Making the skills market work should be our priority – not ending it

The levy system is a long way from perfect – but the principles that lie behind it, in terms of building a functioning skills market, are valuable and worth fighting for, says Neil Carberry

The manifestos are out, and we are less than a month from ministers returning to work. The good news is that the past week has shown the idea of FE as the “Cinderella sector” is definitely passé – it is front and centre on innovation, inclusion, innovation and productivity.

But fine words – even if now backed by a bit more hard cash – won’t deliver real change. That requires a relentless focus on delivering reforms, and no longer re-inventing policy on a two year cycle that destabilises firms, providers and learner experience.

So it is time to start targeting the right things. Much has been made of the 2015 commitment to three million apprenticeship starts by 2020. Many of these starts will lead to great careers. But we all know that it is not the start of the apprenticeship that really matters – it is where it takes you. Technical and professional learning is always – first and foremost – about outcomes for learners.

Sadly, that is not always something that comes across in the targets that are set for the English skills system. Too often the mere existence of provision is deemed to be success – but training that does not help learners move on is wasted money and wasted time. We can do better than this – and now have the tools to do so.

The incentive that exists for employers is reclaiming the levy

For a decade, the holy grail of skills reform has been better matching supply and demand – meeting employers’ needs with high quality provision that is attractive to learners. Successive governments across the political spectrum have been promising this since the Leitch Review, and yet the Department has always paid the piper and called the tune.

For all the challenges with the levy system – and the CBI was clear about the risks of moving so quickly – current reforms offer us the chance to break out of this cycle. By putting real power in the hands of employers to spend levy money and design courses, provision should be better tailored to jobs that will provide better outcomes.

And for providers – whether college or private – the reforms offer the chance to build more stable, long-term relationships with companies. Over time, better clustering in local areas and in sectors will help form serviceable groups of smaller companies, too.

The incentive that exists for employers to drive all this is reclaiming the levy. So the CBI was disheartened to see AoC call for employer access to their own levy funds to be curtailed. This works against the whole principle of the reform. It risks a return to a top-down, government-driven approach that might help some providers, but would lead to subsidies for provision that fails to help learners progress. 

Of course, there is significant room for improvement. The CBI has called for flexibility on how levy money is spent, so it better suits employer needs. We were pleased to see this reflected in manifestos. But we have also said the Department for Education, whoever leads it, needs to invest in commercial and market skills, including at the Institute for Apprenticeships. This is vital because we are moving to a model of a managed market, and high quality work on incentives, provider sustainability and quality will be key to success.

So we will be looking for a new government to focus on longer term outcomes. This requires employers to be at the heart of the system, with a more stable policy framework than we have seen in the past. A focus on social mobility is also important – but this can only be delivered through engaged employers.

The levy system is a long way from perfect – but the principles that lie behind it, in terms of building a functioning skills market, are valuable and worth fighting for. Let’s hope the politicians jump for evolving the current approach and maintaining the idea that success is not just the existence of provision – it has to be about more than that.


Neil Carberry is Director for People and Skills at the CBI

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