The UK is suffering from skills shortages and gaps and should look to The Netherlands and New Zealand if it wants to better its approach to skills development, according to a new report.

Published by the Sector Skills Agency, Lessons from Abroad by Professor David Ashton of the University of Leicester’s Centre for Labour Market Studies, urges the UK to learn from the approaches of other countries to improve the effectiveness of vocational and skills-based training.

Based on research carried out by Dr Johnny Sung and Dr Arwen Raddon, the paper argues that the most effective sector-based approaches to skills development are those which are employer-driven, particularly where some control over funding is also given to organisations.

But it says: “The Sector Skills Agreements (SSAs) provide a potential mechanism for driving the system, as they represent the considered views of employers on the current and future demand for skills. But their effectiveness is restricted because the
employer-led Sector Skills Councils are not in control of the funding required to implement these agreements.”

It adds that identifying skills needs by involving employees is also considered the hallmark of an effective sector skills approach.

The report also highlights the way financial incentives have been used in other countries. For example, in South Africa a company is used to fund training infrastructures; England uses subsidies and The Netherlands offers a 15 per cent rebate on trainees’ wages to accredited workplaces.

However, it points out there can be clashes between employer demands and government policy – for example, if government policy is to deliver level 2 NVQs and employers require workers with level 3.

But the UK does receive praise for its record in allowing employers to define the Sector Skills Councils.

Professor Ashton said: “The main problem with the UK’s system is the inability of employers to control the use of funds for work-based training. Where this is done abroad, especially after consultation with unions or employee representatives, you have a much more effective system of training.”

Mark Fisher, chief executive of the Sector Skills Development Agency (SSDA), which supports the network of 25 employer-led Sector Skills Councils said: “Research into overseas skills development has shown the importance of employer involvement in every step of the process. The UK needs to take heed and follow suit in order to meet our changing skill needs in the light of fierce international competition.”