Strike the right balance between national skills policies and local talent needs

Last year, it was reported that the UK was seriously underperforming in skills development, dropping 26 places to 64th out of 100 countries.

The research showed that the UK is strong in future skills areas such as resilience, adaptability and risk management. But it lags in its approach to the continuous development of new skills.

The UK government has introduced many policies to support the development of skills: from the re-introduction of 'returnerships' and the £34 million boost for skills bootcamps in last year’s budget, to the apprenticeship levy.

An ongoing challenge for this government and the future government, however, is making sure these skills policies deliver on both a national and local level.

UK workers not learning enough new skills

A regional approach

The UK has a wealth of industry specialisms across its regions. It has a growing number of sector-specific hubs, all of which have a hugely positive impact on the UK economy. Whether it’s manufacturing specialists in the Midlands, aerospace in the south west or the emerging gaming sector in Liverpool, regions are capitalising on their booming sectors.

If the UK is to improve its position when it comes to skills development, the government must develop a national skills policy aligned to an industrial strategy, which delivers the talent pipeline and retraining/upskilling opportunities to meet regions’ individual needs.

This would involve a co-ordinated effort between businesses, metro mayors and local authorities, with the government leading on the implementation of a comprehensive national skills strategy. As well as being linked to the UK’s overall industrial strategy, it should also have flexibility at its heart, to support devolved regions but keeping a national focus.     

Flexibility in action

Last year, £3 billion of apprenticeship funding was either handed back to the Treasury by the Department for Education, or left unallocated by the Treasury, following the launch of the apprenticeship levy in 2017.  

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In the Liverpool City Region Combined Authority, this underspend amounted to tens of millions of pounds, leading Mayor Steve Rotheram to urge big firms, such as Liverpool Football Club, to help fund apprenticeships at smaller businesses as part of the Young Person’s Guarantee scheme.

To date, the Combined Authority has transferred £4 million of unspent levy to create 800 apprenticeships.

As well as this, the Greater London Authority has upheld the Mayor’s Apprenticeship Programme since 2021, pledging an annual sum of £1.2 million to support apprenticeships projects.    

These are examples of a national skills policy, such as the apprenticeship levy, being flexed to help devolved governments support regional businesses.  

The Metro Mayors and local authorities

The Metro Mayors and local authorities understand regional skills needs better than anyone. In support of that, the government launched its local skills improvement plans (LSIPs) initiative last year, to ensure training provision better meets the local needs of businesses and regional sectors.  

Employers tackling skills shortages with recruitment rather than training

LSIPs are a positive step forward to tackling skills shortages across regions, however more effort is required to attract people to these opportunities. Training providers cannot train and upskill people if no one is willing to enter into the skills gaps in the first place.

Final thoughts

It’s imperative the government produces a national skills strategy, aligned with an industrial strategy, to empower large employers to embrace national solutions at a local level. In doing so, we are also supporting the local SME market, which contributed £2.4 trillion to the UK economy in 2023.

This national skills strategy should use an overarching national framework to provide the right funding for programmes devolved to the regions. It must also be employer- and learner-led, focusing on flexibility and accessibility that delivers on both a national and regional level.

Without a skills strategy of this kind, the UK will continue to underperform in our skills development and miss out on considerable long-term economic growth.

By Nichola Hay MBE, director of apprenticeship strategy and policy at BPP