Despite former Skills Secretary, John Denham’s pledge for a ‘summer of learning,’ reports of funding worries and empty coffers continue to circulate. So is Gordon Brown’s vision of a training utopia over before it’s even begun? Verity Gough asks: Where has all the money gone?

When this year’s ‘jobs’ Budget was announced, there must have been an audible cheer from a beleaguered training industry. Amidst talk of businesses slashing training budgets, finally the government was showing commitment to the skills crisis. And with greater emphasis on training provision and a generous £260m pledge for funding new training initiatives, Gordon Brown’s vision to push forward the skills agenda suddenly looked plausible. But news of Train to Gain’s continued funding crisis, reports that further education college schemes are still waiting for government cash and applications for apprenticeship funding are to be restricted in 2010, what is the real story with government funding for training?

Funding in crisis

For a start, due to the huge and unforeseen increase of employer take-up of state-funded training schemes it seems likely that restrictions will be imposed in the next year. Geoff Russell, the new chief executive of the Learning and Skills Council (LSC) has already written to training providers saying that left unchecked, Train to Gain and 25+ apprenticeship activity “will exceed the budget allocations we have available for the 2009-10 financial year and create further pressures in the 2009-10 academic year and beyond.”

“The incompetence we have seen in the delivery of training policy under this government would be appalling at the best of times. In the middle of a deep recession, it is unforgivable.” David Willetts, Shadow Skills Secretary.

In a further blow, the LSC’s contentious further education college capital scheme has been put on hold after funds dried up at the end of last year leaving hundreds of colleges ‘in limbo’ as a review gets underway. Shadow Innovation, Universities and Skills Secretary, David Willetts has been vocal in his opposition of the government’s training initiatives, in particular their handling of the FE college scheme to which he refers as a fiasco: "We are seeing training providers forced to reduce new starts next year to zero, the number of NEETs (Not in Education, Employment or Training) is soaring and there are 1.3 million fewer adult learning places,” he says. “The government’s reaction is to reorganise the Learning and Skills Council into three new quangos. This is not an adequate response to the crisis facing school leavers and jobseekers.”

Stealing from Peter to pay Paul

So it is understandable that given the funding crisis, last month’s announcement that yet another swathe of training funding initiatives are up for grabs caused some confusion. Not only is a hefty £20m being set aside for informal learning and £75m for childcare for low income families who want to re-train, but an extra £11m is being pumped into the apprenticeships fund. It certainly begs the question: where is the money coming from?

John Philpott, chief economic adviser at the Chartered Institute of Personnel and Development (CIPD) suggests that the new funding packages are merely old funds re-orientated for the changing circumstances of the recession: “Ideally you want completely new money on top on what is already there, and as little repackaging as possible but the government is strapped for cash and if you are going to do recession-busting things, you have to take from one area and focus on another, it’s just one of those facts of life,” he says.

While this may be true, it certainly isn’t helping those struggling to understand the application processes and their entitlement to funding. “A lot of training providers and employers find the plethora of measures and funding packages available very confusing,” agrees Philpott. “Having a new raft always runs the risk that by the time a lot of people get round what they can access, the time may have passed when they could have made best use of it, so there is an important task in terms of the policy infrastructure - but that’s such an obvious point and a longstanding one."

“The bottom line is that at your peril do you ditch training, if the government or an employer feels that the cost of competence is expensive they should really consider the cost of incompetence.” Huw Hilditch Roberts, Chartered Management Institute.

Willetts agrees: “The incompetence we have seen in the delivery of training policy under this government would be appalling at the best of times. In the middle of a deep recession, it is unforgivable. DIUS needs a fresh approach at the earliest opportunity,” he says. And while his comments may be expected, he is clearly not alone as a growing sense of unease from industry sectors is undermining the government’s message of ‘training for all.’

EEF, the manufacturers’ organisation, has also come forward to criticise what it refers to as a ‘lack of clarity’ over the skills funding future. “There is a real concern for companies that are now looking beyond the recession and where their competitiveness is going to be in the longer term and obviously skills and training are a key part of that. Any uncertainty about the availability of vital funding programmes such as apprenticeships is a real concern for the sector,” says Lee Hopley, head of policy at EEF.

“Apprenticeship programmes are not something for which you can switch the tap on and off. Obviously it’s important for manufacturers to continue to plan and look at their skill needs and how they can address them but it’s difficult to put any kind of plan B in place at the moment as there is no certainty either way,” she continues. Yet Hopley warns that while they are advising members to continue to access funding while it is still available for this financial year, clarity about the future of the apprenticeship funding is needed as a matter of urgency: “We don’t want employers to have to put their training plans on hold because of this uncertainty,” she says.

But while the focus of concern is concentrated on employers and the jobless, what about training providers? Where does the funding squeeze leave them? NCFE, the national qualification provider, is advising its clients to act with caution when accessing government funding: “We work with centres across the UK and the feedback we have received with regard to funding is mixed,” says chief executive, David Grailey. “More clarity is needed about the regional availability of, for example, Train to Gain funding and we would advise centres to be cautious where funding has not been confirmed.”

Yet for many the fear of closure is now more real than ever, so much so that some training providers are reaching into the European Social Fund for money rather than risk beginning a long application process with no guarantee of funding at the end of it.

“The government is strapped for cash and if you are going to do recession-busting things you have to take from one area and focus on another, it’s just one of those facts of life.” John Philpott, chief economist, CIPD.

A silver lining?

However, while confidence in the government training plans has been shaken, one sector that has certainly benefitted is technology. At the end of May, John Denham pledged a £14 billion cash injection for IT training - something that e-skills, the sector skills council for business and technology has been requesting for some time. “E-skills have been very concerned about the decline in the number of people studying IT in schools and universities so we very much welcome the interest the government has had in e-skills,” says Paul Coby, chief information officer for British Airways and chair of the e-skills UK CIO Board.

But is he concerned that, like the construction sector, apprenticeship funding and the FE college catastrophe that the government will remain true to its word? “I think they are serious because they supported e-skills on this,” he reflects. “All political parties as far as I know see the importance of technology for the economy and indeed it was one sector that has been growing in the first quarter while all others were contracting, it’s a very significant employer in itself and a key enabler to be a competitive economy." In fact, the funding boost couldn't come at a more opportune time as e-skills prepared to launch the first ever IT Academy later this year. “We have been really keen to get government support and win the Academy - in fact, we are feeling really positive about it all,” he enthuses.

One thing is certain when it comes to the government training promise, while a great deal depends on the economy, investment in skills training should certainly remain on the top of the government agenda. After the recent Budget, the Chartered Management Institute (CMI) argued that tax breaks for trainers would have been a much more effective use of government money. “The reality is this: we are in a difficult economic climate, so we need good, strong leaders to manage our way out of this, but to achieve this we need to invest in the people that are already there as well as those that are not in place,” says the CMI’s Huw Hilditch Roberts.

“I’m not saying disregard one for the other but I’m saying equally re-skilling people in employment to move the economy out of this downturn is an issue that we must not forget,” he says.“The bottom line is that at your peril do you ditch training, if the government or an employer feels that the cost of competence is expensive they should really consider the cost of incompetence.”