Committee of Public Accounts


Press Notice No. 45 of Session 2005-06, dated 25 May 2006


FORTY-FIFTH REPORT: EMPLOYERS' PERSPECTIVES ON IMPROVING SKILLS FOR EMPLOYMENT (HC 862)

Mr Edward Leigh MP, Chairman of the Committee of Public Accounts, said today:

"A productive and competitive economy needs a skilled workforce. Skills gaps in England are estimated to cost £10 billion a year in lost revenue. It is not surprising, therefore, that a recurring theme for my Committee is the need for public funders and the providers of skills training to work more effectively with employers on employment training.

"The Department for Education and Skills spends large amounts of money on employment-related training: some £6.7 billion each year through the Learning and Skills Council. Employers themselves spend more than £23 billion, including the cost of employees' time. But many employers make no investment. A modern economy simply cannot afford to have more than a third of employers providing no training for their staff. And too much of the public funding is still being used to give people aged 16 to 19 the basic literacy and numeracy skills which they should have got at school.

"Employers naturally put their businesses first and so they need to be persuaded that releasing their employees for training makes business sense. Employers need access to straightforward, clear advice on where good quality, flexible training is available. Those who provide training, whether colleges or private providers, should seek genuinely to understand and meet the needs of employers and their employees. And the skills brokers, costing around £30 million under the national programme Train to Gain, must prove their worth by changing mindsets and securing participation by employers who have not previously provided much training for their staff."

Mr Leigh was speaking as the Committee published its 45th Report of this Session, which examined how employers obtain advice on which training to use; what training best meets business needs; how they can be encouraged to support employees in training; and how employers want to influence the development of training

A strong skills base is an important element in a productive and sustainable economy and the delivery of better public services. Skills also contribute to social inclusion, because better skilled people are generally more able to fulfil their potential, earn more and use their skills for the benefit of their families and communities. The Learning and Skills Council's National Employer Skills Survey has, however, identified skills gaps in England costing an estimated £10 billion a year in lost revenue. Skills training is required both to fill skills gaps and to keep up with the standards in skills that our international competitors achieve.

The Department for Education and Skills (the Department) spends around £6.7 billion, through the Learning and Skills Council, on employment-related education and skills training in England. The priority for government funding is training up to level 2 (equivalent of five GCSEs grades A*-C), which is designed to improve employability and to provide a basis from which people can progress to higher level training. Employers are expected to pay much of the cost of training above level 2, which has a greater impact on productivity. Collectively employers spend more than £23 billion, including the costs of training and employees' time. However as recently as 2005, the National Employer Skills Survey showed that more than one third of employers provided no training at all for their staff.

Recent reports of this Committee have recommended that public funders and providers of training work more effectively with employers on employment training:

€ local Learning and Skills Councils should support training providers who have a good track record of convincing employers of the business benefits of training their staff;

€ further education colleges should analyse their local industries, talk to local businesses about their skills' needs and plans, and seek independent feedback from them about the quality of training the college provides; and

€ Ufi and the learndirect service should substantially increase direct work with employers within the next two years.


Click here to view Report