Social mobility is at its worst in 50 years, but the productivity problem presents an opportunity - Michael Houlihan
At the same time, our country is facing a productivity problem, with a lack of skills threatening economic growth. When compared to all the other G7 nations, the UK is clearly lagging behind.
But what if an opportunity for the UK to boost social mobility while also driving economic growth existed? That would surely be a powerful win-win with cross party support.
This is where skills bootcamps come in. Recent ONS figures show there are still over one million unemployed people across the country. Most are from low-income households. A further 1.7 million people are economically ‘inactive’ but want a job.
In my time leading Generation UK, an employment charity that has placed over 1,200 unemployed people into life-changing jobs, I’ve seen first-hand the positive impact that skill bootcamps can have in helping people find work. At a human level, the impact is profound. When aggregated, this is meaningful socio-economic mobility with a huge impact on government finances and GDP.
That's why if we're to truly achieve social mobility while encouraging economic growth, we need to create the right skilling infrastructure that supports the needs of our country and economy.
In recent weeks, discussions around HS2, and differences in exam results, have highlighted social and economic disparities. At the same time, within regions, there is significantly less access to the high skill, high salary careers for people from under-represented groups and low-income households.
Skills bootcamps are designed to address these specific issues: create increased opportunity for individuals and build talent pipelines that give employers what they need, in turn fuelling GDP.
By design, these programmes address the multiple barriers people face to get into work, including but not just limited to skills training. A critical element of skills bootcamps policy is that they are free to the learner. They must also be based around an industry need and must create direct connections between learners and employers to explore job opportunities after training is complete.
For businesses, skill bootcamps are also an effective solution to a challenging job market. They help employers fill essential roles efficiently. With over one million vacancies, many of which are in key growth sectors for the economy such as health, tech, and green industries – bootcamps are focused on teaching practical skills that can be put to immediate use and meet employers’ needs.
While the Government’s £1.5bn pledge for Skills Bootcamps is a seminal moment, results published to date show that most funding is being spent on people who are already employed, and only 10-20 per cent of funded places so far resulted in people moving out of unemployment into work.
Indeed, we’ve seen huge progress, particularly from local government, in setting up these programmes in their local areas. Leeds City Council’s Skills Hub is a perfect example of this. In fact, to date, by working with Leeds City Council, we’ve supported over 380 students, helping them find life-changing careers.
To make the most out of this opportunity, two things need to happen. Firstly, the scale of delivery of skills bootcamps needs to rapidly increase, but without compromising on quality and results. That is a challenge felt by both the Department for Education and the organisations delivering it.
Secondly, if we’re to create the most possible impact, the policy needs to be more conscious about who gets access to these opportunities. A distinction should be made between the impact of helping someone who is long-term unemployed to start a job in the tech sector versus upskilling someone who is already in a good job but wants to do something different. While both are value-adding, the impact and investment cases are very different.
The benefits of a more targeted policy that focuses on people who are unemployed can have a huge impact on economic growth. According to our calculations for each unemployed learner trained, we estimate an average return to the government of £6,000 over five years. If the government’s funding was focused on training the one million unemployed people in the UK alone, this would unlock more than £6bn for the UK economy in over five years. A win-win for everyone.
In our delivery, we’ve seen the huge potential these programmes can have in breaking the cycle of limited opportunities and the transformational impact they can have on people’s lives and their communities.
If we’re to move the dial on the UK’s social mobility – we need to scale skill bootcamps across the country, ensuring there is wide access and opportunities for those who stand to benefit the most.
Michael Houlihan is CEO of Generation UK.