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UK - Regulatory approach to training seen as costly and counter-productive

17 August 2011

The Confederation of British Industry (CBI) today warned against government plans for wholesale extension of training levies or license to practice schemes which it said would hinder employer investment in staff training and do nothing to increase productive skills levels.

Levy systems operate by charging employers in certain sectors a specified proportion of their wage bill which is then pooled and used to fund training grants within those respective sectors. Licences to practice require employees to be trained to a certain level before they obtain a professional licence to operate in sectors such as care, security, construction and heating and gas.

In a new report on training investment, employers said that a voluntary approach would be the best way to build on the strong business commitment to training and boost skills levels.

Susan Anderson, CBI Director for Education & Skills, commented "the onus is on the private sector to drive the economic recovery through growth and job creation, and businesses recognise that investment in training now will be crucial to this."

"Employers already invest heavily in training for their staff and they recognise their crucial role in supporting sustainable growth by improving the skills of future generations."

"Our report finds a wealth of good practice amongst employers of all sizes who are developing the skills of their staff by a range of methods including formal qualifications, but also on-the-job coaching and learning."

"But employers are clear that a regulatory approach, including the extension of levies and license to practice schemes would actually hinder investment in training."

Businesses already invest 39 billion Pounds each year on training, with European data showing that 90% of UK employers provide training, well above the European Union (EU) average of 60%. A proportion of this investment is on remedial literacy and numeracy training to make up for the shortfalls of the education system. CBI data shows two-fifths of employers have had to provide remedial training on basic skills for school or college leavers. In addition, over two thirds of companies work with secondary schools to develop future skills.

A large proportion of learning in firms will be informal and on-the-job, particularly among smaller and medium sized companies (SMEs). This is not always captured in official figures which the CBI believes under-estimates the extent of business activity.

Employers and government share the ambition of better skills and stronger growth. Minsters are looking to employers to take greater responsibility for skills development by potentially extending regulatory measures on training through levies and licences to practice schemes.

The CBI accepts that licence to practice schemes may be required in certain sectors where there are health and safety concerns, but there is no evidence to suggest that a wholesale extension of regulatory schemes would lead to higher skills.

Instead, the CBI is proposing a voluntary approach based on:

• Larger companies opening up their resources and expertise to smaller firms within the sector.

• Sharing of resources between SMEs in the same geographic area to drive efficiency.

• Universities and further education colleges focusing on tailor made courses to up-skill junior and middle managers through greater use of unitised learning and Continuing Professional Development (CPD) programmes.

• Using Investors in People as a people development tool.

Ms Anderson said "regulation is not the answer to improving skills. Instead we should adopt a voluntary approach."

"We would like to see more large firms sharing their resources and expertise with SMEs, and SMEs also pooling their resources for training by geographical area, for example across business parks."

"There is a real opportunity to up-skill junior and middle managers so universities and colleges should tailor courses to match these employer requirements."

To read the full report please click here
   

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