'Confronting the Skills Paradox' suggests the following policies that will need revisiting if the UK is to construct a set of policies capable of realising the Leitch ambition

• It is hard to see how a skills policy can operate well without changes to the education system that underlies it. A key concern will be to explore how to ensure the skills system is built for 'adaptability' not 'functionality'. Our concern is that we have a flexible labour market policy but not an education and training policy - built partly on the unknown and unknowable.
  

• Allied to this is the question of addressing the problem of adult skills levels on two levels: general and specific. The partnership between the state and employers therefore should be that the state continues to develop the generic education and skills at a high level - offering a range of potential routes-whilst the employer pays for the specific occupational training that their firm requires. Many employers whose skill requirements are at the higher level are most interested in the quality of the generic raw material that the education system produces.

• Increased public sector investment and the successful modernisation of public services could have bigger economic implications in many areas of Britain than the Government's attempts to create a new entrepreneurial culture.

• The years until 2010 will provide a key test as to whether a system based on entitlements for firms is ever likely to succeed in confronting the skills paradox. The analysis presented in this paper suggests that it will not. A 'post-voluntary system', as described by the Chancellor, built upon entitlements for individuals, may well be needed to ensure that investment (and time off) are available to all.

• A key question for the future is how the Government could imaginatively recast the market incentives around training for individuals and organisations. Given how firmly personal interest can drive the desire to learn and subsequent economic activity, focus needs to be moved from incentivising.institutions and key agencies to a more concerted attempt to incentivise individuals differently and to encourage them to develop new tastes and preferencesfor learning.

• More work is still needed to provide flexible learning in order to maximise take up and to offer greater opportunities for people to re-engage with learning. Learning in bite-sized pieces is often a springboard for further learning and employment and easier to pay for, yet is excluded from the level 2 entitlement.

•  In acknowledging the full range of relationships that shape cultures of decision-making, there may be lessons to learn from the private sector. A national peerto- peer system, rewarding individuals, Unions, and other intermediaries for introducing friends and colleague to (completed) modules of adult learning might be one way of helping bring about a shift in attitudes to learning in the UK.

• Helping firms to compete higher up the value chain towards business models based on high skills and high wages, through interventions such as the Design Immersion Programme for manufacturers; providing advice on management and work organisation; and public sector procurement policies. All these can help drive innovation and higher value-added strategies, increasing the demand for skills.
  

• Despite much of the progressivesounding rhetoric that has accompanied it, the focus of economic development on knowledge-based sectors (finance and business services, science and technology, creative industries) has led to widening economic disparities in the UK, both between regions and intra-regionally. Addressing these issues requires labour market policies that are sensitive to the differences between local labour markets; but also requires a more active regional policy to re-balance economic activity.