Effective governance arrangements are the building blocks for improving Latvia’s performance in developing and using people’s skills. This chapter assesses skills governance in Latvia and presents four opportunities to strengthen the governance of the skills system: 1) strengthening strategies and oversight for skills policies; 2) improving co-operation at different levels of government and with stakeholders; 3) building an integrated monitoring and information system on skills; and 4) raising, targeting and sharing investments in lifelong learning.
OECD Skills Strategy Latvia
Assessment and Recommendations
OECD Skills Studies
5. Strengthening the governance of the skills system
Abstract
Introduction: The importance of effective skills governance
Effective governance arrangements are the foundation of Latvia’s performance in developing and using people’s skills. The success of policies to develop and use people’s skills typically depends on the responses and actions of a wide range of actors, including government, learners, educators, workers, employers and trade unions. In many regards, skills policy is fundamentally different from other policy areas. On the one hand, investing in skills is widely popular across different electoral and political constituencies (Busemeyer et al., 2018[1]) as the benefits for economic development and social inclusion are broadly recognised. On the other hand, skills policy is more complex than many other policy areas because it is located at the intersection of education, labour market, industrial and other policy domains. Skills policies therefore implicate a diverse range of government ministries, levels of governments and non-government stakeholders. For instance, labour market policy typically involves trade unions and employer associations, and education policy involves parental and student associations, teacher associations and educational institutions, and others.
The OECD Skills Strategy (2019[2]) identifies four building blocks for strengthening the governance of skills systems (Figure 5.1).
Figure 5.1. The building blocks of strong governance for skills systems
Source: OECD (2019[2]), OECD Skills Strategy 2019: Skills to Shape a Better Future, https://doi.org/10.1787/9789264313835-en.
A whole-of-government approach is essential to increase skills development and use. A wide range of actors have roles and responsibilities for skills in Latvia (Table 5.1). Promoting co-ordination, co-operation and collaboration across the whole of government can lead to more effective and efficient skills policies. Promoting co-ordination typically requires a shared conviction of the priority of skills, co‑ordination between central and subnational authorities, mapping the policies and actors in the skills system, and institutions that adopt a “life course perspective” and monitor and evaluate the skills system. For Latvia, whole‑of‑government co‑ordination is essential on two levels:
1. Horizontal (inter-ministerial): co-ordination between the ministries of the national government on skills policy.
2. Vertical: co-ordination between ministries and subnational authorities (cities [pilseta] and municipalities [novadi]) on skills policy.
Government engagement with non-government stakeholders (employers, trade unions, education and training providers, civil society organisations, etc.) on skills policy is also important. Engaging stakeholders throughout the policy cycle can help policy makers tap into on-the-ground expertise and foster support for implementation. Effective stakeholder engagement requires that the costs of participation are minimised for stakeholders, and the benefits maximised by ensuring visible impacts on policies. It also involves avoiding “capture” and undue influence by individual interest groups (OECD, 2019[2]).
Building integrated information systems harnesses the potential of data and information to optimise the design and implementation of skills policies. Such systems ensure that policy makers, firms, individuals and others have access to accurate, timely, detailed and tailored information on skills development activity and outcomes across the life course, available learning opportunities, and current and anticipated skills needs (see Chapter 4 – Reducing skills imbalances). They also employ a “user-centred” approach to ensure that data become actionable information, including as evidence in skills policy making.
Aligning and co-ordinating financing arrangements is essential to ensure the sufficiency and sustainability of skills investments. Skills funding should rely upon flexible cost-sharing mechanisms from multiple sources, with public funds allocated to achieve outcomes and ensure equal opportunities for developing and using skills. Aligning and co‑ordinating financing typically involves identifying funding gaps in the system, aligning investments to the government’s medium-term priorities, and ensuring that those with responsibilities for skills have the resources to fulfil their role effectively (see Chapter 2 for a discussion on municipal resourcing for student outcomes).
Realising Latvia’s lifelong learning ambitions will require stronger co-ordination and collaboration across national and local levels, and involve key stakeholders such as vocational schools, companies and non-governmental organisations (OECD, 2016[3]).The success of Latvia’s skills policies in general, and the next medium-term Strategy for Education and Skills: 2021-2027 in particular, will be influenced by the quality of co‑ordination between these actors, the quality and use of skills and learning information, and the effectiveness and efficiency of funding for lifelong learning.
This chapter provides an overview of Latvia’s skills governance system and selected performance indicators. It then discusses the four opportunities through which Latvia can strengthen its skills governance system: 1) strengthening strategies and oversight for skills policies; 2) improving co-operation at different levels of government and with stakeholders; 3) building an integrated monitoring and information system on skills; and 4) raising, targeting and sharing investments in lifelong learning. For each opportunity, the available data is analysed, relevant national and international policies and practices are discussed, and recommendations are given.
Latvian skills governance: Overview and recent performance
Overview of current roles and responsibilities for skills
Roles and responsibilities for skills are highly dispersed in Latvia, and a diverse range of actors are involved in supporting lifelong learning and minimising skills imbalances (Table 5.1).
Table 5.1. Roles and responsibilities for lifelong learning and reducing skills imbalances
Overview of Latvia’s skills governance performance
Strategy and oversight to support effective skills governance
Latvia could use strategies and oversight bodies more effectively to support whole-of-government co‑ordination, stakeholder engagement, integrated skills information and co-ordinated funding.
Latvia has several strategies in place related to developing and using people’s skills (see Table 1.B.1. in Chapter 1). However, participants in the OECD National Skills Strategy project stated that Latvia lacks a shared vision for skills development and use to steer diverse government actors and stakeholders in the same direction. No single strategy covers skills development and skills use across the life course. Furthermore, Latvia’s participants reported that strategic efforts are not having enough tangible impact on skills programmes, services and outcomes. Latvia is currently ranked 120th out of 140 countries on the extent to which the government has a long-term vision, according to the World Economic Forum’s survey of executive opinions in each country (World Economic Forum, 2018[4]).
Latvia also has a large number of whole-of-government and cross-sectoral bodies with responsibility for different aspects of skills policies (Table 5.2). However, responsibility for skills policies is fragmented across these bodies. No one body considers both lifelong skills development and skills use. Latvia’s oversight bodies typically lack the analytical capacity to contribute to evidence-based policy making. They also lack decision-making or spending capacity for skills policy, and so are limited to discussion and information sharing, often without tangible results. The government does not have a process in place to monitor the effectiveness of its oversight bodies for skills.
More detailed findings and recommendations for improving strategies and oversight bodies for skills are discussed in Opportunity 1: Strengthening strategies and oversight for skills policy below.
Whole-of government co-ordination on skills
Latvia has a strong base for the inter-ministerial co-ordination of skills policies. While not specific to skills policy, the Bertelsmann Foundation’s 2018 Sustainable Governance Indicators (SGI) show that inter‑ministerial co-ordination in Latvia is relatively strong, with Latvia ranked 14th out of 36 OECD countries (Bertelsmann Stiftung, 2018[5]). This reflects relatively high performance in several areas (Figure 5.2). In terms of “government office expertise”, the government office has sectoral policy expertise and evaluates important draft bills. Most cabinet proposals are reviewed and co-ordinated by cabinet committees, particularly proposals of political or strategic importance. Many policy proposals are effectively co-ordinated by ministry officials/civil servants (“ministerial bureaucracy”).
However, in addition to improving strategies and oversight bodies, Latvia could further strengthen the inter‑ministerial co-ordination of skills policy. SGI data suggest that Latvia has room to improve the government office’s ability to return proposals on policy grounds (“government office gatekeeping”), as well as “informal co-ordination”, which is currently largely limited to a political level Coalition Council. Furthermore, participants in the OECD National Skills Strategy project stated that the Cross-Sectoral Coordination Centre (Pārresoru koordinācijas centrs, PKC), whose remit spans all policy fields, has limited capacity to ensure the coherence of skills policies. The Employment Council (Nodarbinātības padome) (minister level) and its management group (state secretary level) co-ordinate policies for labour market development. However, some participants in the OECD project argued that the council has less impact today than in recent years.
Figure 5.2. Latvia’s performance on inter-ministerial co-ordination
International rankings based on scores given by experts in 36 OECD countries
Note: The highest rank (1) denotes the highest performance, and is shown on the outer edge of the figure.
Source: Bertelsmann Stiftung (2018[5]), Sustainable Governance Indicators (SGI) 2018, https://www.sgi-network.org/2018/Latvia.
Latvia’s performance in vertical co-ordination between the state and municipalities could be strengthened. On the one hand, the SGI suggests that Latvia’s overall performance in vertical co-ordination is in line with the OECD average. Across policy areas, the central government ensures that subnational governments have funds to fulfil most of their delegated tasks, and realise “national standards” of public services (Bertelsmann Stiftung, 2018[5]). On the other hand, participants in the OECD National Skills Strategy project noted that state government co-ordination with municipalities on skills policy is less effective than inter-ministerial co-ordination. Municipalities of different sizes and locations have very different capacities to raise revenue and deliver education and employment services. Municipal representatives could be more involved in national oversight bodies for skills policy (Table 5.2). The state has largely relied on regulations and standards to ensure the implementation of national skills policies, but has made little use of incentive-based or soft-mechanisms such as risk-based regulation, performance budgeting, contracts, agreements or pacts to improve co-ordination on skills policies with municipalities.
There are various examples of subnational co-operation on skills policies in Latvia, but co-operation could be more systematic and substantive. Municipalities are generally reluctant to enter into more substantive forms of co-operation, such as partnerships and shared service agreements for education and employment services. Existing bodies at the municipal and regional level, including planning regions development councils (plānošanas reģionu attīstības padomes), could do more to support co-operation on delivering skills-related services. There are some examples of networks between local policy makers focused on skills issues, but these could potentially be replicated in other regions. The administrative territorial reform and reduced number of municipalities is expected to further strengthen co-operation at the local level and allow new interaction models.
More detailed findings and recommendations for improving inter-ministerial co-ordination, and co‑ordination between the state and municipalities, are discussed in Opportunity 2: Improving co-operation at different levels of government and with stakeholders below.
Stakeholder engagement with policy makers and service providers
Latvia’s existing processes for facilitating stakeholder engagement by policy makers could be better utilised for skills policy. The SGI suggests that the Latvian government’s overall performance in consulting with stakeholders is above the OECD average (Figure 5.3). However, the quality and impact of government engagement with stakeholders is limited. Government communication is often too formal, there is an absence of feedback to stakeholders, and stakeholders want earlier involvement in the policy process. Some participants in the OECD National Skills Strategy project noted that social interest groups are very diverse, and uneven capacity between them leads to some groups dominating skills policy negotiations. A more general challenge for skills policy making in Latvia is that very few citizens voice their opinion to public officials – 10% in any given month, the lowest of all 41 OECD and EU countries except Turkey (Bertelsmann Stiftung, 2018[5]).
Figure 5.3. Latvia’s performance on stakeholder engagement
International rankings based on scores given by experts in 36 OECD countries
Note: The highest rank (1) denotes the highest performance, and is shown on the outer edge of the figure.
Source: Bertelsmann Stiftung (2018[5]), Sustainable Governance Indicators (SGI) 2018, www.sgi-network.org/2018/Latvia.
Furthermore, while there are some promising examples of stakeholder engagement with service providers such as vocational education and training (VET) institutions, this co-operation is not systemic across levels of education, sectors and regions. Sectoral expert councils and conventions (Table 5.2) are increasingly recognised as good practice examples of engaging with VET institutions, employers, trade unions and government. However, participants in the OECD National Skills Strategy project stated that equivalent co‑operation structures are lacking in tertiary education and adult education and training. Education and training providers often lack information and experience on potentially successful modes of engagement with stakeholders.
More detailed findings and recommendations for improving stakeholder engagement for skills are discussed in Opportunity 2: Improving co-operation at different levels of government and with stakeholders below.
Building integrated information systems
Latvia has several data systems for learning participation, available learning programmes and labour market skills needs. However, participants in the OECD National Skills Strategy project cited several opportunities for improving and integrating this information.
Latvia has several data systems and surveys in place to understand education and training participation (Table 5.4). However, there are gaps in this data, including regarding non-formal adult education and training, and qualifications previously attained by adults. Databases held by the Ministry of Education and Science (MoES), the public employment service (State Employment Agency of Latvia) and the State Education Development Agency are not currently linked. Latvia has websites that provide information to users on education and training opportunities (see Table 3.2 in Chapter 3); however, the sheer number, variety, design differences and sometimes overlap of these websites may undermine their value for prospective learners. Existing websites also do not provide high-quality information on the potential job opportunities associated with different paths of education and training.
Several agencies undertake skills assessment and anticipation exercises (Table 5.5), but these remain disconnected, as well as poorly disseminated and used. There are methodological gaps with current exercises, which focus on quantitative modelling and occupational forecasts rather than skills. Stakeholders such as sector expert councils, employers and training providers have little role in contributing to or validating skills assessment and anticipation exercises. Data are primarily disseminated through analytical reports, which policy analysts and others have struggled to interpret. General awareness and the use of forecasts is limited beyond the Ministry of Economics.
More detailed findings and recommendations for better generating, disseminating and using skills and learning information are discussed in Opportunity 3: Building an integrated monitoring and information system on skills below.
Aligning and co-ordinating financing arrangements
Expenditure on lifelong learning is relatively low in Latvia, which amplifies the importance of appropriately sharing and allocating skills investments. Per student funding in Latvia is lower than the OECD average at all levels of formal education (Figure 5.4). However, Latvia’s total expenditure on educational institutions as a share of GDP (4.9%) and as a share of total government expenditure (12.2%) are at and above the OECD average, respectively (OECD, 2018[6]). Latvia’s performance in financing adult learning is relatively low (OECD, 2019[7]), which partly reflects low individual investments and active labour market programme expenditure on adult learning.
Governments, employers and individuals could better share the costs of investing in tertiary and adult education. In tertiary education, the share of funding that comes from public sources is on par with the average for OECD EU member countries, and the rest is from households. Unlike in the majority of OECD countries, private businesses and non-profit organisations (e.g. religious organisations, charitable organisations, and business and labour associations) contribute no funding to tertiary education (OECD, 2018[6]). In adult learning, Latvian enterprises (10+ employees) spend less on continuous vocational training (0.8% of labour costs) than enterprises in every other EU member country. The state provides no funding towards adult learning, and is instead entirely reliant on the European Social Fund (ESF). This has immediate benefits, but involves risks for the future of the system.
Figure 5.4. Total expenditure on educational institutions per full-time equivalent student (2015)
Direct expenditure within educational institutions, by level of education, based on full-time equivalents In equivalent USD converted using the purchasing power parity (PPP) index for GDP
Source: OECD (2018[6]), Education at a Glance 2018: OECD Indicators, http://dx.doi.org/10.1787/eag-2018-en.
Funding for different levels and forms of lifelong learning is not allocated based on strong evidence. Deficiencies in the evaluation of lifelong learning outcomes limit the ability of policy makers to allocate funding to programmes that have the largest positive impacts. The financial capacity of municipalities to fund lifelong learning is constrained and uneven across regions; a challenge which should be mitigated in the context of ongoing territorial reforms.
More detailed findings and recommendations for raising, targeting and sharing investments in lifelong learning are discussed in Opportunity 4: Raising, targeting and sharing investments in lifelong learning below.
Opportunities to improve Latvia’s performance
As mentioned above, Latvia has several opportunities to strengthen the governance of the skills system by:
1. Strengthening strategies and oversight for skills policies.
2. Improving co-operation at different levels of government and with stakeholders.
3. Building an integrated monitoring and information system on skills.
4. Raising, targeting and sharing investments in lifelong learning.
Opportunity 1: Strengthening strategies and oversight for skills policy
Effective strategy and oversight bodies are part of the “enabling conditions” to support a whole‑of‑government approach to skills policy, and are necessary for stakeholder engagement, integrated skills information and co‑ordinated financing.
Visions, strategies and action plans are essential for setting goals and clarifying roles for government and stakeholders in skills policy. They can articulate the challenges that require co-operation; clarify concepts; establish goals, priority groups and targets; allocate responsibility; and establish accountability arrangements.
A holistic approach to skills policy requires effective co-ordination structures that encompass the development and use of skills at all stages of learning and working life. Latvia, like other OECD countries, has oversight bodies and state agencies to co-ordinate specific areas of skills policy – employment, adult learning and VET. Oversight bodies can establish priorities, define appropriate financial incentives, design information and guidance arrangements, and contribute to quality assurance.
Creating a comprehensive and influential education and skills strategy
Latvia has numerous high-level strategies that help to support the development and use of people’s skills (see Table 1.B.1. in Chapter 1).
However, Latvia lacks a shared and integrated vision for the development and use of skills to steer diverse government actors and stakeholders in the same direction. The Latvian government noted that since there are many stakeholders and mechanisms involved, there is a possibility of making governance arrangements vague, “overcrowded” and complicated. Latvia is ranked 120th out of 140 countries regarding the extent to which government has a long-term vision, according to the World Economic Forum’s survey of executive opinions in each country (World Economic Forum, 2018[4]). Furthermore, participants in the OECD National Skills Strategy project stated that Latvia’s strategic efforts are not having enough tangible impact on skills programmes, services and outcomes.
The process of strategy development in Latvia could be more inclusive from the outset to foster stakeholder buy-in. Several participants in the OECD project stated that not all strategy development involves ongoing and widespread social dialogue, and that strategy is often driven by one ministry with consultation taking place towards the end of the process. Latvia’s current efforts to engage stakeholders in the design of the new National Medium-term Strategy for Education and Skills for 2021-2027 represent a new and positive model of engaging stakeholders for the country.
Latvia’s strategic documents have not provided a shared language for skills to underpin cross-sectoral co‑operation. “Skills”, as opposed to educational attainment,1 is a relatively new concept in Latvia that is yet to be properly reflected in policy documents and dialogue. There is a need to clarify the concepts of “skills development”, “skills use” and “lifelong learning” among key actors. For example, Latvia’s Education Development Guidelines 2014-2020 (EDG2020) (Izglītības attīstības pamatnostādnes 2014-2020.gadam) do not explicitly consider skills use in the labour market, which is as important as developing skills for harnessing the benefits of human capital. A lack of awareness among actors about these concepts and their importance may limit their ability to effectively co-operate with each other.
Latvia’s strategies for skills have not consistently used goal and target setting effectively to drive results. The participants in the OECD project stated that goals and targets set under these strategies often reflect the status quo, are not challenging and therefore do not strongly affect policy or behaviour. For example, EDG2020 set the goal for Latvia to increase the share of top performers in reading, mathematics and sciences (measured by the Programme for International Student Assessment [PISA], level 5 and 6) by 2020, but these targets were still below the OECD averages (Geske et al., 2013[8]). Setting specific, measurable, achievable yet challenging, relevant and time-based goals and targets can help facilitate greater action on the part of policy makers and service deliverers.
Latvia’s strategic documents have not sufficiently clarified the roles, responsibilities and activities of the different actors in the skills system. While the action plan for the EDG2020 appoints responsible public institutions for tasks and initiatives, it is not clear how these tasks contribute to the achievement of particular performance indicators and targets. Mapping the roles and responsibilities of all sectors involved – ministries, municipalities, employers, social partners and oversight bodies, etc. – can have several benefits, such as highlighting service gaps to be filled and overlaps to be reduced, as well as opportunities for information sharing, co-ordination or formal partnerships.
The actors involved in skills policy have not faced strong accountability for achieving strategic goals and targets. For example, the Ministry of Education and Science’s 2019 draft interim report on progress against the EDG2020 showed that the performance of 15-year-olds fell in PISA 2015. However, there was no explanation for this development, stated counter-measures or direct consequences faced by the ministry (Ministry of Education and Science, 2019[9]).
Latvia has not made use of other accountability tools such as performance budgeting, whereby recipients of public funding are remunerated for achieving specific targets. OECD countries use different forms ofperformance budgeting to align spending and programmes with objectives, or to change organisational behaviour directly. In New Zealand, for example, the Better Public Service Results programme had 10 key goals related to skills and employment, amongst other things, and awarded bonuses based on collective organisational effort. In the first five years the number of children not enrolled in early childhood education was halved, and 40 000 fewer working-age people received welfare payments over a three‑year period thanks to more intensive and individualised case management and bureaucrats actively developing partnerships with local businesses (OECD, 2018[10]). While performance budgeting is uncommon in Latvia, the Ministry of Education and Science does use something similar for State Research Programme grant recipients, who only receive full grants if performance is adequate and deliverables are met.
Overall, Latvia would benefit from developing a mutually agreed and binding strategy for skills and education from 2021. The Norwegian Strategy for Skills Policy 2017-2021 is one example of a binding strategy (Box 5.1). The participants in the OECD project articulated the desire for Latvia’s Education and Skills Strategy 2021-2027 to go beyond a planning document to have widespread and tangible impacts. A binding strategy with effective accountability mechanisms can help make this happen.
Box 5.1. Relevant example: Comprehensive and influential skills strategies
Norwegian Strategy for Skills Policy 2017-2021 and Skills Policy Council
The Norwegian Strategy for Skills Policy 2017-2021 is an example of a high-level skills strategy overseen by a whole-of-government, cross-sectoral council.
In 2017, Norway adopted the Norwegian Strategy for Skills Policy 2017-2021, following up on the recommendations of the 2012-2014 OECD Skills Strategy Project. This advised Norway to develop a skills strategy that incorporates a whole-of-government approach and strong stakeholder involvement.
The Norwegian strategy is a binding agreement among the strategy partners, namely the government, employer associations, trade unions, the voluntary sector and the Sami Parliament, and delineates the roles and responsibilities of each partner. For example, the government (ministries), in co-operation with social partners, is responsible for the development and implementation of the skills policy, and for ensuring co-ordination across policy sectors and levels of government. Municipalities, including local and regional authorities, are the school owners and provide numerous services to the end user. Employers provide training at the workplace, often in collaboration with other partners. The Sami Parliament ensures that the authorities enable the Sami people to have the necessary linguistic and cultural expertise to develop Sami society and businesses. The voluntary sector contributes to skills development both within and outside the labour market.
The strategy also notes the importance of partners working together to develop and implement measures. For example, the Norwegian county municipalities are responsible, alongside other skills policy partners, for the development of regional skills policy. Vocational and professional institutions and employers should co-operate to allow work placements during the period of study.
The Norwegian strategy is overseen by the Skills Policy Council and includes a Future Skills Needs Committee. The council consists of representatives of all the strategy partners and is in charge of the follow up of the strategy. It meets regularly during the strategy period and discusses feedback from the Future Skills Needs Committee, as well as other relevant issues. The council is responsible for assessing the strategy and will decide whether it should be renewed. The committee is in charge of compiling and analysing information about Norway’s skills needs, both national and regional, and consists of researchers, analysts and representatives of all the strategy partners.
Source: OECD (2018[11]), Skills Strategy Implementation Guidance for Slovenia: Improving the Governance of Adult Learning, https://doi.org/10.1787/9789264308459-en.
Recommendation for a comprehensive and influential Education and Skills Strategy
Ensure that Latvia’s medium-term Strategy for Education and Skills 2021-2027 clarifies skills concepts, covers lifelong learning and skills use, and builds accountability. The strategy should define and clarify the concepts of “skills”, “skills development”, “skills use” and “lifelong learning”. It should be more comprehensive than previous strategies by covering skills development of all forms (formal, non-formal and informal) and at all stages (early childhood to adulthood), as well as skills use in the labour market and workplaces. In order to build accountability for implementation, the strategy should set specific, measurable, achievable yet challenging, relevant and time-based goals and targets, and also map the roles and responsibilities of all sectors involved – ministries, municipalities, employers, social partners and oversight bodies – to achieve these goals and targets. The government should seek to create a strategy that is binding for all sectors involved, for example in the form of an agreement or pact.
Ensuring effective oversight of the education and skills strategy
Latvia has a large number of inter-ministerial and cross-sectoral bodies with responsibility for different aspects of skills policies (Table 5.2). These bodies range from the technical to the parliamentary level, from those with advisory to decision-making capacity, and have remits that span one level of education to public policy more generally. However, oversight bodies in Latvia could better ensure the coherence, effectiveness and efficiency of skills policies in order to improve the development and use of skills.
Responsibility for skills policies is fragmented. No one body considers learning across the life course, as well as skills use. For example, the Adult Education Governance Council (PIPP) and the Employment Council focus on learning in adulthood, with the PIPP overseeing only one specific objective (SO 8.4.1. “To develop professional competencies of employees”) that supports the professional skills of employed young persons (aged 17-24) and employed adults (25+). The ministries involved in the OECD National Skills Strategy project stated that the PIPP has the potential to take on broader responsibilities for adult learning policy.
A holistic concept of “skills” development and use are not yet widely understood, and require a higher profile in oversight bodies. Participants in the OECD project stated that political bodies lack awareness of, and a shared language for, a broad concept of “skills” that covers cognitive, socio-emotional and technical skills. As such these concepts are rarely discussed, with the focus being on educational attainment. Most technical level bodies are sectoral in their focus and so do not consider the need for integrated policies to develop and use people’s skills. Stakeholders stated that “skills” need a higher profile in the inter-ministerial Employment Council (Nodarbinātības padome) in particular; however, this body does not include stakeholders, so is limited to inter-ministerial co-ordination (Opportunity 2: Improving co-operation at different levels of government and with stakeholders).
Latvia’s oversight bodies may lack analytical capacity and support. While existing bodies often have secretariat support (e.g. the State Education Development Agency supports PIPP), this is largely limited to administrative functions. Although the Cabinet of Ministers is supported by the PKC, participants in the OECD project raised concerns about the capacity of the PKC to undertake useful analysis on skills policies given its broad remit.
Latvia’s oversight bodies typically lack decision-making authority for skills policy. Participants in the OECD project stated that the bodies are largely limited to discussion and information sharing, often without tangible results. Latvia’s Tripartite Cooperation Sub-Council of Vocational Education and Employment (PINTSA) can make some binding decisions in VET (Box 5.2); however, the Latvian Government and trade unions stated that the main weakness of PINTSA is that not all of its decisions are binding. The UK Education & Skills Funding Agency is an example of a policy-making institution that functions as a central authority for the skills development of vocational students and adults (Box 5.3). Providing an oversight body some decision-making capacity over skills policy and expenditure can facilitate whole‑of‑government and stakeholder co-operation.
The government does not have a process in place to monitor the effectiveness of its oversight bodies for skills. As such it is unclear how well each body is performing in terms of achieving its remit. This limits the government’s ability to continuously improve inter-ministerial and cross-sectoral co-ordination through methods such as re-focusing, re-organising or terminating bodies. In Norway, the Skills Council and Skills Needs Committees are both under evaluation as to their historical performance and future roles and design.
It will be essential that these challenges are addressed to ensure the successful implementation of Latvia’s next Education and Skills Strategy 2021-2027.
Table 5.2. Bodies with oversight for skills policy in Latvia
Source: Latvian Republic Saeima (2019[12]), “Izglītības, kultūras un zinātnes komisija [Commission for Education, Culture and Science], www.saeima.lv/faktulapas/Izglitibas_komisijas_faktu_lapaLV.pdf; Latvian National Commission for UNESCO (2019[13]), Konsultatīvā padome “Izglītība visiem” [Advisory Board “Education for All”], www.unesco.lv/lv/izglitiba/izglitiba-visiem/konsultativa-padome/konsultativa-padome-izglitiba-visiem/; Latvian Youth Council (2018[14]), “Kas ir LJP [What is LJP], http://ljp.lv/kas-ir-ljp; likumi.lv (2003[15]), Konsultatīvās padomes “Izglītība visiem” nolikums [Advisory Board “Education for All by-laws], https://likumi.lv/doc.php?id=79116; Ministry of Education and Science (2016[16]), Izveidota Nodarbinātības padome trīs ministru vadībā [An Employment Council with three ministers was set up]; www.izm.gov.lv/lv/aktualitates/1849-izveidota-nodarbinatibas-padome-tris-ministru-vadiba.
Box 5.2. Relevant example: Effective oversight bodies for skills policy in Latvia
Latvia’s National Tripartite Cooperation Sub-Council on VET (PINTSA)
The National Tripartite Cooperation Council was established to negotiate interests in social and economic issues at the national level. It co-ordinates and organises tripartite dialogue between employers’ associations, government institutions and trade unions. It is made up of representatives appointed by the government, the Employers Confederation and the Free Trade Union Confederation of Latvia. Within the National Tripartite Cooperation Council there are eight sub-councils, including the Tripartite Sub-council for Co-operation in Vocational Education (PINTSA).
PINTSA’s mandate is to evaluate and make proposals for policy documents and legislative proposals in the fields of human resource development, education and employment, as well as make proposals for their improvement, including for the most efficient use of state budgetary resources. PINTSA’s other functions include approving vocational standards and approving the number of pupils at vocational schools by each programme. A strength of PINTSA is that many of its decisions are binding, such as those on professional standards, professional qualification requirements (if the profession has no profession standard), sectoral qualification structures, and the number of students financed by the state budget and ESF in vocational basic and vocational secondary education programmes.
As noted earlier (Box 5.1), Norway’s Skills Policy Council and Future Skills Needs Committee provide an example of effective strategic oversight of skills policy. In the United Kingdom, the oversight body for skills policy has a stronger mandate for allocating and monitoring funding in the training sector (Box 5.3).
Box 5.3. Relevant example: Effective oversight bodies for skills policy in the United Kingdom
UK Education & Skills Funding Agency (ESFA)
ESFA is accountable for GBP 58 billion (British pounds) of funding for the education and training sector. It provides assurance that public funds are properly spent, seeks to ensure value for money for the taxpayer, and delivers the policies and priorities set by the secretary of state. It regulates academies, further education and sixth-form colleges, and training providers, intervening where there is risk of failure or where there is evidence of mismanagement of public funds. It also delivers major projects and operates key services in the education and skills sector, such as school capital programmes, the National Careers Service, the National Apprenticeship Service and the Learning Records Service. ESFA funds maintained schools and early year’s institutions (through local authorities), academic trusts, special schools, colleges, training providers, and high-needs institutions.
For students, ESFA calculates funding using the 16-19 year-old national funding formula, which is driven by how many students sign up for training and includes factors that reflect student retention, higher cost subjects, disadvantaged students and area costs. Individuals receive a different amount of funding based on the programme they apply for. For adult education programmes (19+ year-olds), ESFA has its own formula to calculate funding for learners that reflects levels of disadvantage and costs. Funding for ESFA comes from the Ministry of Education and the European Social Fund. Students aged 16-17 with high needs who enrol in longer courses can receive up to GBP 4 000 each, with lower funding for other categories of students.
Source: Education and Skills Funding Agency (2019[17]), Education and Skills Funding Agency homepage, www.gov.uk/government/organisations/education-and-skills-funding-agency; Education and Skills Funding Agency (2019[18]), ESFA Funded Adult Education Budget Funding Rates and Formula 2019 to 2020, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/784250/ESFA_AEB_Funding_Rates_and_Formula_2019_2020.pdf; Education and Skills Funding Agency (2019[19]), Annual report and accounts, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/819926/P3297_ESFA_Annual_Report_FINAL_Web_single_pages.pdf; Education and Skills Funding Agency (2019[20]), Funding guidance for young people 2019 to 2020 Funding rates and formula, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/809266/Funding_rates_and_formula_201920_v2.pdf.
Recommendation for ensuring effective oversight of the education and skills strategy
Appoint a whole-of-government and cross-sectoral body with decision-making capacity to oversee the Strategy for Education and Skills 2021-2027. This could be, for example, a new sub-council for skills of the National Tripartite Cooperation Council. The body should have some decision-making capacity on skills policy and spending, and sufficient analytical capacity, for example through expert and/or secretariat support. The state should clearly and formally establish the body’s objectives and goals, and monitor and continuously improve its performance against these objectives and goals.
Opportunity 2: Improving co-operation at different levels of government and with stakeholders
Effective co-ordination between Latvia’s ministries, agencies, municipalities (novadi) and cities (pilsēta) will be essential for implementing lifelong learning and integrating skills and learning information. Such “whole-of-government” co-ordination is crucial to minimise overlaps and gaps in services, share experience and sectoral expertise, identify opportunities for partnerships, design policies to complement each other, and develop better processes for engaging with stakeholders.
Several factors can facilitate effective whole-of-government co-ordination, including clear and shared priorities, goals, targets and responsibilities; and an inclusive, influential and accountable co-ordination body (see Opportunity 1: Strengthening strategies and oversight for skills policy). In addition, effective whole-of-government co-ordination requires that civil servants are appropriately skilled, responsible and recognised for their efforts. There also needs to be sufficient resources of people, time and funding.
Effective stakeholder engagement can lead to better quality skills policy and lifelong learning services. Stakeholder engagement throughout the policy cycle helps to ensure that relevant actors in the private sector, such as trade unions, businesses and employer associations, are meaningfully involved in the design, implementation and evaluation of skills policies. Engaging stakeholders can improve policy relevance, flexibility and sustainability, as well as the effective implementation of policies.
Stakeholder engagement by education and training providers can enable them to better tailor their programmes to the needs of learners and employers. The Latvian government has cited the need to focus on strengthening the involvement of employers in education in order to improve its quality and relevance to changing labour market needs.
Strengthening the inter-ministerial co-ordination of skills policy
Government rules and procedures for the inter-ministerial co-ordination of policies are generally effective in Latvia. The alignment of different ministers and ministries is facilitated by a public statement of policy intent, a government declaration signed by each minister, a coalition agreement outlining the terms of co‑operation between the governing parties, and informal coalition-council meetings. The government office also monitors compliance with cabinet decisions, while the PKC monitors implementation of the government declaration (Anda Terauda, Auers and Jahn, 2018[21]).
Despite its strong performance, Latvia has further opportunities to strengthen inter-ministerial co‑ordination, especially of skills policies, in order to improve policy coherence, effectiveness and efficiency. In particular, ministries could seek to move beyond mere co-ordination to partnerships that co‑design, co-fund and/or co-deliver skills policies and programmes.
Latvia’s existing strategies and oversight bodies are essential to facilitate the inter-ministerial co‑ordination of skills policy (see Opportunity 1: Strengthening strategies and oversight for skills policy).
The PKC, which reports directly to the prime minister, could play a stronger role in co-ordinating the skills policies of different ministries. It currently evaluates all proposals to be addressed by the cabinet on a weekly basis, focusing on three issues: cross-sectoral impact, adherence to the government declaration and compatibility with long-term strategy documents. The PKC can return materials submitted for cabinet consideration based on the quality of impact assessment and adherence to procedures for inter-ministerial agreement and public consultation. However, concerns were raised by participants in the OECD National Skills Strategy project that the PKC is not well staffed enough to meet line ministry demands, and has no financial capacity to engage outside expertise on specific substantive issues (Klein and Price, 2015[22]). Furthermore, it has not fully established its authority in government decision making, and its analyses are sometimes overlooked in favour of political expediency (Anda Terauda, Auers and Jahn, 2018[21]). For the PKC to play a central role in the inter-ministerial co-ordination of skills policy it will need to renew efforts to establish its informal authority, and would require greater resourcing.
Latvia’s inter-ministerial Employment Council, which co-ordinates policies for labour market development, could play a greater role in skills policy making. The council comprises senior representatives of the ministries of education, welfare and economy. Participants in the OECD project noted the significant potential of the council, but some stated that its decision-making authority and impact is less today than in the past when ministers (as opposed to state secretaries) were more active and from the same political party. Expanding the council’s responsibilities to include the co-ordination of skills policy, and increasing the role of ministers, could help improve the effectiveness of skills policy.
Recommendation for strengthening the inter-ministerial co-ordination of skills policy
Strengthen the Cross-Sectoral Coordination Centre’s (PKC) and Employment Council’s roles in the inter-ministerial co-ordination of skills policy. The Employment Council’s remit should be expanded to ensure the coherence of skills development and skills use policies, and potentially skills assessment and anticipation. The state could give the Cross-Sectoral Coordination Centre explicit responsibility to advise the cabinet on opportunities for inter-ministerial partnerships to co-design, co-fund and co-deliver skills policies, and ensure sufficient resources to support this role.
Strengthening co-ordination between the state and municipalities on skills policy
Effective co-ordination between the state and municipalities on skills policies remains challenging for Latvia. As in many OECD countries, Latvia has struggled to find the right balance between local responsibility and autonomy for skills policy on the one hand, and centralised responsibility and oversight on the other. Education governance in particular is highly fragmented. Municipalities vary significantly in size, socio-economic composition and capacity. The OECD has previously identified the need to rebalance the high level of autonomy of municipalities with greater public accountability (OECD, 2017[23]).
Local governments have autonomous tasks, delegated tasks and legally mandated tasks for education and employment policy (Table 5.3).
Table 5.3. Municipalities’ tasks for skills policy
Municipalities’ tasks related to education and employment
Source: Likumi.lv (2019[24]), “Izglītības Likums” [Education Law], https://likumi.lv/doc.php?id=50759; Likumi.lv (1994[25]) “Par pašvaldībām” [Law about local governments], https://likumi.lv/doc.php?id=57255.
Municipal representatives could play a more active role in oversight bodies for skills. Municipalities are permanently represented in four skills oversight bodies, including PIPP (Table 5.2), and may be invited as needed to two other bodies. However, municipal representatives do not appear to be highly active in these or other bodies. Direct co-ordination between municipalities and the Ministry of Education and Science takes place through the education boards of municipalities, which allocate state budget funds for the salaries of pedagogical staff, provide materials for teaching and opportunities to improve teacher qualifications, and organise education for adults (OECD, 2017[23]).
Setting appropriate national standards for education and employment policy has proven a challenge for Latvia. In some cases, such as non-formal adult education and training, there are no national standards (see Chapter 3). For autonomous municipal functions such as primary and general secondary education, municipalities are subject to state government laws and regulations that delineate common standards and define the scope of municipal autonomy. However, the President’s Strategic Advisory Council has warned that over-regulation is seriously encroaching on local government autonomy. The council called for a limit to bureaucratisation and for a reduction in the volume of regulations that govern functions mandated as autonomous (Anda Terauda, Auers and Jahn, 2018[21]). One way to do this would be through risk‑based regulation that rewards high-performing municipalities with less stringent compliance requirements. This could be implemented in the context of administrative territorial reforms, but would require more effective monitoring systems for lifelong learning (see Opportunity 4: Raising, targeting and sharing investments in lifelong learning).
The central government and municipalities do not widely use “soft mechanisms” such as contracts, agreements and pacts for co-operation on delivering education and employment services. These tools allow parties to commit either to take action or to follow guidelines that transfer decision-making rights between them. They can be used in unitary or federal states, and are known as conveños in Spain, “joint tasks” in Germany and accordi in Italy (Charbit and Michalun, 2009[26]). Their advantages are that they are based on mutual agreement, do not require legislative change and are public and transparent. However, they can be costly to negotiate, implement and enforce (OECD, 2018[27]). As roles, responsibilities and expectations for education and employment policies are assessed in the context of the current administrative territorial reform, Latvia could pilot contracts, agreements and pacts in certain municipalities to test their benefits. One application of such mechanisms might be the re-allocation of responsibilities for schools in municipalities that lack the capacity to organise this level of education (OECD, 2016[3]).
Civil servants in the national or subnational governments may sometimes lack the skills and support required for effectively co-ordinating or fulfilling their responsibilities for skills policy. For example, local governments suffer from a lack of capacity in financial management, with the State Audit Office repeatedly noting that they ignore accounting standards and requirements (Anda Terauda, Auers and Jahn, 2018[21]).
Ministries, including the Ministry of Education and Science, have also faced their own capacity constraints (OECD, 2016[3]): government wages have been volatile over the last decade, and stagnant more recently, which has left the public sector with a significant challenge in attracting, retaining and motivating talent (Klein and Price, 2015[22]). Increasing practices such as flexible job descriptions, realistic job previews, regular appraisals and regular feedback on performance could increase efficiency in the Latvian public sector (Lobanova and Ozolina-Ozola, 2014[28]). Latvia’s Public Administration Reform Plan 2020, which updates the framework of public administration competencies and introduces key performance indicators partially introduces these practices. Assessing and developing civil servants’ co-operation skills such as negotiation and conflict resolution may also be necessary in the context of these reforms, as was the case in Slovenia (OECD, 2018[11]). These measures would support both inter-ministerial co-ordination (above) and stakeholder engagement (below). Portugal established a dedicated body to help build the capacity of civil servants (Box 5.5).
Despite their responsibilities, local governments are under funding pressure and face incentives to compete rather than co-operate under the current revenue raising and state funding arrangements (see Opportunity 4: Raising, targeting and sharing investments in lifelong learning).
Establishing an appropriate level of decentralisation that has a mix of hard and soft mechanisms, as well as adequate support for skills policies, will be essential in the context of Latvia’s current administrative territorial reforms. Finland has sought to improve vertical co-ordination through territorial reform (Box 5.4).
Box 5.4. Relevant example: Improving vertical co-ordination through territorial reform in Finland
Finland’s PARAS (palvelurakenne) multi-level governance reform
Finland’s multi-level governance reforms, underpinned by targeted support from sectoral ministries, have driven collaboration between local areas and regions on education and training services.
The PARAS reform in Finland was a multidimensional reform that included municipal mergers, inter-municipal co-operation for service provision (in particular in the areas of healthcare and education), and better governance in urban regions. In merging or co-operating municipalities, the reform also had an impact on managerial practices (organisational restructuring, introduction of new practices, etc.). Decisions to merge or co-operate were taken on a voluntary basis.
Legislation to support the reform was enacted in 2005 and 2007, and implementation of the first phase of the reform was planned over 2007-2008. Legislation introduced quantitative thresholds to be reached for healthcare and education provision. Municipalities or inter-municipalities authorised to provide basic education services had to have at least 50 000 inhabitants. The local authorities involved could agree that the functions of co-management areas would be conducted jointly or by one local authority on behalf of one or more other local governments.
Municipalities and urban regions had to submit their reports and implementation plans to the central government by the end of August 2007. In 2008 the central government evaluated the reform progress based on supplementary information submitted by municipalities. The reform was implemented between 2009 and 2012. As decisions were voluntary, each municipality/urban region implemented (or not) its plans at its own pace. In 2009 the central government submitted a report to the parliament on the reform to restructure municipalities and services. At the end of the reform period a questionnaire was sent by central government to municipalities to find out what decisions they had taken within the framework of the reform.
The establishment of quantitative thresholds for education services drove collaboration, and were supported by a joint project by the Ministry of Education and Culture and education providers to ensure structural and economic support for education and training across regions. One criticism of the threshold was that in urban regions it risked encouraging wealthy “inner-ring” municipalities to co-operate with central municipalities while maintaining their own services.
Source: OECD (2017[29]), Multi-level Governance Reforms: Overview of OECD Country Experiences, OECD Multi-level Governance Studies, http://dx.doi.org/10.1787/9789264272866-en.
Box 5.5. Relevant example: Building the capacity of civil servants in Portugal
A dedicated body to improve civil servants’ skills
Portugal has put in place a multi-dimensional governance framework of policies and institutions to improve the skills of civil servants. The Directorate-General for the Qualifications of Public Servants (Direção-Geral da Qualificação dos Trabalhadores em Funções Públicas, INA) is responsible for establishing a new model to co-ordinate and improve professional training in the public administration.
The legislation involves important governance aspects as it creates two new bodies with consultative and co-ordinating roles to strengthen professional training in the public service. These are the General Council for Professional Training (Conselho Geral de Formação Profissional, CGFP) and the Commission for Co-ordinating Vocational Education and Training (Comissão de Coordenação da Formação Profissional, CCFP).
The CGFP is presided over by the minister in charge of public administration and includes the heads of relevant public services and agencies. Its role is to advise the government in the definition and ongoing improvement of professional training in the civil service. The CCFP has a co-ordinating role and involves the heads of services responsible for training in the public service at the national, regional and local levels.
Source: OECD (2018[27]) Skills Strategy Implementation Guidance for Portugal: Strengthening the Adult-Learning System, https://doi.org/10.1787/9789264298705-en.
Recommendations for strengthening co-ordination between the state and municipalities on skills policy
Strengthen co-ordination between national and subnational authorities on skills policy in the context of Latvia’s administrative territorial reforms. The state should give municipal representatives greater representation in existing oversight bodies for skills policies, such as the National Tripartite Cooperation Council and sectoral expert councils. The state should find opportunities to introduce risk-based regulation for municipalities, rewarding high-performing municipalities with less stringent compliance requirements. Finally, the state and municipalities should pilot softer co-ordination mechanisms, such as agreements and pacts, that outline responsibilities or transfer decision-making rights for select policies, especially for resource constrained municipalities.
Strengthen civil servants’ capacity to fulfil their roles and co-ordinate with others on skills policy. In the context of Latvia’s ongoing public administration and administrative territorial reforms, the state should survey ministries, agencies and municipalities involved in skills policy to understand the extent to which civil servants are capable of fulfilling their responsibilities and effectively co-ordinating with others on skills policies. Based on the results, the state should seek to redress major resource gaps with targeted support in the form of training, exchanges, mentoring, coaching, networking or peer learning, and/or through targeted funding.
Strengthening co-operation on skills policy at the subnational level
There are various examples of subnational co-operation on skills policies in Latvia; however, it could be more systematic and substantive. One study suggests that urban and rural municipalities co-operate more frequently on education and employment issues than in most other areas, including health, infrastructure and transport (Bulderberga, 2014[30]). For example, some public employment offices have co‑ordinated regional information campaigns and events. Riga and 10 surrounding municipalities have established a regional education, culture and sports administration (Pierīgas izglītības, kultūras un sporta pārvalde, PIKSP) to share the functions of education information, state exam organisation, ESF administration and licencing, etc. (PIKSP, 2019[31]). Municipalities also enter into contracts to reimburse each other in the case of a student from one municipality attending school in another (Bite, 2012[32]).
However, in general municipalities are reluctant to enter into more substantive forms of co‑operation for education and employment services, such as partnerships and shared service agreements. Some smaller municipalities lack the capacity to adequately support their local school systems, but remain unwilling to close them down and use the infrastructure of other municipalities (OECD, 2016[3]). Apart from the specific examples cited above, municipalities make little use of agreements, pacts and contracts to improve the quality or efficiency of education and employment services.
Existing bodies at the regional or municipal level could do more to support co-operation on skills. Planning regions have the potential to support co-operation by mobilising actors informally and distributing European Structural and Investment Funds (ESIF). Planning region development councils seek to plan and co-ordinate regional development and co-operation between municipalities, including on transport, return migration and entrepreneurship. Planning regions are connected with, and help facilitate co-operation between, local entrepreneurs, science and education institutions through, for example, clusters and science parks. As such they have access to information on the economic development strengths, weaknesses and opportunities in regions (Ministry of Environmental Protection and Regional Development, 2019[33]). Planning regions have established regional centres to pursue specific policy goals; for example, entrepreneurship centres promote entrepreneurship in the regions and act as intermediaries between entrepreneurs and other institutions (Pelse et al., 2018[34]). Planning regions currently have no direct role in education and employment policy. However, by implementing externally (mostly EU) funded projects, they can take action in skills development, such as the CREATE project for adult education in Vidzeme (2017-2019) (CREATE, 2019[35]).
The impact of planning regions on subnational co-operation will largely depend on their ability to improve their legitimacy with and support from municipalities. Planning regions have no formal power to ensure co‑ordination between municipalities in education and employment services, or in other fields; they can only facilitate voluntary co-operation within regions. In 2014, the State Audit Office could not find assurance that planning region activities met their operational objectives or achieved regulatory requirements. Municipalities have been reluctant to make financial contributions to the maintenance of planning regions as outlined in regulations, with around 83% of municipalities not ready to co-finance planning region operations (Latvijas Republikas Valsts Kontrole, 2014[36]).
Most municipalities operate and fund their own board of education that is responsible for the provision of early childhood education and care (ECEC), basic education, upper secondary education (general and vocational) and non-formal adult education in their territory. Board functions include the implementation of local educational policy, the allocation of state grants to schools for the salaries of teaching and other staff, and the organisation of teachers’ professional development (OECD, 2016[3]). However, some municipalities have jointly established boards to serve a region, such as in Pierīgas. These joint boards support consistent education policy and services, while being administratively efficient.
Associations representing subnational actors are more focused on vertical co-ordination, do not focus on skills and tend to formalise rather than initiate co-operation. The Latvian Association of Local Governments (LPS), the Association of the Big Cities of Latvia (LLPA) and the Association of Regional Development Centres (RACA) represent their members to the state on all local issues, of which skills are one part. Other associations represent the local level on specific issues such as tourism, for example the Resort Cities Association (kūrortpilsētu asociācija) (Bite, 2012[32]). These associations could play a greater role in promoting good practices of inter-municipal co-operation in delivering skills services, and help to formalise emerging co-operation.
The State Regional Development Agency (SRDA) does not currently facilitate regional co-operation on skills policies. Operating under the supervision of the Ministry of Environmental Protection and Regional Development, the SRDA initially focused on administrating programmes for entrepreneurs and implementing various state and structural funds. Its main task now is providing e-services for governmental and municipal institutions (Latvian Government, n.d.[37]).
There are very few networks between local policy makers that are focused on skills. One example is RACA, through which 21 municipalities have formulated common opinions on policy issues. Co-operation has occurred not only among municipal leaders but also amongst experts, including on education. Such networks could be expanded to include more municipalities, or replicated for other skills policies to share information and identify opportunities for co-operation between municipalities.
Previous research has identified cultural, social and systemic/institutional factors as major hurdles to closer co-operation between municipalities (Bite, 2012[32]). The state, for example, does not use the budget or ESF funding to incentivise or require regional co-operation on delivering education and skills services. The participants in the OECD National Skills Strategy project also stated that competition between municipalities for taxpayers is one of the main barriers to co-operation, which reflects the reliance of municipalities on income taxation to raise revenue (see Opportunity 4: Raising, targeting and sharing investments in lifelong learning).
The administrative territorial reform and reduced number of municipalities will address some of these co-operation challenges at the local level and is expected to allow new interaction models. It will be essential that Latvia monitors and supports co-operation by education and employment service providers within the newly merged municipalities. The Malopolska Partnership for Lifelong Learning in Poland is one example of how regional actors can strengthen co-operation on skills policies (Box 5.6).
Box 5.6. Relevant example: Strengthening co-operation at the subnational level in Poland
Malopolska Partnership for Lifelong Learning
The Malopolska Partnership for Lifelong Learning (Małopolskie Partnerstwo na rzecz Kształcenia Ustawicznego, MPKU) commenced in 2008 and involved 55 institutions representing labour, education and training institutions in Kraków. The partnership has since grown to include 131 members, including the Regional Labour Office in Kraków, training and continuing education centres, training providers, employers’ associations, counselling centres and district labour offices. The partnership seeks to improve the quality of lifelong learning, guidance and monitoring in the region.
It represents a unique model of collaboration that expands beyond the advisory role, and implements joint decision making: from setting a comprehensive long-term agenda supported by the annual action plan, to engaging stakeholders from the beginning of the policy cycle, to establishing the monitoring mechanism of programmes.
Source: Związek Powiatów (2019[38]), Association of Polish Counties, www.zpp.pl/konwenty-powiatow; Pomorskie (2019[39]), Local government tasks, https://pomorskie.eu/zadania-samorzadu; Kaczmarek and Tomasz (2016[40]), Administrative division of Poland – 25 years of experience during the systemic transformation, https://journals.openedition.org/echogeo/14514?lang=en; Regional Labour Office in Krakow (2019[41]), The Małopolska Partnership for Lifelong Learning, http://www.sas.tpnk.org.pl/images/pliki/seniorzy/prezentacjaOECD.pdf; Action Plan of the Malopolska Partnership for Continuing Education by the Year 2020 (Wojewódzkim Urzędzie Pracy w Krakowie, 2014[42]), https://www.pociagdokariery.pl/upload/2019/MPKU%20-%20publikacje%20i%20dokumenty/plan_wykonawczy_MPKU.pdf ; Związek Powiatów Polskich (2019[43]), Convention of the Poviats of the Pomeranian Voivodeship, www.zpp.pl/kategoria/organy-zpp/konwenty-powiatw-/konwent-powiatow-wojewodztwa-pomorskiego.
Recommendations for strengthening co-operation on skills policy at the subnational level
Give subnational bodies a greater role in co-ordinating skills policy, while supporting the spread of good inter-municipal co-operation practices. In the context of Latvia’s administrative territorial reforms, planning regions, the State Regional Development Agency and subnational associations should have a more explicit focus on facilitating inter-municipal co-operation on skills policy. The state could create a new body to encourage and co-ordinate inter-municipal partnerships on delivering education and employment services. This could be subordinate to existing regional bodies, similar to the way entrepreneurship centres are overseen by planning regions. Central and regional bodies should raise awareness of successful inter-municipal networks on skills issues, such as the Association of Regional Development Centres and the regional education, culture and sport administration for the Riga area, and encourage their replication.
Provide state financial incentives for inter-municipal and public-private partnerships to deliver skills services. The state should financially reward local and regional partnerships for delivering education and employment services, for example by adding inter-municipal and/or public-private partnerships as criteria in public tenders and other state funding mechanisms, or providing bonuses for such partnerships.
Improving stakeholder engagement with skills policy makers and providers
Latvia’s existing strategies and oversight bodies could be improved to help facilitate stakeholder engagement in skills policy making (see Opportunity 1: Strengthening strategies and oversight for skills policy), but there are other opportunities to improve stakeholder engagement.
Societal consultation in policy making takes place frequently and is diverse in nature. The National Tripartite Cooperation Council (Nacionālā trīspusējās sadarbības padome) is a well‑established, well‑integrated and often-used consultative mechanism that links employers, trade unions and government. The Council of Ministers maintains an NGO co-operation council that seeks to strengthen the representation of NGOs in government engagement processes. Ministries also have 165 of their own sectoral consultative bodies, which is a slight decrease from a high of 173 in 2011, but the number of NGOs participating in these bodies has increased from 980 to 1 128 over the same period (Anda Terauda, Auers and Jahn, 2018[21]).
However, the impact and quality of stakeholder consultations appears more limited. As noted earlier, according to a 2016 Gallup Poll, only 10% of Latvians had voiced their opinion to a public official during the last month, the lowest of all 41 OECD and EU countries except Turkey (Bertelsmann Stiftung, 2018[5]). The State Chancellery of Latvia (Latvijas Valsts kanceleja) surveyed stakeholders on non-involvement in consultations and heard that government communication is too formal, there is an absence of feedback to stakeholders, and stakeholders want earlier involvement in the policy process. In 2017, an influential group of NGOs called for more transparency and participatory mechanisms in the budget planning process (Anda Terauda, Auers and Jahn, 2018[21]).
Some groups of stakeholders may lack the capacity to effectively engage in the multiplicity of bodies and consultation processes. Many employer associations and trade unions are highly capable of formulating relevant policies and are actively engaged in formal consultation bodies. However, social interest groups are very diverse, and uneven capacity between them leads to some groups dominating negotiations. Some social interest groups may require capacity building to be able to engage effectively. Capacity constraints for effective consultation are also a challenge for government, as discussed earlier.
The participants in the OECD National Skills Strategy project highlighted some successful examples of institution-employer engagement that could be replicated across the education system. Education and training institutions can co-operate with stakeholders for different reasons and in different ways. Co-operation may seek to reduce skills imbalances or strengthen research and innovation in a region or sector. It can take the form of work-based training that is included in curricula and provided by employers, and that enables students to develop work-relevant technical skills and soft skills that are valuable in the workplace (OECD, 2015[44]). Employers and institutions can collaborate in councils to design a labour market relevant curriculum (OECD, 2017[45]). Stakeholders can also be involved in the governance of education institutions.
VET sector expert councils and conventions have had some success and could be adapted to other levels of education. Several stakeholders stated that sectoral engagement has been less effective in tertiary education (Chapter 4), and non-existent in non-formal adult education and training (Chapter 3). Adapting successful engagement practices from VET in tertiary and adult education could improve stakeholder engagement at these levels. Latvia could also consider developing guidelines that can be implemented by vocational, tertiary and adult education and training institutions, and tailored to firms of different sizes, to help ensure institution-employer engagement is consistently effective throughout the lifelong learning system.
Box 5.7. Relevant example: Effective stakeholder engagement with policy makers in Ireland
Stakeholder engagement by Ireland’s Skillnet agency
Skillnet is Ireland’s national publicly funded agency dedicated to workforce development. It seeks to increase the participation of companies in enterprise training by operating enterprise-led learning networks in different economic sectors and regions, as well as offering various other services. Skillnet currently supports over 15 000 companies nationwide and provides learning experiences to over 50 000 trainees.
Skillnet Ireland fosters an enterprise-led approach to workforce development. The process of determining training needs and co-ordinating the delivery of training is primarily owned by the enterprise groups engaged with Skillnet Ireland. Through 65 Skillnet learning networks, Skillnet Ireland allocates funding to groups of companies in the same industry sector (or region) and with similar training needs so that they can deliver subsidised training for their teams.
Encouraging enterprises to lead the process in this way helps ensure that programmes delivered through Skillnet Ireland are highly relevant to the needs of industry. This approach also enables cohesive enterprise networking and the flexibility to respond to ever-changing skills demands through formal and informal learning.
Source: Skillnet (2018[46]), Skillnet Ireland, www.skillnetireland.ie/; Cedefop (2018[47]), Skills Panorama: Skillnet Ireland, https://skillspanorama.cedefop.europa.eu/en/useful_resources/skillnet-ireland.
Box 5.8. Relevant example: Effective stakeholder engagement with providers in Latvia
Stakeholder engagement through VET sector councils and conventions
VET sector expert councils and conventions have had some success in stakeholder engagement, and their approach could be adapted to other levels of education. The 12 sectoral expert councils (SECs) allow employers, trade unions and government institutions to co-operate on VET. SECs develop professional standards in the sector, participate in examinations, co-operate with VET institutions and co-ordinate internship opportunities in enterprises. SEC capacity and operational efficiency differ across sectors, and no agreement has been reached between the parties on how they should be financed. However, some sectors are seen as high performing and potentially provide an example for other sectors and levels of education (chemistry industry, print and media technology industry).
Tripartite VET conventions are established for all VET schools and act as advisory boards to the schools. Their objective is to promote the development of VET institutions and determine the strategic directions of its operations in line with labour market requirements. They help providers meet labour market needs, advise on strategic development, oversee the programmes, control budget expenditures, etc. The conventions are defined in law and consist of the leader of the VET institution, a representative of the ministry, which is subordinated to a VET institution, and the relevant local governments, as well as representatives of employers and their associations. The convention may include a print and media technology industry representative of the planning region concerned. The chairman of the convention is the representative of the employer or the respective municipality.
Recommendation for improving stakeholder engagement with skills policy makers and providers
Build the trust and capacity of stakeholders, while supporting the spread of good engagement practices. The government should build stakeholder trust to underpin improved engagement by documenting and publicly communicating how stakeholder input has affected skills policy. It should seek feedback from stakeholders themselves on opportunities to increase the benefits and lower the costs of engagement, especially groups with lower resources. The government could devote ESF or state resources to co-fund the capacity building of smaller, less engaged skills stakeholder groups. The tertiary and adult education sectors should seek to adapt successful stakeholder engagement practices such as VET institution conventions and sectoral expert councils to their sectors. The government and social partners could develop guidelines for employer engagement and work-based learning that would be relevant for vocational, tertiary and adult education institutions, as well as different types of firms.
Opportunity 3: Building an integrated monitoring and information system on skills
As skills systems evolve and become more complex, managing data and information becomes a key policy issue. Effective information systems are needed to collect and manage the data and information that governments and stakeholders produce, analyse and disseminate. This helps to ensure that policy makers, firms, individuals and others have access to accurate, timely, detailed and tailored information. Relevant data and information include the skill levels of individuals, the skills demanded by the labour market, skills needed in the future, as well as information on learning and training opportunities and their effectiveness.
Policy makers should make use of these data to evaluate the impact of policies so that they can test whether training programmes are raising the levels of skills of individuals and improving their employability. Accurate assessments of an over- or under-supply of skills may also help policy makers develop initiatives to achieve better matching between supply and demand by putting in place incentives for skills investments in those areas, or incentives for people to acquire skills that are in shortage (OECD, 2019[2]).
Effective information systems can inform the choices of learners, education providers and firms, and ultimately help diverse actors form a shared understanding of the challenges, opportunities and priorities for skills. This can provide a foundation for effective negotiations, co-ordination and partnerships.
Improving information on learning participation, expenditure, outcomes and opportunities
Policy makers require comprehensive information on learning participation, expenditure and outcomes to inform the allocation of public funding to where it will have the largest benefits. Latvia has several data systems and surveys in place to understand education and training patterns (Table 5.4). However, there are several gaps in the data.
Latvia’s State Education Information System (VIIS) collects, generates, and stores information on education institutions, programmes and staff, from ECEC to higher education. There have been concerns about potential gaps in VIIS data, for example regarding the exact number and characteristics of school staff (OECD, 2017[23]). Furthermore, the VIIS does not cover participation in non-formal adult education and training. Latvia does not have a single database of the professional qualifications issued by non-public providers, or records of the qualifications people attained in previous decades. The Ministry of Education and Science will finish implementing improvements to the system by 2020 to link it to HE graduate tracking data and adult learning data. Latvia’s three main administrative databases (Table 5.4) are not well linked to provide a comprehensive picture of lifelong learning. The use of data matching techniques or unique identifiers at all stages of lifelong learning can help bring the data together into a rich, de-identified research database, as in the case of the Estonian Education Information System (EHIS). However, this would have to come with strong safeguards for privacy and data protection.
Latvia’s only annual survey data on adult learning comes from the Labour Force Survey (LFS). The LFS has several benefits, including a large sample size and regular implementation across the calendar year. However, it does not cover some parts of non-formal learning (e.g. guided on-the-job training), the source of funding (e.g. employer-financed training), the reasons/purposes for the learning (e.g. its vocational goal), participation in multiple learning activities, or training beyond the last four weeks (Cedefop, 2015[48]). Other survey data, such as the Adult Education Survey (AES) and the Continuing Vocational Training Survey (CVTS), are more detailed, but only available every five years.
Latvian authorities lack detailed information on expenditure on lifelong learning by municipalities, employers and individuals. The state lacks a centralised system for monitoring municipal expenditure on education and training over and above state transfers. While enterprises would typically record expenditure on in-house or external training for employees in their accounting systems, they are not required to report this to the State Revenue Service (VID) as a separate entry. Many individuals would report their education and training expenditures to VID in their annual tax returns in order to receive a personal income tax deduction. However, the reported expenditure is currently lumped together with other expenditures, such as health and child-rearing. Hence, accounting and tax reporting standards do not currently support the aggregation of skills expenditure data.
Latvia does not systematically measure the outcomes of lifelong learning at all stages of learning. In Ireland, outcome assessments are an important part of training evaluation, and a new data system (Programme and Learner Support System) has recently been implemented to enable the enhanced tracking of learner outcomes and more informed funding decisions. The system uses the national further education and training course calendar, the national course database and the learner database to track learners’ lifecycles, including application, interview, start, completion and certification (and early leaving) (OECD, 2019[7]).
A recent OECD review of Latvia’s active labour market programmes (ALMP) for unemployed adults found sizeable opportunities for evaluation given the extent of detailed and linkable administrative data on individuals’ participation, labour market outcomes, background characteristics and social assistance. The review used specialised econometric techniques and found that Latvia’s formal and non-formal training both have positive effects on an individual’s labour market outcomes for virtually all sub‑groups of those who are unemployed (OECD, 2019[49]). Latvia is also introducing graduate outcomes surveys in higher education. However, evaluation and monitoring practices are not yet systematic, and differ by level and stage of education. Participants in the OECD National Skills Strategy project stated that moving to a common performance measurement system for lifelong learning, especially in VET, tertiary and adult learning, could help to increase quality and spending efficiency.
Table 5.4. Lifelong learning participation databases and surveys in Latvia
Latvia has a large number of websites that provide information to users on education and training opportunities (see Table 3.2 in Chapter 3). The Latvian Qualifications Database provides information on available qualifications from ISCED 1-8, while the National Education Opportunities Database provides information on where learners can enrol in these qualifications. The main adult learning database provides general information on lifelong learning in Latvia and links to over 100 local websites that provide information on learning opportunities.2 Other websites focus on specific learners (by employment status) and programmes.
The sheer number, variety, design differences and, at times, overlap of these websites may undermine their accessibility for prospective learners. In addition, they do not currently appear to tailor information to the needs of different user groups, such as students, jobseekers, education and training providers, and career counsellors. The websites also lack of high-quality information on the potential job opportunities associated with different paths of education and training.
Box 5.9. Relevant example: Monitoring the outcomes of learning in Latvia
Monitoring the outcomes of higher education in Latvia
The Ministry of Education and Science introduced a register of students and graduate outcomes in 2017. The register is in its early stage of implementation. Information has been gathered for the cohort of 2017 graduates that includes data on graduate employment for the end of 2018, one year after graduation. The information is planned to be publicly available from the end of 2019 onwards for 10 years for each group of graduates. Information from the databases of the Central Statistical Bureau (CSB), the State Revenue Service (VID) and the State Employment Agency (SEA) feeds into the register.
The graduate register contains individual level data about graduates’ employment status, field of work and salary; education institution, study programme and degree related information; and demographic characteristics. The register is administered by VIIS, with individual education institutions importing data on their graduates. VIIS shares data with the CSB, which processes and prepares statistical reports.
The graduate register is expected to form the basis for higher education graduate outcome and study quality monitoring. It will also inform the general public and potential students, as well as provide objective information to policy makers and accreditation experts for analysis of personal employment and career development over time.
Box 5.10. Relevant examples: Comprehensive information on learning participation
Estonian Education Information System (EHIS)
The Estonian Education Information System (EHIS) is a state database that brings together information related to education. The database stores details about educational institutions, students, teachers and lecturers, graduation documents, study material and curricula. Data from 2005 are available, meaning that detailed information on general education levels across the population from school to university is available on request. An Estonian ID card is needed to access the EHIS database; someone outside of Estonia can log in as a guest, but is unable to access as much information as an Estonian resident. The EHIS database is used by many different Estonian agencies, such as the Ministry of Education and Research, educational institutions, local authorities, the Estonian Student Union, and the Estonian Health Insurance Fund. From EHIS data it is possible to get a quick and easy overview of the main indicators of general education institutions. The most common use of the EHIS system is for students applying to universities by simply transferring their details.
Ireland’s Programme Learner Support System (PLSS)
The Programme Learner Support System (PLSS) is a joint project between the National Further Education and Training Authority (SOLAS) and Education and Training Boards Ireland (ETBI). The PLSS is a suite of software applications designed to provide an integrated approach to the collection and processing of the personal data of learners, and the outputs, outcomes and performance of their programmes. PLSS uses the national Further Education and Training (FET) course calendar, national course database, and learner database to track learners’ lifecycles, including application, interview, start, completion and certification (and early leaving). However, these evaluations of outcomes do not capture the effectiveness of training in improving employment outcomes against a control group that did not undergo the training. The PLSS will further enhance the information available to FET providers and learners on labour market outcomes for particular courses.
Source: e-estonia.com (2019[50]), Estonian Education Information System, https://e-estonia.com/solutions/education/estonian-education-information-system/; Eesti Hariduse Infosüsteem (2019[51]), Kes ja milleks kasutavad EHISe andmeid? [Who uses data from EHIS], www2.just.ee/ehis/kasutajad.htm; OECD (2019[7]), Getting Skills Right: Future Ready Adult Learning Systems, https://doi.org/10.1787/9789264311756-en.
Recommendations for improving information on learning participation, expenditure, outcomes and opportunities
Develop a comprehensive dataset on lifelong learning, building on the VIIS and the Unemployment Accounting and Registered Vacancy Information System (BURVIS) databases. Existing data on participation in education and training at different levels of education and life stages should be better linked. More data should be collected on non-formal education and training in adulthood, especially if it is publicly funded. Latvia should collect more data on municipalities’, firms’ and individuals’ expenditure on education and training, for example through new surveys and/or adding to accounting/reporting standards for firms. Evaluation and performance-monitoring of publicly funded education and training providers and programmes should be improved over time, utilising this comprehensive dataset. Over time, the dataset could be augmented with records of the outputs and outcomes of publicly funded providers and programmes.
Consider merging and building upon existing portals to develop an integrated, comprehensive and user-friendly online portal about education and training opportunities, qualifications and guidance services. This should integrate existing platforms and centralise high-quality information on skills needs and available learning opportunities, career guidance services and funding support. It should be tailored for use by different user groups, such as learners, career counsellors, education and training providers, and policy makers. Drawing on administrative datasets, this portal could allow adults to access the digital records of their educational qualifications, which they can then provide to education institutions and employers.
Improving the quality and use of skills needs information
Latvia is gradually improving its skills assessment and anticipation system, but several opportunities for improvement remain.
Latvia’s skills assessment and anticipation system is the shared responsibility of the Ministry of Economics, the Ministry of Welfare, the Ministry of Education and Science and sectoral expert councils. The objective of the system is to develop a co-ordinated approach to forecasting skills demand and supply to inform public policy decisions on employment, education and social affairs. Various stakeholders have an important role in the process of skills anticipation, including those from the education system and employee and employer representatives. Numerous committees, working groups and other bodies involved in dealing with issues related to the labour market and education provision use the results from the forecasts. Other stakeholders, such as educational institutions, employee and employer organisations, also contribute information to skills anticipation activities (Cedefop, 2017[52]).
However, some methodological gaps exist. The quantitative elements of the exercises are well developed, but the processes for qualitatively validating the results with sectors are limited, as is the regional and sectoral disaggregation of the results. Furthermore, the system remains focused on assessing occupations, rather than on assessing changes in the need for specific skills and competencies. Poland, for example, has sought to assess imbalances of skills rather than occupations, through its Human Capital Survey (OECD, 2019[53]).
Several weaknesses have also been acknowledged in relation to the dissemination and use of the forecasts. The results are primarily distributed in the form of a technical report, which is unlikely to meet the needs of the lay person. Limited dissemination channels have led to a lack of awareness about changes in the labour market and a lack of discussions about labour market trends and future skills needs. The forecasts have also not been used in developing policy at the sectoral level. A two-year study on improving Latvia’s labour market forecasting system (AC Konsultacijas, 2019[54]) found a lack of co‑operation between government and stakeholders on interpreting the results of existing forecasts. Also, Latvia lacks a user-friendly online platform for different user groups to access the results to inform decision making or conduct research and analysis. The results of these exercises are also not integrated with information on related education and training programmes.
Following the two-year study, the Ministry of Economics and the Ministry of Welfare plan to introduce new measures up to 2020 that will include more stakeholder involvement in discussing the implications of skills forecasts for policy, streamlining the number of working parties and committees that consider different aspects of the forecasts, improved dissemination channels (e.g. more online access), and an increased role of employers and regional authorities in discussions on labour market needs. However, these improvements have not yet been implemented, and it is not clear how they will be funded. Some participants in this project stated that since sectoral expert councils are composed of representatives from state, industry employers, employees and trade unions, professional organisations and industry specialists on human resource issues, they are well placed to track changing sectoral skill needs and trends. In order for them to play such a role, they would need sufficient resources.
The use of skills and learning data in research and evidence-based policy making is limited. Latvia is increasingly open to evidence-based policy making and external advice; however, participants in the OECD National Skills Strategy project stated that the research and evaluation of lifelong learning and labour market data are under-developed in Latvia, owing mainly to capacity constraints. Ministries often seek expert advice by inviting academics to join working groups, but the government lacks the financial capacity to regularly commission input from the academic community. Consequently, expert engagement is typically given voluntarily without remuneration (Anda Terauda, Auers and Jahn, 2018[21]). A previous OECD review highlighted the need for the Ministry of Education and Science to strengthen its own capacity for data collection and analysis (OECD, 2016[3]).
Participants in the OECD project stated that existing research activities are highly reliant on ESF funding, and could be made more sustainable. Educational research is undertaken by a small number of individuals and institutes, and Latvia lacks a stand-alone labour market research institute. Several participants in the OECD project stated that Latvia lacks skilled researchers specialising in these topics, and the quantity and quality of research on the available data have been too low. The OECD has previously highlighted the need for an independent research institution for education (OECD, 2016[3]).
Table 5.5. Skills assessment and anticipation-related exercises in Latvia
Source: Ministry of Economics (2018[55]), “Informatīvais ziņojums par darba tirgus vidēja un ilgtermiņa prognozēm [Informative report on medium and long-term labour market forecasts]; State Employment Agency (2019[56]), “Darba tirgus prognozes” [Labour market forecasts], https://cvvp.nva.gov.lv/#/pub/pakalpojumi/prognozes/; Bank of Latvia (2019[57]), “Par Latvijas Bankas makroekonomiskajām prognozēm” [On the Bank of Latvia’s Macroeconomic Forecasts], www.makroekonomika.lv/lapa/par-latvijas-bankas-makroekonomiskajam-prognozem; National Centre for Education (2019[58]), “Nozaru kvalifikācijas sistēmas pilnveide profesionālās izglītības attīstībai un kvalitātes nodrošināšanai” [Improvement of the sector qualification system for the development of vocational education and quality assurance], https://visc.gov.lv/visc/projekti/esf_852.shtml; Ministry of Finance (2019[59]), Main macroeconomic indicators and forecasts, https://www.fm.gov.lv/en/s/macroeconomics/main_macroeconomic_indicators/.
Box 5.11. Relevant example: Improving information on skills needs
Portugal - System for anticipating the need for qualifications (SANQ)
Created in 2014, Portugal’s skills needs assessment system (SANQ) is co-ordinated by the National Agency for Qualifications and Vocational Education and Training, with a consultative board that includes the Public Employment Service, representatives of workers and employers, as well as technical assistance from the International Labour Organization. Its diagnostic exercises assess skills needs through both a retrospective analysis of labour market trends and a forecast of the demand for certain qualifications. The system is used to plan the delivery of vocational education and training for young people, and the country is considering expanding the use for planning the supply of adult learning programmes. Portugal is following OECD guidelines on applying skills needs data to the field of career guidance by using inputs of skills needs assessment to assist with guidance in its network of Qualifica Centres, formerly Centres for Qualification and Vocational Education, which aim to guide young people and adults in identifying opportunities to acquire qualifications as part of the National Catalogue of Qualifications.
Source: OECD (2016[60]), Getting Skills Right: Assessing and Anticipating Changing Skill Needs, http://dx.doi.org/10.1787/9789264252073-en; OECD (2018[27]) Skills Strategy Implementation Guidance for Portugal: Strengthening the Adult-Learning System, http://dx.doi.org/10.1787/9789264298705-en.
Recommendations for improving the quality and use of skills needs information
Develop a comprehensive skills assessment and anticipation system with input from, and shared oversight by, social partners. Building on recent projects to improve skills needs information, Latvia should integrate and build on the skills assessment and anticipation exercises of the Ministry of Economics and Ministry of Welfare. The system should be designed based on the needs of key user groups: policy makers, education and training institutions, career advisors, students and learners. These groups should also be represented in the ongoing governance of the system. The improved system should make greater use of qualitative inputs, for example from industry experts, to test the results of quantitative modelling. As shared responsibility, it will be essential to support the capacity of government and stakeholders to utilise skills needs information effectively.
Strengthen the role of sectoral expert councils with the support from industry to validate and provide high quality information on sectoral skill needs and trends. Latvia could utilise sectoral expert councils to ensure representatives of state, employers, employees and trade unions, professional organisations and industry specialists on human resource issues In order for sectoral expert councils to play such a role, they would need sufficient resources, which will likely require co-funding from government and employers.
Build government’s capacity in order to improve the use of skills and learning data and information in evidence-based policy making. The government should invest in its capacity to undertake policy research and evaluation. In the first instance, the state should fund targeted programme evaluation training for civil servants involved in skills policy making. Beyond that, ministries could pool funds to expand public research into education and labour market issues, using the services of existing faculties or creating a public research institute for skills.
Opportunity 4: Raising, targeting and sharing investments in lifelong learning
Governments, individuals and employers need to work together to share the costs of investing in lifelong learning. The government alone cannot shoulder these costs. However, certain individuals and firms are unlikely to invest in learning without government and or/sectoral support. The sharing, sustainability and equity of lifelong learning funding are key challenges in Latvia.
Ensuring sufficient, shared and stable expenditure on lifelong learning
As noted earlier, spending on lifelong learning is relatively low in Latvia: less is spent on educational institutions per student than the OECD average, at all levels of formal education (Figure 5.4). Expenditure on education and training as part of active labour market programmes is below the OECD average (OECD, 2019[7]). Latvia is highly reliant on state funds for learning during the school years, and the state is the sole funder of early childhood and school education (ISCED 0-3), and the main funder of tertiary education. However, the state does not currently fund adult education and training, instead relying on the ESF (Table 5.6).
Table 5.6. Public funding of lifelong learning
Thousand EUR, 2017
Note: EU fund contribution is estimated as average yearly funding, based on the action programme “Growth and Employment” budget for 2014‑2020 period, taking into account priority areas “Education, skills and lifelong learning” and “Employment and labour mobility”. Contribution to education and skills is also possible from other areas.
Employers and individuals also spend relatively little on tertiary and adult education and training. In tertiary education, the share of funding that comes from public sources is on par with the average for OECD EU member countries, and the rest is from households. Unlike in the majority of OECD countries, private businesses and non-profit organisations (e.g. religious organisations, charitable organisations, and business and labour associations) contribute minimal funding to tertiary education (OECD, 2018[6]). Furthermore, since 2010 Latvia has had the largest shift from private to public funding of tertiary education across OECD countries (Figure 5.5).
Figure 5.5. Change in relative share of public and private expenditure on tertiary education institutions (between 2010 and 2015)
Final source of funds, 2010 = 100
Note: Primary education includes pre-primary programmes. Private expenditure on government-dependent private institutions is included under public institutions. Countries are ranked in descending order of the change in the share of private expenditure on tertiary educational institutions between 2010 and 2015. EU23 includes countries that are both OECD and EU member countries.
Source: OECD (2018[6]), Education at a Glance 2018: OECD Indicators, Figure C3.3, https://doi.org/10.1787/eag-2018-en.
In adult learning, Latvian enterprises with more than 10 employees spent less on continuous vocational training (0.8% of labour costs) than similar-sized enterprises in every other EU country (Eurostat, 2019[61]). Expenditure on adult learning by individuals is also below the OECD average (OECD, 2019[7]).
Latvia lacks a clear framework or agreement on how to sustainably share the costs of funding lifelong learning between government, employers and individuals.
Latvia’s reliance on the ESF to fund adult learning has immediate benefits, but involves risks for the future of the system. First, EU funding may fall in the future, as the EU reconsiders its priorities. In addition, the EU budget will be reduced by the potential departure of the United Kingdom from the EU (European Commission, 2017[62]). The European Commission’s proposal for the “ESF+” for 2021-27 has a total budget of EUR 89.7 billion (constant prices, up from EUR 86.4 billion in 2014-20) (Lecerf, 2018[63]). However, the proposed ESF+ would have a broader scope of issues to cover than the current one (including migrants and social integration). The funding available for adult learning in Latvia is yet to be negotiated.
Box 5.12. Relevant example: Sharing the costs of lifelong learning
Norway’s cost-sharing approach
Various models exist of cost-sharing approaches between government, employers and individuals. Norway’s shared funding model for adult learning seeks to assign responsibility for funding to the party expected to benefit from the education or training.
Norway distinguishes between programmes that provide basic skills, enhance job performance or support worker mobility. It considers that government and society benefit most from increasing the basic skills of its population, while employers benefit from job-specific training leading to productivity gains, and individuals from training that raises their employability or mobility in the labour market.
The Ministry of Education and Research supports the development of basic skills through funding The Basic Competence in Working Life Programme (EUR 16.4 million in 2017) in workplaces. Any employer, public or private, can apply for funding for projects that meet key criteria defined by the ministry. These criteria are: basic skills training should be linked to job-related activities and learning activities should be connected with the normal operations of the employer; the skills taught should correspond to those of lower secondary school level; courses need to reflect competence goals in the Framework for Basic Skills for Adults; and courses should be flexible to meet the needs of all participants and to strengthen their motivation to learn.
Municipal or county authorities cover the cost of second-chance school education for adults (primary and secondary level), making it free of charge for participants. In tertiary education, individuals or their employers pay for continuing education courses in public universities and university colleges that prepare them for the labour market or improve quality of life. The government and individuals co-fund general non-formal adult learning and education provided by adult education associations. Private enterprises cover the full costs of job-related non-formal education and training for their employees that is not related to basic skills, such as in the form of on-the-job training. Trade unions also have funds for further and continuing education, for which their members can apply.
Source: OECD (2019[64]); Making Decentralisation Work: A Handbook for Policy-Makers, https://doi.org/10.1787/g2g9faa7-en; OECD (2018[27]), Skills Strategy Implementation Guidance for Portugal: Strengthening the Adult-Learning System, http://dx.doi.org/10.1787/9789264298705-en; Eurydice (2017[65]), Norway: Adult Education and Training Funding, https://eacea.ec.europa.eu/national-policies/eurydice/content/adult-education-and-training-funding-54_en; Bjerkaker (2016[66]), Adult and Continuing Education in Norway, http://dx.doi.org/10.3278/37/0576w.
Second, as ESI funds are time limited, gaps can open up in the provision of learning opportunities in between programming periods, or cease altogether. Latvia’s exposure to ESI funding risks has also extended into core educational services. For example, ESI funds have been used to incentivise enterprises to accept students for work-based learning. These workplace placements have stopped in between funding periods. Some participants in the OECD National Skills Strategy project expressed concerns that using ESI funds for regular tasks in this way is disruptive to the educational system, and has led to “after-ESI” anxiety among current beneficiaries of ESI-funded skills programmes.
Recommendation for ensuring sufficient, shared and stable expenditure on lifelong learning
Develop a cross-sectoral funding agreement for lifelong learning, and allocate state funds towards adult learning. The National Tripartite Cooperation Council should seek to develop a funding agreement that outlines how government, employers and individuals will share the costs of investing in different types of adult learning and skills. The agreement would specify the funding commitments of ministries, municipalities and social partners for skills, as well as facilitate public‑private partnerships in vocational and tertiary education. The government should make the funding of lifelong learning more sustainable by increasing state funding to VET and adult learning to complement ESF funds, initially for disadvantaged groups and between operational periods.
Increasing the impact and equity of lifelong learning funding
Funding for lifelong learning in Latvia is not allocated based on strong evidence about which programmes work best. As noted earlier (see Opportunity 3: Building an integrated monitoring and information system on skills), deficiencies in the evaluation of lifelong learning outcomes limit the ability of policy makers to allocate funding to programmes that have the largest positive impacts. This may entail inefficient public expenditure in some instances. Greater use of performance-based funding can increase incentives for quality and the efficient provision of lifelong learning (see Opportunity 1: Strengthening strategies and oversight for skills policy). Giving a body responsibility for allocating, monitoring and evaluating funding for education and training is one option for ensuring the impact of funding (Box 5.3).
Funding for lifelong learning could be allocated more equitably. The financial capacity of municipalities to fund lifelong learning is constrained and uneven across regions. The allocated tasks of municipalities are meant to be accompanied by a funding source; however, in practice funding is not made available for all tasks (Anda Terauda, Auers and Jahn, 2018[21]). For example, the state delegates the function of adult education provision to local governments, but does not support it with funding. State funding of adult learning is postponed until 2022, with ESF funds filling the gap in the meantime.
Municipal expenditure and revenue are relatively low in Latvia, although expenditure is highly concentrated in education (Table 5.7). Latvian local governments spend a larger share of their budgets on education (40.7%) than any other EU or OECD country. This reflects infrastructure maintenance costs and payment of teacher salaries (transferred from the state), amongst other things. Partly as a result of this, the share spent on social protection, including unemployment, is relatively low (OECD, 2018[67]).
Table 5.7. Subnational government finances in Latvia and EU28 countries
Source: OECD (2018[67]), Subnational Governments in OECD Countries: Key Data 2018 edition, http://www.oecd.org/regional/Subnational-governments-in-OECD-Countries-Key-Data-2018.pdf.
Municipal revenue is growing more slowly than state revenue, although this is offset by decreasing municipal expenditure. A medium-term budget-planning process was adopted in 2012 and envisions the inclusion of three-year budget cycles for local government. While this will provide medium-term budget clarity for local governments, there is also a concern that it will prevent local governments from gaining access to budget increases in proportion to the rate of economic recovery. Data from 2015 showed an imbalance between central and local government budget pressures. In 2015, local government expenditure decreased by 1.1%, while central government expenditure increased by 3.8%. However, local government income increased by 1.7%, while central government income increased by 3.4% (Anda Terauda, Auers and Jahn, 2018[21]).
Local governments have a high degree of expenditure autonomy, but a low degree of income autonomy. In its 2011 report on Latvia’s adherence to the European Charter of Local Self-Government, the Council of Europe concluded that local authorities have inadequate access to independent resources, and urged Latvia to increase the financial autonomy of local authorities (Anda Terauda, Auers and Jahn, 2018[21]). However, the situation may have improved, with local governments in Latvia sourcing considerably more revenue from taxes (60.8%) than other EU countries (41.1%) (Table 5.7).
Unequal tax capacity across municipalities, notably between Riga and rural areas, may lead to disparities in funding lifelong learning. The main sources of funding for municipalities come from individual income taxes and real estate taxes, for which municipalities retain 80% and 100% of the collected amounts, respectively. To match revenues with the service obligation required by law, local governments could, for example, increase property taxes. However, municipalities are reluctant to do this as they are competing for residents (taxpayers) because of the declining population. A better balance needs to be reached between local spending responsibilities and local resources to ensure the quality of municipality public services (OECD, 2015[68]).
The Equalisation Fund seeks to address revenue disparities by allocating additional and untied funding to municipalities based on the number of people in need of support (OECD, 2015[68]). Twelve municipalities paid into the fund (all of them around Riga) in 2019, while the remaining municipalities (107) received money. A previous review of Latvia underlined the need to revise the fund and make it more efficient, as it still leaves significant disparities in funding between municipalities (OECD, 2016[3]). Participants in the OECD National Skills Strategy project stated that one consequence of this in the education sector is that teachers’ in well-resourced municipalities have their professional development publicly funded, while teachers in some less-resourced municipalities have to fund their own professional development.
Latvia’s proposed administrative territorial reform to reduce the number of municipalities could help to reduce disparities in municipal revenue and expenditure. The reform also offers an important opportunity to reassess regional capacity and disparities in student outcomes, adult learning and skills imbalances, and ensure that central transfers for education and employment reduce these disparities.
Box 5.13. Relevant example: Ensuring the equity of lifelong learning funding
Improving municipal fiscal autonomy in Sweden
In Sweden, the subnational financing system is mostly based on own-source revenues, and the system provides a sound base of funding for all subnational governments, while also enabling autonomy in subnational decision making. The subnational government handles not just “pure local public services”, but also many of the redistribution functions of a welfare state, such as education and healthcare. Own-source revenues, especially income taxation, are a major source of subnational level income.
Since subnational governments differ in size, density and ability to raise revenues, the grant system plays an important role in funding municipalities and counties. Sweden uses an advanced system of grants to equalise income bases and costs across subnational governments. Keeping the grant system up to date and ensuring a balance between own source revenues and transfers is a key policy task. It is also important to maintain the right incentives for municipalities and counties to develop their own tax bases. Sweden has a strong tradition in subnational co-operation rather than permanent municipal mergers. Inter-municipal co-operation is practiced in several service areas, including education.
Source: OECD (2017[69]) OECD Territorial Reviews: Sweden 2017 Monitoring Progress In Multi-Level Governance And Rural Policy, https://doi.org/10.1787/9789264268883-en; OECD (2019[64]), OECD Multi-level Governance Studies Making Decentralisation Work A Handbook For Policy-Makers, https://doi.org/10.1787/g2g9faa7-en.
Recommendations for ensuring the impact and equity of lifelong learning funding
Increase the impact of lifelong learning funding through greater performance-based funding. The government should improve the results achieved by public funding for lifelong learning by implementing a common performance-based funding model. The model should partly base the public funding of education and training providers on the skills development and labour market outcomes of their learners. It should be informed by the performance monitoring and funding elements being developed in Latvia’s school system, tertiary education and the State Employment Agency.
Ensure equitable funding for lifelong learning across regions through greater cost- and needs-based funding of municipalities. In the context of Latvia’s administrative territorial reforms, the government should partly link state grants for education and training to the costs of service provision to improve the capacity of poorer municipalities to invest. It could also create incentives (bonuses) in state funding for the joint municipal delivery of education and employment services to spur partnerships, and consider adding metrics on regional skill levels and learning participation to the equalisation funding formula.
Recommendations for strengthening the governance of the skills system
References
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Notes
← 1. In Skills Strategy projects, a broad definition of skills is used, including cognitive skills (e.g. literacy, numeracy and digital literacy), meta-cognitive skills (e.g. critical thinking, complex problem solving, creative thinking), social and emotional skills (e.g. conscientiousness, responsibility, empathy), and the professional, technical and specialised knowledge and skills needed to meet the demands of specific occupations.
← 2. Latvian Qualifications Database www.latvijaskvalifikacijas.lv; National Education Opportunities Database www.niid.lv; Main adult learning database www.muzizglitiba.lv.