The launch of Skills England is expected to bring a transformative shift to the UK’s approach to skills training and workforce development.
Skills England is set to begin taking shape throughout 2025, with the first phase of changes expected to roll out in April and September. This new body is a key pillar in the Labour government’s broader strategy to tackle the nation’s widening skills gap.
By taking over a significant portion of the Institute for Apprenticeships and Technical Education (IfATE)’s current duties, Skills England is expected to streamline the management of apprenticeships and technical education, to create a system that is better aligned with the needs of modern industries and employers. The shift signals a major step toward strengthening the workforce and addressing long-standing skills shortages in key sectors.
This blog delves into the key functions of Skills England and the ways in which we expect its introduction will offer more freedom, flexibility, and alignment with national and regional economic needs for employers.
The Need for Change
For years, the UK has struggled to keep up with other developed nations in terms of skills investment.
Training per employee has dropped, and businesses have long called for more flexible options when it comes to workforce development. The Learning and Work Institute identified that ‘UK employer investment in training has fallen by 26% per employee since 2005 and now stands at half the EU average’, further concluding that ‘there are large inequalities in access to training at a time when the UK is falling behind on basic and technical skills.’
The current Apprenticeship Levy, introduced in 2017, aimed to increase apprenticeship starts and boost training, but despite its benefits, it has been widely criticised for its rigidity. While the amount of levy funds has grown, the number of apprenticeships, particularly at lower levels, has not seen the expected increase. Employers, frustrated by the narrow scope of training options, have often found themselves limited in how they can use levy funds.
This is where Skills England comes in, as it aims to deliver a more adaptive and streamlined approach to skills development, aligning with wider economic priorities.
What Is Skills England?
Skills England is a new body that aims to unify the skills system across the UK, bringing together various stakeholders, including employers, training providers, regional authorities, and government departments. One of its main goals is to close the growing gap between employer expectations and the actual skills delivered by the existing system.
By working in close alignment with key governmental bodies, such as the Department for Science Innovation and Technology (DSIT) and the Department for Energy Security and Net Zero (DESNZ), Skills England aims to ensure that training provisions align with broader national industrial strategies.
From a timeline perspective, it is predicted that Skills England will entirely replace IfATE by March 2025, but full functionality is expected closer to September 2025. The transition will coincide with the dissolution of the Education and Skills Funding Agency (ESFA) and the implementation of the new Growth and Skills Levy, replacing the now outdated Apprenticeship Levy.
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Access the Full ReportGreater Flexibility with the Growth and Skills Levy
For employers, one of the most significant changes under Skills England will be the introduction of the Growth and Skills Levy – this new levy is designed to give employers more flexibility in how they allocate their training budgets.
Under the current system, businesses are required to use levy funds exclusively for apprenticeships. However, with the Growth and Skills Levy, a small percentage of available funds can be used for other training programmes, offering employers more freedom to address immediate and emerging skills gaps within their industries quickly.
This flexibility is particularly valuable in sectors where apprenticeships are not always the best fit for upskilling staff. For instance, industries that rely heavily on short-term, high-demand certifications or training programmes that do not fall under the traditional apprenticeship model will benefit from this change. Employers will be able to invest in qualifications that directly align with their specific workforce needs without being confined to a particular set of training options.
Foundation Apprenticeships
One of Skills England’s key functions will be to focus on foundation apprenticeships and shorter training programmes that provide a more accessible entry point into the workforce.
These apprenticeships, targeted primarily at school leavers and those new to the job market, are less complex than traditional apprenticeships. Foundation apprenticeships offer an alternative for those not ready for the demands of a Level 3 apprenticeship, which often requires considerable off-the-job training and specific qualifications in subjects like Maths and English.
Employers stand to benefit from the increased pool of talent that Foundation apprenticeships will help them connect with. With the UK currently home to over 900,000 NEET (Not in Education, Employment, or Training) young people, foundation apprenticeships provide a crucial pathway for re-engaging this group. By offering shorter, more focused training, employers can bring new workers into their workforce while reducing the time and costs associated with longer training programmes.
Aligning National and Regional Economic Goals
It is expected that Skills England will also work closely with regional and local authorities to ensure that training programmes are tailored to the specific needs of the area. This multi-departmental approach, which includes coordination with the Migration Advisory Committee and Industrial Strategy Council, aims to ensure that skills development is not only nationally focused but also aligned with local economic priorities. Employers can expect to see more region-specific training programmes designed to support growth in key industries within their areas.
For instance, industries in areas with a strong manufacturing base may see a greater emphasis on engineering and technical skills, while regions focusing on digital innovation may prioritise technology and IT skills. This alignment between national policy and regional needs should enable employers to access the skills they need to thrive in a competitive economy.
Enhancing SME Collaboration
SMEs in particular stand to benefit from a more streamlined and user-friendly process when selecting training providers, thanks to the initiatives spearheaded by Skills England. One of the key goals of the new body is to enhance collaboration between SMEs and apprenticeship providers, making it easier for smaller businesses to access high-quality training programmes.
Skills England also aims to boost apprenticeship starts and improve completion rates by creating a more cohesive and supportive system. These improvements should simplify the training landscape, reducing administrative burdens and helping businesses invest in programmes that are directly aligned with their skill needs. By encouraging greater engagement and pushing for a better match between employers and training providers, Skills England can play a crucial role in equipping the workforce with the competencies required for future growth.
How can Baltic Apprenticeships help?
With Skills England’s introduction, Baltic Apprenticeships is ready to help employers navigate the new opportunities it brings. Our Director of Public Affairs plays a vital role, engaging with professional bodies, and government officials, and sitting on key boards. She provides our employers with important updates on policy changes and new initiatives, such as Skills England, ensuring Baltic Apprenticeships stay aligned with the latest developments to better support our employer partners.
Final Thoughts
The launch of Skills England marks a pivotal moment for employers across the UK. Given what we know, it seems employers can look forward to a more adaptive, efficient, and responsive system that will allow them to invest in the skills that matter most to their businesses and the broader economy. By offering more flexibility in how training funds can be used, focusing on accessible apprenticeships and tailored training courses, and aligning national and regional economic goals, Skills England has the potential to transform the UK’s approach to skills development.