How do we ease the pain of transition from a skills system that fails employees and employers?

The House of Lords Select Committee inquiry into skills policy is expected to restart after the election, perhaps with a new call for submissions and some additional questions in the light of points raised during the campaign.

All those concerned about the failure of the UK skills system to address the needs of the majority of population and the majority of employers, let alone to meet the needs of most of those it does try to address (witness the fall in 40% fall in apprenticeships and £billions of unspent levy remitted to Treasury) should therefore read the call and ask whether their trade association or professional body had made a submission. If not they should make their own views heard.

Below is the draft for a submission by the Skills Group of the Digital Policy Alliance. This was sent to members for comment last week and have been updated with those received. The main changes are to the answers to questions 4, 5 and 6. They strengthen comments on the need to:

  • encourage and support local employer engagement (via the Growth and Career Hubs) as opposed to “democratic accountability” (via tiers of local government bureaucracy with little employer contact because businesses do not have votes)
  • clarify the measures of success for bootcamps (is it to meet social inclusion and diversity objectives or to place participants into better paid jobs)
  • make apprenticeship more attractive to non-academic teenagers promote and employers reward who provide good pastoral care, including accommodation, for those living away from home for the first time (e.g. using University accommodation as student numbers begin to drop .

The submission is based on work over that past forty of so years, since commentators first started looking at the impact of machine learning (now called generative AI) on skills. Then it was forecasts of what was to come.  The changes began to gather pace during the run up to Y2K skills crisis. They were accelerating before the first Covid Lockdown condensed a decade of change into ten weeks. They have continued since and their is no sign that the “system” can even begin to cope.

So how do we cope with the pain of change?

You will not find the answers in the submission below but at the end of this blog I summarised the material into half a dozen draft “points for your manifesto”.

After the election I hope work with the members of the DPA Skills Group and others to brief those hoping to join the next government with programmes akin to those organised after the 1997 election in place of previous plans for before the 2009 election to scrutinise the ideas being put to make our skills system fit for purpose.

By copy of this I ask those interested in helping organise those events and supporting their own constituency MPs implement the recommendations to e-mail   [email protected]with a note about youself and how how would like to help with I can share with  those who have already agreed to help.

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The current UK skills system places a strong focus on identifying, developing and rewarding academic mindsets, as needed for University research. Those mindsets are important but not at the expense of developing the other mindsets and skills needed by most employers and the majority of the workforce to cope with accelerating change and uncertainty.

Radical change is needed, including to handle the impact of AI on the status of academic values themselves, but there is no consensus on the nature of that change. There is also little confidence in the ability of national, regional or local government and/or their committees of experts, to do other than follow bureaucratic processes for planning, funding and regulation descended from the Haldane Report in 1918[1]..

The prime objective of skills policy should be to ease the pain of transition: by removing the barriers to incremental evolutionary change, exploiting the opportunities that technology gives for local and global co-operation, (including across traditional organisational, professional and sectoral boundaries) and cutting out the national and regional layers in between.

Questions and Answers:

Q1 What future skills are needed? Can the System Cope?  We need to distinguish between disciplines which change slowly, if at all, and workforce skills, where the current system cannot cope with pace, unpredictability and multi-dimensional diversity of changes in demand and supply..

Q2 Are the various roles in the skills system clear to all? No. There is a need for a cross-departmental task force to use AI to make sense of them and publicise authoritative guidance.

Q3 How can Government best Add Value?  By publicising, building-on and joining up the best of what already exists, including taxonomies and networks, across funding and regulatory silos.

Q4 Are Current Government skills Policies Clear and Consistent? No. Cull those which conflict, compete or cannot be understood, particularly on the welfare to work obstacle course.

Q5 Are the right institutions in place? should co-ordination be national, regional, sectoral?  Use Growth and Careers Hubs because demand is local, global and sectoral, not national.

Q6 Problems with levy and take-up by youngsters? 20% off-the-job training is a major cause of drop-out among non-academic, people-centric, youngsters doing health and welfare apprenticeships

Q7 Role of business? Skills should be employer-driven but under 10,000 are large enough. Hence the need to work via Growth and Careers Hubs to engage with the over 5 million SMBs.

Q8 What are the Incentives for Employers? Why has their spend fallen?  The incentive is return on investment. Their spend has not fallen but switched from batch, off-the-job to on-line, on-the-job.

Q9 What would incentivise employers to spend more? Exemption from National Insurance for time spent on accredited training. This also enables better recording of spend and skills.

Q10 What would incentivise individuals? Addressing benefits traps on the welfare to work path, addressing family support needs, ability to offset skills fees and costs against personal tax.

Q11How does the UK compare and which models we should learn from? Most devolve policy regionally or locally. Singapore, integrated guidance and learning accounts, appears the best model,

Background: why radical change to the skills system (including HE) is probably inevitable. 

The mass market use of machine learning (generative AI) has an impact on the status of the academic values at the core of our skills system akin to that of the printing press on the status of literacy. The ten years of change that took place in the first ten weeks of Covid lockdown prepared the ground for a less bloody equivalent to the dissolution of the monasteries and chantries and rise of secular Universities, Grammer and Trade schools that followed.

Similar institutional change is now probably inevitable, with short term funding problems providing a trigger similar to refusal of the Pope to give Henry VIII divorce.

The report by the Office for Students on the Financial Sustainability of UK Higher Education Providers [2] indicates that about 30% of UK Universities are not sustainable under their current business models and structures Many FE Colleges face similar pressures.

The objective of the OfS report is to point out that the aggregate increases in student numbers and fees contained in the submissions to the OfS as a regulator are out of line with data from UCAS. This indicates a 3% annual fall in UK student applications and 40% fall in overseas applications as at January. The report can also be seen as a bid for increased funding from Government and/or from UK student fees to cover higher costs, blamed on inflation over recent years and/or expected. Given other pressures on Government that is unlikely to succeed.

The structural problem is, however, wider. Changes over past decade (chart page 15) in the subjects studied (from humanities to vocational) has exacerbated the cross-subsidy problems caused by Universities deciding to charge UK students the same fees, regardless of subject. Widespread financial collapse among non-Russell Group Universities after Covid was staved off only by a massive increase in students from China, India, Nigeria and Pakistan (chart page 19) paying full costs.

Meanwhile, many degree-linked apprenticeships have ten to twenty applicants for every place and are more profitable (per student) to their University delivery partners than full time students.

There is also evidence[3] that Industry specified degrees are similarly successful (applications, results and industry support/funding).

As part of their response to such pressures, several Universities have blurred the distinction between HE and FE by becoming local, national and/or global learning hubs, working via their local enterprise partnerships. These can include skills partnerships with recruitment and employment agencies, their employer clients and training providers to, identify and address known local gaps making use of the wealth of training materials now available to reskill existing employees and/or upskill local residents seeking work. Their research teams may also derive more revenue from business partners than from Research Councils.

Similarly some schools are finding ways to handle the regulatory and safeguarding barriers imposed in recent years to become local life-long learning access and skills hubs for partnerships run by Universities and Colleges.

The big question, not asked, is whether it is better for the UK economy and population for Central Government to seek to plan and control change or to remove barriers and act only when necessary to control abuse.

The “answer” is almost certainly “IT Depends” … but on what?

  1. What kinds of skills do you think will be needed for the future of the UK economy? Is the UK’s skills and training system capable of equipping increasing numbers of people with these skills?

 There is a need to unpack the numbers using meaningful skills taxonomies. As an example: hundreds of thousands, perhaps millions, need to be retrained to build and maintain the infrastructure (networks and systems) to support a smart society, from homes to cities. But who actually needs what skills and how are these defined?

The Skills and Productivity Board Review of skills taxonomies: May 2022 recommended the use of the  O*NET Taxonomy plus  SFIA to add granularity for digital skills. That recommendation does not appear to have been communicated, let alone mandated. Publicly funded programmes are still  planned using high level definitions which do not help with needs analysis, content definition, development and delivery. Meanwhile large UK employers and their recruitment and employment advisors are more likely to use local and regional analyses from organisations like Vacancysoft..

Post-graduate skills are needed by relatively few suppliers and consultancies for research and development. Most of the demand for graduates to become “professionals”, including to handle big data and algorithmic systems (alias artificial intelligence), is actually for skilled technicians (level 3).

But by far the biggest demand is for construction workers and installation technicians to build and connect smart networks to serve smart cities, for digitally competent plumbers and electricians to install smart home systems and for health and care workers able to use automated aids to help look after the growing numbers of elderly.

Most of the skills in current demand cross traditional trade and professional boundaries. Many can be acquired within days or weeks using on-line training materials from product and service suppliers. The issue is to organise delivery, supervise work experience and assess competence, when and where needed, within programmes that enable employers or individuals to claim against apprenticeship levy, tax rebates and/or other schemes intended to help meet the needs of today and tomorrow.

The shelf-life of most of the technical skills in current shortage is less than the planning and decision cycles of most public sector planning and regulatory bodies, including the Institute for Apprentices and Technical Education (constrained by the Ofqual and Ofsted).

In consequence the “system” is not fit to meet the skills needs of most employers, even if it were possible to make better predictions than those which have been made regularly since “Cashing in on the Chips”[4] (1979) called for a micro-computer in every school by 1982 or the LEO 40th Anniversary Competition (2001) to predict the next 40 Years[5] . In 1982 Donald Michie, (the teenage prodigy at Bletchley Park who was later the Scottish parent of machine learning, alias generative AI), used the Annual Sperry Press Seminar for the first major event on the social impact of “Intelligent Systems”.[6]

The paper on the impact on education, training and skills[7] predicted: “The possession of book learning or logical reasoning ability will lose status just as literacy did when everyone could read and write. The human touches of sympathy and creativity will be the hallmark of the high status job. … The trauma of this reversal in our hierarchy of status cannot be over-estimated. At one fell swoop it removes the rationale behind most of our educational values … It removes the main justification for the examination treadmill …”

We can no longer afford to spend one or two decades of detailed preparation for a single life-long career progression. Instead we should aim … to impart those basis skills almost certain to be in continuous demand and to build a system capable of responding rapidly to change, and disseminating now skills to any age group when necessary.

Fast forward to 1997 and the top three recommendations of the EURIM briefing “Reskilling Europe for the Information Society”[8] were:

  • Education and training policy must better distinguish between core educational and academic skills (which rarely change over time) and vocational and technology skills (where traditional methods can no longer cope with the pace of change).
  •  Vocational curricula and course content and delivery must be better related to current and emerging skills needs and employers’ recruitment and training plans.
  • Commercial market research and quality assurance techniques should be used to assess skills demand and the relevance and effectiveness of training delivery.

Those recommendations (plus others to handle the then impending Y2K Skills Crisis contained in “The End is Nigh: 1996 – 2001 IT Skills Trend Report”[9]) were used for the Millenium Bugbusters programme (to train 40,000 technical staff to check micro-computer-based systems for two-digit date problems and reset/update them as necessary)..

The subsequent 2001 Budget which saw plans for their wider adoption, including via employer-led Sector Skills Councils. But within hours of the minister announcing the first of these, he was reshuffled. The launch was postponed for a year and by then decision authority of Skills Councils had been removed. They were able only to bid for consultation and delivery projects agreed by officials advised by the funding and regulatory bodies who priorities the Council had been intended to dictate.

There was a similar saga when it was announced that the employer-led submissions to the Institute for Apprenticeships would be constrained by the requirements of Ofqual, Ofsted and Funding Councils for off-the-job academic content, equivalences and end-point-assessment – instead of incremental assessment, flexibility and updating (quarterly for some fast moving skills) to enable employers to “earn while the student learns”,

Before Covid the pace of change was accelerating around the world with large organisations using modular hybrid learning (with materials from libraries of content, from videos of lectures to inter-active simulations) to train and retrain in-house staff and/or those in their supply and customer chains.

The UK “system” was not meeting the vocational skills needs of most employers, hence our growing dependence on those trained overseas, albeit often using content produced in the UK to meet global needs – but not approved for use in UK publicly funded and regulated programmes.

Then came the first Covid lockdown – with a decade of change in the first ten weeks as private sector education and training providers went down or on-line.

Then came the second lockdown and the impact of the social and economic divides, including between those with reliable access to on-line skills content and mentoring and those without, became apparent. Until these are addressed  “levelling up” will not happen.

  1. Is it clear to everyone involved in the skills system what the respective roles of the Government, employers, individuals and institutions are within that system?

There appears to be no authoritative source of guidance to the roles of the various overlapping and competing UK central and local government departments, agencies and regulators.

The fragmentation of policy, programmes and regulation across departmental and agency silos leads to funding and policy contradictions, fragmentation, waste and opportunities for fraud with many schemes, initiatives, challenges and pilots costing more to administer than is spent on delivery. Many, perhaps most, leave no legacy.

There are only 7,700 private sector employers with over 250 employers, i.e. large enough to organise in-house training for existing staff or recruits.

About half of them are involved with the programmes run by the Careers and Enterprise Company[10] to provide guidance via the LEPs[11] and Careers Hubs[12] for state schools. But the C&EC cannot offer services to adults, including several million older NEET or those in the workforce needing reskilling).

HEDD[13] covers University courses and careers services, including records of diplomas and degrees but those seeking to follow the best practice guidance being produced by the Better Hiring Institute[14] to check other records of achievement, e.g. for regulated employment in Healthcare or Financial Services, face a jungle of fragmented records of achievement, with absolute blocks on sharing pupils and student numbers and records.

Meanwhile 5.5 million sole traders and small employers (under 49 staff) employ 40% of the work force, including most of those on the margins of welfare and work, are perplexed.

There is a need for seamless on-line access to education, training and careers materials and advice from schools, college and Universities across the Joint Academic Network, the Grids for Learning and other secure, resilient networks.

But better access to a confused and confusing system is not enough. Outside studies will achieve little in the face of institutional vested interests. Hence the suggestion for a task-force of young high-flyers in Treasury, DfE, DWP and BEIS to be trained in the use of generative AI to analyse the practical effect of current legislation, policy and implementation and produce recommendations and action plans for their permanent secretaries to put to ministers.

The objective should not be to impose centrally planned change or artificially preserve the past against the future, but to allow a new balance between academic values and vocational competence and creativity to evolve over time as individuals and employers are enabled to make better informed choices in the age of life-learning to cope with change and uncertainty.

  1. What is the appropriate level of government intervention in the development of skills policies? How can government best add value in this area?

The most important role of Government is to agree taxonomies, compatible with those used by employers, for policy planning, implementation and performance measurement.

The Skills and Productivity Board Review of skills taxonomies: May 2022 recommended the use of the  O*NET Taxonomy plus  SFIA to add granularity for digital skills. That recommendation has yet to be implemented. In consequence those producing the Local Skills Improvement Plans used a variety of high level skills definitions of little value to those planning skills provision based on needs analysis.

OCN London is a Ofqual accreditation body awarding organisation, created as a community interest company by a consortium of FE colleges to certificate programmes to enable adults returning to education to access higher education. Its regulated qualifications for digital skills now support the  “welfare to work” path from “essential digital skills” through to a variety of level 1, 2 and 3 career paths . About half its revenue come, however, from bespoke certification programmes driven and funded by employers, or groups of employers to meet their own needs.

Last year it became a SFIA partner and launched a service to fit microcredentials into the SFIA framework as part of its contribution to the implementation of the London Skills Improvement Plan. This enables them to be mapped on the NIST, ISC2, ISACA and other professional frameworks already mapped onto SFIA. OCN London has since launched  OCN London Endorsed as a quality mark for employer programmes. The combined aim is to help create employer driven digital skills architectures which facilitate analysis and updating.

Government should also actively support the linking of its programmes to such initiatives locally (via the Skills Improvement Plans) as well as nationally to: 

It should use UK Social Value legislation to embed local recruitment and training into all public procurements to encourage robust supply chains, job creation, reskilling and lifelong learning and to reward good employers for doing good business.

It should task BDUK to use its underspend on voucher programmes to support local access to  JANET, (which serves universities, research centres, science parks, colleges) and the Grids for Learning (which together four private sector providers provide secure broadband for most schools) with programmes to pull through investment in affordable, robust (to industry not consumer standards) full fibre local access to world-class life-long learning via safe study spaces in every school, library, community centre and village hall.

To narrow the digital divide it should look at arrangements with mobile phone operators to enable uncharged access to accredited education and training services and sites, using registration via JANET and/or the Grids for Learning and their peers to control abuse.

Those following professionally recognised training and/or update courses in order to remain employable in their current roles) should be exempted from national insurance (NI) and/or income tax for the periods spent on off-the-job  training and able to offset the costs.

IR35 contractors should be able to offset such costs against earnings.

To present abuse participants would be expected to maintain log books akin to those used for professional development and/or certificates to practice, cross referenced to employer records and third party accreditation records. The NI exemptions would apply only to assessed activities entered in the log for which auditable records are available. The exemptions from National Insurance could then be administered in much the same way as rebates for Statutory Sick Pay.

Those funding their own training using professionally accredited programmes/materials, in order to change career should be able to offset all costs (including child care while engaged in away from home training)  against current future income tax

  1. Are current Government policies on skills, particularly apprenticeships and training, sufficiently clear? Have policies and the institutional set-up been sufficiently consistent over time? If not, what changes or reforms would you recommend?

There is a stark difference between the 18 months DfE commonly takes to procure new publicly funded qualifications/credentials and the weeks or months taken by employers to identify a need for skills training.

There is much muddle over the objectives and measures of success. Thus placement from Bootcamps into higher paid employment correlates with engagement with local recruiters on selection and delivery, NOT on achieving social inclusion or diversity targets. If the latter is to be targeted in areas of deprivation without strong local employer support then lower placement rates, or placement into any form of employment should be rewarded.

Similarly bootcamps should also be an opportunity for the Armed Forces to provide career talks and presentations to audiences looking for employment and career changes (e.g. into cyber or IT). But the provider has only 6 months (under DfE rules) after completion to claim for a successful placement. Successful military sign-up currently takes much longer. That makes it unattractive for training providers to target an employer with known skills shortages.

There are many programmes on offer. The combination looks great, but little account appears to have taken about how employers or trainees might choose between them. Employers received an incentive of £1,000 per Traineeship, which might range from 6 weeks to 6 months with varying requirements. Kickstart was for those aged 16 – 24 who are out of work, on Universal Credit and at risk of long-term unemployment. There are varying incentives for apprenticeships according to age. Meanwhile T-Levels will require 45 week industry placements. Meanwhile Essential Digital Skills entitlement presents challenges of scalability and resilience of delivery as well as of maintaining quality.

Current and proposed national education, training and support programmes should be packaged and promoted in ways that make sense to the target audiences. Those which compete, conflict or cannot be understood should be culled. Designing the necessary processes to enable such a policy to implemented across the silos of central and local government should be one of the objectives of the task force recommended in 2 above.

  1. Are the right institutions in place to ensure an effective skills system for the future? Should co-ordinating institutions be national, regional or sectoral, or a mixture of each.

The Local Enterprise Partnerships were uneven in performance but the transfer of their functions to the various tiers of Local Government [15] appears to have led to widespread loss of employer engagement and the staff attempting to improve this.

It is critical that the new Growth Hubs[16]  are resourced to improve employer engagement and organise local skills needs analyses and provision (to implement the local skills improvement plans) in co-operation with local recruitment agencies and skills providers. This is not something that to which Local and Regional Government, with their many other immediate priorities, can be realistically expected to give priority.

It is also important to also look at the potential role of Universities and Colleges as skills and careers hubs, building on the unique UK resource of JANET (the largest and most powerful educational network outside the US and China) and the Grids for Learning, to provide local on-line access and support for all tiers of on-line learning, enabling local and/or regional partnerships to provide integrated services akin to those of the City State of Singapore by joining up existing programmes and making better use of their funding and drawing in large employers.

In the Internet Age most skills demand is local or global – not national or regional.

The need is for joined up welfare to work, tax and skills policies across the Central Government silos of DfE, BEIS, Local Government, DWP, Treasury and their funding and regulatory agencies with the devolution of implementation to whichever level works best with regard to bringing together employers and training providers.

Instead of devolving skills implementation to a new tier of regional local government bureaucracy, authority should be passed to the employers and training providers involved with the STEM Hubs[17], LEPs[18] and Local Skills Improvement Plans[19], including to work across the silos of central and local government in co-operation with national/international professional bodies and trade associations and their local branches, accepting that how they do so may vary widely. That will mean ensuring that the new Growth Hubs

Thus the Greater Manchester regional approach to adult education, covering all post 16 skills and funding, appears to be very successful but is not the only model. Coastal Communities are likely to benefit from a different approach as part of the follow up to the House of Lords report on the Future of Seaside Towns[20].

But the partnerships to meet the skills needs of Coastal Communities in the South West [21] (building on, for example, over 40 years of co-operation by the Plymouth Manufacturers Group[22] and Pilot Cyberhub[23], which, inter alia, pioneered the use of military training skills and pastoral care to help turn round troubled youngsters) are likely to be very different to those for Suffolk Coastal (with the East Coast Energy Training Academy[24] providing off-shore and energy infrastructure skills).

“They do things differently the other side of Dartmoor”. Thus Plymouth, home to the Survey ships of the Royal Navy for over two centuries, has more skills partnerships with the far side of the world (using global skills standards and taxonomies – NATO, NIST[25] etc) than the rest of the UK, let alone Europe. Meanwhile Lowestoft is very much part of the North Sea economy: turbine operations competing with BMW for the same power engineering skills.

There is also a need to better link such partnerships, perhaps via the Growth and Career hubs, to national sector groups and skills initiatives, like the Construction Industry Training Board[26], Tech Skills[27], the Cyber Security Council[28], CyberFirst[29], and the Marine Society[30] (from sea cadets to distance learning where-ever your ship happens to be)..

  1. Concerns have been raised over the operation of the Apprenticeship Levy, particularly in relation to the decline in young people taking on apprenticeships. Is there a case for reforming the levy, for example by ring-fencing more levy funding for training for younger apprentices? 

The 40% drop in apprentices and £4.4 billion of unspent levy remitted to the Treasury[31] are prima facie evidence that problems at many levels need to be addressed, from the obstacles in the way of young people and the unskilled to taking up those on offer, to the need for functional skills reviews, away from academic skills and towards those required for jobs in current demand.

The requirement for 20% off-the-job is a serious barrier to uptake as well as being unnecessary and expensive given the rise of modular, blended, on-the-job learning (including assessment). Removal would also have a significant impact on drop out rates, particularly among apprenticeships in, for example, emergency services, healthcare and welfare which appeal to those who are people-centric and have difficulty with traditional teaching methods. The problems are at their worst with regard to nursing where off-the-job content can be over 40% and surveys indicate that problems with this are a bigger factor than cost/earnings in causing drop-out.

The obstacles to take-up amongst youngsters include the cost of travel and accommodation and lack of pastoral and support care for teenagers unable to find apprenticeships close to the parental home and/or coming out of the care system.

There is a need for guidance for teenagers and parents on how to choose apprenticeships which covers the support available from the employer and/or its training provider, not just the content and/or location of the apprenticeships. This might include a “Good Apprenticeships Guide” akin to the “Good Schools Guide” or the many student guides on Universities and University Towns.

There is a similar need for guidance and support for employers, particularly smaller employers, with regard to providing accommodation and pastoral care in partnership with their training providers, perhaps using the support services of local colleges and universities for student of the same age..

The distinction between apprenticeships and other forms of training in a world where most regulated skills (e.g. healthcare or financial services) regular updating and the need to retrain for new careers will be common makes the distinction between apprenticeships and other forms of structured-regulated-accredited training unhelpful.

The levy should be usable for all forms of employer recognised and accredited training and skills development programmes, using evolving skills definitions based on real jobs and market intelligence. 50% for non-apprenticeship skills delivery is a good start, but it should be for activities tht are accredited and recorded by recognised  third parties, including for reporting purposes.

  1. What should the role of business be in encouraging the development of skills in the UK? Should business be a consumer, funder, trainer or co-designer of skills provision? 

The UK skills system should be led, driven and delivered, from the top down, by employers. But only 7,700 are large enough to have relevant in-house skills. Even these tend to contract needs analysis and delivery to their chosen recruitment and employment agencies and training providers.

Most of the “employer” inputs to consultations are from professional bodies and trade associations, whether on policy or content, and are either from individuals “putting back” or from large employers without experience of the needs of the 5.5 million SMB and sole traders.

The failure of existing UK programmes to meet the needs of large employers with regard to skills in current shortage has led leading recruitment and training providers to organise their own in order to  give those to otherwise suitable applicants to fill vacancies with their clients. Some of these are large – sifting thousands of applicants to train hundreds to be productive and/or revenue earning within months instead of years, Others are small – hundreds of applicants for dozens of places.

Publicly funded Boot Camps are an attempt to replicate this approach for those without the skills to impress recruiters and/or to meet the needs of local SMBs. Their success depends on the relationships of those organising them with potential recruiters. This is itself a skill in short supply.

Over the past decade many members of the Recruitment and Employment Confederation have looked at using government programmes to help meet the needs of smaller clients. These commonly died when the schemes they used were changed. During Covid leading national and global recruiters like  Reed and Hays created mainstream offerings to help potential applicants improve their suitability as well as running customised programmes for large clients to pre-train recruits.

There is, however, a gap with regard to the skills needed by small and medium sized employers and

the LEPs and those involved with implementing the Local Skills Improvement Plans could and should be supported in working with local recruitment and employment agencies to offer similar services to the 40,000 or so employers with 50 – 250 staff. Whether such an approach is viable for those with 10 – 50 staff needs to be researched and there is   a total absence of any statistically valid research into how to meet the skills needs of those with under 10 staff [32].

  1. In a more mobile, flexible labour market, what incentives do employers have to provide training for their employees? Why do you think that employer investment in training has declined in recent decades? 

The biggest incentive is a rapid return on investment from improving the skills of existing employees and/or enabling new recruits to become revenue earning within days or weeks, not months or years. Basing training programmes on separately accredited micro-credentials enables this and it is often quicker and cheaper for employers to use these retrain the staff they already have than spend time trying to recruit those claiming the skills they need.

The use of micro-credential in the UK is now growing rapidly after a slow start because of lack of agreement on definition, badging and inter-operability and difficulties in embedding them within publicly funded/regulated courses. Thus the Open University defines a  twelve week post-graduate course as a micro-credential and is a members of the  1EdTech Digital Credentials Ecosystem while OCN London defines it as between 4 and 40 hours of separately accredited learning and uses Credly by Pearson for badging interoperability. Global players like Microsoft and Pearson support both and de facto inter-operability appears likely.

OCNLondon (an OfQual regulated awarding organisation) recently became an SFIA partner and launched accreditations for micro-credentials and training providers to make it easier for FE Colleges to support local small and medium sized employers. It has already accredited over 1,500.

There are no reliable sources on employer spend and there is no incentive for employers to publish their own lest their competitors raid them for those they train. Even if they use training contacts[33] to help encourage retention the legal precedent covers only a requirement to repay direct costs depreciated over two years.

What available reports do indicate is a sharp fall in spend over the past decade with Colleges and Universities who cannot help. Meanwhile the global market for english-language packaged learning materials has mushroomed.

Large employers increasingly contract with trusted training providers to assemble (from global English-language libraries of materials) and supervise the in-house delivery of customised, just-in-time, blended learning. Those trusted providers are usually operating to international, not UK, standards although they include Colleges and University departments operating to both.

The main constraint for most Universities and FE colleges is the need to re-train academic lecturers and/or recruit training professional to assemble, deliver and/or support packages to meet employer needs, using already available materials. Most of those who are successful appear to do so in close co-operation with industry partners who help provide the necessary subject and application expertise.

  1. Should further incentives be put in place to reverse the decline in employer investment in training, and if so, what form should these incentives take?

Those most effective additional incentive would be for those following professionally recognised training and/or update courses in order to remain employable in their current roles) to be exempted from national insurance (NI) and/or income tax for the periods spent on off-the-job  training and able to offset the costs. IR35 contractors should also be able to offset such costs against earnings.

To prevent abuse participants would be expected to maintain log books akin to those used for professional development and/or certificates to practice, cross referenced to employer records and third party accreditation records. The NI exemptions would apply only to assessed activities entered in the log for which auditable records are available. The exemptions from National Insurance could then be administered in much the same way as rebates for Statutory Sick Pay..

This would have the added benefit to the individual, if not necessarily the employer, of providing verifiable records of achievement when changing jobs.

  1. What incentives do individuals have to involve themselves in apprenticeships and training? Is the system available and attractive enough to encourage individuals to seek training, and if not, what can be done to improve this? 

The current system has limited attractions to those on benefits and there is a need to review the various welfare to work pathways and pastoral care and support for those with family needs.

Those funding their own training using professionally accredited programmes/materials, in order to change career should be able to offset all costs (including child care while engaged in away from home training) against current future income tax.

There is a strong case for encouraging the growing variety of local learning accounts to evolve and grow in the direction of the successful Singapore programmes by enabling employer contributions to be tax free and individual contributions to be offset against tax, provided the account is only spent on professionally accredited training.

  1. How does the UK’s approach to skills and training compare to those of other countries? Are there examples of good practice that the UK should be learning from

Most other countries are far more generous in allowing training costs, including family support, to be offset against current earnings and/or past/future tax.

Few nations with populations larger than Yorkshire even attempt to run centralised skills planning, control and accreditation systems akin to ours. One size does not fit all. Most devolve skills to regions, cities and counties.

Singapore has long been the model for a smart city skills partnership[34]. Its population is a little more than that of Yorkshire and considerably less than that of London..

In 2015 it introduced skills credits[35] to encourage all citizens aged over 25 to use its Skills Future Programmes[36]. By late 2020, when citizens received a $500 top up these included 25,000 on-line modules, 6,000 targeted on strategic skills. Those aged 40 – 60 are entitled to a further $4,000 for update and conversion courses.

The programme is akin to the Individual Learning Accounts[37]  announced in the 1999 budget. That programmes was, however, brought into disrepute by the failure to include even the most elementary safeguards against systematic fraud by unchecked training providers.

The first big difference is quality control and accreditation with a limited amount of funding from the Government and rather more from employers looking for skills and/or from individuals.

The second is the way that detailed employment forecasts and career advice and guidance have been brought together in a common service.

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Points for your manifesto

These are part of the draft submission but summarise much of the material into a political action plan:


The pace and nature of change in demand for skills and the techniques and technologies to help address those changes have overtaken the ability of centralised planning to cope but we must distinguish between disciplines that change slowly, if at all, and skills where demand may change within the year.

  1. Address the inability of of over 5 million employers to analyse their current needs, let along those in the future. There are under 8,000 employers with the in-house skills to do a needs analyse. In the absence of more meaningful definitions, Government planning and consultations should mandate the use of globally recognised definitions as per the DfE funded review of skills taxonomies: May 2022 and/or the services, used by large UK employers and their recruitment and employment advisors, such as Vacancysoft.and preface “consultations” by serious market research.
  2. Give priority to the engagement of employers, training providers and recruitment agencies over democratic accountability. Authority for planning and delivery should be devolved to the growth and careers hubs, not tiers of local government who will have other priorities for their attention and funding for the foreseeable future.
  3. BDUK and Ofcom to give much greater priority to the needs of the many rural schools which still lack reliable broadband and the many pupils and students in inner cities as well as rural areas, without  the affordable and reliable connectivity (mobile as well as fixed) necessary for home or workplace learning. Use the BDUK Voucher underspend and Rural Services Network to provide local access to world-class, accredited lifelong learning for all via schools, safe study spaces and secure mobiles via JANET and the Grids for Learning.
  4. Use the Growth and Careers hubs, industry-led National Sector groups and Professional Bodies to create local and regional skills partnerships akin to that of Singapore, to accredit content, subject to national industry-led quality control, counter-fraud and quality control processes operating to global standards, which qualifies for tax exemption and/or deduction.
  5.  Address the fragmentation of funding, accreditation and regulation of UK skills programmes is fragmented across DWP (welfare to work), Home Office (right to work), DEmp, BEIS, OfS and their agencies and regulators. Treasury to fund and train a cross-departmental task-force of young high-flyers in the use of generative AI to package and promote current programmes in ways that make sense to the target audiences, identify those which compete, conflict or cannot be understood and should be culled and recommend processes to achieve this across the silos of central and local government.
  6. Address the from employers and apprentices and £4.4 billion of unspent levy remitted to the Treasury with a functional review of objectives and processes, including the requirement for 20% off-the-job training – a major cause of drop out in apprenticeships (e.g. emergency services, nursing, care and welfare) which appeal to those who are people-centric or have difficulty with academic teaching methods. The obstacles to teenage take-up to be addressed include the provision of travel, accommodation and pastoral care for those unable to find apprenticeships close to the parental home or coming out of the care system. Organise or support independent guidance for teenagers and parents which cover the support available from employers and/or their training providers, not just the content and/or location of the apprenticeships.

[1] 1918_Haldane_Report.

[2] Financial sustainability of higher education providers in England: 2024 – Office for Students

[3] 0661.Tech Industry Gold degrees-Report-V8.indd (

[4] Cashing in on the Chips: The view from 1979 – When IT Meets Politics

[5] Envisioning the Global Information Society – The World and Business Computing in 2051

[6] Published as Intelligent Systems: The Unprecedented Opportunity edited by J.E. Hayes and D. Michie. Artificial Intelligence Series, Ellis Horwood, Chichester, 1983, 206pp. (£17.50). | Robotica | Cambridge Core

[7] Also put on-line by OII in 2010 OII | Learning for Change: the view from 1982 (

[8] Reskilling Europe for the Information Society (

[9] The End is Nigh: 1996 – 2001 IT Skills Trend Report: Published by The Institute for the Management of Information Systems and Computer Weekly. Electronic copies available from [email protected]

[10] The Careers & Enterprise Company | The Careers and Enterprise Company

[11] The LEP Network | Supporting all 38 LEPs across England

[12] Careers Hubs | The Careers and Enterprise Company

[13] Homepage | Higher Education Degree Datacheck (

[14] Better Hiring Institute

[15] Guidance for Local Enterprise Partnerships (LEPs) and local and combined authorities: integration of LEP functions into local democratic institutions

[16] Full network of 39 growth hubs boost business support across the country

[17] STEM Ambassadors Partners

[18] The LEP Network | Supporting all 38 LEPs across England

[19] Local skills improvement plans: stage 2 guidance (

[20] The future of seaside towns: Follow up report (

[21] South-West Coastal Local Policy Innovation Partnership

[22] Home | Plymouth Manufacturers’ Group (

[23] About – BIT Training (

[24] East Coast Energy Training Academy (

[25] National Institute of Standards and Technology (

[26] CITB: Construction Industry Training Board – CITB

[27] TechSkills

[28] The UK Cyber Security Council: Chartering the cyber security professional

[29] CyberFirst overview – NCSC.GOV.UK

[30] What We Do – Learn About Our Charities and Goals – MSSC (

[31] Huge fall in apprenticeships under ‘broken’ levy (

[32] Why we need to research the cybersecurity needs of Micro-Businesses

[33]    Contracts of employment recovery of cost  and  Training contracts under the microscope

[34] Home (

[35] SkillsFuture Credit | Education, Career and Personal Development (

[36] Courses |

[37] Individual Learning Account – Wikipedia

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