This should be the year of big policy ideas.

There will almost certainly be a UK General Election in 2024 as well as a host of local elections. Whilst it might be tempting for election campaigns to focus on the most immediate challenges of today, any government must develop a committed long-term plan. The UK needs sustainable economic growth as a foundation for future prosperity and progress. In a difficult economic climate, against a backdrop of stagnating growth and low productivity, success relies on a clear vision but also a consistent, coordinated delivery plan.

2024 will therefore be a crucial year for the UK. The elections will focus minds on the opportunities for the UK and how to unlock them. A Spring Budget on 6 March will also present an opportunity for the current Government to make further changes to tax and spending policy.

This is part one of a two-part blog that sets out what we are watching out for in 2024.

How will the Government respond to the growing skills crisis?

Businesses and other employers need to access the right talent to grow, innovate and to raise wages sustainably. However, the UK faces a rapidly declining pool of workers due to demographic changes as well as widespread skills shortages. The latest results of the Employer Skills Survey show a significant increase in skills gaps and vacancies have been persistently high at around 1 million. As technology quickly advances, the labour market is transforming at pace and the skills gaps will only become more acute. Schools, colleges and universities are preparing people for jobs that may not yet exist, using techniques still unimaginable.

There is urgent need for coordinated national and local policy and interventions to address both the immediate recruitment challenges facing employers, as well as prepare for a radically different future labour market.

Preparations for a new Lifelong Learning Entitlement from 2025

There have been some initiatives to strengthen the education and training system in recent years. However, these have not matched the scale of the challenge. In 2024 we will see preparations for the roll out of the new Lifelong Learning Entitlement (LLE) in 2025 to improve adult education. This will allow individuals to access the equivalent of four years of tuition loans flexibly over their lifetime and enable access to modular and short courses at levels 3-6. Improving lifelong learning opportunities is an essential step as the vast majority of our 2040 workforce are already working.

The LLE bill passed in September 2023, but further secondary legislation will pass through parliament in 2024 for fee limits and changes to the funding system. Higher education (HE) providers will also continue to trail short-course loan provisions across a wide range of subject areas. A consultation on the expansion of modular funding is due in spring. Together, these steps will bring further insight into the opportunities and challenges of LLE ahead of its full roll out next year.

Laying the foundations for a new British Standard qualification

The other major change to the education and training system is for a new British Standard to replace A levels. Inspired by the International Baccalaureate, a consultation on the design of the British Standard is live and closes in March. The British Standard would be a major departure from current UK level 3 provision, requiring students to study at least five subjects, including maths and English. However, delivery will take time and roll out of the British Standard is not expected to start until 2033 at the earliest. Any impacts on the supply of skills will take decades to materialise. It also remains unclear whether other political parties support the change. The Labour party has previously supported a Baccalaureate-style model for the UK but has more recently hinted that reforms of primary education would be their priority.

Will initiatives be proposed to encourage greater dynamism in the education and training system?

The challenge is that much debate to date has focussed on individual interventions and initiatives tailored to particular points in the education system or specific types of skills. For example, in 2024 we are expecting to see a quantum skills action plan as announced in the National Quantum Strategy. However it remains unclear whether similar plans will be produced for the other critical technology strategies identified in the UK’s science and technology framework.

The UK needs a more comprehensive and coordinated plan to support dynamism across the full education and training system. This dynamism is essential so that the education and training system can continuously evolve to match skills needs.

Dynamism requires effective collaboration between employers and education providers, national and local intelligence and coordination, and educational institutions that are able to be adaptable and innovative. NCUB has long called for improvements to intelligence and coordination, noting that the UK Skills and Employment Commission was disbanded and not replaced as planned in 2017. In 2024, we expect to see the first outputs of the new Department for Education Future Skills Unit, which we hope will provide much needed insight into future labour market needs.

Financial pressures on all parts of the education system in recent years, including universities, limit opportunities for educational institutions to plan and innovate. Equally, many students are facing enormous financial challenges as maintenance support has not kept pace with rising costs. Whilst there is the start of a plan to improve access for adults to education via the LLE, funding for the tertiary education system remains strained and there are no plans for review.

In 2024, we will be calling for a coordinated suite of measures in election manifestoes to create the environment that allows educational institutions with employers to create an informed, responsive and dynamic education and training system. As part of this, we will be progressing research to better understand collaboration between universities and employers at present and how it can be further strengthened.

Continued uncertainty on immigration

As the skills and training system gradually evolves, immigration is essential to address skills gaps that cannot be immediately met through domestic supply. However, a number of measures will be taken in 2024 that will make recruitment from overseas more difficult. At the end of 2023, the Government announced plans to reduce immigration numbers. These included disallowing international students on taught university courses from bringing dependents to the UK when they come to study, as well as the promise of a review on the Graduate Visa route.

The Home Office will uplift the minimum salary threshold for those seeking a sponsored Skilled Worker visa from £26,200 to £38,700 in Spring 2024, alongside significantly raising the NHS surcharge. NCUB criticised these moves as a threat to the UK workforce, and highlighted the potential for worsening skills shortages, particularly among technicians and early career researchers.

The announcement spanned five areas which will be tightened, but in the days following, the Home Office reduced the uplift to the Spousal/Partner Visa, which was due to be increased from £18,600 to £38,700 in March, possibly over fears many on valid visas would leave the UK as their partner would no longer be eligible to remain. Plans now indicate this will raise to £29,000 in Spring, and rise to £38,700 at a later stage, phasing the move.

None of the other announcements were reduced or rolled back and the changes to student dependant rules came into effect from the 1st January. This move leaves questions over the Government’s rationale and if the true impact is understood. With politicians keen to see less net migration we may see further plans for reform announced in 2024. 2024 will also start to reveal the impact of recent changes on skills supply and the diversity of student bodies.

Watch out for Part Two

Part Two of this blog will offer further reflections on things to look out for in 2024, including what will happen to UK industrial strategy, whether measures to boost private investment will have an impact, and the UK’s first year as an associate member of the Horizon Europe research programme.