A “new common sense for our age” is needed to ensure the UK remains one of the most prosperous nations in the world over the next decade.

All the key players in the skills debate – individuals, business, government and training providers – must work together if the UK is to achieve the targets set out by Lord Leitch in his 2006 report on the skills the country needs to remain economically competitive in 2020.

Speaking at the launch of a major new report on the skills agenda yesterday, Professor Mike Campbell OBE (pictured), director of research and policy at the UK Commission for Employment and Skills, spelled out the importance of cooperation in achieving Leitch’s targets: “We need, really, a new common purpose between all the key actors here – a new common sense for our age.

“The Prime Minister said on Tuesday: ‘If we don’t invest in our future, we will have no future.’ What it means is that our future prosperity lies in investing in our human capital today and tomorrow. If we succeed, we will create better jobs, better business, a better economy, better and stronger communities and a better future for all of us.”

Ambition 2020: World Class Skills and Jobs for the UK is the first annual report published by the UKCES, set up a year ago to advise the government on the steps needed to ensure the UK is in the top quartile of OECD countries in 2020.

“One of our key tasks is to assess the UK’s progress towards that goal,” says UKCES chairman Sir Michael Rake in his introduction to the report. “This is the first of what will be an annual assessment of how well we are doing, and what more needs to be done to achieve our ambition by 2020. It monitors progress against our international competitors, providing a sound evidence base for advice and an agenda on which future success can be built.”

The report asks how well the UK is doing and concludes that there have been signs of “significant progress” in recent years, with the number of high skilled people increasing by more than a third during the last decade and the number of people without qualifications falling by a quarter.

But the latest data available – from 2006 – shows that, compared to other OECD countries, the UK is ranked 17th on low level skills, 18th on intermediate level skills and 12th on high level skills. The report suggests that “without urgent action, the UK’s relative international position is unlikely to become World Class”.

If recent trends continue, according to Ambition 2020, the UK is likely in 2020 to be ranked 23rd in the OECD on low level skills, 21st on intermediate skills and tenth on high level skills. The UKCES predicts that, “without a step change in numbers over the next decade”, the UK will not achieve any of Leitch’s targets with the possible exception of high level skills.

“Even here, the rate of improvement by other countries may mean that our skills progress is not quite enough to move us into the top OECD quartile,” warns the report.

The report says that, in recent years, there has been “sustained growth” in jobs, mainly those requiring high level skills. The proportion of jobs available requiring low level skills has declined, putting up possible barriers to employment for disadvantaged and vulnerable groups.

“We must prepare now for the jobs of the future,” says the UKCES. “We must ensure that people have the skills necessary for the opportunities that will become available post-recession and that employers will be able to recruit workers with the skills necessary for business success.”

The report also identifies a “growing mis-match” between high skill workers and high skill jobs – there are currently more jobs available than people but the number of highly skilled workers is growing much faster than the number of jobs requiring those high level skills. This could lead to the over-skilling or under-employment of highly skilled workers in the future, which, in turn, could lead them to emigrate in search of jobs that properly utilise their talents.

The UKCES says: “In order to build an internationally competitive economy, the future employment and skills system will need to invest as much effort in raising employer ambition, in stimulating demand, as it does in enhancing skills supply. The aim is to achieve a virtuous circle of skills development, between the skills available and the skills required.”

The UK faces a three-fold challenge, according to the report, to put more emphasis on the demand side of the skills equation, to ensure delivery meets promises made by policies, and to implement better measures of success to align policy with both the 2020 goals and with delivery.

The report then goes on to recommend five key priorities for action:
1 Creating a clear and integrated strategy for economic transformation and renewal
2 Supporting effective economic development in cities and local communities
3 Developing more strategic, agile and demand-led skills and employment provision
4 Transforming individual aspiration and skills into a world class workforce
5 Building employer ambition and capacity to be world class.

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