Introduction – UVAC is the national higher education representative organisation championing higher-level vocational education.  Our membership encompasses ~80 higher education institutions.  UVAC has played a pivotal role in the development of higher and degree apprenticeships in England.  We also support the higher education sector to engage in technical education. Through our academic journal Higher Education, Skills and Work-based Learning and our research, conference, seminar and events programme we aim to promote and disseminate good practice in higher level vocational and work-based learning, apprenticeships and technical education.

As a higher education representative organisation UVAC’s response to the Industrial Strategy focuses on the Business Environment – People and Skills.

Business Environment

Question 7- What are the most significant barriers to investment? Do they vary across the growth-driving sectors? What evidence can you share to illustrate this?

Significant barriers include:

A lack of investment by employers in the training and development of their employees – There is insufficient attention paid to this issue in the Industrial Strategy.  Government should start a national debate on why more should be spent on post compulsory education and training, to drive growth and the relative financial contributions of the state, employers and individuals to the cost of such provision.  The current debate on university tuition fees has largely focused on the relative contribution of individuals and government. Employers also however, benefit substantially from many courses.  Should employers, in some cases, be expected to make a contribution in higher education programmes?

Apprenticeships are mentioned in the Industrial Strategy, but how will the Lifelong Learning Entitlement (LLE) operate to ensure that individuals can invest in the skills needed in growth-driving sectors?  How will Government ensure the LLE complements employer investment in skills provision?

A skills system that does not sufficiently recognise the importance of high-level skills (i.e. level 6 is equivalent in level to a bachelors degree and level 7 is equivalent in level to a masters degree) or the need to develop and update the skills of the existing workforce – For too long skills provision has been synonymous with further education.  Further education has a pivotal role to play in delivering the skills provision needed to grow the economy, so however does higher education.  If skills provision is to have a specific focus on growth-driving sectors, Skills England must ensure that all levels of education, training and development and all types of provider are encompassed in its work.

Business Environment – People and Skills

Question 8 – Where you identified barriers in response to Question 7 which relate to people and skills (including issues such as delivery of employment support, careers, and skills provision), what UK government policy solutions could best address these?

The Industrial Strategy highlights that “Around one third of average annual UK productivity growth was attributable to an expansion of skills available in the workforce between 2001 and 2019.” (p. 29) The weakness in management and leadership skills is also identified as an important issue, as is the importance of the skills of those already in employment “with over 80% of the 2030 already in work”. (p. 29)

A key issue for Government is that skills policy and skills provision has not been and is not sufficiently focused on productivity and growth.  Apprenticeship, the Apprenticeship Levy and the future Growth and Skills Levy, funded through a compulsory levy on employers, provide good examples of how skills policy is not being sufficiently focused on growth.  If the Government is to successfully deliver its Modern Industrial Strategy it must encourage employers to invest in the apprenticeships needed in growth-driving sectors.

The Industrial Strategy states: “Successful People: Reduce skills mismatches and boost higher-paid employment in growth-driving sectors, including via increased enrolment in apprenticeships and technical education.” (p. 56)  This seems to be at odds with the direction of Department for Education policy on apprenticeship.  In its latest policy pronouncements, the Department for Education[1] seems to be seeking to prevent, or at best restrict, employers from using their levy payments on apprenticeships for level 7 apprenticeships.  Level 7 Apprenticeships include programmes for advanced robotics engineer, game programmer, clinical scientist, clinical pharmacology scientist, Artificial Intelligence (AI) data specialist, creative industries production manager, research scientist and systems engineer.  Although the Industrial Strategy notes that 80% of the 2030 workforce is already in work, Department for Education apprenticeship policy appears to be moving to focus on young people entering the workforce and on entry-level roles.  Despite the Industrial Strategy, it seems that the Department for Education could prioritise funding for apprenticeships for young people in for example customer service and business administration roles at the expense of apprenticeships in the type of level 7 roles highlighted above.  Similarly, although the Industrial Strategy identifies the importance of management skills to growth-driving sectors, the direction of apprenticeship policy seems to be focused on restricting the use of the senior leader apprenticeship.

Government could ensure that apprenticeship was appropriately focused on growth and the delivery of the Industrial Strategy by transferring policy responsibility and responsibility from the Department for Education to the Treasury.  The Treasury already has policy responsibility for the Apprenticeship Levy/Growth and Skills Levy.

Question 9 – What more could be done to achieve a step change in employer investment in training in the growth-driving sectors?

Higher Level Skills – The Industrial Strategy rightly highlights the important role of universities in research.  Universities also however, have a key role to play in developing the skills needed by employers, both for those entering the workforce and the existing employees, if we are to “Reduce skills mismatches and boost higher-paid employment in growth-driving sectors”. (p. 56) The development of technical skills (i.e. level 4 and level 5) is critical, but so are skills at level 6 and level 7.  We would note that at level 6, employers have developed 110 apprenticeship/occupational standards including for robotics engineer, creative digital design professional, data scientist, ordinance munitions and explosives professional, nuclear scientist and nuclear engineer, aerospace engineer, aerospace software engineer and digital and technology solutions professional.

At level 7, 65 apprenticeship/occupational standards have been developed, including for advanced robotics engineer, game programmer, clinical scientist, clinical pharmacology scientist, Artificial Intelligence (AI) data specialist, creative industries production manager, research scientist and systems engineer.  Skills England must focus on and prioritise skills provision at level 6 and level 7, where such provision is needed in Industrial Strategy growth-driving sectors.

The UK university sector has substantial expertise in the delivery of work-based learning and the accreditation of occupational competence.  HEIs should work as key partners supporting employers nationally, regionally and locally in identifying the skills needed to raise productivity and growth and designing and delivering training and development programmes as appropriate.

It seems odd, when the Industrial Strategy is emphasising the AI Opportunities Action Plan (p.33), that the Department for Education is looking at preventing employers from using the Apprenticeship/Growth and Skills Levy for level 7 apprenticeships, which include the Artificial Intelligence data specialist level 7 apprenticeship.  The Industrial Strategy states that “The Department for Business and Trade (DBT)’s Global Talent Network and Global Entrepreneurs Programme will ensure the UK is the best place in the world for scientists, innovators, and entrepreneurs to live and work.” (p.33).  Why then may the Department for Education prevent employers from using Apprenticeship Levy funds for the research scientist level 7 apprenticeship?

Management Skills – The importance of the development of management skills to growth is identified in the Industrial Strategy.  Bizarrely, management apprenticeships have however, been subject to intense criticism in the debate on apprenticeship priorities.  If the Industrial Strategy is to be delivered and management skills are to be given the recognition and investment needed, Skills England must prioritise their development through the Growth and Skills Levy.

Apprenticeships – Government should identify, through Skills England, the occupational standards/apprenticeship standards that are needed by the eight growth-driving sectors. Apprenticeships should be a central feature of sector plans. If there are gaps in the availability of occupational/apprenticeship standards, Skills England should ensure they are developed through the employer trailblazer system.

Government must develop apprenticeship as a productivity programme aimed at raising economic growth. This means that apprenticeship should be a Treasury led (not a Department for Education led) programme where policy and the apprenticeship system focus on prioritising the use of apprenticeships that make the greatest impact on growth.  Accordingly, apprenticeships should not be prioritised by level, age of apprentice or new or existing employee.  Instead apprenticeships used by private sector businesses should be prioritised[2] on the basis of the contribution they make to developing the skills needed to raise productivity and growth, particularly in growth-driving sectors.  Department for Education apprenticeship policy however, seems to be moving in the opposite direction with a focus on functional skills, young people and lower level skills.  Such provision will be prioritised by restricting (or preventing) employers from using levy funds for level 7 apprenticeships.  Such a policy will substantially undermine the ability of employers to use apprenticeships in the eight growth-driving sectors identified by government; Advanced Manufacturing, Clean Energy Industries, Creative Industries, Defence, Digital and Technologies, Financial Services, Life Sciences, and Professional and Business Services.

Some change is needed in the operation of the levy and indeed the Government was elected in 2024 on a manifesto commitment to replace the apprenticeship levy with the Growth and Skills Levy. Greater clarity is needed in terms of the objectives of and priorities for the Growth and Skills Levy. Improvements are needed in data collection and presentation. Some government intervention is also needed in the apprenticeship market. The Government and Skills England face major challenges in ensuring the success of new policy.

Q36. Is there any additional information you would like to provide?

Some change is needed in the operation of the levy and indeed the Government was elected in 2024 on a manifesto commitment to replace the apprenticeship levy with the Growth and Skills Levy. Greater clarity is needed in terms of the objectives of and priorities for the Growth and Skills Levy. Improvements are needed in data collection and presentation. Some government intervention is also needed in the apprenticeship market. The Government and Skills England face major challenges in ensuring the success of new policy.

Turf Skirmishes – For too many in the college sector, skills is seen as synonymous with further education. Higher education is something else. There is a tendency for further education to argue for the prioritisation of lower-level apprenticeships/programmes for young people. Indeed, the AoC agreed that employers should be restricted in the use of levy funds for level 7 higher and degree apprenticeships. One lesson of the apprenticeship reforms is that skills at all levels are important. Working with employers and further and higher education providers, government needs to focus on developing a post-18 tertiary sector culture, where skills are seen as important at all levels and for individuals of all ages.

The consultation can be completed HERE.

[1] DfE has stated that businesses will fund more of their level 7 apprenticeships outside of the levy.

[2] An equal weight and priority should be given to Apprenticeships used to train individuals for key public sector roles e.g. police constable, registered nurse, teacher and social worker