Skills system is a mess – top retail exec tasked with sorting it out
Richard Pennycook, former chief executive of the Co-operative Group has been tasked by the government to sort out the “fragmented and broken” skills system as the first independent chair of Skills England.
Prime Minister Sir Keir Starmer and Education Secretary Bridget Phillipson launched Skills England at the Farnborough Air Show today (22 July 2024) to “bring together the fractured skills landscape and create a shared national ambition to boost the nation’s skills.”
A major overhaul of the apprenticeship levy – a 0.5% payroll tax on largest employers – will see it renamed as the “growth and skills levy” but will give businesses more flexibility in how they spend “levy funds”.
Adult education budgets will be simplified and devolved to Mayoral Combined Authorities to ensure that they can address their adult skills needs directly and support growth in their areas.
Philipson said Pennycook, who is also the lead non-executive director at the DfE, will identify the training for which the growth and skills levy will be accessible – an important reform, giving businesses more flexibility to spend levy funds on training for the skills they need, which employers have long been calling for.
Hailed as the man who “saved the Co-op” after he joined on an interim basis at the height of its crisis in 2013, before taking over as chief executive in 2014 when the former boss Euan Sutherland resigned after 10 months in the job.
He also volunteered a pay cut from £1.25m to £750,000 whilst at the Co-operative Group.
His other business interests include chairing Howdens Joinery Group plc, 2 Sisters Food Group, and On the Beach plc. He is also co-chair of the Retail Sector Council. He has also held board roles at Morrison, RAC, Laura Ashley, J D Wetherspoon, and THG. Pennycook was awarded a CBE in the 2020 Birthday Honour’s list for services to retail.
Starmer at Farnborough Air Show
In a statement on Skills England today, prime minister Keir Starmer said: “Our skills system is in a mess, which is why we are transforming our approach to meet skills needs over the coming decades.”
He added: “From construction to IT, healthcare to engineering, our success as a country depends on delivering highly skilled workforces for the long-term. Skills England will put in place the framework needed to achieve that goal while reducing our reliance on workers from overseas.”
Education Secretary Bridget Phillipson said the new Labour government had inherited a “fragmented and broken” skills system and that didn’t work for employers or workers.
“Skills England will jumpstart young people’s careers and galvanise local economies. It will bring businesses together with trade unions, mayors, universities, colleges and training providers to give us a complete picture of skills gaps nationwide, boost growth in all corners of the country and give people the opportunity to get on in life,” she said.
Skills England will recruit a CEO and work on an assessment of future skills needs while building strong relationships with employers.
The Institute for Apprenticeships and Technical Education (IfATE) will fold into Skills England and the government will bring forward a comprehensive strategy for post-16 education to break down barriers to opportunity, support the development of a skilled workforce, and drive economic growth through our industrial strategy.
Kate Shoesmith, deputy chief executive of the Recruitment and Employment Confederation (REC), said: “The urgency with which the new government is setting out to lessen worklessness and to encourage ambition among employers and workers is hugely encouraging because they are key to achieving greater prosperity, productivity and economic growth.”
Lizzie Crowley, skills adviser for the CIPD, said: “The new agency must join up policy across the government’s industrial strategy, the Migration Advisory Committee and local skills and growth priorities. This is no easy task. It’s a challenging road ahead but it’s vital that the government sees this as a long-term project that can finally bring stability and certainty to the skills agenda.”
Anthony Painter, Policy Director at the Chartered Management Institute (CMI), said: “CMI welcomes the Prime Minister and Education Secretary’s plan to address the UK’s skills needs and boost the economy by creating opportunities for young people, and providing increased support for British businesses to recruit more home-grown talent.
“The UK skills gaps, including the significant shortage of skilled managers in our economy, will not be addressed without this concerted, longer term approach to upskilling our workforce at every age and stage of people’s working lives.
“Our research shows that quality standards-based training such as management apprenticeships deliver significant productivity gains and support social mobility. Seven out of 10 (71%) of management apprentices come from families where neither parent attended university and this level of upskilling is raising the performance of business and in our valued public services while driving economic growth and ensuring people have the skills they need in a changing workplace. We look forward to seeing Skills England established as the change agent that will significantly elevate the UK’s skills landscape.”
