Two-tier adult training system needs urgent reform Wednesday, May 27, 2009 - 09:27

Private and public training providers inhabit parallel worlds with little overlap between the two, and greater collaboration between them could greatly improve the delivery of training. This is the central message in a new report on training published on, Tuesday 26th May 2009.

At present, England has a two-tier training system where private training providers responding directly to employer demand offer few formal qualifications such as NVQs says the report - The Private Training Market in the Uk - [PDF] - commissioned by the Independent Inquiry into the Future for Lifelong Learning (IFLL), sponsored by NIACE. Where qualifications are offered, it tends to be because the employers ask for them.

Private trainers see their job as that of providing the skills training needed to make companies more competitive and productive, while leaving the qualifications market on which the government puts great emphasis to colleges and other public sector bodies, who tend to see the individual learner as their main customer.

Training has become a huge market, with an estimated £38bn spent by employers each year although only about £2.9bn of this is spent on external private sector training provision. The number of private trainers doubled between 2000 and 2008 and, while it has been static of late, IT and finance have bucked the trend. The IT sector alone is worth between £530m and £660m in 2006/7, and is still growing at around 10% annually.

Employers have wide-ranging training incentives through the corporation tax relief system which allows them to offset costs, including existing overhead costs such as the wages of those employees managing the training. Whilst this clearly encourages training, the report says, it favours in-house delivery and the use of private training providers, which does little to help meet government qualifications targets.

The report calls into question the use of qualifications as targets for publicly funded provision and says this needs to be reviewed if progress towards an employer demand led system is to be maintained.

Lindsey Simpson, author of the report, said:

"The public and private sector training markets operate in parallel with little overlap between the two. They are driven by different aims."

However, rather than take a negative view, she insists, this provides an opportunity for stimulating knowledge transfer between them.

"The public sector operators could benefit through understanding the more commercial approaches to marketing, delivery and the use of technology that market leaders in the private sector adopt. The private sector suppliers could benefit from partnerships which enable access to public subsidy and open up hitherto less viable markets such as small to medium enterprises (SMEs). Innovations in types and models of provision could result and employers and learners would benefit from greater choice and availability."

Employers also increasingly require "unitised" training in modules that can be delivered flexibly with bite-size learning, particularly in sectors and occupations such as information technology, where the pace of change is very fast, she said.

"The risks are that, without this, there will continue to be a two-tier system where the public sector provision operates separately, driven by qualifications, and employers continue to invest substantial sums in training and learning for increased competitiveness which is largely unrecognised by Government."

Tom Schuller, Director of the Inquiry, said:

"This is a rare analysis of a major sector. One of the Inquiry's main recommendations is for better balance in our system, and this report shows that we need to be clearer about how to balance training for qualifications with other forms of lifelong learning."

He added that although Government and the Learning and Skills Council has put some emphasis on the role of private providers, the inquiry found that of the 12,300 private training providers in the UK operating above the VAT threshold providers very few are comparable in size to an average FE College. A large proportion is very small firms, operating in niche markets on the margins of financial viability.