Considerable discrepancies identified in state subsidies for training
Danish companies have access to a particularly generous system of adult and further training courses and, in tripartite negotiations which begin in September 1999, the government and trade unions want to revise those parts of the state subsidised system that are thought to benefit individual companies more than society. The talks are based on a comprehensive government report which aims to help early school-leavers and strengthen courses which lead to qualifications. The negotiations may lead to a conflict with long-standing business interests.
Danish companies have access to one of Europe's most favourable selections of courses, guidance and educational planning schemes, which are paid for by the state. This includes adult vocational training schools (AMU centres), which spend somewhere in the region of DKK 2 billion a year on offering highly specialised courses designed to meet companies' needs. Trade and industry still has considerable influence on which courses these schools offer.
These facts are highlighted by a report entitled Ways and means in publicly financed adult and supplementary training courses presented by the government on 27 August 1999, based on the work of a committee comprising government officials from the Ministry of Education, the Ministry of Finance and the Ministry of Labour, which was set up in March 1998. For more than a year, the committee scrutinised the Danish adult and supplementary training system (Voksen- og efteruddannelsen, VEU). The result of their deliberations fills around 500 pages and the conclusion is that there has not been an appropriate link between the use of public subsidies for training courses and the outcomes to which the subsidies are supposed to lead: increased knowledge, enhanced skills and more competence, for the benefit of the individual course participant, the company and society in general.
The Minister of Education, Margrethe Vestager, and leading trade union representatives have launched an the attack on the state subsidies received by trade and industry for a number of courses that, it is claimed, companies would probably otherwise have organised and paid for themselves. The statements come as a prelude to tripartite negotiations on the basis of the report, which begin in September and should lead to a reform of the VEU area.
"If we look at the influence of the parties as a piece of folded paper, it might be the case that we should unfold the paper and fold it again in a new way. We must look at the highly company-specific courses and at how their administration is organised. There is a very close connection between labour and management and schools in the specialist committees. But these courses are naturally not intended solely to benefit the short-term interests of companies. Course participants are also interested in gaining greater competence, so that their training could lead to a job with a different company," said Ms Vestager when the report appeared. She added that "it is the big companies that have the resources to plan training courses themselves which make use of these courses most. We must consider whether some of the small and medium-sized businesses have a greater need for the development of competence that society is offering free of charge."
LO believes that adult vocational training courses are being abused
Trade union representatives state that they are ready to consider whether the DKK 12.5 billion spent by the state every year on adult and supplementary training courses could produce greater benefits if it were spent differently. In the opinion of the Danish Confederation of Trade Unions (Landsorganisationen i Danmark, LO), if the forthcoming tripartite negotiations turn out only to focus on cutbacks, they have no chance of success. Negotiations will take a constructive direction only if they concentrate on how to make the government's efforts more goal-oriented. Public funds should be spent less on fulfilling very narrow company needs. The money should rather be spent on providing formal, recognised areas of competence, stated LO's educational secretary, Harald Børsting, in connection with the publication of the government report. The report underlines many times that the emphasis of new training courses should be on real qualifications, and that it is early school-leavers who have the greatest need for supplementary training. "It has never been made clear what these training courses were intended to do. All initiatives have been given a great deal of latitude and direct access to the Treasury. Everything is equally good! When this attitude is combined with a decided decentralisation to institutions and the influence of labour and management, then there is an obvious risk that all sorts of courses will be offered without anybody taken into consideration what their primary purpose is," said Mr Børsting.
This view finds support in the Danish Confederation of Professional Associations (Akademikernes Centralorganisation, AC), where the belief is that it is too easy for employers in many industries to "smuggle" their own needs for training courses into the state system. "It has become impossible to differentiate between which parts of public courses belong under general subjects and which represent internal training in the companies. It would therefore be reasonable for industry, among other areas, to pay for the very company-specific courses," says AC head of department Niels Lykke Hansen. He believes that if two to three years were devoted to the task it would be possible to turn the entire system around. "There should not be anything sacred about this. If attention is still to be paid to industrial policy goals, this must be made clear and explicit in the future. The point of departure must be how the courses can help to meet society's needs throughout the entire labour market,"adds Mr Hansen.
AMU training courses most expensive
One of the areas that will be most in focus in connection with training courses is the adult vocational training area (AMU). AMU courses are the most expensive type of supplementary training courses offered by the state. Annual costs are twice as high per student as other adult vocational training courses which offer professional status. According to the government report, the state's expenses for teaching amount to DKK 475,000 for the most expensive courses. This is eight times higher than the average subsidy to all adult and supplementary training courses together.
The relatively high level of costs reflects the fact that there are many hours of teaching per week in small classes, often involving a good deal of technical equipment. Unlike many other adult vocational training courses, the AMU courses are always free of charge for companies, which also receive subsidies from the state to supplement employees' wages while they are attending courses.
Some industries do not use AMU courses at all. An example is data-processing, a rapidly developing sector where a great deal of money is spent on supplementary training, but very few employees are sent on AMU courses because technological and marketing developments move so rapidly.
Subsidies for courses companies would otherwise pay for themselves
The government considers that there are courses at present that companies would pay for themselves if they were not subsidised. The holds true in particular of the highly specialised, company-oriented courses. Although the state spends a great deal of money on these courses, it fails to increase the variety of courses offered. Financing is simply transferred from trade and industry to the state.
Many courses address specific companies. An example is the AMU course, Team-building for production groups, which was developed for the metalworking industry. The educational guidance literature encourages the teacher to visit the company and gain a detailed knowledge of the company's culture, strategies and objectives through interviews with the management. The government does not consider this to be teaching leading to qualifications.
The government is also surprised that few companies apparently make use of the so-called "company-adapted courses" (VTP courses) which comprise under 1% of the courses on offer. "It is difficult not to be struck by the thought that much of what is offered is so relevant precisely for the individual company, that they have no need to use the VTP scheme where companies themselves must pay for the courses," says Minister of Education Margrethe Vestager.
It will be very difficult for the committee that is now being set up, with the participation of the social partners and the government, to reach agreement on the number and form of the adult and supplementary training courses that will be offered in future, or on which courses will be eligible for state subsidies and which companies will have to pay more for.
If the courses on offer are not vocationally oriented they will not be relevant for industry. If, on the other hand, the courses are highly specialised, companies will derive far more benefit from them than society. Small businesses risk getting into difficulties if they have to pay for the more advanced adult training courses.
Another main conclusion in the report is that it is first and foremost early school-leavers who should come into consideration. This has raised the hackles of academics and engineers because both have a need for specialised courses and both groups believe that society would benefit most if the well-educated part of the workforce could always be capable of taking on new challenges.
The process is leading to a series of meetings which will be characterised by conflict when negotiations between the three parties get going in earnest. It could easily result in a showdown with many of trade and industry's time-honoured interests. (Carsten Jørgensen, FAOS)