46. On 18 July, the new Department accepted the key recommendations of the Leitch Review of Skills. This did nothing to improve one of the weakest areas of government policy for England.
47. The Leitch Review argues that it has learnt the lessons of the last twenty years. In particular it proposes to link taxpayer funding of skills to demand from employers and individuals. But, in fact, it leaves the essential features of the central planning approach unchanged:
■ Central targets - for increasing the proportion of the workforce holding qualifications by 2020 - remain at the heart of policy;
■ a new public agency - the Commission for Employment and Skills - will oversee the industry skills bodies ("Sector Skills Councils"). Because several Cabinet Ministers will "have an interest in the Commission", it is highly likely to act according to central direction; and
■ evaluations have shown that its key practical proposal - the expansion of the Train to Gain initiative - has made very little difference to the amount of training undertaken by employers.
48. In fact, the whole premise of the Review - that UK employers train less than those in other countries - is mistaken:
■ the CBI recently reported that UK employers have the highest spending on training in the EU. 3.6 per cent of their total payroll is spent on training compared to 2.3 per cent across the EU 25; and
■ according to the National Employers Skills Survey, 65 per cent of firms trained their workers in 2005 (up from 59 per cent in 2003).
49. Government-sponsored training therefore imposes a dual cost on the economy: the direct cost of wasted public spending, and the opportunity cost of time which could be better used by both employers and individuals. Despite the clear evidence of wasted spending, the Leitch Review proposes to increase public spending in this area.
50. The new Government has spoken of a new approach to policy - bottom up, decentralised, people-oriented. The Leitch Review represents the old ways -top-down, centralised, bureaucratic. The better way is to build on the strengths of existing experience.