The government launched its shake-up of skills training in an attempt to address the “fragmented and broken” landscape and reduce reliance on overseas labour.
Skills England, a new government body, will bring together local authorities, businesses, and training providers to meet the “skills needs of the next decade”.
Announcing the new body, Prime Minister Keir Starmer said he wanted to reduce firms’ “over-reliance” on migrant workers.
“From construction to IT, healthcare to engineering, our success as a country depends on delivering highly skilled workforces for the long-term,” he said.
“Skills England will put in place the framework needed to achieve that goal while reducing our reliance on workers from overseas,” Starmer added.
The body will be established in phases over the next nine to twelve months. One of its major responsibilities will be overseeing the new growth and skills levy.
The growth and skills levy, which will replace the apprenticeship levy, gives businesses more flexibility on how to use funds set aside for training members of staff.
Skills England will also work with the Migration Advisory Committee to “help reduce reliance on overseas workers”.
Action to tackle skills shortages was a major ask of businesses ahead of the election. Between 2017 and 2022, skills shortages doubled to more than half a million, making up 36 per cent of job vacancies.
“Skills shortages ramp up pressure on firms, damaging their ability to operate profitably and leading to unsustainable wage inflation,” Jane Gratton, deputy director of public policy at the British Chambers of Commerce (BCC) said.
Gratton said the government needed to work “at pace” to establish Skills England. “We need a stable and coherent national skills strategy that ensures institutions are delivering the training the economy needs and that gives businesses the confidence to invest for the long term,” she said.
Shazia Ejaz, director of campaigns and research at the Recruitment and Employment Confederation (REC), said the government’s urgency on tackling the skills shortage was “welcome”.
“Employers have long wanted to see reform of the skills system,” Ejaz said.
While firms were broadly supportive of the new body, many urged the government not to make it too difficult to access overseas labour.
“We need to ensure firms can access global talent to fill urgent job vacancies,” Gratton said. “This requires a more efficient and effective visa system that can support sectors of the economy when they’ve tried everything they can to recruit and train locally.”
Similarly, Ejaz said “we want to hear more from the government on how they will create a fair and flexible immigration system to meet the needs of business.”
The first phase of Skills England’s launch involves setting up the organisation in shadow form within the Department of Education. It will take on the functions currently offered by the Institute for Apprenticeships and Technical Education (IfATE).
IfATE will continue its important work in the interim as the transition of functions to Skills England is finalised.