The UK skills system is broken in ways that directly constrain the entire platform:
Apprenticeship Levy capture. The Apprenticeship Levy, introduced 2017, was designed to fund genuine apprenticeships. In practice, employers route Levy funds into MBA programmes for managers, "apprenticeship" rebadging of existing graduate training, and other high-level credentialing. Genuine entry-level and intermediate apprenticeships have declined since the Levy was introduced. This is the single most egregious skills policy failure of the last decade.
FE college hollowing. Further Education colleges have lost ~30% real-terms funding since 2010. FE is where the technical skills for manufacturing, engineering, construction, and trades are taught. The decline maps directly onto the shortage of skilled technicians, machinists, electricians, plumbers, and building trades.
University drift from STEM/vocational. University funding has incentivised courses that produce graduates rather than courses that produce specific skills. Medicine, nursing, engineering struggle for expansion despite huge economic demand, while humanities and management courses proliferate. This is not anti-humanities. It is recognising that the funding signal has been wrong for decades.
NEETs crisis. Young people Not in Education, Employment or Training have risen substantially post-COVID. Approximately 850,000 people aged 16-24 are currently NEET, a 10-year high. Long-term scarring effects are severe. NEET in early adulthood correlates with 20-30% lower lifetime earnings and significantly higher welfare dependency.
Geographic mismatches. Skilled workers are concentrated in London and the South-East. Manufacturing jobs are in the Midlands, North, Scotland, Wales. Housing policy has prevented the labour market from resolving this. Training policy has made it worse.
Position: The Levy as currently structured is abolished. Replaced with a genuine apprenticeship funding mechanism.
Scale of apprenticeships target: 600,000 starts/year by Y5, up from current ~340,000 (of which maybe 150,000 are genuine entry-level). Doubling genuine apprenticeship places.
Cost: Net neutral at aggregate level (Levy funds redeployed, not new money), but approximately £2bn/year of redirected funding is now hitting genuine apprenticeships rather than being captured.
Position: FE is the backbone of the technical skills system. Restore funding and prestige.
Cost: £3bn/year revenue by Y3, plus £500m/year capital for 5 years.
Zero tuition for medicine, dentistry, nursing, allied health (covered in the NHS briefing), and extended to:
In exchange for service commitment of 10 years (NHS/teaching) or 5 years UK-resident employment (engineering, tech).
Cost: Additional £500m/year by Y5 above the NHS medical figure.
Position: Not abolition of fees, but strategic reallocation of the teaching grant.
Cost: £1.5bn/year by Y5 above current university funding.
Position: Skills funding genuinely devolved to regional authorities.
This is the industrial policy regional organiser framework, formalised.
Cost: No net additional cost; redistribution of existing budget with modest administrative uplift (£100m/year).
Position: Aggressive intervention on NEETs, with structural rather than punitive framing.
Cost: £2bn/year by Y3 fully operational. Offset by welfare savings (dynamic effect, conservatively scored at £800m/year by Y5) and future tax receipts from employment. Net cost approximately £1.2bn/year.
Specific intervention for construction trades given the housing construction programme and reindustrialisation need:
Cost: £500m/year additional within housing/industrial programme budgets.
A significant portion of UK adult population has low literacy or numeracy. This is a binding constraint on employability.
Cost: £400m/year.
| Item | Y3 | Y5 | Y10 | Revenue/Capital |
|---|---|---|---|---|
| FE college funding | £2bn | £3bn | £3bn | R |
| FE capital programme | £0.5bn | £0.5bn | — | C |
| Graduate medical/technical bursaries | £0.3bn | £0.5bn | £0.8bn | R |
| University teaching grant uplift | £1bn | £1.5bn | £1.5bn | R |
| Devolved skills admin | £0.1bn | £0.1bn | £0.1bn | R |
| Youth Guarantee (net of savings) | £1bn | £1.2bn | £1bn | R |
| Construction trades programme | £0.3bn | £0.5bn | £0.3bn | R |
| Basic adult skills | £0.3bn | £0.4bn | £0.4bn | R |
| Apprenticeship Levy reform | 0 (neutral) | 0 | 0 | — |
| TOTAL REVENUE | £5bn | £7.2bn | £7.1bn | |
| TOTAL CAPITAL | £0.5bn | £0.5bn | 0 |
Net revenue cost: Y5 £6.2bn / Y10 £4.1bn
This briefing's revenue cost (£6.2bn Y5 / £4.1bn Y10) overlaps partially with education commitments covered elsewhere in this platform (£8bn Y5 / £10bn Y10). The two should be consolidated.
Close to previous estimates. Headroom impact: marginally higher Y5, marginally lower Y10. Within tolerance.
The skills platform is where the Productive Britain thesis becomes operational. Industrial policy without skills policy is aspiration. Skills policy without industrial policy is training people for jobs that don't exist. The two must move together.
The pitch to young people: "If you're aged 16 to 24 and not in work or training, we will guarantee you a place. Paid training, a proper apprenticeship, a job with prospects. We are not going to write off another generation because politicians don't want to spend the money. The country cannot afford to lose you and we will not let it happen."
The pitch to employers: "We will fix the skills system. The Apprenticeship Levy will fund actual apprenticeships, not rebranded management training. FE colleges will teach the skills your industries need. We will give you the workforce you need to hire, train, and build with."
The pitch to parents: "Your children will have a proper path into work. FE colleges that actually teach trades. Apprenticeships that lead to real careers. University courses in subjects the economy needs. A Youth Guarantee if anything goes wrong."
NEETs are not a statistic. They are young men and women whose lives are being wasted because the system has failed them. Every political party in the last 15 years has promised to fix this and not delivered. Common's commitment is a fixed programme with measurable outcomes: NEET rate halved by Y5, specific sector apprenticeship numbers, specific FE enrolment targets. This is the area where underpromise-and-overdeliver pays the biggest political dividend.