What is employer ownership for?

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Written by Martyn Sloman on 4 June 2014
Recently I learned that one of my former employers is to receive money under the next phase of the government’s Employer Ownership Pilot Funding (EOP). On hearing the news my reaction was to be even more confused on the purpose of the scheme itself.  What on earth is it intended to achieve?
 
On 30th April the Skills and Enterprise Minister, Matthew Hancock, announced that three companies were to receive £5.2 million between them. To quote: “Under this scheme, employers combine their own money with government funding to invest in the training they need.  
 
“The first of these is Blackpool Pleasure Beach. Their project will address the need to improve the quality of the skills in the tourism sector locally, with a new Tourism Apprenticeship framework, which will be owned and developed by employers. The aim is to deliver 100 new apprenticeship places at tourism businesses in Blackpool.”
 
My employment with Blackpool Pleasure Beach took place in the summers of 1967 and 68 at their subsidiary Morecambe Pleasure Park (long since closed).  I was then a student at nearby Lancaster University and worked in the café in the Park during the day and served behind the bar in the evening.  It was a good time and place to be young and produced handy pocket money. However, I was wholly unsuited for the job and doubtless made lousy chips. I was a poor quality casual employee and they must have been pretty hard pushed to offer me employment for a second season.
 
Given this I should be in favour of effort to improve skills in the UK hospitality industry.  Interventions that create more satisfying employment and a better customer experience are surely to be welcomed. While this is true, there is an important question to be asked: is providing a public subsidy to a particular employer, or group of employers, in a particular location, the right way to go about it? This question strikes at the heart of the dubious logic that underpins the employer ownership initiative. 
 
Employer ownership has become the dominant ideology of the coalition government’s skills policy. The underlying idea is that that employers are champing at the bit in their eagerness to shape the skills agenda and have been frustrated in the past when they have been prevented from doing so. It is an idea that doesn’t stand up to serious scrutiny.  What employers will do is to try to secure and retain employees with the skills to deliver their business objectives.  They will train where necessary - and some are very good at it.  They will take advantage of government schemes, and, in particular, government subsidies if they are available.  However most employers do not feel a burning desire to restructure the nation’s skills policy.  They have far more pressing things to do.
 
There is an even more fundamental problem with EOP funding.  The logical consequence of a view that employers should drive the skills agenda is total government withdrawal.  You should simply let employers get on with it and spend their own resources training (or not training) whomever they want and in whatever way they wish. However, this is not likely to be politically acceptable in a country that is experiencing youth unemployment of almost a million.  Something needs to be seen to be happening.  Throwing money at the problem in terms of some pretty randomly selected pilots is the best way that a desperate Government Department can think of to progress the agenda. 
 
This is a shame. A consideration of the hospitality sector raises some important issues on the problems of skills and unemployment.  Here’s one of them. There has been a good deal of recent publicity and debate surrounding zero hours contracts. These are arrangements whereby firms can employ workers for as many or as few hours as they need, with no prior notice. The argument is that such contracts can work to the considerable advantage of the employer but be exploitative of the employee. According to the ONS (Office for National Statistics), there are now 1.4 million jobs in the UK operating under zero hour contracts. This is just four per cent of the total but the proportion rises to a quarter in the hospitality industry.
 
So there 21st century problem to be addressed.  How can we develop the skills employers value in a sector while ensuring that those part-time employees have every opportunity to develop their long-term employability. Framing the question is this way, however, demands a different mind-set.  It demands a recognition that it is not just the interest of employers that matter.  
 
With the support of Training Journal, I am producing a new White Paper planned for publication this summer. In this paper, I will argue that what is required is a whole new approach to the development of our younger work force.  Hopefully this will offer in a different focus. It takes us a long way from subsidising employers in Blackpool for undertaking training they would probably be doing anyway.
 
About the author
Martyn Sloman is a visiting professor at Kingston Business School and a teaching fellow at Birkbeck College. He is principal consultant to TJ's L&D 2020 project and can be contacted at martynsloman@me.com

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