A demand-led skills system? What could be wrong with that?

On the face of it the major political parties disagree on just about everything except skills. Since the estimable Leitch Review of Skills was published in 2006, skills has become a bit too ‘motherhood and apple pie’ for my liking.

We should all by now be familiar with the rhetoric. After 50 years of attempting to become more like Germany/Switzerland/Scandinavia/Singapore (take your pick according to personal preference) through supply side tinkering it is time to give the demand side (i.e. employers) its head. Martin Doel, CEO of the Association of Colleges, reckons there have been some 40 changes to the skills system over the last 30 years. Meanwhile in that time the Germans have had just two changes made in the way their skills system operates.

This may surprise some but such constant change has led to, well, not much of a return. Indeed many commentators argue that the UK has gone backwards in the global league tables. Andreas Schleicher, head of the OECD’s indicators and analysis division, said in 2008 that, despite huge efforts over the last 20 years in the UK, the growth in skills had been “moderate”.

This may be because we spend less and less public funds as young people progress up the education step ladder. The higher they go the less generous we seem to be. By the time they advance to tertiary education the OECD has calculated that we spend less than all other countries as a proportion of total spend from the public purse (25.2%) except for Chile. And Chile is still emerging from the shadow of the Pinochet regime’s economic experiments.

Current economic orthodoxy posits that the higher the educational level the more the individual benefits and so it must be right to ask individuals to pay more for their education. But the other beneficiaries of any skills system are employers. Thus it is also reasonable for employers to invest more in their human capital. In order for this to happen both major parties argue that employers need incentives to step up and take the reins. Hence the recent utterances from the UK Commission on Skills and Employment or former Skills Minister Matthew Hancock MP about employer-led this or employer ownership pilot that.

Not to be outdone, the Labour skills team talk in their recent Apprenticeship report, A Revolution in Apprenticeships: A something-for-something deal with employers, about “giving them [employers] more control over skills funding…” All of which sounds like the skills consensus is an example of the sort of applied common sense so many people accuse the political class of lacking.

Leaving for another time the counter argument to this view of how the economy operates, what is actually happening on the ground in the interface between FE and employers as we move fast towards such an employer-led skills system? What do FE Colleges encounter when trying to work with employers? And what does an employer-led system actually mean? In answering the first question what comes through is that many employers have no real idea what to do and with whom. They need help.

Small and medium size businesses lack the time to engage with the skills system. This isn’t going to change if we hand over ‘control’ of funding to them. They still won’t have the time to engage. Instead they may well largely carry on as before. The recent consultation on Apprenticeship funding reform asked some very leading questions based on a priori assumptions about employer behaviour. I am sceptical. It is often easier to get money for sponsorship of student oriented activity than it is to get SME’s to take on apprentices.

If SMEs in particular do not have the time to engage then what does an employer-led system mean? It means there is a very necessary and real role for brokerage and that means local FE colleges need to step up to the plate and offer themselves in that role. This doesn’t mean simply becoming great at sales. It means becoming great at relationships – being able to build brilliant relationships with a wide range of employers so that the college helps the employers to understand what their skills needs are and then helps to co-produce the resulting solutions.

None of the political parties has yet to clearly articulate this degree of nuance in the system. Until they do ‘demand-led’ may just be wishful thinking.

Nick Isles is deputy principal of Milton Keynes College – follow him on Twitter at @dpmkcollege