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A catalogue of missed skills opportunities?
As new employment measures hit firms yesterday, techUK’s Doniya Soni asks whether they help or hinder the UK’s digital economy.
Yesterday (6 April 2017) was a big day for tech businesses, as a raft of new measures came into force which will impact tech firms of all sizes up and down the country.
techUK’s Policy Manager Doniya Soni takes a look at the latest state of play on the apprenticeship levy, the immigration skills charge, and gender pay gap reporting, assessing this moment in the future of skills policy and whether it represents a missed opportunity.
The UK has a fantastic opportunity to be a world-leader in the digital economy, and is making encouraging progress. Digital technology businesses are key drivers of productivity and will underpin the future success of the UK economy.
To foster this innovation, we need the digital skills to realise the opportunity for the UK to be a global leader in technology for decades to come. We are in an age where jobs in all sectors require digital, not just the tech sector, yet the UK faces a chronic digital skills gap.
Skills policy must now look towards the future – real-time evidence and data-driven policy, responsive to future workforce needs, must be evident in the Government’s approach. This will ensure forward-thinking plans which will ensure the UK will be a world-leader in tech for years to come.
Apprenticeship Levy
techUK has long argued that the apprenticeship levy is not fit for purpose for the most dynamic sectors in the UK economy. There’s no doubt vocational training could offer a route to fixing the UK’s talent pipeline, however, the Government must do more to understand the needs of the sector and work with industry to ensure the apprenticeship programme (and the apprenticeship levy) have a positive, long-lasting impact on increasing the digital skills provision in the UK.
In its current form, the apprenticeship levy does not provide adequate digital skills that are increasingly necessary for citizens in the digital world. As technology drives innovation and productivity it will change the way we work – new skills will be required as new businesses and working practices emerge. For everyone to enjoy the benefits these innovations will bring, Government and industry must collaborate closely to support people to up-skill and re-skill throughout their working lives.
There is a real opportunity to make the apprenticeship levy more flexible so it can be adapted to the new world of work. In an era of rapid technological change, it is imperative that a culture of life-long learning is at the forefront to ensure that companies are investing in genuinely valuable skills for the future. The Government recognises this shift in modern employment, as evidenced by the Taylor Review and the Government Office for Science’s review into lifelong learning.
techUK therefore urges the Government to shift the focus of the apprenticeship programme towards more flexible employer-led training initiatives. Employers should be incentivised to use the Levy to reskill employees in roles that could become vulnerable to automation, or to help other key groups back into the workforce such as military veterans or female returners.
Investing in domestic digital skills is more important than ever, but the Government must back up its foresight into the changing world of work with meaningful policy initiatives that can give people the skills they need to succeed in high value jobs. The current approach to apprentices, however, risks undermining existing training initiatives and deterring future ones.
Immigration Skills Charge
New restrictions on the Tier 2 high skilled migration route are also coming into force this week – including an increased salary threshold, an immigration skills charge, and changes to rules for Tier 2 Intra-Company transfers. Since the announcement of the changes, techUK has argued they will be restrictive to the growth of innovative new tech companies, particularly start-ups who will be adversely affected by the additional salary thresholds. Additionally, the introduction of an immigration skills charge has been viewed by industry as a punitive measure that will not deter hiring of vital international tech talent, but rather add to the number of increased costs businesses will face from April. However, it has been made clear by the Government that plans will not be scrapped in light of the EU referendum vote.
As shown in techUK’s latest Brexit report, Global Tech Talent Powering Global Britain, the new £1000 Immigration Skills Charge is set to raise £250m in 2017-18 financial year alone. These calculations are based on the number of Certificates of Sponsorship granted in the year ending March 2015, multiplied by the typical length of a visa across the three main Tier 2 routes. Rather than use the charge as a revenue raising tool, techUK recommends the Government ringfence the money to help fund world-class domestic digital skills initiatives. The Migration Advisory Committee recognises the UK’s domestic digital skills shortage, hence recommending a review in the sector’s talent pipeline and adding four new tech roles to the Shortage Occupation List.
This additional revenue would build on foundations laid out in the Government’s Digital Strategy. Just as an example, the funds could be put to effective use to supercharge the lifelong learning pilots as outlined in the Chancellor’s most recent budget, provide robust Continued Professional Development training for Computing teachers, and invest in tech company’s returnship programmes, including the ones featured on techUK’s Returners Hub, which encourage individuals back into the tech sector after a career break. These initiatives, and more, are vital to growing a robust domestic digital skills pipeline.
The tech sector faces a triple hit on its ability to recruit and retain talent: the UK’s domestic digital skills pipeline still struggles to meet growing demand, there is significant uncertainty on access to EU talent, and new restrictions to hiring non-EEA workers as outlined above.
In order for the tech sector to continue growing at its current pace, Government must work with industry to ensure skills policy meets the needs of future-looking sectors such as tech. The demand for digital skills far outweighs the supply, and without collaboration and forward-planning, the UK risks losing its momentum in fostering and growing some of the most innovative tech companies.
