Year zero for Skills England

Skills England doesn’t (officially) exist yet.

There is an interim chair (Richard Pennycook), and a very interim website.

Yet it has released its first annual report: Driving growth and widening opportunities – and has post-hoc laid claim to that “occupations in demand” data I plotted yesterday, along with the historic work of the wonderful Unit for Future Skills.

As James Coe and I noted back in July, it’s pretty much a data router in arms-length body form – connecting up everything from the skills needs built into the migration system, the myriad local authorities expecting commissioning and funding powers, various employment sector interest groups, the nascent Industrial Strategy Council, and agencies in Wales, Scotland, and Northern Ireland.

Firehose

Accordingly the first report is a data heavy download of information. We learn that over a third of UK job vacancies are now due to skills shortages, that the availability of qualified workers varies substantially by geographical location, and that the amount employers spend on training is currently at its lowest ebb since 2011. In other words, there are jobs where suitable people are critically in demand, these are skilled jobs, and getting the training or experience is hard.

Notably, the biggest growth sectors up to 2025 are going to need skills at a higher education level – even where these qualifications might not currently exist.

The central message is fairly straightforward – we’re going to need skills (as a nation, and as employees and employers) in order to thrive and grow. To get this we need a skills system providing the right opportunities for people to get them – what we have currently is “confusing and difficult to navigate”, people don’t know how to access programmes and how the various initiatives all fit together. And by people we also mean employers, who spend far less on training than any comparable European nation.

Hence – it seems – the Growth and Skills Levy, which will let employers spend the old apprenticeships levy on a wider range of “high-quality training” to be identified by Skills England. Just not level 7 apprenticeships, which – it appears – may be funded “outside of the Levy”.

Hence the investment in data and information, in order to understand what is needed (locally, and nationally) and ensure that it can be straightforwardly provided as required. If you are jumping up and down screaming “Local Skills Improvement Plans (LSIPs)” then firstly calm down, and secondly rest assured that these plans are a big source of up-to-date information.

The missing middle (the idea that there is an untapped market for level 4 and 5 technical qualifications and the skills that these lead to) is present and correct. There’s been numerous attempts to fill this gap – higher technical qualifications, foundation degrees – but none have ever really taken off, though there is some evidence that apprenticeships are moderately attractive at this level.

Mapping time

Skills England identifies three megatrends that will affect the job market – an ageing population, the possibility of automation and augmentation, and a growth in “green” (clean energy and specialised construction) jobs. These are all going to mean we need to consider adult retraining, so the report flags the various initiatives that exist to support this: including, interestingly, the Advanced Learner Loans that we’d previously expected to be superseded by the Lifelong Learning Entitlement.

Chapter 3 covers the skills demand mapping exercise itself.

Here’s the plot I did the other day:

[Full screen]

This estimates demand for particular occupations drawing on seven indicators:

• Visa applications
• Proportion of vacancies due to skill shortage
• Online job adverts
• Annual change in hourly wage
• Wage premium
• Annual change in hours worked
• Annual change in contract or temporary workers

The biggest occupation in critical demand is care workers, and it isn’t even close. Other occupations in demand include everything from insurance underwriters, metal workers/fitters, software developers – but there are areas across the employment spectrum (life sciences and the green workforce are two areas that may interest universities) where current provision does not appear to be delivering the skilled employees the sectors in question are asking for.

What’s coming next? Well – roundtables and webinars about skills needs this autumn, and an expansion of the initial sector assessments of skills needs. Decisions on what training should be accessible through the Growth and Skills Levy, a standardised skills taxonomy for the UK (I am so excited for this!), work on funding devolution. And – a white paper! – Get Britain Working.

The white paper will focus on earnings potential (in terms of career progression), and the much heralded Youth Guarantee (greater support to access education). The animating idea seems to be to get people working longer hours in better paid jobs.

One more thing

There’s a bit in every education publication of the past few years that is difficult reading for the sector.

Under the last government, we came to know it as the “low quality courses” bit – starting with a citation of that Institute for Fiscal Studies research (skating nimbly over some fairly substantial methodological concerns) before revealing that some courses (broad subject areas) at some universities are closely correlated with low financial returns over a working lifetime. If we are lucky, we’ll get a link to another IFS report and the news that many graduates outside of London are not in “graduate jobs”.

Whose fault is this? Why, universities, of course, Universities are awful.

At least, that was the conclusion I was braced for while reading the first report from Skills England. But the section entitled “Variable returns from higher education” actually concludes:

Overall, the evidence suggests that some students who go into higher education could be better served by choosing an alternative degree course or advanced training short of a degree. Helping students to make a better choice can improve their life chances and support more productive jobs, as well as improve the value for money of the student loans system

This reframing also undoes a bunch of recent thinking on social mobility. Rather it being the fault of universities (yup, them again) that they are unable to offer the same outcomes to everyone, this appears to once again be looking at background as a contributing factor to life chances.