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Scottish Enterprise’s Skillseekers programme had made considerable progress in delivering Vocational Qualifications for young people at reducing unit cost. There are, however, a number of ways that Scottish Enterprise and Local Enterprise Companies (LECs) can build on their successes, Sir John Bourn, head of the National Audit Office, reported to the Scottish Parliament today.

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Skillseekers funds training for Vocational Qualifications, VQs, for young people aged 16 to 24. A guarantee of a training place is made to young people aged 16 and 17. Between 1995-96 and 1998-99 there were nearly 140,000 trainee starts. In 1998-99 Scottish Enterprise spent some £70 million on the provision of youth training places under Skillseekers through contracts with LECs.

On Achievements

Sir John commented that Scottish Enterprise have been successful in making places available to meet the national guarantee to 16 and 17 year olds. However, while training for 18-24 year olds is intended to meet local needs, LECs’ assessments in this respect are not well documented. He said that the LEC network has met targets for numbers of starts and the proportion of trainees employed while training. Although the programme had achieved increasing numbers of VQs at all levels over time, LECs have consistently produced fewer higher level VQs than expected. But the gap has reduced in later years which indicates that progress was being made.

Sir John said that LECs collect most of the information necessary to compile local skills strategies, but training delivered is constrained by the demand led nature of Skillseekers. He supported action by Scottish Enterprise to produce a more consistent and reliable information system relating expenditure and what is achieved by it. He said Scottish Enterprise make little use of the short term follow up survey information they collect and, in common with other agencies in Great Britain, have not yet developed longer term measures of positive outcomes.

An evaluation of the early impact of Skillseekers concluded that young people had acquired relevant and useful skills, and that the programme delivers a range of labour market benefits to employers. Sir John found that most Skillseekers trainees would have received some training in the absence of the programme but not necessarily towards securing a vocational qualification. He recognised that it is inevitable that there will be some dead-weight in relation to the training provided by Skillseekers. He noted that employers participating in Skillseekers recognised that a number of other benefits such as motivated and productive young people, had been achieved through participation in the programme. Sir John said that Scottish Enterprise accept the need to examine the scope for increasing the amount of training which would not otherwise be provided, consistent with maintaining quality standards.

On Efficiency

Scottish Enterprise provide LECs with an incentive to minimise the public sector contribution to training. Sir John noted that there are few occasions when LECs can make use of competitive tendering, and evidence of price negotiations with training providers is not well documented. In these circumstances, Sir John cannot provide assurance that the public sector financial contribution is the minimum necessary, or that reductions in the level of contribution could not have been achieved more quickly. But he called Scottish Enterprise’s £25 million reduction in annual expenditure between 1996-97 and 1998-99 a significant achievement.

In April 1999 Scottish Enterprise introduced a new system which should, over time, provide a comprehensive record of trainee expenditure, progress and achievements from which information relating to budget allocation and training credits can be drawn. Sir John welcomes this development and considers the information the system will provide will be useful in reviewing the prices Scottish Enterprise pay LECs for training provision and in developing measures of relative efficiency.

Sir John found that the proportion of trainee starts that results in a VQ level 2 varies from 39 to 74 per cent across LECs. He also found on the basis of a representative sample of Skillseekers trainees that half had not achieved a VQ level 2 within 3 years of starting, and expenditure on this group across the LEC Network amounted to the equivalent of up to £14 million annually. Within this, up to £3 million may be spent each year on trainees making only limited progress.

Training providers employed by LECs are accredited to the Scottish Quality Monitoring System standards and eight out of ten employers and trainees rated the Skillseekers programme as good or very good.

Sir John recommends that Scottish Enterprise should:

  • review their policy for access to Skillseekers for 18-24 year olds;
  • set targets for continued employment and further training;
  • examine what scope there is to increase the additionality of training without compromising quality;
  • use additional information on volumes and costs of training to improve their pricing system;
  • take steps to improve the trainee completions/starts ratio;
  • analyse further the causes of variation in efficiency across LECs; and
  • continue to monitor quality, particularly taking account of employer and trainee views.

Sir John said today

“Some £240 million has been spent on Skillseekers since 1996-97. There is a good opportunity now to build on the considerable progress of Skillseekers to date. Value for money can be improved by bringing in more employers who would not train to VQ standards without support, the use of better management information, and by more benchmarking across the LEC Network to spread good practice.”

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