The Chairman of the Learning and Skills Council, Bryan Sanderson, today confirmed that it will run a £40 million pilot scheme for 16,000 low-skilled employees to improve their skills. Announced in the Chancellor’s Budget statement, the pilots will run in six local LSC areas: Birmingham and Solihull, Derbyshire, Essex, Greater Manchester, Tyne and Wear, and Wiltshire. They will start in September and finish a year later in August 2003.

The project will cost £40 million over two financial years. It is funded by £25 million of new money from the Treasury and £15 million from within existing LSC budgets.

In each pilot area, the Learning and Skills Council will identify volunteer employers. The employer will release low-skilled employees during working time to achieve basic skills such as literacy and numeracy, or a national vocational qualification at level 2.

Employers may come from the private, public or voluntary sectors. The pilots are targeted particularly at small employers and those who have not been involved in training towards qualifications.

Within the pilots the Learning and Skills Council will offer employers:

- tailored information, advice and guidance;
- free training course and assessment;
- compensation for the wage costs of trainees for their time off for training and assessment, whether at a college, with a private training provider or in the workplace.

Bryan Sanderson said: "This pilot will test an important proposition: that the key barrier to employers training low-skilled workers is the cost of giving them time off to study. We will be providing financial support towards those employer costs. We will pay for the cost of training, and make good advice and guidance available to all concerned. We expect this pilot to be popular, in particular with smaller employers and their workforces. It will enable at least an additional 16,000 employed adults to gain an initial qualification and progress within employment. Employers will gain through improved staff retention, productivity and performance. In my view, this pilot marks an important step in public policy. For the first time we are testing the proposition that small employers will respond to funding incentives linked to the cost of wages of low-skilled trainees. If the pilots work well, we can build on the experience in different ways across the whole economy."

"The Learning and Skills Council is delivering this experiment because we are ideally placed to do so. We work in partnership with many other agencies and can take both a national and a local view. The Cabinet Office report last year highlighted the real challenge of getting employers more engaged in adult training. It suggested making the funding and qualifications systems more demand led - in other words, more responsive to the needs of employers and their employees. We are delivering that vision through our workforce development strategy, on which we will be going out to consultation. As a first step, we have committed ourselves to establishing a new measure that tracks employers' engagement in developing their own workforces. In due course, we intend to set a target for this. We aim to work with employers to show that skills development brings real bottom-line benefits."

What the pilots will test - three key areas:
a) The level of financial and other support needed to compensate employers, linked to the number of paid hours which employees would actually need to take off work, in order to train and achieve a qualification *(whether at basic skills or Level 2) The pilots will allow up to 150% of wage costs for small employers (fewer than 50 employees), and less than 100% for the largest employers (over 500 employees), with a rate in between for medium sized employers.
b) A 100% subsidy for tuition/learning and accreditation costs. Some pilots should look at the effectiveness of offering rewards and incentives to individuals, provided the total cost does not exceed 100% of tuition/learning and accreditation costs.
c) Appropriate information, advice and guidance to employers and employees. This needs to help stimulate employer demand for learning and should cover learning opportunities and advice on skill levels and training needs. Information and advice should also cover the time off and compensation elements of the pilots.