Government says launch of Skills England will transform the economy

Prime Minister Keir Starmer and Education Secretary Bridget Phillipson have unveiled Skills England, an initiative designed to unify the fragmented skills landscape and foster a cohesive national ambition to enhance the nation’s skills. Richard Pennycook CBE, former chief executive of the Co-operative Group and lead non-executive director at the Department for Education (DfE), has been appointed as the interim Chair of the new body.

The government says that training and development is vital to economic growth, with improvements accounting for a third of productivity gains over the past two decades. However, from 2017 to 2022, skills shortages in the UK doubled, which it says is now related  to 36 percent of job vacancies, totalling over half a million roles.

Skills England is intended to collaborate with central and local governments, businesses, training providers, and unions to address the needs of the next decade nationwide. It will provide strategic oversight of the post-16 system, aligning with the Government’s Industrial Strategy.

The initiative sets out to support local areas in developing skilled workforces, particularly in construction and healthcare, as part of the Government’s mission for sustainable growth. By working with the Migration Advisory Committee, the new body also plans to help reduce dependence on overseas workers, the government claims.

Skills England says it will identify training eligible for the growth and skills levy, a significant reform granting businesses more flexibility to spend levy funds on necessary training, a long-standing request from employers.

The organisation will be established in phases over the next 9-12 months to create a responsive and collaborative system. The new Bill is intended to transfer functions from the Institute for Apprenticeships and Technical Education (IfATE) to Skills England. The initiative claims to complement efforts to simplify and devolve adult education budgets to Mayoral Combined Authorities, ensuring they can directly address adult skills needs and support regional growth.

The initial phase involves setting up Skills England in a shadow form within the DfE, assessing future needs, and building strong relationships with employers. A permanent board, Chair, and CEO will be appointed in due course.

Currently, employers shape training through IfATE. As Skills England takes on a broader remit, IfATE’s functions will transfer to the new organisation. IfATE will continue its work during this transition. Skills England says it will maintain a list of levy-eligible training to ensure value for money and alignment of government-funded training with identified needs.

The government will also introduce a comprehensive strategy for post-16 education to remove barriers to opportunity, develop a skilled workforce, and drive economic growth through the industrial strategy.