Employer investment in training, the engine through which workforces adapt to new technology, has been quietly eroding in the United Kingdom. A policy report from LSE's Centre for Economic Performance and its Programme on Innovation and Diffusion documents that the proportion of employers investing in training dropped from 65 per cent in 2011 to 59 per cent in 2024, with spending per employee falling too, just as artificial intelligence and the green transition transform working life.
The report, Skills for growth: what the UK can learn from international approaches for incentivising employer-based training, was written by Sandra McNally, Anna Valero and Aadya Bahl. Drawing on international evidence, it argues that the organising principle for skills policy should be sectoral, focused on the eight growth-driving sectors of the government's Industrial Strategy, including digital and clean energy, with better coordination between employers and training providers.
Its nine recommendations include aligning Local Skills Improvement Plans with the Industrial Strategy, giving Skills England greater convening capacity, enabling places to pilot sector partnerships, and using public procurement to drive employer investment. The authors caution against broad-based subsidies that fund training firms would have done anyway, and stress reorienting existing instruments rather than adding new layers to an already complex system. The work is part-funded by the Economic and Social Research Council.