In the New Year employers will be invited to bid for a share of the new £250m government fund. It will route investment directly to employers. The move is designed to boost economic growth and ensure that the UK workforce has the skills that businesses require.
Prime minister David Cameron said: “I hope this radical new approach will encourage even more employers to take on apprentices and ensure that the UK workforce has the skills we need to boost growth.”
Business secretary Vince Cable said: “Skills are central to the UK economy and our long-term competitiveness. Despite some good progress our system needs more flexibility and we are treading water by international standards.
“We have to fundamentally alter the relationship between employers and the state – giving employers the space and opportunity for greater ownership of the vocational skills agenda, including the chance to bid for direct control of public funds. This will encourage greater competition in the market as we strive for sustainable growth.”
The vision of greater employer ownership has been championed by the UK Commission for Employment and Skills (UKCES) – a Non-Departmental Public Body that provides strategic leadership on skills and employment issues.
Funding for 2012/13 will be up to £50m, with an additional £200m in the second year - subject to evidence of high-quality proposals from employers and ongoing evaluation.
It will test different approaches, come up with new ways of engaging employees and potential employees, other firms and their supply chains to develop news ways of investing in skills, and working with the further education and skills sector.
It will be open to collaborative proposals from businesses of all sizes and from all sectors of the economy. Bids will need to demonstrate how public investment will leverage private investment, support apprenticeships and show a commitment to raising skills levels in their sector or supply chain.
The government expects to issue a formal prospectus on the fund jointly with UKCES early in 2012 so that projects can begin later in the year.
Today’s announcements are part of the government’s growth review. More details and actions will be announced later this month.