Why Has There Been A £6 Billion Drop in Employer Spending on Skills Since 2022? FE Soundbite Edition 807
Welcome to FE Soundbite Edition 807: 26th July 2025 | Why Has There Been A £6 Billion Drop in Employer Spending on Skills Since 2022? More on AI with Ofsted and Digital and AI lessons from Estonia.
This is the weekly e-newsletter and e-journal by FE News: ISSN 2732-4095. We know life is busy, so here’s a snapshot of the latest announcements and epic thought leadership articles from sector influencers and thought leaders across FE and Skills this week on FE News.
Gavin’s Reflective Perspective
I hope you had a great week
£6 Billion Drop in Employer Spend on Skills
According to the Employer Skills Survey, there has been a £6 Billion drop in employer spend on skills, down from £59 Billion in 2022, down to £53 Billion in 2024! This is a 18.5% decrease since 2011! This equated to a spend of £1,700 per employee, down from £1,960 in 2022 and a 29.5% decrease since 2011. I wonder what changed in the sector since 2011? It’s all pretty alarming stuff!
Making AI Work With Ofsted
We had a cracking article from Alex Jones, Director of Insights and Research at Ofsted: How AI is Helping FE and Skills Colleges Prepare Students for Work. Alex was unpacking the recent Ofsted report on how Ofsted looks at AI during inspection and regulation. Alex gives an insight to Ofsted’s perspective on ‘early adopter’ colleges and schools using AI and supporting learners. I would highly recommend checking it out.
AI and Digital Skills Lessons from Estonia
We had a cracking article from Nikolaz Foucaud, Managing Director EMEA, Coursera, and Agur Jõgi, CTO, Pipedrive (in Estonia): How Can We Set up Younger Generations for the Future of Work? According to Coursera’s recent Global Skills Report, 75% of employers now prefer candidates with GenAI credentials over those with more experience but no certifications. Yet Gen Z represents just 9% of UK GenAI course participants, well below the global average, revealing a critical skills gap that Britain’s young workforce must urgently address.
The future of the UK economy depends on empowering people to build and use AI responsibly, with young people, and everyone quite frankly, needing high-quality training in critical thinking and AI skills / AI literacy.
Nikolaz and Agur share some really interesting insights from Estonia. Estonia has championed digital education since 1997 (last century), and is now integrating foundational AI into schools through public-private partnerships, which is helping Estonia’s students be some of Europe’s top performers. It is thought that the UK digital skills gap costs the UK around £63 billion annually and the government’s AI Action Plan targeting 7.5 million workers by 2030, you can understand why this needs to be a massive priority. Skills England talks about interdisciplinary skills in their priority skills areas and you can see why AI training and development needs to be a priority looking at the cost of the skills gap and what is also happening internationally.
UK Transport Manufacturing Skills Inquiry Launched
Other big announcements. A new transport committee inquiry is examining critical skills needs in the UK transport manufacturing sector. Did you know the UK transport manufacturing industry (trains, buses etc) is a £35.3 billion industry and is competing against other priority areas and the race to net zero. So this is a really interesting development and shows the difficulties of tackling 8-10 skills priority areas at once.
So I hope you enjoy FE Soundbite this week.
Epic Exclusives Thought Leadership Articles
Our Top 3 Thought Leadership Articles This Week
Firstly, How AI is Helping FE and Skills Colleges Prepare Students for Work By Alex Jones, Director of Insights and Research at Ofsted
Secondly, Levelling the Playing Field: Why Independent Training Providers Must Collaborate to Meet Skills Needs By James McIntosh, Managing Director, Cogent Skills Apprenticeship Training
Finally, How Can We Set up Younger Generations for the Future of Work? By Nikolaz Foucaud, Managing Director EMEA, Coursera, and Agur Jõgi, CTO, Pipedrive
This week, we also had some other Epic Exclusives!
From Resignation to Retention: How Education Can Help Rewrite the Menopause Story By Vicky Mose, Founder, Imagine How
Adapting Leadership Styles for a Changing Workforce By Professor Lynda Holt, CEO The Braver Group, Honorary Professor of Social Leadership, University of Salford
What’s New in the World of FE?
Announcements
New Transport Committee Inquiry Examines Critical Skills Needs In UK Transport Manufacturing By The Transport Committee
Voices
How to Write a Great Personal Statement? By Dr. Brandi Niemeier, Vice Dean of Basic Sciences and Professor of Behavioural Sciences at New Anglia University
In The Know
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Will you be joining us on the 30th of October in Manchester for the Green Mindset Micro Collective? This is in partnership with our friends at the Education and Training Foundation. We’ve announced the chairs, Toby Perkins MP is coming to speak, he’s Chair of the Environmental Audit Select Committee, and as some of you can remember, he used to be Shadow Skills Minister. We also have a cool venue. Check it out and join us on the 30th to help shape the Green Mindset for the sector.
We hope you enjoy FE Soundbite this week. Stay curious, keep innovating, and let’s shake up the world of FE together, and 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
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