One nation: two problems

Most people who have decided to vote for Tony Blair in the expectation that his lot will have marginally more decent instincts than the present lot would agree that Britain has two big problems. First, a competitiveness problem; second, a social polarisation/poverty/social exclusion problem. They would probably also agree that solving one is not going to solve the other.

"Trickle down" may have some relevance in the fast growing economies of agrarian Asia, but in an advanced industrial society such as Britain, it means little more than sending the day's leftover sandwiches to the soup kitchens.

The fact that solutions to the competitiveness and social cohesion problems can be comfortably accommodated under the same stakeholder slogan does not mean that the two are complementary, or even compatible. The "stakeholders' firm" certainly has advantages over the "shareholders' firm." If you make firms a bit more like communities-by treating core employees as full members of the firm, guaranteeing stability of employment, offering profit-sharing schemes and so on-you can gain commitment, involvement and flexibility. But that usually involves a polarisation between a privileged core (which the wise employer keeps as restricted as possible) and a dispensable "periphery" of part time, temporary and contract workers whose flexibility is still of the easy-hire-easy-fire kind.



Fraternity can all too easily begin, and end, in the home firm. Nowhere are firms more like communities than in Japan. There, even the unions are fragmented single firm organisations; this encourages "enterprise egotism" to a point which precludes "insiders'" concern for "outsiders." By contrast, German unions do show broader social concerns (as in the proposed Alliance for Jobs, which would trade off wage increases for employment). David Soskice, writing in Prospect (April 1996), suggested that this feature of German unions was part of a broader sense of social cohesion, which manifests itself in the strength of chambers of commerce and employers' associations, in co-operation in the apprentice training system and so on. He suggested that this sort of social cohesion was a necessary precondition for any kind of Will Huttonish stakeholder firm; and that it was ruled out of practical politics because Britain is incapable of developing such national institutions.

It is not obvious that Soskice has identified his chicken and egg correctly. A change in company law which acknowledges the claims of other stakeholders-enjoining co-operation and compromise rather than individualistic unilateralism in the enterprise-could be the place for Britain to start building a sense of social cohesion. Once built, that sense of cohesion could enhance the chance of building an electoral majority for the kind of redistributive taxes and public spending which Frank Field's welfare version of a "stakeholder economy" entails.

Utopian? Perhaps. Inheriting a sense of social cohesion from a closed 19th century Germany is not the same thing as creating it anew in 21st century Britain, an increasingly open and individualistic society. But regardless, the two versions of "stakeholder economy"-the Soskice corporate ethos version and the Frank Field welfare version-are distinct. They might in the long run be mutually reinforcing; but in the short run, they are more likely to work against each other. Those who are lucky enough to arrive in the privileged "core" employment sector, with their Bupa membership and their company pensions, will have less reason to look with sympathy on the unfortunate inhabitants of the periphery.

To suggest incompatible solutions to problems which are clearly recognised as distinct is one thing. Muddled solutions to what are in fact different problems, but which are not recognised as such, are quite another. Though neither New Labour nor this government recognises it, this muddle is infecting the revamping of our skills training and certification system that has rumbled on for the last ten years. In this area, too, competitiveness and social cohesion are being conflated.

We have all heard the diagnosis. There are two routes to international competitiveness: the low pay, low skill, price-competitive route; and the high quality, high skills, high wage route. Failure to invest in training is giving us the wrong kind of competitiveness and doing nothing to stop the waste of resources implied in high unemployment. Unemployment results from a skills mismatch: a shortage of highly qualified people and a superfluity of unskilled ones. Thus, the argument goes, unless you give the unskilled skills, Britain will forever flounder in a "low skill equilibrium trap."

But Britain doesn't have a skills problem. Rather, it has two different skills problems. One is the lack of operational efficiency among qualified people who don't do their jobs as well as they might: the engineer who designs engines for trains that break down every 10,000 miles; the software writers who can't deliver what they promised the stock exchange; the doctors who misdiagnose; the job centre clerk who gets his records mixed up.

The other problem is how to pull the socially marginalised back into work: the slow learners who come out of school with little capacity for manipulating numbers or words; those who lack the self-confidence and the self-discipline (the basic ability to turn up at a job at eight thirty every morning) which that capacity confers.

The efficiency and the social rescue problems are distinct; they require different solutions. Improving efficiency might require institutional changes in the training system itself, but above all, it needs a tightening of standards, a "cultural revolution" to eliminate sloppiness.

However, the bulk of the steadily mounting expenditure on "vocational education and training" over the last ten years has focused on the problem of social rescue, not efficiency. Under a succession of labels (YOPS, YTS, YT) courses specifically designed for 16 to 17 year olds who have had their fill of school and cannot get jobs have absorbed the lion's share of public training funds. In his recent report on the rationalisation of education and training provision for 16 to 18 year olds, the ineffable Ron Dearing now suggests yet another name: national traineeships. (One is reminded of the Sri Lankan joke: Why did Ceylon change its name? Because it's so difficult to change anything else.)

A small part of that money has been captured-for example by the construction industry-to support the sort of apprenticeship training that industry ought to be providing anyway. But most of the money has been directed at trying to rescue those whom the labour market cannot absorb, and whom school has discouraged (probably realistically) from aspiring to more education and better-paid careers. The French cynically call this "formation parking"-"put 'em on hold training." It seeks to keep alive the work aspirations of people who can't get jobs, and boost the confidence of those who don't have "proper jobs" by gi-ving them certificates of accomplishment. The fiction that this is "quality training" is sedulously preserved; Ron Dearing endorses it again in his recent report where he deplores the fact that YT only has a 46 per cent completion rate-as if he were blissfully unaware of the realistic perception that staying two years to the bitter end is a mark of failure. The 44 per cent who "come out of the parking zone" and leave YT for jobs (which, according to an official survey Dearing quotes, they still hold six months later) are doing better for themselves than those who "complete" their training.

Where the money goes, there go the professionals. The old Manpower Services Commission's YTS curriculum and certifying experts had the resources to capture a large part of the British training industry; they were by no means lacking in public relations skills. With their sentimental ideology of "every footsoldier a potential field-marshal," they succeeded in concealing the duality of the training problem, presenting their social rescue efforts as the main thrust in a government effort to tackle the efficiency problem. When the YTS was extended from one to two years in the mid-1980s, the MSC took advertisements in the national papers. Two years of "quality training" was the message; it was reinforced by a photograph of an attractive lass with a computer manual; the caption read: "Look out, Japan. Lindy's coming!"

It may be that pretending social rescue money is competitiveness money is a necessary con. Perhaps, if the truth were told, the money would not be forthcoming and the plight of the inadequate school leavers would be even worse as a result. On the other hand, if the social rescue purpose were acknowledged, we might devise better ways of fulfilling it: for example, intense remedial education in reading and arithmetic in the early years of primary school to ensure that people do not reach school-leaving age with their ability and will to learn permanently damaged.

The "single skills problem" fallacy has had even more serious consequences: certification methods devised for social rescue programmes are now being generalised up the occupational scale to areas where improvements are needed on efficiency, not social rescue grounds (for example in craftsman training). In being so applied, these new doctrines-propagated with zeal by the National Council on Vocational Qualifications (NCVQ) and endorsed by the Dearing report-actually fudge standards rather than improve them. Good qualification systems follow the principle: "test only the testable; certify only the tested; subjective assessments are for personal references." The NCVQ, instead, builds subjectivity into the heart of its jargon-laden specifications of "work competence."

This is how it happened. Expanded to two years, the YTS was to offer "quality training." The quality trained expect certificates. But the YTS, open to everybody, had to accommodate those with good O-levels and those who could not read and write. Should the standards be tough enough to be meaningful to employers? Or "flexible" enough to keep down failure rates and avoid labelling too many as inadequate?

The latter consideration won out over the former. No objective tests, no external assessment; certification only by trainers. Legitimating inspiration came from the American ideology of "competence training" developed around the community colleges which also dealt with "slow-learner" problems. The creed begins plausibly enough: work competence can be defined in a work context only by breaking down the functions a worker performs into their sub-functions and their sub-sub-functions. Secondly, it can only be assessed in the work context in which that competence has to be deployed. Moreover, full occupational competence involves all sorts of interpersonal as well as manipulative skills which cannot be tested by objective tests or simulations, certainly not by external examiners who do not have knowledge of the work tasks. And in any case, some people do not do well in exams.

What allowed the doctrines and methods worked out for YTS social rescue work to spread upwards to craft training was the creation in 1989 of the NCVQ. It was given a general competence to co-ordinate and control spending on the crucial certification functions of the training industry. By "training industry," I mean not those teachers involved in passing on specific expertise in courses for bankers, fitters, or plumbers, but the army of experts on training principles and methods: the consultants, occupational psychologists, academic researchers and personnel managers. The latter-who depended on the MSC and the YTS for money-spread the "competence training" orthodoxy, explaining why it and its "no external assessment" principles should capture the NCVQ.

And so it did. The idea of a central council was sensible enough. It arose from a very unBritish desire to clear up the topsy-turvy maze of qualifications; its aim was to save wasteful duplication by knocking the heads of City & Guilds, BTEC and RSA together to produce a system of qualifications intelligible both to individuals seeking skills and employers buying them-qualifications of easily ascertainable fiduciary value. But we should have been warned by the report which recommended its creation. It contained precious little about objective testing and a lot about "the assessment of competence directly relevant to the needs of employment and the individual." As it turned out, we would have been better off with the pre-existing jungle and all its ad hoccery than with the unified body which has replaced it-driven as it is by such a perverse orthodoxy.

The low-level NVQs, as the new qualifications are called, can actually do their social-rescue, confidence-building job reasonably well-if not for the seriously hard to employ, at least for those who get jobs. Thus, a personnel manager who thought well of the new system: "Take somebody who hasn't done well at school and who'd be paralysed if she had to take exams. She embarks on an NVQ; she persists in working through this enormous wodge of stuff; she eventually comes through. There is a presentation. It does your heart good to see the pride. We had a woman of 59 who'd never done much; it gave her a new lease on life." And how would he treat such a qualification in a job applicant? "A kind of character reference."

Splendid. Fortunately the NCVQ has hitherto operated primarily at that level. It is only now that it is actually getting round to the more serious "level 3" and "level 4" qualifications which are supposed to carry a fiduciary value relevant to knowledge and skills, not just character. The NCVQ is seeking to hijack the older type of City & Guilds craftsman qualifications (with externally tested written and practical exams)-an imperialistic ambition which the Beaumont and Dearing reports endorse en passant in astonishingly cavalier fashion. They seem to be unaware of the fact that these traditional qualifications remain popular; that they are preferred by employers who are seriously concerned about their employees gaining substantial skills.

All this must stop. There are lots of good pragmatic reasons for tolerating ambiguity about the difference between competitiveness and social cohesion/social rescue objectives-be it in the area of stakeholding or training. Fictions can be functional, but we must ask ourselves: "Functional for whom?" Are we talking about society as a whole? Or are these fictions functional for the trainees who get psychic satisfaction from their certificates but precious little career advancement? Or are their potential employers benefitting? Or might the answer be that they are really benefitting the training industry whose livelihoods are staked on the present system and its expansion?