Edward Leigh MP, Chairman of the Committee of Public Accounts, said:
"Despite providing work-based training for around five per cent of the workforce, the Train to Gain programme has been mismanaged from the outset. In the face of evidence of what was achievable, targets for the first two years were unrealistically ambitious. The number of learners, the level of demand from employers and the capacity of training providers were at first all overestimated.
"By the third year, demand for training, fuelled by substantially widened eligibility for the programme and by the recession, had increased to the point where the programme could no longer be afforded. Funding to training providers has been stop-start, with many now having to run down the capacity they had been encouraged to build up. Employers with new requirements are being turned away.
"What must happen now is for spending to be brought under control. In the light of experience gained over the last three years of what courses and qualifications have proved most valuable, funds need to be directed at the training and sectors with the most acute needs, and the training delivered by the best quality providers.
"With expenditure on Train to Gain totalling nearly £900 million by the end of 2008-09, it is sobering, to say the least, to learn that around one half of employers whose employees received training say that they would have provided similar training without any public subsidy."
The Committee looked at how the Department for Business, Innovation and Skills (the Department) and the Learning and Skills Council (LSC) can get a firmer grip on demand and spending, how they can increase the effectiveness of training, and how the programme’s efficiency can be improved.
Train to Gain has delivered a substantial expansion of training that is flexible and meets employers’ needs. By July 2009, 1.4 million learners had been supported, and around 200,000 employers had staff involved in training through the programme. Most learners have benefited and some employers have seen business benefits.
There have, however, been serious weaknesses in the way the programme has been managed by the LSC, an executive non departmental public body of the Department.
It started badly with over-ambitious targets, and under-spending in the first two years as the programme failed to sufficiently expand demand for, and supply of, training. In year three, eligibility for training was widened which, together with the recession, increased the attractiveness of the programme for employers.
At the same time training providers were still being pressed to increase training activity. These factors led to a swing from under-spend to overspend, resulting in the current unacceptable position where too much training is in the pipeline and employers with new requirements are being turned away, the report added.
Three common failings in public sector programmes are responsible for this situation:
initially high targets that do not reflect reality as they are not based on evidence of what is achievable
action to address under-performance that takes insufficient account of trends in demand and capacity and economic factors, such as recession
poor, untimely management information, making it difficult to identify and respond to problems quickly
For Train to Gain, the priority is to bring expenditure under control while minimising damage to training providers and the demand for training, the PAC said. The Department and the LSC should focus expenditure on training with the most benefits in sectors with the highest needs, and with providers who provide good quality training.
The Skills Funding Agency, which is to take over the LSC’s responsibility for Train to Gain in April 2010, should address these issues in the future running of Train to Gain and in their management of other demand-led training programmes, such as Skills Accounts.