Bridging the skills gap to secure Britain’s industrial future

15 May, 2025

The need for upskilling extends beyond new entrants to the workforce. Many manufacturers plan to increase spending on retraining their employees in the coming years, recognising that investment in workforce development is essential for growth. To encourage businesses to invest in training, the Commission has recommended tax rebates for companies that invest in accredited skills training in key sectors. This would provide a tangible incentive for businesses to prioritise skills development, ensuring that employees remain adaptable in a fast-changing technological landscape and are equipped to apply their skills to new processes and innovations.

Beyond funding and industry commitments, there is a broader issue of perception. Careers in manufacturing and engineering are often overlooked by young people, partly due to inadequate careers guidance in schools and colleges. The Commission has called for a fundamental shift in how technical education is promoted, including the expansion of the University Technical College (UTC) model. Providing clearer pathways into manufacturing careers would help build a more robust talent pipeline, ensuring that young people see vocational training as a viable and attractive alternative to traditional academic routes, with direct applications in high-tech industries.

Robert Halfon, Co-Chair of Make UK’s Industrial Strategy Skills Commission, has emphasised the urgency of reform. “Modern manufacturing and engineering are major drivers of the innovation needed to capitalise on the AI revolution and deliver on the Government’s growth agenda across new green skills technologies and opportunities. Yet all of this is at risk if we do not urgently ensure our skills system is properly fit for the 21st Century.”

Apprenticeship Levy

The shortcomings of the Apprenticeship Levy have further exacerbated the skills crisis. Since its introduction nearly eight years ago, apprenticeship starts in manufacturing have fallen by 42%, depriving tens of thousands of learners of valuable training opportunities. Stephen Phipson CBE, CEO of Make UK, has been vocal in his criticism. “The Apprenticeship Levy in its current form has been nothing short of a disaster. Apprenticeship starts in manufacturing have fallen by 42% meaning tens of thousands of learners have gone without invaluable training in the last eight years.” He has urged the government to take immediate action. “Government is sitting on a pot of cash that should immediately be ringfenced and spent on skills training. The first priority is properly funding courses, so colleges and training providers aren’t put off delivering higher-cost courses such as engineering. There also needs to be targeted efforts to recruit experienced tutors to train up the next generation in the skills we need now and in the future.”

The proposals put forward by the Industrial Strategy Skills Commission present a clear and actionable framework for addressing the skills gap. The economic impact of inaction is too great to ignore. Without urgent intervention, Britain risks falling further behind in the race to adopt and develop cutting-edge technologies. A well-trained workforce is the foundation of a strong industrial strategy, and securing long-term investment in skills training will be essential to the country’s economic future. The government and industry must now come together to implement these recommendations and ensure that Britain’s manufacturing sector has the skilled workforce it needs to thrive, with an emphasis on applied expertise and technological integration

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