Reskilling for recovery

Equipping the nation for tomorrow’s economy

7 July 2020

By Andy Norman

5 minute read

The outbreak of Covid-19 represents the biggest shock to the British economy in living memory. With nine million workers currently furloughed and a range of forecasters warning that the unemployment rate could approach double figures by the end of the year, the government must act now to ensure millions of people are not locked out of the labour market.

In this context, the skills system comes to the fore. Upskilling and reskilling the population should be a top priority for the government. Unfortunately, the skills system faces three key challenges.

Key challenge 1: falling participation and investment

Participation in publicly funded adult skills training has fallen by 37% since 2012/13. Government funding for adult education is down 39% in real terms since 2002/3. Exacerbating this, the private sector has not stepped into the gap, with average investment and time spent training stagnating in recent years.

Key challenge 2: inequality in participation

Those engaged in training are more likely to be highly skilled already and participation is negatively correlated with deprivation. Apprenticeship participation has also been drifting away from young people from deprived backgrounds towards already highly skilled adults.

Key challenge 3: place-based inequality in skills

Across a range of indicators covering training levels and skills outcomes, there is a clear divide across the country. On seven of the eight indicators looked at, areas covered by the former Red Wall underperform relative to the rest of England. In contrast, London and the South East outperform the rest of the country in all but one of the indicators. Despite this, the effect of formal qualifications on employment is strongest in more deprived areas. The skills system is currently failing those areas that will need it most – where economic hardship is likely to be greatest after the crisis.

Responding to the crisis

We propose a turbocharged Right to Retrain that focuses on digital learning rather than the classroom, upskilling rather than standing still and local rather than national in its delivery.

The package of measures outlined in this report targets those losing their jobs as a result of the crisis, predicted to reach 1.2 million in England by October. Combining this with the existing number of learners, we can boost participation to record highs and equip 3.3 million people for an inclusive recovery.

Our recommendations include:

Building a high-quality online learning system

  • Establish a central infrastructure for online skills training – including regulation and certification – making it easier for employers to understand and trust these courses.
  • Expand and fast track the Education Technology Strategy to reflect the drastically changed context. The £10m already pledged should be scaled up to enable collaborative development of online courses between learning providers, businesses and government departments. The fund should also develop the necessary technology for online teaching of technical skills to be done properly.

Strengthening existing provision

  • The government should pay 50% of wages for all young apprentices. This should come with strict conditionalities for businesses, ensuring proper levels of training and minimum wages are adhered to.
  • Extend public funding to include a first Level 3 qualification for everyone, regardless of their age or employment status. Level 3 teaching should be designed as far as possible to be accessible to people without a Level 2 qualification so they can quickly advance.

Support for living costs for those in need of training

  • People who have already lost their jobs should be paid a Learners’ Living Allowance (LLA) when undertaking training, equivalent to the maintenance loans available for higher education students, to be paid back under the same conditions upon re-employment.
  • Those still in jobs should be entitled to paid time off to undertake training, with government covering up to half the salary costs during this period.

Ramping up local strategic input

  • Further education colleges should have a place-based remit, playing a strategic role in the delivery of provision, rather than competing in a marketplace for learners. This means working with other providers and local government to ensure provision reflects the needs of the local area.
  • Learning the lessons of Local Enterprise Partnerships, the new Skills Advisory Panels should report to MCA mayors on local labour market need. Being democratically accountable, mayors should hold ultimate responsibility for ensuring strategic tailoring of provision.