Recommendation 6

HM Government · verbatim extract Deferred

The Government recognises that there is a lack of private investment in workplace training and reskilling in the UK. This can be explained to some extent by the financial constraints caused by the pandemic, the rise of energy prices, and wider inflation but some of this shortfall of investment does predate these challenges. 2 Full list of social tariffs currently available - Ofcom 6 Post-pandemic economic growth: UK labour markets: Government Response DBT works closely with business to understand the challenges they are facing and address them. Whilst it should remain the industries’ responsibility to address skills shortages in their sectors by increasing investment in training, the Government has taken a range of actions to ensure that the UK has the right tax framework, and the skills system is both accessible and aligned with industry needs. The UK tax system is internationally competitive with our tax-to-GDP ratio still lower than Germany, France, and Italy. The Spring Budget introduced a package of reforms to support enterprise and investment, such as increasing the generosity of capital allowances and support for R&D intensive SMEs. We also announced reforms to capital allowances, introducing full expensing for three-years to support business investment (with a commitment to make the reform permanent when the fiscal conditions allow). It must primarily remain industries’ responsibility to address their medium- and longer- term skills shortages but DBT has been working with Defra, DWP, DfE and other departments to examine where Government can better assist with constraints around the training offer. DBT is also examining where it may better use its funding levers to better drive the sectors skills investment and is supportive of the need to improve the image of the sector. For instance, in the construction sector, DBT has facilitated the introduction of different flexibilities through initiatives such as: • An Apprenticeship Levy Transfer Pledge where larger companies can transfer unspent Levy funding to their supply chains; • a pilot for Flexi-Job Apprenticeship Agencies to support firms and apprentices to fulfil the full apprenticeship learning period where short contracts are the norm; and • SME brokerage contracts have been awarded to raise awareness, increase engagement and grow the volume of apprenticeship starts within ‘disengaged’ SMEs that have not had an apprentice within the last 24 months. Provision of shorter training options through the use of Skills Bootcamps, Occupational Traineeships and the Construction Industry Training Board’s (CITB) work experience Onsite Experience Hubs supporting construction career opportunities and employment. intelligence (AI) effectively in the workplace. Industries have expressed their willingness to fund employees to undertake AI training but have not found training that suits their needs—including training that is business-focused, modular and flexible. Reflecting this feedback and through consultation with expert stakeholders, we have developed guidance for businesses on the types of skills and knowledge that non-technical employees need to use to interact with AI. The guidance, due to be published this summer, will enable employers and training providers to design courses that give their employees AI skills relevant to their business needs. Post-pandemic economic growth: UK labour markets: Government Response 7