Transcript What does policy look like now the money’s run out?

SKILLS POLICIES IN A TIME OF
AUSTERITY – the challenges of
adopting new ways of thinking
and acting
Ewart Keep
Centre on Skills, Knowledge &
Organisational Performance
Aims:
• Share with you some ideas on the nature of the
problems we face (mainly structural) and where
policy might go next in an ‘era of austerity’ that
may last for a decade (or more).
• Stimulate thinking on both where policy should
go next, and what the implications (short and
long-term) of reduced government funding might
be the skills system, and particularly for the role
of employers therein.
There are two potential lenses:
1. The immediate future and all its problems, and
how the various actors cope with these.
2. The longer term future and where you might
want to be in 5-10 years time.
Dealing with 1 is vital, but without a sense of 2
you may never get to where you want to be!
The ‘triple whammy’ of doom!
• Government funding is sailing over a cliff, especially
post-19. ‘Greater freedom’/New Localism = you
choose where to make the cuts, or you find new
sources of funding
• Employers’ willingness to pay is endlessly talked about
by policy makers, but evidence suggests it may be
patchy and limited.
• Low income individuals are facing falling real wages.
How can they pay (more) for education and training?
Against a broader backdrop of
seriously bad news
The UK now has the 2nd lowest productivity per hour worked
in the G7:
Japan
-16%
Canada
+1%
Italy
+3%
Germany
+24%
France
+24%
USA
+29%
Without increases in productivity we cannot support
sustained real wages growth. A recent report by Nesta
shows that between 1998 and 2007 more capital and labour
became concentrated in less productive firms.
The role of employers – an
‘inconvenient truth’…..
When he was first appointed to chair UKCES, Charlie
Mayfield announced that it was an ‘inconvenient
truth’ that employers would have to spend more on
skills. In reality:
• The incidence of training across the workforce
peaked in 2000 and is back to where it was in
1993/4
• The volume of training days across the UK has
fallen by as much as half between 1997 and 2010
• Employer investment has fallen in real terms
And (even more inconveniently)…
According to the latest OECD data (Adult Skills
Survey, 2013), UK employers have the second
lowest demand (after Spain) for workers
qualified beyond primary/compulsory schooling
across 22 countries. This lack of demand may
help explain our very weak and patchy record on
post-compulsory participation.
Employer demand for skill is often
lower than we would like
In 2009 the government consulted on the Specification of
Apprenticeship Standards in England. There were 357 responses
(we don’t know how many of these were from employers or their
representatives).
• A large majority (70%) rejected the idea that maths and English
should be required in all frameworks.
• 68% did not want an ICT qualification in all frameworks.
• Only 53% agreed that all 6 of the Personal Learning and Thinking
Skills were needed in all frameworks
• Only 35% thought 250 hours off-the-job learning was needed.
Most wanted far less (and they got it – the government set the bar
at 100 hours, far less than 2-year YTS – 13 weeks or about 450
hours).
And nothing changes….
HMRC have just created a Level 3 apprenticeship
where they have refused to design in/fund ICT skills
among the ‘transferable skills’ element, saying they
are not relevant. UK employers see apprenticeships
as narrow training for a job, not for entry to a
broadly conceived occupation, or to support LLL or
citizenship.
We have the most narrowly conceived VQs in
Europe, which reflects the low status we accord
vocational learning.
And our problems with poor use of
existing skills are huge:
Having massively expanded post-compulsory
provision, we now have the second highest
(after Japan) levels of over-qualification in the
OECD, at 30% of the adult workforce.
Employers calculate that they have about 4.5
million employees with skills they are not using
fully.
Findings from a Microsoft survey of
UK office workers:
• Process driven tasks dominate many workers’
lives. 71% thought ‘a productive day in the office’
meant clearing their e-mails.
• 51% of 18-25 year olds believe that attending
internal meetings signifies ‘productivity’.
• When asked, ‘when was the last time you felt you
made a major contribution to your organisation?’,
23% responded that they believed they had never
managed this. Only 8% thought they had made a
major contribution in the last year.
Innovation absent
• 45% said they had less than 30 minutes day to
think without distractions
• 41% did not feel empowered to think differently
• 42% did not think they had the opportunity to
make a difference at work
• 38% said, ‘the business is very process-driven and
spends little time on doing things differently or
being innovative’.
SOURCE: Microsoft, 2013 The Daily Grind
Against this backdrop what happens
to the old Skills Policy Model?
• Top-down and highly centralised – national
government was the Major Player in the system
• Central government as monopoly customer
• State funds, so state determines policy aims, targets,
governance.
• Provision ‘planned’ (usually to meet targets)
• Policy linked to a set of expectations about spending
our way to the creation of a ‘world class VET system’
and a workforce skilled to world class levels – if the
recent OECD Adult Skills Survey is correct, this policy
failed. Spending our way to ‘victory’ is dead!
The bad/good (depends on your
perspective) news is:
• That model is dead/dying. The money that fuelled it is
running out and may never return. It is not clear that
policy makers yet understand this!
• Austerity will last well beyond the next election. Even if the
government does eventually have more ‘fiscal room’ there
will be many competing demands – defence, welfare,
infrastructure, housing, early years, pensions, health, social
care for the elderly.
• The years 2000- 2008 may, in public funding terms, come to
be seen as a ‘Golden Age’ for post-19 provision. We may
never, ever have it that good again!
Some macro level questions:
1.
2.
3.
4.
National targets/aspirations will be meaningless if set by
government alone. What new mechanisms for determining
strategic direction and outcome will be required?
If the government funds a smaller % of activity, can it still run the
system centrally, or do other stakeholders/funders now get a
bigger say? Who? How?
If more funding has to be raised/marshalled locally, is bottom-up
policy making the new reality? Does government openly
acknowledge this? How?
What is the future role of government – market maker,
information provider, regulator, quality assurer, funder of last
resort, funder of capacity/infrastructure rather than
throughput……..?
And the $64k question(s):
How do you stimulate employer demand for skills
(nationally and locally), encourage them to
contribute more towards the cost of skill formation,
and enable them to use the skills their workforces
already have to better effect?
In other words, how does skills policy move beyond
a simple focus on publicly-funded skills supply?
Pathways to progress?
1. Helping employers to help themselves –
capacity building – individual and collective
2. A new package of support and incentives
3. Workplace innovation matters
Employers’ training capacity – a
missing dimension
• Old model relied on lots of external provider
provision (e.g. Train to Gain). We need to
boost workplace learning and the capacity of
firms to deliver learning (formally and
informally).
• What is the current state of the HRD function?
No one knows!
A new model for integrated business
support
The integration of:
• Economic development
• Business support
• Innovation support
• Export promotion
• Productivity enhancement
• Job quality enhancement
• Employment relations enhancement
• Skills
As a seamless ‘offer’ – this is emerging (slowly) in
Scotland. CIPD/J P Morgan experiment.
Help organisations to re-think work
organisation and job design
We know that certain configurations of work
organisation, job design and people
management practices support and embed:
1. Better on-the-job learning (expansive
learning environments)
2. Better skills utilisation
3. More workplace innovation
4. Potentially higher levels of productivity
We need more discretionary learning
Discretionary learning workplaces:
Portugal
26% of employees covered
Spain
20%
UK
35%
Netherlands
64%
Denmark
60%
Sweden
53%
Finland
48%
Germany
44.%
SOURCE: OECD, 2010
But instead we have a lot of ‘lean’
These ‘lean production workplaces’ have lower
opportunities for learning and innovation
UK
40.6% of employees
Netherlands
17%
Denmark
22%
Sweden
18.5%
Germany
19.6%
Where can firms go to for help with
this agenda?
In Finland you have the Tekes programme, which
provides subsidised consultancy (from public
and private sector organisations) to employers
to help them change their organisations and
engage in workplace development to support all
forms of innovation (technical, organisation,
process and product).
Scottish Skills Utilisation projects.
Fundamental long-term choices:
• High road or low road competitive strategies
• Some sectors are getting locked into low road,
low pay, low progression, low skill, casualised
models of competing. High costs for workers,
society, government and localities (the in-work
housing benefit bill has doubled in last 4 years).
• The clock is ticking….we have wasted 25-30 years
chasing a skills supply-led dream.
Can city regions do it better than
Whitehall?
Requirements:
• Design capacity for policy that goes beyond a
new set of (localised) targets
• Delivery capacity to provide joined up
business support
• Incentives to power vision
• Ability to secure real buy in from employers
and other stakeholders