The government-commissioned Leitch Review was tasked in 2004 with considering the UK’s long-term skills needs. The UK has had 14 years of unbroken growth and the highest employment rate among the G7 nations. Its skills base has also improved significantly in the past decade.
Despite this, the skills of UK workers remain weak by international standards, hindering productivity, growth and social justice.
The Leitch Review found that, even if the UK meets the challenging targets the government has set, our skills will still lag behind that of many comparator countries in 2020. We will be running to stand still.
The global economy is changing rapidly. Emerging economies such as India and China are growing dramatically. There is increasing technological change. And there is a greater degree of global migration. Unless the UK can make its skills base one of its strengths, UK businesses will find it increasingly difficult to compete.
As a consequence of low skills, the UK also risks creating a lost generation, cut off permanently from the labour market and facing increasing inequality. The best form of welfare is to ensure people can adapt to change. Where skills were once one of several key levers for prosperity and fairness, they are now increasingly the key lever. Radical change is necessary and urgent.
UK vision and ambitions
The Leitch Review recommends that the UK commits to becoming a world leader in skills by 2020, whereby it ranks in the upper quartile of the Organisation of Economic Co-operation and Development’s (OECD) league table of skills (see box).
This means doubling attainment at most levels.
- 95% of working age adults to achieve functional literacy and numeracy (up from 85% literacy and 80% numeracy today). A total of 4.5 million more adults with functional numeracy and 2.2 million more adults with functional literacy. This means more than 700,000 people attaining basic skills per year, compared to 110,000 today.
- More than 90% of workforce adults to be qualified to at least Level 2, achieving 95% when feasible (up from 70% today). Reaching 95% would mean 1.7 million more adults with Level 2 and 500,000 people achieving Level 2 each year, compared to 210,000 today.
- Shifting the balance of intermediate skills from Level 2 to Level 3 and improving the esteem, quantity and quality of intermediate skills, including asking Sector Skills Councils (SSCs) to set an ambitious target of doubling apprenticeships to 500,000. Overall this means 1.9 million more adults with Level 3 and more than 300,000 people achieving Level 3 each year, compared to 130,000 today.
- More than 40% of the adult population qualified to Level 4 and above, increasing the growth rate of people with high skills, up from 29% today. This means 530,000 people a year, compared to about 250,000 at present.
Four principles should underpin delivery:
- Shared responsibility for delivering the ambitions. Employers, individuals and the government must improve their efforts, through increased investment and action. Employers and individuals should contribute most where they derive the greatest returns. Government investment should be focused on ensuring a basic platform of skills for all, increasing access and tackling market failures.
- Focus on economically valuable skills. Skill developments must provide real returns for individuals, employers and society. Where possible, skills should be portable to deliver mobility in the labour market for individuals and employers.
- Demand-led skills. We must ensure that the skills system meets the needs of employers and individuals.
- Build on existing structures. Don’t chop and change. Improve the performance of the current structures through simplification, better performance management and clearer remits.
The prize for achieving this ambition is great. The Leitch Review estimates an overall net benefit of £80bn over 30 years. This would come from a boost in the productivity growth rate of up to 15% and an increase in the projected growth in the employment rate of about 10%. Social deprivation, poverty and inequality will also diminish.
The main recommendations of the Leitch Review can be summarised as follows:
- Increase adult skills across all levels. Progression towards ‘world class’ status is best measured by the number of people increasing their attainment. The extra cost of realising this ambition will build up over time to between £3bn and £4bn per year by 2020.
- Route all adult vocational skills funding through Train to Gain and Learner Accounts by 2010. On adult skills, streamline the role of the Learning and Skills Council to become a funding body and promoter of provider competition.
- Strengthen employer voice. Rationalise the existing bodies, strengthen the collective voice and better articulate employer views on skills by creating a new Commission for Employment and Skills, accountable to the government and the devolved administrations, and responsible for managing the employer voice in the skills system within a framework of individual rights.
- Increased employer engagement and investment in skills. Reform, re-license and empower SSCs. Deliver more economically valuable skills by only allowing public funding for vocational qualifications approved by SSCs. Expand skills brokerage services.
- A new ‘pledge’ for employers to train all eligible employees up to Level 2 in the workplace. If the improvement rate is insufficient by 2010, introduce a statutory entitlement to workplace training in consultation with employers and unions.
- SSCs and brokers to work to increase employer investment in Level 3, 4 and above qualifications in the workplace. Extend Train to Gain to higher levels, double apprenticeships, and improve employer engagement with universities.
- Increase people’s aspirations and awareness of the value of skills. Create high profile, sustained awareness programmes. Rationalise existing fragmented services and develop a new universal adult careers service, offering a skills ‘MoT’.
- Create a new integrated employment and skills service locally, to increase sustainable employment and progression. This will include a new programme for basic skills improvements to help disadvantaged people find and stay in work and a national network of employment and skills boards.
- The Leitch Review also emphasises how critical the government’s reforms to GCSEs are to embed functional literacy and numeracy and how important it is that the new 14-19 diplomas succeed. Once post-16 school participation increases towards 90%, the government should consider changing the law so all young people remain in education or training up to age 18.
These recommendations will deliver a strong positive impact on the UK’s economic and social performance.
Workless people will have a better diagnosis of their skills needs and greater support as they make the transition into sustainable work.
Low-skilled workers will have more chances to gain Level 2 and basic skills in the workplace through Train to Gain, and more control over flexible learning through their learner accounts.
Skilled workers will have more opportunities to develop in the workplace, through apprenticeships, degrees and management and leadership programmes.
Small businesses will have better access to increased levels of training for employees, including managers. This training will have increased relevance, so that management skills and profits will improve.
And employers will have more strategic influence over the skills strategy and system, greater incentives to invest in skills across all levels, access to brokerage, and increased public support for workplace training.
The UK will be able to compete with the best in the world. Productivity and employment rates will increase. Poverty and inequality will decrease.
The Leitch Review presents the policy framework for delivering world class skills. The government and devolved administrations need to act urgently to develop detailed implementation plans.
There is no time to waste.
For more information visit the following websites:
Where the UK stands in the skills league table
The UK is currently ranked:
- 17th out of the 30 OECD countries in the proportion of the adult population who have low or no qualifications (equivalent to less than a Level 2 in the UK), with 35% at this level, more than double the proportion in the best performing nations, such as the US, Canada, Germany and Sweden.
- 18th in the proportion with intermediate qualifications (Levels 2 and 3) with 39% qualified to this level, compared to more than 50% in Germany and New Zealand.
- 15th in the proportion who have high qualifications (Level 4 and above), with 27% qualified to this level. This compares well internationally but it is still significantly behind the US, Japan and Canada where the proportion stands at about 40%.
If the UK meets its current stretching skills targets by 2020, the UK’s relative position will improve, but it will be far from world class. In 2020 the UK will:
- Gain one place to 16th out of 30 in low skills, with 11% of those aged over 25 still lacking the equivalent of a basic school leaving qualification, more than double that of the best performing OECD countries.
- Rise five places to 13th in intermediate skills, with 46% of those aged over 25 qualified to this level, but still far below the levels in Germany, New Zealand and Finland among others.
- Rise two places to 13th in terms of those aged over 25 who have attained high qualifications, with 43% compared to more than 50% in the US, Canada, Sweden and Japan.