Background
The Leitch Review was tasked in 2004 with considering the UK’s long-term skills needs. The UK has had 14 years of unbroken growth and has the highest employment rate in the G7. Its skills base has also improved significantly over the last decade. Despite this, the UK’s skills remain weak by international standards, holding back productivity, growth and social justice. The Review has found that, even if challenging targets to improve skills are met, UK skills will still lag behind that of many comparator countries in 2020. We will run to stand still.

The global economy is changing rapidly: emerging economies such as India and China are growing dramatically; increasing technological change; and global migration flows. Unless the UK can make its skills base one of its strengths, businesses will find it increasingly difficult to compete.

As a consequence of low skills, the UK also risks a lost generation, cut off permanently from labour market opportunity and facing increasing inequality. The best form of welfare is to ensure people can adapt to change. Where skills were once a key lever for prosperity and fairness, they are now increasingly the key lever. Radical change is necessary and urgent.

World leader
The Review recommends that the UK commits to becoming a world leader in skills by 2020, benchmarked by the upper quartile of the Organisation of Economic Co-operation and Development (OECD). This means doubling attainment at most levels.

Objectives include:

• 95% of working age adults to achieve functional literacy and numeracy - up from 85% literacy and 80% numeracy today).


• More than 90% of workforce adults to be qualified to at least Level 2 (A level equivalent), achieving 95% when feasible - up from 70% today.


• Shifting the balance of intermediate skills from Level 2 to Level 3 and improving the esteem, quantity and quality of intermediate skills; doubling apprenticeships to 500,000.


• More than 40% of the adult population qualified to Level 4 (degree level) and above - up from 29% today. This means 530,000 people a year compared to around 250,000 at present.

Schools
The Review’s remit was adult skills. More than 70 per cent of the 2020 working age population have already left compulsory education. Despite this, the Review recognises the vital contribution of effective education for young people to the new ambition.

There have been significant increases in schools standards over the past decade, with more young people than ever achieving five good GCSEs. However, more than one in six young people leave school unable to read, write and add up properly.

The proportion of young people staying in education past the age of 16 is the lowest in the OECD. The Review emphasises how critical the Government’s reforms to GCSEs are to embed functional literacy and numeracy and how important it is that the new 14-19 Diplomas succeed. Once post-16 participation increases towards 90 per cent, Government should consider changing the law so all young people remain in education or training up to age 18.

Main recommendations

• Increase adult skills across all levels.Progress towards ‘world class’ is best measured by the number of people increasing their attainment. The additional cost of realising our ambition will build up over time to between £3-4 billion per year by 2020.


• Route all adult vocational skills funding through Train to Gain and Learner Accounts by 2010. On adult skills, streamline the role of the Learning and Skills Council to become a funding body and promoter of provider competition.


• Strengthen employer voice. Rationalise the existing bodies, strengthen the collective voice and better articulate employer views on skills by creating a new Commission for Employment and Skills, accountable to Government and the Devolved Administrations and responsible for managing the employer voice in the skills system within a framework of individual rights.
  
• Increased employer engagement and investment in skills. Reform, re-license and empower Sector Skills Councils (SSCs). Deliver more economically valuable skills by only allowing public funding for vocational qualifications approved by SSCs. Expand skills brokerage services.


• A new ‘Pledge’ for employers to train all eligible employees up to Level 2 in the workplace. If the improvement rate is insufficient by 2010, introduce a statutory entitlement to workplace training in consultation with employers and unions.


• SSCs and brokers working to increase employer investment in Level 3, 4 and above qualifications in the workplace. Extend Train to Gain to higher levels: double apprenticeships, improve employer engagement with universities.


• Increase people’s aspirations and awareness of the value of skills. Create high profile, sustained awareness programmes. Rationalise existing fragmented services and develop a new universal adult careers service, offering a skills MOT.


• Create a new integrated employment and skills service locally, to increase sustainable employment and progression. A new programme for basic skills improvements in helping disadvantaged people find and stay in work. New programme to improve basic skills. Nationwide network of employment and skill boards.

Rewards
The Review estimates an overall net benefit of around £80bn over 30 years. This would come from a boost in the productivity growth rate of up to 15% and an increase in the projected growth of the employment rate of around 10%. Social deprivation, poverty and inequality will also diminish.

* Related stories:
Leitch Report: Employers Must Make Greater Investment in Skills
Leitch Report: Employers Respond