Government has “once in a generation” opportunity to fix skills, productivity and growth, says new report

• New report calls for government and Skills England, its new skills body, not to squander its “clean slate” opportunity for skills, following “a wasteful cycle of policy churn, duplication and reinvention” over the past 60 years
• Research shows business leaders recognise critical role of skills in boosting productivity, but working age adults lack the skills they need
• City & Guilds and the Lifelong Education Institute provide recommendations to deliver long-term change and pave the way for a single post-16 education system

Leading skills development organisation, City & Guilds, and the Lifelong Education Institute, are calling on government and Skills England, the new policy body for skills, to learn from mistakes of the past and create a truly long-term, cohesive skills strategy for lifelong learning and economic growth.

Rewriting a legacy of skills policy churn and fragmentation

The new report, Making Skills Work: The Path to Solving the Productivity Crisis finds that skills policy in England has gone through a wasteful cycle of policy churn, duplication and reinvention over the past 60 years. This has led to complexity and fragmentation of funding and policy initiatives, a lack of focus on the skills needs of the existing workforce or of specific regions, and little long-term impact.

Skills central to driving productivity and growth

In the context of stagnant UK productivity growth since the 2008 financial crisis[1], and skills shortages doubling since 2017[2], the report – which includes new research data from Opinium – finds that a sizeable majority of senior decision makers (74%) in UK businesses, and over 9 in 10 (91%) CEOs, identify building their workforce’s skills as crucial for boosting productivity.

However, many employed and unemployed adults don’t feel they have the skills they need to succeed. One in four (24%) working age adults who are employed are not confident they have the skills they need to maintain a good career and progress in the company they work for, and nearly half (47%) of those that are unemployed are not confident they have the skills now required to enter the workforce.

Kirstie Donnelly MBE, CEO of City & Guilds, comments:

“We have a once in a generation opportunity to clean the slate of skills policy for good and create a holistic, long-term strategy for uplifting our economy through skills provision that works. It’s crucial now that we learn from mistakes of the past; Skills England must not be yet another reinvention of the wheel. Because if we don’t get this right now, we will never resolve our productivity and growth problem. Not only is this critical to solve in multiple industries in need of skills, it’s also critical to the delivery of this Government’s missions.”

Solving regional inequalities

With the UK one of the most inter-regionally unequal countries in the developed world[3], the data also demonstrates the impact of regional disparities in skills provision and job opportunities.

Overall, fewer than half of all working age adults (48%) feel that they left their time in education with the right skills to transition into a career of their choice. While this rises to 63% of respondents in London, this figure drops to 34% of those in the East Midlands, and 36% of those in each of the West Midlands and South West England.

Kirstie Donnelly continues:

“While skills and talent are everywhere across the UK, opportunity is not – this is to the detriment of people’s life chances, and to productivity and economic growth across the country. Too many people leave school without the skills and direction they need to enter meaningful work and careers in their region, and then don’t have the opportunity to upskill throughout their life. It’s mission critical that we put that right, and better match people’s skills and potential with opportunity.”

“The successful formation of Skills England is just the first step. Ultimately, our vision is for a joined up tertiary skills sector across further and higher education, and a country that puts lifelong learning at the heart of its skills and education strategy.”

Making Skills Work: The Path to Solving the Productivity Crisis

The new Government announced the launch of Skills England in July 2024[4]. The new body will be tasked to bring together central and local government, businesses, training providers and unions to meet the skills needs of the next decade across all regions, and will provide strategic oversight of the post-16 skills system aligned to the government’s Industrial Strategy.

The report Making Skills Work: The Path to Solving the Productivity Crisis lays out a series of recommendations to ensure Skills England effectively brings together the “fractured skills landscape”. And it advises on how the body should work to solve widespread mismatches of skills across regions and industries.

Key recommendations include:

• Skills England should have the ability to redirect resources to address needs and assess the productivity prospects across each part of the country, taking measures to redress where necessary, and producing an annual report to generate more transparency of how the productivity issues in localities are being addressed.
• Skills England should prioritise the higher skill needs of the existing workforce to maximise productivity gains via investments in human capital, whilst recognising the importance of Level 2 and 3 qualifications in kickstarting careers, filling industry gaps and enabling progression into higher education.
• Government should drive further integration of post-16 education, including integration of adult funding budgets, to achieve a single tertiary system.

The Rt Hon. the Lord Blunkett comments:

“This timely report provides a detailed and enlightening roadmap for skills policy – which complements the new Government’s work to unlock productivity in the UK, and help the country meet the challenges ahead.”

Mark Morrin, Principal Research Consultant at the Lifelong Education Institute and co-author of the report, comments:

“If Skills England is to align with the new Industrial Strategy and drive productivity, it will need to prioritise lifelong learning to upskill and reskill the existing workforce, in the places and industries that are most likely to deliver growth. This will require greater participation by employers in skills development and a rebalancing of qualifications at all levels to unlock productivity.”

The full report can be accessed here

[1] https://www.niesr.ac.uk/publications/productivity-uk-evidence-review?type=uk-productivity-commission

And ONS, Productivity flash estimate and overview, 2034

[2] https://www.gov.uk/government/news/skills-england-to-transform-opportunities-and-drive-growth

[3] https://uk2070.org.uk/wp-content/uploads/2019/01/01-McCann-UK-Regional-Inequality-Debates.pdf

[4] https://www.gov.uk/government/news/skills-england-to-transform-opportunities-and-drive-growth