Last month the IPPR think tank published its European Jobs and Skills Report. The report offers some interesting insights into the comparative state of training in the UK compared with Europe as a whole. For example, (as the OECD also noted last year), the UK workforce has fewer level 3-4 qualifications than the European average. Around 45 per cent of the workforce aged 25- to 34 years-old though have a degree, ahead of the average for Europe. This finding begs the question whether we have got our skills balance right and to what extent government funding restrictions on higher apprenticeships affect company investment decisions? Decisions on what vocational qualifications to invest in are, more often than not, driven by what government subsidies are available.
Skills Minister Matthew Hancock has described deficiencies in essential skills as a fault line running through UK education, including vocational learning. Worryingly, IPPR reveal literacy proficiency does not seem to change significantly once people enter work. If you have poor levels of essential skills when you start working, vocational learning is unlikely to make things better despite the focus on essential skills in many qualifications including apprenticeships. It has long seemed clear to me that we need to rethink how workplace learning can support functional skills. Even when employees have level 2 vocational functional skill qualifications, employers frequently tell me that they are not delivering the goods. I know this is fundamentally the role of schools and colleges but employers need staff who can write efficiently and count.
The headline grabbing finding of the report, though, was that between 2007 and 2012 there was a four per cent plus drop in the proportion of people of working age in education or training in the UK. There was also a drop in the numbers of employers offering training opportunities. A finding confirmed by UKCES' most recent skills survey. This fall in UK training activity bucks the trend in Europe where the majority of employers increased opportunities - despite the recession.
The report neatly explains the reason why other European counties maintained training (this is classic economic theory by the way and like the best economic theory is actually, eh, common sense): "in times of slow economic growth, firms may actually attempt to hoard their labour force, as it may be more expensive to sack employees and then rehire when demand return. Re-skilling employees while training costs are generally lower may lead to higher productivity when the overall economy returns to full swing".
I have mentioned before that while the UK economy is growing apace, labour productivity is low – 26 per cent lower than the US and 24 per cent lower than Germany and France in fact. A CIPD survey in April, though, suggested that UK workers feel they work harder than any other group of workers in Europe other than Ukrainians. Has the cut in training activity meant that UK employees are working harder not smarter? Is the training cut, as I have previously argued, an explanation for low labour productivity? One thing is clear the UK economy needs workers with a broad range of skills necessary to be competitive. Employees benefit too, particularly the low skilled. The business department has estimated that achieving even a basic level one vocational qualification, adds 10 per cent to wages.
Reports like IPPRs are interesting but also frustrating. They highlight issues, hint at challenges and possible trends yet offer no explanations for what they find. To be fair that's not the point of them. It would be good though to have more qualitative data to explain why UK employers appear to underinvest in level 3 and 4 qualifications, for instance and how can we up essential skill levels? What can we learn from other European countries? The German vocational systems focus on outputs and partnership look particularly significant to me.
While the UK economy is racing ahead, the IPPR findings should cause some pause for thought. Sustainable recovery will be built on effective skills development. We have some catching up to do there.