As redundancies force people into other sectors, a report from the Innovation, Universities, Skills and Science Committee (IUS) has recommended that the Government makes re-skilling a priority rather than up-skilling.
Re-skilling for recovery: after Leitch considered how the UK workforce must adapt in order to ride out the recession, and is based on evidence given in the summer of 2008.
It has been welcomed by the Learning and Skills Council (LSC), which believes companies and individuals in the current economic climate need to have a wide range of skills to make them more productive and motivated.
The IUS committee is also calling for a radical reform of Train to Gain to reduce issues such as beurcratic pressures.
In a statement, Mark Haysom, LSC chief executive, commented: "Much of the evidence heard by the committee was given last summer. Since then, a wide range of flexibilities and reforms have already come into place.
"A significant number of changes have been made to Train to Gain to reduce bureaucracy, increase the flexibility of the service and enable more businesses to access training designed specifically to help improve productivity. The new flexibilities will help businesses weather the economic storm and ensure they are in a better shape to respond when the upturn comes.
"On top of this, new enhancements came into effect on 2 January to support small and medium sized private or third sector companies. These include: fully funded Level 2 qualifications and subsidised Level 3 qualifications, regardless of whether the employee already has a qualification at this level; bite sized courses in business critical subjects demanded by businesses; and relaxation of eligibility for funding for leadership and management training now available for businesses employing 5-250 employees (from November 2008).
"In addition, businesses with less than 50 employees can receive a contribution to wage costs to cover the cost of time off to train.
"Additionally, from April 2009 newly redundant individuals and those under notice of redundancy will be able to access fully funded support for a range of skills activity that aids progression into sustainable employment."
Dr Mary Bousted, general secretary of the Association of Teachers and Lecturers, said: "ATL agrees with the Innovation, Universities, Science and Skills Committee that re-skilling people to help them back into jobs will be become increasingly important as the recession bites – and further and higher education colleges can play a key role.
"We are pleased the Committee recognises re-skilling should not play second fiddle to up-skilling. But FE colleges must not be turned into skills factories for the unemployed, they need to continue providing a wide ranging education for any over 16s who want an alternative to school."
Wes Streeting, President of the National Union of Students, added: "We agree wholeheartedly with the Select Committee that the Government must make radical changes to its skill policy, to make the system more responsive to individual needs. A greater commitment to lifelong learning is required if the workforce is to be flexible enough to weather the storm of this recession.
"This is why NUS has joined with partners across the education sector and civil society to form the Campaigning Alliance for Lifelong Learning (CALL) to expose the damage that adult education cuts have wrought across the country. This was starkly illustrated by the effects of cuts to the equivalent or lower qualifications (ELQs) leaving many people unable to retrain because they can no longer afford to do so.
"Last year an underspend of over £200 million on Train to Gain was redirected to plug gaps in the higher education budget. This year, the Government should instead reinvest any underspend to empower individuals to take control of their own education and training, gaining the skills they need now more than ever."