the new entitlement to free learning, taken with the other reforms set out in this strategy, provide many of the elements we previously sought to develop through the Individual Learning Accounts. We continue to attach importance to the principles of adults being motivated and helped to return to learning, through wider choice and a stronger sense of ownership of the funds that support their learning. We shall seek to apply those principles as we implement the strategy.

HOW WILL WE DO IT?

21. To meet these challenges, we need to take action across a range of fronts. We will reform the qualifications framework, so that it is more flexible and responsive to the needs of employers and individual learners
22. There is much concern that the existing range of qualifications is not providing what employers require and individuals need. More 14-19 year olds are gaining better qualifications. But the vocational route remains poorly regarded and misunderstood. A review led by the former Chief Inspector of Schools, Mike Tomlinson, is considering how to improve the vocational options for 14-19 year olds, in order to give young people in secondary schools and colleges a much firmer foundation of skills to prepare them for their working lives.
23. For adults, the main learning programmes and qualifications available often do not fit the bill in terms of developing a broad foundation of skills to support long term employability. So we will reform qualifications, so that they better meet the needs of employers, and lead to better rewards and employment prospects for learners:
    1. We will strengthen Modern Apprenticeships, as a top quality vocational route. We will better integrate key skills into Modern Apprenticeship programmes, lift the age cap so that adults can also benefit from Modern Apprenticeship programmes, and involve employers more closely in promoting Modern Apprenticeships.
    2. We will review, through the work of the group led by Mike Tomlinson, the vocational routes available to young people, and strengthen the focus on employability skills and enterprise for young people.
    3. We are developing a wide range of vocational Foundation Degree courses in universities and colleges, so that as we expand places in higher education, we meet higher level skill needs.
    4. Qualifications for adults will be made more flexible. The Qualifications and Curriculum Authority is working with the Learning and Skills Council and the Sector Skills Development Agency to develop proposals for greater flexibility. This includes dividing more qualifications into units; speeding up accreditation of new qualifications; and better assessment of people's existing skills and knowledge.
    5. We will develop a credit framework for adults, to provide greater flexibility for both learners and employers in packaging the learning programmes that best suit their needs. As the first step, we will invite the bodies which award the largest number of qualifications to adults to collaborate, under the leadership of the Qualifications and Curriculum Authority, to develop a shared credit-based approach.
    6. We will make it easier for people to acquire the skills needed for employment. We will review in each major employment sector the need for new adult learning programmes to develop generic 'skills for employment'. People might acquire a 'skills passport' or 'skills foundation' which records their key and generic skills. We will work with colleges and training providers to help them respond more effectively in providing skills, training and qualifications to meet employer and learner needs
24. Learning and Skills Council surveys show that most learners are satisfied with their courses. There has been a substantial growth in the number of learners - nearly 500,000 extra learners (a 13 per cent increase) in funded learning since 1996/97.
25. But standards of learning and achievement vary, and there remain problems with finding the right course at the right time. The Success for All programme launched in 2002 is already raising standards. We will build on that by:
    1. Reforming the funding arrangements for adult learning and skills, to give colleges and training providers stronger incentives to work flexibly with employers while reducing bureaucracy. Within the regional framework for skills priorities, and local Learning and Skills Council plans, colleges and training providers will have more freedom to decide what training programmes to offer, and how to deliver them.
    2. Supporting the development of e-learning across the sector, with more on-line learning materials and assessment, supported by £200 million from the Learning and Skills Council over three years. 26
    3. Helping colleges build their capability to offer a wider range of business support for local employers. Many successful colleges already provide such support, including Centres of Vocational Excellence. We wish to build on their experience.
    4. Broadening the range of training providers, by bringing within the scope of public funding those private providers who offer distinctive, high quality training and can best meet gaps in current provision.
26. One goal of the Skills Strategy is to clarify the roles and responsibilities of Government, learners and employers, including who should pay for what.We believe it is right in principle that those who benefit most financially should also contribute to the cost, while protecting the interests of those who need most help and cannot afford to pay. The Government should be clear about our priorities, so that we can focus public funds where they will achieve most benefit, particularly in raising national competitiveness and creating sustainable employment.
27. We want to encourage the development of skills right across the board. Supporting the development of higher level skills and qualifications is every bit as important in a knowledge economy as helping those with no or low skills. Many of our skills deficits are at those higher levels. So the strategy must provide a framework which encourages such investment. But that is different from deciding who pays for it. The state cannot pay for everything. So in deciding the right focus for allocating public funds, we must take account of where there are market failures which block investment in skills, as distinct from where the rates of return to individuals and their employers make it fair to expect them to contribute to the costs of their own learning.
28. On this basis, our priorities in using public funds are:
    1. The introduction of an entitlement to free learning for adults without qualifications, to help them gain a full level 2 skills foundation for employability. This extends the existing priority of improving adults' basic skills in literacy, language and numeracy.
    2. Supporting those who are developing their qualifications to a higher level in technician, advanced craft and associate professional skills, particularly where those meet sectoral and regional skills priorities.
    3. Supporting those who are re-skilling for new careers, and those preparing to return to the labour market, again particularly where that meets sectoral and regional skills priorities.
    4. Safeguarding a varied range of learning opportunities for personal fulfilment, community development and active citizenship.
29. Providing more support in these areas means re-prioritising public funds. In consequence, we believe it is fair that those learners (or their employers) who already have good qualifications and who wish to undertake further study at the same or a lower level, should pay more. There will still be substantial public funds available to meet some of the costs of their courses. The vast majority of learners will still be receiving support from public funds towards the costs of their training. But we need to balance the contributions from the state, individuals and employers so that they more fairly reflect the benefits gained. So we propose to establish a new framework for raising income and setting fees in further education, consulting on the best approach.We propose that in future, each college and training provider should agree an overall income target with the Learning and Skills Council as part of its development plan.This new element of development planning will be phased in from 2004/05. Colleges will be free to develop their own strategies for securing fee income or other revenue. We will deliver these changes by ensuring that Government and its agencies take an effective lead, and work more closely together in supporting skills and productivity
30. For these changes to happen, the Government must lead by example, showing its own determination to lead a sustained and concerted strategy. The key measures are:
    1. Our new national Skills Alliance, bringing together the key Government departments and agencies with employer and union representatives. The Alliance will represent a new social partnership for skills between Government, the CBI, the Trades Union Congress (TUC) and the Small Business Council, working with a group of key delivery partners. It will pursue a shared agenda in raising productivity for the common good. It will be led by the Secretaries of State for Education and Skills, and Trade and Industry.
    2. We will integrate implementation of the Skills Strategy with the conclusions of the Department of Trade and Industry's Innovation Review. Innovation cannot flourish if companies do not have the skills to create, understand and apply new knowledge in developing new and improved goods and services. Equally, skills will not be fully utilised if companies are not innovating.
    3. We will integrate the work of Regional Development Agencies, the Skills for Business Network, the Small Business Service, the local Learning and Skills Councils, and Jobcentre Plus. This will mean that in each region there is a strong connection between the skills needed to raise productivity by region and sector, and the allocation of funds to training providers. Regional Development Agencies will lead discussions with partners in each region to develop proposals for a regional skills partnership accountable for setting priorities and driving action on skills and productivity. These will build on existing networks supporting the Framework for Regional Employment and Skills Action (FRESA).
    4. We will develop a stronger link between the Department for Education and Skills and the Department for Work and Pensions, and between the operations of Jobcentre Plus and the national Learning and Skills Council.We will give more encouragement for benefit claimants (including those on long term inactive benefits) to gain skills and qualifications to boost their chances of good jobs, and will review ways to give priority to placing people in jobs with training. We want stronger joint working at local level between Jobcentre Plus and the Learning and Skills Council, and will build this into the proposals for the regional skills partnership.
    5. We will support the development of learning communities. We will ask the Government Office in each region to support Regional Development Agencies, local Learning and Skills Councils and Local Strategic Partnerships in their region to identify suitable areas.
    6. We will build up education and training opportunities in prisons through closer working between the Prison Service, the Probation Service, the Learning and Skills Council, Ufi/learndirect and other partners, so that ex-offenders have a better prospect of getting secure employment and avoiding re-offending.
31. The Government will lead by example as a major employer in its own right, to ensure that all Government departments are investing in the skills needed for their sectors. That will help achieve our objectives for public service reform.

WHAT WOULD SUCCESS LOOK LIKE?

32. The Skills Strategy will only work if it brings benefits to employers and learners. The real measure of success is whether individual employers and learners see a difference. The two tables at annex 2 summarise our aspirations for the differences we hope individual employers and learners would in time see, set against the main measures set out in detail in subsequent chapters which would secure that difference.

RIGHTS AND RESPONSIBILITIES

1.33 A successful strategy will bring enormous economic and social benefits to the nation, employers and individual learners. But that is not to say that everyone will get what they want, or that change will be easy. There are some hard decisions that have to be taken, striking a balance between the interests and preferences of different groups. As noted in paragraphs 1.26 to 1.29 above, this applies particularly in deciding who should pay for what.

1.34 The 2001 Budget report set out the Government's belief that, although voluntary approaches have secured increased participation in workplace training, they have not been sufficient given the scale of the problem. Addressing this problem is a priority and will require a step-change on the part of employers, individuals and the Government. The Government is therefore seeking to develop policies through this strategy which will help employers and individuals to meet their responsibilities in this area.

1.35 The main rights and responsibilities are set out in table 2 below.

36. Our aim is to establish an effective infrastructure to support the delivery of these roles and responsibilities. Chapter 7 sets out in detail the role of regional and local partnerships and the specific contributions of different agencies.
37. Achieving our objectives is a long term goal. It will require sustained commitment over many years. Chapter 8 sets out our delivery plan, in terms of priorities and timescales.
38. The strategy reflects widespread discussion and consultation with many parties. In autumn 2002, we hosted a series of regional skills roadshows. In March 2003, we issued an interim progress report and evidence paper for consultation.There have been seminars and discussions with a wide range of stakeholders to consider specific issues, including discussions organised by the Learning and Skills Council as part of the 'great skills debate'. We are very grateful to all those who have contributed. The strategy attempts to reflect the full range of views and discussion. A summary of the written responses to the consultation is being published separately on our website at www.dfes.gov.uk/skillsstrategy. Also available at www.dfes.gov.uk/ria is the regulatory impact assessment. 
39. We intend to press ahead rapidly with implementing the strategy. But we welcome further comments and views. If you would like to comment, please complete the form at annex 5 and return to the address below by 31 October 2003. Consultation Unit Department for Education and Skills Area 1B Castle View House East Lane Runcorn Cheshire WA7 2GJ or by email to SkillsStrategy.comments@dfes.gsi.gov.uk

Chapter 2: Skills for Employers, Support for Employees

SUMMARY OF THIS CHAPTER

1. In England alone employers spend an estimated £23 billion each year on training- related activities. Many have an outstanding record in delivering added-value through innovation and sustained investment in the training and development of their people. We need to build on this commitment so that more employers place skills investment within their longer term business strategies to help improve their business performance.
2. But we recognise this is a two-way process. The Government must do more to support employers by focusing on the needs of employers and employees as the customers. Small, medium and larger businesses and organisations will require different levels of support. But all require training which is easily accessible, flexible in meeting their needs, integrated with other business support services, and transparent in terms of the Government contribution towards financial costs.
3. Many of the reforms set out in later chapters are designed to meet the needs and concerns of employers. But this chapter focuses on providing tailored solutions for employers to meet their needs and encourage more sustainable and better managed business strategies. In chapter 3 we set out how we will give a stronger voice to employers through a new focus on sector skills.
4. We will:
   • Give businesses greater choice in, and control over, their training.
   • Improve leadership and management capability, building on the success of Investors in People and encouraging the spread of best practice through benchmarking and the use of diagnostic tools.
   • Develop a more accessible, coherent and integrated business support network. The network will be focused on working with businesses to meet their current and future skill needs, so that employers can more easily get sound advice on moving up the value-chain, improving the skills of their workforce to develop business performance.
   • Provide better information for employers, particularly about the quality of training. Reform Modern Apprenticeships. Modern Apprenticeships are a key means of helping employers secure the higher level skills they need, with a strong emphasis on work-based learning. As detailed in chapter 5, we will strengthen the Modern Apprenticeship programme, to make the integration of key skills more flexible, lift the age limit, and bring in a wider range of employers.

GREATER CHOICE AND HIGHER DEMAND FOR WORKFORCE TRAINING

5. A demand-led approach to developing skills in the labour force must enable individual employers to access training provision in a way which meets their business needs. It must also encourage them to invest in skills and qualifications, particularly for low skilled employees. Employer Training Pilots were introduced by the Government in September last year in six local Learning and Skills Council (LSC) areas to increase the demand for training by reducing the barriers which prevent people - particularly those with lower skills - from training. They have been extended to run for two years and to cover a further six local LSC areas.
6. The pilots explore the impact on demand for training up to level 2 of providing a package of support which includes: 
   • Free training programmes. 
   • Support for employers to meet the costs of giving staff paid time off to train. 
   • Help to broker the sourcing of training, and ensure that training is provided in the way that suits the needs of learners and employers. 
   • Information and advice for learners and employers, including identifying their skill needs.
7. The pilots seek to address the market failures which are inhibiting take up of training by those with few or no qualifications, helping low skilled employees to attain level 2 skills which will increase their productivity in the workplace and establish a platform for further progression. At the same time, the pilots are giving employers more choice and control over training. Progress during the first year of the pilots has been promising. Over 2,000 employers and 10,000 learners are participating in the pilots, with a high proportion from firms employing fewer than 50 workers. Almost all learners are completing their courses successfully, and both businesses and individuals are enthusiastic about the benefits of the training they are receiving.
8. We are learning important lessons from the pilots about the key factors motivating employers and learners to engage in training, and the best ways to adapt training provision to the needs and pressures of the workplace. For example, the pilots have spurred more colleges and training providers to deliver training on employers' premises, at a time and in a manner suited to their shift patterns. They have encouraged tailoring of training to meet only the skills gaps identified in initial needs assessments. We are taking these lessons on board in planning for the second year of the Employer Training Pilots, and for their extension to six further LSC areas.
9. This extension will allow the Government to test the impact of elements within the model more thoroughly. Pilot areas will be able to explore further ways of increasing the capacity of local training providers and engaging employers in the scheme. It is important that we do not prejudge the results of the evaluation, which will complement work in other areas to inform the development of national policy. We will draw on the lessons learnt from the pilots, including the benefits of a demand-led approach, in deciding the form of any national programme to support employer training.

SUPPORT FOR LARGER EMPLOYERS

10. There is a stronger expectation that larger organisations will pay for the training of their staff, particularly where it is customised to meet their higher skills needs. Such employers are also more likely to have their own networks and contacts through which they can pursue their skills and business support needs.
11. But there are steps we can take to help larger employers improve workforce skills:
    1. The Department of Trade and Industry (DTI) Innovation Review and Business Support Transformation Programme are focusing on providing more effective support for medium and larger companies. We will continue to encourage the transfer of new ideas from universities and colleges to business, including the creation of 20 new Knowledge Exchanges (as set out in the Higher Education White Paper, The Future of Higher Education) to help businesses make the most of new innovations.
    2. The Skills for Business Network - the network of Sector Skills Councils - will provide a new network for employers of all sizes to secure the skills they need, and to encourage all employers within a sector to work together to improve training and productivity. We expect that large employers will play a key role in developing the sector skills agreements described in chapter 3.
    3. Large organisations will benefit from other reforms in this strategy including a more flexible, unitised qualifications system; greater responsiveness by colleges and training providers; greater accreditation for existing skills; scrapping funding rules for training dedicated to a single employer; the establishment of Foundation Degrees; and reforms to Modern Apprenticeships.
    4. Through the increase in the Union Learning Fund, announced in the 2003 Budget, we will build the positive contribution that Union Learning Representatives can make in helping employers identify skill needs and ways of meeting them, as well as providing information, advice and guidance to employees.
12. We welcome the offer from the CBI to lead a project - working with the Department for Education and Skills (DfES) - to identify how best to enhance skills and innovation within supply chains and clusters. This research project will produce a report in summer 2004 recommending how to spread good practice further, including proposals on funding and on a range of options for raising performance through skills and innovation.
13. Through the LSC's National Contracting Service, and through local LSCs, we will support those large employers who are willing to open up their existing training facilities and programmes to train more people than they need for their own purposes.

IMPROVING LEADERSHIP AND MANAGEMENT

14. Effective leadership and management are key to the development of competitive businesses and high quality public services. Good leaders and managers recognise the importance of workforce skills development as a fundamental building block of high performance.
15. Around 4.5 million people in the UK have significant management responsibilities but fewer than a quarter of these hold a management related qualification. Reports continue to show deficiencies in the level of management skills, and that these are most likely to be evident in lower and middle management.A range of organisations already support improved leadership and management capability. For example, the Institute of Leadership and Management supports training of over 60,000 people a year, and Ufi/ provides a wide range of training programmes and support for management and leadership, particularly through its Premier Business Centre network.
16. Current initiatives to improve leadership and management include:
    1. The Chartered Management Institute last year launched a new designation of 'Chartered Manager' status for managers meeting certain criteria.
    2. The Management Standards Centre is developing new world class occupational standards for leadership and management by early 2004. These will underpin management learning and qualifications at all levels, act as a competence benchmark, and be a UK resource for employers and learning institutions.
    3. For the technology-driven sector, new initiatives such as New Technology Institutes and Knowledge Exchanges aim to speed the adoption of modern management practices by improving technology transfer and making links between companies in the same cluster or industry.
17. The Investors in People leadership and management model helps organisations assess leadership and management capacity in more depth.Working with Investors in People UK, the Sector Skills Development Agency (SSDA), the Chartered Management Institute and Ufi/, we will introduce a programme offering tailored support for leadership and management development in small and medium sized enterprises. The aim will be to provide mentors and coaches who can help managers develop a programme for improving their leadership and management skills, including through informal learning. The programme will give support for applying the new Investors in People model to assess leadership and management across the business.
18. We expect to build on the £30 million Small Firms Initiative already being successfully implemented to encourage small firms to pursue Investors in People status. Other key Investors in People initiatives that contribute to improving leadership and management include the Profile Tool (to help organisations benchmark performance) and the Investors in People UK Ambassadors programme for outstanding employers. These will be supplemented by a new DTI-led 'inspired leadership index' and toolkit available during 2004.

INVESTORS IN PEOPLE: DEVELOPING THE STANDARD

19. The Investors in People standard has been a major success story since its introduction in 1991. Nearly 28,000 organisations have achieved Investors in People recognition, employing nearly one-third of the workforce in England, and a further 16,000 are committed to working towards the standard. New national targets for Investors in People recognitions and commitments will make sure that we sustain and build on the success of the standard. The targets are that by 2007, we will seek to ensure that 45 per cent of the workforce is employed by organisations that have achieved, or are working towards Investors in People; and that at least 40,000 small firms have achieved or are working towards Investors in People status.
20. We will develop the framework to encourage organisations to invest in their staff. Investors in People UK will develop a benchmarking programme to allow organisations to assess themselves against a profile of excellence. It will also add to its range of models to support organisations that want to develop specific aspects of their people management as part of their commitment to be recognised or re-recognised as Investors in People. Models on leadership and management, work-life balance, and staff recruitment are already available.

IMPROVING THE SUPPORT NETWORKS FOR SMALL BUSINESSES

21. In order to build successful organisations, and make the most of the opportunities available to them, employers need good business information, advice and support. That must be provided in a way which is meaningful to them and fits their business needs. The Business Link network, managed by the Small Business Service (SBS), is one of the main ways that the Government provides advice and support for business. We want Business Link to broaden its appeal for those businesses that do not know where to go for help, so that it can become the prime access route for small businesses seeking Government-supported services, especially support and advice on skills and business development.This will operate alongside the wide range of existing business support services provided commercially by the private sector.
22. Business Link is not the only organisation that provides support and advice to employers. Our aim is to build and improve the Business Link brand and network so that it will be more attractive to businesses seeking help to take advantage of a new 40 business development opportunity, or to tackle a business challenge. Through this route, they should be able to find the best available package of business support (information, advice, funding and training) that is available from the public, private and voluntary sectors to help them start and grow. Building on the contribution of the Small Business Council (SBC) during our consultations, we intend to reform the current arrangements so that they place greater emphasis on involving and working with a wide range of intermediaries, so that businesses can get information and support from trusted business intermediaries with whom they already work.
23. We recognise that improvements are needed to ensure a consistently high quality of Business Link service across the country. The SBS is working to achieve this, switching the emphasis of Business Link from direct delivery of services to brokerage of a much wider range of support, and acting to ensure that demanding service targets are set and achieved by Business Link operators. If these performance improvements continue, the Business Link access brand will play a central role in brokering business support services in each region. By this route, we want to ensure that small businesses are not faced with an array of competing and conflicting offers of advice and support from different parts of Government, because in future those various services will be offered in a co-ordinated way.
24. The recent Government review of services for small business identified the range of providers offering support and advice to employers. Business Link, or other brokers contracted to provide expert advice, will work closely with those who are in regular touch with individual businesses, including banks, accountants, legal advisers and employer cluster groups such as Group Training Associations. This will ensure that customers are referred to Business Link, when appropriate, and from Business Link to their services. In this way, every employer should be confident they can easily and reliably access what information they need. Instead of being sent from one agency to another before getting basic advice, there will be 'no wrong door' to accessing the support they need.

25. To make this approach work, business support services must be better co-ordinated and delivered. In the North West, East Midlands and West Midlands regions, the Regional Development Agencies (RDAs) are managing the Business Link contract for their regions as part of a new pilot programme. This ensures that the Business Link activities are integrated within wider regional business support services. Different approaches to improving co-ordination are being tested in other regions as well. Drawing on that experience, we will introduce in each region joint arrangements to co-ordinate skills and business support services, through the regional skills partnerships discussed in chapter 7. These will bring together the SBS, RDA, local LSCs, and Jobcentre Plus.

WORKING WITH INTERMEDIARIES

26. One way of improving business support services is by connecting to a wider range of intermediaries who are in regular touch with businesses, including banks, accountants, legal advisers and employer cluster groups. Intermediaries play an important role in the Investors in People Small Firms Initiative (see paragraph 2.18). We would like to expand the role of intermediaries so that they help businesses recognise the benefits of training as part of business development, and know where to refer them for in-depth support. Working with Investors in People UK and other partners, we will explore with other business intermediaries how similar arrangements could work to everyone's benefit.
27. The Small Business Training Initiative, announced by the Chancellor in the 2003 Budget, is an example of major banks working to support small businesses through signposting them to support for training. As part of providing business advice to clients, the banks already discuss training and development with small businesses. The project aims to develop more effective ways in which banks can use this existing relationship to direct business customers, through Business Link, to those best placed to assess and help meet skills, training and employee development needs.
28. The SBC has established an Accountants Group which includes representatives of the Association of Chartered Certified Accountants and the Institute of Chartered Accountants. The purpose is to tackle the problems that small businesses face identifying sources of finance, and ensuring their applications are successful. Over time, this will help to build greater confidence in Business Link by accountants, leading to greater referral of small businesses to the Business Link service. The LSC is also working with banks, sector and trade organisations to use their networks and engage small firms in business, skills and management development.
29. The Business Investment Tool for Entrepreneurs (BITE), which is a self-assessment questionnaire for small and medium sized enterprises developed by the Council for Excellence in Management and Leadership, will be made more widely available for 42 intermediaries. It can be a useful first step in helping businesses work out their priorities and skills needs. Intermediaries will also be able to use the standard developed by the Small Firms Enterprise Development Initiative to offer their clients an independent assessment of the business advice they offer.

BETTER INFORMATION FOR EMPLOYERS

30. Employers often ask for better information about the quality of training available locally. While there is plenty of information available, it is not brought together in a way that is clear and easy to understand. Each local LSC will publish an Employer Guide to Good Training, which will offer simple information on the quality of local learning providers, using factual information drawn from the National Register of Providers already under development.This guide will bring together data on services funded, inspection results from the Office for Standards in Education (Ofsted) and the Adult Learning Inspectorate, and information about Centres of Vocational Excellence and Beacon status.
31. Employers, employees and advisers (including Union Learning Representatives) will also benefit from the reforms discussed in chapter 4 on improving information, advice and guidance (IAG) for adult learners. There is much more we can do to bring together the existing national information services provided by Ufi/ and Worktrain with local IAG provision, so that linked information about job opportunities, training opportunities, and labour market trends is readily available.
32. Companies can do more to improve the available information on skills and training by reporting on their own investment and its contribution to the success of their business. An independent task force, sponsored by the DTI, is looking at how companies measure and report on their human capital management, including the investment they make in their employees' knowledge and skills. The report, due this autumn, will provide guidance on best practice to help organisations measure and evaluate their workforce as a business asset.
33. We will develop the business.gov website, managed by the SBS, so that it becomes the key internet portal through which on-line information, advice and support services can be made available to businesses. We expect to launch the website in 2004.

STRENGTHENING THE SKILLS AND TRAINING ROLE OF TRADE UNIONS

34. Raising productivity through investment in skills benefits both employers and employees. Done in the right way, it will lead to greater organisational success and more rewarding jobs. So there is a strong common interest for employers and employees to collaborate in promoting skills, training and qualifications. We want to encourage employers and unions to work together in deciding how best to raise skills. We will jointly encourage this through the DTI Partnership Fund and the DfES Union Learning Fund. Currently the Partnership and Union Learning Funds overlap in 43 providing support for activity in workplaces to support skills development and partnership, so we shall consider how best to align them.Trade unions should demonstrate their commitment to training and lifelong learning by providing relevant accredited training for their Union Learning Representatives, supporting and guiding their Learning Representatives, and working in partnership with employers to help develop a workplace culture and to tackle low skills. Investors in People UK is also working with the Trades Union Congress (TUC) to extend Investors in People through the union route.
35. We have ensured trade union representation on the boards of the public bodies involved in training, such as the LSC. We are committed to trade union involvement in the new Skills for Business Network, because the sector agenda for skills and productivity concerns employees just as much as employers. We will ensure that there is union representation on their boards as each new Sector Skills Council comes into operation, and will expect union involvement in Councils' subsequent work to develop sector skills agreements.
36. The TUC and trade unions have a vital role in encouraging individuals back into learning through help and support in the workplace. Our recent legislation to give statutory rights to Union Learning Representatives will ensure that this network can play an increasingly influential part. The network has shown that it is effective at reaching out to the lowest skilled and most disadvantaged groups in the workplace, and finding opportunities for them to develop their skills. Adults with low skills often wish to avoid drawing attention to their skill gaps, and do not wish to approach an employer or learning provider to seek help. The role of Union Learning Representatives has been expanded both through legislation (which came into force in April 2003), and by funding for the Union Learning Fund (which is to rise from £11 million in 2003/04 to £14 million in the next two years). These changes mean there will be more Union Learning Representatives, with more time to carry out their duties, and supported by improved products and services for promoting learning.

ACHIEVING THE BENEFITS OF AN INCLUSIVE WORKFORCE

37. We want to increase skill levels for all under-represented groups and encourage all individuals to improve their employability. Women's participation in the labour market is a crucial contribution to UK productivity. Women make up 44 per cent of the workforce but on average have fewer educational qualifications than men.The gender gap in qualifications is concentrated among those women who are over 40 and those who are employed part-time or not at all. This is a significant part of the skills deficit. 19 4419 Walby, S and Olsen W, (2002) The impact of women's position in the labour market on pay and implications for UK productivity, Report to the Women and Equality Unit
38. Women in work are concentrated in lower level non-manual occupations with 24 per cent working in administrative and secretarial occupations and 13 per cent in personal services occupations.20 Women who work part-time may miss out on training opportunities offered by their employers. There have been significant increases in the overall level of skills in the British workplace, but their distribution is uneven. In particular the skill level of women in part-time work has not increased as much as that of full-time workers.
39. The difficulties of balancing family and work commitments can cause people to drop out of the labour market. New measures for working parents are aimed at helping them balance those responsibilities. This will help retain skills within the labour market, and help employers benefit from a broader labour force. The work-life balance campaign aims to increase take-up of employment practices that benefit business and help employees enjoy a better balance between work and other demands on their lives. This helps employers to recruit and retain skilled employees who might otherwise withdraw from employment.

Chapter 3: Skills for Employers - The Sector Role

SUMMARY OF THIS CHAPTER

3.1 At the heart of the Skills Strategy is a powerful new drive, in each major sector of the economy, to identify and deliver the skills that employers need to raise productivity.

3.2 The new network of Sector Skills Councils - known as the Skills for Business Network - will lead that drive. Each Council will work with, and for, employers and employees in the sector they represent.The front runners are already showing what can be done. We want all of them to match that best.

3.3 We will:

a. Expect each Sector Skills Council to deliver top quality analysis of international, national and regional trends in labour, skills and productivity in their sector. This will feed into the cycle for planning and funding the supply of training.

b. Expect each Sector Skills Council to develop occupational standards defining the skills needed in their sector, as a basis for designing up-to-date, high quality courses and qualifications.

c. Expect each Sector Skills Council to seek to work with employers in order to broker a skills agreement for its sector, demonstrating employers' commitment to maintaining and improving the skills base. That agreement will set out a long term agenda for action on skills, tailored to the needs and priorities of each sector and derived from its unique business needs.

d. Ensure that Sector Skills Councils can engage effectively with the Learning and Skills Council, Regional Development Agencies and other funding agencies, through national and regional frameworks for skills action, to get real leverage over the allocation of public funds for adult skills. e. Provide Government support, through the Sector Skills Development Agency, to provide development funding to back up and implement sector skills agreements.

THE ROLE OF SECTORS

3.4 The central theme of this strategy is the importance of identifying the skills that employers must have to support future business success, and doing whatever we can to ensure that the supply of training, skills and qualifications is responsive in meeting those needs.

3.5 Through the Regional Development Agencies (RDAs) and the regional partnership frameworks which they help to shape (notably the Frameworks for Regional Employment and Skills Action - FRESAs), we have a powerful mechanism for determining, region by region, the priorities for economic development and skills. Our proposals for strengthening regional skills planning are set out in chapter 7.

3.6 But that is not enough. Many companies operate nationally and internationally, not just locally and regionally. Table 3 illustrates this. For many purposes employers have a strong sense of local association. But they also identify with their sector and their supply chain, particularly in keeping up with leading-edge techniques, product or service innovation, knowledge transfer from new research, and all of the consequences that may have for future skills needs.

3.7 We want to ensure that employers have access to support through people who have a detailed understanding of their sector. RDAs have a close understanding of their region, but cannot be expected to have that same depth of understanding across each and every sector of the economy. Unless our approach to developing skills includes an understanding of where each sector is going, and what has to be done to match and exceed the best international productivity levels in that sector, we will not pitch our skills ambition at the right level. So we need both dimensions: regional and sectoral.

Table 3: Main focus of product markets at business level, by percentage of businesses in an industry, 2001

Source: Geoff Mason (2003), Enterprise product strategies and employer demand for skills: evidence from Employers Skill Surveys, National Institute of Economic and Social Research (mimeo).

CREATION OF THE SKILLS FOR BUSINESS NETWORK

8. We will build the Skills for Business Network to fulfil the sectoral role. Sector Skills Councils (SSCs) are a means whereby employers can secure influence in shaping the supply of training and skills to meet current and future needs.
9. The full network will be set up by summer 2004.There will be around 25 SSCs covering the UK, replacing the 73 former National Training Organisations. Two Councils have been fully licensed to date, e-skills UK and the Science, Engineering and Manufacturing Technologies Alliance (SEMTA). Both have strong buy-in from the employers in their sectors. In addition, five 'trailblazers' are operating and a further 13 Councils are in development.The Sector Skills Development Agency (SSDA) is responsible for establishing the network, promoting the development of each Council and monitoring their performance. The SSDA acts as developer, co-ordinator and ambassador for the network. Table 4 shows the timetable for creating the network.
10. We and the SSDA will ensure that the way in which the Skills for Business Network is set up is rapid and straightforward. There have been concerns about delays and bureaucracy. There is a great deal to do to build the capacity of the network to sustain the prominent role that we envisage for it. But we will not compromise on the standards that must be met before a licence is awarded to become an SSC. Every Council must represent a major step up in ambition, scope and effectiveness. One component of that is ensuring that each Council covers a sector which represents a sufficient proportion of the labour force to give it critical mass. The broad benchmark is 500,000 people. The SSDA is working with a wide range of bodies representing sub-sectors to support their incorporation within a sector of at least that size.

Table 4: Timetable for setting up Sector Skills Councils

*Trailblazer SSC

11. In setting up the network, the SSDA is seeking to incorporate a role for those groups which do not themselves meet the criteria to form a separate SSC, but nonetheless have an important part to play in defining skill needs for particular areas of employment. A prime example is those working in voluntary and community organisations.The Active Communities Unit in the Home Office is working with the Skills for Business Network and other partners to tackle the skills gaps of this sector to improve capacity. A specific voluntary and community sector skills strategy, building on this Skills Strategy, will be published by the Home Office in early 2004.
12. The Department for Education and Skills (DfES) has to date been the lead department for the SSDA, jointly sponsoring the Agency and the Skills for Business Network with the Devolved Administrations in Scotland, Wales and Northern Ireland, because the Agency and the Councils have a UK-wide remit.The Department of Trade and Industry (DTI) has also been closely involved in setting up the network, and will in future jointly sponsor the Agency, the network and sector-based activities.
13. The DTI has a strong sector focus through its business relations team. In some sectors, DTI has supported employer-led Innovation and Growth Teams, to identify and address the key productivity drivers for the sector. Some sectors support Industry Forums to improve the competitiveness and productivity of sector supply chains. The SSDA will increasingly become the body which brokers, co-ordinates and promotes the skills implications of sector-based activities on behalf of both departments, and engages with the key funding bodies in planning and delivering the SSC agreements. In doing so, it will also work with the range of Government departments which sponsor particular sectors such as transport, land-based industries or culture and media.

ROLE OF SKILLS FOR BUSINESS NETWORK

14. The Skills for Business Network must be built on excellent labour market information, as a basis for understanding skills and productivity gaps, and how they might be met. Drawing on national data collected by Government and its agencies, the network must become the authoritative source of sectoral and occupational data and projections. The SSDA has made a good start on this work. The results so far are given on its website at www.ssdamatrix.org.uk. A summary to illustrate the nature of the sectoral data available on skills and productivity is at annex 3. That table also summarises some of the key issues in tackling skills gaps in each sector, as a basis for continuing discussion and analysis with the network, employers, the Learning and Skills Council (LSC) and the RDAs.
15. Each SSC will have to start by ensuring that it has a rich, authoritative understanding of the skills and productivity trends in its sector, internationally, nationally and regionally. But the picture on skills is not static. So each Council should be collecting, publishing, and regularly updating on the web its analysis of skills gaps and trends. The SSDA will ensure a consistent approach across the network.
16. The core roles of the Skills for Business Network are:
    1. Identifying and articulating the current and future skills needs of employers in their sector, at all levels from basic to advanced.
    2. Developing, and keeping updated, national occupational standards which define the skills, knowledge and competences that employers require, and that training programmes and qualifications should deliver.
    3. Engaging with colleges, training providers, universities and planning bodies to ensure they understand and act on sectors' skills needs.
    4. Identifying the drivers of increased productivity in their sector, and the skills that will be needed to capitalise on these. 
    5. Reviewing the suitability of existing training programmes and qualifications to meet sector needs, and commissioning the development of new programmes where needed. This should underpin the proposals in chapter 4, to ensure the availability of high quality, up-to-date training programmes, suitable for the needs of adults in supporting a broad base of employability skills leading to a full level 2 qualification.
    6. Contributing to joint work across the Skills for Business Network on generic and cross-sector skills. The SSDA is establishing cross-sector Boards to pursue that work. One priority is leadership and management, where the SSDA will have a key role in the new programme referred to at paragraph 2.17. A second is sustainable development, as a theme which needs to be addressed both in terms of the generic skills relevant to all sectors, and the skills specific to each sector, in understanding, developing and implementing sustainable technologies and working practices.
17. Chapter 5 explains in more detail the role of the Skills for Business Network and the SSDA in reforming qualifications and training programmes, working with the Qualifications and Curriculum Authority (QCA) and the LSC.
18. Over and above these core roles which we expect each SSC to undertake, the Skills for Business Network can potentially have a much larger impact through brokering voluntary collaborative action in their sectors. The network is not just a means of addressing the publicly-funded training supply side. It must become a means of brokering action by employers to meet each sector's needs.
19. In doing so, Councils must learn from the examples of excellent practice that already exist. Some of the most innovative work on skills in recent years has been developed through sector initiatives. The case studies below illustrate this. That is the standard all SSCs must match.

SECTOR SKILLS AGREEMENTS21

20. We want each SSC, as it becomes fully operational, to consider the value of a sector skills agreement for its sector. Consistent with the overall approach of the Skills Strategy, it will be for employers not Government to determine, through their SSC, whether an agreement for collaborative action should be pursued. It is important to learn from past experience of both what has, and what has not, proved effective by way of collective action in different sectors of the economy. We also need to learn from experience in other countries. But working with the SSDA, the Government will strongly support and encourage such agreements where the SSC and the employers judge that such an agreement would be valuable. One of the roles of the Skills Alliance (see chapter 7) will be to oversee progress, not by taking a role in individual agreements, but by assessing the impact of the overall approach across sectors, and how it can be developed to achieve the greatest benefit.
21. One reason why individual employers do not invest in the skills of their workforce is because they fear that investing on an individual basis will not only cost more, but the staff (and therefore the value of their investment) may be poached by another firm which is not making a similar investment. Overcoming that fear will require support for collaborative investment in skills amongst the employers in a given sector.
22. The nature of the action that is appropriate will vary from sector to sector. Different industries have already adopted a variety of approaches to promote collaborative action on skills, including licences to practise or operate, skills passports, sector training academies, voluntary training levies, collaborative training programmes, or action through the supply chain. A model of sector skills accounts may suit some sectors. In some cases, different agreements may apply to different parts of the sector. In all cases, it will be important to ensure that the agreement does not become a means of restricting entry to new companies, distorting competition or creating excessive burdens particularly for small and medium sized enterprises. Nor must it have the effect of discouraging or suppressing individual action by employers, but rather complement it.
23. We envisage that the agreements would cover:
    1. An analysis of sector trends, the drivers of productivity, any areas in which a 'low skills equilibrium' is apparent, and the consequent workforce development and skills needs to increase competitiveness over the medium to long term.
    2. A review of the current state of skills in the sector, identifying current skills gaps and latent skills shortages.
    3. A review of the range and quality of training provision available for the sector, and priorities for improvement.This would need to cover provision at all levels including generic employability skills, Modern Apprenticeships and Foundation Degrees.
    4. Identification of major cross-industry skills needs, particularly leadership and management and ICT.
    5. An assessment of the scope for collaborative action by employers in the sector to tackle skills shortages; what form that action might best take; and the extent of agreement amongst employers and unions as to its desirability.
    6. f. Close collaboration with the LSC and RDAs so that existing skills funding is prioritised to meet sector needs.
24. We will support such agreements in four ways:
    1. The SSDA will provide some additional funding for the most credible and creative agreements brokered by SSCs, to contribute towards the costs of developing and implementing them. It will be able to fund the additional costs of, for example, brokering and trialling the agreement, designing passport schemes, setting up collective training programmes, negotiating the terms of a voluntary licence to practise, or designing bespoke training approaches.
    2. In its continuing programme of sector-based training pilots, the LSC will give priority to working with those sectors or sub-sectors that demonstrate they are willing and able to develop agreements that will make a difference. Working with the LSC provides a route to access public funds for some of the direct costs of training programmes for regional and local delivery. The LSC has developed national sector training programmes with bodies representing employers in a range of sectors and sub-sectors, and at different levels. Those pilots have established some important principles for designing responsive training programmes, featuring work-based training, assessment of existing staff skills, packaging of training units to form qualifications which meet industry needs, and brokerage to source the training from suitable providers. The pilots are demonstrating high employer and employee engagement and high success rates.
    3. Under the arrangements described in chapter 7, the results of sector skills agreements will feed through to regional and local planning and funding decisions on training supply. That is the crucial form of leverage enabling the models which emerge to be delivered in volume through the normal budgets of local LSCs. We do not want to set up a parallel funding system, alongside the LSC, to support mainstream training by sectors. That would only cause confusion and extra bureaucracy for learning providers. But we do want robust sector skills agreements to be a powerful influence on the existing allocation method, by building them into the FRESAs, which in turn set the framework for LSC decisions on what to fund. By this means, sector agreements will act as a turnkey to releasing funding more in line with business demand. 56 d. Where both employers and unions in an industry agree, we remain willing to use the existing powers under the Industrial Training Board (ITB) legislation to introduce training levies to pool the costs of training across employers (see paragraphs 3.28 and 3.29 below).
25. The main benefit of these agreements will be to engage partners representing both demand and supply in a compact that develops a shared analysis of the skills challenge for each sector, shared objectives for tackling it, collaboration in taking the necessary action, and the development of a demand-led method for allocating funds in response to employer needs.
26. With SSDA, we will start by working with a small number of SSCs who have the capacity to deliver the agreements, and where there is a commitment amongst sector employers to pursue the approach.We will evaluate carefully the experience of the first SSCs in delivering skills agreements, as a basis for extending the programme across the network.
27. At the same time, we will build a strong interface between the Skills for Business Network and the RDA and LSC operations, so that future sector skills agreements can gain direct leverage over the allocation of funds to training providers. It would be over-complex for every SSC to develop a regional delivery network of its own, to link with every RDA. Instead, the interface needs to work through:
    1. Each SSC working with the LSC nationally on the design of sector skills agreements, as discussed above.
    2. The SSDA establishing, on behalf of the Skills for Business Network, a regional network of representatives so that the collective voice of the SSCs can be integrated in regional and local discussions.
    3. Each RDA partnering with two or three SSCs, so that different RDAs are leading on liaison with different sectors, rather than every sector trying to link with every RDA. d. The LSC also identifying sector leads within the local LSC network.

THE FUTURE OF INDUSTRIAL TRAINING BOARDS

28. One form of collective sector action is a training levy. The 1964 Industrial Training Act enabled Industrial Training Boards (ITBs) to levy funds from employers to support training activity. The DfES is currently undertaking Quinquennial Reviews of the two remaining Boards - the Construction Industry Training Board (CITB) and the Engineering Construction Industry Training Board (ECITB). The reviews are assessing the continuing need for the Boards and the scope for improvements in their operation. Our conclusions from the first phase of the reviews are that the industrial training board approach and the levy suit the particular nature of the industries in 57 construction and engineering construction, and should remain. Reports on that first phase will be published shortly.
29. The Government has a manifesto commitment that, where both sides of industry in a sector agree, we will help them set up a statutory framework for training. Following that commitment, employer and trade union representatives from the print industry have been exploring whether a statutory approach would be an appropriate way forward. If the sector supports this, we are willing to use existing powers to create a new ITB for the print industry. However, the Quinquennial Reviews of the ITBs suggest that, while the statutory levy approach may suit some industries, it is unlikely to be a solution for many. We believe that the collaborative voluntary action that SSC can broker will be the appropri