The organisation and a group of advisors have noted that government and industry providers must unite to deliver a dynamic knowledgeable workforce - in order to compete competitively on the world stage and attract investment in the UK.
The UK is currently facing a skills crisis in manufacturing, which, if not addressed, will undermine our ability to drive innovation and growth, according to Make UK.
The Need for Skills Investment in the UK
For the last five months, Make UK’s Industrial Strategy and Skills Commission has brought together business, employers, educators, and policymakers to create a blueprint to train new and existing industry talent effectively. The UK has the 6th largest economy in the world, but we languish at 24th in the world robot density rankings because we lack the workforce skills to adopt and apply these cutting-edge technologies.
Yet none of this can be turned around in the current climate. Manufacturing is in crisis with a dramatic demand for upskilling at the same time as the pipeline for workers and teachers declines. Companies face a bleak landscape – an ageing workforce with early retirement on the rise, coinciding with a dramatic drop in apprenticeship starts – down 42% since the apprenticeship levy was introduced nearly eight years ago.
A Skills Covenant for the Future Workforce
To begin to turn this around, Government and industry should agree to a formal ‘Skills Covenant’, committing to increased investment on both sides in training and upskilling both the existing and future workforce. This must include short-term measures such as ringfencing skills funding.
All revenue from the Growth and Skills Levy should be guaranteed for skills investment – including the £800 million the Treasury currently spends elsewhere. Government should also ensure that all revenue from the Immigration Skills Charge – which was more than £650m last year – is spent on skills provision as was intended when the charge was first introduced. This £1.4bn combined could fund 40,000 new engineers, going a long way to filling the 55,000 skills gap in the sector which is currently costing the UK economy £6bn in revenue each year.
Proposals to Address the Skills Crisis
In turn, manufacturers will commit to helping boost training availability through a workforce exchange, where companies will second staff to education providers.
The sector will also commit to developing an electronic work skills passport, which will travel with employees to different roles and will keep a record of all qualifications gathered through their career. And businesses will commit to using the Careers and Enterprise Company Employer Standards to further develop their schools.
The Decline in Education Providers and Course Availability
Extra pressure on the system comes from a dramatic decline in the number of education providers offering high-value courses, many of which have become financially unsustainable to run. Urgent legislation is needed to revise funding bands - including the level 3 engineers and technician apprentice position - from £27,000 currently to £35,000.
This would reflect the real cost of delivering courses in engineering and highly skilled technical manufacturing. Rules should also be amended to allow training providers to draw on levy funds for capital investment in machinery and equipment, making it easier to set up capital-intensive subjects like engineering.
Upskilling the Workforce to Meet Industry Needs
This lack of training availability is also hampering the sharp need for upskilling across the sector. Make UK research shows that over 50% of manufacturers intend spending more on upskilling and retraining their employees in the next five years, essential to growth and making inroads in the 55,000 skills gap in manufacturing.
To boost essential retraining, employers should have access to a tax rebate for investment in accredited skills training in key sectors and occupations identified by the Industrial Strategy Skills Council.
Refocusing Careers Guidance and Expanding Technical Education
The Commission has also seen an urgent need to refocus careers guidance in schools and colleges to include information on apprenticeships and technical training. Alongside this, the University Technical College (UTC) model should be expanded to offer more technical routes to young people which would dramatically increase the sector’s talent pipeline.
Closing the Skills Gap: A Call for Action
Robert Halfon, Co-Chair of Make UK’s Industrial Strategy Skills Commission said: “Modern manufacturing and engineering are major drivers of the innovation needed to capitalise on the AI revolution and deliver on the Government’s growth agenda across new green skills technologies and opportunities. Yet all of this is at risk if we do not urgently ensure our skills system is properly fit for the 21st Century.
“It is critical that we remove the barriers for Britain’s innovative companies from offering skills and apprenticeships, so that the new Growth and Skills Levy provides enough quality apprenticeship opportunities that lead to progression and good employment outcomes. That is why financial incentives through a skills tax rebate, cutting bureaucracy and ringfenced skills funding will make a huge difference. The skills crisis will be addressed by putting skills and apprenticeships first and foremost in the minds of government and business."
Addressing the Skills Crisis with Proper Funding
Stephen Phipson CBE, CEO Make UK said: “The Apprenticeship Levy in its current form has been nothing short of a disaster. Apprenticeship starts in manufacturing have fallen by 42% meaning tens of thousands of learners have gone without invaluable training in the last eight years.
“Government is sitting on a pot of cash that should immediately be ringfenced and spent on skills training. The first priority is properly funding courses, so colleges and training providers aren’t put off delivering higher-cost courses such as engineering. There also needs to be targeted efforts to recruit experienced tutors to train up the next generation in the skills we need now and in the future.”
Industry Comments at Make UK Press Conference
Marking the announcement, Make UK held a press panel in London where key speakers provided insights and answered questions.
The panel was hosted by Richard Partington, Guardian's economics correspondent. Speakers on the panel included Robert Halfon, former state skills minister, Yiannis Koursis, CEO of the Bedford College Group, Sian Elliot from the Trades Union Congress, and Kevin Fitzpatrick former senior vice president for manufacturing supply chain management at Nissan.
The key takeaways from the press panel include:
Dealing with gender disparity
EngineeringUK CEO Hilary Leevers questioned the panel on how we incentivise women to enter into the job market and how the sector needs to take responsibility for this disparity leading to such a jobs crisis.
Koursis said: "We need to start at the school years to ensure that this gender disparity does not continue. When you meet students at 16 they already have a pre-determined ideas of job ideals."
"It is hard to infuse people of under-represented groups at the age of 16 to take on certain job, like the ones you see in the manufacturing and computing world. And this is coupled with the issue that only 40% students come out with GCSE's not in English, Maths or Science - which are important subjects to help enter into this sector," he said.
"A vast majority of those who are not taking on Maths at GCSE are girls, because they tend to steer towards the humanities topics," he said. "This means the pipeline is getting narrower."
"It is the early years where people pick up the love for STEM - and that's how we get women into the sector," he said.
Halfon also said that changes to careers advice services needs to occur - with potentially these outlets perpetuating stereotypes. "We need to embed careers early, even in primary schools. Employers and the government also need to actively work together to address the gender balance too," he said.
Making apprenticeship more appealing
Elliot said that the report found that the skills system within the UK is a fragmented one. "The structures in place are not coherent and comprehensive; and are difficult to navigate," she said.
"We need to simplify the pathway for SMEs and schools," she said. "There needs to be reform for the Levy to simplify it for SMEs which will then hopefully stop 1 in 2 apprentices who are now dropping out of their courses."
On this statistic, Elliot proposed that companies also need to invest in their apprentice programmes more to encourage apprentices to stay in their programmes.
"The apprentices are dropping out because of quality. So there needs to be an element of conditionality between businesses and government. Government needs to invest but the businesses need to make sure that these courses are engaging and are beneficial for young people," she says.
Sleeving UTCs in comprehensive systems
Kenneth Baker, member of the House of Lords, also commented on the importance of UTCs in country.
He said: "Schools will not promote apprenticeships as they focus on subjects that will help students get into university. No one, even the Prime Minister, is listening to us because if you want to address the skills shortage you need to start at schools."
"I want to see many more UTCs but building new schools costs about £20m. So in response, we have developed a system that will allow UTCs within a comprehensive school."
"Alongside students competing in their usual academic subjects, there will be a sleeve of students with different teachers and workshops as well as classrooms," he said.
Local employers will also be supporting these UTC sleeves, Baker says. "This is the only way forward and we need to persuade government to do this. We now have 12 schools in the country who are successfully operating these sleeves," he said.
Encouraging long learning and upskilling the current workforce
Elliot says that whilst discussions on apprenticeships are important, there needs to be more support for current workers with the upcoming fourth industrial revolution.
"We need a culture of lifelong learning. We have 78% employment and yet we are not coping as a country which is only going to get worse with the next revolution. So what we need to do is to make sure those already in the labour market are also being upskilled and reskilled - we need to widen out this conversation beyond young people," she says.
