How the Truss government could boost skills – without committing any new money

17 Sep 2022, 6:00

Funding and contracting rules are too bloated and bureaucratic for a start, writes Jane Hickie

The new Truss government has promised a “fiscal event” before the end of September. This will essentially be a mini budget, setting out the new administration’s economic priorities.

Truss has been clear in her view that she can boost economic growth by cutting taxes and tackling the cost-of-living crisis.

We can expect much more detail on this over the coming weeks, including the new energy announcement for households and businesses.

However, the government must realise that sustained economic growth will simply not be feasible without a sustainable skills sector. With any fiscal event, we will always call for increased funding. We know this is essential if we are to build a world-class skills system.

But there are actually a number of things the government could do without committing any significant new funding at all.

These interventions could make a big difference at a time when purse strings are understandably tight.

Cut red tape

Aside from rising costs and staffing, by far the biggest issue for providers is navigating the bureaucracy involved with delivering skills programmes.

This bureaucracy is also a huge barrier for employers – particularly small and medium-sized businesses – even though demand for in-work training is high.

The government could make a real impact on getting more employers engaged in skills without committing significant new money, just by making the existing system much more accessible.

The Department for Education clearly recognises the scale of the problem and has committed to undertaking a simplification project, which is welcome.

Moving to an employer-led system for apprenticeships was absolutely the right call.

However, the apprenticeship service remains a significant barrier. Providers have had to employ extra staff just to administer the system and support employers.

The fact that so few non-levy employers are set up on the system frankly speaks for itself.

The new system for advertising apprenticeship vacancies is causing delays, when employers need apprentices now.

Implementing an auto-enrolment system for employers who could then activate their account would be a significant improvement, along with stripping out duplication and layers of administration.

This would save time and money and should be at the heart of the DfE’s plans.

The apprenticeship funding rules need addressing too. Now at more than 140 pages, they have become bloated and overly bureaucratic.

We need the right measures in place to ensure accountability, but providers should be able to get on with delivering high quality training for learners and employers, without getting wrapped up in red tape.

Reducing bureaucracy around the funding rules and contracting would save providers time and money at a time when many are struggling to stay afloat.

Recycle underspend effectively

We know various skills programme budgets are currently underspent – including apprenticeships, traineeships and the adult education budget.

The reasons are complex, from the ongoing impact of the pandemic on learner numbers to trends in the wider labour market.

Treasury should not use this as an excuse to claw back funding. A strong economy relies on a well-trained workforce.

Without committing any new money, the government could use programme underspend to implement a range of learner and employer incentives to boost participation in skills.

This could include reintroducing the new hire £3,000 employer incentive, which we know had a really positive impact on boosting apprenticeship starts, particularly at level 2 and 3 and for those under 24 years old.

We also know that employer demand for traineeships remains high, yet providers struggle to get learners on to a programme.

Implementing a training allowance would incentivise participation in traineeships – a programme that has proven positive outcomes, particularly for those from disadvantaged backgrounds.

A final call – I hope the new government recognises the significant role our sector plays in delivering economic growth.

You can’t upskill the nation on the cheap – there is clear evidence of return on investment in high quality skills training.

But at a time of economic uncertainty, and with a political agenda of reducing public spending, it makes sense to consider how we can be most efficient with what we already have.

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