How much progress have we made in 20 years of Digital Skills policy

The article below was published in Spring 2002, after the Post Y2K Dotcom bubble had burst.

Gordon Brown had announced a new approach to skills akin to that needed today.

So why did it not happen?

We should never under-estimate the forces wanting jobs for trainers, as opposed to training for jobs.

Nearly as many bottlenecks as a brewery

The Need for New Approaches to Resourcing the ICT Skills “Business”

 Philip Virgo

as Strategic Advisor to the Institute for the Management of Information Systems

 1) The latest Treasury analysis shows the UK problem is intermediate skills but attention is still largely focussed above (graduates) and below (social inclusion). 

In his 2001 Budget speech the Chancellor said the time had come to look at new ways of funding training, including tax incentives. In the 2001 Autumn Pre-Budget Report he announced pilot schemes to test a new policy approach to support the training of low-skilled workers in the UK based on shared responsibilities between government, employers and individuals. More details have now been published by HM Treasury in “Developing Workforce Skills: Piloting a New Approach” The Public Enquiry Unit, HM Treasury, Parliament Street, LONDON SW1P 3AG, tel 020 7270 4558

The pilots are focussed initially on drawing new entrants onto the bottom rungs of the ICT skills ladder but the analysis in the “Developing Workforce Skills” indicates clearly that the biggest gaps between the UK and its overseas competitors are not at the bottom or top of the ladder but in the middle: the intermediate skills levels that used to be addressed by qualifications such as ONC and  HND and are now level 3 in NVQ-speak. Here the biggest problem is that of organising and funding workplace mentoring and supervision to make a reality of “modern apprenticeships”. This may well be an even greater challenge than that of ensuring that FE and HE training providers are resourced (people not just equipment and materials) to produce alumni who can handle not only current technologies but can rapidly master those to come (education and not just training).

2) But Which Intermediate Skills?

Many intermediate skills are technology specific and therefore subject to a high, and increasing, rate of change. They are also the skills where on-the-job assessment (as originally envisaged for the NVQ concept) is most important. The current need is most commonly for cross-training for those already in the work force (or recently made redundant) rather than first entry training for youngsters or re-entry for those excluded from the workforce. Both these groups also need, however, access not only to courses and modules but to work experience opportunities.

The good news is that there is much existing course material available, including on-line. The bad news is that it is almost impossible to predict which skills will be in demand when ICT employers restart recruitment, perhaps later this year, more likely in spring 2003.

The immediate need therefore is to review the frameworks for resourcing and funding “just in time”  cross-training for those whose current technology specific skills are no longer in demand and upgrade training for those moving up from the lower rungs of the skills ladder, so that flexibility with regard to the precise technology content can be retained until it is clear what is actually wanted by those who will be providing the work-experience places and/or recruiting the alumni.

3) The Squeeze on Resourcing and Funding for Intermediate Skills


The High Tech Recession has led to large scale redundancies and a dramatic fall (over 50%) in recruitment effort on the part of those large suppliers who until last year organised and paid for most of the technician and professional level ICT training in the UK. The timing and pace of recovery will depend partly on the pace of broadband roll-out and partly on the availability of the skills and funding to expedite and exploit that roll-out. But the immediate need is to ensure that opportunities for cross-training with skills in known demand form part of the redundancy package.

Further and Higher Education Universities are being expected to drop conversion courses and expand first degree courses at the same time as they face staff recruitment problems because the drop in the numbers doing further degrees means their traditional recruitment pool for new staff is drying up. They are, therefore raiding the FE colleges for experienced staff at a time when the latter are being encouraged to expand courses to give NVQ level 1 and 2 skills to the socially excluded. The result could further widen the gap between the UK and its competitors with regard to intermediate skills. The need is to use the current industry down-turn as an opportunity to entice industry-experienced recruits into both FE and HE who will not just leave when the economy recovers. That means re-introducing flexible contracts to make it easier to mix and match teaching, research and consultancy in portfolio lifestyles which encourage them to stay.


The combination of the effect of the High Tech recession on employer training budgets and the suspension of Individual Learning Accounts means that mature individuals wishing to acquire the technician level skills in current demand must pay for themselves out of after-tax income (albeit perhaps time-shifted with a career development loan) or redundancy money. Independent contractors face a double squeeze from the combination of falling fee-rates and IR35. We need to urgently review the tax position of training funded buy employers and/or individuals. Meanwhile increasing numbers of first entry students from disadvantaged backgrounds following publicly funded FE/HE ICT courses are dropping out because of financial problems. But by the end of the first year most of the latter are semi-skilled professionals: they need courses which allow them to get part-time ICT jobs that will pay at least as well as stacking shelves in Sainsbury’s – an extension of the work-experience concept.

3) Rationalising the funding jungle to achieve targeted flexibility and economies of scale

There has long been widespread agreement that the problems will not be cured merely by increasing the budgets of the existing players (see EURIM Briefing 18, dated 1997 attached as an Appendix).

  • There are too many agencies and programmes with complex rules, expensive bidding processes and slow decision processes.
  • Too much is capital spend (buildings, computers etc.) when the need is for flexible revenue spend (for pre-packaged courses/materials, access to learning networks, part-time staff etc.).
  • Too much spend is fragmented over duplicated programmes to re-invent courses and materials rather than used to expand and replicate what is already available and of known quality.

This leads to waste of public funds in parallel with mounting frustration at lack of funds to exploit success. Meanwhile there is a lack of information on the quality, relevance and value (in employability terms) of what is on offer.

The responsibility for action is less than clear (unless the Sector Skills Councils, for example, are to be given very much more authority than has been announced to date) but a number of initiatives outside DfES make this a good time for a concerted effort to improve cross-departmental flexibility and co-operation in addressing the issues (rather than merely competing for funds).

  • the response of HM Treasury to the recommendation of the Broadband Stakeholders Group that education networks be used as the focal point for aggregating public sector communications spend plus the opportunity to use the follow through programmes to the “invest to save” pilots.
  • the OST review of the funding mechanisms of the Research Councils, which have such a major effect on the way that UK Universities (and their supply chains) can operate.
  • The plans of many parts of the Public Sector (Central, Local and Agency) for large scale education and training programmes for their own staff (e.g. the National Health Service).
4) Recommendations
  • ICT suppliers, employers and training providers to work with the Learning and Skills Council pilot programmes (in Birmingham and Solihull, Tyne and Wear, Derbyshire, Essex, Greater Manchester and Wiltshire and Swindon) to demonstrate success in the “New Approach” to getting individuals on to the bottom rungs of the skills ladder. They should particularly focus on the objective of extending information, guidance and support for employers and individuals, including via “skills champions”and Union Learning Representatives (DfES Small Firms Development Account Pilot, Leicestershire).
  • Secure the publication of the recent OGC report on the aggregation of public sector communications spend and use this as the point of leverage for cross-departmental (E-envoy’s Office, OGC, OST, DfES, DTLR, NHSIA etc) exercises to agree, publicise and mandate common (and greatly simplified) funding rules and approval procedures for all education and training programmes involving public money. This should include a review of the way that UK funding drainpipes are said to discourage symbiotic cross-department and industry-academic relationships akin to those in, for example, the US and Germany.
  • Use the delay in organising the follow-up to the Individual Learning Accounts to bring the tax position of individuals undergoing training funded by themselves or their employers into line with those in our overseas competitors. IMIS has long called for personal spend on industry or professionally accredited courses to be tax deductible, for the pay of employees undergoing off-the-job training to be treated as a grant (i.e. untaxed) and for that of those undergoing on-the-job training under professional supervision to be taxed in proportion to the period of productive work.
  • Produce and publicise guidance on contracts whereby the employer pays for employees training but if the employee leaves within a certain time frame a proportion of the cost is repaid (either by the individual or by the new employer). The skills poaching merry-go-round will be particularly vicious when recovery does come and the successful use of training contracts will be essential to restore confidence that investment in training will be repaid.
  • The terms and conditions (as well as pay) of University and Further Education staff need to be reviewed to address the increasing problem of recruiting and retaining people on academic salaries. We need to move back to the traditional system (still common in other parts of the world) whereby academics with skills in commercial demand derive much of their income from consultancy and research and many of those with educational skills now working in industry also have timetabled teaching roles to help ensure the future supply of suitable recruits to their industry. Unless the current UK situation can be rapidly improved the outlook is bleak with a downward skills spirals at all levels: from school to university.


EURIM Briefing No 18 – Reskilling Europe for the Information Society – Sept 97


Without rapid and effective action the majority of Europeans will be among the unemployed have‑nots of the Global Information Society. The vast majority of infrastructure and content will be developed and supplied by US‑based consortia employing the rapidly developing IT and multimedia skills bases of the Far East. European players will continue to migrate their operations across the Atlantic. Individuals who do acquire marketable skills while working on EU programmes are more likely to practice them overseas than with indiginous suppliers.

The Commission is building on the lessons from the European Year of Lifelong Learning with a series of communications on Learning in the Information Society. That on Education has already been issued and that on Training is due in 1997. On 17th January, Sir Leon Brittan, Vice President of the European Union and “godfather” of EURIM,  included “reskilling the workforce in and through new technologies, as a normal part of workplace activity” among his six priorities for action in 1997 and encouraged EURIM to submit its views.

Technology assisted learning is widely perceived to be the solution to many of the education and training problems that beset Europe,  but progress in large scale delivery, outside a few centres of excellence, is slow. The majority of pilots, even if successful, are not scaled up for live running nor are they replicated elsewhere. Decision taking and procurement are fragmented and slow. Meanwhile we face accelerating change in the skills in current and prospective demand, in the means of delivering learning content, and in the means of assessing and accrediting the knowledge or skills acquired.

We also face an immediate IT skills “crisis”. Present shortages of current IT skills will be compounded over the next couple of years by the conjunction of the Year 2000 date problem and the need to re‑write financial and administrative systems to handle Economic Monetary Union (almost regardless as to which nations are in the first round).

Summary of Conclusions

  1. Education and training policy must better distinguish between core educational and academic skills (which rarely change over time) and vocational and technology skills (where traditional methods can no longer cope with the pace of change).
  2. Vocational curricula and course content and delivery must be better related to current and emerging skills needs and employers’ recruitment and training plans.
  3. Commercial market research and quality assurance techniques should be used to assess skills demand and the relevance and effectiveness of training delivery.
  4. High quality multimedia is expensive to produce, requires tutorial support and must be regularly updated. It requires volume throughput to be cost effective.
  5. Development programmes must therefore be structured to enable the economies of scale that justify investment in quality.
  6. The “Year 2000” and EMU problems should be used as catalysts for wholesale change to the European training infrastructure.
  7. Our future skills competitiveness depends on bringing current players together in world class development and delivery teams.

 The Pace of Change

The increasing rate of change is such that the “half‑life” of IT skills is down to little more than two years. But the time taken to approve new technical degree courses or qualifications in most parts of Europe is at least three years. Even the time to approve shorter publicly funded training programmes, whether National or European, is commonly over two years. Many public sector courses and materials concerned with leading edge skills are therefore out of date before the first student is enrolled. The consequences can be seen in rising student drop-out rates and graduate unemployment.

Education and training decision processes must distinguish between:

fundamental skills, where demand changes slowly (such as literacy, numeracy, languages  and academic/professional disciplines);

vocational skills, where curricula may need to change at 12 ‑ 18 months notice (for example demand for new mixes of technology, business and language skills); and

product or technology skills, where courses may need to be developed, piloted and packaged for mass roll out within 2 ‑ 3 months ( for example, when a new operating system like Windows 95 or NT rapidly captures a mass market).

Short order retraining commonly requires that trainees already have learning skills from their previous education. It may also require a grounding in relevant vocational/professional disciplines. Thus  IT professionals can be rapidly “cross-trained” to use C++ or JAVA, but only if they already have experience of similarly structured languages and methodologies. It is learning and practising the structured approach which takes the time. Similar analogies can be found in most technology‑related professional and vocational arenas.

Even allowing for the slower pace of change in basic disciplines, the lapsed time from the identification of emerging needs to the piloting of courses with new technology content must be cut from years to months  ‑ with mass replication and roll‑out inside the year. The challenge is organisational, not technical. Many private sector IT trainers have long been able to pilot new courses at 10 ‑ 12 weeks notice and then to package them for mass roll out, in the light of feed‑back, inside a further 10 ‑ 12 weeks.

The task is to enable the public sector approval, funding, certification and qualification routines, designed for “batch education”, also to handle  “just‑in‑time learning”. This probably entails the use of value chain analysis and fast‑feed‑back quality routines and making much better distinctions  between basic disciplines (where traditional approval methods may well continue) and changing technologies or product‑specific skills (where new approaches will be necessary). Many public sector education and training organisations may also need to adopt planning and control routines akin to those of the best commercial IT training organisations.

Mismatches Between Demand and Supply

Across Europe, the minimum educational standards necessary for employability and training are rising. There is often graduate unemployment in parallel with skills shortages. There are growing mismatches between employer expectations and educational standards and objectives.

Much of the information used for public sector education and training decisions and careers advice is unreliable, out‑of‑date and based on one-off, low response surveys of intentions and perceptions.

The most accurate and timely current sources of information on skills needs are the private sector salary surveys and analyses of recruitment advertising. To complete the picture we need to add information from recruitment and contract agencies (including on unadvertised demand) and from commercial training providers (on throughput and forward bookings).

We also need to explore and test ways of improving feedback from recent “graduates”, as well as from their employers, to provide better and faster information on publicly funded course quality and relevance.  Such feedback should distinguish between skills for life and skills to meet immediate needs. The marketing and monitoring of NVQs and of courses leading to NVQs needs similar attention.

Too few teachers are trained in the use of new technology and newly trained teachers are still arriving with poor, if any, IT skills.   Many cannot make time to undertake “off‑the‑job” training. Head teachers need training in IT strategy, procurement and management. Current changes in employment structures mean that schools and colleges are the largest organisations of which most of their students will ever be a part.

We should use the technology to free teachers from administration and paperwork and  to retrain themselves using open‑learning facilities (as in private sector establishments of equivalent size), in‑school during breaks between classes or out‑of‑hours, not merely in‑service.

At the other end of the education and training chain, the greatest cause of European competitive weakness is the lack of the attention paid to management education. Business IT skills (including the ability to manage the development and application of multimedia) will be needed by many more than will need technical IT skills.

We need greatly to improve the availability of well‑regarded course modules on the application of IT to meet business needs. (eg those from Bradford, Cranfield, INSEAD, Kingston, London Business School, Strathclyde or Templeton)

Changing the Economics of Delivery

Technology assisted learning (both courses and materials) is very much more expensive to develop than the traditional “face to face” equivalent. Given the increasing pace of change the content needs frequent update.

Multimedia materials can be invaluable in developing basic skills and the youngest pupils can derive most benefit, but, it will rarely be possible to cost‑justify investment in this enabling technology unless it is intended for use by thousands or millions of students. Material that needs special hardware or software or that will not run over common Internet‑compatible networks is also likely to have too small a market to be commercially viable.

Basic literacy, numeracy and learning skills are essential, but national curricula are commonly too narrow to ensure students are well‑prepared to compete for employment in global markets. Those  supplying materials for local curricula are also denied the economies of scale necessary to justify investment in world‑class products.

In consequence most European education, training and multimedia content suppliers are more concerned to sell to the United States and Far East than to other parts of Europe. Those who are successful often then relocate their development and marketing operations. Communications suppliers are also more interested in installing transatlantic capacity than in improving intra‑European links in the face of nationalist regulatory barriers. In consequence the ability to rapidly access materials from US‑based servers is increasing faster than from European sources.  We need to stimulate our local content markets by streamlining regulatory, licensing and funding regimes.

Many schools and colleges now have multiple functions, mixing academic/vocational education,  commercial training and “leisure-learning”. They are often unable to pool resources funded from different sources to meet common needs. Funding regimes should foster  the local bringing together of public and private resources  (grants, fees, contracts etc) to meet the education and training needs  of  the whole community, from children to pensioners, from unemployed to employers.

Urgent priority should be given in National and European programmes to projects which  demonstrate the practical interoperability of materials, networks and delivery platforms (hardware and software) from rival suppliers. The projects should involve marketing, delivery,  support (technical, tutorial etc) and accreditation routines which cross organisational boundaries as well as demonstrating hardware, software and network interoperability.

We also need readily available, low-cost, high-speed, high-capacity,  Internet-compatible Intra-European pathways between our former national telephone monopolies and between them and their new competitors, local and international.

Reducing Market Fragmentation

Less than 30% of the funds available under most National and  European training programmes are said to go on delivery as opposed to adjudication, administration and review. The combined bid costs for some schemes are said to be greater than the amounts awarded. We need to rationalise and streamline the agencies and committees administering public sector education and training funds.

There is also a need to greatly improve feedback on current and past schemes, to disseminate information on the availability and quality of existing materials and to facilitate the replication and roll‑out of the best. The continued focus on pilots and development projects all too often encourages continued duplication of effort, including the reinvention of square wheels.

Future funding should be focussed on projects which are “scaleable and sustainable”. We need to transfer resources from re‑inventing methodologies and re‑developing materials to replicating what is known to be successful. No proposals for new courses or materials should receive public funding unless there is known to be no suitable equivalent already available at affordable cost and appropriate quality.  There is, however, a need for greatly improved information on what is already available (sources, content, quality, methodology etc).

Building Partnerships

Institutionalised divisions between the different types of education and training operation are unhelpful.

The common conflict between “equity” (one or two systems per school/college) and “critical mass” (to change the way the students learn) is best resolved by the use of shared facilities: thus the school/college is also after‑hours study centre, adult education centre and small firms open learning centre.

Sharing requires flexibility in funding, regulation and content licensing. Problems in merging  educational organisations and structures (with differences in expectations, values, processes and cultures) are also easier to address when change includes the ability to earn discretionary funding to meet local needs and reduces the need for approval from central agencies.

Regional networks (eg Highlands and Islands of Scotland or Ulster) can probably handle the scale of change in prospect. National systems (eg England or France)  appear too hierarchical and centralised to do so in the time available.

Expectations that schools and colleges will individually procure hardware, software, materials and support to address centrally determined curricula could lead to “the worst of all worlds”.

Competing international networks might, however, be more effective than regional monopolies in enabling schools, colleges and their suppliers to achieve world‑class delivery at affordable cost.  Thus a Montessori network serving schools from Sienna to Stornoway might give better service to Salen (a small village on the Isle of Mull) than a Strathclyde network based on Glasgow.

Either way, the spread of multimedia and technology assisted education and training across Europe should be user driven (ie it should meet the known needs of teachers and students).  There is still far too much technology‑push, including by national and European agencies as well as by suppliers.

Re‑Engineering Decision Structures

There is a common need across Europe, as well as  within  the UK, to  streamline  the means  of  agreeing the objectives of publicly funded education and training and of planning, co‑ordinating, funding and monitoring delivery to common standards or curricula.

The problem is apparent if one takes a specific area and asks:

  • what should be the outputs from schools/colleges?
  • what are the processes for achieving those outputs?
  • what skills/resources do the teachers or lecturers need?
  • how will the teachers/lecturers acquire those skills/materials?
  • what is the timescale from start of debate on objectives to start of delivery?

Many skills needed in telecoms, broadcasting, networking and multimedia production are not even acreditable under current processes. But, as in most other markets, EURIM believes competition is likely to provide better answers than central planning.

We cannot afford the delay if programmes for the emergent skills were to be based on yet another layer of professional/academic co‑ordinating bodies. Employers should be approached directly to agree common requirements against which  competing qualifications can be graded.

The objective should be competitive European markets in internationally accepted qualifications and not just interoperability between national monopolies. At the mass computer literacy level, the European Computer Driving Licence might be used to provide a model. At the professional level a model might be the way in which Surgeons can choose between the examinations of the English, Scottish or Irish Colleges.

We must rapidly restructure our education and training systems around an open and competitive approach to qualifications, courses and materials  if we are to educate and maintain a workforce that can compete on equal terms with those of the United States and Asia. The growth of “competing but inter‑operable” pan-European development and delivery  networks, involving both  public and private partners, is also essential to the cost-effective local delivery of life-long learning whether in school, home or workplace.

Data Center
Data Management