On July 17, the Government outlined its legislative agenda in the King’s Speech, introducing 40 bills for this Parliament. Among them was the vaguely named “Skills England Bill“. So, what exactly is Skills England, and what could it mean for training in the retrofit and low carbon sectors?
The skills system – A sector under strain
To understand Skills England, we need to place it within the broader context of education and skills policy. Over the past 14 years, skills funding policy has been shaped by the following trends:
- Reductions in overall funding levels. Funding for adult education and skills has been declining since 2010, with only a slight recovery since 2020 as the Government responded to the levelling up agenda and the COVID-19 pandemic. However, funding levels remain lower than they were in 2010.
- Funding fragmentation. As funding has decreased, it has also become more fragmented, spread across a wider range of programs with increasingly varied and confusing accountability structures. The previous government’s levelling up agenda led to a plethora of competitive funding pots, often with relatively small budgets, resulting in a confused overall picture with little strategic direction.
- Funding devolution. While funding has fragmented, it has also been devolved. Over the past several years, a number of combined authorities have received a devolved adult education budget. Along with Local Skills Improvement Plans (LSIPs), this aims to increase local control and accountability for funding and reduce local fragmentation. This represents a significant shift in skills policy, particularly in a country with centralising tendencies. However, it remains an incomplete revolution, as much of the country still relies on a Department for Education-managed Adult Education Budget administered by the Education and Skills Funding Agency (ESFA).
The result is a skills system that is less than the sum of its parts. The incentives in the system face in the wrong direction, with confused accountabilities, small pots of funding, lack of strategic direction and focus meaning that the UK no longer has a skills system that is equipped to train and upskill the thousands of skilled workers required by the retrofit and low carbon heating sectors.
Setting direction for future skills training
These are the three challenges that Skills England must face, and that Labour has tasked it with fixing. In Labour’s own words:
Skills England will work across government departments and with both the Industrial Strategy Council and Migration Advisory Committee to identify skills and labour needs, drive forward training opportunities and ensure that skills policy is aligned with wider needs of the economy.
So, in this interpretation, we might see Skills England as responsible for creating a National Skills Strategy, complementary to an Industrial Strategy and Migration policy. Of note should be the special mention given to “ensuring Britain has the skills needed to meet wider ambitions set out in the Industrial Strategy and Labour’s Green Prosperity Plan.” This is vital in sectors such as retrofit where research conducted by Gemserv on behalf of the National Homes Decarbonisation Group and the Retrofit Academy has found will need hundreds of thousands of jobs in the next 10 years. This plan will need to set out the location, qualifications and skills needed for these vital jobs.
Properly constituted, this plan should provide a framework for local authorities to invest their devolved adult education budgets wisely, aligned to national priorities, while local priorities will be informed by robust LSIPs In short, the role of Skills England will be to provide a framework for devolution that provides coherence and direction.
The second significant announcement is the role of Skills England in administering the new Growth and Skills Levy. This will replace the much-maligned Apprenticeships Levy, replacing it with a more flexible fund whereby businesses can spend up to 50% of their contribution to non-apprenticeships courses. This will be welcomed by many employers in the low carbon heating and retrofit sectors where quality apprenticeships do not always exist, meaning that levy funds are wasted. This has the potential to free up around £1bn for non-apprenticeship training, funding that will make a significant difference to a sector that has been starved of cash.
Direct funding
Skills England will have a crucial role in determining which courses are eligible for this funding, directing a huge amount of money towards certain courses. This gatekeeping will function will be critical to the survival and flourishing of certain sectors and courses. It will also have an influence on devolved skills budgets approving ‘outcome agreements’ that should robustly set the framework and priorities for devolved budgets – ensuring funding is aligned with the National Skills Strategy.
It is right then, that in keeping with its first objective, Skills England engages with employers, trade associations and LSIPs to understand the skills requirements of the UK economy fully. The role of bodies like the National Homes Decarbonisation Group and the Heat Pump Association will be crucial to defining this requirement nationally for the heating and buildings sector.
A bureaucratic shake up
Given the scope of its remit, it is unlikely that the ESFA and Institute for Apprenticeships and Technical Education (IfATE) will survive in their current forms. Skills England is likely to assume the functions of the ESFA that are concerned with determining which qualifications receive public funding, the functions of IfATE that administer the apprenticeship levy and the Department for Education (DfE)’s Unit for Future Skills that holds data on labour markets and skills for local skills. This was assumed by the last government’s opposition costings and has subsequently been confirmed by the Government. It is also difficult to imagine a world where Local Skills Advisory Plans do not need to consider and feed into any national skills strategy, so we can expect reform here, too.
The remit of Skills England to operate across Whitehall, cutting through silos in the Department for Work and Pensions (DWP), Home Office and Business Department to ensure that the Government has a coherent strategy for skills and labour markets is welcome, but it will be challenging to maintain and to survive Whitehall competition. It will need to be given a strong mandate and robust leadership to deliver effectively.
What does this mean for low carbon heating and retrofit skills?
The implications for the skills system are huge.
First, the sector must ensure that it is around the table, making the case for the value of retrofit and low carbon heating jobs nationally and locally in driving growth and high-quality employment and how they can be accommodated in any national skills strategy. Construction and heating jobs are distributed across the UK, in rural and urban communities, in more affluent and less affluent communities. Many of the jobs are skilled technical and vocational roles that should be accessible to people from less academic backgrounds, or those changing careers. The sector needs to come together to make this case vociferously.
Second, local authorities must define their priorities working with LSIPs and others to define their skills priorities and ambitions. They should supply robust evidence around the economic impact and plans for delivery and impact that are complementary with other regional actors and build on their sectoral strengths. We know that low carbon heating and retrofit jobs will be needed across the country in all places where there are homes that people want to live in.
Third, employers must have a clear sense of their workforce skills and qualification needs. This could be PAS 2035, or MCS aligned qualifications, and able to feed into consultations, calls for evidence, their trade associations and to their local governments to make the case for investment, funding and the skills they need.
Skills England has a transformative potential: the low carbon heating and buildings sectors and local authorities ambitious to meet the net zero challenge can’t miss the opportunity. We must be front and centre, driving the debate and ensuring that strategy and funding supports the jobs and training in our sector. The work starts now.
Will Taylor is a Senior Consultant at Gemserv, leading work on the labour markets and skills requirements of the low carbon heating and building sectors. He was previously policy lead for the UK Shared Prosperity Fund and the European Social Fund at the Department for Education from 2020 – 2022.
