1.                        The Work Foundation is a think tank focused on improving working lives across the UK through applied research and new ideas. For over a century, we have worked to break down the barriers individuals and communities face in accessing good work.
    
2.                          We believe everyone should have access to secure, rewarding and high-quality work. By engaging directly with workers, employers, policymakers and leading academics, we deliver rigorous applied research to tackle structural inequalities in the labour market and improve working lives across the UK. We are part of Lancaster University’s Management School, and work with a range of partners and organisations across our research programmes.
    
3.                          Our evidence submission focuses on the current labour market outlook and how it relates to skills challenges, focussing on barriers to accessing training faced by different groups and sectors. It presents policy recommendations for the Department for Education and different Government bodies.

Executive Summary

4.                          Training is a vital tool for responding to the changing needs of the labour market and for retaining and supporting an ageing workforce. However, over the last decade, access to training has declined significantly. This has been coupled with a steady reduction in funding for adult education. Even with the recent investment made through the National Skills Fund, funding remains well below 2010 levels. If we want to improve access to learning throughout our working lives, we need to break down barriers to training, and foster collaboration between providers, local Government and employers to develop training that meets learners’ needs.

5.                          Work Foundation research shows that the current skills system is not preparing us for the skills needed in the labour market and found that those who would likely benefit most from learning opportunities are the least likely to access them. Our research shows that access to training decreases with age, putting older workers at a higher risk of becoming economically inactive as we experience changes in the economy.

6.                          Access to skills provision can be crucial for those in severely insecure work to transition to more secure jobs. The Work Foundation’s UK Insecure Work Index found that 6.2 million workers (19.8% of the labour market) are in ‘severely insecure work’, but concerningly these individuals, particularly those in routine and intermediate roles, are less likely to access training. While the decision to broaden the Lifetime Skills Guarantee eligibility requirements is welcome, many workers who are on low pay but above the minimum wage would stand to benefit from access to subsidised training.

7.                          We also found that people on Universal Credit (UC), for whom training can provide access to good jobs, face additional barriers. They are constrained by a lack of affordable childcare provision, limited by time needed for meeting UC requirements and often can struggle in getting support from their Work Coaches to undertake training.

8.                          Issues addressed in this evidence submission will require an ambitious plan and collaboration between different Government departments. The Work Foundation recommends that the Government:

•   Review the eligibility for the Lifetime Skills Guarantee to maximise access and participation among workers on low pay, offer support with the indirect costs of taking part in training

•   DfE and Department for Work and Pensions (DWP) to work together to ensure Work Coaches have up-to-date knowledge of local skills ecosystems, labour market demand and training opportunities, including Government skills initiatives.

•   Remove restrictions on engaging in training for individuals receiving social security payments like Jobseekers Allowance and Universal Credit.

9.                          The Work Foundation recommends the Department for Education (DfE) to take the following actions:
• The DfE should use the planned new skills funding and accountability measures to enable delivery of more specialist training provision, and include criteria that focuses on the needs of priority groups
• The Skills Fund should also include a component that measures progress made among identified priority learner groups
• Local skills improvement plans (LSIPs) should be shaped through broad engagement with a range of employers and learning from pilots should be captured and shared with other parts of the country
• Further devolution of the skills system would also be welcome. The funding system needs to be simplified and a place-based system could help with this. Currently, around £20 billion is spent on 40 employment and skills related schemes in England, which are managed by multiple Whitehall departments and agencies. The coordination of provision at a local level is undermined by these arrangements.

Barriers and reforms to workforce skills policy

Overview of UK labour market and skills need

2.                       The UK labour market currently features high levels of economic inactivity, skills shortages and mismatches, and significant insecurity for millions of workers. Among those aged 50 and over, some older workers are struggling to find work and may opt to leave the labour market, as evidenced by the strong increase in inactivity levels among this age group.[1]

3.                       There is a risk that with an ageing workforce and the decrease in the number of workers from the European Union, labour shortages might become a long-standing issue for the UK. This could affect certain sectors such as social care and hospitality more than others.

4.                       According to Work Foundation research, the health and social care sector has faced longstanding attraction and recruitment challenges such as high staff turnover, with many vacancies going unfilled.[2] Over a third (37%) of care workers we surveyed are looking for a new role in the sector, with the main drivers being: pay (52%), not feeling valued (45%) and a lack of career progression opportunities (31%).

5.                       Skills shortages are also proving a problem in sectors undergoing rapid growth. Work Foundation research to understand the distinct skills needs of the emergent low carbon sector in Lancashire found that Lancashire’s low carbon businesses face skills shortages that are constraining growth and development:[3]

•   47% of businesses surveyed find it difficult to recruit staff with the skills they need

•   Almost a third find it hard to recruit for specialist skills

•   Skilled trades roles are difficult to source

6.                       The same study found that low carbon businesses who had difficulty recruiting staff with the skills required reported that this is increasing the workload of current staff, delaying the development of new products and services and resulting in increased operating costs. These findings indicate that the skills system needs to better incorporate the workforce needs of low carbon businesses, which will only increase as the march to net-zero gathers pace.

Who can access training?

7.                       Our research shows that participation in training decreases with age. While between 31% and 28% of 16 to 24-year old workers access training, this drops to 25% for workers aged 30 to 49. Moreover, over 7.5 million mid-career workers have not received any training since leaving full-time education, meaning they have no recent experience of engaging in learning and skills development.

8.                       As the UK workforce is ageing, we will need to find ways to support people to upskill throughout their career. Work Foundation research “Learning to Level Up” found that a significant proportion of those in the middle of their working lives, aged 25-49, are ineligible for many new skills support initiatives and are less likely to access training overall.[4]

9.                       We welcome the steps taken in April 2022 to broaden the Lifetime Skills Guarantee eligibility requirements to any adult in England earning under the National Living Wage annually.[5] We would like to see the eligibility criteria to be extended to people maximise access and participation among workers on low pay, offer support with the indirect costs of taking part in training.

10.                    Access to training mainly differs by type of occupation. Just under a fifth of workers in routine and intermediate roles have taken part in training, compared to just under a third of those in more senior roles between April-June 2019.

11.                    We have also found that workers in the sectors most at risk of heightened insecurity are also less likely to have had recent access to training. This is particularly concerning, as the Work Foundation’s UK Insecure Work Index 2022 found that 6.2 million workers (19.8% of the UK workforce) are in ‘severely insecure work’.[6] We found that certain groups of workers, such as disabled people, young people, black and ethnic minority workers, are more likely to be in insecure work which might lead to them facing long-term disadvantage in labour market. As these groups of people already face challenges in accessing secure work, a lack of training opportunities puts them at risk not having opportunities to progress in to more stable jobs.

Barriers in accessing training opportunities for people on Universal Credit (UC)

12.                    Recent research from the Work Foundation highlighted the numerous challenges people on UC faced when working with Jobcentre Work Coaches to secure training that would unlock future job opportunities.[7] A range of interconnected issues are limiting the effectiveness of Jobcentre Plus support for individuals who want to access training.

13.                    One of the main barriers for people on UC is the lack of affordable childcare. A lack of affordable childcare made it difficult or even impossible for some people to access training, especially where they had conditionality and part-time work to balance, leading to a case of someone not being able to attend a funded nursing training course.

14.                    The time needed for meeting UC requirements is an important issue too. UC conditionality requirements built into the system were limiting the types of training people could access, and Work Coaches often didn't adjust job search requirements to account for the time people were spending studying.

15.                    Another major challenge for people on UC is building relationships with their Work Coaches. Many participants went through numerous Work Coach changes and couldn’t establish a trusting relationship, while others struggled to share their aspirations or get advice because meetings were too short.

16.                    Although some of the barriers faced by people on UC are out of the scope of the DfE, if we want to support everyone effectively and increase the effectiveness of our skills system, we need to identify problems that might be specific to certain sectors, groups of people or a specific location, and require cross-departmental action.

Recommendations for Government

17.                    To address these challenges, Work Foundation recommends the Department for Education reviews eligibility criteria for the Lifetime Skills Guarantee to maximise access and participation among workers on low pay, including those who are earning the National Living Wage.

18.                    We also encourage the Government to help employers to meet the indirect costs of staff training, such as arranging cover for staff who are away from work. Our analysis shows that lower paid, lower skilled mid-career workers have limited access to training, but for employers there is little incentive to support workers in routine and manual roles to invest in their longer-term learning and development.

19.                    DfE and Department for Work and Pensions (DWP) should work together to ensure Work Coaches have up-to-date knowledge of local skills ecosystems, labour market demand and training opportunities, including Government skills initiatives.

Recommendations for the Department for Education (DfE)

20.                    The Skills Fund should also include a component that measures progress made among identified priority learner groups such as those in or at risk of insecure work and those on Universal Credit benefits. In following national guidance, colleges should have the remit to identify which groups they will prioritise, through consultation with strategic partners such as relevant local authorities.

21.                    Local skills improvement plans (LSIPs) should be shaped through broad engagement with a range of employers. While the approach to engagement should be determined at a local level to maximise flexibility, the DfE should require evidence of small business engagement in order to approve each Plan. Learnings from these pilots should be shared with other parts of the country.

22.                    Chambers of commerce should ensure that LSIPs involve broad engagement with a range of employers. The establishment of SME/microbusinesses panels could be one method for achieving this. The DfE should require evidence of extensive engagement as part of the LSIP approval process. DfE should also change the qualifications for the employer validation panels to include a mandatory and minimum degree of representation of smaller firms.

23.                    DfE should develop the planned new skills funding and accountability measures to enable delivery of more specialist training provision, and also include criteria that focuses on the needs of priority groups. To help deliver this, the Skills and Productivity Board should ensure the Skills Fund aligns accountability outcomes and funding with industry priorities, as identified through local SDF need mapping. This approach would empower providers to invest in future-proofing provision to prepare for new industrial developments in their local area.

October 2022

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