Funding Government Training Schemes: Mechanisms and Consequences

Abstract

This paper follows the path of public funds allocated to private institutions‐‐Training and Enterprise Councils (TECs)‐‐which, in turn, fund the delivery of Youth Training (soon to be replaced by Youth Credits) and Training for Work. The paper argues that the terms on which funds are allocated to TECs offers little financial incentive for TECs to support high cost, high quality training since their success and cost effectiveness is measured by indicators which take no account of the type of training provided, to whom it is provided and by whom. A TECs performance rating can only be improved if it devotes more of its resources to support for the cheapest, easiest and quickest routes to the government's set of output measures. However, this will do little to cure Britain's well‐known deficiencies in intermediate skills in occupations in which it is costly and lengthy to train.