CBI says there are far too many qualifications on offer

The Confederation of British Industry also wants better careers advice, and reform of qualifications and the "alphabet soup" of skills quangos.

Its proposals came ahead of the Leitch Report, into the UK's "skills crisis".

The government is refocusing England's further education colleges on skills development, with a new bill due to be placed before Parliament this week.

Some observers have already complained that it is proposing legislation before the publication of Lord Leitch's final report, expected in December.

His interim findings were that the country was in danger of falling behind internationally because of a skills shortage.

"The scale of the challenge is daunting," he said.

Quality

The CBI said only a small fraction of the £33bn spent on training by employers was spent on further education (FE) courses and only 15% of employers had had any contact with their local college.

Association of Colleges chief executive John Brennan said the quality of college training far exceeded that of private providers.

"Colleges already compete in an open market very successfully, as 200,000 employers across the country would testify," he said.

But the CBI said funding should be redirected through the Train to Gain scheme, which aims to identify the skills businesses need and pinpoint the right training requirements.

The best colleges would still benefit - but the work they did would be more relevant to employers' needs, it said.

There were nearly 6,000 vocational qualifications, many of which had been designed by consultants rather than employers, who were the people who should be "in the driving seat".

'Unwieldy'

There should be a new, professional careers advisory service.

The "plethora" of government skills bodies and initiatives designed to support employers had become "unwieldy and incomprehensible" and should be simplified.

CBI director-general Richard Lambert said: "To equip the economy for the challenges of globalisation ahead, we have to put employer needs centre stage.

"The current system does not match public funding and support with what is needed to improve low skills and raise low productivity."

He added: "We don't want another shuffling of the deckchairs within a dysfunctional system.

"Instead a closer relationship between businesses and training could really help us face globalisation with confidence."

Improvements

Skills Minister Phil Hope said the government's strategy was putting employers "firmly in the driving seat" and there had been a huge improvement in the supply of skills over the past 10 years.

"Last week the government launched the first three of the new national skills academies as part of the new partnership with employers to raise skills levels in every major sector of the economy. "Over the past year the working age population has increased and the proportion without qualifications is falling.

"But we must continue to improve if we are to meet the challenges of the next decade outlined by Lord Leitch in his review of skills for 2020."

The deputy general secretary of the Trades Union Congress, Frances O'Grady, said the new bill could provide an opportunity to put FE colleges at the heart of a strategy to boost both economic performance and skills opportunities for working people.

"But it is disappointing that the CBI are playing the blame game in calling for yet another round of so-called reform which could put public service training and education in peril," he added.