Flexible working could increase wellbeing and productivity, but benefits are not equally distributed throughout the population and could increase inequalities.
Overview of change
As part of its 2019 General Election manifesto the UK Government committed £3 billion over 5 years, from 2021, to a National Skills Fund to retrain and upskill the adult workforce to meet identified skills gaps, including in digital skills.1 The COVID-19 pandemic has since brought significant disruption to parts of the UK labour market and has had unequal impacts on different groups. Experts are concerned that the pandemic will exacerbate skills gaps in the existing and future workforce and widen inequalities.2 Adult education and retraining policies will be needed to help adults upskill and retrain to enter, or move back into, the workforce or move to different sectors.3 The benefits of adult skills and lifelong learning are well-evidenced and include benefits for productivity and the economy, for health and well-being, and for social justice and communities.4
Challenges and opportunities
There are currently significant skills gaps, and it is reported that by 2024 there will be a shortfall of four million highly skilled workers.4 The UK faces a range of future skills and employment challenges, in part from the Fourth Industrial Revolution, the changing nature of work and an ageing population. The new skills-based immigration system introduced from 1 January 2021 will mean sectors such as adult social care, hospitality and construction will have to recruit from the resident labour force, creating further impetus to increase skills and boost employment.1,5 Training and workforce development are key to addressing current and future skills shortages and skills gaps, and to improving productivity and international competitiveness.6 This includes the need to meet the health and care needs of an ageing population and to build a green economy to meet the UK’s commitment for net zero by 2050.7 There are also benefits for health and well-being, and for social justice and communities.4 However, adult participation in learning is falling and is not distributed evenly across society.8 The poorest adults with the lowest qualifications are the least likely to access training.9
The COVID-19 pandemic has impacted heavily on the economy and specific sectors, including hospitality, leisure and non-supermarket retail.10 Experts are concerned that the pandemic will exacerbate skills and employment challenges and widen inequalities.2,11 It has increased unemployment among young people (aged 16–24 years old) and older workers (aged over 50 years old).12 Hundreds of thousands of older people may be unable to return to their previous jobs as some sectors struggle to recover. There is little sign that workers are reallocating to less-affected sectors of the economy.13 Involuntary job loss can result in adverse psychological effects and may also increase some types of criminal activity.14 Older workers who lose their jobs are far more likely to slip into long-term worklessness than younger workers.15 Prior to the pandemic, more fathers than mothers were in employment.16 Research indicates that the pandemic has led to a major setback for gender equality, especially for mothers of young children and single mothers.17,18 However, some experts have queried whether new ways of working following the pandemic may encourage a more equal division of domestic labour within households in the future.19 Research shows that literacy and numeracy skills are vital to employability.20 Addressing gender differences in these skills may increase equality and women’s confidence as leaders in the workplace.21–25 Initiatives could be targeted at parents, as a child starting school can motivate parents to improve their own skills.1 Ethnic minority groups also experience disadvantage in the labour market that persist over generations, in spite of the high levels of educational achievement of some groups. Throughout the pandemic, pre-existing inequalities across a range of areas have made the impact of the pandemic more severe for people from ethnic minority communities than for people from White communities.26,27 Different interventions and approaches may be required to support different groups to train and access work opportunities.28,29
In December 2020, the Commons Education Committee called for a comprehensive and holistic long-term strategy for adult skills and lifelong learning.4 In January 2021, the UK Government published a white paper on Skills for Jobs, setting out planned reforms to the further education and technical training system to improve the skills of adults.5,7
Further analysis is needed to identify where the UK’s immediate and longer-term skills needs lie to ensure that reforms to adult skills are properly linked to needs at local and national levels.4,30 The long-term impacts of COVID-19 on unemployment and inequality in the workplace are unknown. There are concerns about how adults in insecure and low paid jobs will be supported to access training and retraining. Longitudinal data could be used to better understand the association between training and returning to work or changing industry, and whether different kinds of training and education approaches are required in different contexts.3,31
Key questions for Parliament
- What are the likely future rates of long-term unemployment in the UK following the COVID-19 outbreak? What are the likely long-term changes to the job market and how will this affect the skills needed in the UK workforce?
- What is the combined impact of longer-term trends, the new skills-based immigration system and the COVID-19 pandemic on projected skills gaps?
- Will current government policy fulfil employers’ skills requirements? How can skills provision best support the national economy and be responsive to local labour market needs? How can government incentivise employers and education providers?
- Is current UK Government funding adequate? How should funding be distributed across the devolved nations? Will the reforms proposed by the Skills for Jobs white paper deliver the Prime Minister’s Lifetime Skills Guarantee? How will the National Skills Fund operate in practice?
- How are the life chances and outcomes of individuals affected by gaining skills and qualifications in their adult life? Which groups are most and least likely to engage in adult training and education? What are the barriers to participation in training and is specific support required for specific groups, such as young people and older people?
Likelihood and impact
High impact and high likelihood with some impacts being felt now but others over a 5–10 year timescale.
- Campaign for Learning (2020). Making a Success of the National Skills Fund.
- POST (2020). Education and COVID-19: What are experts concerned about?
- Henehan, K. (2020). Can training help workers change their stripes? Resolution Foundation.
- House of Commons Education Committee (2020). A plan for an adult skills and lifelong learning revolution: Third Report of Session 2019–21.
- House of Commons Library (2021). FE white paper: Skills for Jobs for Lifelong Learning for Opportunity and Growth.
- Department for Education (2020). Employer Skills Survey 2019 research report.
- Department for Education (2021). Skills for Jobs: Lifelong Learning for Opportunity and Growth.
- Egglestone, C. et al. (2019). Adult Participation in Learning Survey 2019. Learning and Work Institute.
- Social Mobility Commission (2019). The adult skills gap: is falling investment in UK adults stalling social mobility?
- Cominetti, N. et al. (2021). Long Covid in the labour market. Resolution Foundation.
- Henehan, K. (2020). Class of 2020: Education Leavers in the Current Crisis. Resolution Foundation.
- Wilson, T. et al. (2020). Getting Back to Work. Institute for Employment Studies.
- Brewer, M. et al. (2020). Jobs, jobs, jobs. Resolution Foundation.
- Rege, M. et al. (2019). Job displacement and crime: Evidence from Norwegian register data. Labour Economics, Vol 61, 101761.
- Centre for Ageing Better (2020). COVID-19 risks triggering long term unemployment crisis for older workers.
- Office for National Statistics (2019). Families and the labour market, UK: 2019.
- Finnegan, J. et al. (2020). Tackling single parent poverty after coronavirus. Learning and Work Institute.
- Harkness, S. (2020). How will the response to coronavirus affect gender equality? Economics Observatory.
- Della Giusta, M. (2020). How has coronavirus affected the division of domestic labour? Economics Observatory.
- Department for Business, Innovation and Skills. (2016). Impact of poor basic literacy and numeracy on employers.
- National Literacy Trust (2020). Our new research reveals the barriers to young people achieving their aspirations.
- National Literacy Trust (2021). Words for Work: Women in Leadership.
- Wisniewska, A. et al. (2020). Gender pay gap: how women are short-changed in the UK. Financial Times.
- Morrisroe, J. (2014). Literacy Changes Lives 2014: A new perspective on health, employment and crime. National Literacy Trust.
- Borgonovi, F. et al. (2018). The evolution of gender gaps in numeracy and literacy between childhood and adulthood. OECD.
- POST (2020). Impact of COVID-19 on different ethnic minority groups.
- House of Commons Women and Equalities Committee (2020). Unequal impact? Coronavirus and BAME people: Third Report of Session 2019–21.
- Youth Futures Foundation (2020). Why the ONS employment figures show young people are slipping through the net.
- Evans, S. (2020). Work & skills for the long-term unemployed. Learning and Work Institute.
- Melville, D. et al. (2019). Local Skills Deficits and Spare Capacity. Learning and Work Institute.
- Bhattacharya, A. et al. (2020). (Adult) education, education, education. The Social Market Foundation.
Many organisations have turned to technology during the COVID-19 pandemic to aid social distancing. Could ongoing automation reinforce existing inequalities?
GDP and income inequality both influence population health. How might the COVID-19 outbreak widen economic inequalities in the long-term?