Further calls to target apprenticeship funding at the industrial strategy

Apprenticeship funding should be targeted at skills which fit the UK’s industrial strategy to combat growing pressures on the levy budget.

That is according to the Independent Apprenticeship Policy Group (IAPG), which was chaired by former education select committee head Neil Carmichael and set up by education giant Pearson to create a long-term vision for apprenticeships.

The report, being launched this morning on the final day of FE Week’s Annual Apprenticeship Conference, states that whilst the apprenticeship budget now available through the levy provides a “significant boost” to employer investment in training, the “current budget available is not enough to support the demands being made on the system”.

It echoes concerns first raised by the Institute of Apprenticeships and Technical Education and then the National Audit Office that the apprenticeship budget is at risk of being overspent after the average cost of an apprenticeship hit double what the government first predicted.

The IAPG believes that decisions on apprenticeship spend should “remain employer-led”, but they should be “within a structure of incentives set by government, and agreed between government and employers”.

Prioritising sectors identified in the 2017 Industrial Strategy, which targeted investment at maths, digital and technical skills, “is important to avoid situations in which the courses being provided are adding little, if anything, to the skills base of the economy”.

Their call comes after Ofsted’s 2019 annual report criticised a high take-up of management and health courses in the system as a “mismatch” with the strategy, calling for this to be “urgently” addressed.

Careers education is another focus of the IAPG report, which calls for a review of the government’s careers strategy, the role of the Careers and Enterprise Company, as well as the Baker Clause.

The clause put into law that schools must invite providers in to tell pupils about technical qualifications and apprenticeships, and “a positive working relationship between apprenticeship providers and their local schools and colleges is a key element of growing the apprenticeship system,” the report says.

But evidence has shown the IAPG that where employers and providers “are keen to engage young people in apprenticeships, they often encounter barriers to achieving this”.

Lord Agnew wrote to headteachers earlier this month in his then-capacity as minister for the FE market to remind them of their legal duties under the clause. The education select committee has previously accused schools of “flouting” their obligations under the clause.

The committee’s chair Robert Halfon accused the Careers and Enterprise Company of being “ludicrously wasteful” with public money in January, after his committee pulled the company up on spending £200,000 on holding two conferences, instead of seeking private sponsorship.

The IAPG also states that “adequate” investment needs to be made available for small-to-medium enterprises, preferably through extra government funding, to ensure “we support the skills needs and help boost the productivity of non-levy paying employers”.

An AELP survey released in January found up to 40,000 SMEs were being turned away by training providers which are either close to having, or have, used up their levy allocation for training apprentices from non-levy payers.

At a debate in Parliament last week, AELP chief executive Mark Dawe said the non-levy system needed an extra £1.5 billion so SMEs could start investing in apprenticeships again.

On funding levels, the report also says funds to deliver individual apprenticeships “should not be set so low to reduce the quality of training or dissuade employers from recruiting apprentices”.

“Recent cuts to funding bands have particularly affected standards in sectors with acute labour shortages,” like social care.

“Uncertainty over funding” could “significantly” reduce the number of opportunities available to learners and has already, along with the aforementioned non-levy funding constraints, forced providers to reduce or cease activity”, according to the report.

Apprenticeship provider Professional Training Solutions told FE Week last May it would stop recruiting for the care sector after the Institute for Apprenticeships and Technical Education decided not to increase the standards’ funding levels, which were leaving the provider running courses at a loss.

The IAPG recommends the funding bands and investment to support apprentices meet maths and English requirements, should be set at a “sustainable level”.

Ofsted boss ‘concerned’ young people losing out as employers cash in on higher apprenticeships

Ofsted’s chief inspector is “concerned” that the rise in higher level apprenticeships is “partly” to blame for the decline in starts for young people at the lower levels.

Addressing delegates at the Annual Apprenticeship Conference (AAC) this afternoon, Amanda Spielman said it was “worrying” that starts at level 2 in 2018/19 were 45 per cent down on 2016/17.

Meanwhile, higher level apprenticeships are “up – massively up – and they have doubled from 16/17 to 18/19, admittedly from a low base”.

She then stated: “We’re concerned that this many new apprenticeships at level 4 or higher is partly why those at level 2 and 3 aren’t coming through. It’s certainly the case that apprenticeship programmes now have an older demographic.

“It is important we increase the numbers of level 2 and 3, as well as increasing the number of young apprentices, as this helps with levelling the playing field.”

Her comments come a week after education secretary Gavin Williamson ordered a review of the level 7 MBA apprenticeship as he is “unconvinced” it provides value for money.

He said he would “rather see funding helping to kick-start careers or level up skills and opportunities”.

The Ofsted boss echoed Williamson sentiment this morning, saying “we need to level the playing field”.

“For some people, this ladder [of opportunity] is broken; in fact, some of the lower rungs are missing. For so many young people, this is their entry level into the workplace. Getting the basics right is vital. Going into some occupations at level 4 without a grounding in the basics can set some people up to fail.

“I’m concerned about level 2 apprenticeships more broadly.”

She noted how the higher-level apprenticeships are “overwhelmingly in the fields of business administration” and “we are concerned about the trend in big, levy-contributing organisations to offer apprenticeships to existing staff, many of whom will have worked there for a while”.

“This effectively turns apprenticeships into a staff development programme. They may well be mitigating skill gaps in management and team leadership, and this may be an initial response to spending the levy, but I would hope that this doesn’t become the norm. If the levy develops mainly to help those who are already in work, it doesn’t help those at the bottom of the ladder.”

Spielman also reiterated concerns first raised in Ofsted’s 2018 annual report, which warned the levy was being spent on apprenticeships it called “rebadged” graduate schemes.

“We know that relabelling existing programmes as apprenticeships to allow them to be paid for by the levy fund is a practice that is sucking money into one place at the expense of another,” she said today.

“We’ve seen very different funding allocations for different sectors. I am concerned that in some instances levy funding is not being used as the policy designers expected.”

The shadow skills minister, Emma Hardy, went even further in her speech at AAC this morning, calling for an end to full funding for adults enrolling on a degree apprenticeship.

Concerns over the rise of higher level apprenticeships at the expense of low level opportunities, such as for the level 2 in business administration, is set to be discussed further on day two AAC when Jennifer Coupland, the new chief executive of the Institute for Apprenticeships and Technical Education, will deliver her first public address to the sector.

Restrict access to degree apprenticeship funding for adults, says shadow skills minister

Degree apprenticeships should only be fully-funded for people aged under 25, those without a first degree and in sectors with skill shortages, Labour’s shadow minister for further education has said.

Emma Hardy, speaking on day one of FE Week’s sixth Annual Apprenticeships Conference, said she supports their expansion at higher education providers across the country, but a decline in opportunities for the “most disadvantaged” needs to be addressed.

“The government’s rushed implementation of the apprenticeship levy has resulted not in an increase in apprenticeship opportunities for the most disadvantaged, but quite the opposite,” she told delegates.

“I believe degree apprenticeships should continue to be fully funded from the levy for people 25 and under, occupations on the shortage occupation list, and adults who do not already have an equivalent qualification.”

Her proposal comes after warnings from the Institute of Apprenticeships and Technical Education and the National Audit Office that the apprenticeship budget is at risk of being overspent.

Hardy highlighted concerns, which have been raised by Ofsted chief inspector Amanda Spielman among others, that companies have been rebadging existing training schemes as higher apprenticeships.

Hardy also brought up the latest report on the apprenticeship system by former Department for Education adviser Tom Richmond, where he said 23 higher education institutions have developed an apprenticeship which requires a PhD, or another level 8 qualification, to start.

Hardy said: “Surely this should not be considered an apprenticeship,” and in her opinion, “the government should end the 100 per cent use of the apprenticeship levy for courses equivalent to a Master’s degree.”

This comes after education secretary Gavin Williamson last week ordered a review of the level 7 senior leader MBA apprenticeship standard.

In his letter to Institute of Apprenticeships and Technical Education boss Jennifer Coupland, he wrote he was “unconvinced that having an apprenticeship standard that includes an MBA paid for by the levy is in the spirit of our reformed apprenticeships or provides value for money”.

Hardy has stressed though that this is not the fixed policy of the Labour party, as they are in the midst of a leadership election, but rather this is something for the next leader to consider.

Lack of levy funding for small employers debated in Parliament

A chair of a leading small business lobbying organisation has thrown cold water on hopes of a boost for non-levy apprenticeships in next month’s budget.

Anthony Impey, who chairs the the federation’s skills and apprenticeships national policy group, told a debate in Parliament on Tuesday that he did not think the government would pay a mooted £1.5 billion out of general taxation to help small and medium-sized enterprises (SMEs) run more apprenticeships.

Instead, he said, “everybody’s going to have to suffer some pain” and training providers and higher education institutions will have to take items out of their apprenticeships which “are not critical”.

Anthony Impey

The debate, held in the run-up to the budget on March 11 and featuring contributions from a number of FE professionals, was hosted by shadow further education minister Emma Hardy and run by FE Week and the Association of Employment and Learning Providers (AELP).

Hardy retorted to Impey that the UK could attract people from around the world with high skills and higher levels of productivity, but warned: “I think part of making that prosperous, optimistic vision for our country happen is by not saying we’re not going to get the money we want.”

The £1.5 billion sum was put forward  by AELP chief executive Mark Dawe, speaking at the event with Hardy and Impey.

He came to that number by adding the £760 million allocated to SME apprenticeships for 2019/20, to the £750 million Institute for Apprenticeships and Technical Education chief executive Jennifer Coupland said last month was needed to prop up small business apprenticeships.

Emma Hardy

Dawe explained the importance of non-levy apprenticeships as SMEs “contribute to productivity, they contribute to the local community. They provide those first steps in learning, and they support the disadvantaged.”

If the £1.5 billion was guaranteed as a minimum, SMEs could start investing in apprenticeships again, as he said: “[At the moment] they have no idea where there’s going to be money in the future – that’s another reason why people aren’t investing.

“That’s why we’ve got this event. That’s why we need to make a lot of noise before the budget. This is the one thing we think this government can do to actually start moving the apprenticeship agenda.”

Another possible means of putting extra money towards SME apprenticeships is lowering the payroll threshold at which employers pay the levy from £3 million to a sum like £1 million.

But analysis conducted by Public First for the AELP ahead of the event found a threshold of £1 million would only raise an extra £400 million, and awarding body AAT’s head of public affairs Phil Hall said at the debate that lowering the threshold would be to bring in small businesses, which are “having such a problem” paying the five per cent co-investment fee with government.

“In what world are they going to then pay the apprenticeship levy? It’s just insane,” Hall said.

This all comes after survey results published in January by the AELP found that providers could not meet demands by up to 40,000 small and medium employers to train apprentices because the amount of levy funding allocated to pay for apprentices at non-levy-paying businesses is insufficient to cope with demand.

We need the government to commit to a separate funding pot for SMEs

Hardy said SME apprenticeships, having originally been seen as “niche”, are “gaining so much airtime”.

“As a Labour MP, it will be of no surprise to any of you here that one of the things which concerns me the most is the impact we have had on the numbers of young apprentices and the impact it has had on apprentices from the lower level.”

Hardy said more funding is being spent on experienced, older apprentices, at the expense of younger ones trying to get their qualifications through SMEs.

She asked the attendees to “put a bit of pressure on the government. We need them to commit to a separate funding pot for SMEs.”

A representative from South Essex College said the question which needed to be asked was: “How can we afford not to invest in apprenticeships?”

She pointed to upcoming government infrastructure projects and said: “If we have SMEs which aren’t able to access skills for apprenticeships, those infrastructure projects are going to collapse. You only need to look at some of those projects which are running over because they cannot get the labour force.”

The government has attempted to help boost SME starts by allowing the employers onto the digital apprenticeship service from last month, initially capped at just three starts each, with the full roll-out now planned for November.

However, chief executive of provider JTL Jon Graham told the debate audience when they set up 50 starts on the digital apprenticeship service in January with multiple employers, that the ESFA said the same week the service was in fact “not ready”, so JTL had to cancel those starts.

Hardy closed the debate by repeating her call that “government needs a strong message from each of us – from all of the training providers, from all of the small businesses, and the universities, that education matters and you don’t get things on the cheap.”

Learning to love the local when it comes to adult education provision

Are we really keen to see London, Manchester, Birmingham and the West Midlands with no powers over education and skills spending, asks Ewart Keep

What are we to make of the apparent outrage at the Greater London Authority spending an extra £40k on a consultant to support an AEB consultation exercise, and at Alison Wolf’s dismissal of AEB devolution?

There are two problems with these reactions. First, it is simply too soon to judge the overall effects and benefits of devolution: policy and practice are still in their early stages, and evolving.

Second, London has a larger population than many EU member states. It is a global city. As Michael Heseltine’s recent Empowering English Cities report demonstrates, elsewhere, comparable urban areas have control over many aspects of education and skills and maintain an administrative and governance structure to deliver this.

Are we really keen to see London, Manchester, Birmingham and the West Midlands with no powers over education and skills spending and all decisions made by the DfE and the ESFA?

If we are, what are the intrinsic benefits of this kind of centralised, national control and why do so few other countries adopt this model?

England is unique among larger (population-wise) developed countries in the degree to which education provision is centralised. In essence, there is central government, its market regulators, and individual providers.

Elsewhere, an intermediary layer of place-based local, regional or state/provincial governance institutions, often allied to some form of social partnership arrangement is the norm.

Either they are all wrong, and we are right, or we may be missing something.

This is linked to the debate about the relative merits of a coordinated system of provision versus market-based competition. We risk the diseconomies of having competitive marketplaces for 11-19 learning – where UTCs, studio schools, free schools, MATs and community and local authority schools (many of which have sixth-forms that are tiny and require cross-subsidy from 11-16 funding) duke it out with FE, apprenticeship providers and sometimes even universities.

There is institutional choice, there is competition, but it often comes at the price of narrowing the overall range of courses that can be provided for a given local per-student spend.

Systems can achieve economies of scale through coordinated “offers”. For instance, the decision to allow schools to offer T-levels may mean that in some subject areas student numbers will be too thinly spread to make it viable for anyone in a locality to offer some routes/pathways.

When it comes to adult learning, different logics apply. There are two strands of activity. One covers individuals learning for fun, or to move to better jobs.

This can be left to individual choice in a national marketplace, providing that prospective students can access independent, top-quality labour market information and information advice and guidance on courses and what they might lead to.

Sadly, we still have country miles to go to reach this position.

Local cooperation and coordination beats cut-throat competition

The other strand of activity is adult workforce upskilling and reskilling, workplace innovation and business improvement.

This is usually linked, in the rest of the UK and the developed world, to local economic development activity, and as the combined authorities (see Greater Manchester) are showing, these are in turn inextricably linked to local transport, infrastructure, regeneration and inclusive growth agendas.

This type of activity is remarkably hard to plan, design and deliver by central government alone, and with “levelling up” liable to be a central driver of policy, we can expect to see more rather than less emphasis upon this kind of joined-up policy package.

The response from colleges has been positive.

The rise of the West Midlands FE Skills & Productivity Group and the Greater Manchester Colleges Group represent useful attempts to construct a joined-up offer to the local combined authority.

Colleges have realised that speaking with a single voice can help ensure that what they have to say gets heard, and that local cooperation and coordination beats cut-throat competition.

Over 1,200 to attend Annual Apprenticeship Conference 2020

Anticipation is building ahead of the sixth Annual Apprenticeship Conference, which is now set to feature the first public appearance from the sector’s new dedicated minister.

More than 1,200 delegates from colleges, training providers and employers will head to Birmingham’s National Exhibition Centre on Monday for the two-day event run by FE Week.

On day one they’ll get to hear from keynote speakers including Ofsted chief inspector Amanda Spielman and Labour’s shadow skills minister Emma Hardy.

Chief regulator Sally Collier will also speak on the main stage on Monday, where she is set to discuss Ofqual’s approach to external quality assurance following the announcement of their expanded role. The day will be rounded off with a debate on the hot topic that is subcontracting.

On the Tuesday, Education and Skills Funding Agency veteran Keith Smith will provide the sector with the agency’s essential policy updates, while Dr Neil Bentley-Gockmann will discuss WorldSkills UK’s postion on FE Week’s #BackABid campaign to host  WorldSkills competition in 2027.

Jennifer Coupland will then deliver her first public address to the sector as the chief executive of the Institute for Apprenticeships and Technical Education.

The conference will conclude with a conversation with former skills minister Anne Milton and former shadow skills minister Gordon Marsden. The pair will reflect on their time in office, including their best moments, regrets and their predictions for the future of apprenticeships policy ahead of the budget on 11 March.

As ever, a range of workshops will be run throughout both days and cover topics such as end-point assessment, the digital apprenticeship service, funding rules and audits. You can download the full agenda here.

A glitzy gala dinner will take place on Tuesday night where the winners of this year’s AAC Apprenticeship Awards, run by FE Week and the Association of Employment and Learning Providers, will be revealed.

And Gillian Keegan, who was appointed as apprenticeships and skills minister in the Department for Education following prime minister’s Boris Johnson’s reshuffle in February, will be in attendance.

She will present the employer of the year award and celebrate all of this year’s winners.

Shane Mann, managing director of FE Week’s publisher Lsect, said: “The build up to our sixth Annual Apprenticeship Conference has been incredibly exciting and we can’t wait to get underway.

“Our agenda is packed with high-profile speakers who will give vital updates to everyone involved in the sector, and we are delighted that Gillian Keegan will be making her first public appearance as the apprenticeships and skills minister at the gala dinner.

“The idea for this conference was conceived following a meeting with the then skills ministers, Matt Hancock, and it has grown each year since. We kicked off in 2015 back in London, where we had 400 delegates, this week we will welcome over 1,200 delegates to confernce and over 550 guests for the Gala Dinner.”

Follow @FEWeek on Twitter for live updates throughout the conference, the hashtag for which is #FEWEEKAAC20.

Profile: Ruth Spellman

FE Week revisits the outgoing Workers’ Educational Association chief executive Ruth Spellman and finds her focused, as ever, on improving adult education.

You could, very briefly, be disarmed into thinking Ruth Spellman is just an unusually sweet-mannered Londoner.

The 68-year-old is standing over me in her upstairs sitting-room in Highgate, with piano music tinkling in the background, offering an impeccably presented afternoon tea tray: Jaffa cakes, shortbread, chocolate biscuits, cups in saucers. Welsh daffodils, a nod to her homeland, are on a table to my right and pretty pictures of flowers, painted by her mother, adorn the walls.

And then she begins to talk, and it’s clear just how much the Workers’ Educational Association (WEA), the adult education charity she headed until January, has lost in losing her.

And yet Spellman, who is now in non-executive roles at the Open University and the Education & Training Foundation, keeps saying “we” about her former employer, as though she’s not quite let go yet.

In a rare move, FE Week has returned to interview Spellman after first profiling her in 2012 when she took the WEA chief executive role, her fourth CEO position and first for an educational body.

Spellman greets award winners with the Duke of Edinburgh when she was CEO of the Institute of Mechanical Engineers

How were the seven years and nine months at the largest adult education organisation in the UK? And why has she left?

The night after our interview is her leaving do and Spellman is trying to get her speech right.

“I’m going to thank everyone, but I’m going to nail a couple of things too.”

Like what? “I will say, we have to have weekend learning. We have to have night school. If we’re going to expand, we have to invest in online learning. And we really need a big focus on communication and marketing so people know who we are.”

Spellman bursts with the sort of policy-focused energetic drive that not only makes rather a mockery of the retirement age, but also indicates she may be one of the best departmental leads Westminster never had.

Clearly, the job isn’t finished. When we first interviewed her, Spellman was saying she’d “like to see schools open at the weekend for adults”.

With no movement in that area, she today reiterates that bringing parents into schools to gain qualifications would “make more difference to education than any innovation I’ve seen in ten years”.

Similarly, she makes a powerful case for part-time learning, again and again.

“You’re not necessarily educated at 16 or 18 – you will need access to part-time education all your life.”

“Eighty per cent of the population are over age 21, and most of them won’t have had higher or further education. It follows that you need repeated opportunities to re-enter part-time learning.”

“Part-time learning is the answer.”

In 2010 when Ruth was CEO of the Chartered Management Institute

Spellman fluently delivers stats, some of which actually shock me. “In colleges, 89 per cent of people are under 19. The overwhelming proportion of the adult education budget is spent on young people. That’s not how it should be.”

One feels that Spellman senses these priorities have never been more urgent than now – even more so than when she was first appointed to the WEA and “the chairman was clear about the need for change”.

Mental illness and individuals struggling with debt are on the rise, she reminds me.

“Poverty has increased. Social mobility has gone backwards.”

Out of almost 48,000 learners on WEA courses in 2019, roughly 75 per cent were women, many of them older – so many younger, disadvantaged men aren’t accessing the courses. Meanwhile total spending on adult education, excluding apprenticeships, fell by nearly two-thirds since 2003.

But the biggest blow was in 2017, almost five years into Spellman’s tenure.

The former Skills Funding Agency announced seven regions would get devolved adult education budgets, with the requirement to tender beginning in earnest this year.

In one fell swoop, about one-third of the WEA’s guaranteed government funding, roughly £7 million out of a £19 million contract, was under threat.

With so much demanding the WEA’s attention, this was a huge upheaval.

Did Spellman decide to leave partly because of the funding change? (In fairness to her, the WEA’s previous CEO, Richard Bolsin, only stayed one year longer in the role.)

“No. It was tricky, and heartaching at times, but, no, I didn’t. The organisation needed new energy. But the funding change was a challenge we simply didn’t need to have.”

She emanates confidence in new chief executive Simon Parkinson, former boss of the Co-operative College, calling him a “subtle” leader, capable of navigating the WEA through external and internal politics.

But her deep frustration at the devolved budget situation she has left behind is clear.

“I’m all for localism, but we were local already. In my view, there is an overstatement of the value of bidding for work every five minutes. For a start, you’re risking breaking the bond we have with students. It’s quite hard to reach the people we reach. If you start saying to them, we’re not going to be running anything here next year, they can be put off. There’s too much casualness about breaking these relationships, and it’s really damaging.”

Spellman is also concerned that annual bidding could encourage organisations to target those learners who are the least expensive to help – “not the disadvantaged, or those with mental health issues.”

Yet Spellman has striven to leave the WEA in a strong position amid the turbulence. Out of 400 WEA employees, 300 were put on redundancy notice, but after voluntary redundancies, she managed to keep actual redundancies to about 50.

Even more impressively, under her leadership the WEA won the contract for six out of seven regions, only losing the Cambridgeshire and Peterborough Combined Authority.

I ask Spellman if she expected the budget challenge.

“No. I did not see the funding change coming. I always thought the loyalty to the WEA, in parliament particularly, would see us through.”

What does she wish she had achieved?

“I think raising the profile of the organisation more, which I have done, but not enough.”

It’s an important point. Before working for FE Week, this journalist had never heard of the WEA nor seen any online advertising, unlike, say, the Open University.

Before she left, Spellman oversaw the organisation’s Strategy 2025 paper, a plan she has passed to Parkinson to carry forward.

It makes considerable mention of ambassadors, and Spellman says “word of mouth” can get more people involved.

But in the age of free outreach on Twitter, Instagram and Facebook, it seems the WEA may be missing a trick if it wishes to attract younger, disadvantaged learners.

It’s quite hard to reach the people we reach 

A quick search of the Strategy 2025 paper shows “social media” throws up zero results. Spellman listens intently to this criticism.

One of her last moves was to appoint a social media manager.

I ask Spellman what she’s most proud of.

“The WEA was very riven when I arrived between those who wanted to take it forwards and those who wanted to take it backwards. It didn’t have a clear strategy, and I brought that.” 

Spellman introduced more flexibility for learners, such as short courses instead of year-long ones. English and maths skills were embedded across courses and tutors trained to provide clearer careers advice, so that learners came away more confident and focused, rather than simply with a qualification.

Internally, Spellman found “no one on my team had had a performance appraisal for 10 years” and she introduced training plans. “The professionalisation of the WEA has happened under me.”

Picture taken outside childhood home in Croesyceiliog, South Wales. Her dad lectured for the WEA as did Ruth and her grandad.

As we speak, Spellman’s clear-sighted passion for the organisation she has led shines out.

Previous to the role, she led Investors in People, the Institution of Mechanical Engineers and the Chartered Management Institute.

In a way, the WEA is the culmination of a life-long career spent powerfully advocating for others’ careers.

There is a long pause where Spellman falters, and her voice catches. “It has a lot of loyalty, the WEA.”

For a moment this leader, whose own father and grandfather used the WEA, cannot speak.

One senses this has been an advocacy role for her like no other – and one which, though she has officially stepped back, will continue to drive her in all she does.

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

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?

READ: City & Guilds reports 17.8m UK workers have outdated skills

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.

City & Guilds reports 17.8m UK workers have outdated skills

A third of UK workers have not received any workplace training in the last five years, according to a new City & Guilds report which says there is an “urgent need” to review adult education.

The Missing Millions report, based on regional labour market data and a poll of 5,000 working age people, has been prepared to explain the current impact of low investment levels in training and to quantify how many peoples’ contribution is being lost because they cannot access regular skills development.

It calculates that 17.8 million people in the UK have outdated skills.

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

City & Guilds interim chief executive Kirstie Donnelly has demanded “action from the government to reverse the decline of the lifelong learning sector”.

She said this should ensure people in all areas have access to “critical skills development” and employers can access the talent “they so desperately need”.

The report argues there is an “urgent need for a review of adult education” and recommends the government reverse cuts to adult education.

It cites Institute for Fiscal Studies research which found spending on apprenticeships and other work-based learning for adults has fallen by around a quarter in real terms since 2009/10.

Fifteen per cent of respondents to City & Guilds survey said they have never received any workplace training while in employment, which the report suggests will make the economy “ill-prepared” for upcoming challenges from automation and globalisation.

The National Retraining Scheme has the potential to partially address the challenges, the report reads, but to fix them: “There needs to be proper funding and resource directed at adult education to meet the upskilling and reskilling needs the UK will have in the decades to come.”

We would urge organisations invest in their employees at all levels to ensure the future success of their business

City & Guilds also recommends the government implement the recommendations from the post-18 Augar review, which included entitling all adults to their first level 2 and 3 qualifications for free and providing an indicative adult education budget so FE providers can plan and budget over a three-year period.

The report also proposes employers invest in training and development across the whole of their business, explaining that if their workers do not receive any workplace training, the company risks becoming less competitive.

“We would urge organisations to look at all their workforce needs for the next five to ten years and invest in their employees at all levels to ensure the future success of their business,” the report reads.

It also recommends employers collaborate with central and local governments on “Lifelong Learning Hubs” for areas of deprivation and where issues like artificial intelligence and Brexit will have the most impact on the labour market.

The hubs should focus on supporting people “displaced by the changing labour market” so they can learn new skills for fresh careers and job opportunities.

As the hubs ought to be led by local employer demand, City & Guilds said employers should be involved in shaping the curriculum and content of courses and be allowed to recruit directly from the hubs – in what the report calls “a win/win for the local community as well as employers”.