Greater clarity is needed to ensure taxpayers know where their money is being spent, a further education (FE) body has warned as a new pilot is launched.

The Association of Employment and Learning Providers (AELP) say that government contribution to employer funded training should be clearly specified and should not subsidise training investment companies “have always made”.

It follows Prime Minister David Cameron’s announcement of a new £250 million pilot fund for businesses to design, develop and buy vocational training. An initial fund of £50m is available in 2012/13 for employers to bid, but if it is a success then a further £200m will available the following year.

However, the specification has yet to be written and the AELP will be making suggestions about how it should be framed. Graham Hoyle, the AELP chief executive, said: “I have absolutely no problems with the concept of ‘employer ownership’ and have indeed argued that the pendulum has swung far too far in the direction of government interference.

“It will be very important, however, for the government to be perhaps clearer than it has ever been about what it, on behalf of the taxpayer, is paying for.”

He added: “What the government should never be paying for is development of specific vocational skills required by employers to run their own, profitable, businesses. These skills have always been funded by employers, who have recognised the bottom line return that such investments invariably bring.”

At the Association of Colleges (AoC) Annual Conference last week, Business Secretary Vince Cable described the pilot as a “radical” approach.

He added: “The introduction of a pilot using employers as purchasers might sound threatening to some providers, and perhaps to some of you, it actually represents an opportunity for the best to expand.

“We aim to build on, not undermine, the strong relationships many of you already have with employers. Our approach will be flexible, rather than bureaucratic – enabling you to work more closely with business.”

AoC chief executive Martin Doel, although admitting that not enough detail was available yet, questioned the plan. Mr Doel asked: “What accountabilities will they accept for receiving or having direct control of skills funding?

“And how will they demonstrate that they are delivering public value, just as colleges deliver public value?” During a press conference, Mr Cable responded to Mr Doel’s questions.

Mr Cable said: “The UKCES, which is the umbrella organisation that actually installs the sector skills councils and operates the levy schemes and so on, that is the main vehicle through which the employers channel their concerns.

“But accountability and the use of public money will be done in the normal way. The Skills Funding Agency is the key agency in government, which will be held to account for the money they spend, just as colleges are when they’re directly funded.”

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