Labour Party Conference: Key takeaways on skills

Enginuity attended this year’s Labour Party Conference in Liverpool, which featured Government commitments on skills alongside a wide range of discussions on skills and further education at the fringe events. Below is a summary of the key insights Enginuity gathered from these discussions.

Key announcements 

PM announces new target to get young people into FE 

Prime Minister Keir Starmer used his main conference speech to announce a new goal two-thirds of young people to get higher-level skills, either through university, further education, or a “gold standard” apprenticeship by age 25. Starmer said this would replace the “target” of getting half of young adults into higher education, symbolically set by Tony Blair in 1999, that Starmer said is no longer “right for our time”.  

The PM explained “If you are a kid or a parent of a kid who chooses an apprenticeship, what does it say to you? Do we genuinely, as a country, afford them the same respect?” Downing Street said this target will include “at least 10 per cent of young people pursuing higher technical education or apprenticeships that the economy needs by 2040, a near doubling of today’s figure”.  

Starmer told the conference: “I can also announce, that further education, so long the Cinderella service, ignored because politicians kids don’t do it, we will make it a defining mission of this Labour government, with higher standards in every college, the quality of teaching raised, more apprenticeships, more technical colleges, technical excellence colleges, qualifications linked to jobs rooted in their communities”.  

The PM also announced that the Government will also place “nearly £800 million” funding into 16 to 19 education next year from the existing spending review settlement, including the creation of 14 new technical excellence colleges. Officials have also revealed colleges will be held to account by new “regional improvement teams” and gain new awarding powers, with details expected to be set out in the upcoming post-16 white paper due by the end of the year. 

Chancellor commits to youth guarantee  

Chancellor Rachel Reeves also used her conference speech to make an announcement on further education, committing to abolishing youth unemployment by “guaranteeing” a job or training place for 18 to 21-year-olds on long-term benefits. The “youth guarantee” aims to combat rising numbers of young people not in education, employment or training (NEET), with the Chancellor saying the Government is committed to “nothing less than the abolition of long-term youth unemployment”.  

The Treasury said the youth guarantee will “build upon existing employment support and sector-based work academies currently being delivered by the Department for Work and Pensions”. The guarantee will include a “targeted backstop, where every eligible unemployed young person on Universal Credit for 18 months without earning or learning will be provided guaranteed paid work”. Participants will receive “support to take advantage of available opportunities, with the aim of helping them transition into regular employment”. Full details, including eligibility criteria and the structure of placements, are expected in the budget on 26^th November. 

Work and Pensions Secretary signals shorter courses in levy 

Work and Pensions Secretary Pat McFadden, who has recently inherited the skills brief that has moved from the Department for Education, said at conference that whilst it is “early doors”, he wants “shorter courses” to become more available for employers. McFadden said: “The traditional first visit for a new secretary of state at DWP is to a job centre. They said, do you want to go to a job centre and I said, well, no, we’ve just taken on skills, I should go to an FE college”. He then described how Waltham Forest FE College where he visited, has a job centre already present to make the job centre offer more flexible. 

Fringe discussions 

• Overall themes: whilst this year’s Labour conference fringe saw a reduction in the frequency of events related to skills – which last year were peppered throughout the entire agenda – this year took a more focussed look at specific skills issues. These were: NEETs and youth, industrial strategy and sectoral plans, levy reform, green skills.  
• Picking winners (and losers): Antonia Bance MP noted the significance of the industrial strategy in setting the Government’s vision for industry for the next decade. She suggested that the Government’s approach is to pick winners, and as such some sectors unfortunately weren’t selected, though this is required for providing certainty with such a vision.  
• Levy reform: Darren Pafffey MP suggested that the high number of NEETs represents the “scandal of our time”, and as such government is rightly looking to address this – he described skills as “the growth strategy”. Paffey pointed to his Select Committee’s findings to a) simplify the system b) for UCAS to cover vocational courses in addition to academic c) for literacy and numeracy to be embedded into vocational courses, alongside financial literacy and d) for reintroduction of levy funding for level 7 apprenticeships. 
• V-levels: Skills Minister Jacqui Smith hinted that an additional route would appear in addition to A-levels and T-levels, with more detail expected in the post-16 strategy. According to a government source following this, V-levels will be pitched as “sector-specific” qualifications next to T-levels, which are “occupationally specific”. More widely, the Minister set out three priorities the Government are looking at on skills – 1) making the apprenticeship levy work, transforming from a failure to a flexible and responsive model 2) developing the lifelong learning entitlement, particularly for missing levels 4 & 5 where the UK lags behind international competitors, and 3) governance through Skills England to understand skills gaps. Minister Smith suggested Secretary of State for Work and Pensions Pat McFadden “understands there is more to be done on adult skills” in addition to NEETs. When asked about recycled levy funds, the Minister suggested that “99%” of the levy gets spent, and that there are not unused funds.  
• Policy chop and churn: the Fabian society suggested that if higher education had seen the same number of changes as the skills landscape, people would be “aghast” and that this disparity is unfair and unequal. A difficult balance will therefore need to be found between addressing the need for reform of skills and injecting long-term stability into the system and end continual policy chop and change. The Fabian Society’s research suggests that the apprenticeship levy has failed on three fronts: 1) apprenticeship numbers have fallen 2) social mobility has worsened due to investment shifting away from deprived regions 3) employer needs haven’t been met, stifling productivity. Recommendations from the Fabian society call for a flexible and strategic approach to the Growth and Skills levy, for rebalancing the system away from graduates and towards young people and lower-level qualifications, and for expansion of increase of the levy by lowering the threshold at which employers pay to £1 million.  
• SMEs and falling apprenticeships: the CIPD noted that the lack of SME access to funds has driven the collapse of apprenticeship numbers – SMEs account for 97% of the drop in numbers. CIPD suggest that demand has been largely ignored in the first year of Labour’s government, which instead has focussed on supply. Recommendations include delivering the flexibility promised within the levy by providing stackable modular learning, link the lifelong learning entitlement to the levy, and review value of the expansion in management and leadership training.  
• Holistic approach: Centre for Cities convened a discussion with mayors that all stressed their holistic approach to skills and growth – focussing not just on FE colleges and universities but exposing young people to the world of work in primary and secondary education. Several of the mayors have cross-sector strategies linking education, workforce, housing, transport and childcare.  
• Addressing NEETs: the Youth Future Foundation illuminated how employment and youth services are designed in silos. Their proposal is for trusted adults can act as a bridge – helping young people build confidence, connect with evidence-based interventions and find their path. Insights from two Youth Guarantee Trailblazer areas have demonstrated how youth sector provision can be leveraged to target employment and skills support towards harder-to-reach inactive young people. 

Our take

Our team shared their thoughts on the key discussions impacting the sector: 

Ann Watson, CEO of Enginuity, said: "The success of the United Kingdom has been built on the skills, talent and ingenuity of its people.  It was heartening to see today the Prime Minister put skills central to economic recovery and productivity.

"We particularly welcomed the removal of the 50% university target which will focus on the skills someone has gained not the journey taken to attain them.  It is a very positive step forward in recognising that both University and Vocational Education are equally valid routes to gaining knowledge and skills.

"With SMEs at the heart of what Enginuity does, the sustained funding and support for SMEs to access apprenticeships including help with non-training costs and release time for staff to mentor apprentices will be welcomed by the 99% of small and medium sized enterprises within the manufacturing sector."

Nicola Dolan, Associate Director ‑ Charity Operations and Impact, added: "We welcome the Prime Minister’s clear and meaningful commitment to skills and apprenticeships in today’s speech. The pledge to create 14 new Technical Excellence Colleges and invest £800 million into 16–19 education represents a bold step towards rebalancing the education system and placing technical routes on an equal footing with academic ones.

"As a charity working closely with employers — particularly SMEs — we see first-hand the urgent need to close skills gaps and raise productivity across sectors. Today’s announcements send a strong signal that the government understands the central role skills must play in economic growth. To turn this ambition into impact, support for SMEs must be front and centre — including help to navigate the system, engage with schools, and take on apprentices. We look forward to working with government and industry to ensure this renewed focus delivers for young people, employers, and the wider economy."

For any questions, please reach out to [email protected].