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Employer Ownership Pilot (England) Round One

Policy Instrument

Employer Ownership Pilot (England) Round One

Employer Ownership Pilot (England) Round One (EOP)
United Kingdom

Description

Timespan

Launched on 7 February 2012

Stage

Pilot

Round two of EOP is ongoing, for the 2014-2018 period.

Foundations

Policy area

The policy seeks to improve the quality of further education and skills training, using Industrial Strategy to help the UK economy and business compete and grow.

Policy goal

The policy goal is to develop a training system that is fully focused on customers, businesses and employees, aligning skills potential with growth investment. By changing the way funding flows through the system, and to place responsibility and reward for investment more squarely with employers for employer-facing programmes, such as Apprenticeships. The Employer Ownership of Skills pilot is a competitive fund open to employers to invest in their current and future workforce in England. Government will invest in projects in which employers are also prepared to commit their own funds, in order to make better use of our combined resources.

Mismatch

Explicitly designed to address skill mismatch

Through employer/partner led training, which allows employers to take ownership of addressing what skills are needed, and then training employees to meet these skills.

Administrative level

Local

Main responsible body

UK Commission for Employment and Skills (UKCES) / Skills Funding Agency

Stakeholders

Department for Business, Innovation and Skills - monitoring
Skills Funding Agency - evaluation
Employers and training providers - implementation

Funding

Aid under this Scheme will be granted from 17 June 2014 to March 2017. The maximum allocation of funds under this Scheme over this period is £225m. BIS does not expect equal levels of spending across each year.

Intended beneficiaries

Individuals (both recent graduates and existing employees who require up-skilling) benefit from receiving higher quality training opportunities, which increase their economic value in the labour market and also the status of practical skills. Employers/businesses are expected to benefit through having greater purchasing power in the training market, driving up responsiveness and quality, and by also developing their own training solutions and growth.

Processes

Use of labour market intelligence

Shifts in two parts: 1) moving away from government leadership to employer ownership of employer-based training, and 2) a move from provider-led to employer-owned adult workforce development. Implementation took form in three models: those involving a single employer, those which include a group of employers, and intermediary led projects, led by bodies, such as providers or industry associations.

Financial schemes

The government provides investment to training programmes (which firms have to bid for), which would then be combined with employer contributions when implemented. This acts as an incentive for small businesses to work together in group clusters to draw direct funding, and also encourages them to employ more young people.

Frequency of updates

No information is available.

Development

Adjustments for round 2: 1) the inclusion of key performance indicators, to ensure that all parties are clear on what the project should deliver, 2) administrative processes were streamlined, and project bids changed into two phases, 3) a simpler data submission process has been implemented for employers.

Barriers

There were barriers to recruitment (of new staff and trainees) due to: a lack of time to recruit, a lack of commitment from employers/industry, a perceived lack of demand from learners, and unrealistic projections in Grant Offer Letters. Once reviewed, demand from learners and employers for a given product is crucial for linking the Grant Offer Letter aspirations to actual delivery. This has been overcome by emphasising the importance of employers having close involvement in the design and bidding stage.

Success factors

The flexible nature of the policy instrument improved its success, namely in EOP's ability to provide specialist training that has met the needs of employers and is led by employers. As a result, choices of provision were widened providing significant increases in the relevance of training, improved value for money and more flexible, targeted provision. Many of the successes have been adaptive in nature, i.e. they have resulted from innovations that made changes to existing training provision within the same sector. For example, reducing programme lengths by removing content or restructuring delivery.

Monitoring

Indicators based on administrative data on: recruitment, learner engagement, etc. However, this posed a significant challenge due to the diversity of projects, which fell under the policy instrument. Also, there were a reported number of changes made to data requirements during the pilot. Innovation was used as an indicator, in comparison to previous practices. Each project would be measured throughout during the pilot period.

Innovativeness

Very innovative

Learners were able to achieve a route into employment, develop careers, or gain confidence. Businesses made gains in productivity and efficiency, and new market opportunities were realised. Additionally, collaborative activity between businesses was encouraged, which created collective impacts. Changes in employer behaviour towards training were also made, especially as the level of risk in terms of cost/time/resources was reduced by funding. Choices of provision have also widened, providing significant increases in the relevance of training, improved value for money, and flexible, targeted provision.

Sustainability

Evidence of effectiveness

The employer-led specialist training resulted in a wider choice of provision, which also increased the relevance of the training offered, improved value for money, and allowed for more targeted provision. Additionally, from the pilot a change in employer behaviour was observed due to reduced/removed risk in regards to cost (e.g. SMEs offered training that would otherwise have not been available). General impacts from the pilot report were: learners gained a route into employment, developed their careers or improved their confidence; businesses reported gains in productivity and efficiency; and providers realised market opportunities. Specific to the instrument was the impact of collaborative activity, such as cost savings made through collective bargaining or a reduction in duplicated training activity, meaning that businesses could become more productive through improved utilisation of staff. No exact figures were given however, as many conclusions have been drawn from qualitative research methods. Innovation resulting from the pilot is subtle. The individual projects funded under Round 1 did not generally produce transformative, unique innovations (most pilot projects adapted or extended existing approaches to training), though this is not necessarily a weakness of EOP. The key impact relates to collaborative activity. The pilot created opportunities for businesses to work together, either directly or through an intermediary, which would be an unlikely consequence of traditional funding models.

Engagement of stakeholders

Workshops and webinars were held before the pilot to ensure the engagement of employers, and events were also shared with stakeholders who are hosting their own to ensure all interested parties were contacted. The stakeholders and employers involved were also contacted and interviewed for the evaluation report, to ensure that their views and experiences were learnt from going forwards.

Transferability

Easily transferable

The instrument allows for different ownership models (three in total were found in the pilot: those involving a single employer, those which include a group of employers, and intermediary led projects, led by bodies such as providers or industry associations). This varied employer ownership means that if the instrument were to be transferred to another country, the models would be tailored to that country through the employers/associations involvement. From the pilot, feedback was generally positive from each model amongst those involved.

Sustainability

Employers have expressed their belief that the project would not be sustainable if funding were to be cut going forwards. There is ambiguity around this topic, as future funding through the Employer Ownership of Skills Pilot has not explicitly been granted. Some project leads in the evaluation felt that it was likely for funding to cease. However, many projects are seeking continuity through converting to mainstream or other funding routes, or through self-financing continued activity.