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The UK skills and employment landscape resembles not so much a crossroads as Spaghetti Junction – fast moving, potentially confusing and with far-reaching implications for the choices made by governments about the direction of travel.

Industries from professional services to manufacturing face a critical talent shortage, exacerbated by an ever-widening skills gap. Expansion in the range of education and skills provision, such as T Levels and Skills Bootcamps, in addition to more established routes to qualification, such as apprenticeships or university degrees, has created a wider range of choices for both individual learners and employers.  

One of the unintended consequences of this expansion has been added complexity – leaving both employers and individuals struggling to navigate upskilling opportunities, which are key to economic growth and productivity. Addressing this challenge requires a fresh perspective, together with policy support for organisations seeking to upskill their workforce. We make two policy recommendations to further these aims. 

Two key policy recommendations

1. Introduction of a Skills Tax Credit Pilot. This targeted incentive will empower organisations currently eligible for the Employment Allowance to begin bridging the gaps they face in digital, sustainability and financial competence skills by offsetting up to £5,000 of the cost of selected accredited training from their tax liabilities. By addressing the impact of chronic under-investment in training, this approach would drive economic growth and productivity, the global competitiveness of the UK as a country in which to do business, and support individual staff retention and growth within organisations.

2. While a boost to training would be welcome by organisations across the economy, additional support is needed to strengthen the entry-level pipeline available for employers that are hiring. To enable this, we propose a government-led baseline assessment of the career guidance and support currently available in England. In the current landscape, guidance and support for individuals and organisations is fragmented, with variable quality and availability across sectors and geographies. An assessment would provide the government with the data needed to identify gaps or weaknesses in provision, improve underperforming regions and empower individuals to access new opportunities in an environment with fast-changing skills needs.

Taken together, we believe this two-step approach could help employers to improve training for existing staff, while creating a wider pool of future talent. In addition to empowering  individuals, this would help the UK to close widening skills gaps across all sectors and ensure our careers service is well positioned to take advantage of the new age of opportunities, from data and digital developments to the green economy.

The report looks in detail at:

  • An employer-led skills system.
  • Supporting individuals in navigating complexity. 
  • The policy recommendations.
  • The benefits to the UK economy of the recommendations.
  • The role of chartered bodies.