The UK is lagging behind other countries in having a nationwide culture of employer-led training as companies fear investing in training because of the risk of losing staff to others.
This is according to the findings of the House of Lords Industry and Regulators Committee’s inquiry into the UK’s skills needs for the future, which heard that employers had become “very lazy” since Brexit.
Baroness Taylor of Bolton, chair of the House of Lords Industry and Regulators Committee, has written to the government today (23 October) calling on it to ensure that apprenticeships and training programmes meet the UK economy’s future skills needs.
In the letter to skills minister Baroness Smith of Malvern, Taylor warned that the current skills system is complex, short-term and lacks strategic direction. The letter also highlights widespread dissatisfaction with the apprenticeship levy, soon to become the growth and skills levy, raising concerns that it is disadvantaging young people.
House of Lords skills inquiry
UK employers lack confidence in skills initiatives
It also found that apprenticeships have increasingly become a means of training workers of all ages and funding the training of existing staff, reducing opportunities for younger people and those moving to new industries.
Baroness Taylor said: “Our inquiry has raised fundamental concerns that apprenticeships and training programmes are not meeting the UK’s future skills needs. We also found that the lack of opportunities for young people who do not go to university is of great concern.
“We look forward to seeing the government’s future policy plans in this area and invite them to take our findings and recommendations on board as they flesh out their initial proposals.”
Some apprenticeships had become overly academic for learners and bureaucratic for both employers and training providers, found the committee.
It also found that effective devolution adds value to the skills system through linking local employers and educators, but there was a need “to avoid reinventing Whitehall locally” through new processes and separate programmes.
It said the government’s proposal to set up a new body, Skills England, could provide a “greater focal point for the skills system through its role as a convenor,” bringing together information on the needs of the skills system to inform government policy.
Role of employers
Summarising some of the evidence the inquiry had heard in an annex to the letter, the committee quoted Sammy Shummo, group director of apprenticeships at London South Bank University.
Alongside other witnesses, he explained that employers have a “crucial role to play” in the skills system through identifying skills needs, designing training programmes with education and training providers, and providing work-based learning opportunities.
Despite this crucial role, some witnesses compared UK employers’ investment in training unfavourably with their counterparts in EU and OECD countries, leading to a system that is “underfunded by government and employers”.
Former skills minister Robert Halfon argued that there is “a cultural problem”, contrasting the approach of UK employers with German employers he visited, whose view was it was their “duty” to train “the next generation”.
Sian Elliott, head of organising, services and skills at the TUC, argued that the UK is “quite unique internationally in not having a space where unions, employers and education providers can come together and talk about the skills system”
David Hughes, chief executive of the Association of Colleges, suggested that before Brexit, the UK “had a very liberal labour market” but that “employers got very lazy” due to a “buoyant graduate market”.
Halfon stressed that the culture of employers “is changing” and witnesses stressed that there are “fantastic examples of employers who are doing the right thing”.
Poacher’s fear
But many witnesses outlined the “poacher’s fear” that makes employers “hesitant to invest in training if they fear that trained employees will leave for other opportunities” afterwards.
For example, UKHospitality explained that as “one of the most mobile labour markets”, businesses in the hospitality sector fear that “they will not see a return on their investment” in training.
This was despite other witnesses telling the enquiry that investment in people’s development helped improve staff retention.
The committee said the government, Skills England and local institutions will have to take a lead in communicating these benefits of training to employers.
“If the government wants to initiate an increase in employer investment in training, it must provide more obvious, immediate incentives,” said the letter.
“Given that one of the key barriers is the short-term cost, we believe there is a case for the government to introduce financial incentives for employers to invest in training, for instance through a skills tax credit.”
It is calling on the government to:
- develop a simpler skills system through its strategy for post-16 education, with greater long-term funding for a smaller number of priorities and programmes
- ring-fence a substantial proportion of growth and skills levy funding for young people, new starters, or lower levels of qualifications
- review current apprenticeship content criteria, including functional skills requirements, which can be restrictive
- use the establishment of Skills England to provide a greater focal point for the skills system
- to ensure local institutions have the resources to enable local work, health and skills plans to be a success
- introduce financial incentives for employers to invest in training, for instance through a skills tax credit
- ensure further education is funded sufficiently to deliver a youth guarantee, including considering a greater level of demand-led funding.
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