Spending on skills

Posted on 22 Oct 2010 by The Manufacturer

Following the spending review the Department for Business Innovation and Skills reveals where the axe will fall on skills provision and which key areas will be protected.

The results of the strategic spending review offer some optimism for industry leaders concerned about the development of relevant and robust skills for a strong UK manufacturing sector as Government sustains support STEM research and apprenticeship training.

The Department of Business Innovation and Skills (BIS) is expected to make an overall reduction of 25% to its resource budget by 2015 and anticipates that 65% of these savings will be achieved through re-structuring funding and delivery systems for Higher and Further Education. Despite this emphasis however BIS has committed to ring-fencing spending on STEM research, news which will come as a comfort to those who feared for the safety of Britain’s traditional place as a global leader in high value R&D. Key capital projects going ahead include £220 million in funding to ensure that the UK Centre for Medical Research Innovation goes ahead as planned. Funding will be provided for the Diamond Synchrotron worth £69 million and the allocation of £1bn for the creation of a Green Investment Bank.

In addition to this protection of academic research and fostering of British IP BIS has listened to employer demands for attention to be given to advanced technical skills for frontline manufacturing and engineering employees. BIS has committed to spending £250m on adult apprenticeship programmes over the next four years creating 75,000 new placements for individuals already in work during that timescale. As manufacturing faces the challenge of upskilling an aging workforce to support its growth as a high-value-adding industry in which the cost of labour is not a barrier to innovative production this support for life-long learning will be valuable.

However, the above apprenticeship schemes refer only to programmes employing individuals over the age of 19. The extent of apprenticeship funding for younger individuals will become clearer as the restructuring of FE goes forward. It is intended that incentivisation schemes for colleges and individuals will help to ensure that provision supports those courses most valuable to employers and relevant to the available labour market. Sector Skills Councils will be responsible for ensuring tat these incentivisation schemes are informed by direct industry data and employer demand.

Speaking about the focus of the BIS spending cuts Business Secretary, Vince Cable, said: “I called BIS the Department for Growth as soon as I joined the coalition government. I have been clear that growth must also be sustainable. The threat to our national economy is the large financial deficit which if left unchecked will damage our capacity to grow and rebalance our economy.

“I am not going to say that any of these cuts are going to be easy and many people are going to feel the consequences, but without action all of us, for years to come, would pay the price. These decisions have been hard but they are necessary”

Among the most prominent curtailments to BIS activities which will have a direct impact on the UKs manufacturing community are the abolition of Train to Gain and (to be replaced by an SME focused training programme) and of the Regional Development Agencies. These curtailments have however been long expected and will not come as a shock to anyone with an interest in industry skills support. Such individuals will be more than aware that as cuts come into play and state support for learners diminishes both individuals and businesses will need to take on greater financial responsibility for skills investment if they value the future security of their organisations and the industry as a whole.