The UK’s skills strategy – what should be prioritised?

Job skills on keyboard

With apprenticeship participation down, and skill spending low – what can the Labour manifesto provide businesses? Nichola Hay dives right in.

Recent research by the Chartered Institute of Personnel and Development (CIPD) found that since the introduction of the current apprenticeship levy system, there has been a 41% reduction in the number of apprenticeships starts for those under the age of 19. For those ages between 19 and 24, participation has fallen by 36%.

The research highlights several factors for the reduction in starts, including a lack of alignment of the current skills and training system with people’s learning requirement, as well as the inability of people from disadvantaged areas to access apprenticeships and training in England. However, it is important to consider the impact of the pandemic as generational economic and societal event, which makes comparisons difficult. Despite this, it is crucial that the provision of apprenticeships, training and higher education increases as it will be future to the long-term prosperity of the UK economy.

Challenges like this underscore the need for the next government to refine the scope and objectives of the Apprenticeship Levy and consider wider changes to apprenticeship policy for all skill levels and ages.

In order to fine tune the current levy system, Labour’s 2024 Manifesto promises high-quality apprenticeships and specialist technical colleges, an updated curriculum for young people to be ready for the real world, and creating an updated and more secure opportunity to access university education with high teaching standards across the UK.

Catering to the entire workforce

Labour’s manifesto pledges guaranteed training, an apprenticeship, or help to find work for all 18- to 21-year-olds, two weeks’ worth of work experience for every young person, and to bring forward a comprehensive strategy for post‐16 education.

The Labour Party’s plans for apprenticeships and training have focused rightfully on the provision of high-quality apprenticeships and a skills ecosystem fit for the current and future needs of the economy and decrease NEET rates.

The Labour Party must, however, mustn’t forget about the rest of the workforce. It’s fundamental to the success of UK business that we provide training provision for people of all ages and all skills levels to boost the overall performance of the economy across all demographics.

Compared to international standards, the UK’s spending on adult skills is relatively low. And according to the SMC, this could “disproportionately affect adults in lower social groups and other disadvantaged groups”. Addressing this should be key for the Labour government if it is successful at the general election.

It is no secret that education and skills development have the power to transform lives, communities, and the world at large. In an era marked by rapid technological advancements, shifting job markets, and complex global challenges, we must all recognise the critical importance of proactively preparing individuals and organisations for the future.

Governments investing in apprenticeship programmes for example, can open up new channels to a more diverse talent pool. Whether it’s parents looking to re-enter the workforce or the long-term economically inactive, or young people who wish to go down a route alternative to university, apprenticeships can create an opportunity for those candidates who may have felt the barriers to apply through the “traditional” channels were too great. Inviting all ages and skill levels to participate in the workforce this way will not only reduce unemployment rates and increase social mobility, but also make it easier for businesses and the government to bridge skills gaps more effectively.

Apprenticeships also provide professionals with the opportunity to take a “zig-zag” approach with their progress, and climb the ladder through different programmes at various levels with different providers and businesses – allowing them to not only gain a wider range of skills, but also have better salary prospects.

A new levy – factors for consideration

For creating a more comprehensive skills, training, and education strategy, Labour’s promises include establishing “Skills England” to coordinate business, training providers, unions, and government to ensure a highly trained workforce, and reforming the Conservatives’ Apprenticeships Levy into a flexible Growth and Skills Levy, which is promising to see. Skills England, however, must be clearly defined in its role and ensure it is not a body without purpose that takes years to implement. This will be achieved by ensuring all key stakeholders within the education space are at the table when it is fully designed, and its outcomes are defined.

As far as businesses are concerned, the current levy has made it difficult for SMEs to engage with apprenticeships. This must be addressed by creating a simplified, accessible apprenticeship levy system to further increase participation levels.

For the SME market in particular, we need to remove the barriers that currently exist so SMEs can easily recruit apprentices with their training providers and additional funding is allocated to support the upfront costs.

Another factor Labour’s Manifesto should be accounting for is the crucial role of independent training providers and the impact they have across the skills sector and beyond, alongside the role of institutes such as colleges and universities.

The announcement of “Skills England” should therefore be supplemented with a National Skills Strategy, aligned with an Industrial Strategy, to ensure the UK has the skills fit for a dynamic economy.

Approaching the skills strategy as a long-term investment will be extremely beneficial for reaping consistent, long-term benefits to the health of the economy. Choosing to take the short-term funding route will be counterproductive for establishing an effective skills system, as it is essential to give larger scale efforts enough time to work.

Looking ahead

There is plenty of evidence that shows the current apprenticeship levy system needs refining. This includes creating more opportunities for those aged 18-21 years old in order to address the rising number of young people not in education, employment or training, encouraging more employer opportunities for young people, and providing robust employment entry pathways.

While Labour’s manifesto shows significant promise in transforming the levy, a more holistic approach for all ages, business sizes, and skill levels is required to boost the economy more effectively. This relies on creating a dedicated, long term sustainable skills system which puts the learner and employer at its heart, empowering all to thrive in an era of rapid change.

Nichola Hay MBE is Director of Apprenticeships Strategy and Policy, BPP

Nichola Hay

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