The government gave away many of its levers for reacting quickly to a skills shortage, writes Julian Gravatt
On Sunday, the government announced £10 million for heavy goods vehicle (HGV) driver “skills bootcamps”.
This is understandable given current driver shortages across England, which have been linked to the fuel crisis.
Ministers wanted to act quickly on a driver shortage so introduced a skills measure and a three-month visa.
What is interesting is that the Department for Education used the National Skills Fund rather than the bigger apprenticeship budget to help a sector with workforce supply.
Perhaps this is obvious. No one starting an apprenticeship now would be finished by Christmas.
But, even if they did, government gave away most of its apprenticeship levers to employers and the Institute for Apprenticeships and Technical Education in 2017.
So when DfE needs to act quickly, it has to do something else. Apprenticeships don’t help in the short term.
What about the long term?
There are standards in place and the post-2017 system puts employers in charge of the money.
Large firms have two years to spend the levy they pay or they can transfer funds down the supply chain. Smaller firms can access apprenticeship funds, albeit with certain obstacles like co-funding.
So, is the apprenticeship system part of the solution? I don’t know. What’s worse, I’m not sure the industry or policymakers know either.
A core feature of the current apprenticeship system is secrecy.
A core feature of the current apprenticeship system is secrecy
Because employers pay their levy to HMRC, their details, how much they pay and what they spend on apprenticeships are kept secret.
Taxpayer confidentiality is a core principle but it results in an absence of data about spending.
Employers in the retail, transport and distribution sectors have paid hundreds of millions of pounds in levy since 2017 yet very little of this is being spent on directly relevant apprenticeships.
It is easy to speculate why transport apprenticeship numbers are low but, without any data on what transport employers are doing with their levy funds, I’m not sure anyone knows which reason is relevant.
HMRC rules reduce scrutiny of actual employer spending and contribute to a situation in which Treasury had to find £10 million in a crisis.
Another factor may be the way employer decision-making is individualised in the English apprenticeship system.
Employers are given an apprenticeship account, some of which they can transfer, but there is no mechanism to pool funds.
This may be fine for some parts of the economy but it’s different from most levy systems in other countries or those that operated in UK the 1970s.
The Construction Industry Training Board and a few other sectors still operate a pooled levy. Perhaps this approach needs a review.
And then there’s the question about migration and skills.
There is some controversy about whether Brexit is a direct cause of the immediate HGV driver shortage but there should be no disagreement on the fact that this is a long-term issue.
The 2021 migration rules exclude jobs at level 2 from skilled worker visas and this has been clear policy since 2018.
Transport, food and care have been clearly identified as sectors affected by this change, but only in Home Office documents. Where’s the policymaking to work through the implications?
The post-Brexit migration rules were a hefty government intervention in the jobs market but our current approach to skills relies wholly on employers to work out a response individually. This just doesn’t work.
We know that leaving everything to the market in education often doesn’t work. Adults under-invest in themselves and are reluctant to borrow for training. Employers focus on short-term needs.
If UK migration policy cuts inflow of people to some sectors, skills policy needs to react.
Workforce planning is difficult and often fails, but sometimes it might be better to have a go.
DfE is moving forward with local skills planning arrangements with the intention that these should guide the single skills fund. Perhaps they need to be a tad more ambitious.
So they should think about planning apprenticeships and definitely publish more information.
Finally, they must use the forthcoming spending review to allocate a bigger budget, and set some national objectives.