Announcement by Bill Rammell MP
Employees could receive government funding to take university courses in vocational subjects as a way to tackle skills shortages hampering the economy, a minister has signalled.
In a survey of companies for the Department for Education, the lack of skilled employees was seen as a threat to businesses over the coming year.
Of those polled, 84 per cent said 2006 would be blighted by a lack of skilled personnel to fill recruitment needs, and 74 per cent were concerned about a lack of skills among their workers.
But in spite of these fears, less than two-thirds of businesses were involved in some kind of vocational training for employees. Less than one in 10 had been involved in designing courses with education providers to help combat skills problems.
Bill Rammell, higher education minister, told the Financial Times the findings, part of research into the impact of the two-year vocational foundation degrees introduced in 2001, were "frustrating".
But he said more businesses could be tempted to use the degrees as a central part of their training strategy if the government was prepared to share the cost.
Mr Rammell said the model would be the employer-training programme, through which the government shares the costs of GCSE or equivalent vocational courses for workers.
"At level 2 [GCSE] we are intervening and investing, and maybe in the longer run - in the next spending round perhaps - it would be good to do that on the vocational side in higher education."
The survey found that 85 per cent of businesses believed a combination of work-based experience and academic knowledge was the best preparation for graduates entering the workforce.
But Mr Rammell said too few of them had so far helped to plan foundation degree courses that would be suitable for their industry or for their company's specific needs.
"The frustrating thing is that if you look at the research, employers see what needs to be done but more of them need to do it," Mr Rammell said.
At first, foundation degrees proved more popular for public sector employers, who developed early relationships with universities starting courses for those training to become teaching assistants, healthcare workers or to work for the police.
However, Mr Rammell said he was encouraged there were now 1,300 courses covering a wide range of subjects suitable for public and private sector employees, with a further 700 planned. Education is still the most common course, but computing, art and design and general business courses are also quite widespread.
Some employers are paying their workers tuition fees while they take part-time FD courses, and Mr Rammell said the government wanted to see more research on the extent of financial support being provided by companies.
The government wants to see 100,000 students on one of the two-year foundation degree courses by the end of the decade, with about 50,000 already on courses this year. Mr Rammell said he was confident of hitting this target, with applications up dramatically last year, according to the University and Colleges Admissions Service.
Foundation degree fees are currently at about the same annual level as academic honours degrees, which increase to £3,000 this autumn. | 
