Introduction

Since 1997 the New Labour government has incrementally introduced a raft of institutional and policy changes in relation to employment, training and skills in order to seek to boost productivity and economic growth. Cast from a mould of neoliberal political objectives, this is in part connected to constructing a knowledge-based economy (KBE) based on rising employment in financial services, high-technology and the ICT sector, media and the broader cultural economy, and the continued rise in self-employment. On another level, however, the KBE is about a new kind of labour market where deeply entrenched unemployment becomes a policy problem of the past, as those involved in the bottom-end of the labour market are actively involved in training and welfare-to-work policies to increase employability and transferable skills (see Jessop, 2002). In contrast to traditional (welfarist) social policy, as discussed in Chapter 11 of this volume, a ‘new paternalism’ is said to exist, whereby a social contract is reinforced with strict behavioural requirements and motivational engineering to increase participations in paid formal employment (Mead, 1997).

Some ten years on from the inception of the New Labour government, reports published by the Leitch Review of Skills – a high-level inquiry initiated by the then Chancellor Gordon Brown – make sobering reading on the combined impacts of this regime to deliver the KBE. A historic skills deficit is highlighted and three key findings stand out:

• • The UK is currently ranked 17th out of 30 OECD countries in the proportion of the adult population who have low or no qualifications – with 35% at this level, which is double the proportion in the best-performing nations such as the US, Canada, Germany and Sweden.

• • The government's targets for achieving skills are possibly too ambitious but even if they were satisfied, “significant problems would be met with the UK skills base in 2020” (HM Treasury, 2005, p 10).

• • It is recognised that substantial investments by both the government and employers are being made in improving skills but the commitment needs to be more ambitious if Britain is to compete in the global economy.

A key theme of the Leitch Review of Skills has been the governance mechanisms and institutional frameworks put in place over the past decade across employment and training policy sectors. It has been questioned whether there are too many agencies, partnerships and actors involved in these initiatives.