The University for Industry was launched again this week. The first obvious thing about it is that it is no university. It is designed to trawl the highways and byways, using all modern means of public persuasion, to draw in those who have learned little and like it less. Only very much second and later is it to help people who are already skilled but seek retreading. It will not select its students, provide its own courses or set and mark exams.

Tackling educational failure and skill shortages is admirable, but calling the project a university risks debasing the currency of a title the government has said it wishes to defend. The UFI is designed to become a commercial kite-marking and franchising business with a supermarket overtone, thanks perhaps to the presiding presence of Lord Sainsbury of Turville as chairman of the transition team. There may even be a UFI club with its own loyalty card.

Suppliers will design courses and offer them for UFI approval, branding and checking quality. The supplier will pay for the privilege of stocking UFI own-brand courses in franchised learning centres. Students or their employers will be expected to buy the products, with exemptions in only a few areas such as basic literacy.

The UFI will put most effort into a publicity campaign to whip up demand for courses, into running information services to steer customers to the right course, and into quality assurance. Only if there is no suitable course may money be forthcoming to commission new products. Gaps are expected to be filled mainly with multimedia packages for students to use at home or in their local learning centre.

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There are some good things in the UFI proposal. It is sensible not to create another institution offering another set of qualifications. This would duplicate what is already being done. It would be hugely expensive and would have little prospect of becoming less so. This model did not work with the Open College. Something has been learnt, it seems.

The telephone helpline information service, Learning Direct, is also a good idea, although gathering information about what exists and where is non-trivial business and keeping it up to date will be difficult.

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It is also welcome that there will be some money to commission courses and learning packages. This should help stimulate an industry in which we are fast losing an opportunity to compete with American media giants. The risk is that this initiative will be marred by the UFI's stated purpose of driving down prices. Good multimedia packages are expensive to make.

The learning centre idea is crucial. There is a growing gap between information technology haves and have-nots. The UFI idea depends on people having access to the Internet and to CD-Roms. Expecting them to do so at home would make the UFI into another mechanism for exclusion. It is to be hoped that plenty of people will bid for franchises to run such centres (for which they will have to pay). But there is still far to go even to connect schools and colleges and the costs of Internet use can mount frighteningly. Perhaps Sainsbury's supermarkets will lead the way by investing in learning centres as loss leaders.

The vision may be exciting but the challenge is daunting and the assumption that a rather small public investment can lever large amounts of private money is questionable. The sums allocated will barely be enough to pay for the advertising campaign let alone for information gathering and quality assurance.

Further education colleges are desperately stretched already without having to pay the UFI to run courses and centres. The target groups of students include those least able to afford fees even with Pounds 150 learning accounts. Small and medium companies are seldom keen to pay for training.

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Tackling this country's long-standing training problem is not going to be cheap, let alone profitable. Unless the government invests seriously in the enterprise it is not likely to succeed. The UFI venture looks blighted at birth by Treasury parsimony - which is odd since it was Chancellor Gordon Brown's idea in the first place.