Skill equals success? If only it were that simple

8th March 2007
By Parliamentary Brief opinion piece

Free Access

This article is provided free-to-view for all visitors to thepolitician.org.

The joint Treasury/Department for Education and Skills sponsored inquiry into the skills that the UK might need in 2020, headed by Lord Sandy Leitch, produced its final report as part of the 2006 pre-Budget announcements. Its ambitions were swiftly endorsed by the Chancellor, who declared a desire to make Britain ‘the most educated nation in the world’.

The Leitch Review recommends many new policies, some only outlined with the vaguest of details. It commits the UK another round of institutional change (though not the ‘bonfire of the quangos’ Leitch is rumoured to have desired).

It promises greater public subsidy to employers to encourage them to train and to offer every worker a minimum platform of skills for the 21st century. It demands that spending on adult (i.e. post-19) skills should be routed through employers and individuals rather than the Learning and Skills Council. Most importantly of all, it pledges to make the UK world class at every level of qualification.

Leitch’s recommendations spring from a very simple central premise, based on an audit of qualification stocks and flows across the developed world. The view is that more is better. In essence, the view is a mercantilist one — the country with the biggest stockpile of qualifications ‘wins’. Skill has ceased to be just one of the factors of economic success and has been transmogrified into the key factor.

This is a huge assertion, for which the evidence base is disproportionately slender. There is no discussion of the complex linkages between skills and economic performance, it is simply assumed that once created skill will automatically be used to maximum productive effect. Nor is there any analysis of how skills interact with the Treasury’s four other drivers of productivity (competition, enterprise, science and innovation, and investment in physical capital).

Leitch argues that skill is now the most important lever within the control of public policy, as though other factors (for instance R&D and innovation) were impossible to influence — practice elsewhere in the OECD suggests they are not.

Some of the countries that are judged to be beating the UK on skills, and who according to Leitch therefore pose a major economic threat, such as New Zealand and Canada, actually trail the UK on nearly all of the Treasury’s preferred measures of economic performance. If we match them on skills, we had better hope we will not as a result match them on productivity.

Closer to home, the experience of Scotland is instructive. For the past three decades Scotland has spent proportionally more on education than England, and has a far more highly-qualified workforce, yet its productivity lags behind England’s.

Scottish policy-makers are increasingly talking about the inability of the Scottish economy to absorb and deploy higher levels of skill productively. Attention North of the Border is hence turning to how other factors and policies will have to change alongside skills in order to produce a positive economic impact — a focus mirrored elsewhere in the OECD.

There are two reasons for the Leitch Review’s failure to understand this. First, an implicit denial that demand for skill has many dimensions. These include labour market regulation (e.g. the extent of licence to practice requirements whereby people need particular qualifications to undertake certain types of work), the way the labour market is creating employment opportunities with different skill needs, whether firms choose high or low skill strategies as a means to compete, and how work is organised and jobs designed in order to use skills productively. All of these may need to change if economic success is to result.

Instead, Leitch internalises both the issues and the answers concerning the UK’s long-standing ‘skills problem’ within the education and training (E&T) system. Thus, current problems with a lack of value being attached to skill/qualifications are a function of poorly designed E&T outputs rather than weaknesses in the structure of underlying demand. In the opposite direction, higher levels of output from the E&T system can, on their own, drive economic success. The need for wider economic development policies can therefore be ignored.

The second problem is that qualification profiles across a national workforce normally involve trade-offs between achievement at different levels. Thus Germany does well at Level 3 (thanks to its extensive, high-quality apprenticeship system), but is not world class at Level 4 (degrees and sub-degrees). America performs well at Level 4, but has substantial weaknesses at other levels, particularly in terms of adult literacy and numeracy.

Leitch opts to buck this trend, and be in the top eight worldwide at every level of skill. Whereas the Review’s earlier Interim Report tried to tie skills targets to projections of actual demand for skill in 2020, the Final Report simply uses international benchmarking to determine what we should be aspiring to — independent of any actual demand in the economy. The overriding aim of public policy is to beat other countries’ stocks of qualification — to ‘win’ in the world league tables. This is potentially a recipe for wasted public money and for the creation of skills that will not be productively utilised.

The Leitch Review illustrates how difficult narrowly-focused government departments, in this case the Treasury and the Department for Education and Skills, find it to confront and analyse broad, multi-layered policy issues. It also suggests that evidence-based policy remains an aspiration rather than a reality in this area.

Rather than accept a rather simple ‘skills and skills alone’ prescription, public debate needs to focus on what other OECD countries are doing in the round to stimulate innovation, higher productivity and economic growth.

Filed Under: Policy, Skills, Leitch
Back to Top^