Investment and strategy needed to rescue UK from its low skills doldrums

29 Feb 2020, 6:00

A decade of cuts in training and adult education has led to millions of demoralised and underskilled working age people in the UK, says Kirstie Donnelly. To boost productivity and social mobility following Brexit, the government must face up to new and complex challenges, she writes.

Across the UK, low productivity and growing skills gaps are plaguing businesses and the wider economy. When compared with our G7 counterparts, the UK’s low levels of productivity see us lagging well behind.

At the same time, social mobility is in a worrying state of decline. Earlier this year, a report from the Social Mobility Commission stated that more than half of people living in Britain feel the government is failing to do enough for the least well off, who face low levels of job security.

Yet unemployment sits at only 3.8 per cent, its lowest since 1975, so why is it that people’s quality of life and life chances haven’t continued to rise?

And why has productivity stalled?

<a href=httpsfeweekcoukp=88287 target= blank rel=noopener noreferrer>READ City Guilds reports 178m UK workers have outdated skills<a>

During the 2008 recession, employers cut investment in training and technology – and that has never fully recovered.

The government also made significant cuts to adult education, amounting to 25 per cent of apprenticeship and vocational courses, according to the IFS.

Added to that, the UK has some of the lowest investment in skills by individuals in Europe – creating something of a perfect storm.

The government has recently announced far stricter caps on immigration and told employers that the new points-based system will not allow them to fill job roles as free movement has enabled them to in the past.

Clearly investing in training is now even more critical and the stakes are higher.

At City & Guilds we launched our Missing Millions research report this week, which revealed that a worrying proportion of the UK workforce are missing out on training and development.

We found a staggering third (34 per cent) of working age people in the UK have not received any workplace training in the last five years. This equates to roughly 17.8 million people.

We found that particular groups in society were hardest hit by this ongoing lack of focus and investment in skills.

Those living outside of London and the South East, people from lower socioeconomic groups, older workers and part-time workers are the least likely to have had training recently and to be satisfied with opportunities for career progression.

As we know, a decade of under-investment has wreaked havoc on the adult education system in the UK. It is critical that we put a far more robust system in place now if we are to overcome the skills challenges that Brexit and more stringent immigration policy may bring.

This is even more important at a time when automation and technology are changing skills requirements almost daily – the OECD predicts 38 to 42 per cent of people in the UK will need to completely retrain over the next decade.

With the upcoming budget and appointment of new regional metro mayors in May, there’s never been a better time for government and policy makers to review the adult education budget and its role in “levelling up” society.

It is critical that both business and government stay focused on addressing productivity challenges

I would urge them to consider re-allocating the budget and create a system that truly supports lifelong learning for lifelong employability, regardless of where people live or their background. A key recommendation in our report is around creating a network of Lifelong Learning Hubs that connect and match local employer skills demand with a locally retrained supply of displaced employees.

Our research found that as many as 31.3 million people felt that their skills were underused at least 50 per cent of the time.

Coupled with this, low levels of training and development opportunities led to only a third of the UK working age population feeling positive about their career prospects.

This is a pretty depressing statistic.

As we look ahead to a year of ongoing economic and political change, it is critical that both business and government stay focused on addressing productivity challenges and unlocking the full potential of the UK’s working age population.

Only by doing this will we be able to increase social mobility and drive up UK productivity.

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