Funding Skills In The Long Term

Thursday, 30 September 2021
By Chris Yapp

georg-arthur-pflueger-eO_JhqabBY0-unsplash.jpg

The funding of long term care has been a running sore in British political life. Recent announcements have brought the debate to the fore. I don’t want to go into that quagmire here, but rather look at another long term issue that also needs addressing in the UK, the funding of skills. When things change, past strengths count less and weaknesses addressed can be sources of leverage for organisations competing against incumbents trying to make their past models survive a few more years.

In the 1990s, Michael Heseltine’s Competitiveness White Paper noted that the gap between UK and German skills was reported to Prince Albert in the 1850s. In truth, the UK remains a low skill, low productivity economy in the main. My father was the last generation of people who led the life of school, apprenticeship, (army), work, retirement. He was unemployed for a few days over a working life of more than 45 years. It is easy to exaggerate the changes with glib phrases such as “the 9-5 job has been replaced by 5-9 jobs as a working life”.

There are many ways in which working life has been impacted including; more women in the workplace, more working beyond retirement age, portfolio careers and developments in technology which have made “being at work” different from being in a specific place. Even jobs that have the same title may be very different to the “same” job 30 years ago. Consider the daily life of a GP. Advances in diagnostics and treatments, changes in demographics and societal expectations( and many other factors) means that a dialogue between a GP of say 1970 and 2021 would, I expect, require a lot of suspension of disbelief on both parties.

I choose 1970 for a particular reason. In that year, Donald Schon gave the Reith Lectures which turned in 1973 into his book, “Beyond the Stable State”. If you read it today, it still feels fresh and pertinent. He made important contributions to ideas around Lifelong Learning, Government as a Learning Organisation and more generally businesses as learning organisations.

robot.jpg

It feels sometimes like nothing has changed over the last 50 years, or maybe 150. It is getting more important over time because of the waves of change that are coming. Starting in the 1970s we saw automation changing factory floor, blue collar, work. The growth of office automation in the 1980s saw impacts on the white collar work. Early in my career, one of my customers senior managers wrote memos in pen, gave them to his secretary to type on a typewriter, then she passed onto another who put it into a word processor. Even after 2001, I came in contact with senior folk who had their emails printed out. What we face in the coming decades is a growing impact of automation on professional work, people like us!

An accountant completing training this year is likely to be working very differently in 10, 20, or 40 years’ time. The balance between the change in the content of work and the working processes will differ significantly between firms, economies and professions. So, let’s try a thought experiment:

Adam has completed training at 23. The cost of his training to date post-graduation is £X. If Adam is to fulfil his economic potential and live a good life, what multiple of X will be needed to be put aside over the course of his lifetime?

If a firm has 100 Adam’s what should their budget be for the organisation to be competitive in 10 or 20 years? Now scale that to a modern economy. The question arises as to who should pay for this, and of course who benefits?

Core to resolving the problem is recognising that education and training have huge economic externalities. An individual who does not go to university benefits from a well-qualified Doctor or Teacher, for instance. A business with a good record in staff development may well be rightly concerned that less committed organisations poach staff trained elsewhere. An individual who retrains at 60 for different work beyond retirement age may make greater contributions economically and have lower medical costs than someone who does not.

As in my recent blog on accelerating chance, we have precedents. During the upheaval of the Industrial Revolution the growth of the Public Library and Working Men’s Institutes spread learning to a wider society than before. More recently, the University of the Third Age has developed new models. Birkbeck college has a long history of achievement in this field and is worth reflecting on.

Earlier, I said that it felt like nothing had changed. Yet, the Open University founded in 1969 had as many students in 1994 as the whole of Higher Education had in the UK when it was created. It is not as if we have been short of initiatives in this space including the Open College, Individual Learning Accounts and of course “Education, Education, Education”. Today, the growth of online learning, which has been developing for decades has come to the fore during the pandemic at schools and in Universities

In the case of the UK, there are strong cultural issues at play. The equivalent status of academic and vocational qualifications, of degrees versus apprenticeships, have hampered attempts at change in educational systems. Certainly, many countries do not have these challenges on the scale of the UK. Yet the changes in professional work will impact them as hard as the UK. Change creates opportunity as well as threat.

There are so many possibilities as to how the system might be funded equitably across the stakeholders that in a post of this length I could not do them justice. Let me describe one possible future, the “Learning Society”. Modelled on the Building Society these could be mutuals, co-ops, social enterprises or private for profit.

konstantin-evdokimov-UUYkTnQkn9c-unsplash.jpg

At birth a “Learning Account” could be opened for a child, or grandchild (as for instance with Premium Bonds). These would be tax free and could get topped up by government bonuses, especially for more disadvantaged children. They would be whole life, with a maximum per year and a maximum whole life tariff (as per maximum pensions).

For adults, employers would contribute to the account. The self-employed could make payments into their own accounts and get tax relief. In the event of redundancy, part of a redundancy package could be taken into the Learning Account. This provides a redundant person with a fund for their re-skilling under their own control. For someone wanting to leave employment and become an independent worker, this fund built over years could support their ambition, rather than solely rely on short-term loans. Similarly, someone needing to refresh their skills over 50 for a different working life would have at least some funding towards that goal.

The Learning Societies themselves could negotiate offers for their members. Some of the societies could be sectorial, such as a Nursing Learning Society. Others might specialise in, for instance, mothers returning to work or other sectors. Importantly, this is a free market that can evolve rather than a top-down, short-term government set of initiatives to alleviate specific shortages that, frankly, do not have a good track record.

I think that there is also valuable symbolism here about the role of learning in our society. The Friendly societies, mutuals, and co-ops were part of the social innovations that were a response to industrialisation. They made mass home ownership a reality, for instance. If you were applying for a job and one offered a good contribution to your Learning Account through flexible packages and another did not, I think that would be noted by many people.

Earlier on, I mentioned a cost of £X as the initial adult training to get someone proficient. I’ve asked people, not necessarily a representative sample, but working in a variety of disciplines. The answers I get back for the lifetime costs vary between £3X and £10X because of the disruption to the future of work. My principal concern is that over my life time training budgets are an early casualty of slowdowns. That means that at a time of maximum need and opportunity, the budget is least.

As I started, care costs have been a political sore for decades. Whether recent announcements address the long term challenges is not for this post. Can we at least start to address the skills challenges? As with privatisation, that became an export industry for UK consultancy, could learning deliver for the home and global markets?