The government is seeking to build an economy that works for everyone. As we leave the European Union, we will need to ensure that our country can compete in a global economy, and the government has set goals of boosting living standards, growth and productivity, and addressing deeply engrained regional inequalities. However, England’s adult skills system is ill-equipped to deliver this, or to address the trends that will affect our economy between now and 2030.
• Demand for skills among employers is low. Employer investment has fallen in recent years and there is a large investment gap with the EU average. Poor skills utilisation means improvements in quali cations haven’t delivered improvements in pay and productivity.
• Too much provision is low quality with poor outcomes. In the absence of clearly articulated employer demand, providers have relied on government-designed funding and regulatory systems. This has led to perverse incentives, mismatched supply and demand, and a focus on courses with poor labour market outcomes. Efforts to build a more ‘employer-led’ system risk exacerbating this.
• The training system has failed to tackle regional and social inequalities. Adults who stand to bene t most from training are the least likely to participate. The adult skills system has failed to support regions scarred by deindustrialisation, and it has failed to address stark regional disparities in economic performance. The apprenticeship levy may accentuate regional skills inequalities by boosting investment most in London and the south east.
The apprenticeships levy as currently formulated would fail to restore employer investment to the levels of a decade ago. The government should therefore expand its apprenticeship levy into a ‘skills levy’, set at 0.5 per cent of payroll for employers with 50 or more employees, and 1.0 per cent for the largest. This would raise £5 billion. Contributions from larger employers should be top-sliced and devolved to provide a regional skills fund for high quality vocational education and training.
Our economy is set to change signi cantly between now and 2030. It is essential that England develops a skills system that not only responds to emerging trends, but actively shapes them in order to support stronger and shared growth. The prime minister has pledged to build an economy that works for everyone, rooted in a more proactive industrial strategy. However, the adult skills system1 as currently con gured is incapable of delivering the government’s objectives of increasing living standards and driving economic growth across the country by increasing productivity and boosting social mobility.
In the past, policymakers in England have left decisions on training to the market: the assumption has been that with the right incentives, employers will invest in training for the bene t of themselves, their staff and the economy. Successive governments have invested in training in the hope that a more skilled workforce will drive innovation and growth.
A shift to a more innovative, higher skilled economy that works for everyone will require far more focus on how the skills of the adult working population are being developed and utilised in the workplace. A more ambitious adult skills policy should be informed by the following goals:
• improving investment in, and utilisation of, skills among employers
• increasing the availability of high-quality specialist vocational provision
• supporting industries and communities facing economic decline to adapt to the demands of the global economy.
Chosen excerpts by Job Market Monitor. Read the whole story at Skills 2030: Why the adult skills system is failing to build an economy that works for everyone | IPPR