01
October 2020

Written by:

Thomas Woolhouse

Senior Account Manager

Closing the skills gap

The Chancellor has previously admitted that, although the Government has taken unprecedented steps to support the economy during coronavirus, he cannot save every job.

The extent to which more could have been done will likely be debated for a very long time to come. However, the acknowledgement that there are (and will continue to be) significant job losses has been accompanied by a new program, designed to retrain those workers who have lost their jobs and redeploy them into new opportunities.

This program, whilst rolled out in response to coronavirus, has also been deployed with a secondary purpose. It is not enough to just help people to retrain to find new jobs, but they must also be equipped with the skills and qualifications which the employment market is sorely lacking: Namely in the STEM and vocational sectors.

Successive Governments and Parliaments have long talked a good game about the need to ensure that further education qualifications and apprenticeships are given parity of esteem with universities and academic routes.

However, this failure to achieve a significant shift in attitudes, or to deliver impactful reform is reflected by how the labour markets continues to suffer from major skills shortages, despite the fact that many of these skills shortage roles are very well remunerated.

One only needs to check the Migration Advisory Committee Skills Occupation Shortage list to understand how deep the skills deficit goes. It encompasses not only IT and engineering roles, but also those occupations which have so long been taken for granted.

One explanation for why so little effort has been made by politicians and policymakers to improve further education is that for many years STEM or vocational roles have long been filled by talent attracted to the UK from abroad, particularly from the EU. Free movement has allowed businesses a consistent pipeline of talent to skilled roles, whilst the domestic pool of talent has continued to age with not enough young people stepping into the gap as the next generation.

However, with the end of the Transition Period approaching many businesses are doubtful that they will be able to continue to access the skills they require. This has only increase the sense of urgency to develop a more sustainable pool of domestic talent.

To give the Government credit, T-levels has been introduced as a means to address these shortages and to improve the quality of further education courses. The Apprenticeship Levy was also introduced to better finance apprenticeship training, although this has had more mixed results.

These were steps in the right direction, and the program announced this week builds upon these efforts. The Lifetime Skills Guarantee introduced by the Prime Minister includes:

  • £1.5 billion in capital funding to upgrade and improve colleges across the country.
  • Adults without an A-Level or equivalent qualification will be offered a free, fully-funded college course.
  • Higher education loans will also be made more flexible, allowing adults and young people to space out their study across their lifetime.
  • Portable Apprenticeships which will see portable contracts being implemented, whereby an apprenticeship contract can be carried over to a new employer.

This is undoubtedly a significant package of investment, although many of the details remain yet to be clarified. It has also clearly been designed to provide flexibility for adults who need to retrain, rather than just focusing on students in full time education.

However, to deliver real results and close the skills deficit will take time and commitment by the Government. This cannot just be a stop gap or a knee jerk response to coronavirus. Instead it must help must pave the way for a real change in attitudes to vocational training, and ensure a sustainable pipeline of skilled workers who are equipped with the qualifications required to fill those roles created by the post-coronavirus recovery, and which are desperately needed by businesses in the longer term.