Major new Government initiative ‘will help bridge UK skills gap’

A new Skills England initiative has been launched by Prime Minister Keir Starmer and Education Secretary Bridget Phillipson to help bridge a skills gap which is blamed for 36 per cent of UK job vacancies.

The new Government today announced the launch of Skills England to bring together the fractured skills landscape and create a shared national ambition to boost the nation’s skills.

The Education Secretary has also today appointed Richard Pennycook CBE, former chief executive of the Co-operative Group and lead non-executive director at the DfE, as the interim Chair.

Skills are crucial to economic growth, with a third of productivity improvement over the last two decades explained by improvements to skills levels.

But between 2017 and 2022 skills shortages in this country doubled to more than half a million, and now account for 36 per cent of job vacancies.

Skills England will bring together central and local government, businesses, training providers and unions to meet the skills needs of the next decade across all regions, providing strategic oversight of the post-16 skills system aligned to the Government’s Industrial Strategy.  

Supporting local areas to develop the skilled workforces they need – in particular across construction and healthcare - is fundamental to the Government’s mission to raise growth sustainably. By working with the Migration Advisory Committee, Skills England will also help reduce reliance on overseas workers.  

Prime Minister Keir Starmer said: “Our skills system is in a mess, which is why we are transforming our approach to meet skills needs over the coming decades.

“They will help to deliver our number one mission as a government, to kickstart economic growth, by opening up new opportunities for young people and enabling British businesses to recruit more home-grown talent.

“From construction to IT, healthcare to engineering, our success as a country depends on delivering highly skilled workforces for the long-term. Skills England will put in place the framework needed to achieve that goal while reducing our reliance on workers from overseas.”

The initiative was welcomed today by Greater Birmingham Chambers of Commerce head of policy Emily Stubbs (pictured), who said: “Our latest Quarterly Business Report found that almost two in three firms currently face recruitment difficulties, and labour costs are of increasing concern to local businesses.

“Skills shortages have been a challenge here in the West Midlands since well before Covid and Brexit, and better planning is needed to address these.

“We need a long-term national skills strategy that ensures institutions are adequately funded and supported to deliver the training the economy needs and gives businesses the confidence to meaningfully increase investment in training.

“To drive impact for local communities, the establishment of Skills England must join up skills initiatives across government, align with immigration policy and work closely with devolved authorities, including the West Midlands Combined Authority.

“And employer skills needs must remain at the heart of the system. Building on Local Skills Improvement Plans – including the West Midlands and Warwickshire Local Skills Improvement Plan - will help develop strong partnerships between employers, training providers and others to ensure people get the skills and support they need.

“But this will not happen overnight. In the meantime, we need to ensure that where they are unable to recruit and train locally, firms can access global talent to fill urgent job vacancies, which will require a more efficient and effective visa system.”

Skills England will be established in phases over the next 9-12 months to create a responsive and collaborative skills system.  

The Skills England Bill announced this week will transfer functions from the Institute for Apprenticeships and Technical Education (IfATE) to Skills England.   

This sits alongside work to simplify and devolve adult education budgets to Mayoral Combined Authorities to ensure that they can address their adult skills needs directly and support growth in their areas.   

The first phase of Skills England’s launch involves setting up the organisation in shadow form within the DfE, and starting work on an assessment of future skills needs while building strong relationships with employers. A permanent board, Chair and CEO will be appointed in due course.   

The route for employers to shape skills training is currently offered by the Institute for Apprenticeships and Technical Education (IfATE). IfATE’s functions will transfer to Skills England, as part of the new organisation’s broader remit.

IfATE will continue its important work in the interim as the transition of functions to Skills England is finalised.  

Skills England will hold responsibility for maintaining a list of levy-eligible training to ensure value for money, and that the mix of government-funded training available to learners and employers aligns with the identified skills needs.  

Click here to read the Chamber's latest Quarterly Business Report.