Part Two of Jethro Marsh’s Look at the CBI Report on FE and Competition in Skills

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Continuing from Part One of the summary of the CBI’s report on FE and skills, the Confederation of British Industry (CBI) does report that certain colleges have engaged successfully.

The report does state that there are indeed examples of colleges that the CBI has found are interacting with employers effectively. The two examples cited are those of Newcastle College, and Park Lane College, who are described as examples of “what can be achieved when the public sector responds well to competition and highlights the success of their employer engagement strategy.”

However, the CBI also point out that this successful employer engagement is not something that their members have experienced as a rule, but rather as an exception; only 25% report having been contacted by a college to provide training. The issue of “ring fenced” funding for the colleges that is never made available to Private, Voluntary and Independent (PVI) providers is also raised, which would appear to be changing with the statement from Government concerning repeatedly poor management in colleges being subject to tender.

The LSC’s Road to Reform

The Learning and Skills Council (LSC) comes in for some criticism as well, as the CBI believes that in spite of the freedoms that are given the body to innovate progress has “remained slow.” Satisfaction with the LSC’s performance is also found to be low; whilst 61% of firms have been in contact with their local LSC, only 31% found the information received to be of any help. The report also stated that only 24% of smaller firms found the information to be relevant and useful to them.

The report acknowledges that the LSC is fully seized of the need to change, quoting from Mark Haysom, the Chief Executive, who said: “We have to play an active role, and more importantly we know that role has to be rebalanced.” The CBI agrees that the LSC has made some progress; however they call for even greater reform, stating: “The LSC must begin to manage the market by creating a level playing field ““ funding the best value provision, regardless of provider, and giving clear signals to the market by rewarding success and penalising failure.”

The Key Date? 2008

Essentially, the key date is 2008. After this point, the funding picture will undoubtedly be different and the CBI believes that an end to the “ring fenced” funding and an opening of the training market to competition represent the best chance for a fully effective training and skills sector. They believe that “Competition should be used as more than a tool to deal with failure,” implying that the threat of private tendering for continuing poor provision is a good first step, but only a first step.

The argument for a reform of funding streams, says the CBI, is that this will offer a more employer facing and demand led training sector. The report, referring to the lack of an incentive currently for those benefiting from guaranteed funding to actually interact with employers in training provision, states: “Ending ring-fencing would mean employers and individuals could purchase training eligible for public funding from any LSC accredited provider, be it an FE college or not.”

The CBI’s stated five key steps for reform are as follows: “A clear delivery plan will inspire confidence; reform of funding streams must encourage demand-led provision and innovation; competition should be used as more than a tool to deal with failure; markets should be run in a fair and transparent way; and better assessments of course quality should be developed.” These measures, believes the CBI, will be the crucial factors in the future success of the skills sector.

The CBI believe that the removal of these barriers to funding would open up the training market to “specialist” area providers. This, they believe, would drive up the quality of provision, which would in turn increase employer confidence in FE’s ability to tackle the task it has been given by the Government, of being the “engine room” for skills for the economy.

Jethro Marsh

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