1、2 SKILLS 2030May 2024This report was written by Dr.Peter Wilson,Senior Researcher at Policy Connect.The views in this report are those of the author and Policy Connect.Whilst these were informed by the contributors to our inquiry,they do not necessarily reflect the opinions of either individuals or

2、organisations.Policy Connect 7-14 Great Dover Street London SE1 4YRwww.policyconnect.org.ukContentsBUILDING A WORLD-CLASS SKILLS SYSTEM 3Co-chairs Foreword 4Executive Summary and Recommendations 6A Vision for Skills in the next Parliament 101.Reshaping Skills Policy Decision-making 132.Investing in

3、the Future of Further Education 203.Removing Barriers for Young Learners 254.Maximising Employer Investment in Skills 305.Making Lifelong Learning a Reality 37Methodology and Contributions 47Acknowledgements 514 SKILLS 2030Co-chairs ForewordAs co-chairs of the Skills Commission,we are pleased to pre

4、sent this report setting out an ambitious agenda for reforming the skills system in England over the next Parliament.With a general election fast approaching,all political parties should recognise the central role that a highly skilled workforce plays in driving economic growth,boosting productivity

5、,and expanding opportunity for all.Since we last co-chaired a Skills Commission inquiry on the skills system in 2020,the Government has made some welcome progress in implementing reforms to the skills system,many of which aligned with the recommendations in our previous report.The introduction of Lo

6、cal Skills Improvement Plans,the promotion of apprenticeships,and the announcement of the Lifelong Learning Entitlement are all positive steps forward.However,as this report makes clear,much more must be done to build the world-class skills system that our country needs.The Skills 2030 inquiry has h

7、ighlighted the significant challenges that the skills system continues to facefrom challenges for further education to falling employer investment in skills to persistent barriers facing both young and adult learners.At the same time,we heard a wealth of ideas and proposals from stakeholders across

8、the sector for addressing these challenges and putting the system on a stronger footing for the future.The vision for reform set out in this report is holistic and wide-ranging,covering five key areas:improving skills policy decision-making structures,securing sustainable investment in further educa

9、tion,removing barriers for young learners,maximising employer investment in skills,and making lifelong learning a reality for all.Taken together,the recommendations have the potential to transform the skills system and ensure that it can adapt and respond to changing workforce needs in the years ahe

10、ad.Crucially,this agenda is not just a wishlist of disparate initiatives but a coherent blueprint for change that can command broad consensus.We believe that the core aims underpinning the Skills Commissions visionincreasing productivity,supporting social mobility,and empowering individuals to upski

11、ll and reskill throughout their livesare ones that politicians of all stripes can and should support.Of course,we recognise the challenging fiscal context in which any reforms must be delivered.However,what came through loud and clear in our inquiry is that investing in skills is not a luxury but an

12、 absolute necessity for our future economic success and social cohesion.The costs of inaction are simply too high.As we look ahead to the next Parliament,it is vital that skills policy is not relegated to the back burner but instead becomes a top priority for whichever party or parties form the next

13、 government.This report provides a roadmap for delivering meaningful and lasting improvements in the skills system-all that is needed now is the political will to act.We thank the many individuals and organisations who have contributed to this inquiry.In particular,we would like to thank Policy Conn

14、ect for delivering this inquiry and our fellow commissioners for sharing their time and expertise.BUILDING A WORLD-CLASS SKILLS SYSTEM 5It is now over to policymakers to heed the powerful case for change set out in these pages and to work in partnership with the sector to build the skills system tha

15、t England needs to thrive in the years ahead.Come 2030,we should strive to have the fundamentals in place for our skills system to lead the world.Rt.Hon Sir John Hayes MPBarry Sheerman MP6 SKILLS 2030Executive Summary and RecommendationsThis report sets out a vision for reforming the skills system i

16、n England over the next Parliament,with a goal of building a world-class skills system by 2030.It covers five key areas:reshaping skills policy decision-making,investing in further education and skills,removing barriers for young learners,maximising employer investment in skills,and making lifelong

17、learning a reality.Reshaping Skills Policy Decision-makingThe inquiry found that the current skills decision-making apparatus faces several challenges,including a lack of long-term vision,insufficient coordination with wider economic policy,and limited devolution of power to local areas.To address t

18、hese issues,the Skills Commission proposes two recommendations:Recommendation 1:The Government should develop a national skills strategy that is embedded within a wider industrial strategy.It should create a Skills and Workforce Council,a non-departmental public body at arms length from government,t

19、o oversee the delivery of the strategys goals.Recommendation 2:The Government should provide Mayoral Combined Authorities and other regional authorities with“no-strings-attached”funding settlements for adult skills and an enhanced set of powers to shape skills provision in their area.A“no-strings-at

20、tached”funding settlement involves:A.A single consolidated budget for all 19+adult skills funding.Enhanced powers should include:B.A joint governance board with the Department for Education to co-design regional 16-18 educationand careers guidance services.C.A statutory role in Local Skills Improvem

21、ent Plans(LSIPs).D.A decision-making role in skills capital investment.BUILDING A WORLD-CLASS SKILLS SYSTEM 7Investing in the Future of Further EducationFurther Education(FE)colleges play a critical role in upskilling the workforce but face significant challenges,including long-term reductions in fu

22、nding,inflexible budgets,and difficulties in recruiting,retaining,and training teaching staff.The Skills Commission proposes two recommendations to support FE colleges and their staff:Recommendation 3:Further Education colleges should receive multi-year funding settlements of 2+years from the Educat

23、ion and Skills Funding Agency or,where applicable,their regional authority.Recommendation 4:The Department for Education should deliver a new Further Education Workforce Strategy.The strategy should include:A.A plan to increase the attractiveness of pay,contracts,and workload in the sector.B.Introdu

24、cing a Workload Reduction Taskforce for Further Education.C.Rolling out the Workforce Industry Exchange Programme announced in 2021.D.Increased support for staff training and CPD,with a particular focus on student mental health and digital skills.Removing Barriers for Young LearnersYoung learners fr

25、om disadvantaged backgrounds face barriers in post-16 education.Financial affordability and educational requirements are barriers to starting and completing apprenticeships.There is a need for more funding support for high-needs students to progress from compulsory education into success in FE.The S

26、kills Commission proposes two recommendations to address these barriers:Recommendation 5:The Government should enact a multi-pronged strategy to address the financial and educational barriers that 16-19-year-olds face when seeking to take up and complete an apprenticeship.The strategy to help young

27、apprentices should involve:A.Encouraging and supporting all regional authorities to introduce free travel.B.The Department for Work and Pensions(DWP)exempting them from earnings-based reductions inUniversal Credit and Child Benefit payments.C.Providing a VAT exemption for their equipment purchases.D

28、.Providing them access to the maintenance loan system.E.The Department for Education developing an alternative to maths&English exit requirements.8 SKILLS 2030Recommendation 6:The Department for Education should extend the Pupil Premium Plus to looked-after children and care leavers aged 16-19 in Fu

29、rther Education,building on the successful pilot programme.Following the recommendations from the pilots evaluation,premium funding should also be expanded to a wider group of 16-19 students who could benefit from additional support.Maximising Employer Investment in SkillsThe inquiry found that empl

30、oyer investment in skills training in England is lower than in neighbouring countries and has been declining.The Apprenticeship Levy has led to some positive developments but also faces challenges,including the Treasury retaining a large amount of the funds,a reduction in lower-level apprenticeships

31、,and inflexibility leading to inefficient spending.The Skills Commission proposes two recommendations to address these challenges:Recommendation 7:To increase investment in skills,all Apprenticeship Levy funding should be allocated to training and not be retained by the Treasury.Underspend should be

32、 redirected to:A.Fully fund and incentivise level 2 and 3 apprenticeships at SMEs of all sizes.B.A government lifelong learning initiative(see recommendation 9).Recommendation 8:The Government should reform the Apprenticeship Levy.Employers should have greater flexibility to use funds for a range of

33、 high-quality training.Part of the levy should be ringfenced to promote entry-level talent in the workforce.Flexibility for employers involves:A.Increasing the time limit to spend levy funds to 5 years.B.The option to spend up to 50%of their levy funds on an approved list of training courses beyond

34、apprenticeships,such as Higher Technical Qualifications.Ringfencing involves:C.50%of an employers levy funds must be spent on apprenticeships at level 2 or 3.BUILDING A WORLD-CLASS SKILLS SYSTEM 9Making Lifelong Learning a RealityAdult learning participation and investment have declined significantl

35、y in England in recent decades.Adults face numerous barriers to learning,including cost,time constraints,and a need for flexible course options.Recent initiatives like the Lifelong Learning Entitlement hold promise.However,more needs to be done.The Skills Commission proposes three recommendations to

36、 help make lifelong learning more of a reality for adult learners:Recommendation 9:The Government should launch a new lifelong learning initiative that supports the“right to retrain”.It should include:A.A right to 5 days a year to train,strengthening the existing legal entitlement to request time of

37、fto train.B.Expanding the free level 2 and 3 qualifications all adults are entitled to through the LifetimeSkills Guarantee.C.A refreshed lifelong approach to career guidance that prepares young people and adults forlifelong engagement with the skills system.Recommendation 10:The Department for Educ

38、ation should develop the digital infrastructure to underpin life-long learning.Each learner should have access to a personalised digital environment including a skills account and passport.A.A Universal Skills Account for all post-18 education funding would build on the current development of the Li

39、felong Learning Entitlement.B.A Universal Skills Passport would enable individuals to keep a record of their skills and educational achievements across their lifetime,using the Unique Learner Number system.Recommendation 11:The Higher Education Minister should lead a working group on cross-provider

40、credit recognition within the higher education sector.The group should include senior figures from the sector and the Quality Assurance Agency(QAA).The working group should first proceed to:A.Develop guidance on best practices for recognising prior learning.B.Promote credit transfer schemes to exist

41、ing alliances and partnerships between highereducation providers.10 SKILLS 2030A Vision for Skills in the next ParliamentThere is an increasing realisation of the central importance that a highly skilled workforce plays in the economy.Sectors across the economy share the challenge of skill shortages

42、 lacking the workers with the necessary skills to fill their vacancies.For example,the automotive industry currently faces around 23,000 vacancies,and this threat is growing.1 Political interest in skills is at the highest level in many years,with both major political parties paying growing attentio

43、n to skills policy.A major player in the overall skills profile of the country is the“skills system”:the wide range of education and training available in the post-16 landscape.It encompasses a wide range of educational pathways in the public and private sector post-16,including further education(FE

44、),higher education(HE),workplace training(such as apprenticeships),continued professional development,and adult learning.Various educational providers work in this space,including colleges,independent training providers,universities,and adult community providers.Skills policy in the UK is devolved t

45、o the four nations.In England,it currently lies mainly under the remit of the Department for Education.However,certain decisions on skills policy are now under the control of regional authorities,such as several Mayoral Combined Authorities.Between 2018 and 2020,Sir John Hayes MP and Barry Sheerman

46、MP co-chaired the Skills Commission,working with Policy Connect to examine steps to be taken in that parliament to improve the skills system in England.This led to the publication of the report Englands Skills Puzzle in March 2020.Over this period,the Department for Education was crafting its Skills

47、 for Jobs white paper,setting out the skills agenda for the years to come.Eventually published in January 2021,the White Paper cited Englands Skills Puzzle several times and featured several of the reports core ideas and recommendations.Since then,the Government has made progress in implementing the

48、 reforms set out in the White Paper and other policy announcements.These advances include the introduction of Local Skills Improvement Plans(LSIPs),the continuing role out of T Levels,and the creation of a Lifelong Learning Entitlement(due to be in place in 2025).Reforms to Higher Technical Educatio

49、n technical qualifications at levels 4 and 5 have also progressed.The Skills Commission intervened in this reform programme,publishing the report Higher Technical Qualifications in December 2023.Most recently,plans for an Advanced British Standard have been announced to combine A Levels and T Levels

50、 into a single qualification framework.This collective set of reforms forms the basis of the skills system that future governments can build on.Yet,the skills system continues to face a range of fundamental challenges.Despite a recent 5%uplift,funding for FE remains below 2010 levels in real terms.2

51、 Apprenticeship completion rates remain too low,with a 40%dropout rate between 2013 and 2018.3 There has been growth in spending on higher-level apprenticeships,but spending on entry-level apprenticeships by employers is down 200 million since 2017.4 Overall,employer investment in training in the UK

52、 has fallen since 2015 and is about half what employers spend in our European neighbours.51 Vacancies Remain Stubbornly High in Automotive Aftermarket at 23,000,Institute of The Motor Industry(blog,accessed 14 March 2024,https:/tide.theimi.org.uk/industry-latest/news/vacancies-remain-stubbornly-high

53、-automotive-aftermarket-23000.2 Institute for Fiscal Studies,Annual Report on Education Spending in England:2023,11 December 2023,https:/ifs.org.uk/publications/annual-report-education-spending-england-2023.3 James Hurley,Four in Ten Apprentices Quit Their Course Early,24 August 2023,sec.business,ht

54、tps:/www.thetimes.co.uk/article/four-in-ten-apprentices-quit-their-course-early-hz006whjf.4 Billy Camden,Level 2 Apprenticeship Spending down by 200m since the Levy,FE Week,23 June 2023,https:/feweek.co.uk/level-2-apprenticeship-spending-down-by-200m-since-the-levy/.5 Becci Newton,Employer Investmen

55、t in Training in England,Institute for Employment Studies,Employer Investment in Training in England|Institute for Employment Studies(IES(blog),6 April 2023,http:/www.employment-studies.co.uk/news/employer-investment-training-england.BUILDING A WORLD-CLASS SKILLS SYSTEM 11More widely,the country fac

56、es challenging social and economic circumstances that the skills system needs to be mobilised to address.As mentioned,the UK faces a variety of skills shortages.For instance,the skills gap within UK manufacturing is significant and costs the economy around 8 billion annually in lost economic output.

57、6 Low rates of economic growth and flatlining productivity are longstanding challenges.Disparities in access to quality education and training opportunities perpetuate economic inequalities and social immobility,leaving many individuals unable to fulfil their potential.We also face a multifaceted li

58、st of future challenges that will require reshaping the future of the UK workforce and amplify the urgency of reforms to the skills system.These include technological change that will redefine job profiles,an ageing workforce,and the need for the UK to undergo a green transition to net zero.Against

59、this background,Sir John Hayes and Barry Sheerman once again convened the Skills Commission to look holistically at the skills system and set forth a vision of the agenda for the next Parliament.The Skills 2030 inquiry was launched to investigate what the next government should have as top prioritie

60、s for a programme of skills policy for the next Parliament,which will most likely come to a close just before 2030.A group of Commissioners,composed of leading figures from across the education and skill sector,were convened as a steering group for the inquiry.Any agenda for reforming the skills sys

61、tem has to be shaped by a vision of the political and economic aims it should achieve.In the initial scoping for the inquiry,it became clear that the Commissioners had a core shared ambition:for England to be on the path to a world-class skills system by the end of the next Parliament in 2030.At a m

62、ore fundamental level,they shared a vision of the goals such a system should achieve.As the inquiry progressed,it became clear that many other stakeholders involved in the inquiry shared a similar view.These goals for what the skills system should achieve include:1.Enabling an increase in productivi

63、ty and economic growth by developing the capabilities andcompetencies of the workforce.2.Ensuring the system is dynamic and flexible to adapt proactively to changing workforce needs ratherthan reactively responding to short-term skills shortages.3.Ensuring that individuals can adapt to changes in th

64、e economy and their personal lives by takingopportunities to skill,upskill,and reskill across their life course.4.Supporting all individuals in their educational journey by addressing barriers to progression that canleave people with few prospects beyond low-paid and insecure employment.5.Ensuring t

65、he quality and relevance of the training available to people in their local areas by enabling acollaborative relationship between government,education providers,and employers.6 Policy Connect,Upskilling Industry:Manufacturing Productivity and Growth in England,25 October 2023,https:/www.policyconnec

66、t.org.uk/research/upskilling-industry-manufacturing-productivity-and-growth-england.12 SKILLS 2030The Skills Commission went out to hear directly from a wide range of stakeholders involved in the skills system and skills policy.We had one overriding question:“What policy initiatives should the next

67、government have as top priorities to help deliver a world-class skills system by the end of the next Parliament?”.Over ten months,we collected extensive written and oral evidence on the issues that stakeholders saw as top concerns to address and priority proposals to address them.Using the Chatham H

68、ouse rule in roundtable sessions,we could hear an honest appraisal of their views on where the skills system is and where it needs to go.Throughout the inquiry,the challenges of the current context were made clear.Firstly,many existing skills initiatives are still bedding in,and time is needed to se

69、e them bear fruit.Constant reform and policy instability have arguably been a cause of problems in the past,so any reform agenda needs to be very conscious of the existing development of the system and try to build on it.Cross-party consensus for any reform is important to help aid policy stability.

70、Secondly,inquiry contributors were very aware of the challenging fiscal situation,with both major political parties suggesting constraints on public spending.Any reform agenda needs to consider this,suggesting reforms that improve the system even under conditions of fiscal restraint and that can all

71、ow the system to flourish and be ready for increased investment when circumstances permit.Despite these challenges,there was a lot of optimism for where the skills system could be by 2030 across the wide range of contributors to the inquiry and a positive vision for change.The findings from the inqu

72、iry have led to a holistic vision for the future of the skills system that can gain cross-party consensus.The rest of this report sets out our findings around five major areas of potential improvement for the skills system improving policy decision-making,reshaping employer investment in skills,supp

73、orting further education,supporting lifelong learning,and reducing barriers to young learners.With an election this year,we hope it will help the next government develop reforms to unlock significant improvements in the skills system.BUILDING A WORLD-CLASS SKILLS SYSTEM 131.Reshaping Skills Policy D

74、ecision-makingThe inquiry sought to understand attitudes around the existing government decision-making structures that shape the skills system.We heard views about the current approach to strategy and decision-making around issues of skills policy including skills shortages,long-term workforce plan

75、ning,and local skills needs.Many contributors to the inquiry mentioned that the current skills decision-making apparatus faces various challenges.It quickly became apparent that stakeholders across the skills system saw this as a priority for improvement.In fact,many stakeholders felt that it was th

76、e top priority:improving the decision-making structure is needed to maximise the positive impact of other reforms.Views were sought on what improvements could be made,and several proposals came up repeatedly throughout the evidence gathering.Consequently,the Skills Commission is proposing two recomm

77、endations that will reshape where decision-making power,funding,and accountability in the skills system lie.1.1.National ChallengesAt the national level,the primary challenge contributors raised was that the English skills system lacks an overarching vision that is long-term and stable.Contributors

78、frequently mentioned the instability within skills policymaking,leading to constant policy churn and little time for reforms to bed in before they are replaced.A recent analysis by the Education Policy Institute identified more than 25 major reforms to the post-16 policy landscape in the past 15 yea

79、rs.7 Educators,employers,and skills policymakers all felt that this affected their ability to maximise the potential of positive reforms.We would caution against change always being the answer to a problem.Many recent reforms to the skills system including T Levels,Higher Technical Qualifications an

80、d Institutes of Technology will take time to bed down and deliver success.West of England Institute of TechnologyAnother challenge many contributors raised is the lack of a robust coordination mechanism to fully align skills policy with the wider government policy that makes up the countrys economic

81、 growth strategy.This includes policy areas which shape the broader economic environment,including macroeconomic policy,employment policy,and research and development(R&D).In particular,alignment with industrial policy was mentioned as crucial by many inquiry participants.The macroeconomic climate u

82、ltimately shapes the demand for the skills that the skills system provides.We want to avoid skills gaps and skills underutilisation.Enhancing the supply of workforce skills can boost productivity,but only when the economic environment is such that employers are using the improved skills effectively.

83、Employers are most likely to maximise workforce skills when they are making the requisite investments in other productivity-improving factors,such as improving job design,machinery,and R&D.8 Industrial policy can play a key role here,with growth sectors of the economy offering plenty of opportunity.

84、7 Education Policy Institute,Comparing Policies,Participation and Inequalities across UK Post-16 Education and Training Landscapes,22 feb 24,https:/epi.org.uk/publications-and-research/uk-nations-education-and-training/.8 Ewart Keep,What Is the Role of Skills and the Skills System in Promoting Produ

85、ctivity Growth in Areas of the Country That Are Poorer Performing Economically?(Skills and Productivity Board,May 2022),810,https:/www.gov.uk/government/publications/how-can-skills-promote-productivity-in-poorer-performing-areas.14 SKILLS 2030Contributors also suggested that cross-government coordin

86、ation between different actors within national government is lacking on skills issues.There was felt to be disjointed decision-making,in large part because of the diverse set of government departments that are involved in shaping the skills system and the skills profile of the country.Since 2016,the

87、 remit for skills policy has sat mainly with the Department for Education,having moved from the then Department for Business,Innovation and Skills(now Business and Trade).However,participants in the inquiry pointed out that different skills and workforce initiatives require buy-in from the Treasury,

88、the Department for Business and Trade,the Department for Work and Pensions,and the Department for Levelling up Housing and Communities.Coordination between them on skills initiatives can be difficult to come by.One example raised was the lack of cross-government coordination on workforce issues:in e

89、ffect,each department and sector has its own task force to work out how to address workforce shortages.1.2.Regional ChallengesAnother challenge raised was the level of centralised decision-making over skills policy.A high level of centralised decision-making is a general feature of British(and Engli

90、sh)policymaking.A recent report by the Centre for Cities and Resolution Foundation characterised Britain as having“internationally exceptional fiscal centralisation”with most of the countrys tax revenue under the control of Whitehall and Westminster despite recent waves of devolution.9 Skills policy

91、 has historically followed this centralised trend.In recent years,we have seen the beginning of a move towards a more local and regionally devolved skills system.A government initiative now means that all 38 areas of England have 3-year Local Skills Improvement Plans(LSIPs).These are developed by lo

92、cal employer representative bodies(most often Chambers of Commerce)and set out current and future local skills needs and what local stakeholders need to do to fulfil them.Regarding devolution to local authorities,since 2019,a growing number of Mayoral Combined Authorities(MCAs)have taken responsibil

93、ity for their areas Adult Education Budget(AEB)the funds for a wide range of education and training programmes for individuals who are 19+.Around 60%of the AEB is now devolved to MCAs and the Mayor of London.In an evidence-gathering roundtable in Leeds,we heard from various MCAs with different level

94、s of devolved powers about their experience of skills devolution.The overall experience had been positive.MCAs told the inquiry about how the changes have allowed them to better align skills spending with the opportunities and needs of local people,their communities,and their local economy and to de

95、liver more value for money with their funds.Increased local alignment has delivered tangible benefits.9 Centre for Cities and Resolution Foundation,Centralisation Nation:Britains System of Local Government and Its Impact on the National Economy,2 September 2022,https:/www.centreforcities.org/publica

96、tion/centralisation-nation/.BUILDING A WORLD-CLASS SKILLS SYSTEM 15Case Study:Devolution of the AEB to West Midland Combined Authority(WMCA)Between 2019 and 2023,WMCA has:Improved the proportion of people qualified to level 4 from 31%to 36.9%.Reduced the number of people without qualifications from

97、13.4%to 9.6%.Overseen a 33%increase in the provision aligned to West Midlands priority sectors such as construction,manufacturing,and professional services.Contributors to the inquiry suggested that several challenges prevent further unlocking the benefits of skills devolution.Firstly,devolution in

98、England to local areas is currently uneven,with a considerable divergence in the powers that different regions have.Some places do not have control over AEB,while other trailblazer devolution deals give areas powers beyond this.Secondly,LSIPs need further development to deliver on their promise and

99、ensure all local actors work together.Contributors were generally positive about LSIP developments but we heard examples where local government was not sufficiently consulted,and key growth sectors were left out of the plan.Currently,local government has no formal role in the process.Case Study:Devo

100、lution of the AEB to West Yorkshire Combined Authority(WYCA)In year 1 of gaining responsibility for its AEB(2021-2022),WYCA oversaw:7%growth in the number of adult learners supported by AEB.A more strategic use of the budget:-A reduction in the number of providers delivering AEB in West Yorkshire fr

101、om 260 to 38.-Reduced subcontracting and passed 1.4m on to learners in saved management fees.More support for adult learners,particularly those facing educational disadvantage:-Learners from the most acutely deprived neighbourhoods:37%to 41%.-Learners who were out of work:59%to 64%.-Learners with no

102、 qualifications or qualified at Entry level:47%to 55%.A 78%growth in enrolment on digital skills courses.16 SKILLS 2030Thirdly,the existing pockets of skills devolution are not sufficiently flexible to maximise spending efficiency and fully align skills policy with local needs.16-18 education and ca

103、reer guidance is still centrally managed,so MCAs can only shape parts of the post-16 pipeline.Crucially,within the 19+space,AEB only makes up one funding stream of many that touch on adult skills.For instance,West Yorkshire has five parallel adult skills funding streams for AEB,skills boot camps,Fre

104、e Courses for Jobs,Multiply,and Skills Connect.Therefore,funding for adult skills comes in highly ring-fenced packages.The provision areas offered are heavily shaped by what can be made to work within these ringfenced funding streams.This introduces inefficiency in the system through a complicated b

105、ureaucratic process and reduces the scope for local areas to shape the provision they offer based on local factors and demand.In a written submission to the inquiry,West Yorkshire Combined Authority summarised the effects this had:Competitive bidding,duplicate programmes,cliff-edge and short-term fu

106、nding creates unnecessary distraction from the vital work to deliver for our region.It is time-consuming with over-engineered processes diverting resource into project management and administration with little added value for communities.West Yorkshire Combined Authority1.3.Priorities for Reform and

107、 RecommendationsOverall,there was a clear consensus that improvements could be made to the skills system by reforming where decision-making power,funding,and accountability lie.In the short term,changes could lead to better local alignment of training for local people and more training funded from e

108、xisting levels of skills spending.In the longer term,they could lay the foundation for a skills system that proactively reacts to changing workforce needs,reduces skills gaps,and helps to increase productivity.A National Skills StrategyRecommendation 1:The Government should develop a national skills

109、 strategy that is embedded within a wider industrial strategy.It should create a Skills and Workforce Council,a non-departmental public body at arms length from government,to oversee the delivery of the strategys goals.At the national level,the inquiry heard universal calls for the Government to dev

110、elop a national skills strategy to set a clearer vision for Englands skills system in the next Parliament.This long-term framework should provide stability and predictability for the system and the employers,employees,trade unions,and local government that work with it.It should clearly set national

111、 priorities for skills and the functions of different pathways and actors within the skills system.It should restate and set out the national minimum entitlement for free qualifications that all individuals are required to have access to across the country and who is expected to deliver this minimum

112、 entitlement.It should clarify the roles and responsibilities of different BUILDING A WORLD-CLASS SKILLS SYSTEM 17actors the individual,employers,national government,and local government in shaping,provisioning,and delivering the training and qualifications available to individuals beyond this minim

113、um.Indeed,the trend toward devolution only increases the need to complement such efforts with a clear strategy at the national level that takes in the big picture,across locations,industries,and complex value and supply chains.The national skills strategy should define the systems core goals and set

114、 underlying medium-term(10-year)and long-term(20-year)targets to advance these goals.These could include specified targets around improving productivity,encouraging upskilling amongst the employed,increasing business investment in training,creating the skills base to attract inward investment,and re

115、ducing the number of young people who are not in education,employment,or training(NEET),and reduce economic activity.The skills strategy should be tightly linked to the Governments wider economic plans,including its industrial policy.The Government currently lacks a formal industrial strategy.10 How

116、ever,we recommend that the skills strategy is embedded within a new industrial strategy,providing employers with a clear and stable plan of the Governments industrial policy.This would allow employers with greater security to invest in employer skills by“de-risking”such investments.Consequently,this

117、 could help increase and optimise business investment in skills(covered in more detail in Chapter 3).Businesses require a long-term industrial strategy to instil confidence in investing in skills.A clear and comprehensive plan from government for the industrial sector signals commitments to the sect

118、ors growth and stability.This offers an incentive for businesses to allocate resources towards skills development within their workforces.Catapult NetworkA Skills and Workforce CouncilAn executive non-departmental public body should be created to oversee the skills strategy and cross-government work

119、ing on skills and workforce issues.A suggestion in this vein was made by the Skills Commission in Englands Skills Puzzle in 2020,and the need for such an independent body remains.As a placeholder name,let us call the body the“Skills and Workforce Council”(SWC).The body could be modelled on the examp

120、le of the Climate Change Committee(CCC).The SWC should be led by a mixture of expert stakeholders on the skills system,including representation from local and national government,cross-sector employer representation(both from large employers and SMEs),representatives from FE and HE,representatives f

121、or young and adult learners,representatives from unions and the workforce,academia,and Catapults.Following the example of the CCC,the SWC should be underpinned by legislation that allows it to hold national and local government accountable for the national skills strategy and its targets.It should r

122、eport to Parliament on progress towards the targets,with an initial recommendation of every two years.The Cabinet Office could sponsor it to ensure skills and workforce expertise feed directly into senior politicians thinking and cross-government policymaking.10 For discussion,see Russell Taylor,Cal

123、ls for a UK Industrial Strategy,25 January 2024,https:/lordslibrary.parliament.uk/calls-for-a-uk-industrial-strategy/.18 SKILLS 2030It would lead on cross-Whitehall collaboration on skills,working closely with the Department for Education,the Department for Business and Trade,and skills leads in oth

124、er government departments.It would also work alongside relevant bodies such as the Institute for Apprenticeships and Technical Education(IfATE)and the Migration Advisory Committee.Crucially,the SWC should take the lead on cross-sector workforce strategy and assess changing demands for workforce and

125、skills over the short,medium,and long term.It should aim to become a world leader in workforce data analysis and forecasting,providing early warnings of likely skills shortages and skills underutilisation.It should be consulted during the development of any public sector workforce plans.The Unit for

126、 Future Skills(UFS),a research unit within the Department for Education focussed on skills and workforce data,should be moved to become the data unit within the SWC.The UFS should be expanded and become the central hub for government workforce forecasting and foresighting.It should work collaborativ

127、ely with the Office for National Statistics and Higher Education Statistics Agency and current leaders using these techniques outside the Government.It should continue and expand its existing activities,including the recently announced plans to develop a Standard Skills Classification for the UK,whi

128、ch will act as a common language for discussing skills across the economy.11 Upon completion,this classification should be embedded within labour market information and career tools to aid individuals career choices.No-strings-attached Funding for Regional AuthoritiesRecommendation 2:The Government

129、should provide Mayoral Combined Authorities and other regional authorities with“no-strings-attached”funding settlements for adult skills and an enhanced set of powers to shape skills provision in their area.A“no-strings-attached”funding settlement involves:A.A single consolidated budget for all 19+a

130、dult skills funding.Enhanced powers should include:B.A joint governance board with the Department for Education to co-design regional 16-18 education and careers guidance services.C.A statutory role in Local Skills Improvement Plans(LSIPs).D.A decision-making role in skills capital investment.At the

131、 regional level,deeper and more consistent adult skills devolution should occur in the next Parliament.We should entrust regional authorities with more power to shape local provision,building on the examples of good practice coming out of AEB devolution.As devolution progresses over the next Parliam

132、ent,all areas should have a regional authority in place with devolved control over the skills system.The aim should be for all regions to have a similar level of control over their local skills system,providing a consistent local decision-making structure for employers and employees to engage with a

133、cross the country.11 DfE and IfATE Launch Groundbreaking New Standard Skills Classification(SSC)Project,Institute for Apprenticeships and Technical Education,accessed 28 February 2024,https:/www.instituteforapprenticeships.org/about/newshub/news-events/dfe-and-ifate-launch-groundbreaking-new-standar

134、d-skills-classification-ssc-project/?utm_source=LinkedIn&utm_medium=social&utm_campaign=Orlo&utm_content=Press+Release.BUILDING A WORLD-CLASS SKILLS SYSTEM 19Mayoral Combined Authorities should be given“no-strings-attached”funding settlements for 19+adult skills.MCAs should be given one consolidated

135、 budget for adult skills,consolidating the complex picture of existing funding streams from the Education and Skills Funding Agency including AEB,skills bootcamps,Free Courses for Jobs,and Multiply.MCAs will use part of the budget to fulfil the national minimum entitlement for free qualifications th

136、at all individuals are required to have access to.However,beyond this,MCAs should have the flexibility to shape skills provision in their area in line with local priorities.Enhanced Powers for Regional AuthoritiesMayoral Combined Authorities should also be given an enhanced set of powers to shape sk

137、ills provision in their area,building on what is being developed in the trailblazer devolution deals available to Greater Manchester Combined Authority(GMCA)and the West Midlands.Firstly,MCAs should each have a joint governance board with the Department for Education,allowing them to oversee and co-

138、design 16-18 education and career guidance services in their area.Secondly,MCAs should be given a statutory role in LSIPs.They should have a duty to be involved and consulted on the LSIP process by the local Employer Representative board.Thirdly,and relatedly,MCAs should have a formal role in alloca

139、ting skills capital investment across their area.This should include a decision-making role on how capital to implement the LSIP(currently through Local Skills Improvement Funds)is allocated.Collectively,these reforms would allow MCAS to create a more coherent and tailored response to the skills nee

140、ds of their local area.Devolution beyond skills policy is beyond the scope of this inquiry.Still,close attention should be paid to the“single funding settlement”from the central government that Manchester and the West Midlands are due to access in 2025 in the next phase of their trailblazer devoluti

141、on deals.These will provide them with a single,multi-year budget that covers five broad policy areas,including local growth and place,transport,housing,and adult skills.12 The inquiry heard from GMCA that they plan to use this new devolution settlement to create more tailored wraparound provisions f

142、or residents,including those for their education and training needs.Once these devolution reforms are implemented and assessed,serious consideration should be given to extending this level of devolution across the English regions.12 Mark Sandford,Greater Manchester and West Midlands:Trailblazer Devo

143、lution Deals,28 February 2024,https:/commonslibrary.parliament.uk/research-briefings/cbp-9901/.20 SKILLS 20302.Investing in the Future of Further EducationAn emerging theme from the inquiry was the critical role that Further Education(FE)colleges play in upskilling the workforce.Contributors emphasi

144、sed that FE colleges are vital in providing technical and vocational training to build and sustain the non-graduate job market.Yet,the FE sector has often been overlooked in policymaking.Historically,the UK stands out as an international outlier in its approach to funding technical and vocational tr

145、aining,spending less on technical students than academic students,while OECD comparators do the opposite.In 2020,the UK had one of the largest funding gaps in the OECD between academic and technical education pathways for 16-19-year-old students,with technical students receiving 23%less funding than

146、 their academic counterparts.13 Recent welcome investments in FE have started to address this.However,contributors highlighted several lingering challenges that prevent England from maximising the high-quality technical and vocational education that FE colleges can provide.This chapter outlines the

147、key challenges identified.The Skills Commission offers two recommendations to ensure this vital sector is well-equipped to provide high-quality training and education,contributing to developing a skilled and productive workforce.2.1.ChallengesMany contributors to the inquiry highlighted the long-ter

148、m challenge FE has faced regarding the level of funding it is allocated.FE colleges faced a significant 8%real-term cut in funding per student aged 16-18 between 2013-14 and 2019-20.14 There was considerable support for the recent increased investment in FE,amounting to a 5%rise in spending per stud

149、ent in 2023-24 relative to 2019-20 levels.However,this boost reverses only about a quarter of the cuts experienced between 2010 and 2020 by 2024-25.15 It should also be noted that the FE sector continues to face funding challenges around capital expenditure because it cannot reclaim VAT on expenditu

150、res,unlike schools,or academies.Inflexible BudgetsThis challenge is compounded by FE colleges lack of budget flexibility.Contributors repeatedly highlighted the need for longer-term funding to give providers the confidence to invest more in their staff and(often expensive)teaching equipment to focus

151、 on meeting local educational needs.FE colleges are hampered by the allocation of yearly budgets,preventing long-term planning for course delivery.Previous Policy Connect research found this disincentivises providing courses that are costlier to provide and harder to fill,such as engineering.16 The

152、Government has made noise previously about multi-year funding arrangements to enable a more strategic approach,including in the 2021 whitepaper Skills for Jobs,but this has yet to become standard practice.1713 Education Policy Institute,An International Comparison of Technical Education Funding Syst

153、ems:What Can England Learn from Successful Countries?,5 March 2020,https:/epi.org.uk/publications-and-research/international-comparison-of-technical-education/.14 Institute for Fiscal Studies,Annual Report on Education Spending in England:2023.15 Institute for Fiscal Studies.16 Policy Connect,Manufa

154、cturing Resilience:Driving Recovery towards Net Zero,12 July 2021,https:/www.policyconnect.org.uk/research/manufacturing-resilience-driving-recovery-towards-net-zero.17 Department for Education,Skills for Jobs:Lifelong Learning for Opportunity and Growth(DfE,Manchester,England,21 January 2021),11.BU

155、ILDING A WORLD-CLASS SKILLS SYSTEM 21The FE Workforce ChallengeA related consequence and challenge is that the FE sector is facing significant difficulties in recruiting,retaining,and training teaching staff.The workforce issue in FE has become so significant that the House of Commons Education Comm

156、ittee has launched an inquiry into the topic.This inquiry is due to report later in 2024.FE staff shortages have the potential to undermine the effectiveness of almost every substantial new policy reform in the skills system,for instance the roll-out of the new T-Levels.National Foundation for Educa

157、tional Research(NFER)Recruitment is a significant challenge with a high level of vacancies each year.The Department for Education has started to publish data on the FE workforce.This data shows that in 2021/22,there was a teaching vacancy rate of 5.7%(2,373 vacancies)in general FE colleges,above the

158、 UK average vacancy rate of 4.3%.18 The year before,an Association of Colleges survey found that 96%of colleges reported recruitment difficulties.19 The same survey showed that the three main reasons colleges reported having recruitment difficulties were getting zero applicants for advertised jobs(7

159、0%),applicants looking for higher pay than they offer(67%),and applicants lacking necessary specialist skills(78%).FE also faces a major challenge regarding retention.16%of college teachers leave their jobs yearly,higher than the 10%rate in schools.There are significant concerns that retention and s

160、taffing shortages will get worse.The age profile of FE teaching staff is one issue,with 45%of FE teachers aged 50 or above.20Worryingly,many staff also say they do not see a future in the sector on the current trajectory.The Universities and College Union surveyed its members who teach in FE and fou

161、nd that 70%said they would probably or definitely not be working in the sector due to concerns over high workload,insecure employment,and low pay.21 On workload,a 2021 staff survey showed FE staff work on average 49 hours per week,14 hours more than their 35 contracted hours.22 On contractual securi

162、ty,the Department for Educations 2021 data shows that around 23%of the FE workforce did not have a permanent contract but instead had a variable-hour(10%),zero-hour(9.1%),or fixed-term(3.8%)contract.23On pay,FE teacher salaries declined by 18%in real terms between 2010-11 and 2022-23 as their pay di

163、d not keep pace with inflation.24 34,500 was the median pay for FE college teaching staff in 2022-2023.25 On average,FE teaching staff were paid about 7,000 less than schoolteachers(a gap of 21%).Today,the salary scales for FE show that the minimum starting salary for a qualified lecturer in FE is 2

164、7,786.2618 Further Education Workforce,Academic Year 2021/22,accessed 5 March 2024,https:/explore-education-statistics.service.gov.uk/find-statistics/further-education-workforce.;The state of the adult social care sector and workforce 2022 accessed,3 May 2024 https:/www.skillsforcare.org.uk/Adult-So

165、cial-Care-Workforce-Data/Workforce-intelligence/documents/State-of-the-adult-social-care-sector/The-state-of-the-adult-social-care-sector-and-workforce-2022.pdf-citing ONS-Vacancies and jobs in the UK:August 202219 Association of Colleges,AoC College Workforce Survey 2020/21,accessed 5 March 2024,ht

166、tps:/ Further Education Workforce,Academic Year 2021/22.21 Deborah Phillips,On the Breadline:The Cost of Living Crisis for Englands College Workers(UCU:University and College Union,6 July 2022),https:/ UCU,Workload Survey 2021 Data Report,June 2022.23 Further Education Workforce,Academic Year 2021/2

167、2.24 Institute for Fiscal Studies,Annual Report on Education Spending in England:2023.25 Institute for Fiscal Studies,What Has Happened to College Teacher Pay in England?,30 March 2023,https:/ifs.org.uk/publications/what-has-happened-college-teacher-pay-england.26 English FE Pay Scales,accessed 5 Ma

168、rch 2024,https:/www.ucu.org.uk/fescales_england.cf.Teacher pay and benefits,accessed 1 May 2024,https:/getintoteaching.education.gov.uk/is-teaching-right-for-me/teacher-pay-and-benefits22 SKILLS 2030In certain subject areas,FE colleges do not come close to competing with industry salaries.This is pa

169、rticularly acute in high-paid specialist occupations,such as construction,engineering,IT,and computing.For instance,electrical engineers can earn more than 70,000 a year,while engineering lecturers typically earn less than 39,000.27 Contributors told of the key role this has in colleges recruitment

170、difficulties for these subjects and how this can lead to a shortage of teachers with up-to-date industry knowledge and experience.There has been some movement on pay in the last year.In 2023,the Government announced 185 million in 2023-24 and 285 million in 2024-25 for FE alongside its 6.5%pay award

171、 for schoolteachers.28 Individual college leaders have the autonomy over their budget to set teacher pay,unlike in other parts of the education sector where the teacher pay recommendation is set nationally by binding collective agreements.However,many colleges follow the recommendations of the Assoc

172、iation for Colleges.For 2023-24,the recommendation was also a 6.5%pay increase.It is welcome that the Government are now considering FE pay challenges on a par with schools.However,the recent recommended increase is an increase in cash rather than real terms,as the 2023 inflation rate was 6.8%(as me

173、asured by Consumer Price Inflation).29On training,contributors to the inquiry suggested that existing staff would benefit from greater opportunities for stints in the industry to aid continuous professional development(CPD).In addition,student mental health support was highlighted as an area for fur

174、ther development.Most colleges now have a senior mental health lead.Still,there are limited resources to develop staffs capabilities to support their students despite 85%of colleges suggesting a surge in need since the COVID pandemic.30 Digital skills and digital competency were also highlighted.Jis

175、cs most recent survey of the digital experience of FE teaching staff showed that only 38%of staff surveyed had been offered training in basic IT,and many had not received support in other core digital skills.312.2.Priorities for Reform and RecommendationsOverall,there was a shared view that more nee

176、ds to be done to support the critical role that Further Education(FE)colleges play in educating the current and future workforce.As demand for FE grows,it is vital that funding grows to match it.Colleges should be given the flexibility needed to plan for provision over the longer term and invest in

177、their provision,staff,and equipment.Addressing the overarching FE workforce challenge around recruitment and retention should be a priority.There should also be exchange initiatives between FE and industry to upskill college staff and to bring in industry experts for short-term stints to provide spe

178、cialist technical training for students.27 Bethan Staton,Colleges in England Struggle to Find Teachers for Critical Skills Subjects,Financial Times,31 July 2022,sec.Education,https:/ Department for Education,Teacher Strikes:Everything You Need to Know about the 2023/24 Teacher Pay Award-The Educatio

179、n Hub,13 July 2023,https:/educationhub.blog.gov.uk/2023/07/13/teacher-strikes-everything-you-need-to-know-about-the-2023-24-teacher-pay-award/.29 CPIH ANNUAL RATE 00:ALL ITEMS 2015=100-Office for National Statistics,accessed 5 March 2024,https:/www.ons.gov.uk/economy/inflationandpriceindices/timeser

180、ies/l55o/mm23.30 Association of Colleges,AoC Mental Health Survey Report 2023,March 2023,https:/ Jisc,Teaching Staff Digital Experience Insights Survey 2022/23,October 2023,4,https:/beta.jisc.ac.uk/digital-experience-insights.BUILDING A WORLD-CLASS SKILLS SYSTEM 23Multi-year BudgetsRecommendation 3:

181、Further Education colleges should receive multi-year funding settlements of 2+years from the Education and Skills funding Agency or,where applicable,their regional authority.FE colleges should receive budgets covering at least two years at a time to enable them and their staff to deliver high-qualit

182、y training more effectively.Previous reports from the Skills Commission and Policy Connect have stressed the importance of multi-year budgets,as did the Augar review of Post-18 Education and Funding.32Colleges should receive multi-year budgets for 16-19 funding and for the adult education budget.The

183、 Education and Skills Funding Agency should deliver this change to the budgets length,except in areas where these budgets are(or become)devolved to regional authorities.These flexibilities will give colleges the support to better plan provision for the long term in line with local employer needs and

184、 to invest in their staff and equipment.A Workplace Plan for FERecommendation 4:The Department for Education should deliver a new Further Education Workforce Strategy.The strategy should include:A.A plan to increase the attractiveness of pay,contracts,and workload in the sector.B.Introducing a Workl

185、oad Reduction Taskforce for Further Education.C.Rolling out the Workforce Industry Exchange Programme announced in 2021.D.Increased support for staff training and CPD,with a particular focus on student mental health anddigital skills.The Department for Education should introduce a new FE Workforce S

186、trategy to address the growing issues of staff recruitment and retention in FE.The central plank of the strategy should be a long-term plan to increase the attractiveness of pay,contracts,and workload for staff in the sector.On pay,a plan should be in place to close the 7,000 pay gap between the ave

187、rage earnings of school and college teaching staff.On contractual security,the Department for Education should encourage a sector-wide move away from flexible contracts(such as variable hours or zero hours)and increased use of permanent and fixed-term contracts.The recommended introduction of multi-

188、year budgets should help here.The Department should encourage longer-term budgets to be used for this purpose,alongside any future increases to the size of funding settlements.On workload,the Department for Education should introduce a workload reduction taskforce for Further Education,mirroring the

189、 initiative it introduced for the school workforce.The taskforce should include FE teachers,FE leaders,representatives from the Association of Colleges and Natspec(the membership organisation for specialist colleges),and representatives from unions representing college staff.It should develop recomm

190、endations for the Government,Ofsted,and FE leaders.32 Department for Education,Post-18 Review of Education and Funding:Independent Panel Report,accessed 6 March 2024,https:/www.gov.uk/government/publications/post-18-review-of-education-and-funding-independent-panel-report.24 SKILLS 2030Workplace Ind

191、ustry Exchange and Staff TrainingThe workforce strategy should also roll out the Workforce Industry Exchange Programme previously announced by the Department for Education.In 2021,65 million was announced to develop such a programme.However,it has yet to be established.33A two-way exchange programme

192、 should now be initiated,aiming to upskill college staff and provide short-term specialist teaching directly from industry.An industry expert in a subject area would come to a college for short stints to provide additional training for students and insight into the latest technical innovations in th

193、eir field.During this period,college staff in this subject area would shadow staff employed by industry experts to gain insight into the latest technical developments.The Workforce Industry Exchange programme would expose current students to an industry expert who can share these developments with t

194、hem while providing full-time FE staff with knowledge of these developments to pass on to future students.The programme should be used in particular for subject areas lacking full-time staff with recent industry experience to offer insights into the latest developments.Furthermore,the programme shou

195、ld embrace the full breadth of industry organisations,from SMEs to large corporates,and from private sector to public and not-for-profits such as Catapults and Research&Technology Organisations(RTOs)-each of which may engage with the scheme in somewhat different ways.To help attract a pool of indust

196、ry employees and employers to the programme,the programme should come with benefits for the employee and the employer.Financial incentives are one option.Another would be a“Future Workforce Development Award”for participating employers,giving them special access to colleges to meet with top students

197、 who might join their workforce.Employees could similarly be awarded a qualification or award for long-term participation.Overall,the aim is to encourage industry professionals to aid with FE college teaching without requiring them to leave their current jobs.The“Further Education Lecturer Reservist

198、s”scheme being developed by the Institute of the Motor Industry and Warwick Manufacturing Group offers another proposal in this vein.34The workforce strategy should also introduce measures to increase support for staff training and CPD.The Workforce Industry Exchange Programme can provide staff with

199、 development opportunities.In addition,colleges should be given more support to train all staff to develop mental health and digital skills to enhance the education and support they can provide to their students.Jiscs strategy to support FE and Skills sectors,including staff,in their digital transfo

200、rmation is one example to build upon.3533 Policy Connect,Upskilling Industry,31.34 Institute of the Motor Industry and Warwick Manufacturing Group,Lecturer Reservists:How the Reservist Model Could Work for Further Education,August 2023,https:/tide.theimi.org.uk/sites/default/files/2024-01/IMI%20-%20

201、Further%20Education%20Lecturer%20Reservists%204.pdf.35 For more information,see Elevating the FE and Skills Sector through Digital Transformation,Jisc,13 November 2023,https:/beta.jisc.ac.uk/blog/elevating-the-fe-and-skills-sector-through-digital-transformation.BUILDING A WORLD-CLASS SKILLS SYSTEM 2

202、53.Removing Barriers for Young LearnersThe inquiry set out to understand how to address barriers to progression in the skills system for learners from disadvantaged backgrounds.Contributors to the inquiry stressed the importance of supporting individuals when young.Failure to provide adequate suppor

203、t during this critical juncture can perpetuate disadvantages and hinder individuals future learning and development prospects.A particular focus was on young people facing barriers to starting and completing apprenticeships and progressing successfully from compulsory education into FE.The Skills Co

204、mmission proposes two recommendations to help address these barriers that young learners face.3.1.ChallengesA successful skills system should support all individuals in their educational journey by addressing barriers to progression that can leave people with few prospects beyond low-paid and insecu

205、re employment.Contributors to the inquiry highlighted that these barriers affect people from the start of post-16 education and that more needs to be done to tackle them.Not so NEET for Young PeopleThe critical importance of having young people engaged in employment or education is widely known.The

206、Government actively measures the number of young people aged 16-24 who are“not in education,employment or training”(NEET).36 A young person being NEET has long-term“scarring”effects on the individual and negative impacts on their community and the wider economy.37 For the individual,it substantially

207、 increases the likelihood of many adverse outcomes later on:unemployment,lower earnings,less job security,and poor physical and mental health outcomes,to name a few.For the community,a higher NEET rate is linked to increased crime.For the economy,a 2010 estimate found that for each NEET young person

208、,the direct cost to the public sector is 56,500,and the wider resource cost to the economy is 104,300.38The compulsory education participation age increased from 16 to 18 between 2013 and 2015,leading to an initial increase in the number of 16-18-year-olds in education and a reduction in NEET.Howeve

209、r,the NEET rate for 16-24 has since stubbornly hovered between 10-12%.39 Currently,4.5%of 16-17-year-olds are NEET.These figures indicate that more can be done to support young people,whether NEET or not,to be engaged and progressing in education from 16 onwards.The rising number of young people out

210、 of education,employment and training represents a top challenge.Confederation of British Industry(CBI)36 The latest date is found in Young People Not in Education,Employment or Training(NEET),UK-Office for National Statistics,accessed 11 March 2024,https:/www.ons.gov.uk/employmentandlabourmarket/pe

211、oplenotinwork/unemployment/bulletins/youngpeoplenotineducationemploymentortrainingneet/february2024.37 For a comprehensive overview,see Lydia Isherwood,NEET:Young People Not in Education,Employment,or Training and Violent Crime(West Yorkshire Combined Authority,April 2023).38 Bob Coles et al.,Estima

212、ting the Life-Time Cost of NEET(University of York,21 July 2010),6.39 NEET Age 16 to 24,Calendar Year 2022,accessed 11 March 2024,https:/explore-education-statistics.service.gov.uk/find-statistics/neet-statistics-annual-brief/2022#releaseHeadlines-tables.26 SKILLS 2030FE Students Who Need Additional

213、 SupportContributors to the inquiry highlighted the potential of vocational education in FE and apprenticeships to help learners of all backgrounds achieve their potential.However,they noted the struggles of students between 16 and 19 who do not pursue the traditional school route.Vocational and tec

214、hnical programmes are the most successful at promoting social mobility.More learners who are disadvantaged are able to access and be successful at programmes which have a range of assessment methods and they are able to demonstrate their abilities through practical and on-going assessment.Weston Col

215、legeIn particular,the inquiry heard of students who needed further support in FE.Some young people who had extra funding support systems in school suddenly find themselves without the same level of support.The Government provides additional funding for some disadvantaged students “pupil premium”to s

216、chools to improve educational outcomes for disadvantaged pupils.However,this does not apply in FE.A prominent example is care leavers,who received a funding boost in school through an additional“pupil premium plus”scheme but not in FE.The Department for Education recently ran a trial of pupil premiu

217、m plus in further education,providing extra funding to support children in care and care leavers in post-16 education.However,it only applied to 16-19-year-olds.The extension has not been made permanent but has entered a second trial phase.Barriers to Apprenticeships for Disadvantaged Young PeopleBa

218、rriers to apprenticeships for young people were also highlighted,particularly in the context of the drop in the number of young people starting and completing an apprenticeship(further discussed in Chapter 4).Low-income families are often reluctant to encourage their children to pursue apprenticeshi

219、ps due to concerns over potential negative impacts on the familys short-term financial situation.A Sutton Trust report found that 24%of former apprenticeship applicants cited affordability as one of the top three reasons for not pursuing an apprenticeship.40A particular barrier for young people from

220、 low-income backgrounds is the financial burdens associated with an apprenticeship.Travel costs emerged as a concern,as apprentices are typically required to cover all their expenses,unlike students in educational settings who often receive subsidised travel.Apprentices can also face considerable co

221、sts for equipment and tools,with some spending hundreds of pounds on items essential for their trade.While tax rebates are available for those paying income tax,many apprentices do not meet the income threshold,leaving them to bear the full financial burden.Another challenge discussed was that some

222、young people cannot afford to take up an apprenticeship because it would reduce their familys income due to earnings-based reductions in Universal Credit and Child Benefit payments.40 Sutton Trust,Where next:What Influences the Choices of Would-Be Apprentices?,6 July 2023,https:/ A WORLD-CLASS SKILL

223、S SYSTEM 27Another barrier identified was the requirement to possess GCSE or equivalent qualifications in both mathematics and English to complete an apprenticeship.While Functional Skills Qualifications are currently accepted as an exit requirement,numerous apprentices struggle to pass one or both

224、of these assessments,leaving them occupationally competent but unable to progress beyond the gateway stage.41 Consequently,many employers have resorted to making GCSE English and mathematics a prerequisite for apprenticeship entry,effectively excluding a significant portion of disadvantaged individu

225、als who may excel in practical skills but face challenges with traditional academic assessments.Employers requirements for GCSE English and maths grade 4+even at Intermediate level,combined with other barriers to access that young people face,mean that level 2 apprenticeships are not accessible for

226、many young people,particularly those who are most disadvantaged.While 65 per cent of Key Stage 4 pupils achieved grade 4 or above in GCSE English and maths in 2022/23,less than half(43 per cent)of disadvantaged pupils achieved this level.NFER3.2.Priorities for Reform and RecommendationsAddressing yo

227、ung learners barriers requires a multi-faceted approach encompassing financial support,educational flexibility,and targeted interventions for disadvantaged groups.The following recommendations aim to alleviate these obstacles and create a more inclusive and equitable learning environment.These actio

228、ns are important not just to enable young people to progress into the next step of education and training,but also to set them up for life-long learning,creating the awareness that engaging with the skills system throughout their lives is beneficial and achievable.Breaking Down the Barriers to Appre

229、nticeshipsRecommendation 5:The Government should enact a multi-pronged strategy to address the financial and educational barriers that 16-19-year-olds face when seeking to take up and complete an apprenticeship.The strategy to help young apprentices should involve:A.Encouraging and supporting all re

230、gional authorities to introduce free travel.B.The Department for Work and Pensions(DWP)exempting them from earnings-based reductions inUniversal Credit and Child Benefit payments.C.Providing a VAT exemption for their equipment purchases.D.Providing them access to the maintenance loan system.E.The De

231、partment for Education developing an alternative to maths&English exit requirements.41 See e.g.Dr Chihiro Kobayashi and Helen Cuthbert in FE Week,Reevaluating Functional Skills Qualifications:Addressing Challenges and Exploring Solutions(April 2024)https:/www.fenews.co.uk/exclusive/reevaluating-func

232、tional-skills-qualifications-addressing-challenges-and-exploring-solutions/28 SKILLS 2030To tackle the financial hurdles young apprentices face,a multi-faceted approach should be adopted to reduce costs and increase their available cash flow.Firstly,all regional authorities should introduce free tra

233、vel passes for all young apprentices(16-19),mirroring the subsidised travel provided to other students.This would alleviate the significant burden of travel expenses that many apprentices currently shoulder.Furthermore,apprentices should be exempted from earnings-based reductions in Universal Credit

234、 and Child Benefit payments,treating them as if they are in“approved education”.This change would ensure that their participation in an apprenticeship does not inadvertently jeopardise their familys financial stability.Additionally,the Government should exempt the costs of essential equipment and to

235、ols for apprenticeships from VAT.It can mirror the VAT relief afforded to disabled people for the purchase of certain goods.42 This measure would provide much-needed financial relief,as apprentices currently face considerable out-of-pocket expenses for items crucial to their trade,with some spending

236、 hundreds of pounds.To directly increase the cash flow for apprentices,the maintenance loan system should be extended to apprentices from disadvantaged backgrounds.This would provide a crucial financial lifeline for those facing economic hardship,enabling them to focus on their training without the

237、burden of immediate financial constraints.Furthermore,the Government should consult on reintroducing an Education Maintenance Allowance for 16-19-year-olds,making it available to apprentices and those in full-time education.If resources are initially limited,this allowance could be targeted at areas

238、 with higher rates of young people not in education,employment,or training(NEET),ensuring that support reaches those most in need.Addressing educational barriers is equally crucial.The Government should develop an alternative to the current exit requirements for apprenticeships.This could involve re

239、shaping the route to gaining these skills for apprentices under 21 who do not yet possess the required levels.Bringing apprenticeships in line with A Levels by making Functional Skills a requirement for funding rather than an exit requirement would create a more inclusive and accessible pathway.Supp

240、orting High-needs Students in FERecommendation 6:The Department for Education should extend the Pupil Premium Plus to looked-after children and care leavers aged 16-19 in Further Education,building on the successful pilot programme.Following the recommendations from the pilots evaluation,premium fun

241、ding should also be expanded to a wider group of 16-19 students who could benefit from additional support.The Pupil Premium Plus is a vital additional funding source to support the educational needs of looked-after children and care leavers.However,its impact is currently limited by an abrupt cessat

242、ion of this funding when a child reaches the age of 16,despite the ongoing challenges they may face during their transition to further education.42 For more information on VAT relief,see Get VAT Relief on Certain Goods If You Have a Disability,GOV.UK,22 January 2019,https:/www.gov.uk/guidance/vat-re

243、lief-on-certain-goods-if-you-have-a-disability.BUILDING A WORLD-CLASS SKILLS SYSTEM 29From October 2021 to March 2022,the Government piloted an extension of the Pupil Premium Plus funding to 16-18-year-old students who are Children Looked After(CLA)or Care Leavers(CL).43 These positive outcomes demo

244、nstrate the potential impact of extending targeted support beyond 16.The pilot has been expanded across local authorities following the evaluation until March 2024.Building on this success,the Department for Education should permanently extend the Pupil Premium Plus to Children Looked After(CLA)and

245、Care Leavers(CL)in FE aged 16-19.This continuity of support is crucial for ensuring a smooth transition and sustained academic progress.The evaluation of the pilot also made recommendations to pilot expanding premium funding to a wide set of 16-19 students who could benefit from additional support.4

246、4 These recommendations should be enacted.Pupil Premium Plus funding should be extended to 16-19 students beyond FE,including apprentices.In addition,it should be expanded to FE learners above the age of 19.By implementing these recommendations,the Government can take significant strides towards rem

247、oving the barriers that prevent many young learners,particularly those from disadvantaged backgrounds,from realising their full potential.Ensuring equal access to educational and vocational opportunities is not only a matter of social justice but also an investment in the future prosperity of indivi

248、duals and society as a whole.By supporting these vulnerable groups during their critical transition to further education and training,the Government can lay the foundation for their long-term success and contribute to a more skilled and inclusive workforce.43 Professor Judy Sebba et al.,Phase One Ev

249、aluation of the Virtual School Heads Extension of Duties to Children with a Social Worker and the Post-16 Pupil Premium plus Pilot(Department for Education,December 2022).44 Sebba et al.,19.30 SKILLS 20304.Maximising Employer Investment in SkillsThe inquiry set out to understand how we can improve i

250、nvestment in skills and training in England by increasing and maximising the amount spent.In particular,there was a focus on maximising the investments in workforce skills businesses make.Contributors to the inquiry pointed out declining levels of public and employer spending on skills and some chal

251、lenges to improving the situation.Concerns were raised about how recent apprenticeship reforms shifted employer behaviour around skills investment.Many stakeholders across the skills system saw reforming the existing apprenticeship funding system,including the apprenticeship levy,as a priority if th

252、e country is to face the skills investment challenge.While there was a range of views on the exact way forward,the Skills Commission is proposing two recommendations addressing a wide range of issues.4.1.ChallengesContributors to the inquiry were concerned about a long-term downward trajectory in th

253、e overall level of investment in training in England over multiple Parliaments.This has happened across the UK.Both public and private investments have been moving in this direction of travel in the 21st century.A Downward Trend in InvestmentPublic spending on adult skills training in England has de

254、clined significantly since the early 2000s.Research by the Institute for Fiscal Studies found that public funding for adult skills has fallen by 31%in real terms since its peak in 2003-04.45 This decline largely stems from a significant reduction in the provision of low-level courses.The number of p

255、ublicly funded qualifications started by adults dropped by 70%between 2004 and 2020,falling from nearly 5.5 million to 1.5 million.However,long-term freezes in funding rates and the funding rates paid to provide courses have also contributed.For instance,funding for an adult learner taking GCSE Engl

256、ish or maths has fallen by 20%in real terms since 2015-16.At the same time,the overall level of business investment in skills training is lower than in neighbouring countries and has been declining.Employer investment in training in the UK is around half what employers spend in our European neighbou

257、rs.46 The long-run trend is that employers are spending less money on training,fewer employees are getting trained,and any employees that are trained tend to experience shorter and less costly training.The Institute for Fiscal Studies(IFS)found that the average training investment per employee fell

258、by 19%between 2011 and 2023.47 In that time,the average number of days of workplace training received annually has fallen by 19%per employee.45 Imran Tahir,Investment in Training and Skills(Institute for Fiscal Studies,2023).46 Stephen Evans,Raising the Bar:Increasing Employer Investment in Skills,M

259、ay 2022.47 Tahir,Investment in Training and Skills.BUILDING A WORLD-CLASS SKILLS SYSTEM 31A number of firms in England today do not regularly provide any training for their employees.A 2022 Department for Education survey showed that 40%of surveyed employers had not provided training for their staff

260、 in the last 12 months.48 There is quite a significant divergence in training based on the firms size.A 2021 survey by the London Chamber of Commerce and Industry found that 73%of larger firms(10+employees)reported investing in training,while only 25%of micro firms(less than ten employees)did.Reason

261、s for not investing included feeling staff were already proficient(most common),it not being a priority,lack of funds,cost of training,and lack of relevant training.The Apprenticeship LevyThe inquiry heard many views on recent reforms to the apprenticeship system and employer funding of apprenticesh

262、ips.Many contributors felt favourable about aspects of the reforms.They suggested they had promoted the image of apprenticeships as pivotal in workplace training in England.Additionally,they felt optimistic about the development of apprenticeships as a pathway to a growing number of occupations with

263、 the rising number of apprenticeship standards.Since the 2017 launch of degree apprenticeships that combine working with part-time higher education,there is now an apprenticeship pathway across a wide range of occupations from qualification level 2 to 7.The most newsworthy reform was the 2017 introd

264、uction of the Apprenticeship Levy,moving towards funding apprenticeships through contributions from large employers.The levy is paid by employers with an annual pay bill over 3 million,currently around 2%of UK employers.49 The levy rate is set at 0.5%of the total pay bill.The funds are transferred i

265、nto a digital account for each employer and topped up by 10%with public funding.These large employers can then use this account to cover apprenticeship training costs.They can spend their funds on apprenticeship training and assessment costs up to a maximum specified funding band per apprenticeship,

266、which differs depending on the exact apprenticeship.The funds are typically spent with independent training providers,who provide most apprenticeships in the UK.The levy also plays a substantial role in funding apprenticeships at non-levy-paying firms.In April 2024,the rules around this were reforme

267、d as the inquiry was ongoing.50 Levy payers can now transfer up to 50%(previously 25%)of their unspent levy funds to smaller businesses of their choice,with this business able to use this to pay 100%of the cost of an apprenticeship.Firms that do not pay the levy can also apply for public funding to

268、cover 95%of the cost of apprenticeship training,having to pay 5%of the cost as a co-investment.From April 2024,100%of the costs are covered if the apprentice is 21 or younger.48 Employer Skills Survey,Calendar Year 2022,accessed 29 February 2024,https:/explore-education-statistics.service.gov.uk/fin

269、d-statistics/employer-skills-survey/2022.49 Department for Education,How Are Apprenticeships Funded and What Is the Apprenticeship Levy?-The Education Hub,10 March 2023,https:/educationhub.blog.gov.uk/2023/03/10/how-are-apprenticeships-funded-and-what-is-the-apprenticeship-levy/.50 Billy Camden,Prim

270、e Minister to Announce Apprenticeship Levy Reforms with 60M Investment for Young People and SMEs,FE News,18 March 2024,https:/www.fenews.co.uk/skills/prime-minister-to-announce-apprenticeship-levy-reforms-with-60m-investment-for-young-people-and-smes/.32 SKILLS 2030Levy funds unspent by levy payers

271、provide part of the funding stream for these public funds for apprenticeships at SMEs.However,crucially,the apprenticeship levy is not currently a hypothecated tax.If it were a hypothecated tax,all the revenue collected would go directly to the Department for Educations apprenticeship budget.Instead

272、,the Treasury sets the apprenticeship budget separately through spending reviews.The Commission heard significant concern from stakeholders across the skills system about how the apprenticeship levy system is working.In particular,contributors to the inquiry highlighted three core challenges with fu

273、nding workplace training through the apprenticeship levy and its effect on employer training.Short-changed on the LevyThe first challenge is that employer investment in skills is limited by not being able to make full use of the money raised by the levy.The Treasury is setting the apprenticeship bud

274、get at less than the funds raised by the levy,and then the budget is also being underspent.In 2022-23,3.58 billion was raised UK-wide through the levy.51 Yet,the total funding the Treasury allocated to the English apprenticeship budget and devolved nations was 3.162 billion,418 million less.The Depa

275、rtment for Education then underspent the apprenticeship budget by 4%,a figure of 96 million.This meant that 514 million,or around 14%of the levy raised,was not spent on training.In 2023-24,this funding gap between money raised and money spent is projected to reach 875 million.52 The skills system is

276、 being short-changed.A Decline in Lower-level ApprenticeshipsThe second challenge is that the levy has coincided with fewer apprenticeships being done at lower qualification levels.Many inquiry contributors raised concerns about this fall,as lower-level apprenticeships are an essential entry pathway

277、 into jobs and careers,especially for younger people.Between 2016-17 and 2021-22,there has been a 68.5%decrease in level 2(intermediate)apprenticeship starts(291,330 to 91,520),and a 20.7%decline in level 3(advanced)apprenticeship starts(190,870 to 151,310).53 At the same time,the number of level 4

278、or higher apprenticeships(higher and degree)has almost tripled.54 Relatedly,NFER analysis shows that the age composition of apprenticeships has shifted,with an increase in the number of starts by over-25s and a reduction in starts for under-25s.55 In 2017-18,59%of apprentices starting were under 25,

279、and that number is now 52%.Spending on apprenticeships has followed the same trend.Spending on over-25 apprentices doubled from 2017-18 to 2021-22,from 460 million to 934 million,while spending on 16-19 apprenticeships fell by 10%,from 686 million to 626 million.5651 Billy Camden,Apprenticeship Levy

280、 Turns into Treasury“Cash Cow”,29 September 2023,https:/feweek.co.uk/apprenticeship-levy-cash-cow/.52 Billy Camden,DfE Set to Surrender 60m Apprenticeship Cash in 2023-24,1 March 2024,https:/feweek.co.uk/dfe-set-to-surrender-60m-apprenticeship-cash-in-2023-24/.53 Department for Education,“Headline F

281、ull Year-Starts,Achievements,Participation by Level,Levy,Age,Region,Provider Type”from“Apprenticeships and Traineeships”,Permanent Data Table,accessed 4 March 2024,https:/explore-education-statistics.service.gov.uk/data-tables/permalink/de613bcd-c2c4-419d-8aa2-08db7860a436.54 Tahir,Investment in Tra

282、ining and Skills,29.55 National Foundation for Educational Research(NFER),Apprenticeships Are Failing as a Vehicle for Social Mobility,FE News,18 October 2023,https:/www.fenews.co.uk/exclusive/apprenticeships-are-failing-as-a-vehicle-for-social-mobility/.56 Camden,Level 2 Apprenticeship Spending dow

283、n by 200m since the Levy,2.BUILDING A WORLD-CLASS SKILLS SYSTEM 33The factors at play in shifting the level and age of apprentices are likely to be multiple.However,two reasons were highlighted by various contributors to the inquiry.Firstly,constraints on the apprenticeship budget and employers abil

284、ity to spend levy funds on any apprenticeship level for any individual lead to open competition over constrained training resources.1618-year-olds are required to be in education and have a reserved state-funded budget for all forms of education,except for apprenticeships,which are supposed to be fu

285、nded through the levy system.So,people who want to do lower-level apprenticeships at a company,who are often younger,compete for funding with existing higher-qualified staff.Employers have a limited amount of levy funds and limited time(two years)to spend it.In this situation,it is natural to expect

286、 employers to default to spending on existing,more qualified,and older staff.A second reason highlighted was the challenges SMEs face when hiring apprentices and the consequent reduction in SME apprenticeships.SMEs have a good history of hiring young apprentices,particularly businesses with staff nu

287、mbers between 100-250.57 Yet,apprenticeships at SMEs make up a decreasing share of the overall total,declining from 54%to 41%between 2017 and 2021.58Square Pegs and Round HolesA final challenge presented by the existing levy system is that its inflexibility and effects on employer behaviour mean the

288、 funds are sometimes being spent inefficiently.The levy incentives levy-paying employers to train employees using apprenticeships even when this is not the most appropriate or cost-effective training method for the employee to gain the relevant skills they need.Three factors play a role here.The fir

289、st factor is the levys incentive for employers to use apprenticeships as a one-size-fits-all.The inquiry heard from several sector bodies that many employers shoehorn all their existing training needs into an apprenticeship structure simply to use the funding.Research by the Learning and Work Instit

290、ute showed that after the levy was introduced,a significant number of levy-paying employers had substituted their existing training budget.59 Additionally,there is evidence of some employers“rebadging”their existing staff as apprentices and offering them pre-existing employer training that has been

291、rebranded as part of the apprenticeship.60At present,a lot of training has to be inefficiently shoehorned into an apprenticeship structure to attract funding.Support for flexible training beyond the existing standards is an obvious reform.Enginuity UKWe acknowledge that apprenticeships do not fit ev

292、ery job role.And that is our point whilst businesses pay into a levy they cant fully utilise,they are forced into training that does not fit their requirement.Road Haulage Association 57 For an overview,see Youth Futures Foundation,SMEs and the Youth Labour Market,October 2021,https:/youthfuturesfou

293、ndation.org/wp-content/uploads/2021/10/SMEs-and-the-Youth-Labour-Market-Report.pdf.58 Tahir,Investment in Training and Skills,30.59 Evans,Raising the Bar:Increasing Employer Investment in Skills,15.60 EDSK,Changing Courses:A New Vision for Employer Investments in Skills and the Apprenticeship Levy,a

294、ccessed 21 February 2024,https:/www.edsk.org/publications/changing-courses/.34 SKILLS 2030A second factor is that the two-year time limit on spending levy funds incentivises employers to spend on more expensive apprenticeship training.The inquiry heard that this encourages a“use it or lose it”mental

295、ity and leads to rushed decision-making that does not always make the best use of the funds for long-term workforce development.In particular,the Commission heard that it could lead some employers to spend on a smaller number of more expensive apprenticeships,often going to more senior staff.The thi

296、rd factor is that the cost of apprenticeship training can often be higher than the alternative non-apprenticeship training that would also have been appropriate to address the skills needs.Much has been made in the media of the large amount of levy funds spent on level 7 apprenticeships,particularly

297、 the level 7 senior leader standard.The debate often focusses on whether such training should be eligible for levy funds.However,what is frequently missed in this discussion is that providing the relevant skills(such as senior management)through an apprenticeship is often more expensive than doing s

298、o through similar non-apprenticeship training.For example,the level 7 senior leader apprenticeship costs 14,000 of levy funds,while the equivalent non-apprenticeship qualification costs 4000.61 It also requires less employee time off the job(six hours a week rather than a day)and takes a shorter tim

299、e to complete(30-36 weeks rather than a minimum of a year).4.2.Priorities for Reform and RecommendationsOverall,there was a clear consensus that the funds raised by the apprenticeship levy need to be unlocked to drive an increase in the level of investment in training.If England is to compete with i

300、ts neighbours on skills investments this is a high priority.Once more levy funding is unlocked,employers should have greater flexibility in using the levy.This would allow them to maximise the value of their spending on training.At the same time,part of the levy should be ringfenced for level 2 and

301、3 apprenticeships to retain skills pathways.Levy Funds should be Reserved for TrainingRecommendation 7:To increase investment in skills,all Apprenticeship Levy funding should be allocated to training and not be retained by the Treasury.Underspend should be redirected to:A.Fully fund and incentivise

302、level 2 and 3 apprenticeships at SMEs of all sizes.B.A government lifelong learning initiative(see recommendation 9).61 EDSK,20.BUILDING A WORLD-CLASS SKILLS SYSTEM 35The Skills Commission welcomes the Governments March 2024 announcement that it intends to cover the training costs of SME apprentices

303、 up to the age of 21 fully.This was to form part of our recommendations prior to the announcement.However,we would like to see measures beyond this to better support and incentivise SMEs to take on apprentices.The Commission recommends scrapping the 5%co-investment cost for SMEs for any level 2 to 3

304、 apprentice,regardless of their age.In addition,funds should be directed to incentivise employers to increase the uptake of apprentices from a wider variety of backgrounds.This includes increasing the grants incentivising SME employers to hire apprentices and increasing the maximum funding band for

305、apprenticeships started by SMEs.An increase in funding bands could help independent training providers improve the quality of the SME apprenticeships they can provide.Collectively,these measures should help increase the number of apprentices SMEs take on while promoting quality.The ultimate aim shou

306、ld be circumstances in which an individual who wants to become an apprentice to enter a career should never be constrained by a lack of SMEs offering such opportunities.62The Skills Commission believes that all levy funds should be used to invest in the skills of the countrys people.If any additiona

307、l funds remain in the hypothecated fund raised by the levy,these should be used to invest in a new initiative to expand adult lifelong learning(recommendation 9).This will be covered in more detail in Chapter 5.A Reformed LevyRecommendation 8:The Government should reform the Apprenticeship Levy.Empl

308、oyers should have greater flexibility to use funds for a range of high-quality training.Part of the levy should be ringfenced to promote entry-level talent in the workforce.Flexibility for employers involves:A.Increasing the time limit to spend levy funds to 5 years.B.The option to spend up to 50%of

309、 their levy funds on an approved list of training courses beyondapprenticeships,such as Higher Technical Qualifications.Ringfencing involves:C.50%of an employers levy funds must be spent on apprenticeships at level 2 or 3.Competition for employer training resources should be reduced once the entire

310、funds raised by the levy are ringfenced for vocational education and training.Once this is in place,the Skills Commission recommends two changes to the levy.Together,these measures can help augment the value of employer investment and promote the future apprenticeship pipeline.62 For further discuss

311、ion of moving towards a fully demand-led apprenticeship system,see Resolution Foundation,Applying the Robbins Principle to Further Education and Apprenticeships,24 October 2023,https:/economy2030.resolutionfoundation.org/reports/applying-the-robbins-principle-to-further-education-and-apprenticeships

312、/.36 SKILLS 2030Firstly,employers should have more flexibility to make long-term,tailored,and cost-effective investment plans to upskill new and existing staff with their levy pot.Flexibility should involve extending the time employers can use their levy funds to 5 years.This would allow employers t

313、o engage in long-term planning of large apprenticeship and training programmes for workforce development and address the inefficiencies from rushed decision-making.Flexibility should also involve employers having the option of using up to 50%of their levy funds on approved non-apprenticeship trainin

314、g that they deem most appropriate to address a skills need.A previous Skills Commission report Higher Technical Qualifications made the case for allowing employers to use levy funds on HTQs,which can be a very appropriate qualification for upskilling current and prospective employees.63 In addition,

315、this report recommends extending eligibility to a more expansive list of approved training,including a range of shorter training courses.It should include training to address shortfalls in basic skills,including courses covering functional and digital skills.It should also include training that addr

316、esses skills gaps identified by the national skills strategy(see recommendation 1).Secondly,all large levy-paying firms should be expected to continue promoting apprenticeships as a pathway for entry-level talent in their organisation and sector.This is crucial for driving the future workforces prod

317、uctivity and promoting social mobility.To aid with this initiative,50%of the pot of levy funds that levy-paying firms amass should be ringfenced for level 2 or 3 apprenticeships.The ultimate aim should be for young people and career changers to have a foundational pathway to enter and advance within

318、 the junior levels of large firms.The other 50%of flexible funds can be used to invest in more level 2 or 3 apprenticeships,apprenticeships higher than level 3,or approved non-apprenticeship training.To ensure the entire levy system operates as effectively as possible going into the future,it should

319、 be fully reviewed at 5-year intervals by the Skills and Workforce Council(see recommendation 2).Smaller interim reviews could also occur within this period.The full review should be holistic.It should look at the list of approved non-apprenticeship training that the levy can be used to fund.It shou

320、ld regularly review the overall allocation of where levy funding is being spent.It should also review the financial stability of the levy.If shortfalls in funds look likely,changes should be made,including considering increasing the levy or expanding the levy to more employers if necessary.A stable

321、and well-functioning levy system will be key to maximising the benefits of employer investment in skills.63 Policy Connect,Higher Technical Qualifications:How to Liberate Employers and Skill Workers for the Future,5 December 2023,https:/www.policyconnect.org.uk/research/higher-technical-qualificatio

322、ns-how-liberate-employers-and-skill-workers-future.BUILDING A WORLD-CLASS SKILLS SYSTEM 375.Making Lifelong Learning a RealityThe inquiry set out to understand how to improve the skills system in England to promote lifelong learning.It was widely felt that this is of pressing importance in an age of

323、 rapid technological change,where individuals will need to upskill and reskill to adapt to the labour market.However,contributors to the inquiry highlighted the wide range of barriers to adult learning.Adult learning and investment in adult learning have dropped this century.Individuals face various

324、 barriers,from time off to insufficient career guidance to course options that are not sufficiently flexible.While there was optimism about the new lifelong learning entitlement,there was a feeling that more needs to be done to make the most of the promise of this initiative.The Skills Commission pr

325、oposes three recommendations to help make lifelong learning a reality.5.1.ChallengesContributors to the inquiry highlighted the significant reduction in formal adult learning participation in this century.The number of publicly funded classroom-based qualifications taken by adults at different level

326、s in England has declined sharply.In 2004-05,adults enrolled in nearly 5.5 million government-funded further education courses,while in 2020-21,that number had dropped to 1.5 million,marking a 72%decline relative to the peak.64 It is worth noting that this is not due to a lack of interest in learnin

327、g in general.Almost half of adults say they have engaged in learning in the last three years;it is just that much of this is informal and self-directed learning not linked to a qualification that is often done online.65The reduction in formal adult learning has been accompanied by decreased public s

328、pending on adult skills over the past two decades.Total adult skills spending was 4.4 billion in 2022-23,down 30%from a peak in 2003-04.66 The trend is particularly pronounced for adult classroom-based education,where current spending(1.7 billion)is now a third of the size of what it was.The Governm

329、ents plans to increase spending for 2024-5 are welcome,though they still leave total adult skills spending 23%lower in real terms than before large cuts in the 2010s.The Limits of Existing Lifelong Learning PolicyStakeholders across the skills system welcomed central governments recent initiative to

330、 promote lifelong learning with a“Lifetime Skills Guarantee”.This included expanding the free level 3 courses available for adults to retrain if they lack level 3 qualifications,earn under the national living wage,or are unemployed.It also included plans for a Lifelong Learning Entitlement(LLE).The

331、LLE aims to transform the post-18 student finance system in England to enable people to train,retrain,and upskill flexibly throughout their working lives.It will be rolled out in 2025 with the creation of a single online account to access funding to help people pay for college or university courses(

332、at levels 4 to 6).64 Institute for Fiscal Studies,Annual Report on Education Spending in England:2023.65 Learning and Work Institute,Adult Participation in Learning Survey 2023,6 November 2023,https:/learningandwork.org.uk/resources/research-and-reports/adult-participation-in-learning-survey-2022/.6

333、6 Institute for Fiscal Studies,Annual Report on Education Spending in England:2023,81.38 SKILLS 2030Contributors to the inquiry widely supported the aims of the Lifetime Skills Guarantee and the LLE.However,there was widespread scepticism that the plans in their current form would lead to a major increase in adult learning participation.One concern is that while the model of the LLE as a single on