Here are three ways the government can make LSIPs a success

18 Jun 2022, 6:50

The government must encourage employers to invest, not just benefit from, the skills system, writes David Phoenix

We currently have a higher education bill, a levelling-up and regeneration bill. A key plank in delivering on these linked agendas will be skills delivery. Yet we still lack explicit details about the further rolling out of local skills improvement plans (LSIPs).

The idea of asking employer representative bodies to work with colleges and universities to develop plans for making technical training more responsive to local skills needs was first set out in the skills for jobs white paper. Since then, the government has been running trailblazer pilots in eight areas across England.

As CEO of an education group with a university, two colleges and two academies, and which works with more than 1,500 employers, I’ve been watching the pilots’ development closely.

While I support promoting collaboration between local employers and education providers, I’m concerned we, too, often treat businesses as customers rather than partners within our skills system.

So I am worried that the current proposals for LSIPs, coupled to changes to the loan system, could reinforce this behaviour and create a ‘welfare state’ for business-led courses.

I’m worried we too often treat businesses as customers

With this in mind, I hosted a roundtable on LSIPs with representatives from the Department for Education, mayoral combined authorities, employer bodies, think-tanks and professional bodies.

There were three main takeaways from the discussion.

1. SMEs need help assessing their skills needs

Certain employers struggle to articulate their actual skills needs. This is particularly true of small businesses lacking established HR departments, businesses working in emerging sectors and non-chartered professions.

Given that SMEs make up 99 per cent of UK businesses and cover the entire country, their involvement is crucial in supporting levelling-up.

Therefore, successful LSIPs will require investment to help SMEs understand the skills they need to grow, and require leadership (not just responsiveness) from colleges and universities.

2. Employers need to invest more in training

Once employers have articulated their skills requirements, they must contribute to meeting them.

Otherwise LSIPs will become nothing more than ineffective ‘shopping lists’ of qualifications. In particular, employers will need to spend more on training rather than relying solely on employees to self-fund using loans.

Employer investment in training has fallen 28 per cent in real terms since 2005. If employers are to be partners rather than customers in our skills system, then they have to invest as well as benefit. The government could encourage this by providing a tax incentive for those companies that invest in training needs identified in LSIPs.

3. People with few or no qualifications cannot be left behind

Finally, it is crucial that those with low or no qualifications are not excluded from opportunities LSIPs could create. Individuals with degree-level qualifications are already three times more likely to receive employer training than those without.

In supporting level 4 and 5 delivery, LSIPs need to recognise both the individual, employer and societal benefit of helping educational progression for the 17 per cent of individuals qualified to level 2; or indeed many of the 54 per cent of the population qualified to level 3 but lacking requisite English and maths qualifications.

There is no one obvious solution to tackling the low-skills crisis. Suggestions from the roundtable included:

  • greater use of accreditation of prior experiential learning;
  • ensuring there are ‘gateway’ institutions within local areas;
  • and using the new lifelong learning entitlement to help create ‘stackable’ credit-based qualifications that can be built up over time.

The government must recognise that colleges, universities and employers need to work together as genuine partners to share the cost of skills delivery.

There’s no question that we already place many demands on businesses. But if we expect them to be one of the main beneficiaries of the skills system, it has to be reasonable to suggest that what they can get out of it directly reflects what they put into it.

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