Skills England has published its first report, ‘setting the scene’ for the newly formed government body to be ‘the driving force’ behind the much-needed upskilling of the economy.
In his foreword, interim chair Richard Pennycook said: “We are the sixth largest economy in the world, and yet our businesses and public services have been laggards in productivity over the past 30 years.”
He described how if we are to succeed in the years ahead, we need to transform the skills landscape. “Students need to be guided towards what they do best and supported to achieve their potential. Employers need to know that there will be a pool of talent able to deliver the opportunities they create. Providers need to be celebrated and respected as the enablers of our skills-based economy,” he wrote.
Skills England
The report outlines a “long list of challenges” to fix a fragmented and confusing skills system.
Significant barriers to growth that Skills England aims to overcome include the fact that more than a third of UK vacancies in 2022 were due to skills shortages, up from 22% between 2013 and 2017 according to official statistics.
For employers, says the report, the qualifications landscape can be opaque, Skills supply may be mismatched against demand, and there are insufficient mechanisms for encouraging employers to invest in skills. And for learners, the pathways into skilled careers are not always sufficiently clear.
The report highlights how employers’ investment in training has been in steady decline over the past decade, with investment per employee down by 19% in real terms, according to the 2022 Employer Skills Survey.
Skills England says more research is needed, but from the available evidence, it suggests this fall in investment has been driven by a range of different causes. These include:
- employers perceiving that their staff are sufficiently skilled
- not having the resources to upskill staff beyond minimum requirements
- a lack of a clear industrial strategy providing a foundation for a linked skills strategy
- strong international labour supply and flexible labour market
- a shift in attitudes, shifting responsibility for upskilling from employers to government, and
- low overall business investment.
Last week, Skills England produced an “Occupations in Demand index”, using seven labour market indicators to rank the demand for each occupation across the UK labour market, as defined by the ONS Standard Occupational Classification (SOC). These indicators include the number of visa applications, online job adverts and annual wage growth.
It identified 39 occupations in “critical demand” and a further 128 showing “elevated demand” across the UK labour market.
Across the UK, more than 2.5 million workers (7.8%) are in critical demand occupations with an additional 12.6m workers (38.5%) in elevated demand occupations.
Skills England said it will launch a series of roundtables and webinars in the autumn to test and refine the initial assessment of skills needs described in the report. It will consult employers and other key organisations to provide initial views on what high-value training should be accessible through the new Growth and Skills Levy.
It will also collaborate with devolved administrations in Scotland, Wales and Northern Ireland, to boost growth and spread opportunities throughout the UK.
Additionally, it will work closely with the Migration Advisory Committee to grow the domestic skills pipeline and reduce the reliance on overseas workers, and the Industrial Strategy Council, so that the UK develops the skilled workforce needed to deliver a clear, long-term plan for the future economy.
Bridget Phillipson, education secretary, said: “This report is a key first step in our long-term strategy to reform our education system. By setting out our vision to meet skills needs, the report invites members across the skills system to use key data insights to inform, challenge and build towards a responsive and collaborative skills system, aiming to align with the future Industrial Strategy.”
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