Understanding Society

Ipsos
Understanding Society
Understanding Society
The future of the UK workforce

The future of the UK workforce

Future public services should enable people to develop skills and change career mid-life to meet the economy’s skills needs. Many people would change career and retrain but don’t know how. We discussed with Fiona Aldridge, Head of Insight at the West Midlands Combined Authority, how the WMCA Trailblazer devolution deal offered an opportunity to design solutions to integrate skills, employment, and careers services, and target funding at regional skills gaps. However, there remain national challenges for the devolution model to meet skills needs.

15 November 2023

Employment

Rosie Gloster
Associate Director

Interview with Fiona Aldridge, Head of Insight at the WMCA

How can devolved employment, skills and careers models best meet our economy’s changing skills needs?

The economy’s future skills needs will be influenced by trends such as climate change, migration, and technological changes like artificial intelligence (AI)¹. Evidence suggests that the public are broadly aware of this. For example, 2 in 3 (64%) Britons think AI will affect their job². Yet around 1 in 3 people in work (36%) say they are not confident they have the skills to use AI at work³. Even without significant future changes, there is already a gap between the skills of the UK workforce and employers’ needs. The UK has over 1 million vacancies⁴, employment rates are below pre-pandemic levels (75.5%)⁵, and one in ten employers (10%) have at least one skills shortage vacancy⁶. Taken together, this suggests that future policy and public services need to be more effective at supporting people to enter work, to remain in work and develop the skills required by industry, and to change career mid-life.

Many people are open to changing career and retraining during their working life. Polling for the Careers Can Change campaign⁷ found over 2 in 5 (44%) people were interested in getting information about their options in relation to work, they just don’t know where to look for support. For example, only around a fifth of adults had heard of the National Careers Service, with people on incomes between £20,00 and £35,000 least likely to have heard of it. People were interested in getting information about how they can use their skills in different jobs (24%) and the different types of jobs or careers that might be available to them (22%).

The Government’s Levelling Up⁸ strategy aims to increase the number of people completing high quality skills training. Ipsos’ Levelling Up Index⁹ found that having access to high-quality skills training as a way to tackle inequalities locally was prioritised by just under a quarter (22%) of the public, making it a middle-ranking priority. However, people living in ‘services and industrial legacy’ areas (often former mining or manufacturing areas) were the most likely to prioritise skills, highlighting place-based differences in priorities. A model developed by Ipsos for the Youth Futures Foundation illustrates the drivers of local labour differences and the many issues being grappled with when trying to meet skills needs. One reason skills shortages have been challenging to meet via national policy is because of variation in what affects the supply and demand for skills between places¹⁰.

workforce supply and demand regional and national context

Devolution is one solution that has been proposed in response to this complexity. With both major political parties broadly supportive of devolution in England, there is consensus in it as the future model of public services¹¹ ¹². But for a devolution model to work, creating a meaningful geography for devolution is important; places need to feel cohesive and distinct. The nine English Regional Development Agencies (RDAs), an earlier regional model, brought together economic development and skills. There were many reasons why RDAs ended, but a lack of distinctiveness in regional skills strategy was one. The rise of structures that would become Combined Authorities was also influential. Gaining both fiscal and political devolution meant Combined Authorities can invest in their priorities and hold people and organisations to account.

A model of devolution is provided by the WMCA which earlier this year signed a Trailblazer devolution deal outlining the region’s intent to integrate employment, skills, and careers to respond to skills challenges, and transform how money is spent. A key aim was to improve the supply of skills and skills outcomes for local businesses and communities.

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In conversation with Ipsos’ Rosie Gloster, Fiona Aldridge, Head of Insight at WMCA, emphasised that ensuring future workforce needs are sufficiently met requires strategic planning alongside flexibility to respond to new trends and economic shocks. The West Midlands experience offers learnings for targeting investment towards priority skills needs that could have wider applicability:

Integrate employment, skills, and careers with wider public services and support, such as housing and health, alongside the other labour market influences shown above, which are frequently issues that people struggle with when looking for work¹³. These policy areas are jointly considered by regional leaders when developing strategy. Initiatives are then designed to integrate services, such as offering careers advice alongside training courses to support career changes.
Put jobs and skills for work at the forefront of public investment. Funded courses are developed starting with the job roles available, then advertised and actively targeted at local people with less access to training, and whose jobs might be at risk in the future. Careers advice is offered alongside training. The WMCA region now hosts courses focused on building digital skills and supporting people working in high carbon emitting industries to develop the skills needed to use more sustainable technologies. Fully funded Level 3 courses in priority economic sectors for all residents, regardless of income, are being piloted. This illustrates how devolved powers have reframed public services and investment to upskill people to meet local skills needs.
Target skills and careers investment at people who otherwise miss out. Following consultation, fully subsidised Level 3 courses paid for using devolved public money will be available to residents earning less than £30,000, just below the median pay threshold, overcoming financial barriers to training that people can face to progressing in work¹⁴. This will offer more working people access to training courses alongside careers advice. Residents on low incomes have been targeted as they are less likely to be able to access training paid for by employers or self-financed¹⁵.

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Devolution will be central to meeting future national skills needs, and areas such as WMCA are positive and enthusiastic about the opportunity. However, there remain national challenges for the devolution model to meet the economy’s skills needs:

A long-term strategy is required, setting out a national vision for the English skills system to complement devolution. While place is important, many challenges will inevitably be nationwide. Changes driven by technology-enabled remote working, alongside skills requiring significant capital investment in training facilities and equipment requires a national skills strategy.
Devolution needs to extend beyond urban areas to ensure the opportunity and benefits can be shared by all places. Mayoral devolution currently covers 41% of England’s population, 49% of its economic output, and just 14% of the land area¹⁶. This means a significant proportion of the country is not benefiting from the opportunities provided by devolution. Nationally, consideration should be given to how to enable more equitable geographic opportunity and ensure institutional capability to collaborate and mobilise devolution to meet skills needs in all places.
The communication of locally differentiated offers to national employers and the public. Solutions to our skills needs should look different across the country, reflecting adapted responses to different contexts. The focus should be on the outcome of meeting local skills needs. This will necessarily create a differentiated offer between places where groups of people are able to access funded training in some places and not others. Central government will need to communicate and rationalise a locally differentiated offer to ensure that national employers and potential learners are aware of the opportunities available in different regions.
Testing, learning, and sharing what works in co-commissioning and in local contexts to support people to retrain and change career to meet the economy’s future skills needs. While devolution has the potential to offer flexibility and tailored policies to address skills and employment gaps, it is important to monitor and evaluate its effectiveness. Lessons learned from successful initiatives can then be applied across the country to ensure a more comprehensive approach to meeting the economy's future skills needs.

article pullquote English devolution of employment, skills, and careers, such as in WMCA, is in its relative infancy. While devolution offers the opportunity to design differentiated solutions to target regional skills gaps, the national challenges require a strategy to complement devolution. A national skills strategy should be at the heart of policy for any future government to effectively meet the economy’s skills needs.