Skills: Importance for the UK Economy and Quality of Life

Lord Aberdare Excerpts

Thursday 9th May 2024 Lords Chamber

Moved by

[Lord Aberdare]

To move that this House takes note of the importance of skills for the success of the United Kingdom economy and for the quality of life of individuals.

[Lord Aberdare (CB)]

My Lords, skills are central to the future of our young people and central to the future of our nation. Every one of the main challenges we face depends for its resolution on our having the right skills, now and in the future. Yet it seems to me that we, including in this House, do not focus enough on how to develop, maintain and enhance the skills needed to achieve net zero; to become a science and technology superpower; to realise the potential of AI; to meet our energy needs; to defend ourselves in an increasingly fractious world; to improve the quality of our health and care systems; to build enough new homes; to upgrade our transport infrastructure; to support our brilliant creative sector; and to pursue numerous other aims. All of these depend on skills.

My belief in the importance of skills is partly personal. I emerged from a very privileged education with an Oxford classics degree, an impressive academic record, virtually no practical skills and little idea of what sort of career to pursue. I believe that we can and should do better for our young people. I am also struck by the contrast between attitudes to education and skills today, and the burning desire to improve themselves that led some 200,000 Welsh people to learn to read the Bible in the circulating schools set up by Griffith Jones of Llanddowror, in my home county of Carmarthen, in the 18th century.

I am absolutely delighted to have obtained this debate to explore how we can better meet our skills needs, and greatly look forward to hearing the contributions of all noble Lords who are speaking, not least the maiden speeches of the noble Lords, Lord Elliott of Mickle Fell and Lord Marks of Hale, and of course the response of the Minister. I am grateful to the House of Lords Library for its briefing for the debate, for additional research that Thomas Weston has done for me, and to the many organisations which have deluged me with helpful and insightful briefings, to which I fear I shall do less than justice in the time available.

Virtually every sector of our economy currently faces worker shortages; so-called skills-shortage vacancies have risen from about 91,500 in 2011 to over 531,000 in 2022—up from 16% to 36% of all vacancies. A recent British Chambers of Commerce survey found that 73% of organisations are facing skills shortages. We have stubbornly high levels of young people who are not in education, employment or training: 12% of young people, some 850,000, are NEET. At the same time, employers complain that young people leaving education lack work-ready skills: 60% of employers struggle to find the right technical skills and 50% cannot find the transferable skills that they need. UK productivity seems to be stuck in a rut and falling behind that of other countries. Teacher recruitment and retention is not keeping up with demand. We face a serious skills challenge.

What sorts of skills do we need? I know other noble Lords will talk about specific skills, so I will just outline some of the categories needed. First, all of us need basic skills, including literacy, numeracy, digital literacy and no doubt oracy, which had not been invented when I was at school—your Lordships may have reason to regret that. Literacy and numeracy are, rightly, required elements of the school curriculum, although the Education for 11-16 Year Olds Committee, on which I served, argued that there should be more functional alternatives to the current requirement to achieve a level 4 GCSE pass, which has a highly damaging effect on the subsequent educational progress of the one-third of young people who fail to attain it.

Secondly, there are specific work or job-related skills, including technical and practical skills, for which training may be delivered by FE colleges, independent training providers or employers themselves. The much-needed green skills belong in this category.

Thirdly, there are the skills variously described as life skills, soft skills or transferable skills. The Skills Builder Partnership identifies eight essential skills: speaking; listening; problem-solving; creativity; aiming high; staying positive; teamwork; and leadership. It has developed a universal framework resource for teaching and assessing these, which is being used in a growing number of schools. These are increasingly important in the modern world, in both our work and personal lives. They are also the skills which employers are crying out for most of all: 57% of employers say they value transferable over technical skills. Employers find that the education system prepares students well for academic progression, rather than vocational pathways, on which there is insufficient focus. Yet 98% of teachers recognise essential skills as important for their learners’ employment opportunities and 86% agree that the national curriculum should include them.

The Local Government Association identifies no fewer than 49 national employment and skills-related schemes or services across England. They spend an estimated £20 billion in total and are managed by at least nine Whitehall departments and agencies. The Minister will have a lot to cover in her response.

I will briefly mention three initiatives within the remit of the DfE about which I feel strongly. Apprenticeships are a key part of skills policy. The apprenticeship levy is an important means of securing employer funding for skills training. There has been a disappointing decline in apprenticeship starts in recent years—from more than 509,000 in 2015-16 to about 337,000 in 2022-23. I will highlight two concerns about the current system. First, the number of apprenticeships for young people aged under 19 has declined even more steeply—from more than 131,000 to less than 78,000, as has the number of entry-level—level 2—apprenticeships, which are most suitable for many in this age group. The levy, in effect, incentivises employers to offer more expensive higher-level apprenticeships, often to upskill or reskill existing employees. This is also important, of course, but the balance seems wrong and needs to be adjusted to ensure a greater intake of younger apprentices, especially at level 2.

Secondly, there is a long-standing need to reduce the barriers of cost, complexity and bureaucracy which deter small employers from offering apprenticeships. Many employers are calling for greater flexibility as to how levy funds can be spent—for example to cover other forms of accredited training. The Government have made some improvements, but take-up by SMEs is still much too low.

A successful skills system depends on the availability of first-rate careers education and information for everyone from primary school age to adulthood. Much progress has been made in recent years, thanks largely to the efforts of the Careers & Enterprise Company and other careers organisations. Some 92% of schools are now part of local career hubs. More than 3,000 careers leaders have been trained, and the average number of the eight Gatsby benchmarks of good career guidance achieved by schools has risen from 2.1 to 5.5 in the last five years. Encouragingly, schools serving the most disadvantaged groups perform above the average. There is still much more to do in improving the quality of careers provision and business engagement, especially at local level and outside schools, tackling barriers to progression into jobs, and firmly establishing careers education as the bridge between young people and business.

The Skills and Post-16 Education Act 2022 led to the creation of local skills improvement plans across all 38 areas of England—most of them are led by chambers of commerce—which set out actionable priorities to tackle local skills needs. My noble friend Lady Lane-Fox, who is the president of the British Chambers of Commerce, will talk more about them. These should be a powerful tool for understanding and addressing skills needs and opportunities across England. Perhaps the Minister could tell us how implementation of the plans will be monitored and assessed. Should there not also be an NSIP—a national skills improvement plan—to ensure that, taken together with LSIPs, they are meeting identified national skills priorities and that programmes at national and local government levels are effectively co-ordinated?

Later speakers will doubtless mention other skills-related government initiatives, such as T-levels, the lifelong learning entitlement and the advanced British standard. We will also hear about some of the Labour Party’s proposals, including for a national skills taskforce. My impression is that existing initiatives add up to rather less than the sum of their parts, rather than a coherent and comprehensive package for tackling skills needs. They seem fragmented and lacking clarity about how different schemes are supposed to work together.

There are also many excellent organisations outside government helping to develop young people’s skills. The National Citizen Service, along with the Duke of Edinburgh’s Award, recently launched a report in Parliament on the enrichment activities they offer. The Scouts seek to empower young people with skills for life. WorldSkills UK, which is this morning announcing the young people selected to represent Team UK at this year’s Skills Olympics in Lyon, described one of its aims as “championing future skills” and helping the UK become a “world-class skills economy” so as to remain globally competitive. I say amen to that.

This Government do not seem keen on strategies, but no well-run organisation of any size would be without a human resources strategy. We, as a country, need a skills strategy to fulfil a similar role. What might such a strategy look like? First, skills should be recognised as a priority for any Government—national, devolved or local—and every area of policy needs to include provision for developing required skills. Secondly, the strategy should be evidence-based, built on sound data about current and anticipated skills needs, shortages and opportunities. There needs to be a process for monitoring and reporting on implementation and progress.

Thirdly, the strategy should be comprehensive and joined up across relevant government departments—I mentioned the nine that have programmes in this area—and across the nation, taking account both of local plans and of regional and national priorities, and seeking complementarity with the devolved nations, from which there may be valuable lessons to be learned.

Fourthly, and very importantly, the strategy should be matched by an education system fully aligned with its goals at all levels from primary to tertiary and beyond. This must recognise and seek to meet the need for skilled technicians and tradespeople, as well as university graduates, and give all of them a strong grounding in basic and essential skills. It is high time for the holy grail of parity of esteem between academic and technical/vocational education to be seized—although I am not sure whether that is the right thing to do with a grail. Of course, the implications of a skills strategy for education deserve a debate of their own.

Fifthly, a strategy should incorporate measures to increase teacher motivation and recognition by allowing them greater flexibility, to teach in a way that best suits their own abilities, experiences and interests. Highly skilled, highly motivated and highly regarded teachers must be a central plank of any skills strategy.

Sixthly, employers must be deeply engaged, both in defining and in delivering the strategy, including by ensuring that their own skills needs are recognised, and through offering work experience placements and apprenticeships.

Finally, the strategy should be vigorously promoted and publicised to individuals, employers, teachers, schools, parents and everyone concerned with skills. Such a strategy should aim to raise skills much higher up the public agenda and recapture some of the passion for education and skills that drove the success of Griffith Jones’s schools. Developing and delivering it would be neither easy nor quick and would depend on attracting the co-operation and commitment of all parties with a stake in raising skills—which is basically all of us. It might be supported by a high-profile campaign to build enthusiasm for pursuing the skills that young people and our economy need and to incentivise and celebrate investment in skills. The DfE’s existing Skills for Life campaign seems lacking in ambition and impact.

I am conscious that I have barely scratched the surface of the issues we are debating. I have every confidence that subsequent speakers will fill many of the gaps. I hope that this House, with the benefit of all the wisdom and expertise that it embodies, will continue to work doggedly with government, education institutions, employers and others in pursuit of policies to make the UK a world leader in skills.

When Napoleon supposedly described us as a nation of shopkeepers, I believe it was meant more as a recognition of our commercial talents than as an insult. Now is the time to apply our talents to a new challenge—to show ourselves to the world as a nation of skills builders. I beg to move.

--- Later in debate ---

[Lord Aberdare (CB)]

My Lords, I have found this a thoroughly absorbing, enlightening and encouraging debate. I am extremely grateful to all noble Lords who have spoken, from so many different perspectives. I particularly look forward to hearing more in the future from the noble Lords, Lord Marks of Hale and Lord Elliott of Mickle Fell, following their splendid maiden speeches. I am also grateful to the Minister. I very much echo the tribute by the noble Lord, Lord Addington, to her knowledge and commitment to this area, and thank her for her characteristically comprehensive response to such a broad debate. I am certainly not going to try to summarise in any sense, but I very much look forward to reading it in Hansard. It has very much confirmed to me the importance of skills as an issue, the breadth of areas it covers and the scale of the challenges we need to address. It is much too broad for a single debate, so I hope we will have other opportunities to discuss it.

My noble friend Lord Clancarty spotted the fact that I had omitted “education” from the Motion. That was because I wanted to focus in particular on the skills aspect. Other noble Lords, including the noble Lord, Lord Addington, commented that skills are not taken seriously enough. It seems that for too long education has been a powerful horse pulling a rather ramshackle skills carriage, when what we need is for them to work in harness with other horses: employers, other departments, parents—all the groups we have talked about—and they should be pulling a first-class, golden carriage accommodating both education and skills. So I was very glad to hear the noble Lord, Lord Holmes, talk about a vision for skills, which perhaps is the design for that golden carriage that we need. This is an issue that I will certainly wish to push further, but I reiterate my thanks to all noble Lords for a really inspiring morning.

Motion agreed.