Mark Fisher, chief executive of the Sector Skills Development Agency, answers questions about why employers need to engage in the skills agenda.

On June 14 employers from across the UK gathered in London at a high profile event to sign the Skills Pledge – a public and voluntary commitment to raise basic workforce skills ahead of possible compulsion in 2010.

The event underlined the key role of employers in achieving the skills ambition set out by Lord Leitch in his Prosperity for All report published last December. This spelt out what it will take to make the UK a world leader in skills by 2020.

It’s a challenging vision and one which has employers at its heart, working with and through their Sector Skills Councils. But six months on from the publication of the Leitch Review many employers still do not fully understand the role of SSCs and their sphere of influence; and many still have questions about what exactly is being asked of them.

Mark Fisher, who heads up the organisation which supports and funds the network of 25 independent SSCs answers some questions.

Why the Skills Pledge?
MF: It is all about developing employable and economically valuable skills. Seven million adults in Britain cannot read and 11 million cannot add up two and three figure numbers. It’s no longer a question of whether we do something about it; we have to. We need employers to engage in a shared responsibility with Government and individuals to drive up skills and, as a consequence, the UK’s competitive ability.

The Pledge is all about boosting basic skills, about getting employers to commit to ensuring their workforce is skilled up to a full Level 2 qualification, delivered in England through Train to Gain and funded by Government. Lord Leitch has said that progress should be reviewed in 2010 and if it’s insufficient Government should introduce statutory entitlement to workplace training for individuals not at Level 2.

I don’t think anyone could argue with the need to work together to support this campaign – and that it’s much better on a voluntary rather than a compulsory basis. No employer wants to get entangled in yet more red tape. June 14 is the start of the journey and the Pledge is just one step towards driving up skills at all levels. There’s a lot of work to do and I know many SMEs and their suppliers are still not engaged in, or convinced by, the urgency of this mission. They probably have concerns about time and investment but I think, also, there is still a lot of confusion about what all the organisations involved in education and skills training, actually do.

So where do SSCs come in?
MF: The key thing to understand about the SSCs is that they are not a business advisory service. They’re not there to give day-to-day practical or operational advice about running a business; other organisations are established to do that. Their fundamental purpose is to work with employers to identify and address their skills needs. What SSCs give employers is strategic and sectoral influence. Recognising that different sectors have different skill needs means that they can broker bespoke, targeted solutions where and when it matters.

It is not a question of needing every employer to make contact with their SSC. It is vital, however, that every employer knows that their sector is being represented and that it has a voice and influence in effecting the dramatic step-change in the skills system which Lord Leitch called for - a more streamlined system grounded in employer-demand. If they want to know how to do this, or check up on what’s already being done in their sector and on their behalf, they can find this out from their SSC or contact www.skillsforbusiness.biz

Why should employers get involved?
MF Leitch spells it out: if they don’t their businesses and, as a result, UK productivity are at risk. I think that’s why he has placed the spectre of compulsion around the Pledge. One of the most important and successful roles of the SSC network is to change the balance of skills delivery from being supply-driven to demand-led. They do this by brokering Sector Skill Agreements between employers and training providers such as colleges and universities and those who fund them. They take the lead role in developing occupational standards and approving vocational qualifications and they ensure that employers get the skills training they need and that it’s the right type, at the right cost and in the right place. They present a genuine opportunity for employers to shape training provision and coherent progression routes from apprenticeships to higher education.

Why should they invest time and money?
MF: While UK productivity has improved in recent years, we still lag behind other nations: the average French worker produces 20% more per hour than the average UK worker, the average German worker 13% more and the average US worker 18% more. Poor skills are holding us back. The benefits that can accrue to individuals, employers and the UK economy from raising skills levels are enormous and employers can also gain from the sectoral work of SSCs. It means they are not investing, or working in isolation. There are tremendous spin-offs from that.

There are also important social reasons for employers to invest in skills. The potential of the people who work for them and their supply chains will go unrealised without it. They lose the chance to feel good about what they can achieve in their careers, in their lives and for their families. At every level skills are essential, from the shop floor to the boardroom.

But at what cost?
MF: Funding for training and skills is a shared responsibility but the Government should – and does – provide much investment. That’s an incentive for employers to get engaged in initiatives like Train to Gain where the providers of training only receive funding if they effectively meet the needs of their customers. The Leitch Review recommends a much clearer financial balance of responsibility, based on clear principles of Government funding to be targeted at market failure and responsibility shared according to economic benefit. To meet additional investment this means: the Government should provide the bulk of the funding for basic skills and the platform of skills for employability, with employers co-operating to ensure employees are able to achieve these skills; for higher intermediate skills (Level 3) employers and individuals should make a much higher contribution, in the order of at least 50%; and at Level 4 and above, individuals and employers should pay the bulk of the additional costs as they will benefit the most.

This is not about asking employers to invest for no return. Recent research commissioned by the SSDA shows that many companies which have closed down in the past six years could still be in businesses today if they had invested in the skills of their staff. That’s a powerful reason to get engaged and I urge employers to speak loudly and challenge all political parties to enable England and the devolved administrations to develop a focused skills strategy. The best way they can do that is through their SSCs – it’s their route to empowerment.