Economic growth has been poor since 2008, leaving average weekly wages £246 below where they would have been, based on pre-financial crisis trends, and public services stretched and strapped for cash. It’s easy to say we need to restart stalled growth, but rather more difficult to do.
Skills should be a golden thread running through all of our growth efforts. After all, someone has to build the homes, staff the health services, install the clean energy that the government says it wants. And we know, too, that learning can be good for health and wellbeing as well as for people’s career prospects, easing pressure on stretched services and allowing people to continue to work.
Most politicians would agree that skills are vital to almost all of our ambitions as a country. And yet research from the Learning and Work Institute shows that we’re stuck in the slow lane compared with other countries – and more unequal, too.
On current trends, one-in-two adults will have a higher education qualification by 2035. That doesn’t compare too badly with other countries, although we stand out for a lack of flexible, work-based options to gain these qualifications at any age.
It’s at A-level equivalent and below that we fall short. By 2035, one-in-three people will have qualifications no higher than GCSE level, meaning we’ll fall behind other countries that are fast improving their skills base.
Dig below those headline figures, and even more worrying divides appear. London and parts of the South East continue to race ahead – on track to match the most highly skilled countries in the world, with three-quarters of people qualified to at least A-level equivalent. But the rest of the country risks being overtaken by Latvia, Estonia and New Zealand.
In other words, the UK combines a high proportion of people with low qualifications with larger skills inequalities between areas than other European countries. The two together contribute to stubborn inequalities in jobs, pay and growth across the country.
This is the inevitable consequence of insufficient focus on vocational education over a long period of time, combined with falling investment in skills. The government is spending £1bn less on skills in England than in 2010, and employers are spending 26% less on training per employee than in 2005.
So far, so depressing. The good news is that we can do something about this. First, we can make sure that all of our growth plans (whether it’s the Industrial Strategy, homebuilding, clean energy or anything else) include a clear skills plan.
Second, we can support and encourage employers to invest more and reverse the declines we’ve seen in previous decades. We need to make sure that non-graduates benefit – currently, they’re one-third as likely to get training at work as graduates. We’ve argued for reform of the apprenticeship system to prioritise career changers and those taking their first steps on the ladder, and for a Skills Tax Credit to reward employers investing in training.
Third, we need a clearer and more joined-up skills system. The current system is a jumble of acronyms, and focuses on allocating public money rather than how it works alongside employer investment. We need to look at the whole picture and make sure public investment ‘crowds in’ private investment.
The problem of a poor and unequal skills base in the UK isn’t new. The necessity of tackling it has intensified. Let’s make skills that golden thread running through all we do.
