The government needs to invest £13 billion a year in skills and retraining to support the future economy, the CBI has said. 

In a new report published today, based on analysis by McKinsey and Company and entitled Learning for life: funding world class adult education, the organisaton said that nine out of 10 employees will need to reskill by 2030 at an additional cost of £13 billion a year.

The CBI recommended replacing the apprenticeship levy with a flexible skills and training levy, and transforming job centres into one-stop “jobs and skills hubs”.

More: SMEs call for further action on skills

News: National Retraining Scheme to join National Skills Fund

Background: Boris Johnson to announce ‘Lifetime Skills Guarantee’

Dame Carolyn Fairbairn, CBI director-general, said that the pandemic had “accelerated the need to act now” and that it was time to end the “failed experiment” of the apprenticeship levy. 

She said: “Jobs were already changing with nine out of 10 employees needing to reskill over the next decade. 

“The right skills strategy can help every worker to progress their careers, drive up living standards and level up the country. But a failure to act will leave businesses facing skills shortages and workers facing long-term unemployment. We are at a fork in the road that requires urgent and decisive action.

“The recently announced Lifetime Skills Guarantee is an important step in the right direction, but it is only a start. The government has long promised meaningful reform of the apprenticeship levy but has not delivered it. Meanwhile, the number of apprenticeships continues to fall. It is time to end this failed experiment.”

At the beginning of October, prime minister Boris Johnson announced an “Lifetime Skills Guarantee”, which will give adults the chance to take free further education courses. But the CBI’s research “shows an urgent need to go further and faster to reskill the country’s workforce”.

The report showed that to cope with digitisation and automation, 21 million people will need basic digital skills, 16 million will need critical thinking and information processing skills, 15 million will need skills in leadership and management, 14 million will need interpersonal and advanced communication skills and 9 million will need to build on their Stem (science, technology, engineering and maths) knowledge.

Commissioner at the Independent Commission on the College of the Future and director of Work Advance, Lesley Giles, said: “Today’s new report from CBI shows the rapid change in the nature of work over the coming decade and the huge leap in the levels of lifelong learning that is needed. Our education, skills and employment systems have to adapt to meet this, and collectively with government they must find ways to incentivise lifelong learning.

“Colleges are a critical part of this and embedded in communities across the UK. They must be better recognised and utilised in delivering on this UK-wide priority as a matter of urgency. The Independent Commission on the College of the Future will be setting out its recommendations for how to achieve this later this autumn. ”

CBI’s key recommendations

• Evolve the apprenticeship levy into a flexible skills and training levy to unlock business investment in high-quality accredited training.
• Introduce training tax credits for SMEs to overcome longstanding barriers of capacity and resource in smaller businesses.
• Launch career development accounts to support unemployed people and individuals with the biggest retraining needs.
• Transform job centres into one-stop “jobs and skills hubs” to support workers looking to retrain.
• Extend the lifelong learning loan allowance to adults of all ages and use it to drive increased availability of bitesize, flexible and online learning.