Foreign Investors Council in Latvia (FICIL) has voiced concerns regarding the efficacy of Latvia’s adult education and requalification policies, advocating for a centralised governance to eliminate overlap of functions between different institutions.

The recent discussions within the Parliament’s Commissions and comments from the State Audit Office about a superficial approach to ongoing adult education “reform”[1], the introduction of the new Human Capital Development Strategy[2] and related initiatives[3] have failed to address the enduring issue of institutional fragmentation in adult education and requalification policy. This problem persists, despite the ongoing efforts to introduce the new Human Capital Strategy.

FICIL, alongside other employer representation organisations, for many years has underscored the necessity of establishing a robust and effective governance of the requalification policy. Such measures are crucial for narrowing the widening gap between the skills demanded by the labour market and those available, ensuring Latvia’s appeal as an attractive investment destination, where the workforce skills align with the current market needs. Delegating a single entity is the first step towards effective policy implementation. While designation of the Ministry of Economics as a chief institution responsible for human capital matters is appreciated, clarity of oversight of the requalification policy remains unclear.

The intended changes within the State Education and Development Agency (VIAA) and the State Employment Agency (NVA) to avoid functional overlap and to enhance effectiveness of requalification and adult education are unclear. Already in 2021 FICIL had alerted the State Audit Office about the potential duplication of VIAA and NVA functions[4]. The audit conducted by the State Audit Office in November of 2023, titled “Does adult education achieve its set goals and meet labour market needs?”, concluded that the organisations of adult education in Latvia does not maximize the added value from projects managed by NVA and VIAA, indicating a potential misallocation of 17.9 million euros[5]. Despite conclusions of the audit, both institutions are still charged with the mission to plan and execute adult education and requalification in Latvia, as per the draft regulation for the EU Cohesion Policy Program for 2021-2027, its implementation guidelines and the Latvian human capital development strategy.

Given the current labour shortage, demographic challenges and projections, there is a need to retrain at least 50,000 underqualified individuals within the next three years and to provide ongoing training for at least 160,000 persons[6]. In view of this, the continued fragmentation of responsibilities and duplication of functions at a national level is ineffective.

Currently, it appears that the responsible ministries and involved institutions (VIAA, NVA) are focused on implementing a superficial reform rather addressing the inefficiencies in state administration processes and optimising the work. This approach is unacceptable, disregarding both the State Audit Office’s critiques and the detrimental impact on adult education and retraining processes, and neglecting the state administration’s duty to prioritize public interest over individual institution self-interest.

FICIL argues that there is no valid justification for the existence of two entities, particularly under different ministries, performing same functions. There is a call for immediate and significant centralisation in the management, planning and execution of retraining and skills development policies to avoid the wasteful use of state resources, function overlap, and accountability gaps.

[1] State Audit Office objects to the formal approach to the “reform” of adult education.

[2] Action Plan “Human Capital Development Strategy for 2024-2027”.

[3] For example, the draft letter from the Cabinet of Ministers “On the Responsible Institutions in the Field of Human Capital Management” or the draft regulation for the European Union Cohesion Policy Program for 2021 – 2027 under specific support objective 4.2.4 “Promote lifelong learning, especially by providing flexible opportunities for qualification improvement and retraining for everyone, taking into account digital skills, better anticipating changes and new skill requirements based on labor market needs, facilitating career changes, and promoting professional mobility” implementing rules for measure “Support for adult education based on individual needs”.

[4] Letter sent to State Audit Office on 14th of June 2021.

[5] The State Audit Office’s audit “Does adult education achieve its set goals and meet the needs of the labor market?”.

[6] The Saeima Analytical Service “Challenges of Employment Policy in Latvia and Possible Solutions”.