This week the government has published its long-awaited industrial strategy, setting out its ten year plan to promote business investment growth. Hailed by the Chancellor and Prime Minister as a new economic approach to backing the UK’s strengths, could it also represent the most significant policy shift for the FE sector in a generation?
While those working in FE may not yet have had time to fully digest the 160-page policy paper and accompanying five sector plans (566 pages in total!), the sector already understands that the success of the modern industrial strategy depends on the ability of industry to access skills and talents, and on the ability of individuals to access the training and support to move into the labour market and unlock high quality jobs. As the strategy rightly recognises, skills are critical to UK competitiveness and growth – indeed the word ‘skills’ appears 140 times in the document. Skills improve productivity, stimulate innovation and support tech adoption. Up and down the country, our colleges and training providers are already powering regional growth, supporting social mobility and contributing to our global competitiveness. The announcement of further investment in apprenticeships and technical training should turbocharge these efforts.
At Skills Federation – the voice of employer-led sector skills bodies – we welcome the sector-focused approach to the strategy. It provides an important mechanism for creating tailored and effective solutions to meet employer needs across our high growth sectors. And the additional £275 million investment, including sector packages for digital skills and AI, for engineering and for defence, is a positive step towards strengthening workforce capabilities in key growth sectors.
However, spread over four years – and in the context of a challenging financial context for FE overall – this funding remains relatively modest, and will need to be deployed strategically to deliver maximum impact. We would encourage government to work closely with sector skills bodies to identify priority areas where this investment can most effectively support the UK’s ambitions for sustainable economic growth.
The next few days and weeks will bring further analysis of the industrial strategy and its likely impact. On first reading, three things have stood out to me:
Firstly, while there is clearly a need for a targeted long-term plan to support our highest growth sectors, we must not forget that most businesses sit outside of these sectors and most people work elsewhere in the economy. The forthcoming post-16 skills strategy will need a dual focus on meeting the skills needs of both high-volume sectors in the everyday economy, as well as in high-growth sectors.
Secondly, alongside its sectoral focus, the strategy doubles down on the government’s commitment to place, setting out a key role for mayoral strategic authorities (MSAs) and reinforcing its commitment to further devolution. What is less clear is how the focus on sector and place will be brought together within a coherent national framework. This will be a key challenge for the local growth plans being developed by mayors; one which will benefit from effective collaboration with sector bodies. It will be vital too for colleges and training providers to work closely with MSAs to help shape regional approaches to meeting skills needs.
Thirdly, the commitment for Skills England to work with devolved governments to create a more coherent and accessible skills system across the UK is extremely welcome; we hear far too often that the complexity of the current system is holding too many employers back from engaging and investing in skills development. A critical first step in taking this forward should be to develop a UK-wide approach to competency standards, from which devolved policies and programmes can then be developed.
The centrality of skills to the government’s industrial strategy is to be celebrated. It sets out a critical role and a clear mandate for FE to transform the UK economy and deliver opportunities for its workers. But perhaps what is most clear is that the government’s decision to anchor our economic fortunes in high-growth sectors is likely to shape opportunities available for learners, communities and employers for at least the next decade.
Our role now is to ensure that this industrial strategy moves beyond aspiration to create lasting change. For the sake of our people, our places and our economy, we can’t afford to miss this opportunity.
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