According to an announcement today by Skills Secretary John Denham, the FSSC “did not meet the standard required”.
The review, which will rely heavily on the views of employers in the sector, will be completed by autumn. At that time ministers will make a decision on the position of the FSSC licence.
The FSSC’s existing licence and contract will be extended to allow this review to take place.
Denham says: “Now more than ever we need to make sure that all employers are given the support they need to invest in skills and prepare for the upturn. Sector Skills Councils play a vital role as advocates for their industries and in identifying and tackling strategic skills needs.
“I am confident that the proposed review for FSSC provides the right direction for securing the changing skills needs of the finance sector. This comprehensive assessment process will assist in raising standards even further, and ensure that SSCs have the confidence and support of employers in their sector.”
The FSSC has hit out at the Government, labeling its decision “inappropriate and backward-looking”.
FSSC chief executive Teresa Sayers says the Commission for Employment and Skills’ argument that the FSSC is not well-managed is “entirely unfounded”.
Sayers says: “The National Audit Office produced its own detailed and comprehensive report four months ago which recognised significant improvements in the way the FSSC operates. It identified no critical failures which indicate that the FSSC cannot continue to be effective in this area.
“The NAO report does make other recommendations for continuing improvement with which the FSSC concurs. However, the NAO found no specific failures under the four measures of being well-run, namely a competent board, effective processes, a professional executive and good financial controls. Given this assessment the UK Commission’s decision is inexplicable and inappropriate.”
Sayer adds that the NAO report recognises specific board and management improvements “which define a well-run Sector Skills Council”.
She says: “The FSSC therefore finds it particularly mystifying and disappointing that the UK Commission seems to ignore this conclusion and instead reports that the FSSC failed to meets its standards as a well-run SSC.
“This conclusion suggests that the UK Commission has ignored the NAO report and has failed to appreciate the complexities of the FSSC’s footprint. The high calibre of its much strengthened board also appears to have been overlooked.”
The Chartered Insurance Institute says it is not surprised that the FSSC has not been relicenced.
Director of policy and public affairs David Thomson says: “We look forward to contributing to the review of the Skills Council and ensuring the new structure meets the requirements of the financial services and insurance sectors.
“We note the UK Commission for Employment and Skills called on the Skills Council to ‘develop more effective and productive partnership arrangements with professional bodies before submitting a new relicencing proposal’. We welcome this.”