Response to Spring Budget 2023
The Lifelong Education Institute welcomes the Government’s aim to combat the high mismatch between jobs and skills in the UK economy. With more than 1 million vacancies, and c. 20% of the UK’s working population economically inactive, radical measures are urgently needed to unlock the talents of new and returning workers. This means creating opportunities for retraining and upskilling that workers can access when and where they need them, and easing the ‘step-on, step-off’ transition points between education and employment.
But even though the Chancellor named ‘education’ as one of the four pillars of the Government’s industrial strategy, there were few announcements in this Budget that promise to address this mismatch. We are disappointed to see the Government doubling down on skills bootcamps, which have suffered from over 20% dropout rates since they were launched in 2020, and which have failed to provide positive employment outcomes for 46% of those who complete them.
Extending the list of available subjects to include construction and technology does little to offer learners systematic support or routes for future progression. This just risks raising unrealistic expectations in learners and employers, and demoralising and disincentivising them from trying such short courses in future when these expectations are not met.
We urge the Government to focus instead on increasing support for employers and Further Education providers to expand higher technical qualifications.
This includes small-credit modules that last 12 to 16 weeks, the same length of time as bootcamps, but which can also be stacked and combined into larger qualifications, such as higher and degree apprenticeships.
Unlike bootcamps, investing in these forms of modular courses would help transform the vocational learning landscape in a way that helps learners build up in-depth skillsets and gain exposure to professional experience.
The LEI supports the ambition for a flexible approach to skills training that takes into account previous experience, and we are pleased to see a stronger focus on training for workers in later stages of their careers. We are cautiously optimistic that the plan for “returnerships” will help those who have recently become economically inactive transition smoothly back into work, including those with long-term health conditions or parenting commitments.
However, questions remain over how much uptake they will see among the Government’s target over-50s group. We are not convinced that they will be enough to overcome the skills loss in the workforce from members of this group taking early retirement due to Covid-19. At the same time, we are concerned that accelerating training time to account for past experience risks cutting corners in the quality and rigour of these “returnerships”.
We encourage the Government to clarify the plans for delivering “returnerships”, including the timeline for their rollout and how they are going to be funded
We also urge the Government to spell out in greater detail how “returnerships” are intended to align with the existing reforms to lifelong learning announced by the Government last week.
We remain dissatisfied with the lack of meaningful reforms to the financial architecture around business support for upskilling their workforces.
One promising model would be to expand the Annual Investment Allowance to cover business investment in human capital as well—a form of ‘skills tax credit’, which we have proposed previously.
This would give businesses the financial headroom to free up their workers to take part-time and regular on-the-job training.
In conjunction with the plans for targeted grants for all courses covered by the Lifelong Loan Entitlement, this would help equitably share the financial responsibility for upskilling the UK’s workers among government, businesses, and workers themselves.
Overall, this Budget leaves much to be desired in its effort to get the UK ‘back to work’. As ever, if the question is growth, the answer is productivity, and means to achieving it are education and skills. Yet this Budget has missed some key opportunities to help the average worker in the UK find new avenues to deploy and hone their talents, and thereby help the UK economy get back on its feet.