A New Era For Upskilling: Labour’s Plan to Close the Business Skills Gap

As the UK welcomes a new Labour government, Cambridge Spark looks forward to the renewed focus on training and skills development promised for the next chapter in British politics.

With upskilling a core component in Labour's strategy to stimulate economic growth, we’re eagerly anticipating the opportunities for Data & AI-driven business success that new training and skills policies could help deliver.

Keep reading to reveal how Labour plan to address the current skills gap with the following measures:

  • Reforming the Apprenticeship Levy into a more flexible “Growth and Skills Levy.”
  • Establishing “Skills England” and encouraging collaboration between businesses, training providers, unions, and government to close the skills gap.
  • Empowering local representatives with more control over adult skills funding.

We’ll also explore how this strategy could offer more support to employers suffering with data and AI skills gaps, and how business leaders can prepare for the upskilling challenges of the years ahead.

How severe is the current skills gap in the UK?

According to the most recent UK Government’s Employer Skills Survey, there were 850,000 “hard-to-fill” job vacancies in 2022, a significant increase from 336,800 in 2017. 

This staggering increase is largely due to a shortage of necessary skills among job applicants. And without the right strategy in place to combat the skills shortage, this number is likely to rise further due to the rapidly changing business landscape.

In recent years, nearly half of UK businesses (48%) have been recruiting for roles that demand strong data and AI skills, yet 46% have faced difficulties in hiring for these positions. 

In a bid to try and start closing the AI skills gap, The Department for Science, Innovation, and Technology (DSIT) recently launched a new pilot scheme under the previous Conservative government. The scheme is aimed at helping small and medium-sized enterprises (SMEs) in the Professional Business Services sector access AI skills training. 

However, there is still significant work ahead to close the data and AI skills gap within the UK. The World Economic Forum predicts that by 2025, 85 million jobs may be displaced by a shift in the division of labour between humans and machines, but a whopping 97 million new roles may emerge that are more adapted to this new division of labour. 

Let's delve deeper into how our new Labour government plans to tackle this challenge.

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What is Labour's strategy for closing the skills gap and what does this mean for employers?

Labour's manifesto puts great emphasis on tackling the UK’s skills gap and preparing the workforce for the evolving demands of the future business landscape.

Their manifesto’s "Breaking down barriers to opportunity” strategy outlines three key components that aim to alleviate the current skills gap issue and the urgent demand for data and AI skills across UK businesses. The plans have potential to address the UK skills gap, and also present potential changes for consideration.

1. Reforming the Apprenticeship Levy 

Firstly, Labour aims to address the current state of the Conservative government's Apprenticeship Levy, a key funding source for upskilling in the UK. Plans to modernise the scheme involve transforming it into a more flexible "Growth and Skills Levy."

The proposed Growth and Skills Levy would include funding for a wider range of training programmes beyond traditional apprenticeships, something that the current Apprenticeship Levy does not currently allow.

Such changes might allow employers a more flexible approach to achieving their organisational goals. However, it will also be vital that any changes to the Levy do not detract from the monumental value offered by apprenticeships: high quality technical training for long-term skill development and top talent retention.

For these changes to resonate positively across industries, we think it is imperative that employers have a substantial say in shaping the design and scope of the Growth and Skills Levy’s training alternatives. This role should mirror their influence in shaping apprenticeships. 

We strongly advocate for a system where employer choice and influence are integral to the design of available training options and Labour’s next proposed strategy shows promise in aligning with these principles.

2. Establishing “Skills England”

In addition to developing the Growth and Skills Levy, Labour plans to set up “Skills England” to bring together businesses, training providers, unions, and government. Skills England will aim to ensure a highly trained workforce aligned with the needs of the labour market and Labour's Industrial Strategy. 

We feel that there is significant potential for Skills England to play a key role in shaping the sector and welcome the proposed involvement of employers and training providers. 

This gives employers the opportunity to offer crucial insights into the specific skills they need through structured discussions and strategic collaborations, especially in dynamic sectors like data and AI. Subsequently, training providers can adjust their programmes to precisely meet the evolving demands of businesses, ultimately closing the skills gap with more direction.

Looking for bespoke data & AI training for your business needs? Find out more.

3. Empowering local representatives

Labour has pledged to grant combined authorities greater control over the distribution of adult skills funding. This means regional representatives will have more autonomy over the allocation of funds, operating on the premise that they better understand the specific skills needed in their local communities.

The theory being that local representatives can quickly allocate funding to address emerging industry trends and market changes, helping to close specific skills gaps that hinder local businesses. 

Though this looks promising for local economies, it must be balanced with the need to support national employers and avoid creating complex and varied procurement processes across different regions.

Employers already face challenges when operating across the four nations of the UK, and it is crucial that these issues are not exacerbated. 

The role of Skills England in bringing together funding, qualifications, and even engaging with the other UK nations will be critical here. They need to establish how to ensure seamless procurement processes for national employers whilst simultaneously empowering local government. 

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Our mission to help close the data and AI skills gap in the UK

At Cambridge Spark, we are also on a mission to close the UK skills gap, by providing essential data transformation skills that drive business growth and success in the AI era.  

We offer a range of flexible learning solutions to meet your organisation's needs, from fast deployment of new skills with Professional Programmes and Skills Bootcamps through to longer-term investment in the workforce with Apprenticeships

Cambridge Spark lead the real-life impact of data & AI education through our:

  • Reach as the UK’s only specialist data & AI skills apprenticeship provider
  • Recognition as the provider of the UK’s Best AI Course 2023 and top choice of 79% of all AI apprentices
  • Unparalleled learning experience through EDUKATE.AI, a unique platform that combines real-world industry simulations with immediate personalised feedback.
  • Experience educating over 5,000 learners.
  • Delivery of £300 million client ROI since 2020

We’re delighted to see skills play such a key role in Labour’s plans and are encouraged by the early signs that the new government intends to engage with the sector as a whole to develop their plans. The input of groups such as employers, providers and future learners and apprentices will be vital to ensuring the changes made have the desired impact. We look forward to working with the government as they develop their plans.

Close the data and AI skills gap in your workforce

How are you preparing your workforce for the future and maintaining competitiveness in today’s digital landscape? Contact us via the form below to start the conversation today. 

We’re here to help your organisation upskill and succeed in the era of data and AI.

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