UK Universities Positioned as Key Drivers of Economic Development

UK Government Seeks Stronger University Engagement in Skills Policy

As Skills England begins its operations, David Bell has emphasised the need for higher education institutions (HEIs) to align more closely with the government’s economic and regional development objectives. He highlighted that since Labour assumed power in July, economic growth has remained a key priority and continues to be central to the government’s Plan for Change, despite ongoing challenges. Bell noted that the UK has struggled with persistently low productivity growth since the global financial crisis, largely due to under-investment in skills. In response, Skills England was established to address critical issues within the skills system, such as fragmentation and insufficient employer investment in training and education. By focusing on workforce development, the initiative aims to enhance productivity and support the nation’s broader economic ambitions.

He outlined that Skills England has a broad mandate, engaging with regional authorities and collaborating with the Migration Advisory Committee and the Industrial Strategy Council. Acknowledging concerns that skills policy is often viewed as the domain of further education and private providers, Bell pointed to the first Skills England report, which recognises universities’ vital role in workforce development. He highlighted that universities contribute by shaping future skills through research and, as major local employers, have a vested interest in regional economic success.

Furthermore, Bell stressed that universities play a fundamental role in addressing key trends such as an ageing population, automation, green energy, and specialised construction. He emphasised that this is a critical time for English universities to focus on skills development, aligning their strategies with the government’s goals of boosting economic growth, national capability, and regional impact. Bell also underscored the responsibility of vice-chancellors in demonstrating universities’ contributions to the skills system. He pointed to opportunities for universities to expand apprenticeships and short courses tailored to employer needs. Universities, he argued, should meet local demands while preparing students for future workforce requirements, reinforcing Skills England’s message: “Better Skills for Better Jobs.”

Encouraging deeper involvement, Bell urged universities to analyse reports released with Skills England’s launch, which outline evolving skills needs across key sectors. He stressed the importance of universities shaping regional skills strategies and presenting a unified voice, countering views of a top-down, disconnected system. He highlighted the formation of Universities for North East England, where five institutions are currently mapping regional skills needs in line with the Mayor’s growth priorities. Despite the cessation of funding for level 7 apprenticeships, Bell pointed to opportunities for universities to offer apprenticeships at levels 5 and 6, as well as other forms of on-the-job training.

Universities continue to play a key role in providing specialist postgraduate programmes, which remain in demand among employers. To be effective, institutions must be fast, adaptable, and responsive, qualities often associated with further education. An example of this adaptability is the University of Sunderland’s acquisition of Gateshead-based Access Training last year, which enabled it to diversify its offerings. With university backing, the provider expanded its work with regional employers, particularly in apprenticeships and workplace training.

The evolving connection between the new employer-funded Growth and Skills Levy and the graduate-repayable Lifelong Learning Entitlement was identified as an area where universities could provide valuable input. Given their direct role in addressing both employer and learner needs, their perspective is essential in shaping policy and ensuring the system meets national and regional workforce requirements. Ultimately, Bell emphasised that universities must engage fully in the skills system to reinforce their role as anchor institutions, supporting productivity and long-term economic growth. For universities to play a decisive role in shaping the workforce and driving economic growth, they must remain adaptable, proactive, and deeply engaged in the evolving skills system.

Editor’s Note:

The UK’s skills crisis is not new, but the establishment of Skills England signals a turning point. For years, productivity has stagnated due to under-investment in workforce development, leaving employers struggling to find qualified workers. While further education and private training providers have been central to skills policy, universities must step up and take an active role. They are not just academic institutions but also key players in shaping the future workforce through research, innovation, and education. If universities fully embrace this responsibility, they can help close the skills gap and drive economic growth. Universities need to be more agile and responsive, offering apprenticeships, short courses, and industry-tailored programmes that address real labour market needs. They should not remain disconnected from the broader skills agenda but work alongside employers and regional authorities to ensure graduates are prepared for the jobs of tomorrow.  The formation of Universities for North East England is an excellent example of how institutions can align with local economic priorities, and more regions should follow suit. If universities hesitate or fail to engage, they risk missing a crucial opportunity to redefine their role in education and economic development.

Skoobuzz believes that universities must move beyond traditional education and become active drivers in closing the UK’s skills gap.