SIX million people in England are at risk of being without a job or in work they are over-qualified for by 2030, suggests new research for the Local Government Association (LGA).
This emerging skills crisis would not only be dire for the individuals affected, but it would also severely impact economic activity, according to the report commissioned by the LGA, which represents councils in England. It estimates that if the skills needs of employers are not met, then it could lead to a potential loss of £120 billion in economic output by the end of the decade.
The research for the LGA by the Learning & Work Institute (L&W) also reveals that by 2030 there could be:
- 1 million low-skilled people chasing two million low-skilled jobs – a surplus of 3.1 million low-skilled workers
- 7 million people with intermediate skills chasing 9.5 million jobs – a surplus of 3.1 million people
- 4 million high-skilled jobs with only 14.8 million high-skilled workers – a deficit of 2.5 million
The LGA argues that the current centrally governed skills and employment system is creating a “confusing, fragmented, untargeted and ineffective” system, but that Brexit offers an opportunity to take a fresh look at how it is handled.
Currently, eight government departments or agencies are spending £10.5 billion a year across 20 different national schemes, but this could be better targeted with a more decentralised approach, it claims.
The report argues that councils, combined authorities and their partners can help the Government tackle skills gaps and more effectively reduce long-term unemployment and the number of young people out of work by being able to target support locally.
The LGA is calling for the Government to use the Budget to devolve all back-to-work, skills, apprenticeship, careers advice, and business support schemes and funding to the local areas in which they are used.
This would see groups of councils across England given the power and funding to deliver a one-stop ‘Work Local’ service for skills, apprenticeship, employment, careers advice and business support provision. It would bring together local skills planning, oversee job support including Jobcentre Plus and the Work & Health Programme and coordinate careers advice and guidance for young people and adults.
“Millions of people face a future where they have skills mismatched for jobs at a huge cost to people’s lives and the local and national economy,” said Councillor Kevin Bentley, chair of the LGA’s people and places board.
“Councils are ideally placed to lead efforts to help the Government bring growth and jobs to all parts of the country and ensure everyone is fully equipped with the skills they need to compete for future jobs.
“For that to happen, our complex and fragmented national skills system needs to adapt to a changing jobs market.
“Better local coordination of services would provide better opportunities for young people to increase their skill levels and adults retrain and upskill for future jobs. This is key to driving up productivity, closing local skills gaps and boosting local economies.”
Stephen Evans, chief executive of Learning & Work Institute, added: “Improving skills is central to making the 2020s a decade of growth.
“Other countries have continued to invest in skills, while progress in England has stalled over the last decade, the result of large cuts in England’s adult education budget which has left us lagging behind other countries and the number of adults improving their skills at a record low.
“We now need a decade of investment, in order to boost life chances, economic prosperity and to level up the country. That investment needs to be delivered through a partnership between national and local government, employers and trade unions. The cost of inaction is large and growing: it is time for action and investment in lifelong learning.”