Coping with complexity and instability in vocational training systems: the case of the United Kingdom
Complexity and instability are challenges that all vocational training systems have to face if they take the needs of the word of work seriously and if they maintain strong and dynamic connections with it. Matching the permanently evolving skills needs of thousands or millions of workplaces, on the one hand, and the supply of skills produced by education and training systems, on the other, has never been simple. As this has been recently expressed explicitly by an expert study published by the European Commission in the framework of the community policy on “New Skills for New Jobs” matching through planning based on formal qualifications does not work. As the study stated: “instead, the emphasis should be on building an agile system that responds to market signals and where LMI [Labour Market Information system] informs consumers, providers and funders, helping them to make more informed decisions, rather than the state ‘planning’ provisions at a micro level” (European Commission, 2010).
Although “employers often use qualifications to describe what they seek in terms of required skills supply and they also use applicant qualifications to filter the supply of skills so that they get what they want” (Coles - Werquin, 2009) systems of qualifications and matching based on them have never been able to reflect properly the complexity of the often “capricious” or “chaotic” skills needs of workplaces. Countries are trying to reduce this complexity, among others, through modernising their qualifications systems and making them more transparent, with the aim of improving mediation between the words of training and that of work. But reducing complexity has also a price as “diplomas seem to less and less able to provide all the information that is required for recruitment and promotion processes” (Planas et als, 2000). There seems to be a need for new mediation mechanisms that allow higher level complexity which still can be kept under social control. The vocational training policy of the United Kingdom offers an interesting example for this. As the question of how to deal with increasing complexity in vocational training systems has appeared as a crucial one in most advanced national systems studying the UK model might be relevant for the emerging European and global skills strategies.
The three explicit strategic goals of the skills policy of the United Kingdom as they were defined a few years ago are (1) making education and training more demand-led, (2) making it more responsive to the rapidly changing skills needs of companies and (3) letting users, particularly employers, have a decisive role in determining the content of supply and the ways it is delivered (DIUS, 2007). All these goals lead to increased complexity in the UK vocational training system which has already been high due to various factors. One of these has been placing skills (or competencies) into the focus of vocational training which has been a key element of turning training policy into a skills policy. The combination of this, in addition, with a demand-oriented, market-type regulation approach leads necessarily to particularly high level of complexity, instability and uncertainty (Planas et als, 2000; Struyven - Steurs, 2004).
It is therefore not surprising that, when the information for this analysis was collected during a field visit in February 2008, the simplification of the complicated skills development landscape was a central theme in the UK. This was already a key item on the agenda of the first (preliminary) meeting of the strategic board set up to coordinate the skills policy, the UK Commission for Employment and Skills (UKCES), which, following this, initiated a specific program to cope with increasing complexity and instability (UKCES, 2008). The main reason of this was that the high level of complexity in the system of skills production was seen as a major obstacle to increase employer engagement, which has been a key priority of the skills strategy of the Government.
The assumption behind the goal of enhancing employer engagement in the process of skills creation and skills utilisation has been that without it any of the three goals of the strategy mentioned above could not be achieved. If employers – together with individuals – are not actively expressing their demands, both individually and collectively, the system cannot be turned into a demand-led one. If employers do not actively address the education and training system with the constantly changing needs of the world of work, this system cannot behave in a responsive way. If they do not show pro-activity in their role of determining the content of supply and the ways training is delivered the new channels of control and influence will remain unused. One of the challenges the UK skills strategy has been facing is that although it can work only if the level of activity and engagement of employers is high its actual level, due to a number of historical, social-economic and cultural reasons (Stanton – Bailey, 2004), has remained relatively low.
One can accept, as a departure point of this analysis, the assumption of relatively low level activity and engagement of employers in the UK, and also the assumption that the increasing complexity of the system of skills production or VET may have a negative impact on this. There are however two things that have to be stressed. The first is that strong employer activity and engagement can be expected only in an environment that allows the complexity of the world of work and production to penetrate into the education and training system. In other words high level employer engagement in shaping and implementing training policies can emerge only if these policies are strongly and directly reflecting the complexity of the reality of the world of work. The second is that the attitudes of employers, like other social actors, are not exempt of ambiguities: on the one hand they want to reduce complexity, but, on the other, they continuously contribute to its growth. This ambiguity can be observed, for example, in the attitude of employers towards qualifications: on the one hand they wish a simple, easily readable qualifications system, with a low number of entries; but, on the other, they wish a system that reflects the specificities of the skills combinations demanded by their particular company or sector.
On the field we were often told by those we met and interviewed that the high level complexity of the system and the bureaucratic constraints are among those factors that may impede better employer engagement. One of the areas where strengths and challenges related with employer engagement have been identified was, in fact, connected with complexity, uncertainty and bureaucratic constraints. The strengths identified were as follows:
· Employers can find various alternative routes for expressing their needs and asserting their interest: they can use both individual and the collective channels. As individuals (individual companies) they can negotiate specific skills packages according to their business needs, they can buy tailor-made training programs, they can create company specific qualifications and request their inclusion into the national qualifications system. Collectively they can aggregate and express their demands through sectoral bodies.
· The existence of sectoral bodies allows employers to express and assert their specific sectoral needs and interests and prevents regionally or locally organised training providers to determine the supply side. The parallel existence of regionally organised funding agencies and the sectorally organised employer-related agencies creates a positive dynamic and allows checks and balances.
· The high variety of routes and bodies allows key actors to have a role in a sophisticated bargain processes and in the elaboration of agreements on the provision and utilisation of skills. Agreements can be reached between actors representing the provider of public funds (the state), the providers of training (schools, colleges, universities) and the skill-users (companies, employers) etc.
· Linking the demand side with both individuals (learning accounts) and companies through specific programs and institutions allows a good balance between the two key actors on the demand side.
· There are many interfaces that allow a rich communication between the education/training system and the world of work/jobs/companies.
· The qualification system has a high level flexibility that allows the cutting of qualifications into smaller units (credits, modules) which allows employers and companies to acquire the specific skills they need, and creates new qualifications according to specific sectoral or company needs without challenging the integrity of the whole of the qualifications system,
· Companies can link the offer of training with their specific business strategy or competitive strategy; the system allows tailor made, personalised solutions that make it possible investing into skills that may lead directly to the improvement of the productivity and competitiveness of particular companies.
The other side of these strengths are challenges that are also related with the level of complexity and uncertainty and also bureaucratic constraints. The following could be identified:
· There are too many decision making, consultation, funding etc. bodies that make it difficult for users to orientate themselves and to define clear-cut responsibilities.
· Training providers might be organisationally destabilised by the variety and volatility of skills demands. It is difficult to harmonise the needs for institutional stability and the needs for adapting rapidly to changing demands.
· There are too many channels for funding training and it is difficult to find the appropriate funds for specific needs. It is difficult to control the ways public funding is used.
· Institutions have to comply with parallel quality standards which are not necessarily in harmony. Competing quality criteria may destabilise institutions
· There are too many documents and frames that guide the definition of qualifications
· There are too many parallel surveys that provide often contradictory evidences for decision making
· The complexity of institutions and procedures is accompanied high level bureaucracy, heavy administrative or regulatory burden
· Changes are too rapid: institutions, programs, “brand names” often disappear before users can get used to them.
Related with these strengths and challenges a number of policy issues, demanding reflection and action, could also have been identified:
This article tries to understand the nature and the sources of complexity and uncertainty in the vocational training system of the UK, in the perspective of these strength, challenges and related policy questions. It is in this perspective that it also tries to analyse the possible impact of complexity and uncertainty on employer engagement. The article also formulates some assumptions about the possibilities to, the needs for, and the possible ways to reduce complexity.
The basic assumption of the article is that those who manage systems can react to increased complexity in two ways: either they can try to decrease it or they can try to create new mechanisms that allow mastering it. In the case of the skills policy of the UK it seems clear that reducing complexity beyond a certain level could be achieved only through giving up some of the goals of the skills strategy (that is, through making education and training less demand-led, making it less responsible to the needs of the world of work and giving less role to the demand side, particularly employers). As the commitment for these goals and the political support for them seem to be particularly strong in the UK, this is probably not a real option.
One can assume, therefore, that in this case there is no other choice than to create and sustain new, innovative mechanisms that allow those who are leading and managing the system to keep complexity under their control. If this is done successfully, this may create an environment that is favourable for the achievement of the original goals. These mechanisms can make it possible to keep complexity at a relatively high level, to live together with it, to reduce the risks that accompany it and to let all those processes work that make it possible to reinforce further the demand-led character of education and training system, to make it more responsive to the rapidly changing needs of the world of work and to let employers have a decisive role in determining supply. While discussing these issues with some of the key leaders of the implementation of the UK skills strategy it was found that they seem to be much aware of this challenge and that those mechanisms that make it possible to keep the increased complexity under control are already operational and they are being developed further.
As we shall see, one of the specificities of the vocational training landscape in the UK is the very high number of actors or partners who take part in the creation and the implementation of policies. As an OECD review of adult learning has highlighted some years ago, “there are many different partners involved in the definition of public policy and provision of adult learning and post secondary education” in the UK (OECD, 2005). In connection with this it is important to stress: reducing complexity for one actor (partner) appears often as increasing it for another. For example, as we shall see below, reducing complexity for employers can often be achieved at the price of increasing it significantly for training providers.
In the case of the UK the high level complexity of the vocational training landscape is amplified by a number of specific features. These are particularly (1) some characteristic features of the VET model of the UK and the specific national approaches towards enhancing employer engagement, (2) the intention to linking skills and skills development with the business strategy or competitiveness strategy of companies and (3) some particularities of the pattern of policy changes in the UK.
Contrary to many OECD member countries, and similarly to some other Anglo-Saxon countries the United Kingdom does not have a well established, clearly circumscribed vocational education and training sector. Vocational education and training is provided by various providers, some of them operating within the formal education system, and some of them outside of it. This model is sometimes described as a “market model” (Ashton-Sung-Turbin, 2000) which is opposed to others, like the “corporatist model” of the German speaking countries, the “developmental state model” of some East-Asian countries or the “neo-market model” followed by some transitional countries with emerging economies.
One of the characteristics of systems belonging to the “market model” is, logically, that they focus less on the supply side (on provider institutions) and more on the demand side (companies demanding skills or consuming training services) than other systems. This has been a characteristic of the UK model even before the current skills strategy was designed. Since the demand side (with the huge variety of companies which compete on various markets with various products) is always more complex than the supply side (especially when supply is concentrated into or monopolised by a well defined public sector) the model itself produces higher level complexity than other models. This is reinforced by the fact that in these models qualifications are also less regulated and people can do much more jobs without being legally obliged to have a formal qualification. In these systems there is more focus on the infinitely complex world of skills than on the more systematised and regulated word of formal qualifications. It is related with these characteristics of the system that the notions “vocational training” or “vocational training policy” are much less frequently used in the UK than in most other countries and the dominant public and private discourse prefers using the terms of “skills” (e.g. “skills development” “skills system”) or “skills policy”.
The current skills policy of the country can be interpreted as an ambitious and dynamic attempt to improve radically skills formation or skills production within the historically inherited VET model. This policy which intends, among others, giving employers greater influence upon training has led to the creation of a new institutional framework which is, in fact, parallel to the already existing one. While the governance and funding of training has been organised basically on a territorial basis, the new institutional framework is organised on a sectoral basis. Taking the model of various other countries with more separated VET systems and stronger business representation into account (Raddon-Sung, 2006; Sung-Raddon-Ashton, 2006) the UK decided to create new sectoral institutions, the Sectoral Skills Councils (SSCs - see more about this below in the section about governance and decision making). On the one hand, this has created greater complexity by adding a new sectoral structure to the already existing territorial one as it duplicated the administrative and governance structures. On the other, however, it made the VET landscape more comprehensible for the various the branches of industry and for companies belonging to these branches.
A similar duplication, creating more complex but, at the same time (at least for the business sector), more readable structures is being carried out in the network of training institutions. There are a relatively high number of types of institutions providing VET in the UK but traditionally the institutional sector that has played the most important role has been the network of Further Education Colleges (FEC). This is a multifunctional institutional network providing education and training to the post 19 age group (including adults) but often also for the 16-19 age group. The VET functions in these colleges have not been well separated from other, general education functions and VET in most of these colleges has not been specialised, that is, it has not had a clear sectoral focus. For employers this has made it difficult to identify those providers which have specific sectoral strengths.
This arrangement has been by challenged various programs aiming at creating new specialized training institutions with clearer sectoral linkages and transforming existing organisations into such institutions (see, for example, the programs on Centres of Vocational Excellence and National Skills Academies). The White Paper on FE colleges, published in 2006, formulated it clearly: “We will expect every FE provider to develop one or more areas of specialist excellence, which will become central to the mission and ethos of the institution and will drive improvement throughout it.” (DfES, 2006). The emergence of a more specialized, more sector-bound network of training institutions is adding a new element to the already complicated VET landscape, increasing its complexity, but, at the same times, it makes this network, or at least parts of it, more comprehensible for industry, as the examples of a number of other countries prove it (Otero-McCoshan, 2004).
A second particular factor that increases complexity significantly is the intention to establish a link between the skills needs of companies and their overall business strategy. The skills policy in the UK has been strongly influenced by labour market research demonstrating that the simple increase of the supply of skills does not necessarily lead to increased productivity and competitiveness. Productivity and competitiveness of companies increase only if they modify their business strategy and, through this, they create a need for new skills (see for example: Keep-Mayhew-Payne, 2006; Futureskills Scotland, 2007; Keep, 2008). This is, in fact the acceptance of the fact that supplying skills in itself is not enough to boost productivity and competitiveness but there is also a need to alter the complex “ecosystem” in which skills are utilized in a given competitive environment and technological context.
This is one of the reasons why the Train to Gain program which offers, among others, a given type of business consultancy service to the companies (carried out by “skills brokers”) has become the "flagship" of the UK's skills strategy. This aspect is much stronger in the Welsh Workforce and Business Development Program, which is the correspondent of Train to Gain in Wales, and which offers overall human resource development consultancy service to companies with a relatively larger pool of HRD advisers. Both the English skills brokers and the Welsh HRD advisers start their activity in the visited companies with preparing an overall organisational needs analysis that not only maps all the skills needs of the company but also links this to its business plan. We heard, for example, from a skills broker that he started his work in a firm operating in the construction industry by analysing, together with the managers, the already concluded contracts and used this to define what specific skills needs the company will have in the future. Skills brokers may help human resource managers to establish a "skills matrix" that describes the specific skills needs of each employee in the light of the business strategy of the company.
Linking skills needs with the business plans or competitive strategies of particular firms and integrating this into training policy change the fundamental characteristics of this policy. It is not enough to look any more at the overall qualifications needs of industry or specific sectors but there emerges a need to take the singularities of every company into account. The creation of advisory services that create bridges between the infinite complexity of the skills needs of particular companies, on the one hand, and the much more standardised and regulated word of training providers, on the other, seems to be a logical answer to this situation. As a related analysis stated: “adopting a skill ecosystem approach challenges and confronts policy makers dealing with education and training issues with a level of complexity to which they are not normally accustomed” (Payne, 2007). This approach challenges the simple and direct relationship between economic performance and skills and tries to cope with the complexity of these linkages. By creating the services of skills brokers and HRD advisers the governments of England and Wales have established a new interface between the complexity of business strategies of particular firms, on the one hand, and the much simpler skills supply system represented by training providers, on the other.
This shift of focus towards the business strategies of companies increases complexity in various ways. For example it creates a problem of how to distinguish between those companies where investing into skills will really improve competitiveness and productivity and those where this would probably not have such an impact. This has an impact on how to define the appropriate target groups, that is, companies where the public support for skills development should go in order to obtain the most efficient use. This would require, for example, making a distinction between companies that are on the way to improve their market position or to conquest new global markets and those who do not have such intentions, and to direct public support for skills development to the former group (Keep, 2008). It is clear that traditional training administrations are not prepared to cope with such a complex task and this necessitates the active involvement of new actors, such as various business support and employer organisations in the implementation of the skills policy.
A third factor that increases remarkably the complexity of the VET landscape in the UK and contributes to the situation being perceived as very unstable is the particular paradigm of introducing changes and innovations into the system. Looking at the rapidity of changes it is not surprising that the word “revolution” appears quite often in official government documents. The OECD review on adult education has already stressed that „there is constant change and development in policies related to adult learning, there is a constant change and creation of institutions and bodies devoted to different tasks within the lifelong learning arena. In fact, many of the institutions involved in adult learning have been created quite recently” (OECD, 2005). A well known academic expert of the area described this instability brought by constant and rapid changes in a critical lecture this way: “...for the health warning for those of you who have never been inside the LSS before. It is a vast and complex world which is restructured so frequently that it has become a full-time job just to read about the latest turns and twists of policy, never mind respond to them. [This is a] fascinating, turbulent, insecure but desperately important world” (Coffield, 2007).
Beyond the rapidity and the frequency of changes there is a further characteristic of the policy change pattern that increases complexity significantly: the culture of introducing new elements into the system so that the existing ones are left intact until the new ones prove their viability. This is very apparent, for example, in one of the reform components of the skills strategy: the introduction of a new secondary school leaving examination and certification, the so called Diploma. The Diploma is a qualification that will orientate the education of the 14-19 age-groups. According to the related implementation plan (DfES, 2005a) “there will be 14 sets of specialised Diplomas, at three levels up to advanced level, covering the occupational sectors of the economy”. Although the original reform proposal (the Thomlinson report) suggested that “the existing system of qualifications taken by 14-19 year olds should be replaced” by the new diploma (DfES, 2005b), the final decision was that the new Diplomas will be offered parallel to the existing qualifications (see DIUS, 2008). This approach is different from what is followed in Wales where the new diplomas will be integrated into the system of the unified Welsh Baccalaureate Qualification (DCELLS, 2008).
The rapidity and the particularly radical character of the changes are also increasing the complexity of both the process of policy formation and that of implementation. As policies are intervening into areas that have not earlier been touched by public policies policy-makers are permanently faced with problems they are not familiar with. They often have to create new terms (e.g. “skills broker”) and they need data in areas that have never been covered by systematic statistical data collection (e.g. the skills profiles and business strategy indicators of companies). The meaning of terms, even in cases when meanings have implications for financing or for the assessment of the success of policy interventions may often change. For example concrete policy targets or financial benefits have been linked with the term of “hard to reach employers”, but the meaning of this term has often been changed, reflecting divergent views and shifting policy priorities. “Hard to reach employers” have to be defined differently, if the stress is on supporting all SMEs with an equity orientation than in the case when the question is how to find those companies that may have a good chance to conquest high technology global market niches but lack the ambition to do so (Keep, 2008).
It is often only during the implementation process that policy-makers realise that certain solutions that seemed simple and logical during the period of designing policies lead to unexpected difficulties. For example when the mediation between companies and training providers was made compulsory in the Train to Gain program, it happened that some training providers and companies agreed without a broker then they together tried to find a broker to sign their agreement in order to gain access to funding (Keep, 2008). We think these errors and uncertainties are unavoidable if policies are intervening into areas hitherto not touched by public policies and when progress can be achieved only through policy experimentation. Designing and implementing policies in such situations require strong leadership, high level intelligence and high level problem-solving capacity from policy-makers.
The emerging new regulatory environment of the skills policy, as already stressed, allows the expression and assertion of employer needs in different ways and at different levels. It seems to be recognised that only the creation of various parallel ways and levels and their simultaneous operation can assure the effective expression and assertion of the high variety of skills needs of employers. This can be interpreted simply as processes increasing complexity but, it can also be described as the creation of mechanisms that improve the manageability of higher level complexity. In this respect the UK follows more or less the same line as, for example, Australia, where there seems to be an emerging consensus, both in the research and the policy community on the need for new coordination and regulatory or governance mechanisms (“coordinated flexibility”) that allow higher level flexibility while preserving social control (Buchanan, 2006).
Letting employers play a key role at various levels and letting them enter various domains of VET policy makes it possible for various employer interests and demands to be expressed and asserted simultaneously. The domains where we can observe this happening, at various depth and intensity, are the following:
Although the level of employer involvement and influence is very different in these domains, all of them open particular channels for employers to determine key processes in the VET area. Employer engagement is being enhanced in all of these domains, and the way employers use these different channels to influence VET processes continuously create higher level of complexity. Complex systems of mechanisms have emerged within all these five domains that allow complexity to grow further, but there are also possibilities to reduce complexity without altering the basic characteristics of the system. It is important to look at the key features in all of these domains, and at the possible ways for and limits to complexity-reduction.
As the result of the developments of the last few years the landscape of skills policy, skills delivery and skills utilisation has become populated by an increasing number of players. The number of involved actors and agencies with various roles and acting at various levels is, as already stressed, very high and this makes it difficult to comprehend the VET landscape even for those within the system (see 1. Figure). As a report prepared by the National Audit Office in 2005 on the employers’ perspectives on improving skills for employment stressed: “some employers are confused by the range of information, bodies and training promotional material available”. It is not surprising that this report came to a conclusion, with two of its four points stressing this, that employers demand significant simplification. As it stressed: employers wanted a “simple ways of getting advice on the best skills training for their staff”, and they wanted to “influence skills training without getting weighed down by bureaucracy” (National Audit Office, 2005). The high level of complexity was stressed as a major challenge already in key strategy documents of the government (DfES, 2006; DIUS, 2007) and, later on, complaints on this appeared in many public documents and publications. In 2009, for example, a report of the parliamentary committee dealing with skills affairs stated this: “We heard pleas from practitioners for simplification. Colourful phrases were used about how training and skills provision looks to those who come into contact with it: ‘a pig’s ear or a dog’s breakfast’, ‘a very complex duplicating mess’, ‘almost incomprehensible’, ‘astonishing complexity and perpetual change’. One witness told us that ‘I do not think there is an employer in the land who understands what the elements of the new system are, particularly pre-19’” (House of Commons, 2009a).
Source: Coffield et al., 2008
The complexity of the system has been increased significantly by the fact that, as already stressed, there are two parallel channels to assert employer interests as both individual and collective needs are recognised. Employers as owners or managers of individual companies can express their specific skills needs through the Train to Gain program, the flagship program of the English skills strategy or through the Workforce and Business Development Program in Wales. These programs allow employers to define and to formulate their firm-specific skills needs with the help of skills brokers (in England) or HRD advisers (in Wales) which are services paid from public funds. Skills brokers and HRD advisers mediate between particular employers and training providers and help employers to find the specific training package they need. Larger employers may have access, with the mediation of skills brokers or HRD advisers, to tailor-made training programmes organised by training providers on their company base.
The mediation service, between employers as “purchasers of skills” and training providers as “sellers”, provided by skills brokers is one of those mechanisms that aim at coping with market complexity. Skills brokers act as an interface between the word of work (companies) and the word of education (training institutions). In this role they are confronted directly with the complexities of these two different words and with, as it was stressed by one of our interviewees, the huge cultural differences separating these worlds. A study prepared by the relevant state agency (giving a positive overall evaluation of the skills brokerage service) in 2007 stressed however that “skills brokers work with insufficient information to successfully match the strengths of particular training providers to the needs of a particular employer or group of learners [...]. Many do not know enough about the skills needs of workers in particular sectors or about specific training courses or qualifications which could meet these needs. Qualifications and training courses are proposed based on very little information about learners’ needs. Skills brokers give training providers too little information on which to base meaningful training proposals that reflect the needs of different groups of staff” (Adult Learning Inspectorate, 2007).
Parallel to the market-type mechanisms employers also have the opportunity to express and assert their skills needs collectively through the 25 Sector Skills Councils (SSC). The creation of SSCs has duplicated the national network of agencies responsible for the implementation of the skills policy. They operate parallel with the network of those regional agencies, the regionally based Learning and Skills Councils (LSC), which are responsible for steering and funding the institutional network that has the strongest role in providing vocational training in the UK, that is, the Further Education colleges. These two lines are complemented by a third one, composed by agencies responsible for regional social and economic development (Regional Development Agencies - RDA). The parallel regional and sectoral governance structures (the first for the supply side and the second for the demand side) make the governance of the UK VET system particularly complicated but, at the same time this allows a dynamic interaction between the supply and the demand sides. SSCs have an increasing role in all levels of VET policy, and they became key players at various levels.
Although there might be overlaps between the jurisdictions of these three lines of actions and related agencies each of them have their well defined functions that justify their separated existence. This creates a complex environment for policy formation and implementation and for the daily operational running of the skills system, including policies aiming at improving employer engagement. One of the ways to assure better coordination and coherence between these subsystems is to give a key strategic leadership role to a national board or agency that overlooks the totality of skills policy and acts as the most important background for government decisions. This type of role has been given to the UK Commission for Employment and Skills which has a key role in driving and shaping the skills and employment system to meet the needs of employers. While this Commission is connected to the sectoral line, it also acts as the main advisory body of the government in the whole area of skills policy.
Employers are complaining not only about the complicatedness of the system of skills policy and skills delivery but also about being weighed down by bureaucracy. Bureaucratic procedures are strengthened first of all by the fact that the use of public money by private companies makes strong public control necessary. This is exacerbated by the high level “risk awareness” of those designing and implementing programs in the relatively new field of skills policies, where most of the mechanisms and institutions are new and the procedures have not yet been stabilised. Our interviewees reported about the fear from public scandals as the public and the media is vigilantly scrutinising the use of public resources in the profit-oriented business sector. This leads to over-insurance in the form of strict eligibility control, high number of detailed standards and control of compliance to these standards, and tough accounting procedures.
The scope to reduce the complicatedness of the policy and delivery landscape seems to be rather limited. In fact all the agencies and actors that emerged during the past few years seem to have their functional place in the complex “skills policy ecosystem”, none of them seems to be superfluous. One possibility to help employers to find their way in this complicated word is to improve client services and to make the operation of public bodies more client-friendly, following the practice of “no wrong door”, that is enabling employers to get the appropriate advice, or service at whichever public organisation they approach. All public bodies have to accept, as a departure point, that employers, particularly SMEs, want “a quick and obvious route to obtain good advice and clear jargon-free information, require clear signposting because they can be deterred by having many options” (National Audit Office, 2005). As for easing bureaucratic burdens, a promising way could be what we saw in Wales where there is a commitment to increase the discretion the employers in using public resources if they meet certain standards.
Not only governance and decision making but also funding becomes more complex in the increasingly employer controlled and demand-led system. Some of the key factors that contribute to growing complexity in the employer controlled and demand-led VET system of the United Kingdom, particularly in England, are as follows:
(1) resources are redeployed so that they come under the control of various users,
(2) services are increasingly tailored to specific user needs,
(3) public and private resources are combined,
(4) employers use both individual market-type and collective mechanisms to influence funding and
(5) funding is increasingly used as an instrument of system-steering by public authorities.
As the growing complexity of funding can also become a major obstacle to the further development of employer engagement the possibilities of making things simpler and more transparent in this area is a major concern in the shaping and the implementation of the skills policy of the United Kingdom. This requires a serious analysis of the causes of high complexity and complicatedness and, particularly, the careful distinction of those factors that are directly related with the strategic goals (building a demand-led system with strong employer influence) and cannot be changed without giving up the goals and those that can be altered within the current strategic framework.
One of the evident causes of high level complexity in funding is related with the key dilemma of voluntarism and the acceptance of sectoral differences. As the government is reluctant, for various historical reasons (see for example Ashton-Sung-Turbin, 2000; Coffield, 2002; Stanton Bailey, 2004; Gleeson-Keep, 2004) to introduce compulsory training levies that would follow similar standards in every sector and as it allows the different sectors to reach their own particular agreement and to proceed at different paces, the complexity of the funding system is unavoidably growing. Some sectors are much more willing to contribute to training than others; some of them are already contributing while others do not. This prevents the establishment of a clear and standard financing mechanism that other countries, which do not follow the principle of voluntarism, can establish more easily.
The complexity in funding is being dramatically increased by the current redeployment of resources so that an increasing part of them comes under the control of users (individuals and companies) instead of remaining under the control of the providers. The creation and the use of individual “skills accounts” and the English Train to Gain program are those mechanisms that allow funding to be controlled by individual and corporate users. According to the document presenting the implementation strategy of the government the resources to be used in the employer controlled Train to Gain scheme will increase from £440 million to £1.3 billion between 2007/08 and 2010/11 (DIUS, 2007). However, as monies do not go directly and physically to the users but remain with the relevant accountable public agencies, complicated mechanisms have to be operated that allow both users to decide on what they spend the money on and the public authorities to control whether spending meets the relevant eligibility criteria.
The mechanism is further complicated by the fact that in an increasing number of cases public and private financing are combined, that is some parts of a “training-package” bought by an employer can be paid from the budget of the company while other parts from the public purse. The public-private combination appears also on the supply side as in many cases the “training-packages” are offered by consortia of training providers which may consist of both public and private institutions (one of them being the main contractor and the others being subcontractors). Those “training-packages” that companies mount with the help of the skills broker in the framework of the Train to Gain program are increasingly tailor-made, based on the specific skills needs of particular companies. The funding resources of such “training-packages” may also be various, as in many cases the costs of such packages are covered from various public and private, domestic and European, national and local, sector specific and sector independent sources. Among the sources, monies coming from regional or community development funds also occupy a significant place. One of the most important tasks of the skills brokers in England is to find all the various resources that can be used in accordance with the specific skills requirements of companies and with the specific eligibility requirements of the providers of resources. The complex landscape of resource providers is illustrated by 2. Figure.
Source: National Audit Office, 2005
A further factor that increases the complexity of the VET funding system in the UK is the fact that funding is used regularly as one of the most important policy instruments for strategic steering in the decentralised, demand-led context. This is one of those mechanisms that are used, as it was formulated by one of the leading personalities of the skills policy implementation process, by policy makers to “interact with the system”. The various actors within the system (particularly employers, learning individuals and training providers) are supposed to follow (with the help of the providers of support services) the changes in the availability of resources, in funding priorities or in eligibility criteria and to adapt their behaviour to these changes. For example, in the period of our inquiry, in accordance with the formal strategy of the government (DIUS, 2007) public funds in the Train to Gain program could be used – with some exceptions – only for trainings leading to lower (NVQ2) level qualifications.
Using funding to alter the behaviour of users (encouraging individuals and companies to invest into learning) increases significantly the complexity of funding mechanisms, as well as the task of those who “play” on these mechanisms. A well identified challenge, often mentioned in relevant publications (and also by several of our interviewees), is that that this way of using funding as a policy tool unavoidable increases the probability of rewarding private actors with public resources for actions that they would have done anyway (deadweight). This makes it necessary the permanent collection of good quality data that permit the analysis of the behaviour of various actors almost in “real time” and also the difficult persuasion of the public that up to a certain level this type of “wastage” of public resources is justifiable. Since this makes funding very vulnerable to public criticism, public authorities feel obliged to operate excessive control through highly bureaucratic accounting and regulation.
Finally, the complexity of funding is being increased also by its linkages with the system of qualifications and the ongoing reform of this system (see more about this in the section on qualifications below). If funding is linked with qualifications, which is the case in the UK, similarly with other VET systems, the complexity of the qualifications system unavoidably increases the complexity of the funding system, as well. As qualifications are broken into smaller units (credits, modules), it becomes possible to link funding with these smaller units. This is, in fact, a deliberate goal of the current reform. As some of our interviewees stressed, one of the ways to increase employer engagement is to allow employers to “buy” only smaller units (credits, modules) instead of whole qualifications. Employer organisations (the SSCs) when they evaluate and approve qualifications, they evaluate and approve also smaller units (credits or modules) within the qualifications. They can allocate various credit-values to specific modules within qualifications and they can change these values according to the labour market relevance they attribute to these specific modules. The complexity created by this can be further increased if the government follows the principle of giving more public support to trainings that lead to full qualifications and less to those that lead only to partial ones or offer only modules, as this could require quite complicated mechanisms of credit calculation.
Since the increasing complicatedness of funding mechanisms and the bureaucratic mechanisms that accompany the development of them appear as one of the main obstacles for enhancing employer engagement the goals of simplifying and de-bureaucratising the mechanisms of funding became salient. This has to be achieved, however, so that it does not impede the achievement of the main strategic goals of the skills policy. One possible way to do this is to strengthen the role of the leading institutions of training provider consortia in coordinating and reporting, so that the employers do not have to care about what kind of resources are used to finance the training package they receive. Another possible way is to increase the discretion of at least certain categories of users on how they use the resources they dispose of. This possibility, which is, as already mentioned, envisaged in Wales, could be offered for those who meet certain standards, for example they are the holders of the Investors in People award.
The third domain where employers are encouraged to and can in fact have a stronger influence on training and training provision is standard-setting, quality assurance, accreditation and evaluation. This allows employers to influence rather directly the operation of training provider institutions. Through influencing the formulation of operational standards and the operation of existing quality assurance, accreditation and evaluation mechanisms or through initiating new ones they can partly determine the way providers operate and they can influence the content of their training products. A large part of this influence is exercised in the area of qualifications (see next section for this) but this can focus also on the operation and the organisation of training institutions. This is a good example of how decreasing complexity for one actor may lead to higher complexity for another. Having access to relevant and simple information about the quality of providers (which are based on detailed standards and rigorous evaluation of whether they comply with these standards) makes things simpler for employers but may put extra burdens on providers.
The Government’s White Paper on Further Education which was the basis of the new Further Education and Training Act adopted by the Parliament in 2007 stressed not only in general the need to strengthen quality assurance in training institutions but also that of linking this better with the priorities of skills policy, including a better focus on employer needs. The White Paper stressed that quality assurance should serve the interest of the users (both employers and individual learners) and warned against quality assurance leading to too much administrative burden and bureaucracy.
The enhancement of employer engagement by training providers has been supported be relevant state agency (Learning and Skills Development Agency - LSDA) for several years. It published, for instance, guidelines for colleges and other training providers on effective employer engagement as early as in 2003 and it also conducted research on the impact of this on the internal management and operation of colleges (Hughes, 2003; 2004). Setting standards for the evaluation of how training providers (colleges) enhance employer engagement made it necessary to define clearly what employer engagement means and also to define performance indicators in this area. The LSDA research on how colleges applied the employer engagement guidelines listed and measured 23 types of employer engagement enhancing activities (such, for example, as setting a strategic goal of increasing the number of employer clients, increasing employer satisfaction or increase revenues coming directly from employers), and provided data on the frequency of these activities within colleges (Hughes, 2004). This has, unavoidably, increased the complexity of the evaluation or quality assurance processes and has led some growth of administrative burdens.
The founding agency of further education colleges (LSC) has offered a standard quality assessment framework based on three key areas: responsiveness, effectiveness and finance. One of the performance indicator groups under the area of responsiveness was responsiveness to employers, which contained two specific performance indicators: employer satisfaction and resources coming from employers (LSC, 2008). In addition to this, a new further standard has been developed (with the active involvement of employer organisations) which focuses exclusively on one single aspect: how training providers satisfy employer client needs. As the relevant documents formulate: “the New Standard is an assessment framework and an assessment and accreditation process which has been designed to recognise and celebrate the best organisations delivering training and development solutions to employers” (LSC, 2007). By February 2008 there were 27 training providers (most of them further education colleges) accredited on the basis of the New Standard. The creation of a specific standard for the assessment of “employer friendliness” and a special accreditation process based on these standards has certainly reduced complexity for the employer side as companies searching for training can use the “New Standards” brand name as a guarantee for good quality services. From the perspectives of colleges, however, this new alternative form of accreditation has unavoidably created ambiguity as it has, in a sense, duplicated quality assurance processes.
Concerns about duplication and administrative burdens have been expressed, not surprisingly, by the university sector which is also increasingly affected by the challenge of supporting employer engagement. A position paper of the UK association of universities (Universities UK) published in 2007 mentioned, for example, several examples of “kite-marking” and endorsement schemes through which SSCs are attesting the sectoral relevance and quality of various vocationally oriented courses or certificates. According to this document universities are faced with the following related challenges:
As we stressed the impact of introducing standards with the control of compliance with them can both increase and decrease complexity. We identified one way of using them to decrease complexity in Wales where, as mentioned, there is an intention to simplify accounting and lessen administrative burdens on employers through giving more discretion to employers in spending public money if they meet certain standards. This is directly related with the intention of linking skills development more strongly with the business strategy of companies. The idea is that if companies have a coherent and advanced human development policy embedded into their overall business strategy (which can be tested, for example, through their meeting the Investors in People standards), and this is publicly recognised, they can use public money for skills development with more flexible eligibility criteria and without excessive reporting. This approach can certainly reduce administrative burdens on the side of meeting eligibility criteria and reporting, although at the price of paying the costs of complying with standards and accepting external assessment.
The qualifications system seems to be the most important domain where employer engagement is enhanced and where increased complexity is perhaps the most apparent. This is where many of the bridges between the complex world of company level skills needs and the much simpler word of training supply have to be built. The mechanisms developed here are particularly complicated but most of these complicated mechanisms seem to be necessary for the effective management of increased complexity.
There has emerged two parallel ways for employers to influence qualifications. One, very recent, is the individual way, and the other is the collective one. Individually employers have obtained the right to create their own qualifications and to make this accepted by the qualification regulatory authority of the state (QCA), through the so called “employer recognition scheme”. This is a radically new arrangement, and the number of these types of "private qualifications" is still rather low. In February 2008, a few weeks after the pilot scheme was launched, there were, 3 such recognised company based qualifications: (1) the “Airline Trainer” program of the air company Flybe, (2) the “Basic Shift Managers” program of McDonalds and (3) the “Track Engineering” program of Network Rail. A public authority, the Ministry of Defence has also received the right to awarding recognised qualifications for three programs (“Heavy Weapons”, “Carpentry and Joinery” and “Survival Equipment”). In addition companies can acquire the right to award publicly recognised qualifications through partnership with existing awarding bodies (e.g. FE colleges or universities). In February 2008 there were 30 companies involved in joint awarding boards.
The collective way of influencing qualifications for employers is created through the SSCs. Within this channel there are several complementary instruments, all of them having their own function. First SSCs are responsible for establishing a strategy based on sectoral analysis about future sectoral skills needs and skills gaps (Sector Qualifications Strategies - SQS). It is on the basis of this that they define priorities for certain qualifications or make it clear which qualifications are not needed any more. Second, they negotiate this strategy with the most important partners, those representing funding agencies and providers and agree with them on the common realisation of their strategy. This negotiated agreement appears in the so called Sector Skills Agreements (SSAs). Third, they elaborate and regularly update a detailed qualitative description of their specific skills needs in a document called National Occupations Standard (NOS). This document gives a precise description of the skills (competencies, knowledge, attitudes etc) needed in the typical occupations of the given sector. The NOS expresses the qualitative skills needs of the sector and they constitute a basis for assessing existing or new qualifications owned or proposed by the qualification awarding bodies (e.g. training institutions). As mentioned above, SSCs will have the right to approve or reject qualifications to be included into the National Qualifications Framework or to be selected for public funding on the basis of how their content fits their NOS.
This collective system of managing qualifications creates a kind of “double loop interface” between, the word of skills needed at company level, on the one hand, and the word of training supply, on the other, and it allows the control of higher level complexity. NOS is one of the loops that is closer to the complex world of skills needed by companies while the qualifications themselves constitute the other loop closer to the world of education and training. In this system employers can assure that they get the specific skills (and not qualifications) and education and training providers (or qualification awarding bodies) can still be sure that they can produce whole qualifications. This double loop interface between the world of work and the world of training is operating under the strategic control of employers who exercise this control in accordance with their agreements with the key partners.
This already quite complicated system is being made even more complex (and also more flexible) by the introduction of what is sometimes called "unitisation" that is the credit or module system. The National Qualifications Framework is being transformed, in England, into a Qualifications and Credit Framework (QCF), which will break down qualifications into smaller pieces of learning units, which will allow people to accumulate credits as they learn over time. One of the aims of this change is to give qualifications simpler titles, “to avoid confusion and overlapping names”. Transforming the National Qualifications Framework into a Qualifications and Credit Framework allows the reduction of complexity at the level of the “brand names” (qualifications) at the price of creating a second level, that of credits, which allows the control of higher level complexity. A credit and qualifications framework has already been developed in Wales and Scotland.
As the UK is transforming its education and training system towards a more demand-led and more employer-controlled system and experiments with radically new solutions the needs for feedback information about the impact of these changes is increasing exponentially. The growing role of various actors acting as clients or pressure groups (companies, individuals, employer organisations, new agencies etc.) which act autonomously and interact with each other makes the evolution of the system less calculable and increases uncertainties. The steering of this type of system demands much more fresh information about various processes than the steering of a system where processes are controlled by suppliers.
It is not surprising that while the number of ad hoc and regular surveys that monitor changes in various domains (e.g. employees, employers, programs, institutions etc.) is particularly high, the need for further information seems to be never satisfied. One can see, on the one hand, the extreme richness of evidences produced by various research and monitoring programs, and, on the other hand, the ever increasing needs for further evidences. It is quite probable that the need for new evidences will increase further in the future. For example, as skills policy is increasingly linked with the specific needs of particular sectors, there appears more and more need for sector specific information. A further growth in information needs may appear with the process of linking skills development and utilisation with the specific business strategies of companies. If, for example, companies with different business strategies express different skills needs, and these needs are to be satisfied in a differentiated way some information on company specific business strategies will be needed. This is well illustrated by the discussion on how to define the group of “hard to reach” employers. If this group may be defined (more in Wales than in England) as “firms that might be most likely to grow in size or where the organisation showed an interest in trying to move its product market strategy upwards, towards higher quality goods and services” (Keep, 2008), the type of information needed to identify who belongs to the group and who does not becomes much more complex than when this is defined according, for example, to training practices or resources spent on training.
As has been stressed from the beginning of this article, complexity, uncertainty and instability are naturally increasing in any VET system that tries to be open to meet the rapidly changing skills demands of companies competing in constantly changing markets. The challenge that he VET system of the UK has been facing, under the social and political pressures to reduce complexity, is how to achieve this without reducing responsiveness and flexibility. In 2008, on the request of the government, as already referred to, UKCES prepared a detailed analysis on the sources of high level complexity and instability and proposed some specific policy measures for coping with it (UKCES, 2008). The report made it clear that there were many, very different and often contradictory motives behind the complaints of employers about complexity and it also made it clear that the possibilities of simplifying were limited. Similarly, the government, when responding to the requests of the parliamentary committee responsible for skills affairs, made it clear that reducing the complexity and the instability of the VET landscape was not only difficult but it was not always desirable. “We recognise the Committee’s call for a period of relative stability” – said the Government in its answer. „But we need to balance the benefits such stability would bring – in terms of employers getting involved in skills and training their staff – with the reality of a rapidly changing world”, making reference to the radical changes in the environment following the economic crisis (House of Commons, 2009b).
The response of the Government and UKCES to the request of reducing complexity and uncertainty was a sophisticated mixture of action and non-action. A decision was taken not to introduce new “disconnected activities”, not to request further reporting, not to establish new “brand names” for programs and not to create new agencies “beyond those already announced” and to allow employers to do what they were doing in one contractual framework instead of several. None of these decisions was removing any of the key elements of the operating system. Beyond this, the launching a number of positive actions has also been decided. On the top of the list of these actions figured the creation of a new computerised information system, with an attractive public internet portal, that allowed employers to have access, through one single entry, to all skills-related services. This system, called TalentMap, supported by several business associations and government agencies and operated by UKCES has opened entries for employers into five key skills-related areas: (1) staff development, (2) recruitment of new staff with relevant skills, (3) improving business performance through skills based innovations, (4) cooperating with schools and other training providers and (5) participating in collective activities to shape the skills system (e.g. influencing the definition of occupational standards through the Sector Skills Councils). The title of the report assessing the measures taken, published in 2009, was “hiding the wiring”, making it clear that what happened was less policy-reshaping and more improving communication and making things more understandable (UKCES, 2009).
Making things more manageable without altering them substantially was in accordance with the original program of UKCES for simplification. However, this program proposed also a second phase of simplifying which was to be launched following a longer consultation process. The original intention in this second phase was to also allow „rewiring the circuit board” (UKCES, 2008), that is introducing more substantial changes. One of these might be the gradual elimination of a key source of complexity: the historical separation between vocational and higher education. The idea of merging the public funding agencies of these two sectors, for example, has been proposed several times by some key actors, and this was also discussed in the already quoted report of the Parliamentary Committee dealing with skills affairs. As the report formulated „there is a significant discrepancy between the funding available to HE and that available to FE. Some have argued that this difference has to be addressed if the two sectors are to work together more effectively.” The Parliamentary Committee took, however, a very cautious stand on this particularly contentious issue: “We conclude that this is an idea whose hour has not yet come but one which should not be dismissed as without merit” (House of Commons, 2009a)
The report of OECD on the VET policy in England and Wales rightly stressed that VET policies in the UK are “more complex than in most other OECD countries” and the landscape is not only complex but „also volatile” (OECD, 2009). It is logical that the report, in accordance with the need expressed by almost all players of the VET scene in the UK, recommended that „institutions of the VET system should be simplified and stabilised”. “Hiding the wiring”, stressed the report, „is useful to an extent but it is limited”. It supported UKCES in its intention to prepare, following the closure public consultations, a further report which might envisage „more radical changes”.
The key message of this article is that (1) increasing complexity and high level instability are among those factors that may seriously impede employer engagement but (2) complexity and instability are caused mainly by the rapid changes and they are strongly linked with the basic strategic goals of the skills policy of the UK (that is with linking skills development with the rapidly changing skills needs of competitive industrial sectors). This means that the necessary efforts to reduce complexity and increase stability have to be made in a cautions way, so that they do not make harm to the achievement of the basic strategic goals. It has also been stressed, that in a changing and turbulent environment reducing complexity and increasing stability from the perspective of one partner can be achieved often only at the price of creating higher level complexity and instability for another.
There are, however, many possibilities for reducing complexity and increasing stability even in the current changing and turbulent environment through, mainly, increasing communication, making the complicated new procedures and institutional arrangements even more transparent, and particularly through trust-building that allows further discretion, more flexibility and less bureaucracy. But, in many cases the solution will probably remain “hiding the wires”. That is showing to employers and other actors only those elements of the complicated arrangements that are indispensable for their particular action and keep all the others “under the cover”, uncovering them only when there is a particular need for this (when, for example something does not work and some procedures or institutional arrangements have to be fixed).
What we see when observing the VET policy landscape of the United Kingdom seems to reflect two broader trends. One is the emergence of advanced systems of lifelong learning with blurring boundaries between the world of formal education and that of job-related learning and with new mediation mechanisms. The other is the unstoppable trend of growing social complexity that characterise all social systems, and which makes it necessary for public policies to invent innovative new forms of steering and regulating. The case of the VET (or skills) policy of the UK is a good example of how public policy can learn now ways of coping with high level complexity and uncertainty. Although all important players of the VET policy scene of the UK are expressing worries and complaints because of the high level of complexity and uncertainty and they are urging measures to reduce it, what is really interesting in this scene is not these worries and complaints, neither the immediate policy reactions to them, but the emergence of new innovative mechanisms which, as shown particularly in the chapter on “domains of complexity” are creating an emerging new potential to cope with complexity and uncertainty. This is close to what Robert Geyer, a researcher on politics, complexity and policy called a few years ago in one of his articles about „third way” politics the „non-linear paradigm” (Geyer, 2003). This type of public policy, that he positioned between what he called the linear (order) and the alinear (disorder) paradigms, might offer significant competitive advantage to those countries which are able to maintain relatively high level of complexity in specific policy areas without losing control.
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 The original version of is article was written as the contribution of the author to the OECD VET thematic review in the UK. A field visit, which is the basis of the analysis presented here, was conducted in February 2008, and the report (OECD, 2009) was published one year later. I wish to thank all the people we met during the field visit and particularly the members of the OECD review team for the inspiring dialogues that influenced directly this article.
 For example, the document presenting the governments action plan for the implementation of the Leitch Report (DIUS, 2007) speaks about “skills revolution”, and states that “this document explains how the Government will provide the right supporting framework to act as the catalyst for this skills ‘revolution”.
 LSS = Learning and Skills Sector
 The Investors in People (IiP) is a voluntary assessment scheme, in which companies are assessed against a number of indicators measuring the commitment of the company to learning and human development. If external assessors give a positive evaluation companies can be is awarded the Investors in People status. In September 2007 there were nearly 35 000 organisations accredited under IiP, and these organisations employed approximately 6.7 million of the UK workforce (http://www.investorsinpeople.co.uk).
 „Clearer performance information will assist providers in their own quality assurance activities, facilitate the new selective approach to inspection and intervention, and help to assess value for money. The extensive information already available to learners and employers needs to be clearer and more accessible. The primary performance indicators need to be aligned with our reforms and allow straightforward and meaningful comparisons. At the same time, we need to reduce significantly the bureaucracy involved in the current arrangements across partner organisations for data collection, analysis, publication and use” (DfES, 2006).
 See detailed information on the website of QCA (http://www.qca.org.uk/qca_15669.aspx; 28 Jan 2008). Case studies of companies developing accredited qualifications can be found at the website of QCDA (http://www.qcda.gov.uk/19841.aspx; 29 January 2009).
 The complete list of qualification awarding bodies can be found in the National Database of Accredited Qualifications (http://www.accreditedqualifications.org.uk/awarding-body/awarding+body+directory.seo.aspx) which contained, in February 2010, 152 organizations including several companies.
 It is worth mentioning that the development of the national qualification system made it necessary to create a new regulatory agency, the Office of the Qualifications and Examinations Regulator (OFQUAL).
 See the portal here: http://www.talentmap.ukces.org.uk/UKTalentMap/home.do