Yesterday, Ed Miliband stood before the Labour party conference in Liverpool and took business to task for not always being a responsible force in society.  While we may disagree with some elements of what he said, it’s difficult to argue that not all recent business practices have been as positive as we would necessarily want them to be.

One comment he made was “...all major government contracts will go to firms who commit to training the next generation with decent apprenticeships. And none will go to those who don't.” http://www.bbc.co.uk/news/uk-politics-15081234

What an interesting comment.  Good businesses, good employers defined by whether they train people.  But why stop at apprenticeships?  On one level a laudable aim, but this may rule out smaller companies which couldn’t commit to an apprentice in their stage of development.  But the idea that what might make a difference to being a ‘good’ rather than a ‘predatory’ business is that they should invest in training their people and developing a skilled workforce is an interesting one and one which could be used creatively when deciding where government contracts are awarded.

How to verify this?  On the same day as Ed was standing in the Liverpool Echo Arena reading out his list of bargains with Britain, a tweet from Laura Overton of Towards Maturity http://www.towardsmaturity.org . It said that participants at the World Of Learning Conference had completed a survey showing that 54% of them did not have an L&D strategy, but felt they needed one .  Maybe if there was a requirement when bidding for government contracts that you included your L&D strategy (or at least policy) alongside your equal opportunities statement and environmental pledge, this proportion would change.  At a stroke – certainly among those businesses wishing to work with government – we will have made progress.

I also think there’s a simpler option.  UK businesses spend on average £350 per employee per year on training (source: http://www.cipd.co.uk/hr-resources/survey-reports/learning-talent-development-2011.aspx) .  Whenever a contract is awarded on the grounds of ‘best value’ is the value to UK PLC of that training investment taken into account?  Clearly not. 

When Bombardier, the Derby based manufacturer of trains and rolling stock lost out to Siemens of Germany to provide equipment to the government, the decision was down to a 10% price difference. Now I’m sure that 10% of a major train contract is a lot of money, but is it ‘best value’ when the alternative is to put around 1300 people out of work in the UK? 

In fact every time one of these contracts comes up for review, the losing bidder describes the numbers of jobs under threat as a result.  Every time one is awarded, the government describes the number of jobs safeguarded. 

So equating a government contract to a number of employees is clearly easy enough.  We can – presumably –ask for verifiable average training spend data?  Every time a business with UK based employees bids for a government contract, let’s look at that number of employees involved, multiplied by the amount spent on training and use this figure as a discount on the contract.  So if you bid for a contract which will involve 100 employees and you can prove you spend £350 per year on each individual’s training you have a sum of £35,000. This represents your investment in the skills of the country.  I would argue that a scheme based on this calculation would ensure that that investment of £35,000 could be discounted from your bid price before cost comparisons are made with other suppliers – whether from the UK or not.  Those who spend most on training have an incentive to continue.  Those who don’t spend anything have a reason to start investing.

Do we agree with Ed that training makes a company ‘good’?  I know I do.

Can we calculate the amount of ‘good’ which training represents?  Using my rudimentary formula of employees x training spend x length of contract you can.  I think if we can place a value on the benefit to UK PLC of training spend then it is only right that this added value should benefit UK based employers when bidding for work.  After all, anything that shows the value of training and that it needs constant support from whichever quarter it is offered has to be a good thing for the L&D profession and for the future of the country as a whole.