A new prescription for UK workforce skills in the wake of Brexit

Sep 22, 2017
With the EU referendum comes an opportunity for the UK to rethink workforce development.

Every few years, the UK government publishes a new strategy to boost growth, productivity, innovation, and investment:

  • In 2011, the Plan for Growth aimed “to equip the UK to compete in the global race.”
  • The 2013 Industrial Strategy was a “long-term, whole of government approach to support economic growth.”
  • In 2015, there was a major new Productivity Plan (Fixing the Foundations) to encourage long-term investment and promote “a dynamic economy.”

The narrative changes according to the context— are we battling the headwinds of economic crisis or emerging confidently to secure recovery? — but the diagnosis and policy prescription are often the same. And, understandably, almost always include a priority focus on the skills of the UK workforce. To borrow from the construction analogies that often pepper these strategies: Our human capital is an important building block for growth.

The Return of Industrial Strategy

Again in 2017, we see workforce skills as a pillar in the latest national plan. January’s Green Paper entitled Building our Industrial Strategy is explicitly framed as a post-Brexit strategy, but has the policy prescription actually changed? It is too early to say definitively, but the Parliamentary Select Committee Inquiry on Industrial Strategy reported that the rhetoric of the Green Paper "strikes a significant departure from that of recent years, even decades."

Ideas related to re-distribution and a more interventionist approach to sector support (“moving away from the power of the markets” in the words of the Select Committee) could mark a step change. But the report questioned whether the Green Paper might be too incremental to really tackle the four long-term weaknesses it, and pretty much every preceding strategy over the last 15 years, has identified in relation to the UK economy: skills deficiencies, relatively low productivity, low investment in infrastructure, and low spend on R&D.

Addressing Structural Issues Underpinning the Skills Challenge

Roughly one in five UK job vacancies are difficult to fill because employers struggle to find applicants with the right skills. This figure rises and falls a little over time, but the problem remains fairly constant. We thrive on measures relating to higher-level skills but perform less strongly in technical and vocational skills, literacy, and numeracy. There is also the question of having the right kinds of skills. Weaknesses in the STEM pipeline have been highlighted for many years, and the transformative changes that technology is having on jobs — and the skills required to perform them — has become an issue of global proportions.

Brexit certainly provides an opportunity to re-think how we plan and develop the skills required for the UK economy. It may be, though, that the major policy shift has already happened. A new apprenticeship levy, introduced in April 2017, provides the rationale for larger employers to actively invest in the skills they need and could mark a genuine paradigm shift away from previous, more indirect approaches to align training with labour market needs.

A Programme of Long-term Reform

Government plans to substantially reform technical education in England include simplifying progression routes, stretching learning, centering on a rigorous “common core” for 16-18 year-olds, introducing extended work placements, and massively rationalising the qualifications market. These plans aim to tackle a problem that has hampered previous, similar reforms: how to boost the status, reputation, and parity of technical education as an alternative to academic study in eyes of young people, parents, and employers.

This is no quick fix. The post-Brexit Green Paper describes technical education as a “neglected” area, and it is difficult to predict what the apprenticeship market will look like in three years. While Brexit provides new impetus for having a long-term programme of transformation, it may be a decade before these reforms take root and the UK economy feels any benefits. So, the most important prescription of all could be a dose of patience and stable policy implementation — quite an achievement during a period of major political change and given that economic and industrial strategies seem to have a usual life expectancy of just a couple of years.

By Colin Howat
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