Listen to the current news and the cost-of-living crisis seems to get worse daily. The current causes of high inflation are generally imported, and the UK can do little to control wholesale gas prices. There is, however, one way to tackle rising living costs, albeit in the medium-to -long term, where the skills sector arguably has the key role to play – that is the development and delivery of training and education programmes that increase productivity.
This is of course easier said than done. The challenge is, however, clear. According to the ONS, in 2019 the G7 countries’ average output per worker (excluding the UK) was 13% higher than the UK. To make matters worse, since the 2008 global downturn, growth rates in output per hour among the G7 have seen the largest slowdowns in the UK, along with the US.
Increase productivity and employers can afford to pay higher salaries that combat against the rising cost of living. Individuals earning more pay more taxes, meaning that Government can increase spending on public services. More productive employees in the public sector also means better public services.
Productivity varies substantially between different regions and if Government is to have any hope of tackling the levelling up agenda it must ensure that employees, in for example Yorkshire and the North East, are as productive as their counterparts in London and the South East.
Level 4+ Reforms
While identifying the problem may be easy, implementing a solution is more difficult. Low productivity has been an acknowledged feature of the UK economy for decades.
The good news in late 2022 is that we now have skills programmes that can make a big impact – Higher and Degree Apprenticeships – and over the next few years Higher Technical Qualifications (HTQs) and a range of flexible programmes at Level 4 to Level 6, that in due course can be supported through the Lifelong Loan Entitlement (LLE). As of August 2022, the Institute for Apprenticeships and Technical Education (IfATE) listed Apprenticeship Standards for 364 occupations at Level 4 -7.
Through the occupational standards they have developed, employers can have a massive influence on the design and development of vocational education at Levels 3 to 7. Through the Apprenticeship Service, employers can select the Apprenticeships their organisations need. This is a massive improvement on the old supplier-led and intermediary developed apprenticeship frameworks of the past. We also have T Levels that are being successfully rolled out, albeit very slowly.
As a general rule of thumb, the higher your skill level the higher your remuneration. Train for a higher-level job and you are likely to earn more, be better able to deal with the impact of price hikes and have more certain employment or ability to secure new employment. While skill gaps and shortages exist at all levels, a higher skilled workforce (in terms of level) equates to a more productive workforce.
Any focus on productivity should be combined with approaches to inclusion and social mobility. Higher and Degree Apprenticeships and HTQs offer new pathways to skilled jobs and professional careers. They should be a particularly good way of retaining local talent in deprived areas.
We are also moving on from the skills sector’s historic obsession with young people at Level 2 and 3 and arguments to reduce government financial contributions to programmes such as Higher and Degree Apprenticeships when used by individuals aged over 24. No one would deny the need to ensure those entering the workforce have the skills needed to raise organisational performance and productivity. If we are to raise productivity and tackle the cost-of-living crisis we do, however, have a far bigger challenge; that is to raise the skills levels of the existing workforce. Look at the figures and the picture is clear.
Post-18 Level 4+ Apprenticeships and Technical Education
There are approximately 750,000 18-year-olds in the UK population today. In comparison there are approximately 33 million people employed. The Government is clear that apprenticeships are an all-age programme, and the new LLE will support more flexible approaches to study, more part-time provision, and a wider range of programmes. Rather than trying to restrict the use of apprenticeships, HTQs and other forms of skills provision by older employers, such use should be championed and supported.
Although we increasingly have the skills programmes to raise productivity, one major problem that remains is employer demand. Employers have consistently spent too little on the training and development of their staff. Where training occurs, it has often been focused on health and safety and first aid. Essential, yes – but there is also a need to increase spending on high quality training with external providers focused on raising productivity.
Intervention through the Apprenticeship Levy has stimulated and incentivised employers to use the apprenticeships that benefit their organisations. We have no doubt that employer demand for Apprenticeships at Level 4 – 7 will continue to grow and grow rapidly.
Beyond Higher and Degree Apprenticeships, IfATE’s quality marking approach for HTQs mapped to occupational standards, is a significant movement forward. The LLE, with its focus on lifelong learning and flexible delivery is a very positive development too. However, in planning the LLE, the Government has focused on the need for individuals to focus on developing the skills needed by employers. The problem of course is that no consideration has been given as to the financial contribution employers should make to lifelong learning and how this relates to provision funded through the LLE.
We should banish the notion that skills programmes, particularly at Levels 4 to 7, are predominately for younger people. The Government and the skills sector should champion the benefits of skills provision as part of the response to the cost-of-living crisis for individuals of all ages.
The Government, working with IfATE and the skills sector, needs to lead a campaign to promote the benefits of training, using the current cost-of-living crisis as the context. Individuals need to know more about the benefits of particular programmes in terms of potential increases in remuneration, promotion and job security. Employers, particularly SMEs, need more information on the value of different types of skills provision and their potential impact on productivity and organisational performance.
Employers, individuals and government ALL benefit from skills provision. We need a national debate and agreement on why each should contribute and the type of contribution (financial and in-kind) each should be expected to make.
By Mandy Crawford-Lee, Chief Executive, UVAC
This article is part of Campaign for Learning’s series: Learning in the cold: The Cost-of-Living Crisis and Post-16 Education and Skills
Order of series
Friday 21st October
- Louise Murphy, Economist, Resolution Foundation: The Cost-of-Living and the Energy Crisis for Households
- James Kewin, Deputy Chief Executive, Sixth Form Colleges Association: The Cost-of-Living Crisis and 16-19 Year-Olds in Full-Time Further Education
Saturday 22nd October
- Becci Newton, Public Policy Research Director, Institute for Employment Studies: The Cost-of-Living Crisis and 16-18 Year-Olds in Jobs with Apprenticeships
- Zach Wilson, Senior Analysis Officer and Andrea Barry, Analysis Manager, Youth Futures Foundation: The Cost-of-Living Crisis and 16-24 Year-Olds ‘Not in Full-Time Education’
Monday 24th October
- Nick Hillman, Director, Higher Education Policy Institute: The Cost-of-Living Crisis and Full-Time and Postgraduate Higher Education
- Liz Marr, Pro-Vice Chancellor – Students, The Open University: The Cost-of-Living Crisis and Part-Time Higher Education in England
Tuesday 25th October
- Steve Hewitt, Further Education Consultant: The Cost-of-Living Crisis: Access to HE and Foundation Year Programmes
- Sophia Warren, Senior Policy Analyst, Policy in Practice: The Cost-of-Living Crisis, Universal Credit, Jobs and Skills Training
Wednesday 26th October
- Paul Bivand, Independent Labour Market Analyst: Economic Inactivity by the Over 50s, the Cost-of-Living Crisis and Adult Training
- Aidan Relf, Skills Consultant: The Cost-of-Living Crisis and Employer Demand for Level 2-7 Apprenticeships
Thursday 27th October
- Mandy Crawford-Lee, Chief Executive, UVAC: The Cost-of-Living Crisis and Employer Demand for Level 4+ Apprenticeships and Part-Time Technical Education
- Simon Parkinson, Chief Executive, WEA: The Cost-of-Living Crisis and Adult Community Learning
Friday 28th October
- David Hughes, Chief Executive, AoC: The Cost-of-Living Crisis and FE Colleges
- Jane Hickie, Chief Executive, AELP: The Cost-of-Living Crisis and Independent Training Providers
Saturday 29th October
- Susan Pember, Policy Director, HOLEX: The Cost-of-Living Crisis and Adult Education Providers
- Martin Jones, Vice-Chancellor and David Etherington, Professor of Local and Regional Economic Development, Staffordshire University: The Cost-of-Living Crisis – The Response of Staffordshire University
- Chris Hale, Policy Director, Universities UK: The Cost-of-Living Crisis and Universities