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Why skills training is vital to increasing growth

Reforming apprenticeships and working with local government are both part of the solution.

The UK is searching for ways to grow its economy after Brexit, and amid a cost-of-living crisis and a challenging geopolitical environment. Rishi Sunak started 2023 with a new growth plan, while Keir Starmer has pledged that a future Labour government would make the UK the fastest growing economy in the G7. The New Statesman and Amazon UK convened a panel at the New Statesman‘s Politics Live conference featuring Bridget Phillipson MP, the shadow education secretary, Bim Afolami MP, Eugenie Teasley, head of impact at Amazon UK, and Jenny Stanning, external relations director at Offshore Energies UK. The panel focused on the role of skills in achieving a better economy.

“I do think we need to have a shift as a country in how we approach skills education,” said Phillipson. She outlined that Labour wants to see a shift to a lifetime learning approach, where people can develop new skills as they progress in the workplace. To that end, she wants to reform the apprenticeship levy so that up to half can go towards supporting wider skills training.

Phillipson also said Labour wants to devolve adult education spending to local areas and regional authorities to give them a greater say in how budgets are spent to meet local employment needs. “Labour would build a national skills task force, Skills England, that would bring together that local and regional push that we need to see around skills connected to a wider national agenda that connects to our industrial strategy,” she said.

“I agree that skilling people needs to be done by companies, needs to be more flexible, and dynamic,” Afolami responded. “I agree there’s a place for a wider macro strategy alongside that.” However, he felt there needed to be a greater focus on productivity, which has lagged behind the EU, US and Japan. “I think as a country, we need to focus on manufacturing. If we do that, we deal with a lot of the productivity problem,” he said. Afolami added that manufacturing jobs could be spread out more across the country, levelling up and bringing jobs to people rather than them needing to move.

Offshore Energies UK is the leading trade association for the offshore energy industry, comprising 400 members across the UK that operate oil, gas and wind installations. “There’s real potential in the oil and gas workforce to support the workforces of the future as well as we go forward,” Stanning explained. According to the organisation’s research, the industry supports 200,000 jobs, of which 90 percent are transferrable to renewable energy. This means the appropriate skills training is vital to ensuring decarbonisation of energy.

“At Amazon,” Teasley said, “50 per cent of those who go and get a job in our operations teams come from either education or unemployment, which is huge. And 95 percent of them say that the reason they join Amazon is because of the skills development opportunities and the progression.” The company has had around 3,000 apprenticeships over the last five years and several other skills training programmes for employees in the company and its branches in tech, creative industries and retail.

Teasley was supportive of reforming the apprenticeships levy to provide more flexibility, especially as many smaller employers struggle to make the best use of it. Amazon UK has been using transfer of funds, giving apprenticeships levy money to companies in its supply chain and local areas to support wider skills development, she explained.

Phillipson agreed that greater cooperation and common purpose, for example through Labour’s proposed Skills England, was needed to really make progress on skills. “I think, with greater flexibility, with short courses with greater employer and trade union involvement, we can do a lot more to make sure that we’re giving people opportunities right, throughout their working lives,” she said.

“The offshore energy industry signed a transformational deal with the UK government called the North Sea Transition Deal, and part of that was around creating new jobs, particularly in transition,” explained Stanning. Out of that has come an integrated people and skills plan, which has highlighted the need to harmonise standards and ensure skills can be recognised and taken into new renewables jobs.

Afolami explained that he wanted to see more devolution of finances to local areas to ensure that decisions are guided by local knowledge and needs, with overall strategy set by national government. “I am just worried that if we have too much control from central government, we actually stifle the thing we’re trying to generate,” he said.

“My favourite partnerships are where you have public, private and third sector all working together,” said Teasley. She believes that skills policy is an area where there is the broad consensus, which means this can happen and work well. Amazon UK has been working over the last three years with the British Chambers of Commerce to deploy a £10m fund to plug regional skills gaps, but this would be more effective with more knowledge and understanding of what those skills gaps are in each area.

Questions from the floor covered the abolition of the careers service, house-building, disability and childcare. Afolami said that he wanted to see greater parity between “purely academic”, mixed academic and vocational, and purely vocational learning, and that young people shouldn’t have to get heavily in debt to get the education they need for work. Phillipson agreed that better careers advice and access to work experience would be an important part of Labour’s approach to employment. Stanning said that the offshore energy industry was working on becoming a more inclusive sector but acknowledged there was lots of work to do.

Phillipson said that Labour’s first step to reforming the childcare system would be universal breakfast clubs. This is key, she said, “as a labour market intervention supporting parents to work”.

[See also: We must focus on skills to boost the economy]

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