1. Chapter One Introduction
Introduction
1.1. Cambridge Policy Consultants were commissioned by the Scottish Executive's Enterprise, Transport and Lifelong Learning Department to evaluate the Business Learning Accounts ( BLAs) pilot programme run by Scottish Enterprise ( SE) and Highlands and Islands Enterprise ( HIE).
1.2. The BLA programme aims "to stimulate learning and business growth in small businesses, providing them with the tools to link training needs with business growth and funding to support the businesses' own investment" (Scottish Executive, Lifelong Learning Strategy, 2003). The development of Scotland's workforce is a key aspect of the delivery of Smart, Successful Scotland and the need for more structured training among small businesses has been highlighted by both the Lifelong Learning Strategy and the FutureSkills Scotland 'Skills in Scotland' 2002 report. SE and HIE's specific interpretations of the BLA programme are as follows:
- In piloting the BLA programme, SE aims "to test solutions to some of the barriers small businesses face when it comes to training and to see how [they] can stimulate ongoing demand by showing how investment in training impacts on a business' bottom line" ( SE Operating Plan 2003-2004); and,
- The aim of the HIEBLA pilot is "to act as a catalyst in changing the culture of small businesses to invest in training and skills development, very clearly making the link between workforce development and business development" ( HIE proposal to roll-out BLA pilot, 2005).
1.3. BLAs offer three core services to businesses:
- Advice and guidance to assess training needs,
- Assistance to source training providers, and
- Financial support (up to 50%) to pay for the training.
Four BLA pilots run across Scotland; two pilots offer BLAs on a sectoral basis (manufacturing and tourism) and two pilots run within specific geographic areas (Ross and Cromarty in the HIE area and Renfrewshire, Dunbartonshire and Glasgow in the SE area). In April 2005 it was decided to roll out the geographic HIE pilot across the whole HIE area. The maximum amount of funding available per company is £3,500 for the tourism and SE geographic pilots and £7,500 for the manufacturing and HIE geographic pilots.
1.4. For each of the pilots one Local Enterprise Company ( LEC) was identified as 'lead LEC', responsible for managing the pilot. The lead LECs are:
- Ross and Cromarty Enterprise ( RACE) for the HIE geographic pilot;
- Renfrewshire Enterprise for the SE geographic pilot;
- Fife Enterprise for the tourism pilot; and,
- Lanarkshire Enterprise for the manufacturing pilot.
1.5. Learndirect scotland ( LDS) are a key partner in the delivery of the three pilots in the SE area, providing information on the availability and cost of different training suppliers for the training activities identified in the company training plans. In the HIE pilot, the LDS training partner in the HIE area played a more limited and informal role in the BLA process.
1.6. The BLA pilots were announced in March 2003 and run until March 2006. The plan is to have launched 300 BLAs, 75 for each of the four pilots. The BLA programme targets companies that:
- Have less than 50 employees;
- Have no identified training budget;
- Are unlikely to have had contact with their LEC for training support;
- Will not have regularly taken part in government initiatives;
- Do not practice a strategic approach to training, i.e. no training plan linked to business growth.
1.7. Eligible training activities are limited to training that contributes to business growth and is clearly linked to the company's business objectives. The BLA programme is also intended to operate as a funder of last resort: only training activities that cannot be funded through other sources are eligible. BLAs are not available for:
- Legislative training, unless required to expand business;
- External training and development that a company is already investing in;
- Established in-house programmes;
- Training and development that is not related to business objectives;
- Training and development that is supported from other funding sources;
- To offset existing employer contributions to other national training initiatives i.e. Skillseekers, Modern Apprenticeships.
Aims and Objectives
1.8. The overall aim of this evaluation is "to assess the effectiveness of BLAs in stimulating demand for training amongst small businesses that traditionally have not trained their workforce, in order to inform any potential future development of the concept, associated policy and funding allocations" (Scottish Executive Research Specification, July 2003). Specific evaluation objectives included:
- To focus on the different delivery processes adopted by the 4 pilots and look to explore what impact they had on the effectiveness of the policy;
- To identify the extent of any changes in small businesses' training activity as a result of the policy and whether that leads to an appropriate improvement in business performance; and,
- To assess the scope and nature of the market failure addressed by the BLAs - the Scottish Executive's Lifelong Learning Strategy (2003) refers to two specific market failures:
- Possible latent skill deficiencies where employers do not recognise that more investment in workforce development could improve their performance;
- Difficulties for businesses, particularly SMEs, to access information on appropriate training opportunities - with a focus on the provision of flexible, good quality learning that is accessible in the workplace.
1.9. This is the Final Report of the evaluation of the BLA pilot. The first Progress Report (October 2004) reported on the early implementation issues in the pilot. The second Progress Report (May 2005) provided an analysis of an initial round of in-depth case studies of companies involved in the BLA programme. This report draws together the findings based on:
- An analysis of monitoring data collated by SE and HIE;
- A telephone survey of BLA companies which had either made some progress in the BLA process or decided to withdraw from the programme altogether;
- A postal survey of individual BLA learners;
- A further round of interviews with 40 case study companies; and,
- Interviews with BLA stakeholders including the pilot managers, local delivery agents, LEC staff and LDS managers and training partners.
More details on the methodology can be found in chapter 2.
1.10. The evaluation framework provided by the Scottish Executive clearly identifies two separate evaluation tasks: 1) evaluating BLA delivery and 2) evaluating the BLA concept. This evaluation report follows the division of the evaluation framework: chapter 3 contains the key findings on BLA delivery; chapters 4 to 6 evaluate the BLA concept with a focus on BLA outcomes (chapter 4), benefits of the BLA programme as perceived by employers and employees ( chapter 5) and added value of the BLA pilot ( chapter 6). Chapter 7 concludes.