Investing in the Future of Skills – Reflections on the Autumn Budget and Spending Review

With the Government’s focus on rebuilding the economy, huge investment and effort will be needed to enable people of all ages to upskill and reskill to meet the needs of employers. We reflect on the announcements from the Autumn budget and what this means for the skills landscape.

09 November 2021

On 27 October 2021, Chancellor Rishi Sunak delivered the Autumn Budget and Spending Review, largely reiterating the Government’s commitment to “level up” the UK economy through investments in education and skills development across all regions of the UK. While the discourse received some public disapproval, many citing it as “more of the same” or “recycled investments”, the longer-term spending commitment still manages to deliver a message of hope for the country’s fast-recovering post-COVID economy and the importance in skills and further education. 

A focus on core areas that meet evolving employer needs

What’s immediately clear from the Chancellor’s announcement is the focus on creating foundational integrity and stability for a burgeoning economy, through broader-thinking solutions with longevity and sustained change in mind. Some of these solutions include:

• £4.7bn investment into schools by 2024-25, returning school funding to 2010 levels, so as to attract and retain world-class educators, and an additional £2bn of new money to aid in the education recovery and catch up process, post-COVID.
• Investing £3.8bn more in further education and skills over the Parliament as a whole to ensure people can access high-quality training and education that leads to good jobs, addresses skills gaps, boosts productivity and supports levelling up.
• T Levels will continue to receive the focus they deserve, with the Chancellor’s commitment to invest £1.6bn cash over the next 3 years. This will allow centres to dedicate more hours to T Level students, further enhancing the learning landscape and options for 16-19 year-olds.
• A c.£3bn boost for the Skills Revolution overall (which includes the T Level budget) is expected to reinforce the Prime Minister’s commitment to lifetime skills development, building a high-wage, high-skill economy through apprenticeships, traineeships, skills bootcamps and the Kickstart scheme.
• The launch of the £560m free numeracy programme, “Multiply”, will provide adults with the means to improve their numeracy skills, through online maths qualifications at different levels.
• Investment of over £550m by 2024-25 will make sure adults, at any age, can upskill to reach their potential, transforming lives and delivering on the National Skills Fund commitment
• Apprenticeship funding will increase by £170 million to £2.7 billion in 2024-25, coupled with further announcements on which organisations will share in the additional £7 million fund to set up and run flexi-job apprenticeship agencies

Speaking of education and skills development, Chancellor of the Exchequer Rishi Sunak said,  “Our future economic success depends not just on the education we give to our children but the lifelong learning we offer to adults.”

Re-skilling and adult learning as a part of the bigger picture

According to the City & Guilds Skills Index 2021 report, more than half of employers in the UK confirm that they need industry-specific skills from employees in the future.

Commenting on the budget delivery, City & Guilds CEO Kirsty Donnelly, say: “Undoubtedly, some solid foundations have been put into place in terms of T Levels and Apprenticeships, but there is still significant work to be done. For starters, if T Levels are to succeed they will need young people to choose to study them. Additionally, we still don’t have a skills system set up to seamlessly also meet the needs of adults who will need to constantly upskill and reskill over five-decade careers.”

The dynamic of skills demand in the workplace has become increasingly complex, considering some of the factors involved:

Digital transformation – Due to the fast pace of technological evolution, the job skills latency in most industries has seen a dramatic increase. Essentially, the half-life of skills has decreased, requiring workers to update their knowledge and application more regularly. This is specifically true of technical and industry-specific skills, such as those needed in construction, infrastructure, land-based and healthcare services.

Net-zero ambitions – As the UK moves toward its net-zero goal, industries impacted by the changing regulations and system upgrades will need to upskill, or re-skill, to remain competitive and compliant. New opportunities are expected to unfold, with new skill sets required to fulfil entirely new job roles as well as a growth in some existing skill areas transitioned to support increased demand. 

Skills bridges – The need for skills bridge programmes has risen sharply in recent years, especially with the Covid-19 pandemic forcing so many into furlough and retrenchment. Skills bridges allow workers to cross industries smoothly, which reduces unemployment and provides new, skilled expertise to industries that may have previously been challenged by a lack of labour supply. The tightening labour market will see employers increasingly looking to reach more diverse recruitment pools and consider upskilling and reskilling of existing employees to transition to where workforce demand is most acute.

The Four-Generation workforce – For the first time, we now have four generations of people contributing to the workforce. Combined with fast-changing employment demands and a shorter skills half-life of many technical and industry-related skills, adult learning could not be more critical to meeting employer skills requirements. Providing all age careers advice and flexible access to lifelong learning will become essential, not just desirable.

Reflecting on the budget delivery, City & Guilds CEO Kirsty Donnelly, responded;

With reskilling forming such a principal part of the Chancellor’s Autumn Budget, it’s undeniable that skills development and progression is, and will continue to be, paramount to the ongoing growth of the UK economy.

“The Chancellor may have pledged investment in bricks and mortar colleges,” says Kirstie Donnelly. “But in a world that’s becoming increasingly digital, as we proposed in our Spending Review submission, we need to act now to introduce more short-term flexible and modular solutions, such as our Industry Insight solutions and Skills Bridges, to help fill key roles and ensure that people of all ages and at all stages of their careers are able to upskill and reskill. What we hope to see is a comprehensive long-term strategy that connects the dots of careers advice, pre and post-16 education, and employment to local labour market needs that fuels longer-term growth and productivity.”

Even though some questions remain unanswered, the future of adult learning and reskilling looks brighter through the lens of the gradually-evolving government funding and the new flexibilities around Adult Education Budget (AEB), which already provides funding for many adult skills programmes – such as those offered by City & Guilds. Through a selection of vocational programmes and skills bridge courses, City & Guilds supports economic recovery and development, by helping people into new roles and career opportunities.

These are sentiments further supported by Patrick Craven, Director of Policy & Stakeholder Partnerships, who comments; “The focus of the Spending Review investments in skills education is a cause for cautious optimism and investment that is long overdue. Within tight fiscal constraints it was never going to be as much as was being called for from the sector, but we have seen some welcome recognition of the importance that skills development plays in economic recovery. It is now more vital than ever that each channel of budget allocation is effectively utilised, and this will need cohesion across DfE, DWP and DLUHC initiatives which is an area that City & Guilds is well placed to support.”

Speak to us about how City & Guilds can support you on your journey, with adult skills, T Level programmes, apprenticeships and traineeships. Contact us at directsales@cityandguilds.com to find out about programmes in your field.