Skills England: An Opportunity to Fix the UK’s Skills Puzzle

Skills England is being launched at a pivotal moment for the UK economy. Major global shifts, from rapid digitalisation to the transition to net zero, are transforming the world of work and driving up demand for new types of skills. Yet we start from a weak position. Investment in training by UK employers has been on a steady downward trend for decades. It now lags behind levels seen twenty years ago. Public spending has fallen too, leaving gaps in provision just as the labour market becomes more complex and fast-changing.

At the same time, the UK continues to grapple with skills mismatches: overqualification is widespread and too many people are in jobs that fail to make full use of their skills and experience. This underutilisation drags down productivity and restricts economic growth. A particular weakness is the shortage of good-quality routes to gain intermediate and higher technical skills, skills that are vital for industries to remain competitive and resilient.

The picture is made worse by a fragmented and confusing skills system. Multiple overlapping funding streams, blurred responsibilities between national and local agencies, and frequent policy churn create uncertainty and discourage long-term investment. Learners, employers and providers alike struggle to navigate this complexity.

Skills England has a critical role to play in addressing these challenges. Its purpose is to bring coherence and strategic direction, identifying skills gaps, convening stakeholders, and shaping the provision of technical education to meet future needs. But for this new agency to succeed, it must also tackle deeper, structural weaknesses in how we plan and deliver skills in the UK.

Joining up policy and delivery

First, Skills England needs to join up policy across government. It must link the skills system more closely with the industrial strategy, the work of the Migration Advisory Committee, and local growth priorities. This means building consensus and ensuring that decisions on immigration, sectoral policy and regional investment all align with a clear plan for developing a skilled workforce.

This is no small task. It requires the UK Government to see Skills England not as a short-term fix but as a long-term institution with the stability and authority to drive change across departments and political cycles.

Strengthening sectoral institutions

Second, Skills England should help rebuild the sectoral structures that are essential to a modern skills system. Sector bodies are crucial in addressing both supply and demand-side challenges; they can help build social partnership, identify shared skills needs, and set clear industry priorities. This, in turn, would support the design of a more flexible and responsive levy system, one that not only works for employers but also for learners and the wider economy. Without this kind of structure and coordination, our skills policy risks becoming fragmented—and less effective as a result.

Yet, at the moment, the UK’s sector bodies are patchy. Some, like the Automotive Council or the Construction Leadership Council, demonstrate what good practice looks like. But many lack the capacity, representation or legitimacy to have real impact. Too often, structures created by past initiatives have withered when political priorities shifted.

Working with the Department for Business and Trade, Skills England should aim to expand and professionalise these sector institutions. This means supporting durable organisations that:

• Bring together a wide range of employers, including SMEs and supply chain firms.
• Involve workforce representatives and academic experts.
• Coordinate collective investment in management capability, skills development and adoption of new technology.
• Play a direct role in setting priorities for the new, more flexible Growth and Skills Levy.

Building local capacity

Alongside strengthening sector institutions, Skills England must support local areas to develop their own capacity to plan and deliver effective skills strategies. Devolving skills funding holds promise, but success depends on local areas having the evidence, expertise and partnerships to use it well.

Some parts of the country already have this capability, especially those with established mayoral combined authorities. But many others don’t. Skills England should help level up this capacity by providing funding, along with access to shared data, tools and expert advice.

Crucially, local plans must complement, not compete with, a coherent national strategy. Getting this balance right will be essential to avoid duplication and ensure that the whole system pulls in the same direction.

A more resilient and responsive system

Looking ahead, the UK needs a skills system that’s not just larger, but more resilient and agile. Workers must have access to learning throughout their careers, delivered in flexible, modular formats that fit around changing jobs and life circumstances. Providers and employers need closer partnerships to co-design and co-invest in training solutions that match fast-evolving industry demands. Equally important is a greater focus on transferable skills, communication, teamwork and problem-solving, that allow people to move between roles and sectors as the economy shifts.

Finally, Skills England must help tackle the demand side of the skills equation. The UK cannot solve its skills challenges by focusing only on supply. Employers must see training not as an expense to be cut in tough times but as a vital investment in productivity and competitiveness. This requires a clear ask of employers within devolution deals, local skills plans and immigration policy. Sector bodies should work with Skills England to agree practical plans to boost training and expand the pipeline of skilled workers.

A system that works for the long term

If Skills England is given the authority and backing to join up policy, strengthen sectoral and local institutions, and shape a flexible levy that supports real investment in skills, it can be the missing piece in the UK’s skills puzzle. We have a unique opportunity here to reshape the UK’s skills system, one that delivers for individuals, businesses, and the wider economy. But we must be prepared to do things differently: to shift the focus from supply to demand, from individual to collective action, and from short-term fixes to long-term solutions.

By Lizzie Crowley, Senior Skills Adviser at the CIPD