Report

Skills in UK – The business case for investment

We live in extremely turbulent times, with major risks and uncertainty for the country’s future and economy.

Uncertainty is not just brought about by Brexit, with its challenges of having to put in place international trade deals as well as dealing with the growing likelihood of a recession. The ‘Fourth Industrial Revolution’, arising from AI and digital technologies, will also create an era when rapid change will be the only constant. And we are just not ready for this.

We need to face up to the fact that we are in for a tough ve years and act accordingly. Skills provide the way to react quickly in an innovative way and will be crucial for our future prosperity and protection of living standards.

The business case is clear and simple. We must create sustainable investment in skills to:
• Upskill people who are already in the workforce to match the needs of the economy in 2024 and the speci c requirements of their sectors;
• Make people more productive over the next ve years, with the skills for the digital/AI economy;
• Improve the skills of young people coming out of the education system so that they are work ready, whilst matching the needs of the sectors they plan to work in; and
• Create greater equality of access for people to improve their skills and share in the bene ts of economic prosperity and social mobility.
Of necessity, this will mean government progressively starting to reverse the funding reductions in skills and, particularly, adult education over the last 10 years. We can then further increase investment to match the ongoing sector requirements of a constantly changing digital/AI economy.

Current position

  • Nine million people in the workforce have inadequate levels of English and maths;
  • Only 2/3rds of 16-year-olds achieve a Level 2 in English and maths at 16 and 5/6ths by 19 – an inherent workforce problem that is not getting better;
  • A lack of basic digital skills across many sectors of the economy;
    Declining numbers of adults participating in learning, as well as stark and growing inequalities in participation by socioeconomic group and region;
  • Progress has stalled over the last 10 years in improving skills, meaning the UK is on track to slip even further down the international league tables by 2030.

Recommendations

SkillPresenting our proposals, the authors wish to make it clear that we are not recommending starting again. Quite the opposite; we propose building upon the progress to date – adding to it and re ning what we have to create a complete skills ecosystem.
We make the following 13 proposals to contribute to the debate on the way forward for the government for skills in England.
1. Establish a single national vision and strategy for skills at all ages;
2. Adopt measures of success for the implementation of the strategy that relate directly to progress towards better matching the skills of the workforce with those of the economy;
3. Improve outcomes in the education system for young people, making them work ready and aligned to the needs of the future economy;
4. Invest in adult skills to deal with the legacy correction for English, maths, digital and employability skills;
5. Establish a simple, integrated, stable, trusted and agile skills development system as the vehicle to implement the national strategy. This should be based upon international best practice (worldwide, such systems are referred to as technical and vocational education and training [TVET] systems);
6. Retain broader provision for young people aged 16-to-19 years, in addition to A and T Levels. Foundation quali cations or awards at Level 1 should be presented in a single coherent offer, to build ‘work readiness’ and a platform for further learning. In addition progression quali cations at Level 2 should represent a legitimate goal for some sectors and a potential step into employment/apprenticeships for
a number of occupational routes.
7. Establish a full set of sector-based ‘national skills curriculum and standards’, building on the work to date, which match the economy’s ongoing requirements, as set out in the sector strategies and based on easy to understand career pathways (see illustration 2 on page 6) which do not put specialisation too early. In this respect we must recognise that Level 2 is a crucial stepping stone;
8. Establish component-based apprenticeships and technical quali cations structured as modularised learning and accreditation, which will facilitate easy adult upskilling and technological updating (see Illustration 3 on page 8);
9. Badge all quali cations that are not academic as T Levels or Higher T Levels above Level 3. Then stick to this brand;
10. Coherently manage the capacity and number of organisations that support the TVET system, such as independent training providers, further education colleges, awarding organisations and end-point assessment organisations. This must include facilitating investment in tutors, assessors and
new equipment;
11. Increase state investment in skills above the rate of in ation (possibly 20% per annum) to bring FE and
HE expenditure into line over a sustainable and manageable period of time. This extra government money would cover the needed legacy correction, basic digital skills, quali cations and apprenticeships for 16–19-year-olds and the rst Level 3 quali cation. As part of this we must signi cantly increase funding rates including those for Functional Skills. For adult upskilling above Level 3, we propose that the government rations the Apprenticeship Levy along economic priorities. In addition, it should introduce, as either a separate pot or an extension of the existing levy, an ‘upskilling levy fund’, which would be similar in size. We should also streamline the operation of the Levy and make it much more exible;
12. Delegate the delivery to the local level, where there should be freedom to match funding against the priorities of the area and the sectors that operate within it. All parts of England should have the same delivery powers and access to funding;
13. Rationalise the number of regulatory and quality control organisations to create a single ‘champion’ for the TVET system – initially within the existing legislative framework. This can be based on adapting the role of the Institute for Apprenticeship and Technical Education. It should be done in a way
that establishes clear ‘ownership’ by employers, employees and their representatives – as well as engaging the contributions from the providers in each sector – whilst ensuring accountability for any state funding.

Chosen excerpts by Job Market Monitor. Read the whole story at Close the Gap – NOCN

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