Expenditure fails to bridge the skills gap

The Public Accounts Committee (PAC) reported back in January that:


“Despite the Department (for Innovation, Universities and Skills) spending £5 billion between 2001 and 2007 on trying to improve the levels of literacy and numeracy, England still has an unacceptably high number of people who cannot read, write and count adequately.”


The Government’s target of 95% functional numeracy and literacy by 2020 will – the PAC observed – also only bring the UK up to the current level of the OECD’s top 25%. Indeed the Chief Executive of the UK Commission for Employment and Skills believes the UK is “unique” within this group for its lack of basic skills.


A relatively large population of under-skilled adults provides employers with a serious headache. Unable to find suitable candidates, businesses are now spending more equipping their workforce with the core skills it needs. The failure of the education system – stretching back through generations and governments – is a tragedy on many levels, but its detrimental effect on the economy is becoming a serious problem.


Clearly the Government’s investment was aimed at an area of need, with the potential returns of a skilled and more productive workforce enormous. Many illiterate and innumerate adults will would gain from more education, and many more would welcome the opportunity to expand their skills set. But unfortunately the money – £5 billion between 2001 and 2007 – seems to have been misspent, with the PAC suggesting that the Department for Innovation, Universities and Skills even lacks the national and geographical information of skills distribution in the UK necessary to “be sure that its programmes are equipping people with the skills that the UK economy needs to remain competitive”.


Spending £5 billion (with planned rises to £9 billion by 2011) without correctly targeting the money demonstrates a profligacy that is not only bad for the taxpayer but also constitutes a real failure to those who need the help. Many people are ill-prepared to competently operate in the workforce, and on a national level, skilled labour would be a real bonus in the midst of this economic crisis. If DIUS “cannot be sure” its spending is hitting the mark then more good money is simply going to follow bad, and too few people are going to benefit.

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