Worrying workforce data demands we focus more on adult skills

By Luke Bocock, NFER Research Director

Friday 13 October 2023

Luke Bocock, NFER Research DirectorThis blog post was first published in FE Week on Friday 13 October 2023.

The long-term outlook for the labour market is bound to be high on the agenda leading up to the next general election. With 80 per cent of the 2030 workforce already in work today, adult education holds the key to upskilling and reskilling those most at risk of losing their jobs due to the rise of automation and AI.  

The recently published results of Employer Survey 2022 highlight worrying increases in the proportion of employers reporting vacancies and skills gaps. Meanwhile, it is widely anticipated that trends including automation and AI will change the jobs available in the labour market and the skills needed to do these jobs. Goldman Sachs have even suggested that generative AI could substitute up to one-quarter of current work.

As with any change, there will be winners and losers. Projections from The Skills Imperative 2035 suggest some sectors (like transport), and occupations (e.g. receptionists) are likely to experience significant losses. Rethinking adult education is likely to be paramount to supporting these workers.  

Sideways moves won’t be an option for everyone. Occupational change is now driven by ‘upgrading’ (the growth of higher-paid occupations), and job-to-job moves are less prevalent in declining occupations. More people in declining occupations need to be able to ‘upgrade’ into stable and expanding sectors.  

This is more feasible for those with higher levels of transferable ‘essential employment skills’ (like problem solving and creativity), but these skills are less easily developed in roles performing routine and/or manual tasks. Peoples’ prospects of returning to work are also significantly greater if they have undertaken qualification-bearing training, yet people without ‘higher’ level qualifications are the least likely to receive qualification-bearing training at work.  

Numbers of mature learners taking qualifications have declined considerably. From 2010/11 to 2020/21, the number of adult learners on qualifications equivalent to GCSEs or below fell by 50 per cent, and adults taking qualifications equivalent to A levels fell by one-third. This was partly due to large cuts to adult education funding, with total spending on adult education and apprenticeships falling by 38 per cent in real terms.  

The number of (mostly mature) students on part-time undergraduate degrees also halved, while numbers on ‘sub-degree’ qualifications plummeted by 28 per cent between 2015 and 2018 following funding reforms that saw means-tested tuition fee grants abolished.  

These cuts are being partially reversed. Adults with few qualifications can access free 12-16 week training programmes, but these are unlikely to contribute to qualifications. Adults without A level or equivalent qualifications will be able to gain their first full level 3 qualifications, but most people still won’t be able to afford a break from employment. Mature students studying higher technical qualifications will be able to access full living cost support, but they will still be reliant on non-means-tested loans.  

Overall, spending on adult education and apprenticeships will still be 25 per cent lower in real terms in 2024/25 compared with 2010/11. Is this going to be enough for education to win the race with technology?  

The UK stands out for having a large share of adults who only have low-level qualifications. What if we took a leaf out of Norway’s playbook? In 2003/04, Norway began offering high-school dropouts a monthly stipend equivalent to around 13 per cent of median monthly income for 30-34 year-olds to have a second stab at completing upper secondary education. Rates of high school completion among the early treatment group subsequently increased significantly. 

The UK, and England in particular, also stands out for having relatively few adults with mid-level qualifications such as HNCs and HNDs. UK adults are one-quarter as likely as adults from the US to have undertaken an advanced vocational qualification. What if we gave students who are eligible for the new part-time maintenance loan the option of a tuition fee grant instead? The Sutton Trust suggest this would come at low or zero additional cost per student and the long-term return on investment would be positive 

Faster change in the labour market strengthens the business case for reducing the costs for adults of returning to education. Through The Skills Imperative 2035, NFER will be further exploring how reforms to adult education could help mitigate the risks on the horizon.