One bill was never going to solve our skills challenge

26 Feb 2022, 7:00

A long-term cultural shift is needed – so after the bill, we need a ten-year plan, writes Stephen Evans

The skills bill is nearing the end of its journey through parliament and will soon become law. Where does this leave us?

The purpose of the bill is to make legal changes to enact parts of the recent skills white paper. Other parts that don’t need legal changes are awaiting the government’s responses to consultations.

This week the Commons considered 35 potential amendments.

While none passed, they helped to raise important issues.

For example, we probably don’t need an act of parliament to be able to retrain people into green jobs, but the proposed amendment perhaps helped to shine a greater light on the issue.

I was also pleased Margaret Greenwood, MP for Wirral West, raised essential skills – nine million adults have low literacy or numeracy in England, yet 63 per cent fewer adults are improving these essential skills compared to a decade ago.

Education select committee chair Robert Halfon continues to be a one-person skills revolution, securing action on apprenticeships for prisoners and rightly proposing strengthening the Baker Clause.

In other words, some of the issues raised in amendments are now more likely to get action as a result. That’s a good thing.

For me, the best part of the final bill is the new lifelong loan entitlement. This gives adults access to loans for higher education, alongside the recently introduced lifetime skills guarantee (although the latter is not guaranteed in law) focused on access to level 3.

Neither are perfect. I’d like the loan entitlement to start sooner, and I’d like the skills guarantee to be wider so it helps with retraining and learning at all levels.

But they’re good steps forward and something to build on.

The bit I’m least convinced by are the new local skills improvement plans (LSIPs). The bill is allowing the government to designate employer groups to draw up skills plans that providers must pay regard to.

This isn’t the first attempt to do this – we’ve seen a whirligig of initiatives over the past 30 years. We tend to go in various cycles of more market-based approaches, and then focusing on greater employer involvement in planning the skills system and qualifications, and then thinking about compelling employers to train, and then repeating. Employers have probably been in more driving seats than Lewis Hamilton.

Will LSIPs stand the test of time? We definitely need a strategic view of skills needs, but it’s not clear to me how the latest approach learns from previous attempts ̶ from the Manpower Services Commission under the Heath government in 1973 to skills advisory panels, which are ongoing.

And, of course, learning is about more than skills and jobs. I worry we’re too focused on employer involvement in planning the publicly funded skills system, but paying too little attention to learning as a whole.

We also need to focus more on how skills are used and employers’ own investment in training. And it feels like there is too little join-up with “levelling-up” plans, including greater devolution and role for local government and the government’s Plan for Jobs, which aims to get more people into work.

This links to my final point. Expectations were perhaps too high among some for this bill. Improvements in skills require a change in culture and long-term investment.

Expectations were perhaps too high for this bill

Laws can help or hinder, but no single act of parliament was ever going to “solve” our skills challenge.

The bill doesn’t do anything to change the apprenticeship system, where numbers are down on pre-levy levels, with falls particularly acute for young people.

It’s good that public investment is rising again, but the bill doesn’t fill the £750 million gap in adult skills funding that will remain in 2025, compared to 2010 levels – or reverse the decline in employer investment in training over the last decade.

However it wasn’t going to “solve” those issues anyway.

That’s why I think we need a ten-year lifelong learning strategy, developed in partnership and backed by long-term investment. The skills bill takes some steps forwards. We now need a giant leap.

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  1. We are now well and truly wedded to the American style approach of a loans funded system and it will continue to widen the gap between the affluent and the rest of us. I really don’t grasp why so many leaders, who often claim the moral high ground on other issues, think this is a good idea.

    The Government itself estimate that only 25% of individuals taking student loans would pay them back in full. Yet it has re-packaged them and extended the repayment write off period from 30 to 40 years.

    There is a strong argument to suggest that a directly taxpayer funded system is less costly than a loan system. The public purse underwrites all the bad loans and sells off the rest of the loan book at knock down rates to well known philanthropic institutions such as Goldman Sachs!

    However, it does allow the treasury to keep the expenditure off the balance sheet and kick the can down the road, forcing the next government to do the same.

    For years RPI has been around 2% and the RPI+3% loan rate has been in play.

    The +3% has been dropped in the repackaging, but RPI is now nearing 8%. The bottom line being that the affluent can better afford not to take on loans. For the less affluent to overturn that degree of financial burden is not realistic and the reason our social mobility metrics compare very poorly with most comparable countries.

    The sad irony is that we also have such a large proportion of adults with numeracy skills below Level 2. They are in no position to understand that their financial futures are being decided for them when they try to improve their situation. All they can do is trust that well educated policy makers make good choices for them.

    Perhaps the Baker Clause should also include a requirement to state that 3 out of every 4 people taking out loans to further their careers are not expected to ever be in a position over the next 30-40 years to pay it back…

    You could even build it into the maths curriculum as an example: If an individual:
    1. takes on a student loan of £9,250 a year for three years at RPI%
    2. and, after graduating, they earn 20% above the average salary of £26k each year
    3. and wages rise in line with RPI (let say 6%)
    Q1: How many years will it take to pay off the loan if they need to pay off 9% of any earning over £26k?
    Q2: What is the total amount of interest payable?
    Q3: How many additional years / months of work would a loan recipient need to complete above that of a non loan taker?
    Q4: Does that sound like a good idea?