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The Industrial Strategy Council report shows how current participation in learning is limited by financial costs

In the Summer Statement, as part of the government’s Plan for Jobs, the Chancellor of the Exchequer announced various measures to create new jobs, training opportunities and increased tailored support to mitigate the impact of the employment crisis created by Covid-19 on young people. However, how can other age groups be best supported to find employment and develop their skills levels?

What has the Government committed to?

The Plan includes a new bonus for employers to hire apprentices over the next six months as well as a Kickstart scheme designed to create hundreds of thousands of 6-month work placements for Universal Credit claimants at risk of long-term unemployment. The measures have been rightly welcomed. The Social Mobility Commission, has described the announcements as “well-targeted” given how the current recession is likely to have a severe impact on young people’s chances of finding good and secure employment. The Association of Employment and Learning Providers has stressed how the new bonus will be crucial to providing hard-hit employers with the means to hire new apprentices.

The Plan for Jobs also emphasises the importance of supporting people to develop the skills they require to find work. The government plans to improve individualised advice on training and careers through the National Careers Service and provide funding to triple the number of traineeships and sector-based work academy placements. The placements will provide young people with vocational training and guaranteed interviews.

Is the unemployment crisis only affecting young people?

According to the Office for National Statistics, the number of people in work in Britain declined 220,000 between April and June following the start of lockdown. This represents the largest quarterly fall since the 2009 Financial Crisis. There is also a differential impact according to type of job. the differential impact according to type of job.  Higher managerial and professional, lower managerial and professional, and intermediate occupations are increasing steadily while small employers, own account workers, lower supervisory, technical semi-routine and routine jobs have decreased. The biggest decrease was for routine jobs down 325,000 (11.3%) for the year and 195,000 (7.1%) for the quarter. These are the occupations most affected by CV.

Early analysis indicates that in line with evidence from previous recessions young people are being badly affected by the pandemic. However, they are not the only group at risk. Office for National Statistics data from the Labour Force Survey emphasises the impact the crisis is also having on older people. Over the April to June quarter, employment declined by 100,000 to 3.72 million for those aged 16 to 24 years and by a record 161,000 for those aged 65 years and over. Conversely, employment rose for those aged 25 to 64 rose by 41,000 to 27.94 million,  Labour Force Survey data may not be the most appropriate data for assessing the impact of COVID-19 as it measures those in employment, those in work and those temporarily away from work i.e. it doesn’t account for those who are furloughed. In June 2020, there were some 7 million people temporarily away from work.  The potentially massive future impact on jobs across all age ranges from the ending of the furlough scheme is clear.

Longer-term occupational trends must also be considered. Older people face a particular risk of unemployment since they make up a larger share of the current workforce and also because evidence from past recessions shows that older unemployed people typically spend longer out-of-work than young people and so are more likely to become long-term unemployed (Wilson et al, 2020, George et al, 2015).

 How can older workers be supported in the labour market?

A new report by City-REDI and the Industrial Strategy Council presents evidence on some of the skills challenges facing the UK and how they might be addressed. It emphasises the importance of promoting lifelong learning in terms of both addressing both short-term labour market challenges and longer-term changes in skills needs associated with digitisation. Even before Covid-19 pandemic, the world of work was changing rapidly because of technological developments (including automation, digitisation and AI).  Evidence suggests that the UK will face severe under-skilling issues within the next decade. The Industrial Strategy Council and McKinsey predict that by 2030 5 million workers be acutely under-skilled in basic digital skills, with as much as two-thirds of the workforce experiencing some degree of under-skilling. Given that around 80% of the workforce in 2030 is already in employment, reskilling across the generational spectrum, must be a priority.

Unlike in many other countries employee participation in all types of training in the UK has fallen since the financial crisis, particularly for low-skilled employees. Whilst participation in training in the UK is slightly above the EU average in the UK, it is often non-formal. Evidence from employee surveys indicates that only around 50% of employees are currently accessing the training required for their current role. In the Chartered Institute of Personnel and Development (CIPD) annual Working Lives Survey, only 54% of workers agreed or strongly agreed that they received the training and information they need to do their job well.

The Industrial Strategy Council report shows how current participation in learning is limited by financial costs, funding rules, course availability, work and home commitments, low motivation, and poor self-esteem.

Information campaigns, employer and union learning representatives, and managers can all be useful ways of communicating the benefits and necessity of lifelong learning to employees. Local skills providers should also focus on signposting more clearly what different forms of adult funding support can be used for and developing greater guidance on eligibility, can help local skill providers to adapt to local skill needs.

Future skills policy direction

It is clear that the short-term impact of COVID-19 is combining with long-term occupational trends to create an unprecedented situation affecting workers of all ages in which unemployment could hit record highs. Skills policy intervention is needed to mitigate this and help individuals fill roles where new opportunities exist. National and regional policy makers need to ensure that skills policy responds for all ages.