People and Skills December Roundup

Before the Industry Growth team heads off for the holidays, we wanted to share a few updates on recent publications and events of the past few weeks including a Skills England webinar on Advanced Manufacturing Skills, the DWP White Paper ‘Get Britain Working’,  the MAC Annual report and a report on compliance and enforcement of the National Minimum Wage in 2024.

If you have any questions on the below, Tanya will be working until lunchtime on 24^th December, and we will be back at work on 2^nd January. We wish you all a wonderful holiday season, and look forward to continuing to work together in 2025. 

Caroline, Tanya and Iliana

Skills England Advanced Manufacturing Skills webinar

On 25^th November, Skills England hosted a webinar on Addressing Skills Needs in Advanced Manufacturing with 44 attendees including a few representatives from food and drink manufacturing and officials from the Department of Education.

Skills England covered key points from its recent report: Skills England: Driving growth and widening opportunities. A few points to note:

• Advanced Manufacturing definition: Production processes that integrate advanced science and technology, including digital and automation, to manufacturing. Importantly ‘advanced’ refers to production processes rather than product.  FDF is working closely with DBT and Defra to ensure food and drink is included in the advanced manufacturing priority sector of the government’s Industrial Strategy.
• The manufacturing sector has the third highest skills shortage density (behind social care and education sectors) – with 42% of all manufacturing vacancies being hard to fill in 2022. Existing key shortages from across the sector include: metal machining setters and setter operators, sheet metal workers, welding trades, electroplaters and laboratory technicians.

Feedback from employers in the session included:

• Skills gaps are not consistent across even Advanced manufacturing - sub sectors are different but there are consistencies e.g. engineering

• Important to note regional differences and the lack of consistent funding 
• Perception of Manufacturing adds to the labour & skills issues
• Standards need to be broader - the move away form frameworks have led to a narrowness which isn't always helpful
• A plea not to change the whole skills system – there are some things that work well and we’d want to keep – and to ensure that changes are incremental – evolution not revolution
• Importance of Level 7 Apprenticeships and higher technical skills that will be needed for economic growth (one of the government’s key missions)
• Massive please to simplify the system for SMEs and ensure there is sufficient funding for them 
• Need to link demand to supply of training provision rather than just leaving to market forces
• Need for a flexible modular system for upskilling 

Skills England and Department of Education officials are now taking feedback away to review and provide advice to Ministers this month.

DWP ‘Get Britain Working’ White Paper

In November 2024, the Rt Hon Liz Kendall MP, Secretary of State for Work and Pension, published the Department for Working and Pension White Paper ‘Get Britain Working’.  The White Paper sets out the different approach the labour government is taking to tackle the employment rate fall, transform the health system, assess the economic inactivity and drive investment.

Key findings from the paper:

• In the last five years Britain's employment rate has fallen significantly, noting the key role of the existing health system and its inability to support people of all ages with long term health issues.
• The government plans to take action and achieve an 80% employment rate, restoring Britain's former economic activity.
• To achieve this, the focus will be to break down barriers to opportunity and rebuild the labour market.
• The new Industrial Strategy and Local Growth plans, the Plan to Make Work Pay and its intention to bring together skills and health to reform the employment support via the newly presented White Paper, are key to reach its goal.
• The Paper also recognises the impact that Covid-19 has had in the economy along with demographic and technological changes.
• Amongst the key areas the government is planning to take action in are:
• contribution of the NHS,
• local support by mayoral authorities,
• delivery of a Youth Guarantee,
• creation of a new jobs and careers service and
• the role of UK employers in promoting and maintaining a healthy work environment.

The Government will bring forward a Green Paper in spring 2025 recognising the need for a change to the system of health and disability benefits across Great Britain,. In its effort to fix the foundations of the economy, the government will work closely, across devolved administrations, with Jobcentre Plus, the National Careers Service, several providers and voluntary organisations and more, including colleges, universities, trade unions and the NHS.

Migration Advisory Committee Annual Report

On 17^th December, the Migration Advisory Committee (MAC) published their annual report outlining the findings from their various commissions from 2024, including the creation of the Immigration Salary list and a review of the Graduate Route. It also covers an analysis of current migration data with recommendation to support the government’s policy to reduce net migration.

Key findings from the report include:

• Net migration between 2021 and 2023 was unusually high, mainly as a result of increased international students and non-European Union (EU) work immigration through the Skilled Worker route (most noticeably in health and care occupations).
• Linking immigration and skills policy is not a ‘one-size-fits-all’ approach and it is important to consider the individual circumstances within sectors and occupations, including diagnosing whether shortages are genuinely driven by lack of skills or are due to poor pay and conditions of certain roles.
• Increasing the level of skills in the domestic labour pool does not guarantee a reduction in the reliance on the immigration system as migrant and domestic workers area not perfect substitutes and employers will often still seek the best possible match for their vacancy, which may be an international recruit.
• Therefore, the impact of investment in skills on immigration will vary by sector and occupation.

Interesting facts from report:

• From the 2022 sector-level data,  the proportion of vacancies in a sector caused by skills shortages were most concentrated in:
• Construction (52%)
• Information and Communications (43%)
• Manufacturing sectors (42%)
• Institute for Fiscal Studies estimate that average employer spending on training has fallen by 27% in real terms between 2011-2023.
• Falling apprenticeship availability in the UK is part of a landscape of falling investment in domestic training.

Future Work:

• The Home Secretary has set out the intention to launch a new Quad framework between the MAC, Skills England , the Industrial Strategy Council (ISC) and Department for Work and Pensions to address systemic long-term issues that have led to reliance from certain sectors on international recruitment, and where appropriate to reduce that reliance.
• MAC have asked government for greater clarity on how the Devolved Government’s will be included in the Quad Framework.
• In order to link devolved skills policy with immigration policy (stated as a goal of government), the different approached to askills across the UK and how the interact with a UK-wide immigration system must be considered. However if these challenges are no addresses, it could lead to unintended consequences for parts of the UK’s labour market.

Low Pay Commission report on Compliance and enforcement of the National Minimum Wage in 2024

On 19^th December the Low Pay Commission (LPC) published their annual report on compliance and enforcement of the National Minimum Wage (NMW).  The report recognises that with the new government a period of transition has begun with the Employment Rights Bill and the proposal for the creation of a new single enforcement body, the Fair Work Agency (FWA).  The FWA would bring together enforcement of the NMW alongside other workers’ rights.  The LPC sees this as an opportunity to address the shortcomings of the current approach to enforcement, but recognises that design and approach will be key to ensure that the new enforcement body works effectively.

The headline finding of the report is that an estimated 371,000 workers were underpaid in April 2025. This is slightly increased from 2023 but is below the estimated numbers from the pre-pandemic period.  Looking at the sector breakdown, food processing showed only slight increase in minimum wage underpayment levels of the adult rate since 2019, but with overall numbers lower than most UK sectors.

Key recommendations to the Government include:

• Government is urged to ensure adequate information is available for employees to know where and how to complain about underpayment.
• Government should look at improving the guidance on work type and the differences in calculated working time between salaries and unmeasured work.
• Ensure more regular naming rounds to create momentum and increase coverage.
• Expand the data HMRC collects on its caseload including:
• Whether underpayment is formal or informal
• The characteristics of underpaid workers involved
• The working arrangements of underpaid workers