Strengthening UK Skills Base could deliver £108 billion boost for the economy

Commission on Sustainable Learning led by Former Select Committee Chair Neil Carmichael produces first report

A radical new approach to education and training, which more adequately prepares people for the world of work and responds to the changing needs of our economy, could deliver a £108 billion boost for the UK, according to a new report released yesterday at the Conservative Party Conference.

The independent Commission on Sustainable Learning for Life, Work and a Changing Economy, led by former Chair of the Education Select Committee, Neil Carmichael, and supported by Pearson, the world’s learning company launched its first interim report at an event last night bringing together business leaders, experts from the education sector and the Minister for Apprenticeships and Skills, Anne Milton.

The report assesses the economic impact of addressing both the demand and supply side challenges in order to get skills education and training ‘right.’ It finds that securing a top 25% OECD ranking for adult education for the UK could improve the potential annual growth rate of GDP by 0.1. This equates to a £108 billion increase in GDP over a 10-year period or £21 billion a year by 2026, which is about a third of the annual DFE spend on education.

The comprehensive document serves as a commentary on existing literature, exploring the UK’s current and future skills needs in response to anticipated technological and demographic shifts. It considers the efficacy of responses from policy makers to date and what is needed to ensure that the UK education and training system is equipping today’s young people and the wider workforce to succeed in a changing economy.

Through four recommendations, it highlights the need for a comprehensive rethink of the country’s approach to education and training, to develop the skills base to meet the needs of employers well into this century. This includes areas for further research and insights to drive strategic policy decision making in this area.

Funding and cost models - in particular, lessons learned from successful models in other countries, with regard to flexibly focussing funding strategies on areas of greatest need while leaving the structural elements of the system intact. This should recognise the differences in the nature of those economies and cultures and the extent to which their principles would need to be adapted to a UK context.

Options for improved labour market intelligence – this being crucial to facilitating alignment between skills supply and demand. Instinct may lead to a centralised solution, but social and technological trends suggest a networked, employer-led model may be more sustainable.

Detailed analysis of sectors in which skills shortages persist. This analysis should seek to uncover the exact nature of such shortages and to inform the most appropriate remedial action.

Regional analysis of productivity and competitiveness and potential impact of skills challenges on this situation.

The Commission, made up of business leaders and industry experts, conducted a series of public evidence sessions over the last six months to understand the UK’s current and future skills needs in response to anticipated technological and demographic shifts, and the efficacy of Government policy in response to these challenges. This process included public testimony from a range of stakeholders including learners, employers, and college leaders, educators and providers.

This interim report marks the first report of the Commission, with its final report expected by year end. With this report highlighting the key challenges and the considerable economic benefits of addressing them, the Commission is now preparing a far-reaching set of recommendations and blueprint for the way. The final report will outline specific recommendations that need to be made to the UK education and training system to support the future economy.

The report was prepared by Bates Wells Braithwaite LLP (BWB) Advisory and Impact team, working closely with members of the Commission.

Neil Carmichael, chair of the Commission commented:

“Over the last four months, the Commission has heard evidence from a range of experts from across the education sector and the business world and it has been a truly illuminating experience. It is clear from our work that what is required is a fundamental change in culture, where young people from all backgrounds are inspired and equipped to develop technical and professional skills to support their career ambitions. We also need a system that is more responsive, more flexible and truly engages employers and industry.

“It is not enough to rely on yet another batch of initiatives and relatively small pots of money to deliver such a system and the workforce we need. Instead, all assumptions must be rigorously tested and new and bold ideas, rooted in evidence, should be advanced. This first report seeks to lay the foundations for such an approach and a robust set of recommendations, which we hope to set out in our next report towards the end of this year”.

Jim Clifford, partner and head of Advisory/Impact, Bates Wells Braithwaite one of the report authors said:

“We are lagging behind many of the OECD Nations we’d like to see as our peers. The economic costs of that are huge. Yet the research shows it will not be fixed by policy changes around qualifications, even if they are part of the answer. It is clear that these supply-side solutions need to be matched with support for employers and whole industries in using those skills well. Around 1% of employment is affected by skills shortages, but between 35% and 45% of employees are not using all their skills in their current jobs. Skills development and the systems that support it into the workplace must change.

“Even as that change is met, we cannot stand still. Competitiveness in future will be built not just on great skills well used, but on the ability to develop and use human skills in a fast-changing environment or technical advances and dwindling natural resources. The challenge is clear – we must now work towards the solutions.”

Rod Bristow, president of Pearson in the UK, commented:

“Pearson is committed to supporting high quality research, investigation and public dialogue which improves the quality of education in the UK. That is why we are so pleased to be supporting the Commission’s important work to ensure that we are developing the skills based that the country will need to succeed in the challenging and evolving decades ahead.”

 

ENDS

Notes to editors

About the report

Download the full report

Download the executive summary

The report was commissioned by Pearson UK on behalf of the Commission on Sustainable Learning for Life, Work and a Changing Economy. It was written by Katie Barnes, Jim Clifford, Louise Barker and Simon Epsley from Bates Wells Braithwaite. For further information, please email katie.combes@plmr.co.uk.

About the Commission on Sustainable Learning for Life, Work and a Changing Economy

The Commission on Sustainable Learning for Life, Work and a Changing Economy was established, with support from Pearson, the world’s learning company to provide a clear and independent overview of the challenges facing education in the UK - with an emphasis on vocational and technical education - and generate practical solutions.

To date, the Commission has held evidence session in London, Nottingham and at the Festival of Education at Wellington College hearing from a broad range of experts from across the education sector and the world of work.

Members of the Commission have also met with students and young people to discuss their experiences of the education system. Extending its reach across the country and to gain regional perspectives the Commissioners also made a field trip to the North East - meeting with local leaders, educationalists and representatives from the North East Local Enterprise Partnership.

The commissioners come from all sections of the economy and education system and include:

  • Ian Ashman (former President, Association of Colleges)
  • Alice Barnard (Chief Executive, The Edge Foundation)
  • Rod Bristow (President, UK & Core Markets, Pearson)
  • Neil Carmichael (Chair)
  • Jim Clifford OBE (Partner & Director of Advisory/Impact, Bates Wells Braithwaite)
  • Ann Francke (Chief Executive, Chartered Management Institute)
  • Nick Hudson (Chief Executive, Ormiston Academies Trust)
  • James Kirkup (Director, Social Market Foundation)
  • Ian Koxvold (Head of Education Strategy, Pwc)
  • John Laramy (Principal & Chief Executive, Exeter College)
  • Ronel Lehmann, Founder, Finito Education Limited)
  • Dave Phoenix (Vice-Chancellor, London South Bank University)
  • Cindy Rampersaud (Senior Vice-President, BTEC & Apprenticeships, Pearson)
  • Mark Stewart (General Manager and Human Resources Director, Airbus)
  • Professor Geoff Wake (University of Nottingham)
  • Professor Jean-Noel Ezingeard (Deputy Vice-Chancellor, Manchester Metropolitan University)

About Neil Carmichael

Neil Carmichael, Honorary Professor of Politics and Education, University of Nottingham, is Senior Adviser, PLMR, providing strategic advice and support across all sectors; Chief Education Consultant at Christine Lee & Co (solicitors); and, Senior Adviser at Wild Search. Neil is also Chair of the Board of FESTOMANE (Festival of Manufacturing and Engineering); Trustee, Sir Heinz Koeppler Trust – Wilton Park, promoting international peace and security; and, a member of the Advisory Board of the D Group, strategic advice and international network. He is now a Trustee of the Sir Edward Heath Charitable Foundation.

Neil was Member of Parliament for Stroud (2010-17), serving on the Education Select Committee throughout period and latterly as Chair. He established the All Parliamentary Party Group (APPG) on School Leadership and Governance, Chair of Vascular Disease APPG, producing influential reports on clinical methods and took the Antarctic Act 2013 through Parliament. Neil was Chair of the Conservative Group for Europe and is Director of Modern Europe.

About BWB

Bates Wells Braithwaite (BWB), founded in 1970, is a legal and professional services firm that works for a wide range of businesses, social enterprises, charities, institutions, public bodies and high-profile individuals.

Bates Wells Braithwaite’s Impact & Advisory team supports organisations to be more successful in their financial, operational, economic, and social impact, advising particularly on strategy, impact management, transactions, and risk and investigation. The team brings multi-disciplinary support to those in the social, private and public sectors, and to those who are sensitive to their social footprint. Their social and economic impact reporting has covered areas including education, children’s and youth services, fostering and adoptions, housing, domestic violence, rehabilitative care, youth organisations, and National programmes such as apprenticeships and the sector skills councils, in the UK and Europe.

BWB is proud to have been one of the first companies in the UK to achieve B Corp certification, in 2015. We have also been named as one of The Sunday Times’s Top 100 Companies to Work For and we are accredited as a Living Wage employer.

About Pearson

Pearson is the world’s learning company, with expertise in educational courseware and assessment, and a range of teaching and learning services powered by technology. Our mission is to help people make progress through access to better learning. We believe that learning opens up opportunities, creating fulfilling careers and better lives. For more, follow Pearson_UK on Twitter.