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Time for action: Skills for economic growth and social justice

Learning and skills contribute to economic growth both directly, by improving the skills base available to employers, and indirectly, by underpinning the five foundations of productivity identified by the government: ideas, people, infrastructure, business environment, and places. This is the case for all levels of learning from basic skills to degree level — research clearly shows earnings, employment and productivity gains for each level of learning. Skills also contribute to social justice, helping to improve social mobility (the extent to which an individual’s life chances do or do not depend on their family background) and reduce inequality (the gap between rich and poor). Gaining basic skills helps people access opportunities, and widening access to higher education also opens up new career opportunities. However, the UK’s skills base has long lagged that of comparator countries, holding back economic growth and social justice. Nine million people in England lack functional literacy and/or numeracy, and a higher proportion of people have low skills compared to other countries, leaving the UK mid-table at best in the international rankings. This is the result of cuts in public funding for adult skills, alongside falling employer investment in skills. This report shows that the UK is on track to fall further back in the international league tables by 2030. Its qualification profile is projected to improve, but this would still fail to match other countries’ rates of improvement. The status quo is not good enough and will hold back economic growth and social justice. This report analyses the potential impact for the UK of a higher ambition based on: (1) Increasing the proportion of people with functional literacy and numeracy to 90% by 2030; (2) Increasing the proportion of people with medium qualifications with a greater focus on Level 3 qualifications. This would mean by 2030 20% and 30% of people have Level 2 and 3 qualifications respectively; and (3) Maintaining the expected rate of progress in high qualifications, so that by 2030 43% of people have Level 4 qualifications or higher. Achieving this scenario would boost the UK economy by £20 billion per year and support an additional 200,000 people into work, along with significant taxpayer savings. It would also improve social justice by widening opportunity and making sure that more people have the fundamental skills and capabilities increasingly needed for economic and social inclusion, as well as bringing wider benefits to health, wellbeing and civic engagement. Ultimately the UK’s future prosperity and fairness relies on high quality learning and skills.