Doubt cast on government skills reform plan by public spending watchdogs

The National Audit Office and Public Accounts Committee outline concerns over whether skills reform plans will work.

The National Audit Office and Public Accounts Committee outline concerns over whether skills reform plans will work.

Warnings have been issued by public spending watchdogs that the government’s skills reform plans may be no more successful than previous attempts to provide the country with the skills it needs.

The National Audit Office and the Public Accounts Committee have said that education chiefs need to step up their efforts amid fears current policies for an employer-led system may not work.

The ‘developing workforce skills for a strong economy’ paper published today by the NAO has called on the Department for Education to put together an implementation plan outlining incentives for employers and learners, how central and local government will work together and metrics the government will use to measure progress.

It has also requested further thought on how barriers to skills training can be addressed and issues around reskilling or upskilling older workers who form a growing part of the UK workforce.

The NAO’s report said that the government “has a reasonably good understanding of current skills needs,” and recognised that “spending on adult education, apprenticeships and other skills programmes has been rising and totalled £3.9 billion in 2021-22”.

But it warned that the “DfE considers that the skills system will be most effective if it is led by employers, but there is limited assurance that the conditions are in place for this approach to be implemented successfully”.

It explained that the model will rely on employers having the capacity and willingness to become more involved in developing local plans, and evidence to date meant it was unclear what assurance is in place for that.

Gareth Davies, head of the NAO, said: “To help people achieve their potential in the workplace and drive economic growth, it is essential that government and employers support opportunities for learning and development.

“The government has taken sensible steps to address skills shortages in recent years, but the challenges it faces have increased.

“There is a risk that, despite government’s greater activity and good intent, its approach may be no more successful than previous attempts to provide the country with the skills it needs.”

Data in the NAO’s analysis indicated that nearly one in four vacancies were because of skills shortages, rising to more than one in three for the manufacturing and construction sectors.

It reported an 11 per cent fall in employers’ spending on training from 2011 to 2019, while the number of adults in government-funded education or skills training had fallen by nearly half between 2010/11 and 2020/21 – down from 3.2 million to 1.6 million.

The report said the decline was seen particularly in disadvantaged areas, with a drop of 39 per cent from 2015/16 to 2020/21, 280,100 people.

The Further Education Skills Index – the government’s proxy measure of the value of further education on productivity – has fallen by 46 per cent since 2012/13, the report said, largely as a result of a drop in learner numbers.

The NAO reported that employers and providers were struggling to navigate the growing and disjointed skills programmes – which can range from apprenticeships and skills bootcamps funded by the DfE, to the train and progress initiative for universal credit claimants and the new multiple numeracy programme led by the Department for Work and Pensions.

Meg Hillier, chair of the Committee of Public Accounts, said: “A properly skilled workforce is vital for the economy, yet training over recent years has fallen off a cliff. Once again, it is people in the most disadvantaged areas who are missing out on opportunities to upskill.

“The NAO highlights some recent positive steps by government, yet the workforce challenges of Brexit, an ageing population and the march to Net Zero are truly immense.

“In the face of this gathering storm, DfE must step up and provide better support to people and their employers on developing skills. It’s vital that they get this right to ensure the country’s workforce remains competitive.”

The DfE’s reforms come as part of the skills and post-16 education act 2022, which includes a commitment for lifelong loan entitlement, and ambitions for strengthened links between employers and further education providers to create courses designed to meet the needs of businesses and allow them input in designing courses.

It includes proposals to recruit more teaching staff, create LSIPs (local skills improvement plans) to respond to local labour market needs in key skills, and reform levels 4 and 5 technical education.

A flagship proposal is the lifetime skills guarantee which allows adults without a level 3 qualification to take a free course. But early data on this scheme found that it was struggling to boost enrolments.

A DfE spokesperson said: “We are investing in high quality training to deliver the skilled workforce employers need to grow and plugging skills gaps in our economy, helping more people into jobs.

“This includes rolling out new T Levels in fields like construction and manufacturing, while investing £2.7 billion by 2025 to support businesses to create more apprenticeships.

“We’ve also launched the Unit for Skills to focus future support and are investing £1.6 billion over the next three years, including on expanding our popular skills bootcamps and free courses for jobs offers.

“The NAO recognises the progress made but we know there is more to do.”

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