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This blog post explores how the development of a tertiary education system in England could help address the skills challenges now facing the government and the wider economy. These challenges are numerous (not all can be reviewed here) and many have hitherto proved intractable.

The challenges

The first challenge centres on adult skills. Although most policy attention focuses on initial education and training (E&T) – because that is where the vast bulk of public spending is committed – trends in training for the adult workforce have been heading in the wrong direction for at least a decade, with employers locked into a long-term, structural retreat from upskilling their workforce (see NAO, 2022).

This is occurring at a time when technological change is driving large-scale shifts in skills demand. Some estimates (NAO, 2022, p. 7) suggest as many as 20 per cent (6.3 million) jobs will be directly affected by the changing skill needs thrown up by the transition to net zero, as the process creates a rising need for craft and technician-level workers who can weld pylons, lay cables, retrofit insulation and install heat pumps and district heating systems. Given the carbon-free transition timetable, massive skill shortages loom.

‘Technological change is driving large-scale shifts in skills demand … and as many as 6.3 million jobs will be directly affected by the transition to net zero. Given the carbon-free transition timetable, massive skill shortages loom.’

In addition to the effects of changing skills demand, digitalisation and artificial intelligence (AI) are going to be major forces for change. Depending on how organisations choose to adopt AI (it can either augment and complement human skill or it can be used to replace and downgrade it), there will be a need for reskilling across many sectors as work is reorganised and jobs redesigned (IFOW, 2025).

These challenges interact with one another. As the annual total outputs into the labour market from English initial E&T amount to between two and two and a half per cent of the employed workforce, large and relatively rapid shifts in skills demand cannot solely be met through adjustments to initial E&T. Adult education will be vital to addressing skill needs.

A tertiary ‘offer’ as a response

Given a choice, most employers would probably prefer a single point of entry into advice on and the delivery of workplace skills audits, enhanced initial E&T and adult reskilling and upskilling. At present they are confronted by a set of competing offers from different providers (initial further and higher education, apprenticeship, and adult learning) depending on course type and qualification level (Skills England, 2024). Besides supplying skills, there are a related set of activities – technology adoption, knowledge transfer, business development and improvement, and innovation support that many UK businesses are in dire need of and around which regional consortia of universities and colleges could construct an integrated ‘offer’. This would appeal to businesses, and to mayoral combined authorities (MCAs) and their regional economic development arms, not all of which will focus solely on the eight sectors chosen for the UK government’s industrial strategy (Coyle et al., 2023).

In thinking about how to design this kind of joined-up offer, are there existing examples we can learn from within the UK? The answer is plainly ‘yes’. In England, the (IoTs) have demonstrated how colleges, universities and employers can collaborate to deliver an integrated blend of specialist training facilities and skills support to firms in a sector or who are deploying a particular technology. One of the selling points of IoTs is their ability to create a seamless ‘offer’ of education and training from level 3 to level 7. IoTs already exist in manufacturing and engineering, digital, construction, health, agri-tech and the media industries, and the 21 IoTs involve 77 colleges, 35 universities and 99 employers.

In Scotland the Scottish Funding Council (SFC) has just completed two Regional Tertiary Pathfinder projects in the Borders and the north-east. These have tested the implementation of the SFC’s long-term goal of creating a national tertiary system, and new ways to more closely align E&T provision with economic need. Bringing together schools, colleges, universities, local authorities, employers and regional economic partnerships, the Pathfinders explored five issues:

1. Closer co-ordination and collaboration between providers in a region (for instance joint prospectuses for colleges and their local universities)
2. Enhanced partnership between E&T institutions and employers
3. Areas of provision to expand and areas to disinvest from
4. New qualifications and learning pathways with multiple exit points into the labour market (such as in green energy and emerging rural industries)
5. New sources of labour market information and analysis, and strengthened careers information, advice and guidance.

The SFC has published detailed , including process lessons. There is much that English policymakers can learn from this very thorough piece of ‘action research’.

References

Coyle, D., van Ark, B., & Pendrill, J. (Eds.) (2023). The productivity agenda. The Productivity Institute, Manchester University.

Institute for the Future of Work [IFOW]. (2025). Final report of the Pissarides Review into the future of work and wellbeing.

National Audit Office [NAO]. (2022). Developing workforce skills for a strong economy.

Skills England. (2024). Skills England: Driving growth and widening opportunities. Department for Education.