Getting the skills system right is essential if we are to deliver on key national commitments – from building millions of homes to seizing the opportunities of the green economy and giving people genuine hope for a better future through work. The system we inherited is deeply flawed and will take time to repair, which creates a significant political challenge.
Unemployment has risen, long‑term sickness remains stubbornly high at 2.8 million, and nearly one million young people are “NEET” – not in education, employment or training. Labour must confront these deep structural problems through welfare and skills reforms that help people move into secure, well‑paid jobs and offer a better life than relying on benefits.
Major investment is already being directed into programmes designed to tackle these issues, including the Youth Guarantee and the WorkWell scheme. These initiatives address long‑term barriers and reflect Labour values, but we must also respond to concerns that the cost of employing staff – particularly young people – has become a barrier to hiring.
The Milburn review on tackling the NEET challenge will report in the summer. Ahead of that, the Skills Commission’s Earning or Learning report, which I’ve been involved with as co-chair of the APPG for Skills, has already set out interim recommendations. Our findings show that place‑based approaches, early intervention and targeted support for the most marginalised young people deliver the strongest outcomes. The challenge, as always, is securing the upfront investment required, even when the long‑term economic and social benefits are clear.
There are steps the government can take that do not require significant new spending. Simplifying systems, improving engagement with employers, and giving businesses more flexibility would make a meaningful difference. The new Growth and Skills Levy, alongside free apprenticeship training for SMEs, could be transformative in constituencies like mine where over 90 per cent of businesses are small or medium‑sized. But we urgently need clarity on how the levy will operate in practice, which should be done with industry.
Another priority is ensuring that vital education reforms retain momentum despite skills policy now being split between the Department for Work and Pensions and the Department for Education. Careers advice must reach children earlier in schools and promote technical pathways, as well as being delivered through job centres. Apprenticeship reforms must balance the need to reduce NEET numbers with ensuring frameworks enable progression to higher‑level qualifications, too. The new Lifelong Learning Entitlement has the potential to boost productivity but needs to be more ambitious to deliver the culture shift that will encourage more investment in the workforce.
Finally, no overview of the skills landscape would be complete without touching on artificial intelligence. AI is neither a cure‑all nor an apocalyptic threat. I have seen the benefits of AI first hand in local businesses and public services in reducing administrative workloads and allowing workers to focus on the human‑centred aspects of their roles. All relevant parties must stay alive to both the opportunities and risks of this new and evolving technology, as legitimate concerns remain about its impact on jobs, particularly graduate entry routes alongside the wider pressures facing universities.
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