The UK is facing a crisis of skills, across various policy areas. From older workers looking to retrain, from younger people learning the skills of the future, staging the right interventions will be mutually benefiting employers, employees, and the wider economy.
Spotlight asked experts across the skills sector about where the government needs to go in terms of its skills strategy.
Reverse the decline in apprenticeship training
Jamie Cater, employment and skills lead, Make UK
Since 2016-17, the number of people starting an apprenticeship in engineering and manufacturing has fallen by 42 per cent, despite growing demand for workers across a range of job roles. From trade roles such as welders and toolmakers to professional occupations in engineering, the success of the government’s industrial strategy rests on improving investment in skills training for the current and future UK workforce. Only then can the government look to deliver on its missions to achieve economic growth, net zero and improved productivity.
Reversing the decline in apprenticeship training should be the priority.
Forty-seven per cent of manufacturers say that their inability to access the right training provision locally is the main barrier they face to developing their skilled workforce. Funding for training providers to offer key manufacturing apprenticeships has not increased in line with inflation in recent years, which has led to many engineering and manufacturing courses being scaled back or scrapped altogether. This has constrained employers’ ability to invest in the training they need as it has become increasingly difficult to find the relevant courses. Targeted financial support for providers to sustain apprenticeship training related to the industrial strategy’s critical occupations – especially where there are already shortages of skilled workers – would be an effective first step.
Better focused support for employers to recruit apprentices would also help to address the decline in starts. The government has been right to start developing a closer link between immigration and skills policy. Labour shortages in manufacturing have not been helped by the combination of falling investment in training and the introduction of new restrictions on employers’ ability to recruit skilled workers from overseas. The UK should follow the example of countries like Australia and provide financial incentives for employers to train apprentices in shortage occupations
Fix the foundations: literacy, numeracy and digital
Stephen Evans, chief executive, Learning and Work Institute
One in five adults have low literacy or numeracy, skills as fundamental as understanding the dosage instructions on an aspirin packet. Millions more have low digital skills. That holds back people’s chances at work, access to public services and ability to participate fully in society.
Learning and Work Institute modelling shows that local divides in these essential skills can drive economic divides: 38 per cent of adults in Heslington in York and Wivenhoe Cross in Essex have low literacy or numeracy, compared to just 15 per cent in Didsbury West and Chorlton in Greater Manchester.
This is perhaps not a huge surprise given austerity cuts to adult education. As a result, 63 per cent fewer adults are improving their English and maths compared to ten years ago. Employers are investing less, too.
The latest OECD survey shows welcome improvements in literacy and numeracy for young people. But for adults, the scores have gone backwards.
We can’t fix this just by focusing on young people: four fifths of our 2035 workforce have already left education. For too many, learning English and maths is a one-shot chance at school.
We need to inspire adults to want to learn by showing the benefits for life and work. We should actively promote literacy, numeracy and digital skills learning at the GP’s surgery, shopping centre, school gates, workplaces and community centres. We need to make it easier by creating learning that fits around work and home life, and by building literacy, numeracy and digital skills into apprenticeships and other learning too.
Helping adults with these basics can unlock doors: making it easier to help children with their homework, opening up a new career or promotion, helping to access health services or financial support. Literacy, numeracy and digital are foundations for life, work and society. It’s time to fix the foundations
The future is coming fast, our kids must be ready
Nimmi Patel, head of skills, talent and diversity, techUK
In 2019, we asked parents and guardians working in the tech sector a simple question: are schools preparing children for the future of work? Five years on, with AI and automation revolutionising entire industries, we asked again. What we found paints both a hopeful and concerned picture.
On a positive note, our 2024 survey shows that 73 per cent of parents and guardians believe that AI and automation will create opportunities, removing mundane tasks and opening new doors. Despite the suggestion that AI will take away jobs, 64 per cent of parents feel optimistic about their children’s job prospects.
But beneath the surface there’s a growing unease that our education system is failing to prepare young people for a digitally minded future of work. Only half of parents feel somewhat confident that schools are preparing children for future jobs.
Meanwhile, over a quarter (27 per cent) are outright sceptical. The divide becomes even bigger when we bring in questions about fostering essential human skills like critical thinking and problem solving. A staggering 70 per cent believe schools are falling short – that’s a jump from 65 per cent in our 2019 survey.
Worryingly, despite the growing need for technical skills, 59 per cent of children are not pursuing computing qualifications. That is despite over two thirds (69 per cent) of parents recognising these qualifications as important for future careers. Girls, in particular, remain under-represented in tech education. The low uptake of computing qualifications by girls is reflected in how effectively parents think schools encourage tech education. Just 34 per cent feel schools are somewhat effective at encouraging tech for all genders, while 25 per cent don’t trust them to do so.
If we want the next generation to be prepared for a world where technology is reshaping everything, we can’t afford to keep clinging to outdated educational models. The future is coming fast, and it’s up to us to make sure our kids are ready for it.
Make training work for smaller firms
Tina McKenzie, policy chair, Federation of small businesses
Meeting the skills needs of small businesses is key to a productive and growing economy. Yet gaps exist, hampering productivity. Our research shows almost one in five small businesses say a lack of appropriately skilled staff is a top barrier to growth over the next year.
The hurdles to investing in skills include the rising cost of employment; concerns about poaching of upskilled staff; and the cost of employees being away from work for training.
With a new government, we hope this will be an opportunity to get to grips with the challenges small firms face. Central to this is further incentivising training through the tax system, via either corporation tax or National Insurance, upping the relief for employees with lower qualifications.
Skills bootcamps can be incredibly useful as a quick fix for skills shortages and should be maintained long-term. Line-management skills bootcamps would also help microbusinesses retain top talent.
Apprenticeships help small firms tackle skills shortages within their teams – government must work to increase the number of starts, especially to help deliver the Youth Guarantee. Helping to offset a small firm’s lack of time and resources by re-implementing the £3,000 incentive for taking on an apprentice would be beneficial.
Forty-six per cent of small firms lack the skills to integrate AI within their business. Policymakers should be addressing the AI skills gap and introduce programmes to ensure small business owners make the best use of it.
Skills England must show brains and brawn
Andy Westwood, policy director, The Productivity Institute
Tackling the skills system is essential to the government’s missions on growth, housebuilding and improved public services. It is also key to delivering the industrial strategy.
Much of the responsibility falls to a new body, Skills England, which must bring together colleges, universities and apprenticeships and make them function as a collective, joined-up system. It will also need to coordinate with other parts of the wider system that lie beyond the Department for Education, such as adult education devolved to mayors, the Department for Work and Pensions’ employment programmes, and R&D spending by the Department for Science, Innovation and Technology.
Reform should focus on universities and colleges, as the most important providers of skills. Currently these institutions are struggling to make ends meet. The Office for Students says that nearly three quarters of universities could be in deficit this year. Decisions taken at the Spending Review will be critical.
Employers and individuals must play their part, too. Employer investment in training has been falling steadily over recent years. Skills England must tackle this too if the economy is going to grow.
Skills England must be the strategic brain of a broader and better coordinated system, able to understand, take signals and then transmit priorities to the day-to-day activities of colleges, universities and other providers. But it will need to have some brawn too. That means not just expertise for forecasting and collecting data but also levers over regulation and funding to protect our colleges and universities.
It’s time to address the city skills mismatch
Andrew Carter, chief executive, Centre for Cities
Many cities across the UK have experienced a “jobs miracle” since 2010. Employment rates in British cities compare favourably with cities in other G7 countries.
But despite their success in creating lots of jobs, many of Britain’s cities in the north and Midlands – particularly the big cities such as Birmingham, Newcastle and Liverpool – have been much less successful at creating jobs in higher-skilled, knowledge-based activities compared with big cities in the other G7 countries.
A significant share of the adult population in Britain’s big cities have no formal qualifications – in Birmingham and Liverpool 10 per cent fall into that category, for example.
At the same time many cities also have more high-skilled people living and working in them than there are high skilled jobs available. This creates a mismatch between the supply of and demand for skills.
The shortage of this cutting-edge economic activity is one of the reasons seven of the ten largest British cities are ranked in the bottom 20 for productivity out of a total of 112 large G7 cities. If Britain used the skills it has more effectively, this would make a big difference to its productivity, and even help us to compete at the top of the G7’s growth rankings.
Tackling this mismatch requires interventions to boost the demand for skilled workers – innovation, investment, transport – in these cities as well as interventions to increase the skills of those with very few formal qualifications.
This article first appeared in our Spotlight Skills supplement of 7 February 2025.
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