Friday 15 November 2019 4:58 am

Laugh about the Lib Dems’ skills wallet all you like, but we’re all going to want one

It is hard to think of a more unsexy name for a policy than the “skills wallet”.

Juxtaposing two profoundly unexciting terms (as policy areas go, there’s nothing fun about skills, and “wallet” is the kind of word that starts to sound wrong if you say it in your head too many times), the Liberal Democrats’ announcement this week was never going to cause much of a stir, except to be sniggered at by mocking journalists.

That’s a pity, because name aside, the Lib Dems are spot on. 

Their idea centres on adult education. Every UK citizen would get an allowance of £10,000, paid in installments at various ages, to be spent on education and training throughout their lives.

Labour has an even more ambitious plan: six years of free education for all adults, to enable everyone to study and retrain when necessary at any age.

There are some significant issues to iron out with both these policies. 

As Lib Dem detractors have been quick to point out, £10,000 barely covers the first year of university tuition fees, so is hardly sufficient for a lifetime of learning. 

Labour’s policy, meanwhile, looks wonderful until you consider both the bureaucratic hurdles of implementing it (who decides what courses are eligible, what kinds of institutions will offer them, and how do we hold them to account?), and the seismic costs to taxpayers. 

Labour has priced the proposals at £3bn per year — which, while substantial, does not seem nearly enough, considering that each university cohort costs the taxpayer £8.5bn already, according to the Institute for Fiscal Studies. Expect costs to spiral

Still, what both of these proposals get right is that adult learning can no longer be considered an afterthought tacked on to “proper” education policy; it is a core part of education policy — and business and economic policy too, come to that.

On the one hand, Britain faces a skills crisis. The CBI’s London Business Survey this year found that 74 per cent of companies cited attracting and retaining talent as their top policy priority, while according to vocational education charity The Edge, skills shortages cost UK businesses £4.4bn per year. 

On the other hand, the workers that we have do not have the skills they need. The OECD estimates that up to 42 per cent of the UK population will need to retrain in the next decade to stay relevant, but that’s probably an understatement.

Look at the demographics. A 2009 study found that, if the current trend continues, over half the babies born in developed countries from 2000 can expect to live to 100. The first person to live to 150 years old has probably already been born. 

And as longevity rises, retirement ages are likely to increase too. Even if we don’t all make it to 100, most of us can look forward to at least five decades in the workforce — a workforce that is changing rapidly, with constant progress in automation and artificial intelligence fundamentally changing how we work and the skills we need to stay relevant. 

So if businesses are struggling to recruit now, how on earth are they going to be able to function if nothing changes?

With these demographic and technological shifts in mind, the idea that someone could study at school until they were 18, do three years of university or vocational training, and then be fit for a lifetime in the workforce is utterly ludicrous. 

How can we expect teenagers to predict the skills they will need in the future when we have no idea what the jobs will be? 

Even the most skilled 21 year olds today can expect to be redundant by halfway through their working lives if they are not able to retrain. And that’s to say nothing of those leaving school without employable qualifications right now. 

Lifelong learning, in other words, will be critical for all of us. And expecting individuals to shoulder the entire financial burden themselves, at a time of insecurity when they’ve just become unemployable, is not sustainable, from the point of view of businesses or social mobility.

This isn’t a class issue, or a matter of ideology — it’s fundamental to future-proofing our society.

While adult education has for decades been considered a backup plan by various governments, with the emphasis placed firmly on getting as many young people as possible into universities, we simply do not have that luxury anymore. 

Everyone is going to have to retrain, probably multiple times. And our educational landscape is going to need to adapt to reflect this culture of constant learning.

Of course, whether this retraining is organised by the government (via Labour’s lifelong learning scheme, out of general taxation), businesses (via the current apprenticeship levy, whereby firms can — theoretically — tap into levy funds to upskill their employees), or individuals themselves (via a skills wallet like the Lib Dems are offering) requires further discussion. 

We can argue the details, and your view will likely be influenced by your political ideology. But what is not up for debate is that, for the sake of the economy and the fabric of our society, some kind of lifelong learning provision is vital. 

This isn’t an election gimmick — it’s the only way to ensure that Britain’s workforce remains fit for the future. So laugh about the skills wallet all you want, but in a decade’s time, we are all going to wish we had one.

Main image credit: This Is Engineering

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.