Skills England has marked its inaugural anniversary by releasing its first Annual Skills Report, providing a wide-ranging evaluation of the nation's current and future training requirements.

The release follows last week's interim report into young people and employment by Alan Milburn, which revealed that close to one million individuals aged between 16 and 24 are currently not in education, employment or training (NEET). This stands in stark contrast to new data from Skills England indicating that employment demand across key growth sectors is projected to rise by approximately 24% over the coming ten years, creating a need for an additional 1.8 million personnel.

These parallel trends highlight the pressing requirement for a more flexible, high-calibre skills framework that can adapt to a rapidly shifting economy while creating clear pathways for young individuals. By examining ten priority sectors vital for economic expansion, the report establishes a roadmap to strengthen the training framework, support the national Industrial Strategy, assist small and medium-sized enterprises (SMEs), and help people transition into stable careers.

The publication outlines five central challenges alongside the specific initiatives Skills England intends to implement:

With demand for critical occupations expected to surge by nearly 25% over the next decade, a strong focus will be placed on upskilling and reskilling the current workforce. Skills England plans to assess and alter the current combination of technical education and apprenticeships to ensure training matches live labour market demands.

To counteract a sustained drop in funding from businesses and help SMEs that find the current framework difficult to navigate, Skills England will leverage data, AI-driven insights, and a fresh network of specialists. This approach aims to rapidly modernise training options, providing the short courses and apprenticeships businesses need to upskill their staff.

While AI is set to transform nearly every industry, the speed of implementation and precise future staffing needs remain unclear. In response, Skills England will establish and integrate fundamental AI capabilities into technical training programmes to help workers adopt emerging technologies quickly.

-- Advertisement --

Following warnings from the Milburn Review that the NEET population could escalate to 1.25 million in the coming years, combined with corporate feedback regarding a lack of career readiness, Skills England will team up with bodies such as Youth Employment UK. This collaboration will focus on improving how businesses value core employability skills and expanding access to high-quality work placements.

To ensure national strategies enhance regional economies, Skills England will collaborate with Strategic Authorities and local stakeholders to better align regional training provision with available vacancies. Additionally, the Skills England Investment and Infrastructure Service will offer specialist guidance to major projects to assist businesses in building a qualified local workforce.

The findings stress that these deep-seated issues cannot be solved by any lone entity, calling for deeper integration between corporate leaders, training providers, regional authorities, and central government.

Baroness Jacqui Smith, Minister for Skills: "Today's report highlights the importance of making sure our workforce has the skills it needs today, while preparing for the demands of tomorrow. With 1.8 million new priority jobs expected by 2035, we are determined to keep this country at the cutting edge of fast-growing sectors like AI and the creative industries. Our reforms to the apprenticeship and skills system, alongside continued engagement with employers, will ensure people can build long lasting and fulfilling careers that work for them and the wider economy."

Phil Smith, Chair of Skills England, said: "We're expecting strong growth in priority jobs, which presents a huge opportunity for the UK. But to realise it, we must urgently address the skills gaps holding people and businesses back. The Milburn review findings made clear the scale of the challenge, particularly with so many young people currently not in education, employment, training. Employers – especially small and medium-sized businesses – also have a critical role to play in investing in apprenticeships, training and reskilling staff. I'm proud of what Skills England has achieved in its first year. This report sets out how we will work with partners across the system to tackle these long-term challenges and make sure people and businesses can thrive."

Laura-Jane Rawlings MBE DL, CEO of Youth Employment UK, said: "Skills England's first Annual Skills Report lands at a critical moment. With more than one million young people now not in education, employment or training, and demand in priority sectors set to grow significantly, we have to connect the youth employment challenge with the skills and workforce needs of the economy. Young people are not short of aspiration, but too many are still locked out by unclear pathways, limited access to work experience, uneven local support and employers who often want to help but find the system difficult to navigate. A more responsive skills system must make it easier for employers, especially SMEs, to invest in young talent and to understand the practical steps they can take. Youth Employment UK welcomes Skills England's focus on employability, employer engagement and place-based skills systems."

Sara Todd, Chief Executive of Trafford Council, said: "It's great to see Skills England shining a light on how much Place matters when it comes to skills. What works in one area won't always work in another, and local leaders know their economies best. Strategic Authorities are already bringing businesses, providers and communities together to make training match real jobs. This report recognises that and backs a more local approach. If we keep building on that, we can make it easier for people to get the skills they need and help local economies grow in a way that works for them."