The £39bn Skills England Wake-Up Call | FE Soundbite 800

Welcome to FE Soundbite Edition 800: 7th June 2025 | The £39bn Skills England Wake-Up Call

This is the weekly e-newsletter and e-journal by FE News: ISSN 2732-4095. We know life is busy, so here is a snapshot of the latest announcements and epic thought leadership articles from sector influencers and cool thinkers across FE and Skills this week on FE News.

Gavin’s Reflective Perspective

Another busy week in the World of FE, Skills, Work-Based Learning and Employability. IfATE is now shut down. Skills England has launched and come out of ‘Shadow mode’.. which sounds all a bit Star Wars!… Bridget Phillipson told the joint CEOs of Skills England the priority areas for Skills England to operate in. .. and on the day that Skills England was officially launched.. they released a report, well 11 reports (one report and 10 Priority skill areas for priority sectors)… we had Construction and Health as priority areas, we now have eight more sectors as priority areas.

So Skills England dropped their second report this week, and honestly? The numbers should terrify us all. We’re looking at a skills crisis that’s not coming… It’s here, it’s massive, and it’s getting worse! Skills England have highlighted 10 Priority Skill areas (up from the two we have had earlier this year).

What are the 10 Priority Skills Shortage Areas?

The 8 Industrial Strategy Growth-Driving Sectors:

• Advanced Manufacturing
• Clean Energy Industries
• Creative Industries
• Defence
• Digital and Technologies
• Financial Services
• Life Sciences
• Professional and Business Services

Plus 2 Additional Critical Sectors:

• Construction (essential for 1.5 million homes target)
• Health and Adult Social Care (facing demographic pressures)

The Brutal Reality Check

Let’s start with what Skills England actually found when they surveyed 743 employers across ten critical sectors. Construction has 52% of jobs unfilled, up from 36% in 2017. That’s not a typo. More than half of construction roles are sitting empty while the government promises 1.5 million new homes.

Manufacturing? 42% vacancy rate. Healthcare? 40%. Tech sector? 43%.

These aren’t just numbers… they’re the reason your house purchase is taking forever, why NHS waiting lists keep growing, and why that app you need built is going to cost twice as much and take three times longer.

The £39 Billion Question

Skills England puts the economic cost at £39 billion annually. That’s not pocket change… that’s nearly twice the entire school’s budget. And it’s only getting worse as the AI revolution demands workers who can blend traditional skills with cutting-edge tech capabilities.

Creative industries report 69% of employers saying their staff need urgent retraining due to new technologies. Life sciences wants people who understand both advanced AI and traditional scientific expertise. Good luck finding those.

The Government’s Response: Revolutionary or Rushed?

Here’s where it gets interesting. Skills England’s solution is to completely overhaul how we think about training with some genuinely radical changes:

• 8-month fast-track apprenticeships (down from 12 months minimum) for roles like smart meter installation and cyber security. Sounds great, but are we just cutting corners to hit targets?
• Foundation apprenticeships targeting entry-level roles, specifically designed to attract young people into sectors they’ve never considered. The theory’s sound, but execution will be everything.
• ‘Bolt-on’ AI training to upgrade existing workers without lengthy retraining. Again, brilliant in principle… if it actually works in practice. Bolt on… it also sounds like an after thought! .. .but this is where I see the rapidly deployable, agile system that FE can deliver for employers and learners.

But Here’s What’s Really Worrying Me…

The inequality data in this report is shocking. Women are substantially underrepresented in over half the priority sectors. Only 26% of creative workers come from lower socio-economic backgrounds compared with 38% economy-wide. Just 9% of tech employees are from disadvantaged backgrounds.

We’re sitting on a goldmine of untapped talent, but our systems are actively excluding the people we need most. Foundation apprenticeships targeting underrepresented groups sound promising, but we’ve heard this before.

What will the budgets be to Upskill the Priority Skill areas, And How Do We Reduce The Cost of Competiton For Competing Skills Priority Areas?

Construction has had £600M for skilling 60,000 Construction workers. Clean Power 2030 Action Plan needs 135,000- 725,000 new jobs in low carbon industries by 2030 (at least double compared to Construction)! Will the Green Skills and Low Carbon Industries receive £1.2 Billion to upskill and reskill… erm probably not?!

Interdisciplinary Skills Is Going To Be Key

Looking at the 10 Skill Priority Areas. There will be quite a lot of competition on the priority mission areas. The answer is thinking about this with an Interdisciplinary mindset and I am really excited to see Interdisciplinary mentioned in the 10 reports by Skills England. How do we bake in Interdisciplinary, transferable skills from the get go.

Bolt On Training… does sound like an after thought, but… this is where I see FE and Skills saving the day. Not just funded programmes, but potentially commercial offering that are rapidly deployable (unlike normal Qualifications, that have a two year development to deployment time.. eg missing the mark). So this is where I can see the ‘flex’ that Government wants, Employers need and learners want to have. We have talked about Micro Credentials and Stackable skills, but maybe we now need to change our language with employers and talk about Bolt on Training to match their needs.

The Sector Response Tells a Story

Hayley Pells from the IMI (automotive sector) makes a crucial point that worries me. She says the automotive aftermarket and technician workforce is “under-represented” in Skills England’s evidence base, despite being crucial for net zero and clean growth.

If Skills England is missing entire chunks of critical sectors in their analysis, how confident can we be in their solutions?

Racing Against Impossible Targets

The government wants 1.5 million new homes, Clean Power 2030 needs 725,000 new clean energy workers, and 48% of workers need degree-level skills by 2035. Meanwhile, construction can’t fill half its current roles.

The maths doesn’t add up. Even with 8-month apprenticeships and foundation programmes, I get why we are rolling out rapidly deployable programmes, but does it give the depth that employers need and trust? Are we potentially developing a two-tier workforce or skills system? Someone might have the certificate, but can they do the job?

What This Means for FE

Skills England is working with Local Skills Improvement Plans to implement changes from August 2025. That’s two months away. The first 8-month apprenticeships launch, then foundation apprenticeships follow shortly after.

But here’s my concern… are we creating a two-tier system where rapid training becomes second-class training? And how exactly do these “bolt-on” AI modules work in practice?

The Questions That Matter

How will Skills England ensure they’re not missing crucial sectors like the automotive aftermarket? Who decides which AI skills get prioritised? And most importantly, can revolutionary training reforms really solve a crisis that’s been decades in the making?

Bottom Line

This Skills England report confirms what we all knew… the skills crisis is real, massive, and getting worse. The proposed solutions are genuinely innovative, but they’re also untested and incomplete.

We’re about to find out whether fast-track training and foundation apprenticeships can plug holes that traditional approaches couldn’t fill. Either way, the next two years will define whether Skills England becomes the solution or just another expensive reorganisation.

Anyway, I hope you enjoy FE Soundbite this week.

Epic Exclusives Thought Leadership Articles

Our Top 3 Thought Leadership Articles This Week

Why Young People need a more Coordinated Skills System By Emily Tanner, Programme Head, Post-14 Education and Skills, Nuffield Foundation 

Never Mind if Young People are ‘Work Ready’, Are Workplaces Ready to Work with Young People? By Emelia Williams (Research and Policy Analyst) and Jess Redmond (Policy Advisor), Work Foundation at Lancaster University

Does the UK have the ability to adapt to the AI revolution? Cassandra MacDonald – Dean of BPP University School of Technology

This week, we also had some other Epic Exclusives!

What Are AI Agents and How Could They Transform the FE Sector? By Isa Mutlib, Founder of Cotalent AI

New Zealand’s Vocational Education System: The 2026 Vocational Education Reform By Stuart G A Martin, Founder of George Angus Consulting

Assessment Security in 2025: New Whitepaper Reveals Growing Threats from AI, Wearables, and Emerging Tech By Niamh Pierce, Head of Research at the Assessment Security Research Group (ASRG)

What’s New in the World of FE?

Announcements

What Are The Skills England Priorities For 2025-26? By Department for Education (DfE)

New Free School Meals Entitlement will also Includes those in FE By Department for Education (DfE)

More Financial Support for Welsh Adult Learners in FE By Welsh Government

Reports

Skills England Report: Critical Skill Shortages Threaten Economic Growth By Skills England

New AoC Report Highlights Impact of Practitioner Research on College Sector By Association of Colleges (AoC)

Skills for All: A new Report Calls for Inclusive, Employer-led Skills Reform By St Martin’s Group 

The 5% Club 2021-2024 Accredited Membership (Employer Audit) Summary Report By The 5% Club

Updates

16 to 19 Funding Updates: 5.5% Increase and Enhanced Support for 2025/26 By Department for Education (DfE)

Voices

How course endorsement enables flexible learning By Paul Bullock, Training Qualifications UK

In The Know

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This week, we announced our latest Collective with a whole new format, so on the 30th October in Manchester, join us for the Green Skills, Green Mindset Micro Collective. This is in partnership with our friends at Education and Training Foundation. Come and join us to help shape this massively important report, particularly after Skills England have highlighted the massive need in this massively important area. Spaces are limited, so I’d recommend booking early!

We hope you enjoy FE Soundbite this week. Stay curious, keep innovating, and let’s shake up the world of FE together – catch you next week!

By Danny O’Meara, Digital Project Manager, FE News

By Gavin O’Meara, CEO and Founder, FE News and FE Careers