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'The perfect storm in the skills system is damaging hopes of economic recovery'

David Hughes, chief executive of the National Institute of Adult Continuing Education, writes:

If analysis solved problems then we would have the best skills system in the world. The last few weeks has seen a plethora of reports analysing what is wrong with skills, nearly all of them setting out a common analysis of how our system fails employers and the economy. The UK Commission for Employment and Skills Growth Through People report is the latest.

All of them have great analysis and well-thought through proposals for action. Perhaps surprisingly, most of the reports agree that the current system is not addressing the productivity and pay problems we face over the next decade. I agree, hence the call in the Niace general election manifesto for a commission (perhaps a Royal one) to provide leadership and solutions.

The analysis is stark. There are wide skills gaps and skills shortages, with low productivity sitting alongside millions of people stuck in low-paid work or not able to access full-time work. We also have an ageing population and need more people in work to find ways to improve their skills and stay in work longer. The skills system, meanwhile, focuses mostly on the transition to work rather than supporting people in work. There has been a collapse in participation in part-time higher education, Level 3 and 4 training and a reduction in employer investment in training over the last five years. This ‘perfect storm’ is damaging the prospects for a sustained and vibrant economic recovery and limiting the horizons for millions of people who want to get on at work. 

None of the reports, though, look at the skills system from the perspective of learners or would-be learners. That's not unusual, but misses a whole dimension of analysis which will need to be carried out if we are to design and deliver a better system for everyone. We cannot simply analyse the deficiencies of the skills system by pointing to what it does not deliver for employers and the economy; we must also ask why people are not investing their own time, money and ambitions in more learning, throughout their lives. We should take the time to ask them and then find ways to encourage a new optimism about skills investment at all ages and all levels of learning.

I am privileged to meet hundreds of successful learners each year through our research and development work as well as at Adult Learners' Week celebrations. What I hear corresponds to the findings of the Niace annual participation survey, which provides invaluable insight into what people across the UK feel and think about learning, as well as data about their participation and achievements. Four big issues shout out at me from our work with people of all ages: there is low demand from people in work for skills; a lack of investment in low-paid workers by employers; Government investment is too rigidly focused on big qualifications rather than skills attainment; and, people have too little say and control about what, where and how they learn.

There are solutions to this. The UKCES itself is a good example of the social partnership approach we need nationally and across the country to deliver a new localism where skills and employment services are better joined up. This will allow employers to work with colleges, universities and other providers to find the skills solutions which will support better progression in work and higher productivity.  A key part of this new localism must be the ceding of power from Whitehall to provide true freedoms for colleges, universities and training providers to be more creative in supporting skills delivery.

I would argue strongly that we then need to find out more about what motivates people back into learning at any age. From our work, we believe that people should have more power to access the learning and skills they need through measures like Skills Accounts, Career Reviews and an Apprentice Charter. These are the actions which will incentivise people to invest in their own learning and to participate in workplace improvements. Their investment is vital because public funding for skills and learning will not meet the need.

We also need every employer to invest more in the skills of all of their workforce. Most employers want staff who want to carry on learning because then jobs and working practices can change and productivity really can improve. With 90 per cent of the current workforce still in work in 2024 we know that their skills will help or hinder improvements in productivity. But too many employers still believe that they can bring in young people with the skills they need; they are mistaken and emerging skills shortages prove that.

This week’s Autumn Statement is another good example of opportunities missed. Despite a number of smaller and promising announcements, the longer-term challenges for our economy were ignored. Two things shout out at me. Firstly, despite acknowledgement that tax returns are lower than hoped because of lower pay, the link between skills, productivity and pay were not acted upon. Secondly, the welcome capital investments in roads, flood prevention and the ‘Northern Powerhouse’ were not accompanied by the skills investments we know are needed to ensure sustainable local growth.

Sustainable and inclusive economic growth will only come about in the next decade if we can motivate and incentivise more people to invest in their own skills, matched by and supported by employers and the government. We must give confidence to learners and employers that their investment of time and money will result in better jobs, higher pay and increased productivity.


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