The CIPD’s formal response to the government’s green paper on the UK’s industrial strategy argues pervasive underinvestment and failed policies on skills explain the UK’s poor performance on key measures.The report also warns that by failing to put skills at the heart of its plans for Britain, the government risks creating a “low-value, low-skills” economy that leaves the nation ill-prepared for its post-Brexit future, particularly if the UK is to face restrictions on accessing talent from outside of the UK.Backed by OECD figures, the CIPD makes the case for putting skills at the heart of the industrial strategy and supporting this with extra funding to reverse the trend since 2007 of declining job-related adult learning.

Industrial Strategy under fire

The government’s green paper came in for early criticism for its lack of a long-term plan for skills from the Business, Energy and Industrial Strategy (BEIS) committee.After the green paper Building Our Industrial Strategy was unveiled for consultation in January, the BEIS government committee said it believed its ten-pillar proposals fell short of what is needed, calling them “deeply disappointing.” The CIPD also responded, saying the strategy showed little fresh thinking.The professional body's new analysis, From ‘inadequate’ to ‘outstanding’: making the UK’s skills system world class, which forms part of its response to the consultation, highlights the scale of the issue the government, employers and employer bodies face:

• England and Northern Ireland together rank in the bottom four OECD countries for literacy and numeracy among 16-24 year olds
• the UK ranks bottom-of-the-class on young peoples’ computer problem-solving skills when compared to 19 other countries
• UK employers spend less on training than other major EU economies and less than the EU average and the gap has widened since 2005. In 2010, the cost per employee was €266 in the UK, against €511 across the EU
• The UK is fourth from the bottom of the EU league table on participation in job-related adult learning, with evidence showing a marked deterioration since 2007.

More emphasis on workplace learning and development needed

Commenting on the findings, Lizzie Crowley, CIPD skills adviser and report co-author, said: “This is a sobering analysis of the state of skills in the UK. Our report should serve as a real wake-up call for the government to break with the past two decades of failed skills policy and set the UK on a new course that delivers the right results for individuals, organisations and the economy as a whole.“While more efforts are being made to reform education, it’s clear that there needs to be a much greater emphasis on learning and development in the workplace.“As we move towards Brexit, and possible restrictions on overseas talent, it’s crucial that government works in partnership with education providers and businesses to address these deep-rooted issues that continue to blight individual and business potential.”

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Related reading:

• Learning and development top HR priority for next 12 months

• Plunge in number of EU citizens seeking work in Britain

• New advice targets root of STEM skill shortages

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Putting skills at the heart of the Industrial Strategy

With the consultation now closed, the CIPD is calling on the government to build strength and stability into the UK skills system, with the following measures:

1. Make additional skills funding for the workplace a priority

The CIPD believes that some government funding could be redirected from existing, related programmes of work and put towards training and development in the workplace. The government could, for example, divert £1bn (5%) of the National Productivity Investment Fund announced in the Autumn Statement and about £2bn of the total funds raised by the Apprenticeship Levy, which the Institute of Fiscal Studies estimates is not currently forecast to go towards apprenticeships.

2. Put skills at the heart of the Industrial Strategy

What happens inside the workplace has material value and workplace practices - such as training and development, and leadership and line management - have a direct impact on business and economic success. It’s vital that the government’s Industrial Strategy recognises the value of skills in improving outcomes for individuals, organisations, economy and society.

3. Reframe the Apprenticeship Levy as a training levy

The Apprenticeship Levy should be reframed as a training levy to make it more flexible to employers and to boost individuals’ skills.

4. Encourage organisations to raise their ambitions and invest more in workplace learning and ongoing skills development

The majority of the workforce of 2030 is already in work and will be untouched by the current round of education reforms. Rather than expecting the UK’s skills challenges to be solved at the point of supply, government and business must act to build and nurture cultures of lifelong learning within organisations and society.

Creating a lasting plan of action

“We can either take the high road as a nation, with government, employers, education and business support groups working in partnership to boost investment in skills and create more high-value, high-productivity workplaces,” says Lizzie Crowley. “Or, we can keep doing what we’ve always done and get the same mediocre results.“The government should seize this moment to raise the ambitions of the UK. We need to lift the lid on what is happening in UK workplaces and address skills at a much deeper and broader level than ever before“Successive governments have merely tinkered around the edges of skills strategies that have ultimately failed to deliver. Now is the time for real and lasting change and a clear plan of action to address skills at a national, sector and local level.”

The spring issue of Relocate magazine features more of the latest research and analysis on HR, education and skills. Download your copy here. Relocate will also be reporting from the CIPD Learning & Development show on 10-11 May 2017 to bring you the latest insights.

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