Last week I spoke on a panel at the Employment and Skills Convention 2018. The debate, entitled ‘Moving up or moving out: skills for getting unstuck’, was apposite because – perhaps now more than ever – having a job is no longer a guarantee of avoiding a life of poverty. In the UK, there are an estimated 883,000 people on zero-hour contracts and 1.6 million are in jobs paying the minimum wage. And so 60% of those in poverty are in work.

How do we repair this breakdown between work and prosperity – or at least work and a decent standard of living? From a skills point of view, we must start by building an effective post-16 education system so that a low-skill, low-pay job ceases to be anybody’s only option.

The good news is this doesn’t have to be the only option. The statistics on the prevalence of low-skill, low-pay work sit side-by-side with significant shortages in technical skills. The Centre for Progressive Policy estimates that employers are struggling to fill as many as one in three technical jobs in the UK. These are often well-paid jobs, with average advertised salaries in excess of £30,000 – a significant premium over the living wage.

But while the good news is that these well-paid technical jobs already exist, the bad news is that we don’t seem to have a skills system capable of filling them. In terms of post-16 education, three things need to change:

1. University or bust mentality: Despite a concerted effort for a number of years to achieve – what has now become rather clichéd – ‘parity of esteem’, the inferiority with which we as a nation view the technical route runs deep. According to a poll conducted by Demos, over 9 in 10 parents agree apprenticeships are a good option for young people, but only 1 in 3 think it is best for their child. This sits uncomfortably next to the fact that the university route is no longer the guarantee of prosperity it once was. Research we conducted at the Centre for Progressive Policy found that around 75,000 higher education graduates each year are in non-graduate jobs six months later.
2. Funding: The IFS estimates that per pupil funding for Further Education has fallen almost 7% in real terms between 2010-11 and 2015-16. We also need to rethink how we fund individual courses so that it incentivises provision of the courses that develop skills most in demand from employers. The Greater London Authority appears to be leading the way on this, promising that adult education funding will be outcomes based, and it’ll be interesting to see how they negotiate the various pitfalls of this approach.
3. A lack of decent information. This ‘Data Deficit’ – highlighted in the Centre for Progressive Policy recent report – prevents optimal decision-making, leaving learners, providers and policymakers in the dark. For example, we still don’t know what jobs people are doing after they complete an FE course or apprenticeship. We know if they are in sustained employment but have no idea if this employment is relevant to their course. Essentially, we have no systematic understanding of which courses are fulfilling their purpose and which aren’t. This is why we’re exploring the feasibility of setting up a Further Education Statistics Authority as an equivalent to the Higher Education Statistics Authority (if this is of interest, please do get in touch).

When it comes to upskilling those already in work, it is clear that as a society we need to do more. Research by the Resolution Foundation shows that young adults are receiving less in-work training than in the past. Ideas floated like the £1 billion better jobs deal – alongside the forthcoming National Retraining Scheme – are welcome and have the potential to empower people to access the economic opportunities this country has to offer. However, the relatively small scale of these schemes is a worry. The Danish system of flexicurity has proven to be very successful in helping people retrain for new jobs, yet they spend 2% of GDP on active labour market policies. It’s almost unthinkable in the current climate that the UK government would be willing or able to do the same.

Problems of scale and funding aside, however, what really matters in a structural sense is having a transparent system where all participants understand the consequences of their decisions and are able to see where the greatest value is. I’m optimistic that this can be achieved, but make no mistake, there’s a very long way to go yet.

Andy Norman, Research Analyst, Centre for Progressive Policy