Money worries

With Con-Lib austerity cuts looming, it's hard to know what the future holds for learning

Before the general election, searching the Conservative Party policy locker for anything on skills and training gave few clues to the direction the government would be taking to build the skills needed to take the UK out of recession.

Small wonder then, that when David Cameron, the prime minister, committed the government to supporting growth ­industries during a recent speech in Leeds, the sectors he mentioned - aerospace, pharmaceuticals, high-value manufacturing, hi-tech engineering, low-carbon technology and creative industries - were exactly the same as those singled out in the New Industries, New Jobs white paper, launched in April 2009 by Lord Mandelson and John Denham.

No change in emphasis, then, and no tinkering, either, with the Department for Business, Innovation and Skills (DBIS) which retained its broad brief ­created under the previous government.

A tighter focus

Vince Cable, the Secretary of State for Business, is confident enough to describe his new portfolio as the "department for growth" ahead of the forthcoming departmental spending review. In his first major speech since taking office, at the very time that the Chancellor, George Osborne, was shaping an austerity Budget, Cable announced a 20 per cent increase in the number of apprenticeships awarded nationally each year, taking the total to 300,000. "It is shocking that we only have 250,000 ­apprenticeships to start with," he said.

The reallocation of £200m to further education and 50,000 extra apprenticeships laid down a marker for shifting expenditure and some inevitable dismantling within existing bodies. The funding was transferred from the last Labour government's Train to Gain scheme. The scheme had been looking vulnerable after the National Audit Office questioned its value for money.

But there seems little appetite in business or government for root-and-branch reform of skills training at a time when so many initiatives established ­during the past two governments are still bedding in.

The National Skills Academy attracted cross-party support; and while some sector academies may find themselves under pressure to increase business support, both business and government have put too much faith in the academies for either to pull out now. The private sector is contributing up to 50 per cent of their funding with some companies choosing to run their own schemes.

Cable has already gone to war on what last year he called the "heaving nest of quangos". But the bulk of the skills sector has been spared so far.

When Cable announced that some 13 of the department's 74 quangos were to be axed, merged or have their funding reduced, only four dealt directly with training; and changes for some, such as the Institute for Learning, which must become self-funding by the spring of 2013, were already in the pipeline. But more DBIS quango cuts have been promised.

However much Cable says he is committed to education for its own sake, his department is unlikely to resist pressure within business for prioritising education and training around the so-called Stem agenda, focusing education-for-work poli­cies on the core subjects of ­science, technology, engineering and mathematics.

A survey published in May by the Confederation of British Industry and EDI, an accrediting body, pointed to increasing concerns in business over skills shortages in science disciplines. In spite of the recession nearly half of 694 employers questioned in the research were struggling to recruit such skills. Six out of ten companies expected to have difficulty finding Stem-skilled people in the next three years.

“The new government must make ­encouraging more young people to study science-related subjects a top priority," says Richard Lambert, director general of the Confederation of British Industry.

Demographic trends, which show that the number of young people entering the labour market in the next ten years is reducing, mean these problems will be exacerbated in a recovery. The UK will find that it cannot rely solely on youth for a growth in relevant skills.

Policies will be needed to promote women returning to the workforce and the reskilling and training of older people. For now, however, too little has been forthcoming to stimulate the older labour market.

For radical change in higher education, the government appears to be concentrating on universities. David Willetts, the minister responsible, has made it clear that universities will need to find £700m in savings, but is ­delaying specific measures until the Browne review of university funding reports in the autumn.

Willetts has suggested that universities will need to think more deeply about providing cheaper distance-learning options for students. This suggests that in future a university could become as much a brand in education as a bricks-and-mortar institution.

ducational branding enables universities to establish and cash in on global reputations, which could extend spheres of excellence and bring in much-needed foreign earnings without damaging educational provision for students in the UK.

Depth and flexibility

Public spending cuts across the EU are demonstrating that economies have become too interdependent to enable stand-alone recession-proofing. Globalisation has changed the game for economies that believed they could isolate themselves from international economic fluctuations.

Workplace, technological and broader demographic trends highlight a need in future for generic skills, equipping nations with adaptable populations capable of meeting new and unexpected demands.

But, at the same time, the education and skills sector must build a capacity for deep skilling, so that demands for flexibility are not interpreted as a charter for mediocrity. What price a German-style apprenticeship in this financial climate?

Business in the UK has been reluctant to copy the German model where, over many years, a craft apprenticeship goes through distinct phases to the highest status of meister, equivalent to a master's degree in the UK.

These are the challenges shaping Cable's new agenda. The toughest part of his job - even harder than his commitment to redesign growth for an age of ­austerity - will be to lay the foundations for a fairer society, defined by meritocracy rather than the privilege of birth or parental wealth.

His priorities, he says, are an increased emphasis on lifelong learning, stripping away bureaucracy in further education, and "making sure that the outdated value distinction between blue-collar apprenticeships and further education, on the one hand, and university, on the other, is disposed of for good".

That's an agenda Gordon Brown's government could have been proud of - and no wonder, since many of the skills and training policies that must remain in place are a legacy of Labour restructuring in the past ten years.

Richard Donkin writes for the Financial Times, and is author of "The History of Work" and "The Future of Work"

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Geoffrey Howe dies, aged 88

Howe was Margaret Thatcher's longest serving Cabinet minister – and the man credited with precipitating her downfall.

The former Conservative chancellor Lord Howe, a key figure in the Thatcher government, has died of a suspected heart attack, his family has said. He was 88.

Geoffrey Howe was the longest-serving member of Margaret Thatcher's Cabinet, playing a key role in both her government and her downfall. Born in Port Talbot in 1926, he began his career as a lawyer, and was first elected to parliament in 1964, but lost his seat just 18 months later.

Returning as MP for Reigate in the Conservative election victory of 1970, he served in the government of Edward Heath, first as Solicitor General for England & Wales, then as a Minister of State for Trade. When Margaret Thatcher became opposition leader in 1975, she named Howe as her shadow chancellor.

He retained this brief when the party returned to government in 1979. In the controversial budget of 1981, he outlined a radical monetarist programme, abandoning then-mainstream economic thinking by attempting to rapidly tackle the deficit at a time of recession and unemployment. Following the 1983 election, he was appointed as foreign secretary, in which post he negotiated the return of Hong Kong to China.

In 1989, Thatcher demoted Howe to the position of leader of the house and deputy prime minister. And on 1 November 1990, following disagreements over Britain's relationship with Europe, he resigned from the Cabinet altogether. 

Twelve days later, in a powerful speech explaining his resignation, he attacked the prime minister's attitude to Brussels, and called on his former colleagues to "consider their own response to the tragic conflict of loyalties with which I have myself wrestled for perhaps too long".

Labour Chancellor Denis Healey once described an attack from Howe as "like being savaged by a dead sheep" - but his resignation speech is widely credited for triggering the process that led to Thatcher's downfall. Nine days later, her premiership was over.

Howe retired from the Commons in 1992, and was made a life peer as Baron Howe of Aberavon. He later said that his resignation speech "was not intended as a challenge, it was intended as a way of summarising the importance of Europe". 

Nonetheless, he added: "I am sure that, without [Thatcher's] resignation, we would not have won the 1992 election... If there had been a Labour government from 1992 onwards, New Labour would never have been born."

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.