Two decades of skills policies haven’t improved productivity, says report

Failure to boost lower and intermediate-level skills is harming UK productivity

Failure to boost lower and intermediate-level skills is harming UK productivity

12 Sep 2023, 16:00

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Nearly two decades of reforms to the skills system have failed to improve UK productivity, claims a new report

The research, commissioned by the Federation of Awarding Bodies and co-authored by its former chief executive, Tom Bewick, said it “found no evidence to show government skills reforms have had a direct or positive impact on UK productivity” in its analysis tracking back to the Leitch Review of Skills in 2006.

Too much emphasis has been placed on boosting the number of jobs in the economy, the report states, without “improving the quality (and therefore the productivity) of existing jobs,” the report, called Running to Stand Still, said.

Alongside analysis showing how UK worker productivity compares to competitor nations in the OECD, the federation has tracked the extent to which recommendations made in six major skills reviews have been implemented by the government. 

For example, it found that ten recommendations from the 2011 Wolf review of vocational education, four recommendations from the 2016 Sainsbury review of post-16 skills and 13 recommendations from 2019 Augar review of post-18 education have not been implemented.

Interviews with 25 sector experts, including the author of one of those reviews, Baroness Alison Wolf, lay the blame on distrust between the government and sector providers, a lack of consensus on the purpose of education and a “toxic relationship” between the Department for Education and the Treasury. 

‘Skills laggards’

Using qualification attainment levels as a comparator, the report points out that the UK remains third from the bottom of OECD measures of intermediate-level skills in the workforce, despite a commitment made in the Leitch review to “become a world leader in skills by 2020”. Conversely, the UK beats countries like Australia, Germany and France in higher-level skills. 

“Data highlighted in this report and elsewhere shows that access to adult skills and apprenticeships, as a total participation measure, have declined in recent years. It is particularly noticeable that the UK, when compared to other advanced economies in the OECD, has turned into a skills laggard by comparison,” the report said.

Declines in the number of below level 3 qualifications being awarded to adults should be a “major concern” to incoming ministers, according to the report, “because it is a major reason why the UK’s productivity record is so poor”.

Skills policies have failed to help grow productivity. Graph shows flatlined UK productivity since 2005
Source Running to Stand Still Federation of Awarding Bodies 2023

Bewick, who co-authored the report with social researcher Matilda Gosling, said he called the report Running to Stand Still because, “in the end, the main purpose of skills policy should be to support rising real wages and economic growth. 

“Despite the best efforts of successive governments, our detailed analysis of these policies, including feedback from leading sector experts, found no evidence that various skills initiatives have really helped shift the dial on sluggish UK productivity rates”.

‘Regulation has tripled’

Budgetary constraints and the slow workings of Whitehall are also responsible for the government’s failure to act quickly enough to rescue the UK’s poor productivity. 

Experts said that distrust between policymakers and sector providers had contributed to complexity in the skills system, which is also holding back productivity. “The challenge for people working in the Department for Education ‘is that they have to test [changes] out against gaming and unforeseen circumstances.’”

Despite the Sainsbury review talking about simplifying the skills system’s regulator landscape, “it now has more regulators and more qualification categories within it … It feels like regulation has tripled,” according to one interviewee. 

Excessive government regulation in the skills system could itself be harming productivity, the report alleges.

The report doesn’t make firm recommendations on specific policy areas, but does make a plea for a UK-wide “integrated skills plan” and floats a new Department of Employment, Productivity and Workforce Skills to oversee the plan.

It also criticises departments, like DfE and the Department for Work and Pensions, for involving civil servants too much in the delivery of programmes, like T Levels, rather than “what they do best – policy”.

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  1. Yet another formulaic report spewed out by the leadership merry-go-round.

    Continuing to nudge the sector language from ‘education’ toward ‘skills’ to segway into economics.

    Ask any one of them to specifically describe how productivity is measured, what the influencing factors are and which levers to pull, then gauge how meaningful the message is.

    The graph is a prime example. The orange line described as (productivity) ‘growth forecast’. Who did the forecast? No-one. It’s simply a rose tinted growth trajectory using 2005 as the extrapolation point as that date leverages the biggest gap between the two lines by 2021. It is designed to emphasise a point, but is totally meaningless, without comparison to other countries.

    Even if it did have comparison to other countries, it’s just comfort blanket economics. Unenlightened pursuit of productivity gains and economic growth, driven by fossil fuels is like running toward a fire with a bucket of petrol, instead of a bucket of water. It doesn’t matter how skillfully you deposit your bucketload, it’s what’s in it!

    Priorities and sequencing is what they should be talking about.

  2. Aidan Relf

    I haven’t read the report so I can only comment on the above. Firstly the demise of the DfEE after the 2001 election was a terrible mistake. It’s evident that the Treasury trusts the DWP much more than the DfE as was shown by the creation of Kickstart at the start of the pandemic. Secondly, no attempt in the last 10 years has been made to research productivity gains from apprenticeships – just feeble efforts to show apprentices’ wage increases as some sort of indicator. It was an obvious port of call for the short-lived UK Skills and Productivity Board but all we got was a hasty piece of secondary research tenuously linked to levelling up.