Skills England: Our New Skills Engine Management System

Skills England is poised to play a key role in tuning up England’s skills system.

Unsurprisingly, as details emerge about the structure and leadership of the new agency, there have been a chorus of voices pointing out the scale and complexity of the challenge it faces, and voicing doubts about whether it will be able to cope. In a recent HEPI Policy Note (Note 62, March 2025) policy analyst Tom Richmond – one of the speakers at our Annual Conference on 29th April – asks the intriguing question: “When Skills England calls, will anybody answer the phone?”

Our answer is: yes, most of us in the post-16 education sector will definitely pick up their mobiles! There may not be a Trump-like stampede to kiss Skills England’s ass, but there will be a universal desire to engage positively with such an important new body.

A successful skills strategy for England  depends on three things: sufficient resources to deliver good quality provision, better alignment between skills supply and demand, and better distribution of opportunities across the country. Skills England will have a part to play in each.

We see no merit in Skills England being directly involved in resourcing. In our view, it should certainly have an influence over funding and investment decisions at regional and national level, working behind the scenes to draw the attention of funding agencies to gaps and shortfalls that need to be addressed. But getting directly involved as a funder would risk the new agency losing its agility by becoming tangled in the weeds of bidding, spending, and accounting. In any case most providers feel there are already too many different funding streams – and associated regulation - to manage.

Skills England’s real value will be in driving the closer alignment of supply and demand for skills, based on accurate and up-to-date intelligence on both. Like the engine-management system in a modern car, the agency should have sensors in key components of the skills engine and be able to adjust inputs and outputs to achieve maximum efficiency and smooth running.

As part of this coordinating role, Skills England will also need to improve the distribution of opportunities across cities and regions, a complex challenge, but one that needs to be grasped if the benefits of a better skills system are to be felt by citizens throughout the country. This is not just about how skills provision is fairly spread geographically, but also about how well-paid, high-skills jobs are to be created in areas outside London and the South East which have lagged behind economically. It’s a tough problem because there’s inevitably a “chicken and egg” element to it; if skilled people are trained up in areas with few skilled jobs, the risk is they’ll move to other areas to find work, while if skilled jobs are created in areas with low skills, employers will have no choice but to import labour from elsewhere. To square this circle needs careful timing to synchronise skills supply with demand, and careful tailoring to local circumstances, which is why the LEI’s report in partnership with City and Guilds (“Making Skills Work: The Path to Solving the Productivity Crisis”) called for Regional Skills Observatories to be developed across the country.

Reservations about the prospects for the new agency centre on two areas of concern. First, is the decision to make Skills England an internal DfE agency rather than a legally established separate body. Will it have enough clout within government to be effective? Probably not, but this shouldn’t matter. Given it will in essence have an influencing role, we believe it’s effectiveness will depend primarily on the quality of its work and the credibility of its leadership, and the appointments made so far are reassuring on that front. It’s the DfE that will exercise any clout required, not Skills England.

The second concern is whether it will be able to cope with the sheer range of functions with which it has been tasked – it’s already been labelled a “Swiss army knife” of an agency for this reason. We would ask the opposite question; how can Skills England work without taking on a wide range of functions? Going back to our engine-management analogy, any effective coordinating function has to be able to process a complex array of signals from the labour market or it simply won’t work well enough. Similarly, it has to turn these multiple inputs into well-calibrated outputs, in terms of practical advice to politicians, government departments, training providers, employers and job seekers. Yes, it’s complicated, but so is the problem we’re all trying to solve.

Over the next few months we’ll be asking a range of sector experts – from both FE and HE - how they evaluate the prospects for Skills England. It’ll be fascinating to pick the brains of such experienced figures as Alun Francis, College Principal and Chair of the Social Mobility Commission on 14th May, David Hughes, CEO of the Association of Colleges on 10th June, Dame Sally Mapstone, President of St Andrews University and current Chair of Universities UK on 26th June, and leading economist and Director of the Institute for Fiscal Studies, Paul Johnson on 2nd July at our Summer Lecture & Reception.

As England’s skills orchestra tunes up in preparation for its new conductor to take the stage, it’s the perfect time to hear from some of our leading players.