Budget - Training highlights

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BudgetThe Budget has identified the pilot schemes, planned in the pre-Budget report, to improve access to training for the low-skilled. It also confirms that more funding will be allocated to putting more small firms through the Investors in People process.

The Budget restates the crucial importance of skilled labour to a fast-changing economy, and of the UK's skills shortages compared with the US and other European companies. This is addressed on both fronts: young people entering the workforce from education, and adults acquiring new skills. As evidence of the government's commitment to skills the Budget cites February's Education Green Paper which announced a greater emphasis on vocational options, November's extension of the Modern Apprenticeship scheme, and the policy to widen access to Higher Education. The new moves, though, are on adult skills. Several problems are identified in the training market:

"Individuals and businesses may be unable to gain the full returns to investment in training and commonly face credit constraints. Survey evidence also suggests that people are often poorly informed about the value of training and that time and money are important barriers to take-up. These market failures affect low-skilled workers in particular - people with lower qualifications are much less likely to receive training. There is also strong evidence to suggest that those who work for small firms are less likely to receive training than those who work for larger firms."

The Pre-Budget Report's outline of a new policy for basic skills is repeated:
- free learning provision and accreditation for employees without basic skills or level 2 qualifications to work towards recognised qualifications up to the level 2 standard (including basic skills), with approved providers.
- some form of arrangement for individuals to take up training - such as a minimum entitlement for all employees who have not attained basic skills or level 2 qualifications to paid time off each year to train towards the standard.
- financial support for employers whose staff take time off to train to acquire basic literacy, numeracy and ICT skills and to progress to level 2, with additional financial incentives for small firms.

The pilot schemes to test these policies will be operated by local Learning and Skill Councils in Birmingham and Solihull, Derbyshire, Essex, Greater Manchester, Tyne and Wear, and Wiltshire and Swindon from September 2002. They will test different periods of time off for employees to train towards the level 2 standard and different levels of compensation for employers. Further details of the national pilot model and of individual pilots are set out in the accompanying paper, Developing Workforce Skills: Piloting a New Approach, which you can download.

The other news for training in the Budget is further support for Investors in People: £30 million for the DfES to encourage small organisations to reach the IiP standard. "The LSC will work with the CBI-TUC Productivity Group and others, building on the joint LSC and IiP UK action plan, to ensure that small organisations are supported in a way that meets the needs of both employees and employers as effectively as possible. Further details will be announced shortly."

The government's reliance on the CBI and TUC's joint working groups is restated throughout, confirming their importance as indicators of future policy.

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