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Can Labour’s skills policy break the “class ceiling”?

Keir Starmer has pledged to boost social mobility, but the success of previous interventions is mixed.

By Harry Clarke-Ezzidio

It is harder to climb the social ladder in Britain than in many other developed nations. According to research by Goldman Sachs from 2018, Britain is one of those countries where incomes are most likely to stay the same across generations. And this year, the Institute for Fiscal Studies (IFS) found that it is harder now than at any time in the past 50 years for people born in lower income families to improve their socio-economic status. 

Labour has pledged to break through “the class ceiling” with its “national mission” to “break down the barriers to opportunity”, while another of its missions promises sustained growth that will make “everyone, not just a few, better off”. Spending on skills and apprenticeships is often billed not only as a driver of growth, but as a lever of increased social mobility. But how far can a skills agenda go in helping to achieve more equal opportunity? 

Research on the specific impact of adult skills provision is sparse, and the evidence is mixed. Government reviews in 2006 and 2016 looked at the link between skills and social mobility, but neither provided concrete evidence that the former leads to the latter. Nor did they focus specifically on adult skills. 

If Labour connects skills policy with its aims on social mobility, regional governments ought to play a central role. Adult skills-spending is one of the few universal policy areas that metro mayors across the country control. Since 2017, regions with Mayoral Combined Authorities (MCAs) have been responsible for spending their allocated Adult Education Budget (AEB), which was once exclusively held and distributed by central government. (In 2022-23, 60 per cent of England’s total AEB was handed to MCAs.) 

Regional leaders, who know their areas better than civil servants or Labour Party officials in SW1, believe they are best placed to decide on local skills spending. Dan Norris, mayor of the West of England, wants Keir Starmer to give him more power over skills and jobs programmes if Labour forms the next government. When he won the mayoralty from the Conservatives in 2021, Norris told Spotlight, the skills programmes his predecessor Tim Bowles had devised were “not necessarily the most productive [for the] region”. The initiatives reminded Norris of programmes he used to run in his former career as a social worker, mostly focusing on engaging with “people who were quite distant from the job market”, such as those struggling with mental health issues. Initiatives to upskill people already in work, improve their prospects and wages and meet the needs of employers in the region, were limited. 

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Norris has now changed focus. Support for people struggling to get into work “isn’t really a jobs challenge – it’s another kind of challenge that other parts of the system should deal with”, he said. The West of England Combined Authority now offers courses “futureproofing” skills for vocational workers, including electricians, welders and retrofitters, but also filling current shortages in areas such as social care and bus-driving.

One area of concern for Norris is that the University of Bristol has some of the lowest acceptance rates for white working-class males in the country. This reflects a wider trend. According to a 2021 education committee report, in 2018-19 the percentage of white British pupils on free school meals who start higher education by 19 was the lowest of all ethnic groups, aside from the traveller community.   

While Norris wants university attendance rates to improve, he also wants to introduce other kinds of training for people to build skills and get jobs in the region. Norris points to the £4bn gigafactory being built by Jaguar Land Rover in Somerset, set to open in 2026, as an example. The factory will be located in an area with “historically very high unemployment, particularly among working-class people”, said Norris. Locals not at university “could jump from where they are now, to [acquiring] the skills needed”.

Across the country “there’s a variation between the combined authorities in terms of the impact they’re having” through their skills policy, said Stephen Exley, head of policy, PR and public affairs at the LTE Group, a training and further education provider. A big part of that, he suggests, is down to the large variation of funds available to each MCA, with more funding for regions with big cities. In 2023-24, for example, Greater London and the West Midlands Combined Authority have increased their AEB budgets by 13.5 and 10 per cent respectively, on top of the funding they get from central government. Meanwhile MCAs in less affluent areas – Tees Valley; West of England; North of Tyne –“have less wiggle room in their budgets”, said Exley, and will not increase them from the baseline figure. 

These disparities, Exley believes, could hamper efforts to balance the UK’s unequal economy: “Not only do you risk having those funding gaps between the devolved areas and non-devolved areas [increase], you also have the risk of gaps emerging between the different devolved areas.”

If the link between funding for skills and equality of opportunity has yet to be fully evidenced, the connection between regional inequalities and poor social mobility seems clearer. Last year’s IFS study found that people born in London are more likely to earn higher wages than their parents, compared with those from big northern cities such as Manchester, Leeds and Newcastle. 

In 2019, the government’s Social Mobility Commission (SMC) asked whether a decrease in adult skills investment was hurting social mobility. The SMC noted research which suggests that, while there may be a “small positive relationship” between participating in adult educational classes and subsequent qualifications gained from them, the “magnitude of this relationship varies widely”. Studies on “the relationship between adult skills and social mobility have been similarly mixed”, the report found. Any social mobility gains from adult learning become apparent in the medium-term, and these tend “to accrue most to younger adults (aged less than 25)”. 

What is clear is the appetite for education. Nearly half of adults (49 per cent), a record high, are either currently learning or have done so within the past three years, according to research from the Learning and Work Institute. But this has coincided with a decline in funding for adult further education: despite a boost announced in the government’s 2021 Spending Review, total adult-skills spending in 2024-25 will still be 22 per cent below 2009-10 levels. The money that is held by MCAs is sometimes hard to spend, too, especially on skills and training. While the AEB is devolved to local leaders, they “do not have full responsibility” over spending regarding skills and jobs, Andy Street, mayor of the West Midlands, said in a 2022 Institute for Government report. Some interventions, including the National Careers Service and technical and lifetime skills education, were controlled and spent in “quite a fragmented way” by Whitehall, with local leaders having little overall influence, Street said. 

Meanwhile Britain’s spending on adult skills is relatively low by international standards. The SMC’s 2019 report warned that this could “disproportionately affect adults in lower social groups and other disadvantaged groups”. These cohorts are already the least likely to access training initiatives, compared with those from more affluent and educated backgrounds. 

More money aside, Norris believes “radical” devolution could counter Britain’s adult skills bottleneck. He wants to create a holistic West of England employment service that includes upskilling opportunities, but which would also help the unemployed back into the workforce. This would mean taking responsibility (and corresponding budgets) from various central government departments: the National Careers Service and National Skills Fund (overseen by the Department for Education) would be combined into a single, local service in conjunction with Jobcentres (run by the Department for Work and Pensions). 

Gordon Brown made this recommendation in his 2022 report for Labour’s Commission on the UK’s Future. The party has adopted some of those ideas in its proposed Take Back Control legislation, which if Labour wins the election will devolve more powers (including regarding skills) to regional leaders across England. 

Norris believes such devolution could boost the economy and turn the UK into a place where it is easier to move socio-economically. He advises caution, however – and thinks the combined authorities could be where Labour tests out new ideas. The party needs “ambitious plans, but we should trial them and roll them out regionally”, he says, “and metro mayors would be a very good way of doing that”.

This article first appeared in our print Spotlight report on Skills, published on 2 February 2024.

[See also: English councils are facing an “out of control” financial crisis]

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