Training and Enterprise Councils [Appendix I Revised 1 August 1997]

Training and Enterprise Councils Research Paper 97/48 7 May 1997 [Appendix I revised 1 August 1997] Between the Spring of 1990 and the Autumn of 1991, responsibility for the administration of most Government training and enterprise programmes was transferred from the Department of Employment to a new network of 82 (now 79) Training and Enterprise Councils (TECs) in England and Wales and 22 Local Enterprise Companies (LECs) in Scotland. This Research Paper gives a brief account of the reasons for this change and some details of the composition, functions, funding and mechanics of TECs. It concentrates on TECs rather than LECs, although much of what is said about TECs applies equally to LECs. To help Members who may need to approach their local TEC, Appendix 1 lists all Parliamentary constituencies with the name of the TEC or LEC operating in their area. This has been compiled by Susan Kielty. Appendix 2 gives the address and telephone numbers of the TECs. Appendix 3 lists the LECs in Scotland. This Paper replaces Research Note 92/21, "Training and Enterprise Councils", which has been updated with the help of Jeremy Gyepi-Garbrah. Julia Lourie Business and Transport Section House of Commons Library Library Research Papers are compiled for the benefit of Members of Parliament and their personal staff. Authors are available to discuss the contents of these papers with Members and their staff but cannot advise members of the general public. CONTENTS Page Summary 5 I Background 7 A. TEC Mergers 10 B. TEC National Council 12 II Status and Composition 12 A. Annual Contracts 13 B. Three Year Licences 14 C. TEC Boards 15 D. Labour and Liberal Democrat Policies 16 III Staffing 19 IV Functions 20 V Funding 22 VI Accountability 23 VII Issues 27 VIII Further Reading 30 Appendix 1 Parliamentary Constituencies and TECs in England and Wales, and LECs in Scotland 33 Appendix 2 Names and Addresses of TECs in England and Wales 57 Appendix 3 Names and Addresses of LECs in Scotland 71 Appendix 4 TEC Programmes and Funding Methods 1995/96 72 Appendix 5 TEC Budgets 1991/92 - 1996/97 77 Summary • During 1990-1991, the Conservative government transferred responsibility for delivering the training and enterprise programmes previously organised by the Employment Department to a network of independent, local, employer-led Training and Enterprise Councils (TECs). Their aim was to "place the 'ownership' of the training and enterprise system where it belongs - with employers". • In Scotland, responsibility was transferred to a similar network of Local Enterprise Companies (LECs) which also took over responsibility for local economic development from the Scottish Development Agency. • Through a process of merger, the number of TECs in England and Wales has been reduced from 82 at the start to 79 in May 1997. Ten of these have merged with local Chambers of Commerce to form Chambers of Commerce, Training and Enterprise (CCTEs). • TECs are private companies limited by guarantee, but receive over 95% of their income from central government. They operate by means of annual agreements negotiated with the Government Office for the region in which they are situated. In turn, the TECs contract with providers such as employers, colleges, voluntary organisations and training companies, who actually deliver the programmes. • The main programmes delivered through TECs are training and work experience for young people (including Youth Training and Modern Apprenticeships), training for the adult unemployed (Training for Work), Investors In People (designed to raise standards of training within companies) and, in partnership with Business Links, advice to small firms. • There are complicated funding arrangements which vary from year to year, but there has been an increasing emphasis on output-related funding - linking payment to measurable outcomes such as job placements and qualifications achieved rather than to the number of training weeks delivered Research Paper 97/48 6 Research Paper 97/48 I Background TECs are independent, local, employer-led councils which were established throughout the country during 1990 and 1991 to take over responsibility for running the training and enterprise programmes previously organised by the Department of Employment's Training Agency. The proposal to devolve responsibility for these programmes to a local level and to inject a strong degree of private enterprise into them was first announced in the White Paper, "Employment for the 1990s", published in December 1988:1 5.7 The Government now intend to build on the existing involvement and commitment of business by inviting local groups led by employers to submit proposals for the establishment of Training and Enterprise Councils (TECs) in England and Wales to contract with Government to plan and deliver training and to promote and support the development of small businesses and self-employment within their area. This will mean the Council engaging the commitment of employers to training and education and to fostering enterprise in their local communities. TECs will enable training and enterprise activities, including the Government's major training programmes, to be tailored to local needs. They will provide a vehicle to bring decision-makers together in the interests of broader economic development and of creating active local partnerships. In this way, the Government hope to place 'ownership' of the training and enterprise system where it belongs - with employers. 5.8. The Training and Enterprise Councils will have several key functions. They will examine the local labour market, assessing key skill needs, prospects for expanded job growth and the adequacy of existing training opportunities. They will draw up a plan, containing measurable objectives for securing quality training and enterprise development that meets both Government guarantees and community needs, tailoring national programmes to suit area needs and to achieve agreed performance outcomes. They will manage training programmes for young people, for unemployed people, and for adults requiring new knowledge and technical retraining. They will be responsible for the development and provision of training and other support for small businesses relevant to local needs. This activity will include the planning and administration of the Enterprise Allowance Scheme, and the counselling currently provided in England through the Small Firms Service. This service will continue to be provided in Wales by the Welsh Development Agency. 5.9 TECs will also work in co-operation with the private sector to harness the considerable resources which are being applied to encourage and support small business enterprise through local enterprise agencies. They will be responsible 1 Cm 540 7 Research Paper 97/48 for promoting and directing more private sector investment in training, vocational education and enterprise activities designed to strengthen the local skill base and to spur economic growth. It is envisaged that TECs will become an important local forum and agent for change, building relationships between key interest groups, and investing public and private resources to enhance the economic vitality of the community and the social wellbeing of its citizens. The Welsh Office will consider how best to integrate the training responsibilities of TECs in Wales with the enterprise activities undertaken by the Welsh Development Agency and Mid Wales Development and by the Department itself. The Scottish equivalent of TECs are LECs (Local Enterprise Companies). Like TECs, they are local, employer-led bodies, but they have a wider remit, being responsible not only for training and enterprise but also for economic development (previously the responsibility of the Scottish Development Agency). The Scottish changes were announced in the White Paper, "Scottish Enterprise", published in December 1988:2 5.1 At national level, the creation of Scottish Enterprise will do much to promote a climate within which Scottish entrepreneurial talents can flourish; but it is at local level that the process of economic development must be focused. In recognition of this the Government propose to promote the establishment of a network of local employer-led agencies to take on this task. As already mentioned, Enterprise Trusts have shown the way by involving local business people in work on behalf of the community. The challenge is an invigorating one: an opportunity is being offered to people of proven talent to take on executive responsibilities in their areas without remuneration but for the common good. The concept stands or falls on the willingness of people of calibre to respond to this exciting challenge. 5.2 Each local agency would be responsible for stimulating the growth of self- sustaining enterprise, encouraging the creation of viable jobs and the reduction of unemployment and improving the skills of the workforce in its area. Clearly in the training field the existing national programmes will form an important part of the services offered by the new organisations; while working within national policy guidelines, they will nevertheless have the flexibility to develop local solutions to local problems. 5.3 Clearly there is scope for different views as to how much of the SDA's present activities could or should be devolved to local level. There are attractions in delegating as much authority as possible to the local level, thus giving the local agencies the widest possible flexibility and power to respond to 2 Cm 534 8 Research Paper 97/48 the problems and opportunities of the local economy. In certain of its areas of operation, however, a national remit and powers have proved a major strength of the Agency. Similarly the Training Agency's success in implementing major change (for example through the Technical and Vocational Education Initiative) has stemmed from its national focus. A balance will have to be struck between local and central powers which enables the retention of present strengths as well as the desired improvement of local delivery. The Government have not yet come to a conclusion as to where this balance should lie.

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