Four years ago the Government announced a major rethink of its approach to skills and training. The UK's myriad lead bodies and industrial training organisations were to be replaced by new public-private sector partnerships.
These National Training Organisations (NTOs) were seen as the answer to the skills shortages that were plaguing employers in all sectors, particularly information technology. It was, ministers said, a new era for training in the UK, one that would supply employers with a workforce equipped with the skills needed to compete successfully in global markets.
In IT, for example, the E-Skills NTO, renamed E-skills UK on 1 April, pioneered a programme of modern apprenticeships, which brought a new generation of youngsters into the profession. It developed vocational qualifications in IT, and began liaising with universities to make sure they were producing graduates with the IT skills that employers needed.
Despite positive achievements in IT and other sectors, the Government admits NTOs as a whole have failed to live up to their potential. There were too many of them; they were often too small and too poorly funded to rally support from employers or hold any critical sway with government.
"The best of the NTOs were very good," said adult skills minister, John Healey. "But there was a long tail of NTOs that were too small. They had insufficient reach in their own sectors and insufficient influence beyond their sectors to do the job that needed doing."
So to plan B. NTOs are about to be replaced by new bodies, called Sector Skills Councils. There will be fewer of them - 30 compared to 75 NTOs; they will be better funded, up to £1m a year each; and the Government has promised that participation will give employers more influence over policy.
The councils are not simply NTOs with another name, Healey insisted. The standards they are expected to meet are quite different from the standards laid down for the NTOs, he said. Many NTOs will simply fail to make the grade as Sector Skills Councils and will probably be closed down.
The skills councils will have to show that they have real backing from employers. This means, for example, that employers will be expected to make their senior staff available to sit on skills council boards, and to match government funding for training initiatives with company money.
"Our expectation is that employers will be prepared to reflect the sort of investment that we as a government are prepared to make. We expect to see an increase in the levels of investment that employers in their sectors are prepared to make in workforce development and skills," Healey said.
In return, the Government is promising a "new relationship" with employers. They will be able to influence policy on schools, higher education, and universities; they will have an impact on decision-making in the Department for Education, the Department of Trade & Industry and other government agencies.
"If you look at some of the policy areas within our department, our aspirations to reform secondary schools, the 14-to-19 curriculum. We can only do that with strong influence from employers.
"We are going to reform further education, and the view and contribution employers can make is going to be significant. The same may be said for any reflections that we might make on the qualifications system," said Healey.
His department plans to measure the success of the skills councils, not by the number or quality of the training initiatives they begin, but by the impact those initiatives have on the productivity of the workforce.
Skill levels in the UK are lower than Germany and the rest of Europe. It is not a coincidence, the Government believes, that the UK's productivity is also lower.
"We want to take it one stage further and be concerned not just about the levels of investment, or activity, or qualifications gained, but about being able then to track the impact that has on how successful, how productive the particular business is - and, by aggregation, the sector," said Healey.
"I hope we will also encourage more companies to develop more refined measures of their own productivity gains," he added.
The Government approved the first five skills councils, dubbed trailblazers, on 1 April. Many were disappointed that IT was not among them but the proposal from the former E-Skills NTO for the Sector Skills Council, good though it was, was not good enough, said Healey.
"IT was an NTO-plus proposal. It was, 'This is what we do at the moment and this is where we are going to develop it.' What it did not do, specifically, was recognise the need for a much wider and stronger employee involvement in the sector."
Healey's comments came as a surprise to those involved in IT training. Supporters pointed out that E-skills NTO was widely seen as one of the most successful NTOs and its application to become a Sector Skills Council had backing from a long list of employers, including John Lewis, ICL, Norwich Union and Pricewaterhouse-Coopers.
One training expert closely involved in the bid, suggested that the Government may have had different motives for turning it down. "We were told we could not be a trailblazer because we had already blazed our trail."
The timetable for the E-Skills NTO winning Sector Skills Council status remains unclear, but the prospects for smaller NTOs are even more uncertain. Many do not know whether they will survive beyond August.
Critics say that this uncertainty will make it difficult for them to focus on their training responsibilities. There are concerns that employers in IT and other sectors may begin to withdraw their support if the bidding process for the councils drags on beyond the summer.
Healey is unrepentant. "If you are looking to translate NTOs into SSCs there might be an argument for a strict timetable," he said.
"I do recognise that it is difficult for organisations, but we are not in the business of maintaining organisations for the sake of it.
"The other way of looking at it is this - it is quite a tough test for these bodies and the assertions they make about employer commitment to the work they carry out."
Healey signalled his support for the former E-skills NTO this week with a £402,000 grant that will allow it to continue its essential work, which includes administering the Modern Apprenticeship programme, and preparing UK-wide labour market skills forecasts, until August.
"That is the largest sum we have allocated to any of those bids from more than 40 former NTOs," Healey said. It should be a strong sign to employers that they should maintain that interest and commitment, and an indication that a Sector Skills Council for IT cannot be too far away.
Key council goals
- Reduce skills gaps and shortages
- Improve productivity, business and public service performance
- Increase opportunities to develop and improve productivity
- Improve learning supply through apprenticeships, higher education and national occupational standards.
Evolution to Sector Skills Councils
First NTOs awarded recognition. Ministers describe it as the start of a new era for training in Britain
The Information Technology Industry Training Organisation (IT ITO) becomes a National Training Organisation
The IT NTO and E-business NTO merge to form the E-Skills NTO, a single body responsible for IT training
Government announces plans to reduce the number of NTOs from 75 to 30. It warns that poorly-performing NTOs will be derecognised
Government announces that the National Training Organisations will be replaced with Sector Skills Councils. Some are criticised as being little more than industry "drinking clubs"
Government announces five trailblazing Sector Skills Councils in retail; land-based industries; audio-visual industries; apparel, footware and textiles; and petrochemicals. IT fails to make the grade
NTOs are abolished but receive funding to continue essential services until August. E-Skills NTO was renamed E-skills UK on 1 April.
The E-Skills National Training Organisation (NTO) was created in June 2000 from the merger of its predecessors, the IT NTO and the E-business NTO.
It was a public-private sector partnership, responsible for developing IT and telecoms skills in the workforce. Its work includes forecasting IT skills demand, and co-ordinating national training initiatives such as the Modern Apprenticeship programme, and subsidised IT training programmes for small businesses.
It has carried out pioneering work in schools to tackling the poor image of IT. It has backing from employers including Barclays, Consignia, John Lewis, Microsoft and ICL.
This was first published in May 2002