£100 Million per year: The Cost of Futureproofing Northern Ireland’s Education and Training System

A leading think-tank has calculated that the cost of preparing Northern Ireland’s economy for the future challenges of an ageing population and automation, to be £100 million each year until 2025.

In a key report published today (22 Nov), “The Future is Coming: Ready or Not?” the Institute for Public Policy Research (IPPR) warned that Northern Ireland’s skills system is not yet prepared for future economic disruption from automation and ageing.

The report has been undertaken with support from the Further Education Trust for Leadership (FETL).

Current economic weaknesses are significant. The report finds:

• 19% of workers under-25 are employed in insecure work– the highest in the UK
• 26% of all workers in Northern Ireland are paid under the real living wage
• On average, only 2.5% of workers in Northern Ireland escape low skilled work each quarter, the lowest rate in the UK. Low paid work too often becomes a low paid career

Previous research from IPPR has shown that the level of change facing Northern Ireland is huge:

• 49% of jobs in Northern Ireland face high potential of change due to automation – retraining and upskilling will be crucial
• The number of pensioners will increase from 26 to 35 per 100 workers by 2040 – boosting productivity and job quality will be crucial
• Brexit, climate change, and wider economic disruption will bring significant change across the Northern Ireland economy

IPPR has called for the implementation of a number of ambitious but achievable recommendations. They include:

• The introduction of a short-life Automation and Ageing Taskforce, to set out a vision and strategy for Northern Ireland to prepare for these challenges.
• Seeing an increase by 45,000 in the number of adult learners engaged in the skills system each year by 2025 – bringing participation rates in Northern Ireland to among the best in Europe – at a cost of £90m per year.
• A new Learning Account to support training that delivers pay increases and promotions for workers in Northern Ireland, called Progression Accounts, they would be worth £1000 a year for up to 10,000 workers at a cost of £10m per year.
• A new compulsory skills participation age of 18, to replace the current school leaving age of 16 – every child should be in learning whether in the workplace or the classroom.
• An ambition to see every young person under 21 engaged in education or training, whether in the workplace or the classroom.
• A new £20 million per year Productivity Credit for small businesses to boost business investment in productivity enhancing activities, including skills – sharing the transition costs between public and private funding.
• UK Government protection for EU funding to Northern Ireland’s skills system – ensuring skills investment does not fall following Brexit.
• A shift to an outcomes-based approach to funding education, with agreed Northern Ireland ‘missions’ bringing the whole of Northern Ireland education system together to deliver against Northern Ireland priorities

Taken together these recommendations could lead to Northern Ireland being among the best prepared in the world to take the opportunities of automation and ageing.

Russell Gunson, a Director at IPPR, said:

“Automation and ageing will bring huge change to Northern Ireland over the coming years. Our research shows that investment in education and training, and lifelong learning in particular, will be one of the single most important ways to get Northern Ireland ready to take the advantages of these changes. Second to Brexit, and once the Northern Ireland Assembly is back up and running, reform to education, learning and training must be a top priority for Northern Ireland. 

“To be ready for automation and ageing, we will need to see significant increases in the number of workers upskilling and reskilling, taking Northern Ireland up to among the highest numbers of adult learners in education and training in Europe. We also need to see far fewer young people leave the education system into poor quality work, with poor prospects for the future. Every child in Northern Ireland should be engaged in learning, whether in the workplace or the classroom.

“There is no doubt that preparing for automation and ageing will be expensive and won’t come cheap. However, the costs of not investing could be far more significant than doing so. “

The recommendations for Northern Ireland, as detailed in the report are as follows:

Preparing Northern Ireland for disruption

An Automation and Ageing Taskforce to set a vision for how Northern Ireland needs to prepare for automation and ageing, and clear strategy and plans to do so.

A new ambition across Northern Ireland to see 100 per cent of under-21s engaged in the skills system by 2025. As part of this, Northern Ireland should replace the current school-leaving age of 16, with a new skills participation age of 18, with young people learning in the workplace or the classroom until the age of 18.

A new target to increase the number of over-21-year-old workers engaged in the skills system in Northern Ireland by 45,000 by 2025 to aid transition from the Northern Ireland of now to be ready for the future. These transition costs could reach £90 million of additional skills investment per year by 2025, bringing participation rates up to among the highest in Europe.

A Review of Lifelong Learning established to deliver a lifelong learning revolution.

Smart Information Advice and Guidance for learners and employers, under the banner of Progression NI, offering professional careers advice from the age of 11, with clear outcomes and measures, and independent brokerage for employers to help navigate the skills system.

The costs of this should be shared

A new £20 million per year Productivity Credit for small businesses in Northern Ireland, replacing the Small Business Rates Relief, to boost business investment in productivity-enhancing activity.

A new Progression Account, to provide a learner account worth up to £1,000 per year, carried forward for up to three years, for 10,000 lower-paid workers, investing up to £10 million in the skills system in Northern Ireland.

UK government protection of EU funding to Northern Ireland’s skills system.

A coherent skills system

New cross-cutting ‘missions’ for Northern Ireland’s skills system, bringing government, employers, learners and the skills system itself together, at the national and regional level, to tackle the key challenges and take the opportunities over the coming years.

New Regional Mission Groups to encourage collaboration across post-14 learning in Northern Ireland at the local level.

The introduction of outcome agreements across the skills system in Northern Ireland based on the principle of collaboration and an outcomes-based approach, and housed in one department (and in time under one minister).

Northern Ireland City Deal[s] that use capital spend and procurement to place skills investment at their heart.

Today’s report is the final of three to be published as part of IPPR Scotland’s work which looks at what a 21st century skills system should look like for Northern Ireland and Scotland. 

IPPR Scotland is Scotland’s progressive think tank. A cross-party, progressive, and neutral on the question of Scotland’s independence. IPPR Scotland is dedicated to supporting and improving public policy in Scotland, working tirelessly to achieve a progressive Scotland.