British Firms Spend Less on Skills Retraining After Brexit, New Report Finds

British Firms Spend Less on Skills Retraining After BrexitNew Report Finds

The number of adults participating in government-funded further education and skills training has dropped dramatically, according to a report by a parliamentary committee

The Department for Education’s £4 billion a year programme to upgrade the skills of workers across the nation is failing to deliver targets needed for a post-Brexit England and to meet the Government’s levelling-up promises, MPs have warned today.

The department has presided over a halving of training since David Cameron came to power and seen a 39% drop in training programmes in the most deprived areas, according to Parliament’s Public Accounts Committee.

Its chair, Labour’s Dame Meg Hillier, said that “participation has fallen off a cliff, especially among older workers and in poorer areas” and that the Government “is not going to make inroads on levelling-up if it does not get ahead of this”.

“With UK workforce numbers falling, the Government needs to get serious on skills – the future of the economy depends on it,” she added.

The report reveals skill shortages have hit the under-staffed Unit for Future Skills – which was meant to drive the programme across government. It is only employing 18 civil servants and cannot recruit sufficiently skilled analysts.

The number of adults participating in government-funded further education and skills training has dropped dramatically, from 3.2 million in 2010/11 to 1.6 million in 2020/21, the report states.

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The situation is worse in deprived areas, with MPs on the committee saying they are “extremely concerned at the dramatic fall in participation in further education and skills training among disadvantaged groups”.

The total number of participants in government-funded further education and skills training in the 20% most disadvantaged areas of England fell by 39% between 2015/16 and 2020/21 (down by 280,100 participants). The largest decline in these areas occurred among people aged 50 and over, with the numbers participating dropping by more than half.

Part of the problem is that big companies tend not to have offices or factories in deprived areas so cannot provide on-the-job training. Until the Government can persuade them to move there, the problem will continue.

But the report also reveals that, despite the new challenges of Brexit, firms are actually spending less on retraining than they did when the UK was a member of the EU which “which risks leaving the economy without the skills it needs”.

The department’s employer skills surveys indicate that employers’ spending on workforce training per employee fell in real terms from £1,710 in 2011 to £1,530 in 2019.

The 2021 employer skills survey found that 52% of the total workforce had received some training during the year – the lowest proportion since the first survey in 2011.

According to the report, the Business, Energy and Industrial Strategy department is particularly concerned about small and medium-sized enterprises (SMEs), which often lack the resources to invest in workforce training.

“Several of the organisations that submitted written evidence raised concerns about the inflexibility of the apprenticeship levy and suggested that employers should be able to use their levy contributions to fund a wider range of skills activities,” it states.

MPs also raise concerns in the report about further education colleges not being able to provide enough reskilling training.

“We found that financial pressures had caused some colleges to narrow their curriculum and reduce the length of courses,” the report states. “We are also concerned about colleges’ ability to recruit and retain teaching staff. DfE recognises that pay in the college sector will often not compete with pay in relevant industries, but highlights that the 2021 Spending Review increased funding for skills by £2.8 billion”.

It is considering how to give colleges greater funding certainty and is working with the sector on initiatives, such as supporting people who want to teach part-time and work in industry part-time.

Minister for Skills, Apprenticeships and Higher Education Robert Halfon told Byline Times: “In recent years we’ve transformed the skills landscape introducing new high-quality apprenticeships, T Levels, Skills Bootcamps, and Institutes of Technology. All of this is backed by £3.8 billion over this Parliament as the report from the PAC highlights, and we’ve seen the popularity of degree level apprenticeships grow and grow with over 148,000 starts since their introduction in 2014/15.

“Our skills programmes have been designed hand-in-hand with businesses to meet their needs and that of the wider economy. Our ambition is to ensure people of all ages, at all stages of life, can access high quality technical qualifications and training – and are able to climb the ladder of opportunity.

“We are focused on delivery to drive long-term economic growth and create a pipeline of talent to meet the needs of our future workforce. That is why in the Autumn Statement we announced Sir Michael Barber will be advising on skills implementation to drive forward our progress.”