Britain’s skills record has hindered, not helped, our productivity drive. That needs to change

Between the recent budget, the Industrial Strategy White Paper and last Thursday’s Skills Summit, we’ve heard a lot about the need to boost Britain’s productivity and how education and training can support that drive. One of the more striking new announcements made in the Budget is the National Retraining Scheme initially focused on digital and construction skills in England, overseen by the CBI and TUC.  The aim is laudable. We should certainly address skills shortages and future skills needs.

However, this is only one side of the coin.  We also need to boost productivity of those already in work, and particularly those in our large, and largely unproductive, sectors.  And yet Britain has a poor record on training its workers. What’s more, this poor record runs across the labour market: from poor management skills to a worrying rise in the number of employees who lack the skills to do their job well. And this matters: firms suffering from skills gaps and poor management are less competitive and indeed, less productive.

So how is the UK measuring up against these skills challenges? Our training patterns display something of a ‘Matthew Effect,’ with those who have already attained the highest level qualifications being trained at the highest rate. For example, last year workers with Masters degree were five times as likely to report having had recent work-related training, as those with no qualifications.

For those lucky enough to have training, the proportion whose training lasts longer than a week is down by nearly a third since 2006. Worryingly, duration has fallen most for those in lower-skilled occupations, especially older people working in lower-skilled occupations. It’s fallen across industries too, with some of the starkest drops occurring in low pay, low productivity sectors like agriculture, retail, and food and accommodation.

This fall in work-related training hasn’t been shored up by growing numbers of adults studying for further qualifications. Among those classed as employees or self-employed, study rates have fallen across the board since 2006-08. Managers and process/plant workers had the largest falls, down by roughly a third. Taken together, the decline in both training and professional study suggests that fewer people are able to do their jobs better, and in all likelihood, progress to higher levels of responsibility and pay.

This is a huge and growing challenge. Britain’s labour market is already starting to shift towards a new era of lower migration, which will put extra pressure on the need to upskill existing workers. Many firms across all sectors will have to rethink their business strategies in order to address falls in training and wider workforce development.

This is difficult work, and it requires more than the occasional nod to further education. To get productivity on the right track, we need to increasingly view skills as a central element of the agenda. The government is certainly right to focus on retraining but we can’t forget about those already in work.

Kathleen Henehan is Research and Policy Analyst at the Resolution Foundation