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Putting skills centre stage in a fast-changing economy

Blue collar workers working during coronavirus
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With long-term economic changes, the pandemic and Brexit, the employment landscape in the UK is changing. Dr Deborah Talbot talks to Dr Fiona Aldridge, Director of Policy and Research at the Learning and Work Institute, about why skills should be at the core of every UK policy.

Dr Deborah Talbot: Welcome Fiona. Can you explain your understanding of the importance of skills, both to individuals and the economy?

Dr Fiona Aldridge: Skills – developed either in your initial education or as adults – are really crucial to individuals’ life chances. We know that people who have higher level qualifications are more likely to be in employment and likely to earn more. Beyond the economic benefits, learning and skills development is associated with improved health and wellbeing, better community cohesion, and people feeling that they have more agency over their lives.

There are benefits to businesses too. Skills improve productivity and competitiveness and support economic growth. So it’s wins all around when we invest in skills.

Deborah: Without those skills, what happens to the economy?

Fiona: Without those skills, we find that businesses have skills shortages, affecting their ability to grow and develop. In turn, this affects economic growth and productivity.

Deborah: Can this explain why different regions in the UK have very distinct economies?

Fiona: Yes, in part. We know from our own research that the skills profile of local areas can be very different. Part of the answer will be to invest in skills development in ‘left behind’ areas, but we also need to invest in job growth and better skills utilisation so that people see the reward for developing their skills.

We also need to find better ways of sharing information about what skills are needed and valued in the local labour market. This point is particularly critical in the current economic crises, where workers are more likely than ever before to have to move between different sectors of the economy and retrain to change careers. 

Deborah: In that light, I’m wondering how you would assess whether the kinds of policies we see around skills are enough?

Fiona: These policies are an important start, but they don’t go far enough. I’m pleased to see the focus on supporting young people to develop skills and find work; however, we need to do much more for adults.

The lifetime skills guarantee and the collation of online learning resources into the skills toolkit are a start, but we need to have a higher ambition and go much further if we are to equip and support adults to develop the right skills, find the right jobs, and move around the labour market. This will involve investing in basic skills and qualifications up to and at level 2 and offering and short, sharp, flexible provision that’s shaped around adults’ lives. We know there are skills shortages at levels 4 and above too, and we need to develop a stronger offer here as well.

Earlier on in 2020, Learning and Work Institute published a paper with Reform called When furlough has to stop, which outlined a comprehensive package of support for adults to update their skills to find new work or change careers. One of the key points we made was that furlough was a great opportunity to encourage people to learn new
skills, either for their existing job or to find new employment.

It was a missed opportunity for many, although our annual Adult Participation in Learning survey does show that many adults took time during lockdown to learn something new and develop their skills.

Of course, many of employment and skills challenges that we have seen in recent months were already in train before the pandemic – automation, the decline of some sectors and growth in others, and, of course, Brexit. And yet we had seen a decade of decline in investment and participation in learning. Public investment in adult learning fell by nearly half, while UK businesses spend just half the EU average training their workforce.

If we are going to help people survive and thrive in a time of economic change, then we should avoid too much central planning. Instead, we need to ensure that people have good information and advice about employment and skills opportunities, that we support them to be confident, resilient learners, and that we offer accessible and affordable
opportunities for adults to develop their skills.

Deborah: We have a government for whom, despite recent turnarounds, state intervention is not in their DNA. Is there a risk that, without sufficient skills investment, we’ll end up with economic shrinkage?

Fiona: Yes, there is clearly an important role for government to play here. Public investment in skills is critical if we are to grow our way out of the economic challenges that we face. But government also has a role to play in encouraging employers to invest in skills and to make it easier for individuals to invest their time and/or money. 

Deborah: Is there also an issue of flexibility and access as well? L&W have recently published a report on lone parents during the pandemic, and, of course, other groups have been affected too. I’m wondering why there hasn’t been more thinking around how to create more access for those groups? I’m particularly thinking about the technology aspect because it’s technology that can often facilitate flexible access.

Fiona: Yes, over the past few months, Learning and Work Institute has been looking at the impact of the pandemic on important role to play in getting people the sorts of information and support that they need. But more broadly, our research on single parents suggests that they also need high-quality employment and skills support, greater access to high quality flexible and part-time work, improved childcare and better
support through our social security system.

In relation to technology, there’s some really interesting work taking place led by Nesta at the moment that is looking at innovative solutions using tech to help people develop their skills to change careers. As this develops, it will be great to see some of this scaled up. And, of course, at Aptem, all of your products are geared towards facilitating flexible, remote learning.

Deborah: If you were to name one policy that could impact employment and skills training most significantly in 2021, what would that be?

Fiona: Referring back to our paper with Reform thinktank, I would like to see a comprehensive skills and employment package for adults looking to find a new job or change careers. If we can get this right, then we start to create a culture of lifelong learning and an expectation that learning new things and updating our skills is something we all can do throughout our lives to grow, develop and thrive. And, of course, it’s important to remember that learning is fun too. It’s not just about developing skills for work; learning is for wider life and valuable in its
own right.

I would also like to see skills integrated into wider government policy. So, as we start to invest in infrastructure, in rebuilding a sustainable economy and in our public services, we think strategically about the role that skills have to play. Skills are too important to be considered as just the responsibility of the Department for Education.

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