No sooner had the general election been won on 4 July, the new Prime Minister, Sir Keir Starmer, signalled the birth of Skills England.
The Prime Minister stated “our skills system is in a mess, and this is why we are transforming our approach to meet skills needs over the coming decades”. The role of a new quango was to bring together “our fractured skills landscape” and develop a “shared ambition to boost skills”, although the reference is to England, of course.
In mid-July, the Skills England Bill was announced as part of the King’s Speech.
In late July Richard Pennycook CBE, former chief executive of the Co-operative Group and lead non-executive director at the Department for Education (DfE), was appointed as the interim Chair.
And late last month, adverts were placed by the DfE for a permanent chair and six other board members of Skills England.
The Skills England Bill will transfer functions from the Institute for Apprenticeships and Technical Education (IfATE) to Skills England. This will sit alongside endeavours to “simplify and devolve adult education budgets to mayoral combined authorities” to ensure that they can address the skills needs of the economy and fuel the growth agenda.
Skills England is expected to provide strategic oversight of the post-16 skills system aligned to Labour’s new – but still to be published – Industrial Strategy.
Forecasting current and future skills needs will be a critical function of the new quango. So too will be working alongside the Migration Advisory Committee (MAC) and presumably the Department for Work and Pensions (DWP).
Skills England, MAC and DWP together will be expected to advise the Government on the balance between the Skilled Worker Route and training the resident post-16 employed, unemployed and inactive population in order to secure skilled workers.
We know, of course, that Skills England is a big deal for further education. It is also a potentially big deal for DWP’s back to work strategy, including the totemic 18-21 Youth Guarantee. But a critical question is whether Skills England is also a big deal for higher education.
Vocational Higher Education and Skills England
A useful way to start to explore this question is to define higher education in terms of qualifications above Level 3, including Level 4-6 and Level 7-8.
Skills England will certainly have a role to play in advising on the type and funding of Level 4-7 apprenticeships. In academic year 2021/22, overall spending on Level 4-7 apprenticeships was nearly £0.9bn, with £380m spent on Level 4-5, £290m on Level 6 and £216m on Level 7 apprenticeships respectively.
The quango will also want a say over Skills Bootcamps – if they continue - which funds Level 2-5 skills training. Allocated funding in financial year 2022/23 was £150m, although only £85m was actually spent. Perhaps around £17m - some 20% - might have been on Level 4-5 courses.
And then there are Adult Learner Loans which fund Level 4-6 courses through income contingent loans managed by the Student Loan Company (SLC). Of the £130m advanced to students, £12m was used to fund Level 4-6 courses.
But there is another source of Level 4-5 higher education – which places like Staffordshire University have been investing in - vocational sub-degrees. These include full-time and part-time foundation degrees, HNDs and HNCs, and HTQs more recently. These Level 4-5 courses are regulated by the Office for Students (OfS) and are funded through income contingent loans managed by the Student Loan Company.
In academic year 2021/22, there were around 39,000 full-time and part-time students on these courses. Taking into account fee loans, and both maintenance loans and grants which were available at the time, the total cash cost might have been £300m or so, and slightly less perhaps than spending on Level 4-5 apprenticeships.
A key question, however, for developing a comprehensive skills system in England is whether Skills England will have a say over Level 4-5 vocational sub-degrees as well as Level 4-5 FE courses and Level 4-5 apprenticeships, and how they should be funded and planned in the context of Metro-Mayors and Local Skills Improvement Plans (LSIPs).
If Skills England decides to become involved in the funding, expansion and planning of vocational sub-degrees funded through the higher education system, the quango will be a big deal for HE.
But the role of Skills England is unlikely to end there.
We know the Apprenticeship Levy is to be replaced by the Growth and Skills Levy. Although we still await the detail, employers – levy-payers and perhaps even non-levy payers – will be able to access funds for flexible training if a minimum amount is spent on apprenticeships.
Skills England will advise on the type of provision which falls under flexible training. Modular courses are expected to feature on the list, including modules at Level 4-5.
In the name of developing a comprehensive post-16 skills system, Skills England is also bound to want to have a say over the development of stand-alone modular courses in the regulated HE system whether Labour runs with the Lifelong Loan Entitlement or not.
Arguably, the influence of Skills England would be stronger if Labour do indeed run with a version of the Lifelong Loan Entitlement to support upskilling and reskilling at Level 4-6 - including eventually Level 4-5 courses funded through Adult Learner Loans - especially modular courses.
The Higher Education System and Skills England
We can expect Skills England to seek to influence regulated vocational higher education in its quest to develop a comprehensive post-18 skills system. But there is also the question of the scale of vocational Level 4-6 higher education as a share of the entire post-18 education and skills system.
Pushing this narrative for a moment, Skills England might want to ask whether the higher education system is producing too many non-STEM Level 6 first degrees through full-time and part-time study. Capping numbers on some humanities degrees, for instance, could free up resources for full-time part-time Level 4-5 vocational degrees in other disciplines.
We should also not forget Level 7 master’s degrees funded through income contingent loans. During financial year 2023/24, around £630m was advanced to students from England, although somewhat less than previous years.
In 2021/22, employers spent £216m on Level 7 apprenticeships, an amount which is likely to have risen since then. Skills England might well wish to look at both the level of spending and the type of Level 7 courses funded through apprenticeships and income contingent loans to assess whether they are meeting the skill needs of the economy, businesses and workers.
Skills England and the Office for Students
We, in higher education, are awaiting the forthcoming post-16 education and skills strategy. And, of course, there are serious concerns over the future funding of post-18 higher and further education. Both Skills England and the Office for Students will be at the centre of all this.
The OfS Business Plan 2024-25 makes it clear that it will ‘continue to run programmes to address skills shortages’ and ‘will work with partners to shape wider skills policy’. This line of argument implies that a first order action is for Skills England and OfS to work hand in glove.
Joint working between Skills England and OfS might also cause the government to reflect on the raison d'être of each, in new ways.
Meeting employer needs is to be at the centre of the work of Skills England but this needs to be balanced to some extent with meeting the needs of students, learners, and workers.
Meeting student needs is at the centre of the work of the Office for Students and yet this must be balanced with a greater priority of meeting employer skills needs.
All this of course, needs to be placed in the context of the government’s intention to educate and train our resident population rather than always looking to net migration to fill high-skilled occupations.
If the Government decides it is important to educate and train the resident post-18 population at Level 4-6 and Level 7-8 higher education - including apprenticeships, further education and regulated HE - a more joined-up approach to higher level skills and the skilled worker route will be needed.
Skills England and OfS will need to work in a coordinated fashion with MAC to give the best advice to DfE and Home Office.
Higher education in all its forms is central to meeting the skill needs of our economy, our businesses and our people. Skills England and the Office for Students must work closely together in common endeavour to achieve the aims of the new government.
A memorandum of understanding between the Office for Students and Skills England would be a good start.
Professor Martin Jones is Vice-Chancellor of Staffordshire University
Our regular guest policy views are written by senior leaders and thinkers. They aim to stimulate discussion, identify issues and contribute to debate on post-16 education, skills and employment policy. The opinions expressed are the authors' own and do not necessarily express the views of the Campaign for Learning