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7. Chapter Seven Conclusion
7.1. The overall aim of this evaluation was to assess whether the BLA pilot programme has succeeded in stimulating demand for training amongst small businesses that traditionally have not trained their workforce.
7.2. It is clear from the research findings that BLAs have increased the demand for training: all evidence points towards a substantial degree of (partial) additionality in BLA training activities, particularly in terms of training undertaken earlier or to a larger scale than would otherwise have been the case. The picture of the sustainability of this increased demand for training is mixed: BLA companies are divided more or less evenly between companies that intend to undertake more training in future and companies that plan to continue training their staff at the same (pre- BLA) rate.
7.3. The BLA programme specifically aimed to also encourage learning as opposed to just training. The BLA funding was not only to be used for more traditional classroom courses but also for alternative learning opportunities such as online learning, learning trips or mentoring. Sample sizes are quite small, but the research findings suggest that a substantial proportion of BLA companies did indeed consider alternative learning methods in the course of the BLA process. Stakeholder interviews show that traditional training courses still appear to be the 'default' option among workforce development advisors, particularly in the SE area, but the BLA programme seems to have succeeded in acting as a catalyst for both the SE and HIE networks: stakeholders in both areas appear keen to incorporate a wider range of learning opportunities and a stronger focus on flexible and bespoke workforce development in their offer to businesses.
7.4. For SE and HIE stakeholders alike one of the key features of the BLA programme was the clear linkage between workforce development and business development: the BLA training activities had to be directly connected to business objectives and potential business growth. It is very difficult to assess to what extent BLAs have led to business growth. The set-up and timing of this evaluation have meant that only a small proportion of companies (12%) had completed their BLA training activities when they were contacted for the telephone survey. This necessarily limits the robustness of any statements about the impact of companies' BLA activities on their business performance.
7.5. The survey evidence that is available points towards increased business profits in half of the BLA companies, but qualitative evidence from in-depth company case studies put these findings in perspective: case study companies struggled to clearly indicate how to measure improved performance and, crucially, attribute this performance to the BLA programme. Moreover, there is some qualitative evidence that, when there is a clear link between BLA activities and improved business performance, the additionality of the BLA programme appears to be lower: in other words, when companies clearly see how training affects their bottom line, they appear to be willing to undertake these training activities without public support.
7.6. It is thus not possible to make any conclusive statements about the impact of the BLA pilot on business growth. This also means that any cost/benefit analysis can only be built around assumptions and possible scenarios. The total cost of delivery per BLA account opened is £3,994; average company turnover is £1.1 million. This means that, for benefits (in terms of increased company turnover) to exceed costs, the BLA programme must lead to an average increase in company turnover of 0.4%, on top of any increase in performance due to other (non- BLA) factors.
7.7. Overall, to the extent that the evaluation evidence allows the evaluation to draw conclusions, the BLA outcomes appear fairly positive:
- Estimates of additionality compare favourably with other workforce development programmes;
- Sustainability of outcomes as forecasted by the companies themselves sits at a respectable 50%;
- The degree of flexible learning opportunities included in the BLA programme appears to be substantial; and,
- The scenario that is needed for a 'break-even' in terms of costs and benefits of the BLA pilot is not implausible.
7.8. However, a key question is whether these positive outcomes befall the right companies. The BLA programme set out to engage with those companies that had not previously engaged in training and had not previously been in touch with the business support agencies for workforce development support, but all evidence points towards limited success in achieving this objective. The vast majority of BLA companies had undertaken training activities in the 12 months prior to their BLA engagement. Likewise, although sample sizes are quite small, the vast majority of companies had already received workforce development support (in terms of advice and/or financial support) from their LEC and/or Business Gateway. This is the case across the four pilots.
7.9. So, although the BLA pilot appears to have succeeded in increasing demand for training, BLAs have not succeeded in increasing demand for training in those companies that have traditionally not trained their workforce. The research findings indicate that, while the design of the BLA concept clearly identified the BLA target group, a number of other elements in the design of the concept have contributed to this:
- Throughout the evaluation, little or no evidence was found of proactive targeting of companies. Self-referrals appear to have been the main source of referrals in the HIE area; in the SE area, the vast majority of referrals seem to have happened as and when SE account managers or Business Gateway client managers came across potential BLA candidates. This would not have been a problem had it not been for the inclusion of targets - the use of targets is an important part of performance management in delivery but for some the objective of BLAs did narrow down to the achievement of 75 BLAs. This has strained the delivery of BLAs into areas where the eligibility of companies and the quality of outcomes are debatable; also, companies eligible for BLAs could only be characterised (according to the design of the programme) by what they have not done;
- It was always going to be difficult to reach companies that had traditionally been outside the reach of (the workforce development branches of) the business support agencies. The BLA programme discouraged active marketing because there were only limited financial resources available; the pilot was not to raise expectations among SMEs that could not possibly be met. Also, marketing would have been likely to attract companies which already had a positive approach to training or those which were already planning to do some training. Unfortunately, the side effect of this de facto ban on marketing was that it was more difficult to really reach out. Active outreach would have required far more additional resources than LECs were willing or in a position to provide;
- In theory, it would have been possible for the BLA pilot to engage with companies already known to and supported by the LEC networks in other areas (not workforce development), but the research findings show that this has not been the case to any great extent. This appears logical: business support is an integrated package and, if a company has specific workforce development needs, these are likely to already have come up in a business support dialogue, even if this dialogue was not necessarily focused on workforce development needs. It would have been strange for the BLA pilot to have discovered a multitude of LEC or Business Gateway customers with undiagnosed workforce development needs;
- The role of 'funder of last resort' assumed a degree of integration between local training and business support services which existed only rarely at the outset of the BLA pilots. In some local areas, the range of local support is such that it has been very difficult to identify where BLAs can fit into the jigsaw. The fact that SE support is in principle already available to any company with growth potential (starting from a minimum turnover baseline) made it very difficult for the BLA programme to find any niche market. In some areas this has forced BLA delivery into industries where the potential for business growth is limited. Preliminary research into the availability of SME workforce development support, both within and beyond the SE network, could have enabled the BLA pilot to better differentiate between individual LEC areas. The HIE pilot suffered less in this regard, with local workforce development support in the domain of the HIE network only;
- The sector-based pilots do not appear to have delivered particular advantages in terms of outcomes which outweigh the additional set-up and management costs. One issue has been the selection of 'sectors' such as manufacturing, which do not have a ready definition, do not exist in the current structure of delivery and therefore cut across programme teams and responsibilities.
7.10. With regard to delivery, the BLA stakeholders in the SE area have largely managed to overcome any hiccups that were present in their cooperation at the start. It is fair to say that the BLA pilot has helped facilitate better working relationships and mutual understanding between SE and LDS. Nonetheless, the HIE pilot shows that processes are smoother if one organisation takes ultimate responsibility and make choices in delivery. For example, monitoring information on programme performance has struggled in the SE area with each pilot initially developing its own monitoring system. Overall, the different BLA stakeholders deserve credit for pulling together a process across business development and workforce development - the integration of which greatly improved throughout the project cycle of the BLA pilot.
7.11. A final objective of this evaluation was to try assessing to what extent market failures are at work in SMEs' approach to training. It is obvious that this relatively small-scale evaluation can only present a modest contribution to the wider market failures debate. In particular, the BLA pilot offers some insight in two specific instances of possible (information) market failure:
- Employers do not train because they are not aware of their companies' training needs and how these affect their business performance (latent skill deficiencies); and,
- Employers do not train because they have insufficient access to information about training opportunities.
7.12. There is qualitative evidence of latent skills deficiencies in BLA companies: in particular, employers tended to be less aware of their companies' non-technical training needs and of their own needs (as opposed to their staff's skills shortages). However, most companies tended to be aware of at least some of their training needs, indicating that it is more than just latent skills deficiencies that stop companies from training. There is similar qualitative evidence on limited access to information about training opportunities: the vast majority of case study companies were able to suggest the names of at least some training providers to the local delivery agents, showing that it is also more than just the lack of information about training opportunities that stops companies from training.
7.12. The picture that arises from the BLA evaluation evidence is that market failures are not the main barrier to training in SMEs. The main barrier seems to be that there are too many conflicting demands on the manager's (and staff's) time and that training is not (cannot be) considered a business priority in this time-poor environment. The BLA programme offers a partial answer to policy-makers trying to address this barrier in the role of the local delivery agent. The local delivery agent support fulfils a dual objective in both limiting the amount of time the employer needs to be spend on organising the training (since the local delivery agent does a lot of the work for the company) and forcing the employer to make this time. No less than half of BLA companies agreed with the statement that the main benefit of their BLA involvement was that someone forced them to sit down and make time from training issues. The local delivery agent support is a key BLA feature that deserves to be mainstreamed in SME workforce development delivery.
7.13. In conclusion, the BLA pilot programme has succeeded in achieving fairly positive outcomes, but has not managed to engage with the target group it set out to reach. This is essentially due to a number of elements in the design of the BLA concept: crucially, companies with growth potential are in principle already on the radar of the LEC networks and those that are not already are unlikely to ever be reached by any programme that does not include a serious and sustained effort at active outreach and that does not provide the substantial additional resources needed for this. Therefore, a roll-out of the BLA pilot is not recommended. However, it is worth mainstreaming the successful elements of the BLA delivery, in particular the local delivery agent support and the flexible approach to learning, in SE and HIE workforce development delivery. It is the case that a number of the key principles of BLAs have already been included in business and workforce development approaches of HIE, SE and LDS.
References
Department for Education and Skills (2004) Evaluation of the Small Firm Development Account, Cambridge Policy Consultants
Department for Education and Skills (2005) The Impact of the Employer Training Pilots on the Take-up of Training among Employers and Employees, The Institute for Fiscal Studies
Education and Learning in Wales (2005) Evaluation of the Company Learning Account Pilot Programme, BMG Research
Scottish Enterprise (2005) Improving Market Segmentation & Consistent Customer Management
Scottish Executive (2003) Life through Learning through Life - The Lifelong Learning Strategy for Scotland
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