Upskilling to level up

The UK's longstanding skills gap has proved a headache for both the government and employers for a number of years now. Employers often struggle to find potential employees with the required skills for the roles they need to fill. Consequently, the skills shortage has accentuated the divide between London and the south east of England and the rest of the country.

The government recently announced its Lifetime Skills Guarantee, which will create a post-16 and adult education and training system. It is the latest of several schemes aimed at closing the skills gap and levelling up the UK's economy. Here, we consider some of the solutions being proposed.

Damaged labour market

The coronavirus (COVID-19) recession has caused significant damage to the UK labour market and has led to fears of a 'brittle' and 'rigid' UK workforce that lacks the vital skills the economy requires in order to forge a recovery.

This was highlighted recently by research carried out by manufacturers' organisation Make UK, which revealed that a record level of Apprenticeship Levy funds expired in 2020 without being spent by businesses.

The research revealed that £1,039 million in Levy funds expired in the nine months from May 2020 without being spent by firms. Expired funds cannot be used.

Make UK has urged the government to extend the lifetime of the funds from 24 to 36 months for a period of one year in order to help businesses recover from the coronavirus pandemic.

Business groups say that apprenticeships and training schemes are key to unlocking the recovery and building a strong industrial base in the UK.

The Lifetime Skills Guarantee

As part of efforts to upskill the UK's workforce and meet Prime Minister Boris Johnson's levelling up agenda the government is introducing the Lifetime Skills Guarantee. This will create a post-16 and adult education and training system that aims to provide opportunities to train throughout a lifetime.

It includes:

  • a new student finance system, which will give every adult access to a flexible loan for higher-level education and training at university or college, useable at any point in their lives
  • employers will have a statutory role in planning publicly-funded training programmes with education providers, through a 'Skills Accelerator' programme

These build on schemes already underway to update the skills and training offer across the country, including the introduction of new T Level courses and access to free, job-relevant 'bootcamp' courses.

The government says the restructured skills system will put local employers at the centre of skills provision through the 'Skills Accelerator programme'.

The programme will build stronger partnerships between employers and their local Further Education colleges, or other local training providers, ensuring that provision meets local needs in sectors including construction, digital, clean energy and manufacturing.

The Kickstart Scheme

The government's £2 billion Kickstart Scheme opened last year for employer applications.

It aims to create work placements for young people who are at risk of becoming unemployed for the long-term. Businesses can join the scheme, with the government paying employers £1,500 to help set up support and training.

Selected out-of-work young people will be offered six-month work placements for at least 25 hours a week to help them gain experience, skills and confidence. The scheme is designed to be a steppingstone to further employment and runs until December 2021.

However, the Confederation of British Industry (CBI) has urged the government to extend the Kickstart Scheme to help young people who are bearing the brunt of the subdued job market.

The CBI says the extra lockdown at the beginning of the year means it needs to stay open for longer to allow businesses the time to deliver opportunities for young people.

Levelling up

In creating a skills system which is fit for the future, the government needs to ensure that the ambitions to drive up the quality of post-16 education and training to meet employer needs are made a reality.

International skills benchmarking shows the UK needs to catch up on other major global economies in valuing high-quality skills to help drive economic competitiveness and productivity.

By raising standards for young people and employers to not only help attract more inward investment to boost job creation and economic recovery but also support the government's levelling up agenda.

Providing opportunities

As we continue down the roadmap out of lockdown businesses are looking to the future. It is vital they invest wisely, using the available government support, to develop a skilled and motivated workforce.

We are happy to advise on the best approach to suit your circumstances. Please contact us for more information.

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