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What does the Pre-Budget Report do for skills training?


In the PBR, Gordon Brown has announced measures to boost current training initiatives.

A new employer-led taskforce will be created to support the improvement and expansion of Modern Apprenticeships, and there is a new target to increase the participation of young people in post-16 education and training. There is more money for the pilot schemes set up by the last Budget to test ways of encouraging individuals to undertake training and supporting their employers in allowing them time off. Improving basic skills remains the priority. The PBR also re-iterated the Government’s support of the Howard Davies review, which recommended five days’ enterprise activity for pupils in secondary schools. As announced in Spending Review 2002, this will be backed up by £60m in 2005-06.

Gordon Brown said: "Skills are critical to an individual’s chances of success. To push a teenager into the world of work today without any qualifications is to put them at lifetime risk of poverty, failure and wasted potential. A skilled workforce is also important for the wider health of the economy and for UK employers - improving productivity and increasing prosperity. Adults in the workforce with low skills must be supported to develop their potential if we are to increase productivity and tackle social exclusion."

Main Points
- a new target to increase post-16 participation in education and training. By 2010, 90 per cent of all 22 year olds will have participated in a full-time programme fitting them for entry into higher education or skilled employment;

- a new National Modern Apprenticeship Taskforce, led by Sir Roy Gardner, to encourage more employers to get involved in Modern Apprenticeships and report to ministers and to the Learning and Skills Council on key policy issues;

- providing £130 million to enable the Employer Training Pilots to be extended for a second year, and expanded to around a quarter of local Learning and Skills Council areas, to test the impact on the training of low-skilled adults of a wider range of policy packages. The announcement will allow the testing of wider range of policy packages in different areas, with the pilots extended to around a quarter of the 47 local LSC areas.

- further steps to ensure that the UK immigration system helps meet the recruitment needs of UK employers, including by extending permanently the Highly Skilled Migrant Programme.

The PBR got a good welcome from the DfES. Education and Skills Secretary Charles Clarke today hailed the baisc skills aspect: "There is a large number of adults in the UK workforce with no or very low level qualifications. This has to improve because the quantity and quality of skilled labour is essential to our productivity and growth. By improving standards in our primary and secondary schools we are laying the foundations for long-term improvements in the UK skills base. But a faster improvement can only be achieved by updating the skills of those already in the workforce. That is why we are rapidly expanding the pioneering Employer Training Pilots and setting up a new Modern Apprenticeship task force."

"The Pre Budget Report has is also helping to create a more civic society by allocating £5m to pilot initiatives to encourage more volunteering during gap years. Volunteering during a gap year can be a very valuable individual experience as it can develop leadership and management qualities. It also benefits society as it encourages more youngsters to look beyond their own circumstances."

PBR and skills: Further Details

Post-16 participation in education
The decision to remain in education and learning after the age of 16 is the major determinant of skill and attainment levels as an adult. The Government wants to ensure that young people can enter high quality academic and vocational programmes, reducing the historically low rate of post-16 participation compared with other countries. In 2000, 86 per cent of 18 year olds in Germany were enrolled in full-time or part-time education or training, compared with only 56 per cent in the UK. The target includes young people studying level 3 academic or level 2 or 3 vocational programmes, both work- and college-based, and builds on the existing Public Service Agreement that by 2004, 28 per cent of 22 year olds will have participated in a Modern Apprenticeship.

Modern Apprenticeships (MAs)
MAs provide opportunities for young people to develop skills in a work environment, with the costs shared between the Government and employers, and are at the centre of the Government’s strategy to ensure that all young people can access high quality education and training. Recent measures have done much to improve MAs, and participation is rising - with over 135,000 young people enrolling on MA courses each year. Employer involvement in MAs is critical to ensure MAs continue to meet the needs of UK firms and offer young people high quality training in a work environment. A National Modern Apprenticeship Taskforce was launched today to champion MAs and encourage more employers to get involved. The Taskforce will also report to the Government, and to the Learning and Skills Council, and report on key policy issues. The Taskforce will be led by Sir Roy Gardner, CEO of Centrica, and will include individuals from across industry and the education and training sector.

Employer Training Pilots
Employer Training Pilots are now operating in six local Learning and Skills Council areas. Firms who offer their low-skilled staff paid time off to train are provided with subsidies to cover the costs involved (up to 150 per cent of wage costs for small firms), free training courses up to NVQ level 2, and information and guidance on training.

The Employer Training Pilots are designed to test the four elements set out in Chapter 3 of “Developing Workforce Skills (published 17 April) and will be targeted at people who do not have basic skills or qualifications at Level 2. These are:
• free tuition and/or accreditation costs;
• employers to provide time off for their employees to train;
• compensation paid to employers for the time off taken by their employees;
• advice and guidance to support employer and employee decisions about learning.

Early evidence suggests that the model being tested in the pilots is proving successful in engaging low-skilled individuals in training, and employers have responded positively to the pilots. At the end of October, only 2 months into the pilots, nearly 500 employers had signed up to participate, and almost 900 employees with low levels of qualifications and skills had committed to undertaking basic skills or NVQ level 2 training. Over 40 per cent of individuals signed up to the pilots so far work in firms employing fewer than 50 people.

The Government has made available £130 million to enable the Employer Training Pilots to be extended for a second year. This will enable the Government to further explore the impact of the pilots on the demand for training, and allow the expansion of the pilots to around a quarter of local LSC areas. The LSC has welcomed this funding increase, as it will allow the scheme to become available in around a quarter of the UK.

The Highly Skilled Migrant Programme will now be extended from January 2003, in view of its success since January 2002. To improve its effectiveness further, the criteria for awarding points in certain categories will be revised from 28 January 2003.

Further steps are also being taken to ensure that SMEs can benefit fully from the work permits system. The Government has created a new Small Business Unit in Work Permits UK to ensure that small firms can access appropriate information and more easily recruit skilled staff to meet their needs.

Last month the Home Secretary annnounced new sectoral migration schemes to help address skills shortages in specific sectors, such as hospitality and food processing. In light of experience with these previously announced sectoral schemes, the Government will consider the case for further policy development in this area, working with other sectors where employers are facing labour shortages.


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