This section describes the rules and settings of the various individual learning schemes reviewed in this report. ILS differ in many respects, including in terms of coverage, and financing arrangements – the degree of cost-sharing and sources of public financing. While ILS are often initiated by a government body, responsibility for the scheme and actual management can be delegated to other public entities or contracted out to private firms/organisations. ILS generally define the type of training that can be undertaken, leaving more or less freedom to individual choice. Finally, the size of support provided also varies significantly, as does the extent to which ILS can be combined with other training schemes.
Individual Learning Accounts
Panacea or Pandora's Box?
The coverage of individual training schemes differs significantly across schemes/countries and has often evolved over time within schemes. The ILA in the United Kingdom, SkillsFuture Credit in Singapore and the Chèque Annuel de Formation in Geneva Canton (Switzerland) are/were almost universal as they cover(ed) all adults above a certain age.1 This was also the case of the Scottish Individual Learning Account until October 2017, but in an attempt to better align the programme with the needs of the labour market, the new Individual Training Account now only covers individuals in work or actively looking for work. In fact, many schemes limit eligibility to individuals in work or actively looking for work, with some focusing exclusively on jobseekers or employees, while others allow for both (Table 2.1). Self‑employed workers are less often covered than employees are, although they are increasingly covered too. For example, they became eligible to the Austrian Bildungskonto in 2010 and to the French CPF in January 2018.
Besides the activity and employment status of individuals, individual learning schemes often restrict eligibility based on income and/or education level. For example, in the United States, only jobseekers eligible for the Workforce Innovation and Opportunity Act (WIOA) Adult programme can receive the ITA and low income is one of the eligibility criteria.2 The Geneva Canton and Scottish schemes apply income thresholds close to the average wage (i.e. anyone earning above would not be eligible for the programme). In Canada, the learn$ave pilot scheme concerned only working-age individuals belonging to a low-income household with limited liquid assets. The German Bildungsprämie initially also had a relatively low taxable income threshold that was increased in 2010, thus enlarging the number of eligible employees. In Flanders, since 2015, only low- and medium educated workers can access the Opleidingscheques. The same was true for the Scottish scheme between 2012 and 2017 and the Austrian Bildungskonto, although eligibility for the latter programme has been enlarged over time to workers with upper secondary education as well as to those with tertiary education meeting certain income criteria.
1. Only employees with atypical contracts.
2. The United States' ITA scheme also covers displaced workers.
3. Self-employed were eligible in principle from 1st January 2018 but never accessed it and access is now closed during the transition period to the new CPF scheme.
4. Only women returning to work after parental leave are eligible.
Source: OECD Secretariat.
Some countries also directly target very specific population groups. In Germany, for example, the Bildungsprämie specifically targets individuals on parental or care leave. Since its inception in 1993, the Austrian scheme also explicitly targets women returning from maternity leave. The Carta ILA in Tuscany puts a priority on female jobseekers, but also on a number of different small groups which vary by province (e.g. employees in non-standard contracts, women returning to work, immigrants, militaries, transgender and transsexuals). The US ITA is also accessible to displaced workers eligible to the Workforce Innovation and Opportunity Act (WIOA) Dislocated Worker Programme, and in the Adult Programme, veterans are given priority.
Other ways of targeting priority groups is through modulating the amount of support provided. In Austria, Flanders and France, active individuals with less than upper-secondary education benefit from higher support (Table 2.2), as do, in Austria, women returning from child-related breaks, low-income employees above 50 years of age, individuals with only compulsory education level and no vocational credentials, and immigrants studying German.
2.2.1. Cost-sharing
Very often, individual learning schemes include some form of cost-sharing between the government and the individual benefiting from the scheme. Schemes in Germany, Upper Austria and Flanders require financial participation by individuals ranging between 40% and 70% of the total costs of training (Table 2.2). To compensate for the potential disincentive introduced by co-financing for some under‑represented/targeted groups, the Upper Austrian scheme requires a smaller financial contribution from them. Co-financing is by construction central to individual saving account schemes: in the Canadian pilot individual savings account scheme, individual participation varied from one sixth to half of the costs across the 10 communities implementing it, and in the US LiLA scheme, individuals contributed from one quarter to half of the deposits on the account.
Note : 1. From January 2019, firms with more than 11 employees pay a training levy of 1% of their yearly gross payroll, and those with less than 11 employees a levy of 0.55% of their yearly gross payroll. Part of the training levy is then allocated each year by decree to the CPF.
Employers are more rarely involved in the financing of schemes. Direct employer involvement was at the heart of the pilot LiLA saving accounts scheme in the United States, and is also requested to a lesser extent for employees in the Portuguese Cheque formação (employers are requested to contribute at least 10% of training fees for their employees). The French CPF is rather exceptional in being exclusively funded through a training levy on medium‑sized and large firms. A training levy collected by sectoral training funds to finance workplace-related training had been in place for a long time in France, and part of it was redirected towards the CPF when it was created in 2015, so that employers are only indirectly involved.
Other schemes such as the ITAs in Scotland and the United States, the Geneva, Portuguese and Singapore schemes are fully financed from public money, as was also the Tuscany scheme.
2.2.2. Sources and methods of funding
In general, public money for ILS comes from the level of government responsible for its implementation, i.e. the national/federal government in France, Germany, Portugal and Singapore, and the regional level in Austria, Flanders, Geneva, Scotland and Tuscany. In Austria, the regional parliament periodically decides the amount of resources allocated to the scheme. By contrast, in the US ITA, responsibility for implementation lies with the states but funding comes from the federal government under the Workforce Innovation and Opportunity Act (WIOA). In Canada, the federal government also funded the pilot scheme implemented by the communities.3
In most cases, public money consists of a direct subsidy in the form of a voucher or a matching contribution to the individual’s saving account, but tax advantages are also sometimes used. For example, individuals (in the case of the United States LiLA) and employers (in the case of Washington State) both benefited from tax rebates4 (Table 2.2). In the Canadian learn$ave, the programme proceeds were not considered as taxable income (Leckie et al., 2010[4]). The French CPF is the only example of a scheme funded out of a dedicated/earmarked social contribution.
Private funding of the schemes other than employers is rare. In the United States, the Ford Foundation and other private funders did contribute during the first three years of experimentation to the LiLA schemes implemented in Chicago, Northern Indiana and San Francisco, and private foundations also contributed to schemes subsequently piloted in other areas.
2.3.1. Initiative and responsibility for implementation
The decision to create an individual learning scheme most often originates from the government, predominantly at the national/federal level with the ministry in charge of employment and social affairs or the ministry of education (as is the case, for example, in the Canadian, French, German, Portuguese, United States ITA, Singaporean and UK schemes). Regional governments took the lead in Flanders, Geneva, Tuscany and Upper Austria. More rarely, non‑governmental bodies set up such schemes. In the United States, the Council for Adult and Experiential Learning (CAEL) designed the LiLA schemes in the first experimentation phase and contributed to the development of subsequent LiLA schemes in other geographic areas. The Social and Enterprise Development Innovations (SEDI) had lead responsibility for the design of learn$ave in Canada (Leckie et al., 2010[4]). In Upper Austria, the Chamber of Labour, an organisation representing Upper Austrian employees5, launched the initiative of the Bildungskonto in collaboration with the regional government.
Responsibility for implementation generally rests with the body who initiated the scheme, i.e. the government department in charge of training policies, or in the case of the LiLA and learn$ave schemes, the CAEL and the SEDI (Annex Table 1). In Flanders and Portugal, responsibility for the schemes has been delegated to the public employment service. In the United States, responsibility for the ITA initiated by the Federal Department of Labor has been decentralised to the states. The Tuscany region shares that responsibility with the lower government level, i.e. the provinces.
2.3.2. Actual management
Responsible authorities can be in charge of the actual management or operation of the schemes, as in for example Geneva, Upper Austria, Scotland (since 20176) and Singapore. Until 2005, the Chamber of Labour was also involved in the management of the Upper Austrian Bildungskonto, notably in developing the regulations, but that type of cooperation ceased with a change in regional government. However, the Chamber of Labour is still collaborating with the regional administration at the delivery level, in particular to help establish eligibility of individuals to the scheme. In Flanders and Portugal, the regional and national public employment services delegate service delivery to their local offices.
In many cases, however, the responsible authority delegates the management of the scheme either to public agencies, often under its authority, or to private organisations, with different degrees of de‑concentration of services. In France for example, until the end of 2019, the system was rather complex and organised in “silos” (i.e. different streams for different target groups) : training funds (OPCA) were in charge of delivering the CPF to employees, while the public employment service (Pôle Emploi) and the Fonds de Sécurisation des Parcours Professionnels (FPSPP) – a social partner organisation in charge of mutualising and redistributing funds collected through a training levy – were responsible for providing these services to jobseekers. The Caisse des Dépôts et Consignations (CDC), a public sector financial institution, was in charge of managing the information system that credits the accounts. From 2020, the CDC will operate the whole system, i.e. manage the information system and pay the training providers. In Tuscany, the local employment offices (Centro per l’Impiego) were in charge of operations.
Full delegation of all management aspects to a single for-profit company occurred only in the United Kingdom. In Flanders, a company is in charge of delivering cheques to beneficiaries and paying training providers. In Canada and Germany, service provision was/is fully contracted out, but to a number of local private organisations, community based NGOs in Canada and a mix of for-profit and not-for-profit organisations in Germany. In the United States, the local Workforce Investment Boards (WIBs) are in charge of the daily administration of the ITA but they contract with private organisations, publicly funded community colleges or other public or private educational institutions to actually deliver the services, typically for a period of one to two years. Banks or micro-credit institutions were also involved in the two saving account schemes (learn$ave and LiLAs) as well as in the Tuscan Carta ILA.
All schemes establish rules on the type of training that participants can choose. Training can be either formal or non-formal. Informal training is generally excluded, however there are exceptions. For example, in its early implementation phase, in order to attract individuals who may be reluctant to return to formal, classroom-based education, the Tuscan Carta ILA allowed informal training – i.e. non‑institutionalised training which can take place almost anywhere within the family, with friends, at work or at facilities made available by education and training providers.
Training is most often required to be professionally useful. Only the UK scheme and its successor in Scotland (until 2017), as well as the Singaporean SkillsFuture Credit, did/do not explicitly require training to be relevant for the labour market. This may be partly explained by the fact that these schemes also cover individuals above the retirement age. In Singapore, SkillsFuture Credit aims to foster innovation through pursuing personal interests and developing personal potential, which may not always coincide with current labour market demand.7
However, the extent to which this criterion of professional relevance is translated into practice varies across schemes. In Austria, Flanders and Germany, training has to be primarily vocationally oriented (Table 2.3), and participants can sometimes get counselling services to make their choices, but there is no other tool/measure to steer individual choices. By contrast, in the US ITA, training must be related to in-demand occupations, which are determined by the local Workforce Investment Boards. In Michigan, for example, the WIB uses lists established by various public institutions, such as a “Hot 50” occupation list, three lists of high-growth/high wage industries, as well as existing and emerging in-demand industries. The WIB also uses results from consultations with employers, as well as information from companies scraping job‑postings on the internet to determine in-demand occupations. However, in practice, the extent of steering depends on the local workforce investment areas, as they can choose among three types of approach to implement the ITA: i) in the “structured choice” approach, participants are required to receive counselling and counsellors can overrule the training choices of participants; ii) in the “guided choice” approach, counselling is mandatory but less intensive and counsellors cannot reject the participant’s choice; and iii) in the “maximum choice” approach, counselling is voluntary and counsellors cannot reject the participant’s choice. The majority of local workforce investment areas appear to have chosen the medium stance (guided choice). Steering is also present, although to a lesser extent, in the Scottish and Portuguese schemes, where training programmes need to link with the labour market training priorities established by the government and the public employment service.8
A number of schemes also require training programmes to be chosen from a list of eligible programmes, as for example in France until December 2018, Geneva, Tuscany after 2007, Singapore and the US ITA. While these lists aim to ensure training quality (see Section 5.1), they can also improve the labour market relevance of training. In France until December 2018, for example, training programmes were eligible if they fulfilled one of the following four conditions:
They deliver a certificate registered in the Répertoire national des certifications professionnelles (RNCP)
They deliver a certificate registered in the “inventaire” which completes the RNCP with certificates and clearances/accreditation corresponding to transversal skills used at work
They deliver a Certificat de Qualification Professionnelle (CQP) delivered by the branch level collective organisation and conceived to answer specific needs of their enterprises
They are part of the training programmes for jobseekers financed by public institutions (regions, Pôle Emploi or Agefiph for the disabled).
The system was very complex, with three levels of lists, at the national level, at the sectoral (“branche”) level, and at the regional level, reflecting for the two latter the skill needs in each sector/region. However, since January 2019, the system of lists has been eliminated and all certificates registered at the RNCP and at the “Répertoire spécifique” (former “inventaire”) are now eligible to the CPF.
In the Canadian learn$ave scheme, the only restriction placed on participants in choosing a training programme, was that the training provider had to be an institution recognised by the national Canada Student Loans Programme.
The focus on the labour market relevance of training also raises the issue of whether training financed through the individual learning scheme could substitute training that used to be financed by employers or for which the employer should be responsible. To avoid such a substitution, the German and the UK schemes expressly mention(ed) that such training could not be covered by the scheme. Some countries also put restrictions on whether training can take place during working time or not. Arguably, employers are more likely to allow training to occur during working time (and finance it themselves) if it is directly related to the job (as opposed to training that benefits employability more broadly and could result in the worker leaving). In Flanders, for example, the scheme explicitly excludes individuals undertaking training during working time or training that is financed by employers.9 The French scheme had an opposite stance until 2018, as it explicitly favoured co-financing by the employer or by the sectoral training fund (see Section 2.5 below) and training can take place (fully or partly) during working time if the employer agrees. In Portugal, the funds can be taken up either by firms (for their employees) or by individuals.
Most schemes will only cover tuition fees. In Flanders and France, the schemes also finance skills assessment services10. The US ITA allows funds to be used to pay for books and supplies, but none of the funds may be used to compensate the individual for earnings losses resulting from taking time off work, child care expenses while attending classes, or transportation costs. Learn$ave in Canada and Carta ILA in Tuscany were the only schemes that also financed other types of expenses associated with training such as travel, subsistence, housing, and even childcare costs (Table 2.2).
The amount of support provided to beneficiaries varies considerably across schemes, but remains relatively limited in a majority of them. Amounts are/were lowest in Flanders, Scotland, the United Kingdom and Portugal. They were higher but still relatively low in Germany, Portugal (for jobseekers) and Singapore (Table 2.2). Austria and Geneva offered higher amounts of support. In the US ITA, the amount of support depends on the type of training undertaken, with a maximum value fixed by the local Workforce Investment Boards (WIBs). In Michigan, for example, up to USD 10 000 is available. In the Canadian learn$ave programme, the maximum support was relatively high, as it was estimated to cover the tuition fees for about 1.5 years of a full-time undergraduate university programme, or 3-4 years of a college programme (Leckie et al., 2010[4]).
The French scheme is the only one which provided credits in hours (rather than money) (Table 2.2), to account for the fact that training costs can vary significantly by training programme (e.g. more technical programmes tend to cost more); it also allowed the training funds to provide higher support to training leading to skills though most in need in their sector. In practice, ceilings were often set on the cost of an hour of training by the training funds. These ranged from EUR 15 to EUR 100, depending on the sector concerned, and the rate for job seekers was set at EUR 9 (IGAS, 2017). These different rates implied strong inequalities between groups (IGAS, 2017[8]). This was one of the reasons why the government decided that, in the new CPF, the accounts will be credited in money rather than in hours, with a conversion rate for accumulated hours of EUR 15 per hour, and a build-up of rights of EUR 500 per year up to a maximum of EUR 5 000. Those with a level of education less than upper secondary can accrue higher rights, up to a maximum of EUR 8 000. Switching to actual money rather than hours is also meant to facilitate the use of the CPF by individuals by making it more “readable”. It eliminates the intermediaries (i.e. the training funds) who were converting hours into Euros. This should place individuals at the centre of the scheme, and hopefully increase competition among training providers.
Comparing the size of support as a percentage of the average wage is not straightforward because, as described in Table 2.2, each scheme has its own rules. Some provide a fixed amount and others a percentage of the training cost (up to a ceiling), and with amounts sometimes differing between the standard case and specific groups. The French scheme is also different as it provides a given amount each year, capped at a maximum. Despite these difficulties, Figure 2.1 shows that the average support varies between a minimum of 0.3% of the average wage in Flanders to a maximum of about 21% of the average wage in the reformed French scheme for individuals with a low education level. The Flemish, Singapore, UK, Scottish and Swiss schemes all provide support in the standard case amounting to less than 1% of the average wage, and the German scheme is not far from there. The Upper Austrian and Canadian schemes provide a maximum support of less than 5% of the average wage, and the Tuscan scheme of about 9% of the average wage. Maximum support is above 10% of the average wage in the French and US ITA scheme. Support could even be higher in the previous CPF scheme when credits were expressed in hours and funded at different rates by the various training funds as mentioned above.
Note: Average annual wages are the national data corresponding to the year (or average of the years) the scheme was in place. For currently existing schemes, 2018 data are used.
1. The benefit can paid for a maximum of three consecutive years and specific groups can obtain three checks in a given year.
2. The benefit for the standard case is paid over two years.
3. Corresponds to the maximum accumulated amount.
Source: OECD Secretariat, Cour des comptes (2015[2]), Euréval (2012[3]), Leckie et al. (2010[4]), OECD Dataset on Annual Average Wages (http://stats.oecd.org//Index.aspx?QueryId=25148) and Trading Economics (https://tradingeconomics.com/singapore/wages) for Singapore.
Besides the support directly provided through the individual learning schemes, what matters for the individual is also whether it can be combined with other possible funding for training. This in turn depends on how the scheme relates to the overall system of training financing, as well as on the generosity of other existing training schemes. Here, also, the situation differs across countries:
In Scotland, the use of ITA explicitly forbids access to other Scottish government funding, so support for ITA participants is overall very limited.
In Austria, the Bildungskonto can be combined with other existing training schemes, in particular those run by the Chamber of Labour, such as: i) the AK Leistungskarte which provides a discount on training programmes delivered by the training providers related to the Chamber of Labour; and ii) the AK Bildungsbonus which provides additional support. Combined, these schemes can reduce individual training expenses by up to 90% for courses with low training fees (around EUR 300), but only by about 40% for courses charging fees at the maximum level (EUR 2 000).
In the United States, individuals eligible to the two WIOA programmes can in principle combine the ITA with other sources of funding, such as State-funded training funds or Federal Pell Grants if they can demonstrate that funding from such programme is insufficient to meet their training needs.
In France, until 2018, if the number of hours accumulated on the account was lower than the duration of the training envisaged, the CPF allowed employees and jobseekers to ask for complementary funding (“abondements”), from either employers and/or training funds and the regions, or from Pôle Emploi. In practice, this occurred very often. Additional funding from the training fund is no longer available for employees in the revised CPF scheme. The CPF could also be articulated with the Congé Individuel de Formation (CIF), a right to financed training leave meant to be used for up-skilling or re-skilling.11 Indeed the readiness of the individual to mobilise his/her CPF for his/her training project was one of the eligibility criteria for some of the organisms financing the CIF. From 2019, the new law provides for a “CPF de transition” which will be similar to the CIF, but only for professional retraining.
In Singapore, SkillsFuture Credit can be used in principle in combination with other, generous, training schemes and, in particular, the Workforce Skills Qualifications scheme which is accessible to all workers and subsidises 50% to 90% of course fees and provides an absentee payroll compensation to the employer.
← 1. In Geneva, however, the required professional usefulness can de facto exclude old-age pensioners and more generally inactive persons.
← 2. Individuals eligible to the Dislocated Workers WIOA programme are also eligible, but income is not an eligibility criteria for them.
← 3. Moreover, in EU countries, individual learning schemes can be co-financed with the European Social Fund (ESF). In Germany, for example, the European Social Fund finances the training costs while the federal government funds guidance and counselling services, and the same applied in Tuscany.
← 4. A pilot LiLA programme was launched in 2009 in the Washington State in four counties with financial support from a consortium of funders including the Lumina Foundation and the Council for Adult and Experiential Learning (CAEL).
← 5. Each Austrian state has its Chamber of Labour (Arbeitskammer). Membership is mandatory for all except executive employees and public sector staff, and the Chamber is financed by a levy of 0.5% of gross wages up to a ceiling. The Chamber does not participate in collective bargaining but provides services such as information and advice and legal assistance, for example in case of individual and collective labour disputes, educational and cultural services, as well as consumer protection (Source https://www.etui.org/ReformsWatch/Austria/Austria-The-Chambers-of-Labour-role-and-functioning).
← 6. Until October 2017, the Student Awards Agency, in charge of delivering support to students, was in charge of managing the scheme.
← 7. In the Lifelong Learning Institute, one of two Continuing Education and Training campuses (CET) by SkillsFuture Singapore (SSG) launched in 2013, a 1.5 Meter slogan in the lobby says “Find the passion in you”.
← 8. The 13 curriculum areas approved in the Scottish Labour Market Strategy are: construction; fitness, health and beauty; hospitality; security; health and safety; transport; early years/childcare; social care; business; IT/ Science, Technology, Engineering and Mathematics; language; adult literacy and numeracy; and agriculture.
← 9. Source: CEDEFOP database.
← 10. “Bilan de compétences” in France.
← 11. French employees had the right to take training leave (Congé Individuel de Formation, CIF). Training does not have to be related to the current job of the employee. The employee had to request approval for the training leave from the employer, but the employer cannot refuse. The training leave focused on long‑term training, with a maximum duration of one year for full-time training and 1 200 hours for part-time training. Additional training leave could be granted by the sector or employer. During the training leave individuals received between 80% and 100% of their salary, depending on the level of their gross salary. The wage and training costs were covered through social partner organisations (FONGECIF or OPCA), using funds collected from employers (OECD, 2017, Getting skills right France).