Beyond Brexit: What are the new Government’s plans for developing skills and embedding good work?

By Melanie Wilkes, Senior Policy Advisor

This week has seen plenty of speculation about what the new Government plans for the UK labour market, with rumours of limiting worker rights through the EU Withdrawal Bill; enhancing rights through a new Employment Bill, and an unconventional intervention encouraging employers to increase workers’ pay.

Here at the Work Foundation, we’ve been reviewing the Conservative Party Manifesto to understand what the new Government holds in store for the UK’s workforce and employers.

While the manifesto came under fire for being light on detail, at closer reading it did provide some indications for the potential areas of focus we’ll see over the months ahead.

The context – what is the current landscape for employment and skills?

In 2017, the Government commissioned an independent review of modern working practices. This highlighted the challenges affecting many British workers, including disparities in entitlements and protections experienced by workers with differing employment status. In response, the then Government developed the Good Work Plan, alongside a series of public consultations on Taylor’s proposals regarding employment status and transparency and enforcement of rights.

Over the same year, the Industrial Strategy was launched, and was closely followed by a series of sector deals to facilitate innovation and enhance productivity.

Alongside this, the Improving Lives consultation and paper and the Farmer/Stevenson review of mental health and employers  sought to understand the barriers faced by disabled people and people with long term health conditions in entering and staying in work, and changes needed in support available. Following these papers, a series of pilots have been set up to test new approaches to employment support, and a voluntary scheme has been introduced for employers to report on disability, mental health and wellbeing.

What are the Conservatives ambitions for working life in the UK?

We’ve considered what the manifesto set out for lifelong learning and skills; fairness at work; productivity; and communities and places across the country.

Skills

The Conservative party manifesto included a new National Skills Fund to match-fund training for individuals and small businesses, worth £600 million in new funding each year. Alongside this, additional skills funding could come through using £500 million of the UK Shared Prosperity Fund to “give disadvantaged people the skills they need to make a success of life”.

The party has also committed to focus on apprenticeships, with a plan to review how the Apprenticeship Levy can be improved.

Our recent evidence scoping exercise looking at skills, talent and diversity within creative industries highlighted that as demand for creative skills and roles is growing across the economy, supply of talent is failing to keep apace and current learning pathways aren’t well aligned to the industry’s needs. Previous research we conducted on demand for skills within Construction similarly found pronounced challenges, with more than half of construction sector firms reporting they were experiencing skills shortages, and progression beyond level 1 qualifications is limited.

A consultation is planned on the design of the Skills Fund, and it is clear that engagement with employers and industry stakeholders will be essential to the success of the scheme.

Fairness at work

It’s positive to see a statutory entitlement to leave for working carers included in the manifesto. This is something we called for through our 2018 research on the experiences of working carers. However, our research also highlighted the impact of financial insecurity on the wellbeing of working carers, and so it is disappointing that this entitlement will be limited to unpaid leave.

Another step to address barriers to entering and progressing in work faced by some groups came with the commitment to “reduce the disability employment gap”, a reference to the difference in employment rates of disabled and non-disabled people within the UK. That said, this is notably less specific than the commitment to support 1 million more disabled people in to work made by Theresa May’s Government in 2017.

A new £1 billion fund for childcare could be a significant boost for working parents too, particularly given the commitment to look at provision during school holidays as well as before and after school.

Flexible working is increasingly highlighted as an effective way of supporting disabled workers, working carers and parents to thrive at work, so the Conservatives plan to consult on making flexible working ‘the default’ in most circumstances is welcome. There’s real potential here: Work Foundation research found that 7 in 10 workers we surveyed had not had the opportunity to work remotely.

Productivity and Communities

The Conservatives have committed to increase the Research and Development Tax Credit from 12% to 13% of qualifying spending. Crucially, they also plan to review the definition of R&D so that investments in cloud computing and data are also included.

The manifesto emphasised the importance of decision making beyond Whitehall, with an English Devolution White Paper to come in 2020. A new Towns Fund will target funding for economic development across 100 towns.

So, we can expect new funding to be channelled in to local communities and lifelong learning, and a greater expectation on employers to offer more flexibility to workers. Less clear are the future direction of ongoing programmes on work quality, workplace wellbeing and support for workers who are disabled or experience mental or physical health problems. We’ll also be looking for more detail on the new Skills Fund, and on the scale of ambitions and funding for apprenticeships, and work to recruit and retain disabled employees over the coming months.