Reimagining the skills system - LEI Annual Lecture summary by Andy Haldane
Summary of LEI's Annual Lecture, delivered on 13th October 2026 by Prof. Andy Haldane CBE (Chancellor, University of Sheffield and President, British Chambers of Commerce). The event was kindly hosted by Kaplan, at their International College in London. You can read the summary below, or download it in PDF form:
Key takeaway
Andy Haldane's overarching message was that the UK faces a once-in-a-generation transition driven by longer lives and rapid technological change. The traditional model of education followed by a single career is giving way to a future characterised by continual adaptation. In that world, economic success will depend on creating a genuinely lifelong learning system that enables people of all ages to learn, retrain and contribute productively throughout their lives. Such a transformation, he argued, will require action from government, employers, education providers and learners themselves.
Welcome and introductions
Welcoming attendees on behalf of Kaplan, Linda Cowan (Managing Director, Kaplan Pathways) emphasised that skills development is central to the organisation's mission, whether supporting international students, apprentices, employers or professional learners. The lecture's theme reflected a challenge facing every part of the education and employment system: ensuring that people have the skills, adaptability and opportunities needed to thrive throughout increasingly long and varied careers.
Introducing the lecture on behalf of the Lifelong Education Institute, Mark Morrin reflected on the Institute's commitment to promoting lifelong learning as a driver of economic prosperity, social mobility and personal development. He noted that questions of productivity, workforce development and adult learning have never been more important as the UK seeks to improve economic growth while responding to profound demographic and technological change.
Setting the scene: a century of progress and a new economic reality
Andy Haldane began by reflecting on the remarkable economic and social achievements of the twentieth century. He argued that while much contemporary debate focuses on economic challenges, it is important to recognise how dramatically living standards, health outcomes, educational attainment and life expectancy improved during the last hundred years. However, the institutions that supported that success were designed for a very different era. The question facing policymakers today is not whether change is coming, but whether society's education and skills systems are capable of adapting quickly enough to meet it.
"The twentieth century was a century of abundance."
Key observations included:
Living standards rose dramatically across the developed world.
Global poverty fell to historically low levels.
Educational attainment increased substantially.
Improvements in health and longevity transformed people's life chances.
Human capital and education were critical contributors to these advances.
The end of the traditional three-stage life
Andy Haldane argued that one of the most significant consequences of longer life expectancy is that the traditional model of life is becoming obsolete. For much of the twentieth century, people's lives followed a predictable path: education in youth, employment during adulthood and retirement in later life. According to Andy Haldane, this model is increasingly incompatible with modern demographics and technological change.
In the future, learning, working and reskilling will need to occur continuously throughout life rather than in separate stages.
"The old model of education, work and retirement is no longer fit for purpose."
His key points were:
Life expectancy continues to increase significantly.
Many people today are likely to live well into their nineties and beyond.
Lengthy periods of retirement may become economically unsustainable.
Future careers are likely to involve multiple transitions and reinventions.
Learning will become a lifelong necessity rather than a one-off phase of life.
Demographic change: turning longevity into an economic asset
A major theme of the lecture was the economic potential of an ageing population. Andy Haldane challenged the common tendency to view ageing solely as a fiscal burden. Instead, he argued that longer lives present a major economic opportunity if societies are prepared to invest in skills, health and workforce participation.
In his view, the UK has yet to fully grasp the potential contribution that older workers could make. Unlocking this "longevity dividend" would require a concerted effort to support retraining, reduce age discrimination and create opportunities for people to work productively for longer.
"Longer lives can be a dividend, not a burden."
Among his observations:
The world is older than at any point in history.
Labour force participation among older workers remains lower than in several comparable countries.
Extending working lives could generate significant economic benefits.
Continuous skills development is essential if older workers are to remain economically active.
Ageism remains a major barrier to workforce participation.
Artificial Intelligence and a future defined by uncertainty
Turning to technology, Andy Haldane discussed the transformative impact of artificial intelligence. Rather than focusing on predictions about specific jobs disappearing, he concentrated on the broader challenge of increasing uncertainty. Previous industrial revolutions eventually created new forms of stability and predictability. AI may be different because it has the potential to alter a much wider range of occupations and to do so at unprecedented speed.
As a result, Andy Haldane suggested that adaptability may become the most important skill of all. The challenge for governments, employers and education providers is not simply preparing people for today's jobs, but creating systems that enable individuals to adapt repeatedly throughout their lives.
"The future labour market is likely to be more uncertain than anything we have previously experienced."
Key themes included:
AI will reshape many occupations rather than simply eliminate them.
Workers will need to change roles and acquire new skills throughout their careers.
Predicting future skills requirements is becoming increasingly difficult.
Lifelong learning will become a core economic necessity.
Education systems must become more flexible and responsive.
Why current skills policy falls short
Andy Haldane welcomed the introduction of the Lifelong Learning Entitlement (LLE) but argued that it remains too limited to meet the scale of the challenge. While the policy represents an important recognition that learning should continue throughout adult life, he suggested it has been designed around existing educational structures rather than the realities of modern working lives.
He argued that future learning systems need to be far more flexible, accessible and responsive to individual needs.
"We need lifelong learning to become a reality, not just an aspiration."
His criticisms included:
Insufficient flexibility in course design.
Limited opportunities for smaller, modular learning experiences.
Weak support for older learners.
Heavy reliance on loans rather than incentives and grants.
Risks of low public awareness and take-up.
He contrasted this with international models, particularly Singapore's SkillsFuture programme, which gives learners greater flexibility and support throughout their working lives.
Reimagining the skills system
The second half of the lecture focused on practical reforms that could help create a genuinely lifelong learning society. Andy Haldane's central argument was that responsibility for skills development cannot rest solely with schools, colleges and universities. Employers, local government, national government and individuals must all play a larger role.
"Human capital is every bit as important as physical capital."
His recommendations included:
1. Stronger employer engagement
Expand meaningful work experience opportunities.
Increase employer involvement in schools and colleges.
Improve collaboration between businesses and educators.
Address age discrimination in recruitment and workforce development.
2. A training Tax Credit
Andy Haldane advocated creating tax incentives for workforce development, arguing that investment in people should receive support comparable to investment in research and development.
3. Reform of Higher Education
Andy Haldane argued for:
Greater integration between universities and employers.
Expansion of degree apprenticeships.
Stronger links between qualifications and labour market outcomes.
More flexible routes into and through higher education.
4. Digital skills passports
Andy Haldane strongly supported the creation of a digital learning record capable of documenting:
Formal qualifications.
Micro-credentials.
Workplace learning.
Professional development achievements.
5. Local leadership and devolution
He argued that labour markets are local and that skills policy should increasingly be shaped through local partnerships involving:
Employers.
Universities.
Colleges.
Combined authorities and mayoral regions.
Summary of the Q&A session
Phillip Blond (ResPublica)
Phillip Blond argued that the UK's productivity challenge lies less with people outside the labour market and more with workers employed in lower-productivity firms. He questioned whether too much attention is focused on NEETs and not enough on improving productivity within existing businesses.
Andy Haldane agreed strongly, arguing that the UK's productivity challenge is characterised by a relatively small number of highly productive firms alongside a long tail of underperforming companies. He emphasised the importance of workforce mobility, skills diffusion and continuous training for employed workers.
"The challenge is not simply getting people into work, but helping people move into more productive work."
Sir Vernon Bogdanor (King's College London)
Sir Vernon Bogdanor raised two issues:
The future of Further Education and whether it requires substantially greater investment.
What advice Andy Haldane would currently offer the Chancellor.
Andy Haldane described Further Education as having suffered decades of relative neglect.
"Further Education is the collapsed left lung of our education system."
He argued that rebuilding vocational education should be a national priority.
On economic policy, he stressed the importance of fiscal credibility and making difficult spending choices to support economic confidence and investment.
John Harrison (UCDx)
John Harrison discussed the development of digital lifelong learning records and asked how government and employers could be aligned around a common framework.
Andy Haldane strongly endorsed the idea, arguing that the technology already exists and that the principal challenge is now leadership and coordination.
Professor Claire Pike (University of East Anglia)
Professor Claire Pike highlighted future demand for advanced qualifications and asked how postgraduate education could be prioritised without diverting attention from lower-level skills needs.
Andy Haldane agreed that advanced skills remain critically important but argued that employers should carry a greater share of responsibility for supporting postgraduate and professional development.
Victoria Milne (Institute of Innovation Management)
Victoria Milne challenged the tendency to discuss "skills" in broad terms and asked which specific skills are most lacking within UK businesses.
Andy Haldane pointed to management and leadership capability as a persistent weakness.
"Management quality remains one of the UK's most significant productivity challenges."
Alex Durand (SaxonAir)
Alex Durand argued that many employers remain disconnected from schools and colleges and suggested that business engagement is often the real bottleneck.
Andy Haldane agreed, describing skills investment as a collective-action problem where firms often hesitate to invest because they fear losing trained employees to competitors.
Robert Nitsch (Federation of Awarding Bodies)
Robert Nitsch asked whether traditional university degrees continue to offer sufficient value and how degree structures may need to evolve.
Andy Haldane argued that universities need stronger links with employment outcomes and endorsed further expansion of degree apprenticeships and work-integrated learning.
Paul Sutherland (Institute of Innovation Management)
Paul Sutherland asked about lower rates of entrepreneurship among older people in the UK and whether cultural factors may be limiting economic dynamism.
Andy Haldane agreed that the issue deserves greater attention, suggesting that barriers to finance and business growth may be preventing many experienced individuals from becoming entrepreneurs.
