Matching Skills Supply and Demand: The Welsh Approach

The Peer Review was held on the 29^th-30^th October 2007 in Cardiff, Wales, hosted by the Welsh Assembly Government. In addition to the host country, a further seven countries participated in the discussions as follows: Bulgaria, Estonia, Finland, France, Greece, Latvia and the Netherlands. An official representative from Cyprus also attended the meeting, as did an observer from CEDEFOP. In addition to receiving presentations on various aspects of the Welsh approach, from government officials, and an external critique of the approach from a UK independent expert, participants attended a site visit to a hospital under construction in the Rhondda valley (a former coal mining and steel area), a project which is making use of the skills of unemployed local workers.

Matching Skills Supply and Demand

The development of the Welsh approach to the matching of skills supply and demand is set in the context of the devolution of skills and education policy to the constituent countries of the UK (although employment policy remains a UK-wide responsibility), and the wider review of skills in the UK – particularly the Leitch Report (October 2006) – which addresses the UK’s comparatively low skills base and its effects on the economy and labour market.

The Welsh approach to tackling the skills issues involves a high degree of partnership between the key stakeholders, but also reflects the commonly-held view that the training system is too dominated by the providers. The perceived need, therefore, is for a more demand-led approach and a key development (which applies across the UK) has been the creation of 25 Sector Skills Councils (SSC’s) which are employer-led but, at the same time, involving other partners in the joint determination of what is needed for the sector (the meeting was presented with a detailed example of the use of labour market intelligence for skills matching, in the construction sector). In Wales these developments have been given added emphasis with the adoption of the ‘One Wales’ strategy by the Welsh National Assembly, which attempts to bring more coherence to employment, skills and business development.

This is assisted by the work of Future Skills Wales which, over the part eight years, has been engaged on a research programme that involves numerous bodies such as schools, training providers and employers (and a series of surveys looking at employers’ skill requirements), with the aim of providing a common backcloth to Welsh employment and skills policies. Associated with this, is the more recent development of a ‘skills observatory’ that is bringing all the relevant data into one place for ease of access and aiming to allow the development of interactivity whereby users can not only access the data, but also contribute to it on an ongoing basis.

The approach taken in Wales to some extent reflects the employment and skills framework in England, although the opportunities for a higher degree of cooperation exist in the smaller Welsh situation. However, while there appears to be some coherence between the various Welsh initiatives, all the bodies involved are at a relatively early stage in their development and so any evaluation to date has tended to be formative, and evidence of impact is limited.

Aspects of Transferability

The participating countries took varying perspectives on how transferable the Welsh approach would be. Many participants felt that the most notable feature of the Welsh model was the high degree of co-operation and partnership between the various stakeholders – government, intermediary organisations and employers. Also impressive was the attempt to integrate the ‘three points of the triangle’: skills policy, employment policy and business development policy  For some, the sector approach had much to merit it, while others pointed to the importance of an occupational focus that often transcended sector groupings. There was also some debate about the need for a more regional or local labour market focus where most skills are acquired and ultimately used, though this has to be considered in the context of the more centralised approach to education and training in some countries – sometimes underpinned by training levies on employers. Furthermore, in some of the more dynamic economies of the EU there was felt to be little scope at present in adopting an employer-led approach in the face of high labour turnover and low investment in skills acquisition. Concerns were also raised by some representatives of new member states, regarding the potential cost of adopting the Welsh approach, and it was argued that the most appropriate strategy would be to integrate elements of the Welsh approach into the existing institutional structure, rather than attempting to create new structures along the Welsh lines; in several countries (e.g France), although the institutional landscape was very different to that in Wales, there could, nevertheless be observed ‘functional equivalents’ of various aspects of the Welsh approach.