Three challenges for Skills England

The UK suffers from a skills crisis. According to the?Department for Education, between 2017 and 2022 the UK skills shortage doubled. In nominal terms, this represents over 500,000 vacancies, or 36 per cent of all job vacancies. Significantly, the skills shortage is estimated to cost the county?￡120 billion by 2030.

Skills shortages are most acute in?human health and social work, construction, and accommodation and food services. Given the current crises facing both the?NHS?and the?housing sector, a lack of skilled workers in these areas is of particular concern. Furthermore, getting skills development right will be crucial to ensure the Government can deliver on its ambitions.

And so, the recent announcement promising a renewed approach to tackling this issue is welcome.

At the beginning of the week the PM and Education Secretary announced the launch of?Skills England. This new body is intended to address the “fractured skills landscape” and boost skills to help drive economic growth.

The Skills England Bill will transfer functions from the Institute for Apprenticeships and Technical Education to Skills England, providing the body with a broad remit to provide training opportunities and enhance the learning of young people.

Several policy challenges are likely to emerge as this new approach unfolds. We look at three examples below.

Flexibility of the levy

The previous Apprenticeship Levy had specific stipulations and caps on what the money could be spent on. This rigidity frustrated businesses and organisations, who repeatedly?called?for reforms to improve flexibility. Businesses will now have more flexibility to spend levy funds on the training for the skills they need, rather than having to stick to strict guidelines.

Whilst this will certainly please businesses, some?research?suggests that this may inadvertently lead to a reduction in apprenticeship starts as businesses put more of the money into the development of existing, rather than new, employees.

Alignment with industrial strategy

Meeting the skills of the next decade, whether that be through developing green technology or adapting to AI-induced workforce shifts, will be key to ensuring sustainable growth and reducing the skills gap. This means that it will be crucial to align the approach and objectives of Skills England within the context of Labour’s broader industrial strategy and push for growth.

It is welcome, therefore, that Skills England will be expected to align with industrial strategy and work with the Migration Advisory Committee. However, this may be complicated by the fact that the policy vehicle is expected to be a separate body neither fully regional nor fully based in Whitehall.

Devolution

Skills England will also need to work extremely closely with local and combined authorities. The Government has said that it will devolve more powers locally to ensure the right training is happening in the right places.

The theoretical benefits of this are well documented. Local people have insight about what will work for their areas. Giving them powers should, therefore, enable better decision making.

There are early indications from the new Government that it will be willing to be bold on devolution. Furthermore, combined authority powers in adult skills should soon produce an evidence base to help determine the best approach.

However, it is likely that realising these benefits will depend upon substantial devolution so that skills policies can be aligned and integrated with other local public services. This could ultimately look like a?more?fractured skills landscape, not less, as services are tailored to particular local need. Time will tell whether government will be willing to embrace that possibility.