IoD urges Government to learn skills policy lessons from the past

Dated: 6 July 2011

In a new report published today by the Institute of Directors and education and skills researchers CFE, the consequences of a flawed skills system to the economy are laid bare. Despite ten years of intense government activity and effort on the skills front, 47 per cent of company directors report that some of their employees have gaps in their skills.

The report, based on a critique of government policy in the 2000s allied to research carried out among employers, sets out to challenge existing thinking about skills policy and to offer an ‘employer’s eye view’ of the skills system. It analyses the latest skills strategy and concludes that while the new government’s approach to skills policy should be broadly welcomed, there are some worrying signs that it may repeat policy mistakes of the past.

Key points from the report:

  • Skills deficiencies continue to shackle businesses and undermine economic recovery. According to the survey evidence presented in the report, 58 per cent of company directors reporting skills deficiencies said that skills gaps were holding back the growth of their firms.
  • The Government skills strategy published last year, Skills for Sustainable Growth, offers a positive prospectus for the future of skills policy. It is based on sound principles and the commitments to free up the skills system and to move away from a target-driven, command-and-control model should be applauded. However, other aspects of the strategy disappoint: the simplification of the skills infrastructure is too timid and the encouragement of collective measures such as training levies is unwelcome.
  • The IoD/CFE report outlines six headline proposals to help realise the potential of Skills for Sustainable Growth and deliver a more effective skills system. They include recommendations to measure the effectiveness of the skills system rather than counting aggregate numbers of qualifications; to give true purchasing power to customers of training; and to free up training providers to respond to businesses’ needs.

Commenting on the report, Miles Templeman, Director General of the Institute of Directors, said:

“There is much good in current skills policy, but from the employer perspective it can look too much like situation normal. And situation normal doesn’t work. It is vital that the Government concentrates on supporting the majority of employers that do invest in training, rather than being preoccupied about the minority that do not. Good intentions can easily result in unhelpful and unnecessary interventions. Employers will always be best placed to know what training they need: it is better to let competition decide what works in business, not government policy.”

James Kewin, Managing Director of CFE, said:

“Our research suggests that skills policy should focus on creating the environment in which employers can invest in the skills of their workforce and training providers can respond effectively to their needs. Employers, and those colleges and providers that supply training to them, have the potential to work together even more effectively than they currently do, but the role of government in this relationship should be informed by the lessons from previous policy interventions we identify in the report.”

Read the full report at: www.iod.com/skillssystem

Sarah Trivedi
Director of Corporate Services
CFE, Phoenix Yard, Upper Brown Street, Leicester, LE1 5TE
Tel: 0116 229 3300
Mob: 07970 902170
Email:  sarah.trivedi@cfe.org.uk

ENDS

Contact Points

Edwin Morgan
Media Relations Manager
Institute of Directors, 116 Pall Mall, London SW1Y 5ED
Tel: +44 (0)20 7451 3392
Mob: +44 (0)7814 386 243
Email: edwin.morgan@iod.com
Website: www.iod.com/policy

Notes to editors

  • CFE are research and consultancy specialists in education, employment and skills. They have been providing expert services to public and private sector clients for twelve years. CFE work on behalf of government departments and agencies, membership bodies, universities, colleges and employers. Their experience and unique understanding of the local, regional and national policy landscape enable them to deliver services that are innovative, practical and responsive to the needs of their customers. For more information visit www.cfe.org.uk
    • The IoD (Institute of Directors) was founded in 1903 and obtained a Royal Charter in 1906. The IoD is a non-party political organisation with upwards of 45,000 members in the United Kingdom and overseas. Membership includes directors from right across the business spectrum – from media to manufacturing, e-business to the public and voluntary sectors. Members include CEOs of large corporations as well as entrepreneurial directors of start-up companies.
    • The IoD offers a wide range of business services which include business centre facilities (including ten UK regional centres [three in London, Reading, Birmingham, Cardiff, Manchester, Nottingham, Edinburgh and Belfast] and one each in Paris and Brussels), conferences, networking events, virtual offices and hotdesking, issues-led guides and literature, as well as free access to business information and advisory services and a comprehensive Information Centre. The IoD places great emphasis on director development and has established a certified qualification for directors – Chartered Director – as well as running specific board-level and director-level training and individual career mentoring programmes.
    • In addition, the IoD provides an effective voice to represent the interests of its members to government and key opinion-formers at the highest levels. These include ministers, constituency MPs, Select Committee members and senior civil servants. IoD policies and views are actively promoted to the national, regional and trade media.
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