Future in the balance RTITB answers back
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An "educational bureaucracy" — just one c the criticisms that have been levelled against the Board. And the RHA believes it can undertake its own training, and better. Here, lain Sherriff invites director general Eric Tindall to put his side of the story
THE ROAD Transport Industry Training Board has not enjoyed the best of relations with those who pay training levy in the road haulage sector.
In the beginning, it came under attack from the then chairman of the Road Haulage Association, Philip Turner, and his successor, Noel Wynn. They and others have mellowed over the years, but the RTITB has as many critics now — albeit with different names — as it had in the beginning. The present RHA chairman, Ken Rogers, left the Board in no doubt about how he felt at the Association's annual conference last month.
We hear regular adverse comments on the Board's activities. The Manpower Services Commission has recently sent its proposals to the Secretary of State for Employment and the future of the RTITB is in the balance.
The Board's director general Eric Tindall accepted our invitation to answer some pointed questions put by CM'S editor, and this is a transcript of the dialogue.
Sherriff: The Board is now 13 years old and despite early opposition it has introduced a volume of training to the industry which would not have been contemplated in 1968. But has it now served its purpose of indoctrination, implementation and development?
Tindall: The first public platform I occupied 13 years ago when I had just joined the Board was at a Conference dealing with the newly introduced Training Board and with the 1968 Transport Act. I took as the title for my paper Training in a Dynamic Industry and my theme generally was the need to regard training as being something which was carried on in a constantly changing situation. We have come a long way since those days, but the thesis remains — we are change agents working in a world of change.
In the early days there was a backlog which we needed to overcome. Our first aims were to bring most companies up to the standard of the best and while we had to be ahead of our industry, we realised quickly that we must never be too far ahead or we should lose all contact. It became clear in those early days that the industry was very short of training resources. The average technical college always had an Engineering Department and Construction Department, but colleges which dealt with the skills required in our industry were few and even those pioneers were often ill-equipped.
In addition to boosting the contributions of the colleges we enabled them to set up 6,000 integrated training places for apprentices), we also provided the industry with its own training and development centres at the two MOTECs. Later we started the vital Group Training movement.
Some of the objectives that the Board identified in those early days were only capable of being met over a very much longer period of time.
I suppose a good example of this is our current skills testing programme which was first envisaged in 1968. We hope to test the skills of about 10,000 apprentices at the end of their stage 3 in the year ahead. This could have been done earlier, but would not have been acceptable.
The answer then to your question is that the role of the Board has changed and will change still further.
There are still some fundamental training needs unsatisfied and there are new needs arising due to the dynamic nature of the industry. The role for the Board is to foresee these changes and to help the industry prepare to meet them as far as trained manpower is concerned.
In doing this the nature of the Board may change out of recognition, but industry will always need training and there will always be a need for an industrial catalyst to urge that training.
Sherriff: There are some doubts about the Board's future. Should its role be changed and modified?
Tindall: It is always helpful to review industrial organisations and we need to do this regularly. On the other hand, I am not happy when a review takes on a political character. The 1972 review damaged the work of the Board.
I am not much of a gardener, but 1 know enough to stop pulling up the plants to see whether the roots are growing and this was very much what took place at that time.
The current review is being handled much more sensibly. The latest report from the MSC's review body is really saying that to meet needs for the rest of the century, we need more of the same mixture but more flexibly applied — much clearer definitions of the roles of the MSC and ITBs and some administrative amendments, the chief of which is that the administrative costs of boards should be returned to industrial funding.
The role of the Board is clearly about to change, but then it does this regularly through the democracy of its boardroom. When the change becomes a political matter, you are right to suggest that this causes doubts to be expressed about the Board's future and changes of this kind which are threatened are naturally harmful so long as the threat remains. I hope, therefore, that wha1 ever it is intended should tak: place quickly, since failure to di this will inhibit planning an leave uncertainity in the mind of all involved in the business c training throughout the industri
Sherriff: The MSC believes i should identify areas for Indust rial training while Boards shouli identify individual trainini needs. Does the RTITB have an, plans in this direction?
Tindall: The proposals in thi review body report to the MS( which have not yet beei adopted by the MSC indicati that there should be a nationa role for the MSC and an industr, role for the ITBs. I think that un der the current design thesi roles are often confused and thi: has caused difficulty throughou the industry.
The RTITB must welcomi clarification of this kind and ha: plans to make an input on behal of the industry into whateve centralised planning may be de vised by the MSC. Our only hop that this will be numerate and current as possible. We are in ie business of identifying preant situations and predicting Jture movements, not in ,i.cording history.
Sherriff: With the recession eying flooded the labour marat with drivers, what is the rture for training this type of perative? Will there be a Aback in GTA activities?
Tindall: The current recession ; biting hard into all parts of our idustry and is clearly making fe difficult for anyone conerned with training. Training is II about the future and when le future is as doubtful as it is at resent, then it is more difficult ) get employers to turn their ttention this way.
Clearly, five-year plans for abour needs tend to have econd place behind financing urrent oil bills with the present igh interest rates. But I have een reactions to recession in iclustry in the past and I am luch heartened by the present esponsible reaction of our inustry.
They are still talking training nd still looking to the future. In ituations of this kind we have to stablish the best ways of Preparing for the end of the reession. I believe that the system ve have for driver training in Iritain makes us better able to lo this than anywhere else in the vorld.
By investing heavily in raining resources we have been ble to reduce the length of 'river training below that of any rther developed country. This neans that as long as we safe;uard these resources, we can le much more flexible and imnediate in our future responses. It is vital that if the recession persists, we do everything posible to maintain training reources and instructional staff. The GTAs, like the industry, Ire going through a very difficult ime. Also like the industry, they pre largely surviving. I have just }een looking at the financial perormance of 100 groups in the 'ear ending July 31, 1980.
Of 69 groups with centres: ten nade operating losses totalling :86,000; 59 made operating su raiuses totalling £883,000; three ppprentice groups made small .urpluses; of 25 Training Officer iervices, only five made operatng losses and the remainder ,urpl uses.
Even more interesting than heir financial results, however, s their training utilisation. In the Tar 1979/80 groups with operaive centres actually carried out 1,500 more days of training than n the previous year. Some local abour markets may be flooded with drivers, but the 166,697 hgv training days performed by groups in 1978/79 only dropped to 165,121 in 1979/80.
Sherriff: The MSC believes that levy should rise to 1.25 per cent so that the industry will cover its own costs. Would this percentage cover the cost, or might they be reduced to hold the percentage down at 1?
Tindall: I am not sure of the grounds for this question, and I was not aware that the MSC had expressed any belief that levies should rise. On the contrary, this is the worst possible time for industry to take on additional financial burdens,
The size of our levy is an annual decision made by the industry's representatives in the boardroom and they are always mindful of the economic state of the industry. I would not have thought that they were of a mind to increase the levy at the moment. Indeed, they did consider reducing the current year's levy, but reluctantly left it alone in the face of difficulties of late changes.
Sherriff: The ratio of training staff to employees in scope varies enormously between Boards:
Food, drink and tobacco, 1:6857 Hotels and catering, 1:5852 Distribution, 1:5160 Engineering, 1:3613 Construction, 1:1181 Transport, 1: 840 Can this ratio be justified or has the time come to re-examine the staffing level at the RTITB?
Tindall: The ratios reflect the different approaches of different Boards and without knowing these approaches, comparisons are often misleading.
I should point out in this respect that the RTITB figure includes a lot of direct training staff (group training officers, MOTEC instructors, OSG consultants and so on) who have no equivalents in other Boards. Their presence has to be set against incomes and benefits they bring the Board and the industry.
Our staff in April was 871 and we have already reduced this to 805.1 hope this shows that these figures are constantly under review.
If financial control moves back to the industry I believe that further reductions are possible because inevitably some of our staff are employed in dealing with the bureaucracy concomitant with Government financing.
To give one example, because we receive some Government funds we have to cope with four lots of external auditors — this takes up the time of our own finance staff and if the future administration could be simplified, I would hope to save some staff as a result.
Sherriff: There has been criticism of the number of staff
cars at the RTITB. Figures put them at more than 400. Is this so, and if so can it be justified? If not, what is the true figure?
Tindall: Everybody employed in British industry knows that
thoughtless criticism is often made about emotional areas such as motor cars, carpets, ex penses and lunches. I am not aware that we have had more of this than any other public body.
From the outset, the Board decided to make cars available only for those staff who needed them to do their jobs. We have currently 281 staff with Board cars. This needs to be consid ered against the use made of these vehicles. We have recorded altogether one and a quarter million visits to our industry.
Our fleet is mixed because this seems proper for an organisa tion dealing with the motor vehicle retail and repair trade. We have a policy of buying the bottom model of the range for reasons of economy and our staff reimburse the Board for the private use of these vehicles.
Sherriff: Are there some areas of overheads which the Board could reduce without reducing efficiency?
Tindall: As good managers, we are constantly seeking ways
of reducing overheads without reducing efficiency and when we find them, we act,
Sherriff: The RHA suggested that the RTITB activities should
be confined to providing advice, consultancy and research. This would mean a restructuring of the Board. Could it be achieved, how long would it take, and what might it cost?
Tindall: The Board will be meeting the RHA shortly to discuss this suggestion and in
dealing with it, I must not anticipate that discussion. I am sure that staff and I would welcome a relationship of the kind suggested if it would work. We must bear in mind that our latest intelligence shows us that only one in five of all companies in road haulage undertakes any training. This is the worst performance of any sector in our scope and I would have thought therefore that the proposal was not timely for road haulage if only to be fair to the one haulier in five who does train,
Sherriff: What is the annual cost of running the RTITB, and does the levy provide a reserve fund or balance at the end of each financial year? What is it in cash and percentage terms?
Tindall: The detailed figures are available year by year in our annual reports. The figures quoted in table 21 of the MSC review body report for our operating costs is £5.258m. Our reserves position is best expressed by an extract from our chairman's statement which accompanies the accounts for the year ended March 31,1980.
"The result on revenue after deferring capital expenditure of £0.87m was to end the year with a surplus of £1.63m. The Board has decided to allocate £1.50m of this sum to help counter the cyclical downturn in training which is underway in the present difficult industrial climate.
"In the balance sheet there is a reserve for staff redundancy of £3.39m to meet part of the contractual contingent liability to our employees. In addition to the fixed assets there are current assets of £8.43m which are largely represented by shortterm loans and cash.
"These current assets represent the Board's reserves, which of course will include the cyclical reserve of £1.50m referred to above.
"In this sum of £8.43m there are also specific reserves of £1.71m to support the the grant point value in the eight different sectors of the Board. The remaining £5.22mPis working capital (equivalent to just over eight weeks of current levy income). The Board does not receive levy at the time it is assessed but at the end of the year nets the amount against any grants due.
"As the MSC grants reduce in amount, the Board has to find more of its own money to finance its cash flow during the year."
Sherriff: What are the main directions you would like to see the Board taking in the next few years?
Tindall: First a return to a continued overleaf
closer identity with the industry: The last few years when we have been part Government financed have not been as successful as they should have been.
Government interference has been time consuming and frustrating, but worst of all we have been seen by our industry as an arm of Government.
That would be a situation bad enough in any industry, but disastrous in ours which believes that it gets more State attention than any other part of private industry.
Second, coupled with this is the need to work with other organisations in educating the public about the importance of road transport. To many of those who make decisions about the way our society develops, industry is still thought of in terms of factories and workshops.
In fact, over the last 30 years employment in service industries has overtaken that in manufacturing. In 1953, 40 per cent of the working population was employed in manufacturing and 38 per cent in service industries. By 1980 these proportions had altered to 31 per cent and 52 per cent respectively. This is ref
lected even more clearly in the make-up of the gross domestic product.
In 1958, 36 per cent was contributed by manufacturing and 39 per cent by service industries. Currently the proportions are only 28 per cent for manufacturing while services contribute 56.5 per cent.
Third, I look to a more scientific and less emotional approach to the whole business of people in industry. Of all Britain's industries, we have best quantified our manpower needs and are monitoring our progress towards satisfying them.
Transport is a young industry and it is an open-minded and forward looking one with fewer prejudices and restrictive practices than most. In this climate, action can be based on facts rather than opinions, on logic rather than emotion.
Finding answers is often easier than determining the right questions to be asked. FACTORING in some form dates back to antiquity. A factor was a key figure in the economy of the Roman Empire. Wealthy senators and nobles entrusted the management of their property and their agricultural produce to agents, called the factor, who received a commission for their services.
The commission-agent form of factoring was recorded again in the 13th Century and by the beginning of the 14th Century it was widely conducted in Northern Italy.
In the 18th Century the term del credere appeared. Del credere is the undertaking on the part of the commission agent to assume responsibility for the credit worthiness of the buyer or the ability to liquidate his debt on the due date. There is a clear parallel with modern "maturity" factoring.
During the 17th and 18th Cen-• tunes the Netherlands were financing a large part of the world's commerce and production and the Dutch came to be described by Voltaire as the factors of the whole world.
Historically, records show that in Europe in the 18th Century advances were being made directly against receivables up until the First World War when in Germany the procedure of granting advances against receivables was stopped by decree issued by the Reichsbank in 1911. This spread to other European countries and at the peak of the colonial era factoring has almost ceased to exist in Europe.
By contrast in the United States between the wars factoring, which had been taken across the Atlantic by early settlers, was receiving a new lease of life. In America from 1890 to 1930 factors did business primarily with textile mills, selling agents and converters that sold their products to the clothing manufacturers, department stores and, as they developed, chain stores.
Throughout this period factoring remained highly specialised showing no tendency to expand into fields other than textil But small incursions into ni traditional fields started in 1920s receiving considerable mulus following the stock m ket crash of 1929 and the gr depression when the text trade shrank along with the f tors' profits. By the early 195 when the rebirth of factoring a major force in commerce ref began the portfolio of accoul had been widened to inclu manufacturing and service dustries.
Summary Factoring is a unique financ service particularly appropriE in today's economic conditio which can prove of great val to growth motivated companiE Right from the start it shot be clearly understood that fi taring is not a lending operatic and that factoring is comp mentary to banking not compE tive. Factoring has been ap described as a way of "1 creasing the productivity money" by freeing funds beil locked up for months on end trade debts. It has also been a
propriately described as a ma agement tool for solving a firrr liquidity, debtor and sales E
countancy problems.
The normal application of fE toring is as follows:
The companies that sell credit have an asset in the foi of debtors; it is this asset tt the factor purchases. The fact makes available an initial a vance of up to 75 per cent of t debtors. Subsequently, the ff. tor collects from the client's et
tomers. Then, on a date agrel between the factor and client, the factor makes availat the balance of the debt n previously advanced.
In this way, sales can I effected with the certa knowledge of funds being mai available by the factor.