£2 billion per annum is being wasted on the government’s flagship skills programme


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More than £2bn a year is being wasted by the government on programmes to promote skills and further education for adults. And the programmes have had no positive impact at all on the country’s economic productivity.

That’s the conclusion of An Adult Approach to Further Education

. The new research paper is by Alison Wolf, Professor of Public Sector Management at King’s College London, and is published today by the leading free market think tank, the Institute of Economic Affairs.

Professor Wolf argues that:

• Approximately a third of the budget – around £2bn a year – is being entirely wasted owing to monumental levels of administration, the promotion of valueless qualifications and the creation of vast numbers of quangos to handle further education. Professor Wolf makes no specific recommendation about how these savings can be used – but they amount to the equivalent of providing around 300,000 apprenticeships, paying 10% of the overall cost of Crossrail (in year one) or the savings could be used to reverse the proposed increase in employers’ National Insurance contributions..

• Compared with quangos in higher education, those in further and adult education spend ten times as much – as a proportion of their overall budget – on administration. A total of 21 different quangos have had responsibility for the funding and content of post-compulsory education and training since 2006. Approximately 75% of the Learning and Skill’s Council’s costs are a direct result of misconceived and micro-managed programmes.

• The government’s flagship policy of seeking to increase economic productivity through improving the skills of adults in the workplace has been a total failure – with no gains to overall productivity. The evidence suggests the government’s most heavily promoted programmes do nothing to enhance an individual’s earnings power.

• There has been a substantial fall in adult learners. Between 2005 and 2008, the government’s own figures show a drop of 1.4m in the number of adult learners in publicly funded education. In the midst of an economic recession, government funding is increasingly given to employers to train people in existing jobs. This is at the direct expense of providing new skills for those seeking new jobs and properly equipping the unemployed.

• Despite government claims to the contrary, there is no evidence that employers are under-investing in training – although a considerable number of large companies are now having their initial training paid for by the UK taxpayer.

• Adult education should be treated along the same lines as undergraduate education, with nearly all of it (except apprenticeships) being funded by directly subsidising the learner, rather than through central planning by a huge network of quangos. This would reduce spending, ensure money is spent effectively and would enable learners to equip themselves properly with relevant new skills and education.

Professor Wolf said:

“Improving the skills base of adults has been a flagship policy for this government. The result has been an almost complete failure – combined with an extraordinary bureaucratic mess, with a plethora of inefficient quangos having overlapping responsibilities. The programmes on offer are doing nothing to improve earning potential and nothing to increase productivity.

“Government ministers talk endlessly about training being demand-led, but the truth is that the qualifications available are determined by centralised, unresponsive quangos. We need to place more trust – and much more power – in the hands of individuals in determining the skills and training they need.”