Take 5: Phil Smith CBE, Chair Skills England, Episode 2, Youth Guarantee

In this episode of Take Five, we are joined by Phil Smith, Chair of Skills England, to explore the Government’s Youth Guarantee and the recent announcements aimed at reducing youth unemployment and expanding access to apprenticeships.

We discuss the strategic ambition behind the Youth Guarantee, the role employers can play in creating more opportunities for young people, and the new incentive structures designed to support businesses in recruiting and developing early-career talent. The conversation focuses on how employers can respond to these changes and what this means for workforce planning and long-term skills investment.

 This episode provides practical insight into the direction of travel for skills policy and the opportunity for employers to take a leading role in shaping the future workforce.

 You can read the Government’s announcement on the Youth Guarantee and new employment drive here:
https://www.gov.uk/government/news/major-employment-drive-to-help-unlock-200000-new-jobs-and-apprenticeships-for-next-generation

Employers interested in contributing to the development of Skills England’s Expert Groups can express interest through relevant sector or membership bodies, including The 5% Club, or by contacting Skills England directly at: expertnetwork.skillsengland@education.gov.uk

To find out more about The 5% Club and how to get involved, visit: https://www.5percentclub.org.uk

Transcript

SPEAKER_01 0:05

Hello and welcome to Take Five, the podcast from the Five Percent Club, where we bring you insight, inspiration, and innovation from employers, sector leaders, and policymakers, all in just five percent of your working day. So grab yourself a cup of tea or pop on your trainers and headphones. However, you want to listen, we're glad you've chosen to listen with us. I'm Lindsay Conroy, Director of Policy and Strategic Engagement at the Five Percent Club, a national employer movement built by employers for employers, inspiring organisations to take positive action to create high-quality, inclusive, and accessible earn and learn opportunities for all. Today's episode is filmed following announcements made by Secretary of State for Work and Pensions Pat McFadden on the Youth Guarantee, the government's drive to reduce youth unemployment and the changes made to the apprenticeship system in order to support the repositioning of apprenticeships. To unpick these announcements, I'm joined today by Phil Smith, Chair of Skills England. Phil, thanks for joining us again on Take Five. So the announcements made by Pat McFadden yesterday, they do signal a significant phase of reform in terms of the skills system to support the much-needed government targets to reduce youth unemployment. I think before we get into any specifics here, it would be really helpful to kind of start by understanding the bigger picture and the strategic intent behind the funding priorities.

SPEAKER_00 1:22

Yeah, I mean, you and I have talked before, and I know as an organization you're massively committed to this principle of people engaging into good jobs, you know, they're fulfilling and capable for that for their life and for their industries and their sectors. And I think the challenge we've got is of course, we've seen some of these shocking statistics about young people, the number of not in education employment are not earning and learning that or learning, the number who are not, you know, in jobs at all, and even youth unemployment overall, these are all very challenging issues. And so as the government thinks about that and as we look at the evidence from Skills England and start to work out what we could do about this, it was clear that the apprenticeship system, which traditionally, of course, has been about bringing people into employment over and above, you know, in a vocational mode, but not necessarily in a purely academic mode, has something that's kind of got quite badly misaligned from that. Not that those things that it's doing aren't all valid, but the fact is that these young people, it's not really serving them as effectively as it could do. So the principle really is saying, well, can we find a way of giving more confidence to young people? I mean, I many of you have told me stories. I've heard stories of people say, you know, I've applied for 100 jobs and nobody's replied. I mean, that's shocking and so discouraging for a young person to get into that situation. So the more we can bring it towards a system that works to bring young people in, but also has mechanisms for upskilling people, for giving people access into different areas for sector specialization and so on, the better. And so this announcement really here is really about saying, can we provide a bit more confidence to young people that there will be paths for them, but also to get employers and others engaged into the system to say we really need to think about this as a priority to bring people into the system to give them fulfilling and sustainable and productive jobs, and for the system to work within the bounds it's got, which of course are fiscally challenging, but also you know quite dynamic in the in the modern world. So I think really the picture has been can we pivot the system, as you said, back towards younger people with the budget we've got, and recognize that if we can give them fulfilling and um useful ways of entering the workforce, then ultimately we're building the future for ourselves and for the for the nation, you know.

SPEAKER_01 3:52

And I think I think those announcements yesterday will be really welcomed by employers, won't they? Because there were some really significant incentives that that were talked about yesterday to help bring young people into employment, which certainly will help SMEs in in particular. Um, are you are you able, and I appreciate this is very much you know, DWP, but from a skills increase perspective, are you able to talk at a high level about what some of those incentives are and what they look like?

SPEAKER_00 4:15

Yeah, I mean I think those incentives, particularly as you said, for small, I mean, we recognise the small business community as the is the predominance of of industry in in the UK, five and a half million small businesses, you know, some 80-90% of the economy is based on small businesses. So we've talked for some time, and I think we talked in our in our last discussion about the difficulty in getting small businesses to take on apprentices or and do a number of other transformational things. And I think the more we can give them an easy path to do that, then the better. And of course, you know, whether that be monetary incentives or support around you know, simplifying how they access that system or even simplifying the system overall is good for small business. That doesn't mean it's exclusively for small businesses because much of the system is pivoting towards getting young people into um into these apprenticeships, and in that case, you know, fully funding them, um, you know, up to 24 is a is a good thing to do. Providing mechanisms that still allow people to reskill later on in their career is important as well. But you know, giving genuine incentives, giving people um support models and simplifying the way they access that as well is also really important. So I think we you know, we've talked a lot, and when I I think I talked the last time, I talked about you know the need to simplify, need to engage employers, the need to be data-oriented. I think this is a virtue of the fact that we're seeing some scary numbers about young people unemployed. We're seeing that it was quite difficult. And actually, if you're a small business, you know, you've got a lot on your mind. And so sometimes monetary incentives are useful, but they have to be quite substantial to take away some of the pain that you might well just say, well, it's on the wrong side of the risk balance there. So bringing people in with potentially, you know, thousands of pounds worth of funding, you know, makes a tangible difference. And I think it's been broadly accepted that this may well be a way of getting some SMEs on the path. And I think the one thing the 5% club proves is that once people get on the journey, it becomes a lot easier. They recognize the value, they recognise what can be done. And so I think that's that's been really helpful, you know.

SPEAKER_01 6:31

We said that last time, didn't we? Often that first step is the hardest step to take. And as I said, I think the incentives are going to be really well received. And you're right, they the the amount of money that's available for employers to be able to access to help bring those young people into work, I think is not um, it's not a low amount of money. You know, it's not a small amount of money. Um, but of course, that has to come from somewhere. And wrapped up in the announcements yesterday, we did um hear about some apprenticeship standards that are going to be defunded. And uh we live and breathe this every single day, but we have to recognise that many of our listeners aren't going to be close to these announcements. So it would be good if we could just touch on um those standards that are being defunded and and what we aren't going to kind of have available um as we move into this world of pivoting towards bringing young people in.

SPEAKER_00 7:17

Yeah, well, we talked in in uh previous iteration where um some of the you know the higher level apprenticeships, so level seven, which is a master's level, have been defunded. That wasn't specifically what was talked about yesterday. What I was talking specifically was about um you know a number of standards, because there are over 700 apprenticeship standards, which were going to be defunded. And those were that didn't mean that they're not gonna be available, but it means they'll not be funded by government. And it was predominantly because the bulk of those, and certainly the ones around management and leadership, which you know I'm very committed to, as I know you are, um, is is an area where it was predominantly people later in their careers, predominantly over 25, and you know, and very expensive to be quite honest. And so if you're trying to make a balance in any system where you've got priorities you have to recognise, if you're looking at somewhere where it's not really targeted at bringing young people on, it's not really targeted at um at uh you know areas which we can go out to a much wider community on, then you know, those have got to be the areas you think, well, can we take some of the resources from there and place them into areas which are better for bringing more people on? Now, there'll be great examples of people who have been brought from disadvantaged environments into leadership and management, and we can always make more, but in the round, and when we looked at the numbers, you know, the predominance of this was that older people further in their career doing what you might describe as more advanced continuous professional development rather than entry into jobs and opportunities for people. So, yeah, that was that was definitely part of it. And so there's a series of those ones, and then there's a series of others, I think 13 or 14 who are being looked at. And of course, the problem is if you've got over 700 apprenticeship standards, you have to maintain them, you have to explain them to people, you have to position them with people. And although there'll be people who will do these things, the reality is that in this world we've moved on to, there's probably a lot of overlap in apprenticeships that maybe wasn't a partner initially. And so I think there will be pathways for many of those people to still get trained and effectively um delivered into jobs, but maybe not, you know, maybe in a more simplified system.

SPEAKER_01 9:38

So and I think I think that does make sense. And you know, you look at other systems around the world, and certainly 700 standards is is a large amount of standards. Um, it's interesting that you mentioned that the standards will still be available, and that's certainly questions that we have been asked in the past and will probably be asked again. So Skills England will maintain the standards that are there, but perhaps to be funded commercially by the employer, is that correct?

SPEAKER_00 9:59

Yeah, I mean that's the the principle of it, you know, the because the truth is that when you've got, I mean, we've all got to the situation. If I'm an employer, you know, I was an employer, ran a big organization, you know, I was training my people because I wanted people who were skilled and capable in what they were doing. The fact that I could get some government support from it was a good thing, but it wasn't that I didn't want to do it. I did still want to train those people, I did want them to have the expertise. So I think the opportunity to say that some of these could still be available because there are lots of other funding pots around. You know, the adult skills budgets predominantly devolve. We've got the lifeline, lifelong learning entitlement, which you know comes into play. So there are opportunities for people to um use different pots of funding to potentially fund these kind of um uh training paths if that's what they feel is appropriate, because it's still got the quality, it's still got the behaviours, it's still maybe got some of the expertise behind it.

SPEAKER_01 10:57

And I think it's important that employers understand that and recognise where else they can get that support. One of the um findings that was found from the recent research from the Association of Apprentices talked about the fact that high quality line management support was one of the strongest indicators of success of an apprentice. And an apprentice who receives really high quality line management support is three times more likely to get a pay rise or promotion post-apprenticeship. So it's crucial that we continue to invest in in line managers for sure. Which, you know, again, it's understandable why people might feel disappointed, but I think our listeners will recognise that there are decisions that need to be made, right?

SPEAKER_00 11:30

No, I agree. And line management and leadership generally is super important. You know, don't get me wrong, I'm a big fan of leadership and development, but it's the question of, you know, with limited resources, where do you target your pounds? You know, you target them in the areas where you're really trying to get people onto the path. And hopefully the companies, you know, who are developing their people will continue to develop. And the great companies, big and small, you know, do exactly that. And sometimes they take advantage of government initiatives, but sometimes they don't, yeah.

SPEAKER_01 11:59

So and I think um one of the things that we're seeing from employers is is concern around further streamlining or funding restrictions, which I appreciate you're, you know, you're not going to be able to answer to employers today, but I guess what our listeners will would love to hear from you is how you're engaging with employers to understand their needs. So if there does need to be any further look at streamlining or funding restrictions, for instance, that actually Skills England DWP understand perhaps the lead-in time that employers need and where things will have the biggest impact. Can you just tell me a bit about that engagement, please?

SPEAKER_00 12:33

Yeah, I think that's really important. It's something that's been fundamental as we've set up Skills England that we're trying to get to. I don't think we've cracked it completely at the moment, but we're definitely on the path. So if you if you look back at how things were within the kind of iFate world, it was predominantly about people who were engaged in building or maintaining apprenticeship standards. So there were people who were kind of expert in that particular area. As I've said already, we've got 700 plus. We're probably not going to be building hundreds of new apprenticeship standards. If anything, we want to reduce them and consolidate them. So what we really need is a different vehicle to talk to a much greater number of people. I think, I think when you and I talked before, but certainly offline, I've talked a lot about the way that companies you know would talk to their customers. They talk through partners, they talk through scale, they talk through people who are continually talking to people and understanding what's going on. So we're building what we call an expert network, and that will bring thousands of employers in through directly, but also through partner organizations like yourselves. I mean, the fact you're such a strong representative group that to have you bringing people together, as you've done with me many times, whether it be dinners or seminars or you know, or uh summits where we can actually speak at things, you get an opportunity to talk to a lot more people. And so I think that expert network, as we're describing it, is a way of us building a set of connections, direct and indirect, with larger number of employees where we can continually talk to them. And that, you know, that's a new muscle, if you will, that needs to be developed. It's done in some cases very well, but I do think we need to keep doing that. And so I think the work that we're doing at the moment has been bringing people in who are place experts, people who are sector experts, people who are, you know, size in terms of business size experts, SME experts, and having them work with various communities on an ongoing dialogue basis. So, not a you know, come along to dinner or come along to a meeting, we'll explain to you what we're going to do and say thank you very much. We collaborated, much more on this is what we're thinking about, which is actually quite interesting. I actually had a meeting a couple of weeks ago where we tried to do that. We went to a set of regional authorities and we sort of talked to them about something which was very early in development. And you could see them kind of going, why are you talking to me about this? It's like, well, because we're trying to get your view of what it isn't. It was so alien to them, that ability for you know a government organization in this case to come in and say, Well, we're really in early stages, we want to help us shape it with you, then they kind of slightly struggle. So I think we need to all develop that muscle a bit better as to how we collaborate well, how do we find ways of hearing what's happening? Because it's the world is changing so fast at the moment, not just in technology, but globally, where you know, economically, you know, a whole series of things happening where we've got to be a bit more agile. And so we might think this is the greatest thing in the world, but then we talk to employers and go, we're not focused on that anymore, we're focused on you know just keeping the lights on, so we have to do different things. So I think we have to build that sort of model. And I, you know, I'm really pleased with the way the team are rallying to do that.

SPEAKER_01 15:40

You know, I think listeners will be really pleased to hear that as well. Um, so look, we've talked about incentives that are coming in through the youth guarantee, we've talked about how those incentives are going to be funded. Um, and it's clear that you know there have had to be some decisions that have been been made, and the incentives that, as I said earlier, will absolutely be welcomed. But the incentives alone aren't going to fix the issue of youth unemployment. Um, so so what else are you doing to help make it easier for young people to get into meaningful work? What else is available?

SPEAKER_00 16:10

Well, I mean, I think there's a a lot of different things available. Part of the challenge we've got, as we've discussed before, is the complexity of it. And so sometimes I think certainly we're talking about um there's a there's a chunk of money available to work through the Merrill and other strategic authorities on brokerage services, on how do you get joining people up between somebody who wants to do something and something that's available. I mean, classically we've seen brokerage things like UCAS in the university space where somebody says, I want to go to university, and there's this sort of matching going on. But when I go around the country, I've been up to the Northeast, to Manchester, to Northern Ireland, and to a series of other areas where I find people who have got these kind of services in place where they're trying to say to young people, you know, come into here, match the business at the other end, make it a bit easier for them. You know, that's something I think we need to get much better at. And there's a chunk of money available in the department for a series of brokerage um pilots, or I like to call them proof of concept. So, you know, rather than a pilot just be a thing you do, how do we prove the concept that if we do it this way with these kind of people in this kind of way, we're going to get people into jobs? So that's that sort of thing is is really important. I think, you know, also the the kind of um general employer engagement, and again, you know, organizations that yourself realize this, but the more you can get people work experience placements and so on, and we've seen things like V-levels been announced in the last few weeks, where it's very much tied to jobs, foundation apprenticeships as well. Um you know, whereas an area we're saying, how do you genuinely get something where you're engaging with an employer, and that employer you're starting to gain some of the softer, more meta skills that are needed to work. That's really important as well. So, you know, foundation apprenticeships, brokerage systems, and you know, simplification of the system are all important because you're right. I mean, the youth unemployment thing is not just a matter of if we have a bunch more apprenticeships, it's all going to be fine. Because, you know, the NEETs, it's a complex issue. I mean, apparently there are 300,000 of the million who are not on any benefits. So it's not like you've got a million people sitting on benefits waiting for some time. You're 300,000 people who are not on benefits and not in education and not in training. It's like, so what are they doing? How do you make this even relevant to them? And so I think there's a lot of work that needs to be done. And I do think the regions and the way we engage with regional authorities on both, you know, the way that things, the understanding that we get from those areas, but also the delivery of those in a much more local, simple, yeah, um, relevant way to people. Because talking to people about some national thing is great. But if you know that your local college is doing something where you can just go along and start to get a bit of a sense of it, I think that's going to be much more powerful here.

SPEAKER_01 19:08

I agree. And you talked there, you you briefly touched on foundation apprenticeships, which uh obviously we saw yesterday the announcements for new foundation apprenticeships in retail and hospitality, which I think is an excellent leap to help bring young people into work. And and also um what I think will be really welcome is the approval of the business admin at level two as well.

SPEAKER_00 19:27

Yeah.

SPEAKER_01 19:27

Can you just um just for the the sake of our listeners, just ex explain a bit more about foundation apprenticeships because I think there is some confusion sometimes amongst employers, you know, why are they different to a standard level two? You know, what's the purpose? Can you just help them understand?

SPEAKER_00 19:40

Yeah, I think the principle of foundation apprenticeships is really to get people, it's another step to get people onto the ladder. There's no doubt about it that some people on level two apprentices, you know, are taking that step as well and making it. But the evidence is that, as we've seen, you know, the number of young people who are not engaged in it, the the fact that you know apprenticeships have dropped off radically, particularly in that 16 to 24 range over the last 10 years, says that there's something about getting people onto the ladder which needs an extra step. And foundation apprentices are really about saying, can you help people get the basics of you know learning, getting into work, understanding what work is about, which might then allow them to go onto a more specialist apprenticeship or other other path as they want. And certainly when you see these things starting to work or similar models in Scotland, similar models in other parts of the world, it does get people into it. And I think you know, there's various organizations around who have been tasked with um giving people uh you know access to employers, whether that just be work experience or careers advice or whatever, when you're in those environments, you suddenly find that people's propensity, one or two touches in a business, and suddenly they're much more you know aware of what the opportunities are. And so I think getting people, because you know, foundation apprentices are still apprenticeships, so they have real employers behind them and so on, get real work experience. I think getting people onto that, we've still got to really ramp them up. You know, I don't think they've been as uh widely taken as they could be, but I do think, as you say, that the what was quite obvious is that hospitality and uh you know retail are areas that many people get that first step in. So getting them in, getting them work ready, allowing them to go onto other sectors is probably sensible.

SPEAKER_01 21:35

Brilliant. So I mean there's a lot in there for young people, right? Um, and there's there's clearly a need for all of us to pull together as a sector. Um, but there are, of course, other challenges that employers will face, in particular, that upskilling piece for that kind of mid career level, reskilling, you know, bringing people along in terms of AI, etc. Um, and the withdrawal of some apprenticeships might make that difficult for employers, but I know there are. Things that are happening around apprenticeship units that you know will very much be geared towards helping employers in that space. Could you perhaps just help us understand a bit more about the apprenticeship units?

SPEAKER_00 22:09

Yeah, I think what what we heard and and was widely talked about was the necessity to try and provide lighter touch mechanisms for people to get skills that are relevant for today. And those could be things like AI as you discussed, you know, other things in the clean energy space that are not full apprenticeships because these people are already skilled in potentially, you know, um uh HVAC or you know, um uh air conditioning and other such things are maybe a bit alien to them. So, how do you give them a short, sharp update on that? And so we talked a lot about short courses, dynam, dynamism, and so on. And so the first set of found as the first set of uh apprenticeship units, as they're called, which you can obviously fund through the growth and skills levy, um, and are available also to small businesses who are using the, you know, would you have the flow down of the levy from other companies, are mechanisms for providing that kind of shorter form. How do I get people skilled up in a particular area? And you know, there's been about a dozen of them announced so far, and there'll be a series more over time. But I think the reality is we need to make sure that they are relevant for what we need for now, and that alongside things like the AI Boost um program, which was announced to upskill 10 million people in AI, that was something that was said, well, industry, you've got a load of stuff that you can also help people get onto a path, maybe get a digital badge, which might then allow them to do an apprenticeship unit or whatever, which might take them further into the career. So you're right, upskilling in flight is a really important thing to do, but it's got to be dynamic. It can't be something that takes you know a year or more to approve, then to start teaching, and then two or three years later it comes out and you think, okay, that was what was relevant three years ago. What's relevant actually now? AI is the most obvious one at the moment, but it's but it's definitely one that I think um, you know, I think will be valuable going forward.

SPEAKER_01 24:14

So I think if that's really good to hear, because you are right. Often when people are at that stage in their career, they don't need a full apprenticeship and everything that sits around a full apprenticeship. So what we can hope is again that engagement that you talked about with employers will you know really push those apprenticeship units in the direction that will support employers in the best way. Look, this is it's clearly a period of really significant transition for the skills system. And we know that change can make people nervous and it can make them pull away. And we also know that employers need that long-term stability so they can really get behind the system. So, you know, very quickly, because we're coming to an end, unfortunately, from your perspective as chair of Skills England today, what would your message be to employers right now?

SPEAKER_00 24:56

Well, I think employers um, you know, really genuinely need to think about what they need to make the business successful. I mean, all business good business leaders do that anyway, but I think we've maybe in some cases, not all, because there's lots of amazing employers who are doing good things, have got a little bit, you know, reticent about thinking that we have to get our own people skilled up or we have to get new people into our business, or maybe relied a little bit more on just recruiting people from the marketplace, whatever. That's actually become increasingly challenging for lots of reasons. Not only just getting the skills, but sometimes getting the people as well. So I think I'd say to employers: the more you can lean into this, the more we'll be there to support you. That expert network is about getting people with their opinions and us trying to shape the system to what they need. Because I, you know, I don't have all the answers. Skills England don't have all the answers, the government doesn't have all the answers. There's some combination of all of us working together where we can get the right answers. But I think either throwing rocks at the system or just not engaging and assuming that you're going to get the right people into your business is not the way. Well, it's never been the case, to be honest. I remember when I started doing apprenticeships and started and you know talked to other people about tier levels, the way you did it is because we wanted to get access to those people as well. So it's a it's you know, it's a kind of battle for talent. It always has been, and I think it will increasingly be as years go upon, you know.

unknown 26:22

Okay.

SPEAKER_01 26:22

Well, look, Phil, thanks so much for your time today. I think what's clearly come through from this conversation is that it's it's not change for change's sake. Actually, we're working to really create a system that's going to be effective for employers and the economy and really importantly for young people as well. So we're going to continue this conversation in future episodes. I definitely want to be able to touch more on that expert network with you in future episodes as well. And I'll look forward to be able to do that, particularly in our next episode as we talk about the assessment reform. So thank you again for coming to join us today. If today's conversation has sparked ideas or helped you think differently about apprenticeships, workforce strategy or skills development, we'd love for you to share it with a colleague or across your social channels. You can find more episodes, resources, and links to the expert network that Phil's talked about in the show notes from today. You can also find more information at the5%club.org.uk and across our LinkedIn. Join us next time for more insight, innovation, and practical learning on Take 5.