Largely the Department for BIS retains responsibility for skills policy, and delivery of vocational training is primarily through the Skills Funding Agency (SFA), the successor to the Learning and Skills Council (LSC). Recent policy developments in relation to skills are similar to those with regard to Welfare to Work. There have been major policy shifts initiated by an independent review by an expert third party starting with Lord Sandy Leitch, who was commissioned to examine government policy and performance in relation to skills in 2004 and reported in December 2006.

The Leitch Review identified a significant shortfall in skill levels in the UK and set out an ambitious programme of improvement to bring the UK up to world-class levels by 2020. The then Labour Government largely accepted both Leitch's diagnosis and his recommendations for change and set out its proposals for the implementation of Leitch in a whitepaper, 'World Class Skills' published in July 2007. World Class Skills committed to a number of the changes in policy recommended by Leitch, which were, in broad terms, designed to shift support for training and skills development outside schools from a centralised system, led by the providers of training (and especially FE colleges) and the then LSC, to a demand-led system which gave greater control to employers, who need a better trained workforce, employees and those seeking work who need upskilling.

The changes set out in World Class Skills were accompanied by significant changes to delivery channels that led to the dissolution in the summer of 2010 by the newly elected Coalition Government of the LSC which had been the umbrella body through which all funding for skills outside schools had been funded since 2001. 

Following the formation of the department for Children Schools and families (DCSF) and the Department for Innovation, Universities and Skills (DIUS) in July 2007, the then Labour government confirmed its intention to transfer responsibility for commissioning training for 14-19 year olds to local authorities. This entailed the transfer to LAs of responsibility for around £7bn of funding formerly controlled by the LSC and was finalised in April 2010 just prior to the last general election.

Responsibility for adult (post-19) education and skills and around £4bn of funding passed from the LSC to its successor, the Skills Funding Agency (SFA). The SFA has responsibility for routing funding to FE colleges and other providers; meeting the demands of employers and learners; managing the creation and management of the new adult advancement and careers service advocated in 'World Class Skills'. It is also responsible for managing the new National Apprenticeship Service, which has end-to-end responsibility for the Apprenticeships Programme, including ultimate accountability for national attainment of targets.

The centrepiece of the previous Labour government's skills policy was the introduction of Train 2 Gain (T2G). T2G was designed to enable a demand-led service for training to employers and employees and by doing so to raise skills levels, broaden interest and investment in skills training from employers and to increase the capacity to respond to employer demand among providers. T2G received funding of just under £1bn a year from 2006 onwards.