There is considerable focus on the way Skills England will be set up, including what will happen to the functions of IfATE. Whoever leads the new body needs to set out a clear vision for a world-class skills system with an associated road map for delivery.
To succeed and be around for the long-term, Skills England will need leadership with the clout to influence the whole of government, not just a sponsoring department.
However, even more important is the new government’s plans for the growth and skills levy. How it will choose to use the money available to grow the talents and opportunities of our workforce will be critical to the economy and lifting the UK’s poor productivity.
The new levy will be critical to all five of the government’s five missions to rebuild Britain.
Since the 1960s, the UK has had numerous forerunner levies in one form or another, including in construction and related engineering for companies of all sizes.
These have been run and adapted over time by industry and sector skills councils, generally with success. A more recent and more familiar example is the apprenticeship levy introduced in 2017.
Employers complained that the apprenticeship levy focused only on large firms, lacked flexibility and was over-bureaucratic. So the growth and skills levy presents a rare opportunity for the government to really “put the employer in the driving seat” through a new sector-led approach.
Drawing lessons from historical industry levies which have proven effective over six decades and from devolution policies, we suggest industry groups oversee the new levy’s implementation, while the government focuses on collecting funds and setting regulatory frameworks.
This approach would emphasise local input, collaboration with the UK’s devolved nations and regions, and set clear skills outcomes aligned with technological advancements, AI, and net-zero goals.
This approach would emphasise local input
Sector-specific strategies would also ensure inclusivity for SMEs and the self-employed, with a commitment to leveraging experts in new technologies for workforce training, including partnering with further education colleges.
There could be a structured sector deal or sector license with five-year renewable terms, promoting strong governance and an industry-wide commitment to skills development.
The overarching goal is to place responsibility for skills upgrades in the hands of industry professionals, who can better respond to real-time economic demands, technology shifts and the move to net zero.
Skills and productivity improvements will involve considerable commitment and contributions from local government in England and the administrations in Northern Ireland, Scotland and Wales. Their engagement must be integral to the way forward.
So, what might be the underpinning conditions of a sector deal or license? Here are five key considerations:
First, clear outcomes for the delivery of the skills needed for sustainable economic growth and productivity improvements and for upgrading businesses and workforces (including SMEs and the self-employed) for new technologies, AI and net zero.
Second, an industry-developed national sector skills strategy for the whole of the sector including SMEs and the self-employed.
Third, strong governance through a sector leadership group that looks at sector strategies as a whole, including the skills requirements. This is essential, and the governance organisation must be able to take the whole of the sector with it.
Fourth, close working with devolved authorities to support the differing priorities and needs of each locality.
And fifth, a commitment from the sector to utilise the skilled people who are at the cutting edge of introducing the new technologies, AI and net zero skills to support training and occupational standards development.
Instead of assuming all that will happen is tweaking of the existing apprenticeship levy, let’s start a real debate about what the growth and skills levy should look like and how it should be governed and operated.
The above proposed approach puts responsibility where it really rests and in the hands of the people who can truly implement the changes in skills that the UK’s economy desperately needs.
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