By Marek Zemanik, Senior Public Policy Adviser, Scotland.
As the Covid-19 public health emergency morphs into an economic emergency, some tough decisions lie in store for both the UK and Scottish governments. How do we target financial support? What interventions are needed to prevent deep structural damage to the labour market? Can we do this without picking winners and creating losers? I don’t really have the answer to any of these and I certainly don’t envy those who need to make these decisions.
What I did want to do, however, was to virtually lobby for what has long been a forgotten area of public policy – lifelong learning. “Forgotten” is probably unfair, but it has certainly been a prime example of a policy area where rhetoric has rarely matched reality. The National Retraining Scheme (England-only) was announced almost three years ago and is yet to move beyond a pilot stage. A few weeks ago, the Scottish Government announced their intention to set up a new National Retraining Scheme, presumably involving the National Retraining Partnership – announced back in 2018. Progress has been slow.
Understandably, the focus over the last few weeks has been on youth unemployment. We know from previous recessions that young people are more likely to take the economic brunt of a downturn, compounded by the fact that the Covid-19 crisis is hitting sectors with traditionally younger workforces the hardest – e.g. retail or hospitality. This has led to stark warnings of ballooning youth unemployment levels and of significant long-term impacts. Both the Scottish and UK governments have responded by announcing a series of measures aimed at softening the impact of the crisis – job guarantees, employer subsidies and investment in employability schemes.
When it comes to lifelong learning, however, we are already starting from behind. The world of work is changing at an accelerating pace. Covid-19 may have permanently shifted thousands of jobs away from the office, but this is just one small aspect of our changing economies. The fourth industrial revolution is here, whether we like it or not. And even though many of us had to rapidly get to grips with (what feels like) seven different video-conferencing software solutions, this is only a precursor to the upskilling most of us will have to go through over the next few years.
There’s plenty of statistics out there to show the international gap in UK adult skills development – be it participation rates or funding - but I will use this opportunity to showcase a bit of our own CIPD research. This year, for the first time, we published our Working Lives Scotland report, which looks at various aspects of job quality in Scotland. One of the surveyed topics is the availability of skills development in the workplace. The following table breaks downs those who agree that their job offers good opportunities to develop their skills by age.
For three of the four age brackets the differences are too small to be statistically significant, but there is a clear gap for those in the 45-54 age bracket. Now, of course, some of this will simply be a reflection of these workers’ career stages, but it may also reflect a gap in the infrastructure of provision – be it employer or government.
With changes in the economy accelerating, and life expectancy growing, the days of single careers over a lifetime are coming to an end. And yet our skills public policy framework is wholly unprepared for this – funding is still very much skewed towards young people’s initial education and skills development. We need to be bolder and more creative when it comes to both the delivery of skills development (flexible, online, bite-sized, transferable credits etc) and the funding of it (balancing further and higher education, combining employer, government and individual contributions etc).
When reading about supply and demand in the context of skills, what most commentators focus on is the demand for skills from employers and the supply of skilled workers from the education system (or sometimes immigration). However, there is also a different dimension to the supply/demand mismatch. The supply of skills development opportunities needs to be matched by the demand for skills from learners themselves.
This demand is of course linked to broader socio-economic cultural considerations (I believe we need a collective mindset shift comparable to that achieved by pension contribution reforms), but there are public policy stimuli that can help – chief amongst them types of individual learning accounts. Made famous by Singapore, but in existence in various forms across the world, such accounts can aggregate funding from government, the employer and an individual, to create a fund redeemable against skills development opportunities within certain parameters.
Scotland is unique in the UK in having retained a type of these accounts. Individual Training Accounts, administered by Skills Development Scotland, provide eligible individuals £200 to use for skills development in areas specified in regulations. Back in April, the CIPD wrote to Jamie Hepburn MSP – the Minister for Business, Fair Work and Skills – suggesting a boosted ITA scheme for those on furlough would be a worthwhile intervention. Past iterations of the programme have shown it to be very popular, with applications closed due to over-subscription. Those who have used them, however, are overwhelmingly positive – a 98% satisfaction rate, coupled with 60% of positive employment outcomes.
The ITA model could be significantly expanded and boosted, especially in the context of a rapidly changing economy post-Covid-19. Indeed, one of the options considered by the Enterprise and Skills Strategic Board sub-group looking at Covid-19 mitigation policy is a new Covid-19 Transition Training Fund, rolling ITAs and several other schemes into one. The estimated full cost of one intervention is in the region of £2,500-£3,000, which puts the £200 ITA offer in some perspective.
There are other options of how this could work during our post-Covid-19 recovery and, crucially, beyond it too. I am delighted that the CIPD will work with IPPR Scotland over the next few months to explore these issues in detail. We want to learn from international examples, draw on existing literature and build on Scotland’s ITA experience to provide tangible recommendations to the Scottish (and maybe UK) Government before the next budget and all political parties ahead of the 2021 Scottish Parliament election.
This won’t be the only intervention needed – a better digital provision of courses and improved careers guidance will have to play a part – but it is one that can help us navigate our recovery through Covid-19 and, crucially, help us meet the challenges of a rapidly changing economy in the long-term. A government framework, combining individual choice (and agency) with co-funded support and flexibility of provision is surely a formula worth trying.
