CONFRONTING THE SKILLS CRISIS: Agents for change - The Government's new training structure puts the demands of employers centre-stage. Through licensed Sector Skills Councils, they'll be able to tell training providers exactly what skills and talents they need.

Last Updated: 31 Aug 2010

The Government's new training structure puts the demands of employers centre-stage. Through licensed Sector Skills Councils, they'll be able to tell training providers exactly what skills and talents they need.

If the International Olympic Committee introduced a new event for the Athens games next year - that of 'Reinventing the wheel' - the UK would be favourites for the gold. In spite of past initiatives, reviews and reforms, the problem of our low educational attainment endures.

We now have a workforce in which nearly eight million people have failed to acquire the equivalent of five decent GCSEs, and where too many still enter the world of work having had a dismal experience of education and training.

We shouldn't be surprised if those who have been let down by the education system have a negative attitude to the idea of learning. This is a situation that Digby Jones, Director General of the CBI, has rightly called 'shameful'.

Brendan Barber, the new general secretary of the TUC, has also identified skills as an urgent priority. 'The least skilled work is the least satisfying and least productive work,' he told this year's TUC conference. 'Millions are working way below their talents and capabilities. They suffer, and the country loses out ... We need more high-performance workplaces.'

In July 2003 the government published a new White Paper, '21st Century Skills - Realising Our Potential'. It is a hefty 140-page document. But it is worth a look, because it brings with it very good, and significant, news. The Government has listened to, and understood, the critics of our 'shameful' performance on skills. The cycle of 'initiativitis' has been broken. The White Paper launched a completely new skills strategy for this country.

It is demand-led - that is, designed to meet the needs of employers. It involves a radical rethink of the country's education and training system, under the auspices of the Learning and Skills Council (LSC). It is part of a coherent approach, consistent even with the renewed drive at primary school level for improved literacy and numeracy.

The White Paper is clear that employers' needs must be placed centre-stage. It says: 'Skills are not an end in themselves, but a means towards supporting successful businesses and organisations. We must give employers more support in accessing the training they need, and more influence in deciding how that training is provided. That is what we mean by a 'demand-led' system.'

At the heart of the skills strategy stand the Sector Skills Councils (SSCs), which are new employer-led bodies. A total of 23 SSCs will be in operation by the middle of next year - ahead of the original schedule - covering most business and industrial sectors. Between them, they will service more than three-quarters of the country's workforce.

SSCs come into existence officially only when they have been granted a licence by the Secretary of State on the recommendation of their regulating authority, the Sector Skills Development Agency (SSDA). This new agency, launched in April 2002, has a pounds 43 million budget, and is charged with ensuring that SSCs are performing their tasks effectively.

Says Christopher Duff, chief executive of the SSDA: 'We have a very high-quality threshold for the SSCs. We will expect a high level of governance and performance, but with that will come operational independence.

'Key to the success of SSCs will be industry leadership,' he explains.

'A core component will be the presence of business leaders with expertise in their field.' A typical SSC will average a budget of between pounds 4 million and pounds 5 million, and will be staffed by between 25 and 40 people. Each SSC will be an agent for change in its sector, bringing together employers, trade unions and industry experts.

One of the main tasks of any newly licensed SSC will be to draw up a sector skills agreement. This will take the form of an analysis of the current and future skills needs of the sector. The agreements will have to be reached for the SSC to stay in business. It is just one part of the more rigorous approach that the skills White Paper has brought about.

The SSDA will supervise the work of the SSCs on an ongoing basis. Employer satisfaction with their SSC, and commitment to it, will be monitored.

Again, this is designed to ensure that employers' demands for relevant skills development are being met.

SSCs will also require training providers - further education colleges and private companies - to be flexible and responsive to the needs identified in the sector skills agreements. And in its new role co-ordinating the work of training providers, the LSC - with a budget of more than pounds 8 billion - is a far more muscular presence than the incoherent network of TECs that it has replaced.

If the new structures work, the traditional employer complaint about the inflexibility of training providers should become a thing of the past. As Professor Mike Campbell, Director of Policy and Research at the SSDA, puts it: 'Employers' needs will be much better articulated thanks to SSCs. We will also have better skills and labour market intelligence, and a really sound assessment of the skills needs in a sector.

'Employers, through their SSCs, will be able to tell training providers: 'This is what we need. This is what we want you to give us',' he continues.

'This will represent a big change in the world of training. We are going to start with what is needed rather than with what is already being supplied.' In this way SSCs are going to make their presence felt.

SSCs will also have a role in influencing central government policy, with their advocacy soundly based on real market intelligence. And far from being London-centric operations, SSCs will be located around key industry hubs and clusters, working in collaboration with the new regional development agencies to maximise their impact.

Several challenges remain. A particular effort will be required from SSCs to harness the support and participation of SMEs, which have historically been ill-served by the training industry. With more limited resources, smaller firms need targeted help if their development needs are to be met.

There is also employer scepticism and apathy to overcome. Scepticism because, in the past, National Training Organisations (NTOs) claimed to be performing at least part of the role now being fulfilled by SSCs. Indeed, the abolition of certain NTOs has been controversial and unpopular in some sectors.

And apathy, because there are still many employers out there that have not accepted all the arguments for investing in staff. Natural selection may tell on many of them, but not all. And while these firms remain in business they may act as a drag on others in their sector.

There has been impatience in some areas that SSCs have taken as long as they have to become established. This, the SSDA points out, is an indication of the care and rigour with which they are being established. SSCs are not simply 'rebadged NTOs', as one source puts it. The SSDA has to be sure that new SSCs are robust and fit for purpose before winning their licence to operate.

These plans are ambitious - massively so. They constitute an unprecedented degree of co-ordinated strategic action. British business has never seen the like of it before. The door is now open to them to play an active part, to make their voices heard and influence change.

If these new structures prove successful on the ground, a fatal blow will have been struck against the low-skills culture once and for all.

'If we get this right, it really will be a win-win-win for employers, employees and the training industry,' says SSDA's Campbell.


About 21 million of us use IT in some form at work. But 57% of employers say that their staff are not adequately trained in IT to do their jobs properly. This mismatch is severely undermining UK productivity. No wonder, then, that e-skills UK, one of the first SSCs to be licensed earlier this year, is focused hard on the IT skills agenda. Backed by all the major IT firms, with CEO-level engagement, e-skills UK serves the IT, telecoms and contact centre (aka call centre) industries.

One of the key challenges for e-skills has been establishing skills frameworks - nationally agreed definitions of the techniques and skills required by employers in a language they understand.

Currently, three of these frameworks have been created, for IT professionals, Contact Centres staff and general IT users. 'Having created these frameworks, we needed a way to take them to market,' says e-skills chief operating officer Terry Watts.

So the most ambitious piece of work being developed by this SSC is the new e-skills passport. This is a brand-new web service that allows employers and employees to identify and understand the IT skills possessed by staff and potential recruits. It works by people self-assessing their current IT skills against the IT user skills framework, allowing HR managers to track skills levels quickly and accurately, efficiently identifying individuals' future training needs.

Launched in October 2003, the e-skills passport will have four key elements to it: employee self-assessment, identifying training needs, planning development programmes, and helping people to gain external verification of their skills. e-skills UK will also be able to aggregate data derived from the passport, generating valuable labour market intelligence. 'Employers will be able to use these passports as a tool to understand and improve their workforce IT skills more effectively,' explains Watts. 'Many have signed up already - there are thousands of e-skills Passports out there.'


Asked why he focused all his criminal attention on banks, the notorious bank robber Willie Sutton replied: 'Because that's where the money is.' Tesco has taken a different approach to building new stores in deprived areas. It has gone to where the money isn't. The firm's origins lie in London's East End, where Jack Cohen opened his first store almost a century ago. Now, in 12 sites around the country, Tesco has launched stores in partnership with local authorities and other agencies with a remit to boost economic activity in deprived areas, training and developing people and offering a guarantee of employment. Tesco's commitment to taking on low-skilled staff and training them is impressive. Training is based on a 'first impression' interview, not formal qualifications. All candidates are given a job offer before they start. In Beckton, east London, Tesco distributed leaflets and ran open days to attract applicants such as Mary Skyers (above). A basic skills assessment helped bring them up to nationally accredited standards in English, literacy and numeracy. Applicants received a pre-interview briefing and were then offered the 'job guarantee' on completing training. The firm has received plaudits for its regeneration programme from the local MP, the trade union Usdaw, the local authority, and the head of JobCentre Plus. Although this initiative does not form part of Tesco's involvement with Skillsmart, the SSC for the retail industries, it is a prime example of the sort of skills development that Skillsmart is promoting. The firm is in no doubt about the value of its work. 'We believe that sustainable regeneration depends on reviving the social and economic fabric of communities as well as their physical surroundings,' the company says.


When Phil Wade and Leslie Zunz set up as a freelance TV crew 15 years ago - Phil on sound, Leslie on the camera - they had no idea that by the end of 2003 they'd be employing 46 people, based in a 24,000 sq ft office in south London, turning over pounds 6 million a year. Picture Canning is now an established TV crew and video equipment hire specialist, its services in demand by all the major TV channels and production companies, their talents having been deployed on programmes such as London's Burning, Crimewatch, the South Bank Show and Changing Rooms. What is remarkable about Picture Canning, doing business in a highly competitive industry, is that more than half its staff are former or current trainees. Picture Canning has effectively reinvented the sort of TV apprenticeship that has long since been 'rationalised' out of the industry. 'We are entirely up-front about what our trainees can expect,' says MD Phil Wade. 'We say we will offer very little money initially and very long hours, but that at the end of four or five years they will be fully trained in all the key technical skills they need to have a good freelance career.' Trainees can expect to triple their salary after five years. But this is not soft-heartedness. 'We have selfish reasons for doing this,' Wade says. 'I need to know that there will be a continual stream of people to employ. Margins are always under pressure in this business.' Skillset, the trailblazer SSC for the audiovisual industries, sees the firm's work as a benchmark for an employer-driven approach to raising skills levels for commercial advantage, and points to the fact that the company maps its training against the occupational standards produced by Skillset as a main reason for Picture Canning's success in the independently judged B+ talent development award this year. Wade's father Steve, who directed Richard Dimbleby's live outside broadcast of Churchill's funeral in 1965, would doubtless have approved.


The question you have to ask yourself is: Would you give a young guy with only three GCSEs and a one-year GNVQ a chance to work in your business? The British American Racing Formula 1 team (BAR F1), based in Brackley, Northamptonshire, did.

Now Oliver Bray, still only 21, working on a Higher National Certificate in engineering design at Buckingham University, is well on the way to becoming one of BAR F1's most valued employees in the design team. Few stories could better illustrate the importance of recognising potential and encouraging it to flourish. Says Mick Wilby, manager of the R&D lab at BAR F1, who was one of the first to give Oliver a break at the firm: 'He started as an apprentice in the machine shop, and when he came up to the R&D lab you could just tell he was going to do well, he was enjoying it so much. He was one of those bright lads who showed a lot of enthusiasm.

The more you encourage that in people, the more you gain. If you are enjoying what you do, you learn that much quicker.' Formal education had not served Oliver well. Before joining BAR F1, he had been working seven days a week to make up for the ground he'd lost at school - three days a week at college for the GNVQ, two days at a local garage and all weekend with the garage's car racing team. Perhaps people with Oliver's kind of initiative and commitment will always do well. As far as Semta (the SSC for science, engineering and manufacturing technologies) is concerned, this is a classic example of the gains to be had by supporting training and development. Oliver is pleased about it, too. 'I'm really in my dream job now,' he says. And the future? 'Carbon gearbox casings.' You read it here first.

- For further information about how to get involved with the Sector Skills Development Agency and the Sector Skills Councils, visit, or e-mail

Alternatively, you can call 01709 765 444.

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