Even before the pandemic-induced economic crisis, the UK was dealing with stagnant productivity and a major skills gap. In 2018, research by the Open University found that the skills shortage was costing employers some £6.3bn a year in additional training for lower-skilled staff, temporary staffing, and other costs. Some 91 per cent of UK organisations reported having struggled to find people with the right skills over the previous 12 months.
As the economy evolves, this will only become more acute. In 2020, a CBI report found that nine in ten workers will need some form of reskilling by 2030.
Alongside its oft-repeated rhetoric on levelling up the UK economy, this government has also made a point of its commitment to boosting further education (FE) and skills development to plug this gap.
Last year, Education Secretary Gavin Williamson announced that the government was dropping the commitment to getting 50 per cent of school-leavers into university one year after it was first achieved, and pivoting to focus on vocational education. In a speech on this new direction last July, Williamson derided the “inbuilt snobbishness” towards FE and pledged to work towards a “world-class, German-style further education system”.
The government’s Skills for Jobs white paper, published in January, fleshed out the ideas floated in that speech in more than 30 proposals, some building on old ideas.
Key among the new ones were Local Skills Improvement Plans, which will be piloted in 2021, backed by a £65m Strategic Development Fund, and a greater role for employers in designing vocational courses. The latter is based, according to the white paper, on German best practice.
But these reforms cannot paper over long-term funding gaps. According to the Institute for Fiscal Studies, FE “has seen the largest falls in per-pupil funding of any sector of the education system since 2010-11”. Per student, funding for FE and sixth-form colleges fell by 12 per cent in real terms to 2019–20.
As the Centre for Cities think tank outlines in its latest Cities Outlook report, if investment in further education is essential to economic recovery and “levelling up” in the long term, then any boost to FE will require the funds to make up that gap, and make up for lost time.
This article originally appeared in the Spotlight report on Skills and Apprenticeships. You can click here for the full edition.