In January 2020, forecasts for the economy looked promising as the UK finally started to shake off Brexit uncertainty. But then we entered March…and a global pandemic.
As it stands, the UK and global economies are on course for a paralysing recession, with governments doing all they can to minimise the damage caused by COVID-19. As great as the economic initiatives being put forward are, many focus wholly on the short-term. The government needs to prioritise long-term strategies to rebuild the workforce, especially seeing as many people’s educations have been disrupted and others may find themselves having to reskill completely after being made redundant.
Let’s turn back the clock a bit; when we were on the cusp of entering lockdown, Rishi Sunack laid out the 2020 March Budget in which he announced boosts to UK infrastructure, promising over £600bn worth of investment over the next five years, which will supposedly lead to a long-term productivity increase of 2.5%. This was a positive statement, but I was concerned about the lack of investment into apprenticeships. Apprenticeships are a vital part of arming the population with critical skills in the likes of cybersecurity and IT – which are even more important now the workforce has been disrupted. The question, therefore, that I would like to raise, is how did the government foresee a productivity increase when the UK was, and still is, in the midst of a skills crisis which will only be exacerbated by COVID-19?
In this piece, I’ll examine the state of the digital skills gap and the impact this has been having on businesses and the economy. I’ll then review what measures the government should take to alleviate and tackle this crisis head on to protect the long-term productivity of the workforce post-COVID.
The current climate
Prior to coronavirus turning the world upside down, the UK’s digital sector accounted for 7.7% of our economy and produced more than £400 million a day. But despite this, there was a severe lack of digital skills in the country, with 9 out of 10 organisations admitting they were facing a skills shortage. This has been a talking point for years, but there has been little action. I hope that the pandemic will finally trigger change because we’ve seen the digital sector truly at the forefront of the fight against COVID-19 – from providing invaluable support to the NHS, to keeping a large number of businesses running completely remotely – this sector has shown, even more than before, that we simply can’t survive without it.
So, what needs to be done? Education, namely apprenticeships and university degrees, are key to ensuring that the UK retains and grows its invaluable digital sector post-COVID. However, the pandemic has put the brakes on learning for many and has caused major disruption for others. It remains uncertain when universities will reopen and what the format of teaching will be when they do. Many due to head to university this year are finding the option to defer their course for a year more and more attractive. The digital apprenticeship sector has proven more resilient. Many organisations offering apprenticeships (including the NHS and BT), in partnership with apprenticeship providers, have rapidly pivoted to provide online training to ensure apprentices can stay on track. However, unlike universities who are still accepting this year’s school leavers, many new apprenticeships have been put on hold as the hit to the economy means that businesses (especially smaller businesses) are unable or reluctant to take on any new employees or training programmes.
This multifaceted disruption to learning will have a devastating knock-on effect to the UK’s economy and productivity. It’s therefore crucial that there’s ongoing investment into high priority skills to ensure the digital industry can continue to run and innovate efficiently during and after the pandemic.
The undervalued route into work
The reason that apprenticeships may have been missed off the March Budget agenda (as well as the impact of COVID-19 on this form of education barely reaching the news agenda) is that they continue to be an undervalued route into the workplace. When hiring, many companies continue to favour university degrees.
This mindset must change, recognising apprenticeships for the value they bring to both organisations and the economy at large. Digital apprenticeships in particular bring a huge return on investment for businesses. University educated talent who possess valuable digital skills were already in high demand before COVID-19 and only look to be more so afterwards. In place of casting the net into an already crowded space, companies should look towards apprenticeship training, which reaches a much larger and more diverse pool of people. This will not only result in immense savings on costs but will increase productivity over time. By implementing a dedicated apprenticeship scheme, a business is able to upskill existing employees while also training loyal new talent, resulting in a steady flow of skilled employees at the foundation of the company.
Many organisations believe that apprenticeship strategies are too time intensive to provide value. My argument is, if your business has the time and resources to bring in grads or interns, then there is little difference in how much time it’s going to take to train up an apprentice. It’s just about being strategic and working with apprenticeship partners who know what they’re doing.
The unused tool
If more organisations put as much onus into hiring apprentices as they do grads, then I truly believe that they could be a long-term solution in plugging the digital skills gap and reviving the UK economy.
Businesses and the government already have a framework in the UK Apprenticeship Levy to propel the uptake of apprentices. Not without its faults, the Levy is a dormant pot of money within countless organisations that can be used to provide the urgent investment needed to upskill the nation. To unlock its full potential, however, the government must simplify the Levy and introduce funding that will prioritise certain groups of people and skills. There must be a focus on training young people and unskilled people in the skills which are in most desperate need: cybersecurity, IT, manufacturing and STEM.
This, as well as other key initiatives around adult education such as Adult Learner Loans, must be looked into if post-Brexit and post-COVID Britain wants to navigate its way out of the impending global recession and remain competitive in the global economy.
Apprenticeships are therefore an important component in tackling the digital skills crisis and, in turn, the UK’s productivity crisis. As a recession looms for the UK, the government needs to begin to look forward and think longer-term for the country’s businesses and economy – more investment into training and education will establish a workforce that’s equipped with the skills and knowledge needed to pull the UK out of austerity. COVID-19 may be the current reason for the country’s economic downturn but a lack of skills will ensure that it will be a long time before we see any growth.
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