Between the management of human resources and the governance of employment? The case of industrial training in the UK

Leonard Holmes
University of Bedfordshire
Putteridge Bury, Hitchin Road, Luton LU2 8LE

Tel. 01582 734111 ext 5014

Presented at "Reconnecting Critical Management", the Fifth International Critical Management Studies Conference, Manchester Business School, 11-13 July 2007

Stream: Where is Critical HRM?
Between the management of human resources and the governance of employment? The case of skills training in the UK


A growing body of literature in the field of strategic human resource management presents claims for considerable knowledge of the links between managerial practices and organisational performance (Purcell et al., 2003). Whatever the validity of such claims, particularly in respect of their universal application and in terms of assumed causality, such work is limited to the extent that it is typically organisation-centric. Little attention is given to issues, concerning employment, that lie outside of, or are not restricted to the bounded arena of the organisation. This paper seeks to promote an approach to enquiry and analysis that is not limited in this way, particularly be considering the potential application of socio-political governance theory to the broader area of employment. It will argue that a combination of HRM theory and research and a socio-political governance approach to employment may provide a more fruitful way to examine key issues that are poorly addressed by either approach. The case of skills training in the UK is considered in such terms, particularly focusing on a critical period halfway through the past half century of government attempts at intervention in this field.

Human resources versus employment?

Boxall, Purcell and Wright open the first chapter of their edited Handbook of Human Resource Management (Boxall et al., 2007b) with the assertion that
"Human Resource Management (HRM), the management of work and people towards desired ends, is a fundamental activity in any organization in which human beings are employed. It is not something whose existence needs to be elaborately justified: HRM is an inevitable consequence of starting and growing an organization.".
(Boxall et al., 2007a: 1)
Their definition of HRM as "the management of work and people in organizations" (op. cit.: 7) would probably be accepted by the host of textbooks and courses in this area, and in much of the research literature. We should note, however, that by 'people', the authors are referring to those who undertake work in and/or for the organisation. They do not mean the wide range of other people who are in various ways connected with the organisation: for example, customers, suppliers, passers-by, health and safety inspectors, or the children, parents and siblings of those working for the organisation. For 'people', we can generally read '(paid) employees', albeit that many working for an organisation may do so under a variety of employment relationships. Moreover, 'management of people' is mainly limited to employees in their roles as such; that people have other roles and relationships is generally of no concern except to the extent to which these may affect the work performance of employees, and where such a situation may be subject to attempted control to limit the effects on work performance.

Employment itself also requires consideration and qualification. The organisation of work in the now-dominant form of paid employment is a relatively recent phenomenon, mainly arising under the growth of industrial capitalism and 'organisational society' (Presthus, 1979). It exists in our contemporary world as an institutionalised form alongside other forms including (upaid) family employment in small businesses (Baines et al., 2003), the gangmaster system (Brass, 2004) and, of course, forced labour {International Labour Office, 2001 #463; Anderson and Rogaly, 2005). Formal paid employment also has a counterpart in 'informal employment', "the paid production and sale of goods and services that are unregistered by, or hidden from, the state for tax and welfare purposes, but which are legal in all other respects" (Williams and Windebank, 1998: 1). There is also unpaid housework, calculated by the Office for National Statistics, on the UK 2000 Time Use Survey data, as having an economic value of which was calculated at £700 billion . None of these areas of work are discussed in any significant way in standard textbooks and most research literature in the HRM field, despite their clear importance to the economy as a whole, and to the production and sale of goods and provision of services undertaken by organisations.

The organisation-centric focus of HRM thus tends to be somewhat blind to and mute about areas of work that are not bounded by formal employment relationships. As a form of knowledge, HRM must be considered to be only a part of a broader arena, that of employment in our contemporary society (see figure 1). Of course, any field of enquiry must set itself boundaries in order to focus collaborative effort in knowledge production and dissemination. However, the boundaries between formal employment and other forms of the societal organisation of work are clearly not fixed and are arguably more porous than adopted in conventional approaches to HRM.


Figure 1: HRM as a subset of employment



The societal organising of work, including that of formal employment, is an arena of engagement by governments. Indeed, formal employment can only exist under conditions of societal order, where contracts can be (formally) freely entered into with confidence that they can be enforced, where potential conflicts of interest can be subject to consistent procedures for resolution, and where the effects on society of the activities engaged in under formal employment are subject to control. In different countries, the role of governments may vary, largely reflecting institutional and cultural differences: HRM is societally embedded (Paauwe and Boselie, 2007), 'International HRM' may be considered as a special field of knowledge itself (Sparrow and Hiltrop, 1994; Brewster and Harris, 1999; Dowling and Welch, 2004; Harzing and Ruysselveldt, 2004). Moreover, even within a country, policy choices and interventions (and non--interventions) made by governments in relation to work and employment may vary, and their effects may be more or less successful in relation to espoused goals. We may therefore consider not only the socio-political context within which HRM is embedded, but also more broadly the socio-political governance of employment.


The term 'governance' has been increasingly deployed in recent public policy theorising and research (see, eg, Kooiman, 1993; Rhodes, 1997; Pierre and Peters, 2000; Richards and Smith, 2002; Kooiman, 2003). Pierre and Peters (2000) attribute the popularity of the term, as a contrast with the narrower term 'government', to its capacity "to cover the whole range of institutions and relationships involved in the process of governing" (p. 1; emphasis added). It has arisen within new thinking about the nature of the state, its relationship to the economy and civil society more generally, and the capacities and limitations of governments to direct and control activities with the economy and society. Thus, rather than being restricted to the actions and activities of government, governing is seen the "more of less continuous process of interactions between social actors, groups and forces and public or semi-public organizations, institutions or authorities" (Kooiman, 1993, p. 3). Reference is often made to the etymology of the word 'government' from the Latin for 'steering', emphasising the limitations of governments to direct and control the economic and social affairs under conditions of complexity and uncertainty, whilst indicating that governments do have a role to play.

Many writers on governance often acknowledge that the term is used with different meanings (often with different views about the number of different meanings ). The debates on governance have included discussions on the changing nature of the state under late-twentieth economic, social and political circumstances, where such discussions have been normatively oriented, ie making claims about how governments should act. Such discussions are manifested in the advocacy and attempted implementation of 'new public management', the 'entrepreneurial state', 'third way' politics and so on. This area of the governance debate might be viewed as analogous to normative approaches to HRM. In contract, much of the governance literature seeks to deploy that term as a mode of conceptualising and theorising how societal order comes about.
"The governance concept points to the creation of a structure or an order which cannot be externally imposed but is the result of the interaction of a multiplicity of governing and each other influencing actors."
(Kooiman, 1993: 64)
As Stoker (1998) puts it, governance is "ultimately concerned with creating the conditions for orderly rule and collective action", focussing on "governing mechanisms which do not rest on recourse to the authority and sanctions of government"(p. 17).
This approach to governance may be seen as analogous to the analytical approach to HRM proposed by Boxall et al. (2007a)

The governance approach, or perspective, has been the basis for considerable theorising and research over the past two decades, within policy studies. There is not one single governance theory, but rather a number of different modes of developing theoretical models and undertaking empirical investigation. There are a number of key themes, however, relating to the intentional adoption of the notion of governance and its evocation of the 'steering' analogy. An emphasis is placed on recognition of the dynamism and complexity of the social and economic arena under consideration. Governing is viewed as processual and distributed, not narrowly centred on a single actor (the government or the state as an entity), nor on a single moment of policy decision that merely rolls out as intended. Various modes of governance are possible, in various 'mixes' mainly of hierarchies, markets, networks, and communities (Pierre and Peters, 2000). These relate to and interact with each other in complex ways, and changes to any may have unintended consequences in another.

Stoker presents the key tenets of the concept of governance in terms of five propositions
"1. Governance refers to a set of institutions and actors that are drawn from but also beyond government;
2. Governance identifies the blurring of boundaries and responsibilities for tackling social and economic issues;
3. Governance identifies the power dependence involved in the relationship between institutions involved in collective action;
4. Governance is about autonomous self-governing networks of actors;
5 Governance recognizes the capacity to get things done which do not rest on the power of government to command or use its authority"
(Stoker, 1998, p. 18)

Governance of employment

Clearly, societal ordering of work in the institutional form of employment relies upon the creation and maintenance of "conditions for orderly rule and collective action" (Stoker, 1998: 17), and so involves governance as understood in the terms discussed above. There is a long and well-established body of theory and research on the role of markets in the field of employment, human capital theory (Becker, 1964) taking a dominant position even where its assumptions and modes of analysis are challenged (eg Booth and Snower, 1996). It is certainly the case that employment is not solely governed by market processes and relationships, but is significantly affected by government actions. Employment-related laws are introduced, enforced by agencies created by, and in a hierarchical relationship with, government which also provides resources in levels that seem to indicate the degree of policy priority.

Employers form associations in support of mutual interests, lobbying governments and engaging with trades unions, the collective bodies formed by employees, and the associations of trades unions. Professional associations seek to promote their members' claims to provide special expertise to address significant issues. In the skills training area, there are long-standing qualifications-awarding bodies established by voluntary groupings such as City and Guilds and Royal Society of Arts long before governments became involved. Any analysis of the functioning of employment within society clearly would need to examine how such various modes of governing operate and interact within particular settings.

However, whilst attempts at governing employment, or at least affecting its governance, may be examined in this way, their effects are ultimately manifested in terms of employment within work organisations. To take one example, the Labour Government's implementation of manifesto commitment to minimum wage depended upon the acceptance by miriad employers in continuing to employ low-paid workers, acting in accordance with the minimum wage order. It was possible that such employers would have found ways to avoid the intended effects of the legislation. Similarly the success of the attempt by government to promote flexible working in the interest of work-life balance will depend upon employers acting in the spirit of the Work and Families Act 2006, using the reason of 'business ground' for refusal of a request only where such a ground is genuinely thought by the employer to exist .

The two arenas of enquiry and analysis in relation to employment, human resource management and the governance of employment, clearly cannot easily be disconnected. HRM texts typically treat the issues addressed under the arena of governance as 'context', the workings of which are 'black-boxed'. Discussions of employment matters within the wider societal context likewise typically treat the employing organisation as a 'black-box'. Yet both approaches cover at least some common territory of action, and thus for enquiry and analysis. By examining particular issues, events and situations in this shared territory, it may be possible to open up the 'twin back-boxes' and widen the analytical scope of each (see fig. 2). This would be particularly important in respect of areas generally viewed as 'troublesome' by actors in either area.


Figure 2 HRM and the governance of employment



Skills training in the UK

One such 'troublesome' area is that of skills training, or 'workforce development' to use the term adopted by the Performance and Innovation Unit (2001). This has been subject to various interventions by governments since the late 1950s, at seemingly regular intervals. From Carr (Ministry of Labour and National Service, 1958) to Leitch (2006), a similar tale is told, largely emphasising the need for the UK to have a more highly trained workforce to be able to compete within the global economy, and drawing attention to the UK's relative low levels of skills compared with other competitor nations. Various explanations are put forward for the problems, and remedies presented. With the notable exception of the era of the industrial training boards, the use of regulatory powers for enforcement of employer investment has been eschewed in favour of exhortation and financial inducements, delivered through a changing set of institutions and agencies, and modifications to qualifications espousedly to make these 'more relevant' to the workplace. The latest intervention, the Leitch Review (Leitch, 2006) strongly suggests that previous interventions have not succeeded. However, the reasons for their lack of success remains unexplained; without an adequate explanation, the likelihood of the success of the Leitch proposals must remain questionable. In particular, the assumption that, this time, the proposed arrangements will be successful, and that employers and others will play the part allocated to them, seems a matter of hope over experience.

Histories of policy on skills training and development

The main reviews of skills training and development can be easily listed: What is less easy is to understand and explain the frequency of reviews and the basis for prescriptions, often very similar, at each review.

Most general HRM textbooks give little attention to public policy on skills training. Marchington and Wilkinson (2005: 216) note that
"the so-called 'training problem' has been with us for a very long time; [...] over the years there have been many attempts at developing a coherent national VET [vocational education and training] policy. Sadly, most have not proved particularly successful, and as a result there have been regular radical reviews and revisions."
They go on to discuss 'recent developments', and do not examine previous developments, nor elaborate their the assertion that most previous policy attempts has not proved successful (ie which may be considered to have been successful, and what factors seem to influence success?). Discussions in textbooks focusing more specifically on training as a subfunction of HRM, generally tend to present descriptions of the current situation, coupled with brief history, mainly over the past five decades, varying in the detail provided. In the fourth edition of her textbook, Harrison (2005) mainly focuses upon the recent and current scene, referring readers who are interested in the key stages in the development of UK policy to Cannell's factsheet produced for CIPD (Cannell, 2004). Reid et al. (2004) intersperse references to public policy in a historical review of the 'evolution of HRD', followed by a mainly descriptive account of the current institutional context. Gibb (Gibb, 2002) mainly focuses upon the recent scene, but is perhaps more analytical than the previous two mentioned books. Hamlin's chapter (Hamlin, 1999) in Stewart's textbook (Stewart, 1999) is now somewhat outdated in respect of the current UK context, but does present what is probably the most detailed history as well as discussing other countries and presenting critical discussion.

The obvious danger with descriptions of current public policy arrangements is the historic tendency for these to be subject to frequent change. Presentations of history can tend to be content-focussed, in effect, chronicles or descriptive accounts of 'one damned thing after another'. Alternatively, they may fall into the category of whig histories, in which the present scene is implicitly taken to be the inevitable outcome of the past. To be of use, the history of policies on workforce development need a framework for analysis, in order to identify the key factors and forces at work. Sometimes it may be wider, macro-level factors that are significant; at other times, there may be more micro-level, or meso-level factors in play, that are more significant .

Reviews and reforms

There has always been a clear recognition in the many reviews over the past half-century that employers must have a leading role in ensuring that the UK workforce develops the skilled capacity needed for the UK economy to maintain and develop its competitive position within the global economy. There has also been recognition that, without some additional influences, economic forces in terms of the activities of individual employers will be insufficient to meet the needs of the economy as a whole, the problem of 'market failure'. Various interventions by government have therefore attempted to use a mixture usually of exhortation, fiscal measures, and the creation and reform of quasi-government institutions, and sought the co-operation of existing associations within civil society. There has, arguably, been a tendency to look to a single major intervention as the basis for reform, rather than taking account of the processes by which the various elements implicated might act and interact to bring about the state of affairs. There has been even less attempt to examine how the particular state of affairs that exists at the time of any review has come about. Leitch (2006) restricts his main examination of the period from 1964 to the present to less than a page and half, and confusingly uses the phrase "the previous system" (p. 48) to refer to what clearly has involved several different attempts to create a stable and effective set of arrangements (see, eg, Sheldrake and Vickerstaff, 1987).

There has also been a tendency to look to similar ways to address the problems as understood. Whilst the era of the industry training boards (ITBs) stands out as one apparently different from the preceding and subsequent periods of voluntarism, there has continued to be a reliance on sectorally-based organisations, recognised by government as having strategic responsibilities for issues of standards and quantity of skills training. ITBs were replaced by Non-Statutory Training Organisations (NSTOs), followed by National Training Organisations (NTOs) then sector skills councils. Various approaches to provide for some aspects of national oversight have been created: Industrial Training Council (post-Carr), Central Training Council (from the 1964 Act), Manpower Services Commission (MSC) (created by 1973 Act), Training Agency (from 1988), Learning and Skills Council (from 2001). To such national bodies we can add other national agencies working alongside existing national bodies, notably the National Council for Vocational Qualifications and now Leitch's proposal for a Commission for Employment and Skills. Locally-based approaches have been tried, including local group training schemes, area manpower boards, training and enterprise councils (and local enterprise companies in Scotland), locally-based learning and skills councils, and now Leitch's proposal for a network of employer-led employment and skills boards (see appendix 1 for summary of national, sectoral, and locally-based agencies created under various reviews).

Throughout the period there has been repeated exhortation from government ministers and individuals appointed to key positions in the national agencies. The Leitch Review asserted that "the UK must commit itself to a world class skills base in order to secure prosperity and fairness in the new global economy" (Leitch, 2006: 14). To achieve this, Leitch calls for, inter alia, the establishment of a 'Basic Skills Pledge', whereby employer representative bodies would "support and encourage" all UK employers in making a pledge, "a specific promise to the workforce that every eligible employee would be helped to gain basic skills and a level 2 qualification" (op. cit.: 20).

Government has also used fiscal measures to attempt to encourage employer to provide skills training. During the initial period of the era of the industrial training boards, these bodies had statutory powers to impose levies, a form of taxation, on 'in-scope' employers, and use funds so acquired as grants to employers who engaged in training in line with ITB strategy for skills development in the relevant sector. The 1973 Employment and Training Act modified those powers, such that any employer who demonstrated that it was meeting its own skills training needs would gain total exemption from levy. Of the original set of ITBs set up under the 1964 Act, only the Construction Industry Training Board continues to exist and retain levy and grant powers .

Other financial support and inducements on a changing set of initiatives, usually expressed in terms of the initials of their names: eg TOPS, UVP, YOP, YTS, ET, NVQ, ILA. Currently, funding support is provided under the 'Train to Gain' initiative to employers, covering course costs and wages, for providing basic skills and a level 2 national qualification to employees who currently lack these. Leitch recommends continuation of such funding, and the revision of funding to the further education sector, such that this is mainly for provision of skills training that clearly meets 'employer demand'. Leitch calls for a 'demand led skills system', seemingly identifying 'demand' with 'need' and assuming that employers are best-placed to articulate labour market information.

Such constant reworking of similar attempts to remedy what is generally recognised as a 'failing system' suggests a failure to heed Santayana's dictum that "those who cannot remember the past are condemned to repeat it". Or, rather, those who fail to examine the past and learn from it, are condemned to repeat it. With that in mind, the next section takes a key period in the history of policy on skills training, the abolition of ITBs, and re-examines it in terms of a governance approach.

Abolition of Industrial Training Boards: a reconsideration

The all-party supported Industrial Training Act of 1964 and the Employment and Training Act of 1973 seemed to entrench an interventionist approach to public policy in respect of skills development. Yet within less than a decade after that second Act, the policy had been effectively reversed. The decision to abolish all but six (of 23) ITBs that had been established under the powers of the 1964 Act would thus seem to be a prime candidate for examination in any attempt to understand public policy on skills training. However, most presentations of this decision tend to pass by with barely a comment. Cannell (Cannell, 2004) states that
"a review was embarked upon which resulted in the 1981 Employment and Training Act. This empowered the Employment Secretary to set up, abolish or change the scope of ITBs."
Hamlin (Hamlin, 1999:. 41) similarly reports that there were 'detailed reviews of the working of the 1973 Act "which led to the 1981 Employment and Training Act", and that 16 of the ITBs were abolished and "replaced by more than 200 voluntary Industry Training Organisations (ITOs)". Gibb (Gibb, 2002: 232) does not mention the abolition of ITBs, but asserts that
"by 1981 the need to change the institutional context again was evident, and another Employment and Training Act was passed. This created Industry Training Organisations (ITOs), which were to be the new means of re-involving employers more in the analysis, design and delivery of training in the UK."
Such presentations seem to suggest or assert a straightforward, even inevitable, process leading to a settled outcome. More detailed examination of this period presents a different story.

The decision to abolish the majority of ITBs was announced by Norman Tebbitt, then Secretary of State for Employment, in November 1981. He took this decision, he stated, "in the light of the extensive consultations that have taken place and the recommendations made the Manpower Services Commission" (Hansard, 16th November 1981, col. 30; emphasis added). In response to a question from a Labour MP, he stated that "it is in large measure to what industry has requested that I have acted". In concluding the question and answer session lasting about 30 minutes, Tebbitt stated that
"I am sure that there is no opposition to the idea that the Government should do all they can to improve training in industry. That is common ground. What is not common ground is that the only way to do that is through the statutory structure, which in some cases has been extremely ineffective". (op. cit., col. 40).

In referring to the recommendations of the MSC, Tebbitt does not make clear that in not one single case was an ITB recommended for closure. His predecessor, James Prior, had instructed the MSC to set up a review body in July 1979 to the 1973 Act. The view expressed by Gibb, stated above, on the 'evident' need to change the institutional context, is hardly borne out by the findings of that review (Manpower Services Commission, 1980). Amongst the conclusions of that review were that the existing mixed system of statutory ITBs and voluntary joint bodies had important strengths "particularly in securing involvement of both sides of industry in ways appropriate to each sector" (Manpower Services Commission, 1980). What was needed, the review report argued, was "to build on the strengths of the existing system and adapt and develop it to do the job more effectively". Moreover, the report recommended removal of the 1% limit on the levy, and allowing ITBs discretion in in exempting employers from levy. The review argued that the system of granting full exemption from levy to any employer that demonstrated that it was meeting its own company training needs may not always work to the country's benefit. Both the 1% limit on levy and the levy exemption system had been introduced by the 1973 Act, which was thus seen to have undermined key aims of the 1964 Act.

However, the review report, 'Outlook on Training', did recommend a review of the scope of ITBs, ie the definition, for each board, of the sector it covered under its statutory powers. This led James Prior to ask the MSC for a sector-by-sector review. That review, covering 42 sectors, of which 23 were covered by statutory ITBs and one (foundry industry) by a industry training committee with similar powers, was completed by July 1981 when the report was published with recommendations (Manpower Services Commission, 1981b). In not one single case did the MSC recommend that an existing ITB be closed. The report noted, in several places, that the Government had indicated its 'general preference' for voluntary arrangements, but expressed concern at the speed with which it had required the sector-by-sector review, particularly as the outcomes were awaited on major consultation by the MSC as 'A New Training Initiative' (Manpower Services Commission, 1981b) started in May that year. The report called attention to the
"risks in prescribing a return to a regime similar to that which existed before 1964 despite the progress made since then."
(Manpower Services Commission, 1981a: para. 6.3)

The decision taken by Tebbitt, clearly contrary to MSC recommendations, was possible only by virtue of powers gain under legislation earlier that year, through the Employment and Training Act 1981. Prior to that, under the 1973 Act, an ITB could only be abolished on the recommendation of the MSC. The inclusion of a specific new power to make such a radical decision against MSC advice, suggests a clear intention to make decisions on a partisan view of what is appropriate, rather than relying upon the considered judgement of the very agency created to remove training affairs from partisan politics. It would be easy then to regard Tebbitt's announcement as merely another example of those policies in action, through a hierarchical mode of governance. However, that would be to miss out other important influences on the policy decision.

One significant influence on the policy process over the period was that of a report by the Central Policy Review Staff (CPRS), the No. 10 Downing Street 'think tank'. Published in May 1980, 'Education, Training and Industrial Performance' (Central Policy Review Staff, 1980) came with a statement on its inside cover asserting
"This report ... is being published as a contribution to public discussion. Publication does not imply that the Government are committed to all aspects of the analysis nor to all the conclusions and recommendations contained in the report."
A document produced in October 1980, by the ITBs branch of the union ASTMS, representing professional staff grades in seven ITBs, put the matter differently:
"It is likely that the Report, submitted directly to the Cabinet, will be at least as influential in shaping any new Training Act as the Review conducted by the MSC and published as Outlook on Training."
(source: archives of ASTMS ITBs Branch}
It is instructive at this point to note the parallel with the similarity of the Performance and Innovations Unit's report (Performance and Innovation Unit, 2001) to Leitch's report.

The CPRS report contains many terms and phrases that came to have significant resonance later. It drew upon the Donovan Commission Report in 1968 to recommend that "objective standards to be laid down by which qualifications may be judged", and removal of 'artificial barriers' on entry to training, to avoid the use of the concept of skill as a 'restrictive labour practice'. Individuals should have a personal training record, indicating particular skills acquired; this was referred to as 'the passport approach'. Reference was also made to a 'jungle of qualifications' . ITBs should no longer monitor the amount and type of training by employers, but promote reform of existing schemes and innovation in areas currently neglected.

Another influence was a report published by the Centre for Policy Studies (CPS) (Elliott and Mendham, 1981), a 'think-tank' founded in 1974 by Sir Keith Joseph and Margaret Thatcher "to champion economic liberalism in Britain". The report's argument is indicated by its title: 'Industrial Training Boards: Why They Should be Dismantled'. The authors asserted that ITBs are bureaucratic and costly, and cannot prove their effectiveness. Whatever the merits, and faults, of the report, its provenance suggested the view that would be adopted by a Government whose policies had largely emerged from the CPS.

Other 'associations' that had some role in the policy process obviously include employer bodies and trade unions. The idea that employers were overwhelmingly opposed to the continued existence of ITBs is clearly wrong. The MSC's sector-by-sector review indicated a mixed response by employer bodies. Even where employer bodies had argued for abolition of an ITB, there was often no clearly viable alternative proposed. This indicates a significant degree of fragmentation in various sectors, such that there was little coordination amongst employers on training arrangements.

The influence of trade unions in such policy process was clearly minimal, reflecting the determination to reduce the perceived power of unions. However, the three TUC members (Commissioners) of the MSC remained in their posts throughout this period, and continued to do so until 1988 when the Training Commission (which had replaced the MSC that year) was abolished following Congress decision to boycott the Employment Training scheme for unemployed adults. Despite calls from within the trade union and labour movement, the TUC apparently considered it better to be in 'the corridors of power' to try to influence policy and its implementation. Admittedly, the critical voices were often 'grassroots' groups which failed to gain a significant degree of support outside of their immediate circles.

The 1981 decision to abolish the majority of the ITBs can thus be seen to have emerged through a policy process much more complex than often described. A variety of actors were involved, with varying interests and able to engage in different aspects of policy dynamics. Clearly, it was ultimately the legal power bestowed on the Secretary of State to abolish an ITB, with or without a recommendation from MSC, that enabled the final decision. Except, that is to say, that it was not the 'final' decision.

The policy decision taken in November 1981 did not automatically ensure that the espoused policy aims would be achieved. In so far as the policy was intended to lead to an improvement in training and skills levels amongst the British workforce, it could clearly only be effected by the actions of others. These include individual employers undertaking appropriate training, for which there may be the need for some coordination with other employers with the aid of a statutory ITB or Non-Statutory Training Organisation (NSTO). Moreover, individual employees would need to play their part, for which there may be the need for trade unions to engage in appropriate relationships with employers to provide support for training; and employers would need, where relevant, to engage appropriately with trade unions.

The term 'Non-Statutory Training Organisations' (NSTOs) was used to refer to employer bodies that either took over from ITBs, or already covered sectors for which no ITB existed, in 1982. In 1986, David Trippier MP, a junior minister in the Department of Employment, sought progress reports from 81 of these NSTOs; the responses suggested that "while some NSTOs were meeting expectations, ohers appeared to be less successful and a few were virtually moribund" (Vaarlam, 1987: 1). In 1987, a MSC-commissioned report by the Institute of Manpower Studies found that only 56 (of the 102) NSTOs were effective; 15 were found to be 'marginally effective' whilst 11 were 'ineffective or inactive'. It seems that the claims made by supporters of ITB-abolition were nowhere near fully realised.

Such issues can be examined within a governance approach. However, it is not clear how such an approach can, by itself address issues relating to how individual employers, and individual employees (and/or prospective employees), act in relation to public policy. Two years prior to the report on NSTOs, the MSC and the National Economic Development Office has commissioned consultants Coopers and Lybrand Associates to "investigate the main factors which influence the attitude of senior management to investment in training - and in human resource development generally" (Coopers and Lybrand Associates, 1984: 4). The report found that the attitude of senior management towards training could be best described as 'complacent'. There was very little pressure on employers to invest in training, particularly from:
· comparisons with other companies
· individual employees or unions
· external commentators such as financial analysts
· Government (op. cit., p. 4-5)
Such an analysis was very much in line with previous analyses; there was certainly no indication that the move back to voluntary arrangements in 1981 had led to significant improvements. Interestingly, amongst the proposals were the obligation to include 'measures of training effort' in company reports, and the (pp. 17-19) and the establishment of workplace training committees (p. 27), both matters that gained little support at the time but which have returned in more recent discussions.

Employer and employee engagement in skills training

To understand the failure of the 1981 policy return to reliance upon voluntarism, it is necessary to engage with the issues that arise within the 'space', shown in figure 2, that is occupied by both HRM and the governance of employment. A key question here concerns what forces and factors lead an employer to engage in skills training for its workforce, and what factors and forces would tend to inhibit an employer so doing. Pettigrew et al. (1988; 1989) examined these, using a force-field analysis and based n a study of 20 case study companies. The model they produced (see figure 3 for simplified version) attempted to capture a number of 'positive' and 'negative' factors that interact in complex ways.

Much of the literature on HRM, particularly in a normative vein, assumes that HR policies and practices should be geared to the creation and maintenance of high skill, high performance working. The Leitch recommendations are predicated on this as the basis for national economic performance. Yet, as Keep argues,
"Far from being the inevitable destiny of all organisations, the high skill, high participation, high performance workplace model may actually only be relevant within a limited sub-set of organisations, particularly when set within the wider context of the Anglo-Saxon variant of capitalism."
(Keep, 1999: 337)
Keep presents a model developed by IRRU at Warwick of no less than seven different trajectories of work organisation. Each of these would have different implications in respect of skills training by employers and in terms of the relationship with wider labour market and societal aspects of employment.

Figure 3: Interaction of positive and negative factors on training (source: (Pettigrew et al., 1988: 29), adapted)

Much of the literature on HRM, particularly in a normative vein, assumes that HR policies and practices should be geared to the creation and maintenance of high skill, high performance working. The Leitch recommendations are predicated on this as the basis for national economic performance. Yet, as Keep argues,
"Far from being the inevitable destiny of all organisations, the high skill, high participation, high performance workplace model may actually only be relevant within a limited sub-set of organisations, particularly when set within the wider context of the Anglo-Saxon variant of capitalism."
(Keep, 1999: 337)
Keep presents a model developed by IRRU at Warwick of no less than seven different trajectories of work organisation. Each of these would have different implications in respect of skills training by employers and in terms of the relationship with wider labour market and societal aspects of employment.

These include the behaviour of individual employees, which defies reduction to the rational-egoist, calculative model assumed by human capital theory. In their study of participation in education and training within South Wales, (Fevre et al., 1999) develop a set of ideal-type orientations including functional avoidance (employees see no utility in education and training: if an employer requires skills, it will provide for them), instrumental credentialism (employees see no intrinsic value in the content of education and training but value the qualifications hat are gained), and vocational transformation (where the content of education and training is valued). Such orientations are not merely individualistic, but are embedded within the social and political culture. Fevre et al argue that the increasing reliance upon the 'logic of individualism' evident in much of public policy efforts in this area ae likely to increase functional avoidance and instrumental credentialism, rather than vocational transformation; the latter requires 'group loyalties'.

The attempt to portray the behaviour of both employers and employees as evident of 'complacency' (Coopers and Lybrand Associates, 1984), and efforts to encourage both employers to provide skills training and employees to make personal investment in their skills, fail to take account of the dynamics identified and analysed by the above-discussed researchers.


It is clear then that both policy development and decision over the period surrounding the announcement of the abolition of most of the ITBs, emerged from a complex set of processes involving a variety of actors and agencies in various ways. The orderliness, or otherwise, of the organisation and coordination of skills development at a level beyond that of the individual employer is a matter that cannot easily be achieved, and any attempt to devise measures and frameworks to achieve it must take cognisance of such difficulty. A governance perspective provides an approach that highlights key elements. In so doing it indicates that there is no inevitability of particular policy decisions. More importantly, it indicates that policy decision by government is insufficient to bring about the state of affairs that, purportedly, is desired by all.

At the same time, it must be recognised that a governance approach cannot by itself provide analysis of the implementation, or failure of implementation of policy in terms of the behaviour and actions of employers and employees, individually and collectively. In its organisation-centric orientation, HRM literature lacks analytical purchase on this joint arena of activity. This points to a need to develop a hybrid of the HRM and governance approaches. Whilst the focus here has been on skills training in the UK, it is reasonable to assume that such a hybrid approach is equally likely to be of utility in respect of other areas.

Appendix 1 National, sectoral and local agencies involved in skills training

National bodies established by government
1958 Industrial Training Council
1964 Central Training Council
1973 Manpower Services Commission (MSC)
1986 MSC + National Council for Vocational Qualifications (NCVQ)
1988 Training Agency +NCVQ
1997 Qualifications and Curriculum Agency (QCA) +Department for Education and Skills
2001 Learning and Skills Council + QCA
2006 LSC + Commission for Employment & Skills + QCA

Sectoral agencies initiated and/or sponsored by government
1964 Industrial Training Boards (ITBs) (+ non statutory bodies)
1981 some ITBs + Non-Statutory Training Organisations (NSTOs)
1986 onward 'lead bodies' for development of NVQs
1997 National Training Organisations (NTOs)
2001 onward Sector Skills Councils

Local agencies initiated and/or sponsored by government (or quasi-government agencies)
1960s Group Training Schemes (under ITBs)
1980s Area Manpower Boards (plus local authority alternatives, eg Greater London Training Board)
1989 Training and Enterprise Councils (TECs) (in Scotland, Local Enterprise Companies, LECs)
2001 regional LSCs


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