The Centre for Cities initial reaction to the Leitch Review of Skills.
We are impressed by the principles which Leitch has used to underpin recommendations, but we’re not sure about the recommendation to build on existing structures. For instance, will it bring greater responsiveness to local conditions and local demand?
Of the specific recommendations, the following will have the biggest impact for towns and cities:
We particularly welcome the integration of skills and employment services, which is a step forward in tackling worklessness, but need more detail. Streamlining the Learning and Skills Council is also welcome and overdue.
A new Commission for Employment and Skills with a network of lower level Employment and Skills Boards should strengthen employer engagement, but seems to be a rather toothless tiger. We need more detail on the role and responsibilities of the Employment and Skills Boards, which should come with the Treasury’s review of sub national economic development and regeneration.
It’s going to be a tough challenge to encourage employers to invest more in “portable skills” for their employees – transferable skills are the most vulnerable to ‘freeriding’ on the investment of others. Evaluation of the Employer Training Pilots by the Institute for Fiscal Studies found that there was little evidence of additional training being provided, suggesting that employers were substituting the government subsidy for there own investment in training.
Leitch touches on education and schooling for young people, but I am not so sure that concentrating so much on the current stock of adult workers is right. The interim report showed that the cost benefit ratios for improving the skills of those still at school were much better than improving adult skills. In the long term, wouldn’t it be better to concentrate more on the flow of young people coming through than the current stock of adults?
It’s not all that easy to see what the costs of recommendations and financial implications are, but there was a lot on this in the interim report.
A provider/supply driven system.
The UK is falling behind competitors but appears to be better on high level skills than low and intermediate.
Training by employers is disproportionately focused on high skilled workers who are five times more likely to be trained at work than low skill workers.
Talks about being a world leader in skills – upper quartile of OECD countries.
Potential net benefit of at least £80 billion over 30 years, an annual average of £2.5 billion, through increased productivity and employment, based on the evidence and cost benefit model developed in the interim report.
Between Government, employer and individuals with the balance of responsibility being:
A Commission for Employment and Skills to strengthen employer voice, merging the Sector Skills Development Agency and National Employment Panel, to
The Commission will also ensure better integration of the employment and skills services.
Reform, re-licence and empower Sector Skills Councils with a lead role in developing vocational qualifications – only those approved by the SSC should get public funding, and role in raising employer engagement and demand for skills.
A Network of employer led Employment and Skills Boards reporting to the Commission:
“Their role will be to engage local employers, articulate local labour market needs, scrutinise local services and recommend improvements in integrating labour market and training support. Engaging local employers will improve the matching of work-ready applicants to sustainable jobs, including the disadvantaged. This network will rationalise and build on successful city, employer coalition and regional models.”
The Review recognises that employment and skills boards are already developing through local initiatives in a number of cities and the need to avoid a ‘one size fits all model’ but recommends that the Boards should be licensed by the Commission for Employment and Skills and that geography should fit with the conclusions of the forthcoming HM Treasury review of sub-national governance.